10 April 2024 – James Arbuthnot of Edrom and Anthony Hooper
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(10.00 am)
Mr Beer: Good morning, sir, can you see and hear us?
Sir Wyn Williams: I can see you but I can’t hear you at the moment, Mr Beer.
Mr Beer: I’ll try again. Can you now hear me?
Sir Wyn Williams: Yes, now I can.
Mr Beer: Thank you very much, I can now see and hear you. Can I call Lord James Arbuthnot, please.
Lord James Arbuthnot of Edrom
LORD JAMES NORWICH ARBUTHNOT OF EDROM (sworn).
Questioned by Mr Beer
Mr Beer: Lord Arbuthnot, I am Counsel to the Inquiry. My name is Jason Beer, as you know. Can you give us your full name, please?
Lord James Arbuthnot of Edrom: James Norwich Arbuthnot of Edrom.
Mr Beer: Thank you for providing the Inquiry with a very detailed witness statement and for giving evidence today to assist us in our investigation. In relation to the witness statement you’ve provided, can we look at it, please. It’s the only time I’ll ask you to look at a hard copy document. The URN is WITN00020100. The witness statement is 180 pages in length, excluding its exhibits, and dated 12 March 2024. Can you turn to page 180, please.
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Is that your signature?
Lord James Arbuthnot of Edrom: It is.
Mr Beer: Are the contents of that witness statement true to the best of your knowledge and belief?
Lord James Arbuthnot of Edrom: They are.
Mr Beer: As I’ve said, your witness statement is exceptionally detailed. You’ve kindly devoted what’s obviously been a substantial period of time to the making of it and you set out relevant events in chronological order, adding in your recollections, where you have remaining recollections, and providing us with documents in your possession.
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: That witness statement will be uploaded to the Inquiry website today so it’s available for public view. I’m accordingly not going to ask you about every matter within it.
Lord James Arbuthnot of Edrom: Good.
Mr Beer: It stands as your evidence and is being made available, as I say. Instead, I’m going to take you to some more significant events that have occurred over the last 15 years or so, ie since your first involvement with the Horizon system and the Post Office’s running of it, which was in April 2009, I believe –
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: – and ask for your further recollection about them.
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Can we start, please, with a little about your background. Would you agree with this summary: you were formerly a barrister practising in Chancery matters?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: You were a Member of Parliament between 1987 and March 2015?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: In that period, you were a backbench MP?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: You held senior positions in government, including in Trade and Industry, in Work and Pensions and in Defence?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: You held senior positions as an opposition MP, including as Assistant Chief Whip, Shadow Secretary for Trade and Industry and Chair of the Defence Select Committee?
Lord James Arbuthnot of Edrom: I was actually a full Chief Whip.
Mr Beer: I’m so sorry. In October 2015, you were made a Life Peer?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: You have been extensively involved in, and played a significant role in, the investigation of the Horizon system, the use of data from that system to prosecute and bring civil proceedings against subpostmasters and Crown Office employees, the conduct and behaviour of Post Office employees, senior executive and board members, the conduct of government, the operation of the legal system and of the courts and the process of seeking redress and accountability; is that a fair summary?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: That all began, I think, with a coffee morning in your constituency on 3 April 2009; is that right?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Then, I think, you learned about the case of Jo Hamilton?
Lord James Arbuthnot of Edrom: I did.
Mr Beer: Your involvement continues, I think, to this day, not least because you’re a member of the Horizon Compensation Advisory Board?
Lord James Arbuthnot of Edrom: That’s right.
Mr Beer: As I’ve said, your first involvement came about, I think, by reason of being told about Jo Hamilton’s case.
Lord James Arbuthnot of Edrom: Yes, it did.
Mr Beer: I think you also learned about an article that was being written, it hadn’t yet been published, but it was being written by Rebecca Thomson of Computer Weekly; is that right?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: I think you tell us that you already held that publication in high regard because of some previous involvement in some work it had done?
Lord James Arbuthnot of Edrom: Yes, the Chinook crash on the Mull of Kintyre.
Mr Beer: Then later in 2009 you learned about a second case, that of David Bristow, the former subpostmaster in Odiham; is that right?
Lord James Arbuthnot of Edrom: That’s right.
Mr Beer: His contract was terminated by the Post Office by reason of an alleged shortfall of £42,000, he suggested that the Horizon system was responsible for the shortfall; is that a fair summary?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Now, as well as lots of liaison with those who had drawn your attention to those two cases, Jo Hamilton’s and Mr Bristow’s, and liaison over permission to use the information that you had been given – I’ve seen all of the correspondence where you sought such permission – would it be right that the first significant step that you took was to write to Lord Peter Mandelson, who was when the Secretary of State for Business, Innovation and Skills?
Lord James Arbuthnot of Edrom: Yes, that’s correct.
Mr Beer: Can we look at that first significant step, then. The document will come up on the screen, it’s POL00114298. It’s page 9. If we can just enlarge so we can see the text. Thank you. You write on 3 November 2009 to Lord Peter Mandelson, the Secretary of State for Business, Innovation and Skills, sometimes known as BIS. You say that you enclose two emails that you’ve received from a constituent, Mr David Bristow, and you give his address. I’m not going to show you those emails for the moment, it’s not necessary. You note a PQ raised by Brooks Newmark MP on 12 October and the reply of 13 October 2009 from Alan Cook, the MD of the Post Office.
Then you say this:
“Nonetheless there does appear to be a significant number of postmasters and postmistresses accused of fraud who claim that the Horizon system is responsible, including at least two in my constituency.
“Given the level of impact this has had on the personal lives of these postmasters and postmistresses and their families, often involving bankruptcy and certainly significant financial hardship, I should be most grateful if you would let me have your comments on what can be done to investigate the matter.”
So this is, to put this in context, you as an opposition MP at this time –
Lord James Arbuthnot of Edrom: Yes, I was.
Mr Beer: – writing to the then Secretary of State, drawing his attention directly to the suggestion that Horizon was responsible for shortfalls which were being laid at the door of subpostmasters by accusations against them of fraud?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Why were you writing, may I ask, to the Government rather than to the Post Office, who ran this Horizon system?
Lord James Arbuthnot of Edrom: Because the Government owned the Post Office.
Mr Beer: I think you followed this up with a chaser, if we look at page 3 of the pack, here, same clip. If we can just expand that a little bit. So we’re now on 10 December 2009, you write to Lord Mandelson again, saying:
“I write further to my letter of 3 November regarding correspondence received from [David Bristow].
“I enclose a copy of my previous letter, and the two emails to which it refers. I also enclose two subsequent emails from Mr Bristow and an email from a local counsellor, John Kennett, describing the circumstances of the second Post Office in my constituency affected by the Horizon system, Jo Hamilton of the South Warnborough post office, Hampshire.
“I have not yet received a reply and should be most grateful if you would let me have your comments on the matter. I also request reassurance that BIS [that’s Business, Innovation and Skills, the department] will investigate this matter fully and take action as and where appropriate. Given the urgency of Mr Bristow’s situation I would ask for your attention as soon as possible and a response by way of a letter or, if preferred, a meeting.”
You were asking here that the Department for Business, Innovation and Skills should investigate the matter. Again, may I ask, why were you asking the Department to look into the matter rather than asking the Secretary of State to ask the Post Office to look into the Post Office?
Lord James Arbuthnot of Edrom: I was not hugely interested in the intricacies of who was responsible for what. I just wanted it sorted out, and I thought I might as well write to the person who owned it, who was Peter Mandelson.
Mr Beer: Now, in the meantime, it seems that a letter had been drafted and perhaps even sent by way of reply to your first letter. If we can look at that, please. UKGI00011506. You’ll see that this is dated 5 December 2009 and, presumably, this hadn’t been received by you, by the time you had sent your letter of 10 December?
Lord James Arbuthnot of Edrom: Presumably, yeah.
Mr Beer: You will see, if we scroll to the bottom, please, it’s sent by the Minister, Pat McFadden, rather than the Secretary of State, Lord Mandelson. If we go to the body of the letter, please, he thanks you for the letter of 3 November and says he’s replying as the Minister of State for Business, Innovation and Skills, and he says:
“Under the Government’s postal sector reforms introduced in 2001, Royal Mail (which includes Post Office Limited) was given greater commercial freedom, as the management and unions had requested, and Government has assumed an arm’s length role as a shareholder in a public limited company. Subject to agreeing its strategic plan with us, the Board can structure the business as it decides best to meet the challenges of market development and changing customer needs.
“The issues raised by your constituent are operational and contractual matters for [the Post Office] and not for Government. I understand from [the Post Office] that errors at the branch have been fully investigated and there is nothing to indicate that there are any problems with the Horizon system. The company’s position as regards the integrity of the Horizon system remains as set out in the reply from Alan Cook … to which your letter refers.”
You’ll see in the second paragraph there Mr McFadden took the point or took the line that the Government had assumed an arm’s length role as the shareholder with the Post Office and, in the third paragraph, that the issues raised by you, which included that a large number of people may have been wrongly accused of crimes when, in fact, Horizon was to blame, was not a matter for the Government.
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: What was your reaction, if any, to those points?
Lord James Arbuthnot of Edrom: I was frustrated and annoyed but it was clear that the Government was saying that it was really nothing to do with them, and I didn’t see at that stage where I could take it.
Mr Beer: Why were you frustrated?
Lord James Arbuthnot of Edrom: Because I’d wanted what had seemed to me to be something that was potentially an injustice to be sorted out and, since the Government owned the Post Office, I assumed that the Government would be in a position to sort it out, but they were saying “No, not me, guv”.
Mr Beer: You tell us in your witness statement that, notwithstanding the frustration that you felt at the time, it didn’t then occur to you quite how troubling the reply was?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Can you explain what you mean by that?
Lord James Arbuthnot of Edrom: What this arm’s length arrangement essentially means is that the Government is refusing to take the responsibilities that go with ownership and I don’t think it’s right to do that for various reasons. One reason is that, if you have an organisation that is as important to the community as the Post Office is, then the people have got to be able to have proper control over it, if the people own it. And there’s a sort of democratic deficit that is popping up here if the Government is refusing to take responsibility for it.
And, also, I know that Mr Henry has been talking about the risks of owning a dangerous dog. You cannot say that the dangerous dog has an arm’s length relationship with you if you – if the dangerous dog behaves badly.
So the whole process of arm’s length control is a worrying one, it seems to me.
Mr Beer: That can come down. Thank you. Much later on in the chronology, and this is paragraph 106 of your witness statement, you say that, after the publication of the Second Sight Interim Report of July 2013, the then minister, Jo Swinson, in the event decided to make a statement in which she again emphasised the arm’s length nature of the relationship between the Post Office and its owner, the Government.
I think you say that in your view that was essentially the same position being taken as we see in this letter here, in 2009?
Lord James Arbuthnot of Edrom: Yes. I don’t know when this arm’s length arrangement started but it was one that moved from the Labour Government to the coalition Government and carried on into the subsequent Conservative Government, yes.
Mr Beer: Can we turn to 2011 and early 2012, please. I’m going to skip over some other events, in particular your meetings with Jo Hamilton and with David Bristow, a meeting and correspondence with Ed Davey in 2011, the BBC Inside Out piece, presented by Nick Wallis and your conversation with Alice Perkins at a conference at Ditchley Park, and, instead, may I pick up the narrative, please, with letters that you wrote to Moya Greene, the then Chief Executive of Royal Mail Group, and again to Ed Davey, the then Parliamentary Undersecretary of State for Business, Innovation and Skills.
Can we start with the letter to Moya Greene and a reply that you got from Paula Vennells, then managing director of Post Office Limited.
So let’s start with your letter. POL00105483. This is you writing on 15 December 2011 to Moya Greene, the Chief Executive of Royal Mail Group Plc, and you say:
“I have been contacted by a number of constituents living in Odiham in Hampshire who are most upset by the fact their local post office has been closed, and that a longstanding employee, Paul Kemp, has been dismissed due to ‘irregularities’.”
Just stopping there, you’re referring there, I think, to a second subpostmaster, who had replaced Mr Bristow, who had himself in turn been dismissed from the Odiham branch.
Lord James Arbuthnot of Edrom: Precisely. Mr Kemp did not himself approach me but my constituents in Odiham did because they were worried about losing the Post Office in Odiham.
Mr Beer: I think you tell us in your statement that this gave rise to a number of concerns that, in particular, you considered that it could not simply be a coincidence that two subpostmasters in quick succession at the same branch would be dismissed by the Post Office over alleged shortfalls?
Lord James Arbuthnot of Edrom: As well as the subpostmistress in the next-door village of South Warnborough. Actually, there was something at the back of my mind which continued to trouble me, which was the number of these people who were being told “You are the only person this is happening to”, and that struck me as being profoundly wrong because, at first, it was obviously disprovable, they were not the only people it was happening to; second, it was isolating those subpostmasters and postmistresses, so they could not get support from others in the same position; and, third, it had an element of intimidation about it; all of which set the Post Office and its way of operating with its subpostmasters in a bad light, and that was at the back of my mind, even though I didn’t put that in this letter.
Mr Beer: I’ve skipped over your meetings with Mr Bristow and Jo Hamilton. You tell us in your witness statement that at a personal level, in the light of seeing them face to face, which is what you had done, you formed a view of them that they were transparently honest people with integrity –
Lord James Arbuthnot of Edrom: Yes, absolutely.
Mr Beer: – and that, in your judgement, it was vanishingly unlikely that they were the type of people who would have done what was alleged against them?
Lord James Arbuthnot of Edrom: Yes, completely.
Mr Beer: Carrying on, you say:
“I am most concerned on a number of fronts. First, my constituents tell me that this case appears to be a continuation of the problem that Post Office employees have been having with the software system that reconciled takings. I am aware of 34 individual employees throughout the country who feel they have been wrongly accused of fraud due to faults in this particular system, and am meeting with them in the New Year to discuss what action they plan on taking. You may recall that this case was brought to my attention in 2008 [I think that should actually be 2009], when the subpostmistress from South Warnborough [Jo Hamilton] in Hampshire faced the same situation. It has not been rectified, a situation which does not bring credit to the Royal Mail.
“I am also writing to the Minister to make him aware of this.”
We will look at that in a moment. Then you deal with a separate point about the closure of the branch in Odiham.
Overall, in this letter, you were raising the Horizon issue, not just in the context of the Odiham Post Office but as a much broader point; would that be fair?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Can we look at the reply, please, POL00107698.
“Thank you for your letter of 15 December addressed to Moya Greene [that’s the one we’ve just looked at]. As Managing Director of Post Office Limited, Moya has asked me to reply to you direct.”
If we look at the foot of the page – sorry, over the page – we can see it is a letter from Paula Vennells.
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Then back to page 1. So 9 January, Paula Vennells is writing back to you.
The first page of this letter is about the last paragraph of your letter about the opening and closing of the branch in Odiham, so I’m going to skip over all of that because it’s about whether and in what circumstances there should or should not be a Post Office at Odiham. Then, over the page, Ms Vennells addresses the wider issue that you raised:
“Turning to your more general comments about the Horizon system, we handle large sums of public money as well as the money entrusted to us by the 20 million people who visit our 11,500 branches each week. There are a small number of previous and existing subpostmasters, including Mrs Hamilton who used to run the South Warnborough post office, who allege that financial discrepancies at their branch are due to a fault with the system. We are also aware of the activities of a group called Justice for Subpostmasters Alliance, JFSA. There has been no evidence to support any of the allegations and we have no reason to doubt the integrity of the system, which we remain confident is robust and fit for purpose.”
She hopes that that has clarified the position.
You describe this in your witness statement as being given the brush-off?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: You say in your witness statement that the subpostmasters that you had met seemed to you to be transparently honest –
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: – that there was no suggestion that the introduction of a new computerised accounting system had thereby uncovered previously hidden fraudsters –
Lord James Arbuthnot of Edrom: No.
Mr Beer: – and, if anyone had made such a suggestion, you would have given it short shrift because of the self-evident honesty of the subpostmasters you had met because of the sudden rash of similar allegations, shortly after the installation of a new computer system –
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: – and, therefore, you were not satisfied with being given the brush-off by Paula Vennells?
Lord James Arbuthnot of Edrom: No, I wasn’t.
Mr Beer: Can we turn to the letter to Government that you wrote to Ed Davey, UKGI00001395. You’ll see he was the Parliamentary Undersecretary of State in BIS at that time and you say:
“I have been contacted by a number of constituents living in Odiham in Hampshire who are most upset at the fact that their local post office has been closed, and a long-standing employee, Paul Kemp, has been dismissed due to ‘irregularities’. I would be most grateful if you would look into these related matters as a matter of urgency.
“We discussed this matter some months ago, and I am most concerned that the ‘irregularities’ may be a continuation of the problems that Post Office employees have been having with the software system that reconciled takings. I am aware of 34 individual employees throughout the country who feel that they have been wrongly accused of fraud due to faults in this particular system.”
You say that it’s a situation that has not been rectified, a situation which does not bring credit to the Royal Mail, and you note that you’re writing to Moya Greene. Then you take up the point in the last paragraph about the closure of the Post Office, irrespective of the other issues that you raised.
So, in this letter, would you agree you’re drawing attention to the suggestion that Horizon is to blame for the losses that are being laid at the door of the subpostmasters?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: You’re making it clear, would you agree, that this is a country-wide issue –
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: – and you refer to your previous correspondence. Did Mr Davey ever reply to you?
Lord James Arbuthnot of Edrom: I don’t think he did, but I referred in this letter not only to my previous correspondence but also to a face-to-face discussion, at the top of the second paragraph, that I’d had sometime before when I must have raised it with him. But I don’t think he replied to me, probably because he was told that Paula Vennells was replying to me herself.
Mr Beer: I’m going to skip over the meeting, the early meeting between subpostmasters, Shoosmiths solicitors and Parliamentarians in Portcullis House on 27 February 2012.
Lord James Arbuthnot of Edrom: Yeah.
Mr Beer: That’s addressed in paragraphs 37 and 38 of your witness statement and in detailed minutes of that meeting – there’s no need to display this – on SMIS0000247 at pages 4 to 7. But, in short, you chaired the meeting –
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: – you told the subpostmasters that you did not believe that they were anything other than honest –
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: – and that the Post Office’s line, as you described it, that there was nothing wrong with Horizon, was wholly implausible.
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Is that a fair summary of the meeting?
Lord James Arbuthnot of Edrom: It is.
Mr Beer: What was the idea of the meeting between subpostmasters, Shoosmiths and Parliamentarians?
Lord James Arbuthnot of Edrom: One MP alone can’t achieve much but, if there is a nationwide issue, then getting more than one MP together makes for much greater effect, as we can see.
Mr Beer: This led, I think, to a meeting with Alice Perkins, Alwen Lyons and you very shortly thereafter on 13 March 2012; is that right?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: I want to explore briefly with you a meeting that you had with Alice Perkins and Alwen Lyons. So the context, I think, for the meeting was a written communication, an email that you’d sent to Alice Perkins on 23 February, if we can just look at that, please. POL00105470. If we look at the very bottom of page 1., you say on 23 February:
“Dear Alice,
“You may remember that when we last met at, I think, Ditchley Park [that’s the conference I mentioned earlier] I mentioned the issue of the Horizon computer system in use at sub post offices throughout the country and I said I had a real concern about the way some of the subpostmasters in and outside my constituency had been treated.”
Over the page:
“May I please come and see you about it? I know it is the position of the Post Office (supported by the National Federation of SubPostmasters, though not by the Communications Workers Union) that there is nothing wrong with Horizon. I am deeply sceptical about this, and I hope I can persuade you to look afresh at the matter, rather than accepting there should be a closing of ranks around the computer.”
So you end this by saying you’re deeply sceptical about the Post Office’s position there is nothing wrong with Horizon and the purpose of the meeting that you were seeking was to persuade her to look afresh at the matter; is that right?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: You say, rather than her accepting that there should be a closing of ranks around the computer; is that what you had thought had happened already?
Lord James Arbuthnot of Edrom: Yes, it was. That’s what had happened. The system was “robust”, we were told.
Mr Beer: You make a point in your witness statement about the use of that word “robust”.
Lord James Arbuthnot of Edrom: Yes, it was clearly the line to take. There were lots of people who were told to use this word, which implied a sort of series of groupthinking seminars, which led to the use of language, which is very important, and that’s what they chose, “robust”.
Mr Beer: You were concerned, presumably, that that is what would continue to happen, a closing of ranks around the computer, if things were allowed to continue unabated?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: So can I turn, then, with that context in mind, to the meeting itself, POL00105481. It’s the three of you, we can see from the top: you, Alice Perkins and Alwen Lyons. Paragraph 1, you started the meeting by explaining why you were concerned about the Horizon system and the support that subpostmasters received from the business when they’re faced with a discrepancy in their accounts. The minute says you told them about a recent meeting with you and another eight MPs, that was the Portcullis House meeting that we mentioned –
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: – in which you had met some of the affect subpostmasters and Shoosmiths, their legal representatives. If we just scan through paragraph 2, that’s Alwen Lyons speaking; paragraph 3, Alice Perkins inviting you to visit the model office to see how Horizon works; you, in paragraph 4, making a counter proposal to come to Old Street, so offering to come to Old Street, but accompanied by a computer expert, possibly somebody from Computer Weekly, and you made the point that you put credence on their opinion because of their involvement in the Chinook helicopter crash inquiry and that you told them that Computer Weekly had also been sceptical about Horizon.
Then paragraph 5, something I just want to concentrate on. It records, and this is the Post Office’s own note:
“[Alice Perkins] explained that the system had been independently reviewed by several people, including [Royal Mail] Internal Audit and Deloittes (who had no relationship with the Business or Fujitsu).”
You are recorded as saying that you were not convinced that this had been done by IT experts.
I suspect you have got no recollection of the meeting itself –
Lord James Arbuthnot of Edrom: You are correct.
Mr Beer: – but, from the minute, would you understand that you were being told that Royal Mail Group Internal Audit was independent of the Post Office?
Lord James Arbuthnot of Edrom: Yes, I would have been sceptical about that independence.
Mr Beer: Then, secondly, that there was a separate audit of Horizon by Deloitte?
Lord James Arbuthnot of Edrom: Yes, because there was something inherently implausible about a new computer system being completely fault free.
Mr Beer: Have you, to this date, ever seen such an independent audit of the Horizon system completed by Deloitte before 13 March 2012 when this meeting took place?
Lord James Arbuthnot of Edrom: No.
Mr Beer: We can see what paragraph 6 says:
“[Alice Perkins] offered to consider a further review of the system by an IT expert specifically looking at the integrity of the data and discrepancy errors thrown up in subpostmasters’ balances.”
You said that the training was not adequate –
Lord James Arbuthnot of Edrom: Which is a different point.
Mr Beer: – yes – introduced the issue that the subpostmaster’s contract was over 100 pages long, written in ‘94, when Horizon was not in place, and didn’t explain the process for making good errors clearly enough. That’s, again, a separate point. You suggested that the subpostmasters didn’t get a copy of their contract until they had taken up their appointment, by which time it was too late to understand the full commitment they were making, and that’s a yet fourth point, I think.
Then we can see what’s discussed in paragraphs 8 and 9. Then, over the page, at 10, in closing, you informed Alice Perkins that there had been discussion about an adjournment debate on the topic.
What was the purpose of mentioning that kind of thing?
Lord James Arbuthnot of Edrom: Well, just to say that it – if there were eight MPs involved in the meeting with Shoosmiths and subpostmasters, then raising it in Parliament would be a good way of bringing publicity and ministerial attention to an issue that was clearly important.
Mr Beer: Is it a sort of an attempt to drive action by the Post Office?
Lord James Arbuthnot of Edrom: Yes, it must have been, not that I’d ever done an adjournment debate by that stage but, nevertheless, I suppose that’s what I was doing, yes.
Mr Beer: Ie this needs to be taken seriously –
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: – one of the consequences, if it’s not, may be an adjournment debate?
Lord James Arbuthnot of Edrom: Precisely.
Mr Beer: Can we look, please – and I’m dealing with this part of the chronology in some detail because it may be important in due course – at a letter of 4 April that, in fact, you weren’t copied into but can we look, please, at POL00107710. If we just look at the second page, please, we can see it’s from Paula Vennells.
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Then back to the first page. It’s a letter to Oliver Letwin of 4 April 2012, and I just want to see whether this, what is being said by Ms Vennells here, is reflective of the kind of thing that Ms Vennells and other senior executives at the Post Office were saying to you at this time in the spring of 2012.
Oliver Letwin, just for context, was one of the MPs who was amongst the group who was seeking to pursue this matter in the same way as you?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Ms Vennells says:
“Dear Oliver
“I understand you raised a query on the robustness of the Post Office Horizon system yesterday with Moya Greene. I am grateful to Moya for passing this query on to me.”
Then Ms Vennells says this:
“The Post Office takes very seriously any perception that there is an issue with the accuracy of the Horizon system: there isn’t. The Horizon system has been rigorously tested using independent assessors and robust procedures.”
The independent assessors point, is that the kind of thing that was ever said to you?
Lord James Arbuthnot of Edrom: Oh, probably. Although – I mean, I can’t remember the words being used but probably, if that was what they were saying to –
Mr Beer: Were they ever named? We saw in the meeting that it was said that there was an independent audit commissioned or carried out by the Royal Mail Group’s audit function, and Deloittes. These independent assessors, can you remember whether any other names were given?
Lord James Arbuthnot of Edrom: Well, it’s 12 years ago now. I can’t remember whether names were used. It was the independence that I would have been interested in rather than the names.
Mr Beer: Yes. We see that there is a very firm line taken in the first part of that paragraph.
Lord James Arbuthnot of Edrom: Yes. It seems odd.
Mr Beer: Then paragraph 3:
“Therefore when queries are raised, my team will work with the postmasters to help identify the problem. Very often the ‘missing’ funds are a keying or balancing error that can be put right, and training given to ensure it doesn’t happen again. These checks and procedures resolve virtually all discrepancies satisfactorily.”
So that’s saying it’s the subpostmaster’s responsibilities or fault, essentially?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: “However, in some cases, which fortunately are very few and far between, we have had to prosecute subpostmasters for theft or false accounting and provide evidence which substantiates our legal position. In every instance, the courts have found in our favour.”
Now, that’s a false statement there, that “In every instance, the courts have found in our favour”, it’s just not true. Would you have known at that time that that was a false statement?
Lord James Arbuthnot of Edrom: No, I wouldn’t.
Mr Beer: Would you, if the senior executive of the Post Office was writing to you on Post Office headed paper and formally as an MP and said “In every instance, the courts have found in our favour” accept at face value what they were saying?
Lord James Arbuthnot of Edrom: Yes, I would. I would expect public officials, as Paula Vennells was, to tell the truth. However, I would have had, at the back of my mind, the knowledge that the Post Office had been, as a matter of almost routine, telling lots, and lots, and lots of subpostmasters that they were the only ones having these problems. That would have been at the back of my mind, I think. So I might have had some question about what they were saying.
Mr Beer: Thank you. That can come down. I’m going to skip over the meeting that you and Oliver Letwin had with Alice Perkins, the Chairman of the Post Office; Paula Vennells the then CEO of the Post Office; Susan Crichton, the Legal and Compliance Director; Lesley Sewell, the Chief Information Officer; Rod Ismay, the then head of Product and Branch Accounting; and Angela van den Bogerd, the Head of Network on 17 May. It is addressed in detail in paragraphs 43 to 46 of your witness statement and in a comprehensive pack prepared for the meeting.
The outcome of the meeting, is this right, was that the Post Office offered to give independent forensic accountants access to the Horizon system and for the Post Office to fund such an investigation?
Lord James Arbuthnot of Edrom: Yes. It was the first time I had heard the phrase “forensic accountants” and I didn’t know what they were, but it sounded good and it turned out to be good.
Mr Beer: This, I think, had been something that had been suggested by Andrew Tyrie MP back in the Portcullis House meeting of 27 February 2012 –
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: – and so I think you were pleased?
Lord James Arbuthnot of Edrom: Yes, very pleased, partly because the offer came from Paula Vennells, namely to have the forensic accountants. It was something that we wanted but when Paula Vennells offered it, we bit her hand off, as it were.
Mr Beer: I just want to ask you for some details about what the Post Office said, through its senior representatives, that it was proposing these forensic accountants should investigate, so that we can see and we can compare what was proposed with what we ended up with –
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: – at the end of the Second Sight investigation. Can we look, please, at POL00033825. This is something that I don’t think you would have seen. It’s a Post Office pack containing the documents set out in that index there, an agenda for the meeting, key messages that the Post Office wished to deliver.
Lord James Arbuthnot of Edrom: I think I saw this when I was asked to draft my witness statement.
Mr Beer: Yes.
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: You wouldn’t have seen it at the time?
Lord James Arbuthnot of Edrom: I certainly didn’t see it at the time.
Mr Beer: No. So they’re essentially, I think, speaking notes in large part for the meeting. Can we turn to page 3, please. We can see the key messages to be delivered by Alice Perkins, under the “Who” column, in the introductions to the meeting:
“Thank you for coming today.
“The people around the table are …
“We understand you have raised some concerns …
“… we take this issue very seriously. This impacts the lives of individuals, public money is at stake, and so is our reputation.
“We are open to feedback and we will provide you the information we have available, our aim is to be open and transparent.
“We are hoping that you will find that we are handling these issues openly and fairly and would like your advice on how we best approach those who are sceptical …
“We are constantly looking at ways of improving our IT systems and the support we give …”
Then this:
“Our IT systems are routinely audited and our recruitment and the training provides are independently reviewed so that we can make improvements.”
We will be exploring in due course the accuracy of that, IT systems being routinely audited. Then reading on:
“We are also considering an sudden audit of our end-to-end processes, systems and data. I’ll come back to you at the end of the meeting to get your views.”
Is that the offer – we’ll come back to the later minute in a moment – that you were pleased about, an external audit of our end to the processes, systems and data?
Lord James Arbuthnot of Edrom: No. I think that came later in the meeting. This was the introductory spiel and so I think the key messages involving the appointment of an independent forensic accountant came later.
Mr Beer: Just skipping through, we’ll get to the end in a moment, page 5, please. This is Lesley Sewell speaking, third bullet point:
“Although we recognise that Horizon is not perfect, no computer system is, it has been audited by internal and external teams, it has also been tested in the courts and no evidence of problems found (of the nature suggested by JFSA).
“Horizon was designed with integrity in mind from the very beginning.”
Then if we go on, please, to page 7, I think this is where Alice Perkins wraps up, where she comes back, as she promised to do, as we saw on that first page. Second bullet point in the bottom box:
“We are [also] considering commissioning an independent audit as an assurance measure, but in light” –
Lord James Arbuthnot of Edrom: I think that was – that was the one.
Mr Beer: Yeah:
“… but in light [of the fact] that there is no evidence that there is a problem, we need to determine if this is a good use of public money.
“What are your thoughts?”
Presumably, you bit the hand off?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: What did you understand was being offered?
Lord James Arbuthnot of Edrom: That there would be an independent, deep dive into what had gone wrong with these subpostmasters who had been prosecuted or made to pay money, and that was exactly what Andrew Tyrie had suggested and what we needed, that somebody other than the Post Office would be looking into the workings of Horizon.
Mr Beer: So that would involve, would this be right, looking at Horizon as an entire system, at the end-to-end process involved –
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: – as well as other Post Office accounting procedures?
Lord James Arbuthnot of Edrom: Yes. One of the things that I had raised in one of the documents you’ve earlier shown me was the issue of the helpline, the issue of training, the issue of the contract, and so, yes, to look into all of that.
Mr Beer: It seems that there was an agreement to have a further meeting with a wider group of Parliamentarians and that was set for 18 June 2012?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: This may be quite an important meeting, so I want to examine it in a little more detail, if we may. Can we look, please, at JARB0000001. I think these minutes were taken, is this right, by Janet Walker, your then Chief of Staff?
Lord James Arbuthnot of Edrom: Yes, that’s correct.
Mr Beer: We’ll see that there are six MPs present, including you and Mr Letwin, plus representatives from three other MPs?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: So nine MPs in total were either present or represented?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Then four Post Office people present: Ms Perkins, Vennells, van den Bogerd and Lyons?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Then scroll down, please. You introduced the meeting, which was limited to MPs and Post Office personnel only:
“The issue of problems reported with the Horizon system has given rise to controversy dating back a number of years. Many MPs’ constituents have been prosecuted for false accounting, theft and fraud, many protesting their innocence.
“A meeting was convened in February at the House of Commons, attended by MPs and their constituents at which this matter was discussed.”
That’s a cross-reference to the 27 February meeting at Portcullis House?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: “Following this meeting, [you] had several private meetings with Ms Perkins and her colleagues to discuss how the issue might best be approached and resolved.”
That’s a cross-reference to the meetings that we’ve just looked at.
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: “Alice Perkins then gave background information and the Post Office’s perspective and introduced her colleagues.
“Post Office Limited is now a completely separate entity from the Royal Mail. She arrived at the organisation in August 2011 and became aware of the issue soon after starting. She emphasised that the matter was a very serious one for the Post Office, whose business rests on its reputation as being trustworthy. She said the Post Office also recognised full well that the matter was also very serious for the subpostmasters and mistresses involved as it was invariably life changing.”
So far, so good, I think?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Then, over the page, please:
“She said that now was a time of enormous change at the Post Office and that it was important to give MPs confidence in the business and its reputation.”
Again, so far, so good:
“She stated that the matter involved treading a tightrope regarding questions of money. The Post Office and its staff are stewards of large quantities of cash – the cash does not belong to the Post Office; it is in transit as it comes through the Post Office. There is the issue of trying not to put temptation in people’s way, but in any retail business, this is not possible.”
What did you or do you understand to be the point being made there about temptation being put in people’s way?
Lord James Arbuthnot of Edrom: At the meeting of 17 May, with Oliver Letwin and me, Alice Perkins and Paula Vennells had both raised the problem of there being lots and lots of cash lying around in unexpected places, and whether this meant that they thought that that led subpostmasters into temptation and being inherently dishonest wasn’t entirely clear but that was the issue that they were raising, I think, and we never really got to the bottom of that, but that’s what the issue she was talking about.
Mr Beer: We then see that Ms Vennells picks up the temptation baton and says:
“She said that temptation is an issue, but that trust in the Post Office as a brand is absolutely paramount. Post Office needs competent, trustworthy people on staff, and its processes and systems must be transparent and must work well.”
So, again, at the moment, the focus, I think, is all on the honesty and trustworthiness of the postmasters?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: “Of the 11,800 subpostmasters and mistresses currently employed, only a tiny number are presenting as cases where there is an alleged of fraud involving the Horizon system, the problem therefore is relatively very small.”
Then I want to go through what’s later said here, as a series of assertions made. She said, according to the minute, that:
“The Horizon system is very secure.”
The first assertion, assertion 1. Did you at this stage know whether that was true or false?
Lord James Arbuthnot of Edrom: At this stage no, I didn’t. We were going to have an independent investigation to see whether that was true or not.
Mr Beer: Did you accept what you were being told by the Chief Executive of the Post Office?
Lord James Arbuthnot of Edrom: I did not accept that the Horizon system was very secure, no. That was a matter still to be investigated.
Mr Beer: Can I turn to the second assertion, assertion 2:
“Every keystroke used by anyone using the system is recorded and auditable.”
Did you know whether that was true or false?
Lord James Arbuthnot of Edrom: I didn’t know whether that was true or false. That was a matter still to be investigated.
Mr Beer: Did you accept what you were being told by the Chief Executive of the Post Office?
Lord James Arbuthnot of Edrom: No.
Mr Beer: She’s recorded as continuing to say:
“When things go wrong in a sub post office, there is a helpline which staff can call 7 days a week during office hours, and back-up staff who will help further if things go wrong. It is here that issues are normally resolved.”
Did you know whether that was correct, true or false, that, at the helpline stage, issues are normally resolved?
Lord James Arbuthnot of Edrom: I believed it was probably untrue, at that stage, mostly because of the experience that Jo Hamilton had had of seeing – of telephoning the helpline, asking what to do, doing what they said and seeing the balance that she was alleged to be owing to have doubled in front of her eyes. So that assertion struck me as being untrue.
Mr Beer: Can we turn to the fourth assertion:
“It appears that some subpostmasters have been borrowing money from the Post Office Account/till in the same way that they might do in a retail business, but this is not how the Post Office works. Post Office cash is public money, and the Post Office must recover it if [it] goes missing.”
Did you or would you take, from what is recorded as being said there, that the issue, according to Ms Vennells, was with postmasters putting their hands in the till rather than with Horizon?
Lord James Arbuthnot of Edrom: Well, it’s clearly possible that that might have happened in some cases but, if you don’t have a robust, to use the word, Horizon accounting system, you can’t be sure whether it has happened. So I thought it might have happened in some cases but to say that it happened in a lot of cases struck me as being – needing to be examined and tested.
Mr Beer: Then the fifth assertion:
“Every case taken to prosecution that involves the Horizon system thus far has found in favour of the Post Office.”
Assertion 5.
We will come in a moment to look at that statement which, as I’ve said, is not a true statement. But did you know whether it was true or false at this time?
Lord James Arbuthnot of Edrom: Well, what I knew about Jo Hamilton was that her case had been found in favour of the Post Office and yet it was her case that I was particularly questioning. So it may have been true, so far as I was aware, but I didn’t place much credence in what she had said there.
Mr Beer: Can we go to the foot of the page, please. You’ll see just in between that the minute follows largely the structure of the speaking notes that we’ve looked at, with Angela van den Bogerd now speaking to the two case studies. It notes there that they are attached. Do you think you might have got something from that pack that we saw?
Lord James Arbuthnot of Edrom: Well, they were attached. I think I did see some case notes, yes. They are somewhere around in a large bundle of papers.
Mr Beer: Thank you. If we go to the foot to of the page, Mike Wood MP asked the question, to which an answer is given later, so we should look at the question as a whole now:
“Mike Wood [MP] asked whether anyone at the Post Office had entertained the thought that there might be well be problems with the Horizon system, rather than believing that there was not. He asked whether the Post Office was saying that the system was 100% secure and 100% foolproof, making the point that it would be the first software system implemented by government to be so, were this the case.”
Then if we go over to the top of the next page:
“Andrew Bridgen [MP] asked whether there had been any case where the discrepancy was the fault of the system.”
There is then a discussion where it seems there was a side tracking about the identity of the forensic accountant. Then if you see three boxes from the bottom there:
“Paula Vennells said that going back to Andrew Bridgen’s question, there had not been a case investigated where the Horizon system had been found to be at fault.”
So there is then what I’m calling assertion 6.
Did you know, again, it’s expressed in a different way, whether that was true or false –
Lord James Arbuthnot of Edrom: No.
Mr Beer: – there had not been a case investigate where the Horizon System had been found to be at fault?
Lord James Arbuthnot of Edrom: No, I didn’t.
Mr Beer: So we’ve seen the assertions made and the assurances given to nine MPs or their representatives. Would you agree overall that this is a fair summary: the problem is that a small number of postmasters borrow money from the till; the problem is not Horizon; every prosecution involving Horizon has found in favour of the Post Office; and not a single case existed where, on investigation, the Horizon system was found to be at fault?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: I think it follows that Alice Perkins, Paula Vennells, Angela van den Bogerd and Alwen Lyons did not disclose to you and the other eight MPs or their representatives the following: firstly, anything about the Julie Wolstenholme case –
Lord James Arbuthnot of Edrom: No, they didn’t.
Mr Beer: – in which expert evidence had been served by a man called Jason Coyne concerning bugs in the Horizon system and which case was subsequently settled by the Post Office?
Lord James Arbuthnot of Edrom: They didn’t disclose that, no.
Mr Beer: They didn’t mention the case of Lee Castleton and the obtaining of the a report from BDO Stoy Hayward, which had found errors in the operation of the Horizon system?
Lord James Arbuthnot of Edrom: No, they didn’t.
Mr Beer: They didn’t mention the acquittal of Maureen McKelvey by a jury in 2004, Mrs McKelvey having blamed Horizon for the causing of losses of money which she was accused of stealing?
Lord James Arbuthnot of Edrom: No, they didn’t.
Mr Beer: They did not mention the speedy acquittal of Suzanne Palmer by a jury in 2007, Mrs Palmer also having blamed Horizon at trial for the losses attributable or said to be attributable to her?
Lord James Arbuthnot of Edrom: No, they didn’t.
Mr Beer: A jury question directed at the Post Office to the effect of “What is Mrs Palmer supposed to do if she didn’t agree the figure that Horizon had produced”, which the Post Office had been unable or unwilling to answer, and an order that the Post Office pay £78,000 in costs?
Lord James Arbuthnot of Edrom: No, they didn’t.
Mr Beer: They didn’t mention any of the following bugs, all of which had been discovered and notified to the Post Office by this time, the Callendar Square bug – sometimes known as the Falkirk bug – operative, by the Post Office’s admission, between 2000 and 2006 and, on the findings later of Mr Justice Fraser, until 2010?
Lord James Arbuthnot of Edrom: No, they didn’t mention.
Mr Beer: They didn’t mention the receipts and payments mismatch bug of 2010?
Lord James Arbuthnot of Edrom: No.
Mr Beer: The suspense account bug that was operative between 2010 and 2013?
Lord James Arbuthnot of Edrom: No.
Mr Beer: They didn’t mention the Dalmellington bug, operative from 2010 and the fact that it was still operative at the time of this meeting?
Lord James Arbuthnot of Edrom: No.
Mr Beer: They didn’t mention the remming in bug operative in 2010 or the remming out bugs operative in 2005 and, again, in 2007?
Lord James Arbuthnot of Edrom: No.
Mr Beer: They didn’t mention the local suspense account bug operative in 2010?
Lord James Arbuthnot of Edrom: No.
Mr Beer: The reversals bug operative in 2003?
Lord James Arbuthnot of Edrom: No.
Mr Beer: The Giro bank discrepancy bugs operative in 2000, 2001 and 2002?
Lord James Arbuthnot of Edrom: No.
Mr Beer: They didn’t mention that consideration had been given to the commissioning of an independent expert review and report on Horizon in December 2005, and again in March 2010, but that on each occasion the Post Office had decided against it, on the latter occasion seemingly on the grounds that it might be disclosable in criminal proceedings?
Lord James Arbuthnot of Edrom: They didn’t mention that.
Mr Beer: They didn’t mention problems with the show called ARQ data and whether those issues should be revealed to criminal courts who are hearing criminal charges against subpostmasters based on ARQ data and of which the Post Office had been notified?
Lord James Arbuthnot of Edrom: No.
Mr Beer: Does it follow that your state of knowledge at this time, based on what the Post Office board member and executive members were telling you, was that you were unfair of any bugs, errors or defects which had been detected in Legacy Horizon or which were then evident and emerging in Horizon Online?
Lord James Arbuthnot of Edrom: Yes, I was unaware. I think we were all unaware, but Mike Wood was raising the question: is this the only absolutely perfect computer program in existence?
Mr Beer: You were unaware of the problems with the so-called ARQ data –
Lord James Arbuthnot of Edrom: I was.
Mr Beer: – and its presentation to criminal courts?
Lord James Arbuthnot of Edrom: Yes, completely unaware of that.
Mr Beer: Sir, that’s an appropriate moment, if it’s convenient to you, to break in this line of questioning.
Sir Wyn Williams: Certainly, Mr Beer. I will just ask you, Lord Arbuthnot, if I may: we have reached the summer of 2012 and it may be that Mr Beer will pursue this further but just so that it’s – now that it’s stuck in my mind, can I ask you this: in any of these discussions, was the role of Fujitsu mentioned at all?
Lord James Arbuthnot of Edrom: It’s hard to remember precisely when Fujitsu’s role came up. Certainly it was raised at some stage and I believe it had been raised before now, yes.
Sir Wyn Williams: Right.
Lord James Arbuthnot of Edrom: But I can’t remember exactly when it was first raised.
Sir Wyn Williams: But were you given a kind of summary, for want of a better description, of the role that Fujitsu might be playing in providing information which permitted the Post Office, either to prosecute or take disciplinary action against subpostmasters?
Lord James Arbuthnot of Edrom: No, I don’t think I was, not at this stage.
Sir Wyn Williams: Fine. Then I wouldn’t ask you any more and, if Mr Beer wants to take it up, then he may but I was just conscious that, in the documents we looked at, which may only, of course, be a small representative sample, there was no reference to Fujitsu, so I just wanted what your memory was about it. Thank you.
What time shall we start again, Mr Beer?
Mr Beer: Can we say 11.30, please?
Sir Wyn Williams: Yes, of course.
( 11.14 am)
(A short break)
(11.31 am)
Mr Beer: Sir, good morning, can you see and hear us?
Sir Wyn Williams: Yes, thank you, yes.
Mr Beer: Lord Arbuthnot, in my list of 16 or 17 things that were not mentioned to you against being told that every prosecution involving Horizon had found in favour of the Post Office and that not a single case existed where on investigation the Horizon system was found to be at fault, I omitted to include one, that of Ms Nichola Arch, who was acquitted in 2000, so very early on. Was that something that was mentioned to you?
Lord James Arbuthnot of Edrom: No, that was not something that was mentioned to me.
Mr Beer: I had mentioned the jury acquittal in 2004 of Maureen McKelvey and the jury acquittal of Suzanne Palmer in 2007, that’s a third jury acquittal not mentioned.
Lord James Arbuthnot of Edrom: Right.
Mr Beer: In that list of 16, now 17, issues that were not revealed to you at the meeting that we were talking about in mid-June, does the same apply to all of the meetings you had with senior Post Office managers, and by that I mean the meeting with Alice Perkins and Alwen Lyons on 13 March 2012?
Lord James Arbuthnot of Edrom: Oh yes, the same applies. I was not told “Here is a list of bugs that you ought to take into account”, no. They failed to do that.
Mr Beer: I might divide it into three. One is civil and criminal cases, the second is bugs and the third is consideration in the past of independent investigations?
Lord James Arbuthnot of Edrom: Absolutely. They did not do that.
Mr Beer: Does the same apply to the meeting with Alice Perkins and Paula Vennells on 17 May 2002?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: In all of this time, did any of them ever mention the facts and matters which I’ve listed, 16 or 17 of them?
Lord James Arbuthnot of Edrom: No.
Mr Beer: Now, at or in preparation for this meeting of 18 June 2012, there was also a pack prepared, just like the last meeting of 17 May 2012 of the Post Office, and I just want to look at some of the things that the senior representatives of the Post Office were intending to say or were briefed to say, as opposed to what the minute actually records them as actually having said. Can we look at POL00096640. Can you see this is in similar format, a pack for the 18 June meeting?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Can we go to page 4, please. This is the part that sets out the Paula Vennells briefing note, speaking note or lines to take. Can we look at the fifth bullet point, please, where she is briefed to say or to include in the meeting:
“I am confident about the integrity of Horizon; it was built on robust principles of reliability and integrity. It has undergone many external audits and no problems of this nature have ever been raised.”
Then, on a technical level, 1:
“An audit trail is created for each transaction which means we can look at all transactions done at the counter and see what happens to them subsequently.
“Each transaction is protected with a digital signature to prevent change or tampering, which means that if someone was able to penetrate the many layers of security – they wouldn’t be able to unlock the seal that protects the transaction – this prevents any malicious manipulation.
“Reconciliation processes automatically detect any problems, which means if there is a problem, deliberate or otherwise, it would be caught on the reconciliation report.”
Did you or would you take such a statement to mean that remote access to alter the branch accounts was not possible?
Lord James Arbuthnot of Edrom: I would have taken that to mean that, yes.
Mr Beer: The conclusion of the meeting was that an independent review or investigation should be undertaken?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: You address in your witness statement and the documents exhibited to it, the process by which Second Sight came to be appointed and can I just summarise and see whether this is correct, please. Firstly, Second Sight was identified by Susan Crichton of the Post Office and that was because she had a previous connection with Ron Warmington at GE Capital?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: It was identified that it was necessary for relevant MPs and the subpostmaster community, including Alan Bates, who was by now undertaking a leading role in representing some of the subpostmasters, to be satisfied as to the competence and independence of Second Sight?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Therefore, meetings took place, firstly on 4 July 2012, between Second Sight and five MPs including you, which was essentially a species of vetting interview?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Secondly, on 12 July 2012, between Second Sight, you, Alan Bates and Kay Linnell, a forensic accountant?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Then there was a series of exchanges of correspondence between you and Alan Bates, which I’m not going to address but is the long and the short of it that MPs, through your offices, started to send individual cases to Second Sight after their appointment?
Lord James Arbuthnot of Edrom: Yes, and it – although it may have been via me or my office, probably was.
Mr Beer: So you were a hub –
Lord James Arbuthnot of Edrom: I was.
Mr Beer: – for the forwarding of such cases?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: I think it’s right that your office didn’t vet or decide which cases should go forwards or not?
Lord James Arbuthnot of Edrom: No, we would have been in no position to do so.
Mr Beer: Can I turn to some early reporting back from Second Sight. I think it’s right that in March 2013 you received some early feedback from Second Sight on the investigations that had, by then, taken place and this caused the meeting to be scheduled for 25 March 2013 at Portcullis House. In advance you wrote a letter to Alice Perkins on 7 March 2013 and I’d like to look at that, please. POL00097588. 7 March 2013, you to Alice Perkins. If we can blow up the text, please:
“As you know, I am hosting a meeting on 25 March … at Portcullis House … about the subpostmaster/mistress issue.”
That the meeting that we’re going to turn to:
“The meeting is to take the form of an update from Ron Warmington and Ian Henderson of Second Sight on how their investigations are proceeding. I wonder if you might be free to attend, along with any of those of your colleagues you deem it is appropriate to invite? I have invited all MPs who have constituents who have raised this matter with them, Alan Bates, who heads the Alliance for Justice for Subpostmasters, and Kay Linnell who is working with him. I do not propose inviting [the] media.”
Then we can scan over the remaining paragraphs on that page. Go over the page, please. If we look, you say at the top of the page:
“I would like to raise two matters here, and these are things that may need a conversation between you and me … before the meeting. In my discussions with Ron and Ian, I gather that questions have been raised offer the absolute integrity of Horizon, though without their being so fundamental as to say that the system is not fit for purpose. Since it is a system that remains in current use, there is the risk that existing subpostmasters and mistresses may find themselves in exactly the same position as those whose cases are being investigated. I know definitive results are not yet available, but I hope the Post Office would be ready to address this issue.”
I think it follows from that that you had, by that stage, received information from Second Sight that questions over the absolute integrity of Horizon were being raised by them, Second Sight.
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: In the last paragraph –
Lord James Arbuthnot of Edrom: Not necessarily by them. Questions were being raised at least in the presence of Second Sight, possibly by Second Sight, or possibly both.
Mr Beer: I understand. You say in the last paragraph that you’re:
“… impressed beyond … expectations with not only how the investigations are proceeding, but of your continuing support. [You could not] recall a more important campaign, nor one where the end result has been so consistently supported by all parties involved. You have my gratitude and admiration for how the Post Office is handling this.”
You tell us in your witness statement that at the early stages of the Second Sight investigation you believed – and this is my summary not yours – that the Post Office was entering into the enterprise in good faith.
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Did that remain your belief?
Lord James Arbuthnot of Edrom: By this stage, yes. By the time I wrote this letter, I certainly did believe that.
Mr Beer: We’ll come later to when seeds of doubt started to be sown.
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: But can you identify, in summary, what those seeds were and when they occurred?
Lord James Arbuthnot of Edrom: The summary of the seeds of doubt arose through my initial fears about the Post Office’s approach to the truth, in terms of telling people like Jo Hamilton that “You’re the only person that was involved”. But let’s ride over that.
There was a degree of legal battlefield that arose. There was a degree of delay in providing Second Sight with information. There was a degree of delay in providing the documents that the Post Office had promised to give Second Sight, being absolutely open and transparent, and yet they weren’t. There was a slowness, a secrecy, a general slowing everything down that worried me.
Mr Beer: I think it’s right to say that the Post Office did not react well to this letter that you wrote them?
Lord James Arbuthnot of Edrom: I think it is right to say that.
Mr Beer: Can we look at what you say about that in your witness statement, please, at page 42, paragraph 80, please, the foot of the page. You say:
“My letter caused strong pushback from the Post Office, and on 19 March there was a meeting between myself and Alice Perkins. It appears from a speaking note that Janet Walker [your Chief of Staff] wrote for me for a telephone call on 20 March 2013 between myself and Ian Henderson that at a meeting on 19 March Alice Perkins said amongst other things: that the Post Office didn’t believe anything was wrong with Horizon; that they were very concerned that any opinion being formed by Second Sight at this stage was being communicated; that Second Sight should not be expressing an opinion, not least as [Post Office] hadn’t had a right of reply; that there was a limit to the Post Office’s willingness to continue funding investigations; that it seemed that there would be some sort of deadline for cases of the end of February … and that the Post Office would not attend the meeting of 25 March but there would be an open letter from the Post Office available for distribution at that meeting; and that the Post Office would expect to be ready to attend a meeting with MPs in perhaps June.”
Lord Arbuthnot, I don’t understand. Can you help me. I thought the Post Office had said they wanted their systems, processes and data independently assessed.
Lord James Arbuthnot of Edrom: Yes, with absolute openness and transparency. I didn’t understand it either. I was a bit surprised because I thought my letter to the Post Office of 7 March had been rather a nice one, so …
Mr Beer: They’d said that they were invested in securing the truth and that they wished to be open and transparent with subpostmasters and with the public and yet here was the Chairman saying to you that the independent investigators should not communicate their opinions that their funding may be withdrawn and that they were pulling out of a meeting?
Lord James Arbuthnot of Edrom: Yes, which didn’t sit well with the way that Second Sight had been appointed, which was almost a joint exercise between the Post Office and the MPs and the JFSA, and yet it seems that the Post Office was saying that Second Sight were not to talk to us, which seemed to us to be odd and wrong.
Mr Beer: So the meeting went ahead with you, with other MPs, with the JFSA, and with Second Sight, but without the Post Office?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: We’ve got your speaking notes for that meeting, your Chief of Staff’s meetings of that meeting and Second Sight’s speaking notes. I just want to look at the last of those, which is JARB0000047. These are the Second Sight notes for the meeting of 25 March 2013.
There is a summary in the first, second, third and fourth paragraphs. Then scroll down, please.
Then at the foot of the page, they, Second Sight, recall that:
“The fast track review process had identified the following 7 issues as being a significant feature in one or more of the case submitted:
“1. Transaction anomalies following communications or power failures;
“2. ‘Rogue’ transactions not ended by [subpostmasters] or their staff;
“3. Missing or duplicated transactions associated with postage labels, phone cards, Giro payments, ATMs or cheques;
“4. Training and Support issues;
“5. Loss of transaction audit trail being available to [subpostmasters];
“6. Accounting issues at the end of the trading period; and
“7. The contract between [the Post Office] and [subpostmasters].”
If we go over the page, please. They said:
“The investigation is progressing well. A number of difficult issues have been satisfactorily resolved and an excellent working relationship has been established with both JFSA and [Post Office]. Second Sight has regular meetings with senior representatives of [the Post Office] and is grateful for the support [the Post Office] is providing. The investigation is complex and involves looking at events that occurred over a long period of time – in some cases 7 or 8 years. We are still at the evidence gathering stage, particularly for cases submitted in the last few weeks, and it is too early for us to reach even preliminary conclusions on the matters under review. This is a fact based investigation involving complex information technology and it is important to allow all relevant parties to submit evidence on the matters under review.”
The seven features that we saw on page 1, did you understand these to be established or findings by Second Sight at that point or is that to be qualified by what’s said in this penultimate paragraph here?
Lord James Arbuthnot of Edrom: I thought that they were things that required further work.
Mr Beer: It seems that, in turn, what was said at the meeting caused concern with JFSA, and can we look, please, at Mr Bates’ letter of 1 April 2013, JARB0000049. This is a letter from you to Mr Bates. He says:
“Having had the opportunity to reflect on the meeting at Portcullis House [the one we’re talking about], I thought it important to convey to you the concerns that both Kay Linnell and I took from the Second Sight report and the briefing document they produced for the meeting.”
That’s the one we’ve just looked at.
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: “Whilst every individual’s case is extremely important to that individual, it is also doubly so in the weight that it adds to the systemic failures with Post Office and their Horizon system. These are issues which we at JFSA have been raising for years, and having worked closely with Second Sight over the last few months, can see that they too have independently arrived at the same conclusions through their analysis of the cases.
“We can neither understand why Second Sight was so reluctant to bring the systemic failures to the fore at the meeting, nor see why the focus of the investigation has not been now centred on them. These systemic failures are proven facts, and are at the root of most of the [subpostmaster] cases. Although from the Second Sight briefing document, it seems that they are only going to be treated as an adjunct to the issue of the cases, to the point where only the first three they list may be featured in their forth coming report.
“The items I am referring to from their document are [then he lists the seven of them].
“We fully appreciate more work has to be undertaken to draw together the descriptions of each of the systemic failures recognised so far, and the others known about, but for whatever reason not appearing on the list. Yet the work involved would be minor in comparison to labouring through the individual cases first. These systemic failures are also … for others to comprehend without the requirement of an in-depth knowledge of the finer points …
“These systemic failures should now become the yardstick that the individual cases are measured against. This approach would [be] quicker and far more [effective] method of addressing the whole issue and would minimise the information required from POL, which is the main cause of the slow progress Second Sight has made with the individual cases.
“There does seem to be far too much sensitivity in not requiring POL to address these systemic failures now, rather than waiting until a report is produced later in the year.”
In your estimation at the time, were these fair points that Mr Bates was making?
Lord James Arbuthnot of Edrom: It was probably beyond my technical understanding of the way Horizon worked but I thought that these were points which certainly needed to be answered, both by Second Sight and by the Post Office. There was, at some stage a dispute about the meaning of the word “systemic” and Second Sight used it eventually to mean a system-wide set of problems, whereas Alan Bates was using it to mean a problem with the system, wherever it struck, and the Post Office grabbed the most favourable to them meaning of the word “systemic”, and Alan Bates pursued the least favourable to the Post Office use of the word “systemic”.
Mr Beer: Did you gain any sense at this time of whether the Post Office’s intervention by the letter from Alice Perkins and the refusal to attend the meeting, the strong push back that you mentioned earlier, had itself had an effect on the strength of view that Second Sight held or at least the way it was prepared to present such views?
Lord James Arbuthnot of Edrom: I’m not sure exactly what you’re asking there. I did think that this was the first time that the Post Office had really objected to what Second Sight was doing and that might well have a consequence on Second Sight.
Mr Beer: Thank you. I think that answers the question.
You had a telephone conference call with Paula Vennells as a consequence of this, for which your Chief of Staff prepared a briefing or speaking note. Can we look at that, please. JARB0000052. The call is at the request of the Post Office, following the meeting on 25 March:
“The Post Office is nervous that the MPs are wanting individual cases resolved rather than following the existing approach taken by Second Sight.
“An earlier meeting with Alice Perkins demonstrated the concern that the Post Office had been shown no evidence of problems with Horizon. Final para of this note (Second Sight to Alan Bates) indicates that they may have found something.”
I should have said that you tell us in your witness statement that you believe that the conversation with Paula Vennells went much along the lines of this briefing note.
Can we go to the second page, please. The foot of the page, please. So you’re here rehearsing – Mrs Walker is rehearsing for you – the contents of an email exchange between them and Alan Bates under paragraph 2:
“You have mentioned ‘numerous miscarriages of justice’ and it’s pretty clear that James has also focused on that … as has POL’s top management. You, Kay, Ian and I all know how much reliance has been placed by the courts (Criminal and Civil) on [the Post Office’s] assurances (such as that ‘there is no remote access to the system or to individual branch terminals which would allow accounting records to be manipulated in any way’). As you know, Alan, several of the spot reviews have presented what appears to be evidence that completely undermines and disproves statements like that. I am pretty certain that, in the event that even one of those spot reviews (for example SR005 the Bracknell Basement/Rudkin one) turns out to be irrefutable, then James will completely earned the implications, as I’m sure will POL’s senior management.”
Was that issue mentioned by you on the call to Paula Vennells?
Lord James Arbuthnot of Edrom: Well, it’s hard to be sure of what was said, well, 10 years ago, in a call, but it was a very important issue and I would have thought it probably was, yes. Remote access would have completely undermined the Post Office’s position.
Mr Beer: Why so?
Lord James Arbuthnot of Edrom: Because, if Fujitsu or the Post Office can manipulate a subpostmaster’s accounts without the subpostmaster knowing about it, then how can you prosecute that subpostmaster for something which could not be provably down to the subpostmaster? It might have been an action by the Post Office or by Fujitsu. It would, I think, completely undermine the question of the stand of proof required in a criminal trial.
Mr Beer: So, for you, was it an important or an unimportant matter?
Lord James Arbuthnot of Edrom: It was central to the entire business.
Mr Beer: So this isn’t a record of the call, it’s not a minute made of the call, it’s a briefing for the call?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: In this part of it, it’s not a narrative of what to say; it’s a recitation of an email of about ten days before –
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: – between Second Sight and Mr Bates, but referring to the Bracknell basement/Rudkin Spot Review. Your evidence as I understand it, is you believe that this issue of remote access was addressed in the call with Paula Vennells?
Lord James Arbuthnot of Edrom: I think it would have been, yes.
Mr Beer: Can you not go any further than that, in saying the detail that, in fact, you mentioned?
Lord James Arbuthnot of Edrom: I can’t go any further than that, because it may well be that, at this stage, the Bracknell basement/Rudkin issue was something which Second Sight was still trying to get final proof about. I can’t remember whether at this stage the Post Office was still denying that that meeting had ever taken place and that Second Sight were trying to get email evidence. I can’t remember exactly when that was resolved.
Mr Beer: Can we turn to a new document, please, POL00098379, which is the Post Office’s minute of the call.
Sir Wyn Williams: When you say “new”, Mr Beer, do you mean very recently disclosed?
Mr Beer: I mean new to Lord Arbuthnot.
Sir Wyn Williams: Right. Fine. Just so that I am clear. Thank you.
Mr Beer: I don’t think you had this when you made your witness statement?
Lord James Arbuthnot of Edrom: No, I didn’t but I was shown it this morning before I came in, and it – I think it may show that – if we go down a bit, it may show that the Rudkin issue was raised.
Mr Beer: Yes, so this is – just to be clear, we’ve looked at your briefing notes for the purposes of the call, we’ve seen the “Rudkin issue”, I’ll call it in summary, mentioned in it, we’ve heard what your recollection is. Can we look, please, at page 2 of the Post Office’s note of the call, and look four bullet points in. I think that’s a separate issue.
Lord James Arbuthnot of Edrom: Yes, but if you look at six bullet points in, you’ll get to what you want, I think.
Mr Beer: Yes, you’re quite right. Yes, I meant to ask about four bullet points in because it’s the run-up to the conversation in bullet point 6. We can just start at 4:
“JFSA raised a concern with James that the Post Office is continuing with prosecutions despite the review taking place, predicated on the view that there is ‘nothing wrong with Horizon’. [You] did not think that we should be prosecuting on the basis [ie that the Post Office should be prosecuting on that basis].”
Then Ms Vennells then says:
“I think because [Second Sight] have made noises about finding something.”
She is recorded as promising to you to get back on that point.
On that point, was it your view that the work on Second Sight affected the propriety of continuing to prosecute?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Why was that?
Lord James Arbuthnot of Edrom: Because of the standard of proof required in a criminal prosecution. You need to be sure that the criminal activity has been done by a subpostmaster accused, as opposed to having been done by somebody else.
Mr Beer: Then the sixth bullet point, which is linked to the fourth, you’re recorded as saying:
“… we should not go ahead [ie I think the Post Office should not go ahead with prosecutions, presumably] until [the Post Office] can move that there is no remote access to the system or branch terminal which can change the [subpostmaster’s] account. (He did not say so but I think [Second Sight] have suggested this).”
Does that help you to recollect with how the conversation went?
Lord James Arbuthnot of Edrom: Well, if I – I certainly wouldn’t question that I raised that, if this is what their minute says. No, I must have raised it, as they say I did. I think I would not have told Paula Vennells that Second Sight had suggested it, but it was something that I think Andrew Bridgen had been raising consistently because his constituent was Michael Rudkin.
Mr Beer: But this, in any event, is a record of, I think, Ms Vennells noting that Second Sight had suggested that there could be remote access to the system or a branch terminal which could change the subpostmaster’s account?
Lord James Arbuthnot of Edrom: She was saying that they might have done.
Mr Beer: Yes.
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: We’ve seen that one of the points that the Post Office was taking at this stage in the narrative was that Second Sight should not be saying anything to anyone, unless and until the Post Office had had the opportunity to respond to the points that Second Sight was putting to the Post Office?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: I just want to look at what Second Sight was saying to you about that. JARB0000053. This is an email the next month, on 12 June, from Ron Warmington of Second Sight, and he says:
“I’ll send a proper response to your latest email later today … I don’t think we need your help in getting [the Post Office] to respond to the spot reviews. They are RESPONDING … but not yet in a form that will really WORK in our interim report or in the 8 July meeting. They are still – understandably I suppose – incredibly defensive and nobody – at the levels producing the responses – is ready to give an inch. They probably fear it will be career death to concede any failings whatsoever. We have consistently and clearly asked for short, easy-to-understand, honest and complete answers to the assertions that we have put forward. What we are getting are highly technical, multi-page responses that will appear to many to have been crafted so as to avoid actually giving any answers to those assertions and allegations at all. Without wishing to burden you with the detail, the attached is a pretty good example … and shows my exasperation in trying to get them to ANSWER THE BLASTED QUESTIONS.”
Was this email that you received here and what Second Sight were then saying about the Post Office’s approach, at this time, a recurrent theme?
Lord James Arbuthnot of Edrom: I think it was, particularly the use of the word “defensive”.
Mr Beer: You’ve addressed in your witness statement, it’s paragraphs 100 to 105, alongside numerous contemporaneous documents exhibited to that part of the statement, the issues arising from the publication of the Second Sight Interim Report on 8 July 2013 and, save for one point, I’m not going to explore that. The exception is the role of Second Sight in relation to criminal cases. Can we just turn up paragraph 142 of your witness statement, please, which is on page 75.
We are jumping forwards significantly here, we are into January 2014 but it’s the background to the questions that I’m going to ask you. This is a conversation that happened with Paula Vennells on 28 January 2014. Then you say:
“… she then said that Second Sight would not be advising Post Office on criminal cases or prosecution policy as they were forensic accountants and not lawyers. I believe that at the time this struck me as wrong. It was at odds with what she had just said about not restricting Second Sight’s ability to investigate the issues with Horizon. Accountants in their training and work have a great deal to do with criminal cases and prosecution.”
And then there’s some other material.
In relation to the first part of the Second Sight work, what was your understanding and expectation of the extent to which Second Sight could investigate cases that had resulted in criminal proceedings or a criminal conviction?
Lord James Arbuthnot of Edrom: My understanding was that they could have the complete openness and transparency that Paula Vennells had promised me and access to any documents that they considered to be relevant, including documents that were confidential, in order to get to the bottom of the issues that the Post Office told us they wanted to get to the bottom of.
Mr Beer: The “they” in that sentence early on, “Any documents that they considered relevant”, means any documents that Second Sight – is that right?
Lord James Arbuthnot of Edrom: Second Sight considered relevant.
Mr Beer: Can we look, can we go back in the chronology, then, to July 2013, and look at the notes of a meeting that you held in Parliament on 8 July 2013 after the publication of Second Sight Interim Report. It’s POL00029664. I think this is a meeting after the publication that day of the interim report between Second Sight, Alan Bates, Kay Linnell, Shoosmiths and a number of MPs.
Can we look, please, at the bottom of page 3. Right at the bottom:
“Andrew Bridgen MP asked Second Sight if they believed the issues they had identified had an impact in relation to the historic convictions.”
Then over the page, please:
“Second Sight said that was a legal question which they were not qualified to answer and they did not consider it was appropriate to express an opinion. They have to present facts and it is for others to consider the impact on any historic cases.”
Firstly, would you agree with Second Sight’s characterisation of the limitations of their professional expertise?
Lord James Arbuthnot of Edrom: I’m not sure I would, really. The key issue with the appointment of Second Sight was that they were going to have to look at a number of different issues – computer programming, accountancy, the legal implications arising out of those things – and the key issue was that they should be independent of the Post Office. And so I had rather greater faith in Second Sight’s legal expertise than it seems they did and particularly since they had discovered a potential prosecution of Jo Hamilton on the basis of theft, when there was no evidence. They had raised that.
And that was an ethical issue which seemed to have passed by the Post Office lawyers, who ought to have picked it up. So Second Sight’s limitations in their own minds, on their own availability, was not something that I would have accepted.
Mr Beer: As a separate issue, accepting the limitations that they themselves accepted, would that, in your view, have amounted to a proper bar in investigating the facts of any cases that had ended up as prosecutions or convictions?
Lord James Arbuthnot of Edrom: No. I don’t think – I mean, what we had been promised was total transparency and total openness. Second Sight were the independent investigators going into the Post Office to achieve that total transparency and openness. They were the people to look into these things, and so I wasn’t prepared to accept any bar on what they were looking at.
Mr Beer: Can I just take you to their engagement letter with the Post Office, please. POL00000213. This is moving on to the second part of the enterprise, the ICRMS, but may tell us something about the earlier part of the enterprise too. Can we look at page 6, please. Clause 5.1, if you scroll down.
“In providing the services, Second Sight shall:
“act with the skill and care expected of qualified and experienced accountants; it is acknowledged that matters relating to criminal law and procedure are outside Second Sight’s scope of expertise and accordingly shall not be required to give an opinion in relation to such matters …”
Would you agree that, in the light of this letter of appointment, they should not offer expert opinion on matters of criminal law or procedure?
Lord James Arbuthnot of Edrom: Well, this letter of appointment is made 1 July 2014 –
Mr Beer: Yes.
Lord James Arbuthnot of Edrom: – and that was close to the period at which this entire process broke down. I actually believe that accountants are pretty well able to deal with legal issues in the same way as lawyers are pretty well able to deal with accountancy issues. I suspect that this letter of appointment – I don’t know whether Second Sight signed it or not, I don’t know – I can’t remember when I first saw it. It may have been in relation to giving evidence in this –
Mr Beer: It is.
Lord James Arbuthnot of Edrom: Oh, right, okay. I don’t know whether Second Sight signed it.
Mr Beer: I think they did.
Lord James Arbuthnot of Edrom: They did.
Mr Beer: You’re right, Lord Arbuthnot, that perhaps oddly, at the beginning of the mediation process, there was no letter of appointment and the Post Office raised the issue of a letter of appointment towards the end of the process, and this was it.
Lord James Arbuthnot of Edrom: Oh well, I bet this was draft – oh okay, right.
Mr Beer: In any event, as to my earlier question, even accepting this, would you agree that any accepted limitation by Second Sight on their ability to offer an opinion on issues relating to criminal law and procedure should be a bar to them investigating cases that ended up in criminal proceedings or a conviction?
Lord James Arbuthnot of Edrom: Certainly not, that would be an illogical consequence of events.
Mr Beer: Thank you. That can come down.
The Post Office prepared a briefing for responding to the Second Sight Interim Report of the 8 July 2013. Can we look at that, please. FUJ00081852. Can we look, please, on page 9 at the bottom. Under “Spot Review 5”, remember that was mentioned earlier the Rudkin basement issue:
“This Spot Review principally focuses on an assertion by Michael Rudkin that during a visit to Fujitsu’s site at Bracknell on Tuesday, 19 August 2008, he observed an individual based in the basement of the building who demonstrated the ability to access ‘live’ branch data and directly adjust transactions on the … system.
“Given the amount of time that has passed, neither [the Post Office] nor Fujitsu have any record of Mr Rudkin attending the Bracknell site.
“Post Office and Fujitsu have attempted to establish the Bracknell visitor logs for the day in question to verify Mr Rudkin’s attendance and his contact on the day, however these records are not retained for as far back as 2008.
“Fujitsu have additionally made the effort to go through all email, documents and archived information to hand but do not have any information for Tuesday, 19 August 2008 that would suggest they had visitors to the site.
“Further review into the Post Office work logs indicates that there were just three [Post Office] test managers present on site in Bracknell on 19 August 2008. None of them have any calendar records relating to a visit by Mr Rudkin.
“It has however been determined that in August 2008 the basement of Fujitsu’s building contained a Horizon test environment that would look very similar to a live Horizon environment. This environment was not physically or technologically connected to the live Horizon environment. It was therefore impossible for anyone in this room to have adjusted any live transaction records, though Mr Rudkin may have witnessed some form of adjustment to the test environment.
“This separation of test and live environments is designed to guarantee the integrity of Horizon data.”
Arising from the Second Sight Interim Report and the Post Office’s response to it, did you understand it then, that’s July 2013, that the Post Office was denying that remote access to Horizon accounts was possible?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Prior to the publication of the interim report, did Second Sight tell you anything about remote access to Horizon accounts?
Lord James Arbuthnot of Edrom: I can’t remember exactly when I heard about this very odd business of Michael Rudkin visiting Fujitsu. But I do believe that Second Sight, whether it was Ron Warmington or Ian Henderson, told me that they were trying to get to the bottom of it, that they were trying to find evidence and that, without that evidence of emails or calendar entries or whatever, they would find it difficult to be absolutely definitive in their interim report about there being remote access to Horizon.
Mr Beer: Did Second Sight ever tell you of a conversation that they said they had with Simon Baker of Post Office’s IT department on 22 May 2013 where, so say Second Sight, Simon Baker had said that Fujitsu had come clean about its ability remotely to access live data and to make changes to it?
Lord James Arbuthnot of Edrom: It seems unlikely that they would have told me about that because I’d have gone stomping all over the place if they had, I think. But I can’t be absolutely sure.
Mr Beer: I think it follows that they, Second Sight, didn’t tell you that Mr Baker had, so said Second Sight, informed Alwen Lyons and Susan Crichton of this –
Lord James Arbuthnot of Edrom: I don’t think they did.
Mr Beer: – or of a conversation on 22 May, of which a recording exists, 2013, where this issue was further discussed?
Lord James Arbuthnot of Edrom: I don’t think they did.
Mr Beer: Aside from those conversations between Second Sight and Post Office personnel, the Inquiry has heard a lot of other evidence in relation to the remote access capabilities of Fujitsu, including evidence from John Simpkins, from Anne Chambers, from written policy documents setting out the extent to which there existed unrestricted and unaudited privileged access, in some parts of Fujitsu, to Horizon data. What would your view have been, had this material been disclosed to you in mid-2013?
Lord James Arbuthnot of Edrom: It would have been that there had been a large number of miscarriages of justice, that the convictions that had been secured by the Post Office were unsafe and that most, if not all, of the Post Office’s convictions of subpostmasters should be re-examined in the forum probably of the Criminal Cases Review Commission.
Mr Beer: You make the point in your witness statement that this, 8 July 2013, was the very time at which the Post Office was probably commissioning advice from Simon Clarke, an employed barrister at Cartwright King –
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: – about the effect of the Second Sight Report and indeed some other documents and information that he was passed on the evidence that Gareth Jenkins had given in a string of cases that had resulted in the conviction and in some cases imprisonment of subpostmasters?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Did you know that, shortly after the publication of the Second Sight Interim Report, that the Post Office was informed that that witness, Mr Jenkins, which it had used to provide evidence in a series of prosecutions, had failed to disclose to the court material which undermined the opinions that he gave?
Lord James Arbuthnot of Edrom: No.
Mr Beer: That the Post Office was advised that he hadn’t complied with his duties to the court?
Lord James Arbuthnot of Edrom: No.
Mr Beer: That the Post Office was advised that his credibility as an expert witness was fatally undermined?
Lord James Arbuthnot of Edrom: No.
Mr Beer: And that the Post Office was advised that it, itself, had been in breach of its duties as a prosecutor and that there were, therefore, a number of convicted subpostmasters to whom disclosure should have been given but was not given?
Lord James Arbuthnot of Edrom: No.
Mr Beer: In all of the conversations that you had with the Post Office at this time, was there any mention of any of those facts and matters?
Lord James Arbuthnot of Edrom: No.
Mr Beer: Was there any hint that the Post Office was in receipt of any advice or direction which ought to cause them to examine the safety of previous convictions, their duties of disclosure, or the reference of any cases to the CCRC?
Lord James Arbuthnot of Edrom: Quite the reverse.
Mr Beer: What was the reverse that was being said?
Lord James Arbuthnot of Edrom: We were being told that the Horizon system continued to be robust, that the convictions were safe, and that there was no remote access.
Mr Beer: Was anything ever hinted at about the matters that I’ve mentioned in all of the meetings, conversations, letters and email exchanges that you had with everyone at the Post Office, from Alice Perkins and Paula Vennells downwards?
Lord James Arbuthnot of Edrom: Not once.
Mr Beer: Were there convicted subpostmasters within the JFSA?
Lord James Arbuthnot of Edrom: There were, yes.
Mr Beer: Were there convicted subpostmasters whom you were pressing the case for?
Lord James Arbuthnot of Edrom: Yes. Jo Hamilton was one of them.
Mr Beer: When was the first time that you learned that the Post Office had been informed of the facts and matters that I’ve mentioned?
Lord James Arbuthnot of Edrom: I think it was the 18 November 2020, when the Clarke advice came up in the Court of Appeal’s hearing to overturn convictions of 39 subpostmasters.
Mr Beer: So seven and a bit years later?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Can we turn to the Mediation Scheme, which is the second part of the Second Sight story –
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: – first dealing with the setting up of it. You tell us in paragraph 114 of your witness statement about a meeting concerning the setting up of what became the Mediation Scheme and refers to a minute from the Post Office of that meeting. Can we turn to that, please, POL00099354.
So I’ve rather blithely skipped over what we’ve just discussed, which was that the Post Office, internally, was being advised about breaches of duty, failures of candour, breaches of its own duty as a prosecutor having an impact or possible impact on the safety of convictions, and none of that was revealed to you?
Lord James Arbuthnot of Edrom: I did raise this with the Minister, Lord Callanan, on 20 November 2020. I was not blithe.
Mr Beer: No. Then, the worm had turned by November 2020?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Would you expect to have been told something back in July 2013, not necessarily of the detail of the legal advice that the Post Office was being given but about the consequences of it?
Lord James Arbuthnot of Edrom: Yes, but it’s not just that I would expect to have been told something. It would have been essential for the subpostmasters who had been convicted to be told something, because their convictions were potentially unsafe.
Mr Beer: We’re going to come in a moment to the setting up of the Mediation Scheme and the operation of the Mediation Scheme. In general terms, what did the Post Office do in relation to that group of people who stood convicted of a criminal offence in the Mediation Scheme?
Lord James Arbuthnot of Edrom: In general terms they started by saying, yes, everybody can join the Mediation Scheme and we’ll try and get to the bottom of their cases, which sounded to me to be very good, “You can apply to the Mediation Scheme, we may need to involve the CCRC or the Criminal Cases Review Commission, but certainly you can apply”. That was what they began by saying but then, later on, what they said was “If you’ve pleaded guilty or if you’ve been convicted, then you must go to the back of the queue”.
But in the final meeting at which the bust up between the MPs and the Post Office took place on 27 November 2014, they said, “Well, we don’t see why someone like Jo Hamilton should even be included in the Mediation Scheme. She pleaded guilty, so she’s stuffed”.
Mr Beer: If we just take this document down whilst we discuss that, please.
What was your understanding, throughout the Mediation Scheme until that point, as to whether Jo Hamilton was somebody who should be able to benefit from it?
Lord James Arbuthnot of Edrom: Well, it was perfectly obvious to me that the Post Office and I were agreeing that Jo Hamilton could be included in the Mediation Scheme.
Mr Beer: What would you have done if, at the beginning, which we’re about to turn to, they’d said, “No, no, no, people like Jo Hamilton can’t be included”?
Lord James Arbuthnot of Edrom: Well, I wouldn’t have agreed to it.
Mr Beer: Why not?
Lord James Arbuthnot of Edrom: Because I believed from the beginning that Jo Hamilton had not committed the offences for which she had pleaded guilty and so, clearly, there needed to be a proper investigation, preferably with the help of Second Sight but, in any event, with an independent element, into what had gone wrong in her case, and there were lots of other MPs who were very active and who had constituents in the same position. We wouldn’t have agreed to a Mediation Scheme which excluded those who’d pleaded guilty or been found guilty in court.
Mr Beer: Can we turn to the setting up, then, of the scheme and the document we were just looking at, POL0099354. If we can just scan through, this is essentially the meeting which led to the setting up of the Mediation Scheme. You’ll see that the people present are Paula Vennells, you, Ron Warmington, Ian Henderson, Susan Crichton, Mark Davies and Alwen Lyons.
We’ll see that Ms Vennells welcomed everyone to the meeting saying that they wanted to work collaboratively, respond to learnings and put a process in place to move the cases forward.
Then if you just scroll through that to yourself and, if we scroll down, please, then over the page, please. Quite a lot of practical and technical detail there. Then carry on, please, scrolling –
Lord James Arbuthnot of Edrom: Could you stop there?
Mr Beer: Yes.
Lord James Arbuthnot of Edrom: At the top of the page you see:
“It was thought that Gareth Jenkins produced high quality, and he may be able to help the process.”
That’s an interesting point. Sorry, carry on.
Mr Beer: Yes, so this is – I think, you’re pointing out that this is eight days after the Post Office had received an Advice saying that he was discredited as a witness, couldn’t be used ever in a future prosecution in a breach of duties to the court.
Lord James Arbuthnot of Edrom: That’s what I’m pointing out.
Mr Beer: In this minute, is there any suggestion that any class of people would be excluded from the scheme as a whole –
Lord James Arbuthnot of Edrom: No.
Mr Beer: – or that they would have restricted rights within it –
Lord James Arbuthnot of Edrom: No.
Mr Beer: – for example, that their case could not progress to mediation? Is that reflective of the fact that there was no such limitation?
Lord James Arbuthnot of Edrom: There was no such limitation.
Mr Beer: At this stage, does it follow that you didn’t understand that the Post Office saw any restriction in them entering or progressing through the scheme?
Lord James Arbuthnot of Edrom: Absolutely.
Mr Beer: Can we look, please, at POL00146048. A letter to Mr Bates of 27 August 2013 from Angela van den Bogerd, we can see at the foot of the page. Then, if we scroll up, this a letter to Mr Bates of the JFSA about the setting up of the scheme. Fourth paragraph:
“In collaboration with [JFSA] and a group of MPs [led by you], Post Office established an Inquiry into Horizon. Second Sight was appointed to lead this Inquiry …”
The interim report is copied in or a link is given to it:
“Post Office now wishes to offer a Scheme to subpostmasters so that individual subpostmasters have an opportunity to raise their concerns directly with Post Office. In partnership with subpostmasters, the JFSA and Second Sight and interested MPs, all sides can then work towards resolving these concerns.
“[Enclosed is] a pack of documents describing how the scheme will work.”
I’m not going to go through all of those:
“A postmaster not obliged to submit his/her case to the scheme … their legal rights will remain …”
Then a deadline of 18 November 2013.
Any suggestion in that of exclusion of a whole class of people –
Lord James Arbuthnot of Edrom: No.
Mr Beer: – or that they would have restricted rights?
Lord James Arbuthnot of Edrom: No.
Mr Beer: We can look through the pack that was sent but I don’t think there’s any suggestion in that pack that was sent alongside this letter of any such inclusion. Was any information fed to you from any other source at this time, that a whole class of people would be cut out from the benefits of the scheme?
Lord James Arbuthnot of Edrom: No.
Mr Beer: You tell us in your witness statement – no need to turn it up, it’s paragraph 120 – that on the announcement of the mediation, you did an interview outside Jo Hamilton’s shop –
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: – in South Warnborough?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: The thought that the Post Office might exclude Jo Hamilton from the scheme didn’t cross your mind for a moment at that time?
Lord James Arbuthnot of Edrom: No, it didn’t.
Mr Beer: You tell us in your statement that, around this time, you thought that the people you were dealing with in the Post Office were dealing with the matter in good faith –
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: – and intended to work towards a resolution of all of the outstanding cases?
Lord James Arbuthnot of Edrom: Yes, that’s what I thought.
Mr Beer: Knowing what you know now, does that remain your view?
Lord James Arbuthnot of Edrom: No.
Mr Beer: Why not?
Lord James Arbuthnot of Edrom: What I know now is that they had commissioned the Clarke advice.
Mr Beer: I’m so sorry, the document can come down from the screen.
Lord James Arbuthnot of Edrom: Right. They had commissioned the Clarke advice. They knew that the evidence that had given rise to a number of prosecutions had led to those prosecutions being unsafe. They knew there were a large number of bugs in the system which they had not told MPs about. They were operating – I never got to the bottom of Project Sparrow, but they were operating some sort of behind the scenes deception process which suggests to me now that they were stringing MPs along in order to preserve the robustness of Horizon, the existence of Horizon, and possibly the existence of the Post Office. That’s what I know now. But I didn’t know that at the time.
Mr Beer: If we can turn up page 66 of your witness statement, please. You say:
“I understand that during September 2013 Susan Crichton left the Post Office. I do not know why she left, but it may be important, because it was (I now see, looking back on it) around this time that the Post Office’s approach changed. Their change of attitude may have been because they had been expecting Second Sight (whom Susan Crichton had recommended) to give Horizon a clean bill of health, which Second Sight had not done. The Post Office clearly did not like that.”
125:
“Alternatively or additionally it may have been partly because Susan Crichton’s replacement, Chris Aujard, brought a different tone to the Post Office’s dealings. I cannot exactly put my finger on it. I felt uncomfortable with him and thought him uncommitted to the process we were going through. I cannot at this remove in time give details of what he said or did or in which meetings to give rise to that feeling, but I do remember thinking that things were somehow different – less open, more combative – because of him.”
That can come down. Thank you.
You tell us in these paragraphs that the Post Office did not like it that Second Sight had not given them a clean bill of health. How did they make that known to you?
Lord James Arbuthnot of Edrom: Well, they portrayed Second Sight’s interim report as giving Horizon a clean bill of health when clearly it hadn’t, and that led me to think that they didn’t like what Second Sight had said about Horizon. But it’s really looking back on it that I think that they so objected to what Second Sight had said and they obviously later objected it to a great deal more in view of what Second Sight said later.
Mr Beer: You tell us that Mr Aujard brought a different tone to the Post Office’s dealings. You can’t put a finger on it but things were less open and more combative because of him? Was that immediately after he took over as General Counsel?
Lord James Arbuthnot of Edrom: No, I think it was a gradual impression that arose because the Mediation Scheme gave rise to what I or somebody else described a legal battlefield with him as the sort of general commanding that process. So I think it was gradual, rather than immediate, because I take people as I find them, and I was prepared to give him the benefit of the doubt to start with.
Mr Beer: Of course, at this time, September 2013, that is only two months or so after the provision of the Simon Clarke advice –
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: – you didn’t know at the time that the Post Office had been told that some of its prosecution evidence was tainted?
Lord James Arbuthnot of Edrom: No, I didn’t.
Mr Beer: Therefore, some of its prosecutions may have been unsafe or, at least, information needed to be disclosed to subpostmasters for them to question that issue?
Lord James Arbuthnot of Edrom: Yes, I didn’t know that.
Mr Beer: Are you able to point to any particular conversation or communication that led to the impression that the Post Office was becoming less open or more combative?
Lord James Arbuthnot of Edrom: I can go through my witness statement to find some, but it was a gradual impression rather than a – rather than this was the point, although September 2013 seemed to be roughly the break point between when the Post Office was trying to get to the bottom of any issues with Horizon, and believing that there weren’t any, and the later period when they were trying to fail to answer Second Sight’s questions, or fail to disclose documents to Second Sight, or fail to allow MPs any information about what was going on with their constituents. So this was roughly the break point.
Mr Beer: At the time did you draw any link between the extent to which that conduct may be because of knowledge that convictions may be unsafe?
Lord James Arbuthnot of Edrom: No.
Mr Beer: In any event, the Mediation Scheme gets set up, and gets up and running.
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Sir Anthony Hooper is appointed as chairman of the Mediation Scheme and you deal with the process by which he came to be identified and his appointment in detail in your witness statement, again exhibiting many documents, contemporaneous documents, backing up what you say. Can I just pick out a couple of moments in the narrative, please.
Lord James Arbuthnot of Edrom: Yeah.
Mr Beer: Firstly, you tell us about a meeting you held in your office with the Post Office on 28 January 2014, and there’s a Post Office minute of that meeting. It’s POL00026743. Can we see who is present: you; Alice Perkins; Paula Vennells; Janet Walker, your Chief of Staff; and David Oliver. Just to refresh your memory, David Oliver was the programme manager for Project Sparrow?
Did you know anything about Project Sparrow at the time?
Lord James Arbuthnot of Edrom: No, I didn’t. I still don’t know much, if anything, about it because I haven’t been into it, really.
Mr Beer: I just want to ask you about a specific point that’s recorded in these notes of this meeting on 28 January 2013. It’s on page 3, please. Third paragraph, beginning “AP”:
“AP said that Post Office should have had a letter of engagement in place with Second Sight from the start and that this [I should have said that the previous discussion was about getting a letter of engagement out] was now putting that issue right. [You] agreed that there should have been a letter in place. [Paula Vennells] suggested that if Second Sight’s nervousness was that Post Office was trying to restrict them from raising issues she could assure [you] that the engagement letter was not designed to restrict in any way Second Sight’s ability to investigate issues with Horizon that were raised by applications to the scheme …”
Then there’s some more text about the drafting of the letter.
Did that kind of communication in the course of the meeting, that there would be no restriction in any way on Second Sight’s ability to investigate issues with Horizon that were raised by applicants of the scheme, contribute to your belief that there was no restriction or no restriction was to be introduced on Second Sight’s ability to investigate all and any issues with Horizon?
Lord James Arbuthnot of Edrom: It did, except that she then went on to contradict herself. But yes because, from the start, Second Sight’s had been promised access to any documents that they, Second Sight, believed they needed and we, the MPs, had been promised complete openness and transparency.
Mr Beer: This is a point that you make in your witness statement on page 74, if we can turn that up, please. Page 74 at the foot of the page, please.
The last three lines:
“It seems from the note [that’s the note I’ve just taken you to] that Paula Vennells told me that Second Sight’s engagement letter was not designed to restrict in any way Second Sight’s ability to investigate issues with Horizon.”
Then over the page.
“This was not the first time she had promised access for Second Sight to any document or file that was relevant their investigations.”
Did you have, as a result of things that Paula Vennells had said to you, an expectation that there well up full openness and transparency?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: From the start of the mediation, did you believe that Second Sight would be given access to investigation files?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Including if those investigation files were the very files which contained data, the analysis of data, and Post Office’s views on such data that were relevant to the issues to be mediated?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Was it right that that point, full access and liberty to examine and investigate all issues, were very important to you?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Can we look, just before lunch, please, at POL00100222.
This is an email from your Chief of Staff on the minute we’ve just looked at, ie asking for matters to be included or recorded within them. Having checked over the minute, Ms Walker responds on your behalf by saying:
“With regard to the minutes, James thinks they are absolutely fine except for a few differences, which he would like recorded.”
Then point 2:
“[Paula Vennells] confirmed that if problems were found with Horizon, that Second Sight were at liberty to investigate – in other words, there were no ‘no go’ areas in the investigations.”
Firstly, was that said at the meeting?
Lord James Arbuthnot of Edrom: I believe it probably was and, if I was saying that the minutes should be amended to include that, I think it almost certainly was.
Mr Beer: Secondly, was it a matter of importance to you –
Lord James Arbuthnot of Edrom: Oh, yes.
Mr Beer: – to establish that there were no “no-go” areas?
Lord James Arbuthnot of Edrom: It was certainly a matter of importance, yes.
Mr Beer: Why so?
Lord James Arbuthnot of Edrom: Because if there had been any no go areas, then the Post Office would be able to hide potential issues of miscarriages of justice.
Mr Beer: Thank you very much, Lord Arbuthnot.
Sir, it is 1.00 pm.
Sir Wyn Williams: Indeed it is. What time do you want to restart, Mr Beer?
Mr Beer: Can we say 1.50, please, sir.
Sir Wyn Williams: Yes, by all means, that’s acceptable to everyone in the hearing room, I take it, including the person who has the arduous job of transcribing.
Mr Beer: Yes, she has just nodded very slightly.
Sir Wyn Williams: Yes, I’m very sorry but I take it we are under a little pressure of time today, Mr Beer?
Mr Beer: We are, sir. I plan to ask Lord Arbuthnot questions until approximately 2.30 and then to link in with Sir Anthony Hooper, who Mr Blakey is questioning.
Sir Wyn Williams: Fine. All right. See you at 1.50.
Mr Beer: Thank you very much, sir.
(1.00 pm)
(The Short Adjournment)
(1.50 pm)
Mr Beer: Good afternoon, sir, can you see and hear us?
Sir Wyn Williams: Yes, I can. Mr Beer, before we start, for no more than probably some seconds, Sir Anthony Hooper was visible to me. I don’t know whether he’s visible in the hearing room any more but, regardless of that, if he wants to listen to what’s going on there’s no problem about that, clearly. I just wanted to check whether you could see him?
Mr Beer: No, we can’t, sir, and sorry to give you a fright.
Sir Wyn Williams: No problem. Thank you.
Mr Beer: Lord Arbuthnot, good afternoon.
Lord James Arbuthnot of Edrom: Hello.
Mr Beer: You deal in paragraph 143 onwards, which is on page 75 of your witness statement, right up until page 89, paragraph 184, of the events of February to early August 2014, in terms of the Mediation Scheme. Again, what do you say is all cross-referenced to the contemporaneous material that you’ve exhibited and I’m not going to ask you in detail about that period.
Overall, is it fair to say that the breakdown in the relationship between the JFSA and MPs on the one hand, and Post Office on the other, and the Post Office on the one hand and Second Sight on the other, began to emerge at that stage?
Lord James Arbuthnot of Edrom: Yes, it is.
Mr Beer: Can I turn to the time when Second Sight produced part 2 of its Initial Complaint Review and Mediation Scheme briefing report, that is the 21 August 2014 and, if it helps, can we turn up, please, paragraph 166 of your witness statement, on page 90, on the screen, please.
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Paragraph 166, about the report of 21 August 2014, you say:
“The report contains many points that were damning. Whether at the time I saw it I recognised quite how damning they were is less clear in my mind. There is no reference, for example, to the Post Office or Fujitsu being able to access Horizon remotely, something I remember being concerned about. But the question ‘Is Horizon fit for purpose’, is answered by Second Sight’s conclusion – no. Uppermost in my own mind was always the question, have the actions taken against these subpostmasters, whether disciplinary, litigious or prosecutory, been fair and are the results safe? The conclusion I would have drawn from the summary whenever I did see it was, ‘Almost certainly not, and certainly not in every case’.”
Can we look, please, at the report itself. POL00030160. This is the report that you’re talking about, the Part 2 Second Sight Report. I’m not going to go through it all, it’s over 20 pages in length and it speaks for itself. Can I just look at one part, please, page 22. Reading from the bottom, paragraph 22.1, the report deals with things under headings or themes, and there are headings of “Training”, of “Contract Issues”, and this is dealing here with “Post Office Investigations”, and Second Sight say – and to be clear, this is a report that goes to the Post Office, including to Paula Vennells and the then Chair of the Post Office, Alice Perkins:
“As a result of our investigations we have established that Post Office’s Investigation Team has, in many cases, failed to identify the underlying root cause of shortfalls prior to initiating civil recovery or criminal proceedings. This includes cases where applicants brought to the Auditors’ or Investigators’ attention their own suspicions as to the underlying root causes.”
Is that one of the paragraphs that you had in mind when you said that you would have drawn the conclusion, “Have the actions been taken against subpostmasters including litigious or prosecutorial, safe?”
Lord James Arbuthnot of Edrom: Yes, certainly it is.
Mr Beer: “Many applicants [it continues] and almost all the Professional Advisers, assert that there was inadequate investigation prior to suspension (without pay); termination; or civil/criminal action.
“Based on the cases examined so far, Post Office’s Investigators seem to have defaulted to seeking evidence that would support a charge of false accounting, rather than carrying out an investigation into the root cause of any suspected problems. Evidence to support a charge of false accounting is often easily obtained since, when confronted during interview with evidence of obviously over-stated cash figures, the accused person will often readily admit to falsifying the end of trading period accounts.”
Over the page:
“With the exception of an interview conducted in accordance with [PACE] we note that the interviewee is not allowed to be legally represented, although they may be accompanied by a ‘friend’, albeit with very limited powers.
“Interviews will usually be recorded and, when an admission has been made, this will virtually always trigger a ‘Guilty’ plea by the defendant and often an associated repayment proposal. As a result, Post Office Investigators seem to have found that recording admissions of false accounting was the key to achieving relatively rapid, and (to Post Office) inexpensive, asset recovery.
“As a consequence of this, Post Office’s Investigators seem to have de-emphasised the importance of unearthing the true root causes of the ‘mysterious shortfalls’ that applicants claimed to have covered. Even when faced with requests from subpostmasters for investigative help, this has often been refused. Regrettably, this refusal to provide investigative support is in line with the standard contract.
“It is clear from comments made by applicants, that this is clearly contrary to their expectations and that they were unaware that, under [part of the contract], the Post Office Investigation Division does not have a mandate to provide general investigative support to subpostmasters.
“Post Office’s instructions to (and training of) its Investigators seems to have disregarded the possibility that the Horizon system could be in any way relevant to their investigations. A consequence of this flawed approach to investigations is that many opportunities for process improvements have been missed.”
Then last page – sorry, I think that is the last page. Thank you very much.
Is that included in your description of the report containing many conclusions that were damning?
Lord James Arbuthnot of Edrom: Yes. It was an asset recovery process rather than an application for justice.
Mr Beer: You tell us in your witness statement that by this time you’d come to trust Ron Warmington and Ian Henderson?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Your feeling about their approach was that they were straightforward, open, competent and experienced in the issues with which you were all dealing?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: You had, by this stage, abandoned your initial suspicion of, at least, Ron Warmington’s past friendship with Susan Crichton?
Lord James Arbuthnot of Edrom: Precisely.
Mr Beer: You say in your witness statement:
“At the same time, the Post Office personnel with whom I was dealing had become defensive, legalistic, and determined to keep from MPs information about which they had previously promised to be open. Where there was a dispute between Second Sight and the Post Office, I felt more inclined to favour Second Sight’s version.”
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Sorry, that can come down. Thank you.
Where you say that the Post Office personnel with whom you were dealing “had become defensive, legalistic, and determined to keep from MPs information”, who were you referring to there?
Lord James Arbuthnot of Edrom: Well, particularly Paula Vennells. I can’t remember precisely which meetings I had with Chris Aujard and Angela van den Bogerd but those were the people with whom I dealt with most; Alice Perkins to a certain extent as well.
Mr Beer: Can we go to page 92 of your witness statement, please, paragraph 170. I’m not going to go to the letter because you summarise it here, that:
“On 5 September 2014 Angela van den Bogerd wrote to Second Sight asking Second Sight to reconsider their recommendation that a particular case was suitable for mediation. The reason she gave boiled down to the fact that the applicant had pleaded guilty in court to false accounting and theft, so that there was no basis left for mediation.”
Then keeping on in the same paragraph, you say:
“… if the same logic were applied to all of the cases where there had been guilty pleas, then the basis of the mediation scheme would have been fundamentally changed.”
Was this one of the aspects which led, ultimately, to the breakdown of the Mediation Scheme?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Paragraph 171. You tell us:
“It had always been obvious that the Mediation Scheme would not have been able to alter convictions in court.”
In the question you had asked in Parliament, if we go over the page, you said:
“We must look after them and try and provide them with redress, perhaps through the [CCRC].”
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Is it right, therefore, that you saw the Mediation Scheme not as a means of overturning or even questioning, by the words used by Second Sight, convictions themselves but providing an investigatory platform and uncovering material that might itself lead to a reference to the CCRC?
Lord James Arbuthnot of Edrom: Quite. It would give rise to further processes overturning miscarriages of justice.
Mr Beer: Thank you. You deal in your witness statement, again supported by the contemporaneous material with the Post Office’s response to Second Sight’s second report. Can I just pick out some key passages, if I may. Paragraph 178 on page 95. The long and the short of it is summarised in paragraph 178: Post Office replied to the second report and said it was unable to endorse it?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: What did you think, when the Post Office said that it was unable to endorse the report?
Lord James Arbuthnot of Edrom: By this stage, I wasn’t surprised because of the Post Office’s defensiveness, secrecy, legalism and the fact that it seemed to be blocking information to go to Second Sight, and the part 2 report was not kind to the Post Office and the Post Office was going to get even more defensive when it came out.
Mr Beer: You tell us in the second part of paragraph 179, which is on the screen there, that, when you saw the reply, you assumed from its tone that it had been drafted mainly by Chris Aujard, as it struck you as “unconvincing, defensive, offhand and designed to be obstructive”?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Why did you associate this reply with Mr Aujard?
Lord James Arbuthnot of Edrom: Because I considered him to be unconvincing, defensive, offhand and obstructive.
Mr Beer: This all culminated in a meeting in your office at Portcullis House on 17 November 2014. We can see that from paragraph 198 on page 103. You referred earlier today and to a meeting in which I think you said the MPs “let rip”, or some similar expression. Was this the meeting you were referring to?
Lord James Arbuthnot of Edrom: It is.
Mr Beer: Were there strongly expressed views by MPs at that meeting?
Lord James Arbuthnot of Edrom: Very strongly expressed views.
Mr Beer: To what effect?
Lord James Arbuthnot of Edrom: To the effect that the MPs essentially broke off relations with the Post Office and said that the Post Office’s behaviour had been such that we couldn’t trust the Post Office any more and that we weren’t prepared to take further part in the Mediation Scheme or negotiations with the Post Office.
Mr Beer: We can see from 199, if we go over the page, please, your memory of the meeting, and you say you felt:
“… it was controlled, on the Post Office side, by Angela van den Bogerd and Chris Aujard. They said the Post Office should exclude altogether from the Mediation Scheme people who pleaded guilty – a different proposition from [an earlier one that had been made of] being put to the back of the queue. [You] asked them how they thought [you] would have supported a scheme which excluded my constituent Jo Hamilton, to which they had no answer.”
For you, that was the final straw. You say:
“Paula Vennells seemed almost cowed by their stronger personalities and said little. I told her she was breaking her word. I sensed, rightly or wrongly, that she felt ashamed. The meeting broke up in acrimony.”
Does that accurately reflect what happened?
Lord James Arbuthnot of Edrom: It does, yes.
Mr Beer: Why did you think Angela van den Bogerd and Chris Aujard were seeking to resile on the promises, as you saw it, that had previously been given by Paula Vennells about which issues could be investigated and access to which documents would be given?
Lord James Arbuthnot of Edrom: I thought at the time that they were worried that Second Sight was actually uncovering something really crucial about Horizon, that they were worried that Second Sight was getting too close to the truth and that, if they allowed Second Sight to go on uncovering these things, it posed an existential threat to the future of Horizon and that that, in turn, posed an existential threat to the future of the Post Office. That’s what I think I thought they were doing and I still think that that’s what they were doing.
Mr Beer: So it was the conclusions that had been reached in this second Second Sight Report that, in your view, were fundamental to a sea change or a step change in the Post Office’s position?
Lord James Arbuthnot of Edrom: Yes, although they’d begun before the second part of the Second Sight Report came out.
Mr Beer: In paragraph 201 of your statement, which is on page 106, you say that shortly after that meeting Paula Vennells wrote to you rejecting a proposition that there should be a presumption in favour of Second Sight’s recommendation as to who should go forward for mediation.
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: I think what you’d been suggesting is that, if Second Sight suggested that an individual case should go forward to mediation, then that case should presumptively go forward to mediation?
Lord James Arbuthnot of Edrom: Yes, well, MPs, when we’d gone in for the Mediation Scheme in the first place, had expected that every case would go forward to mediation, except for one or two outliers, that might obviously have been a subpostmaster trying it on.
Mr Beer: Did you see anything controversial in a proposition that, if an independent investigator recommended that a case should go to mediation, then the case should go to mediation?
Lord James Arbuthnot of Edrom: Nothing controversial, not least since the independent investigator had been appointed and recommended by the Post Office itself.
Mr Beer: Can we look at the Paula Vennells letter to you, POL00101699. This is her letter to you of 28 November 2014. She says:
“Thank you for the meeting in your office on 17 November. I am [setting out] the Post Office’s position on the proposition put forward … that there should be a ‘general presumption’ that Post Office will agree, save in a few (undefined) exceptional cases, to mediate all cases where this is the recommendation of Second Sight, regardless of their merits and specific circumstances.
“Having considered the proposition carefully and having discussed it as promised with my Board, I have concluded that I cannot agree to it.”
You tell us in your witness statement that this gave you a sleepless night or sleepless nights; is that right?
Lord James Arbuthnot of Edrom: Well, this is what it seems I told Alice Perkins, yes. But I think the sleepless night came from the breakdown of the whole process.
Mr Beer: So it wasn’t specifically the rejection of this proposal; it was more that you could see that the writing was very clearly on the wall?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Can we look at your reply then, please, POL00101700. This is your reply to Paula Vennells of 8 December 2014. It’s a long and detailed letter. I only want to look at the conclusions, if I may, on page 3.
Lord James Arbuthnot of Edrom: Yes, I’m sorry it’s so long.
Mr Beer: If we scroll down please under “Conclusions” from paragraph 13 onwards, you begin a series of paragraphs in the same way, “Despite” something:
“Despite the fact that Second Sight have identified the issues of investigations and contracts giving rise to concern … the Post Office response of 22 September stated, among other things, that contracts and Post Office investigations were outside Second Sight’s remit.
“Despite your agreement that the Mediation Scheme was to be available to all [subpostmasters] whose cases had been identified by Second Sight as giving rise to concern … in recent months Post Office has been objecting to around 90% of cases going forward to mediation …
“Despite your agreement to fund the engagement of professional advisers to support [subpostmasters] ‘in all relevant stages of the process’ … the Post Office is attempting, in the absence of representation by those professional advisers … to have 90% of cases excluded from mediation.”
Over the page:
“Despite your agreement that those who have pleaded guilty would be able to take advantage of the Mediation Scheme … the Post Office has objected to cases going to mediation on the ground that the [subpostmasters] pleaded guilty.
“You put forward these arguments in secret, and when MPs asked you in July how the mediation [scheme] was going, you pleaded, in the interests of ‘the integrity of the Mediation Scheme’, confidentiality.
Paragraph 18:
“Clearly the Post Office is aware of the Limitation Act point set out … above – it has enough lawyers. The Post Office could allay any suspicion that this was a factor in the way it has been behaving by agreeing that [it] will not take any time-barred limitation point in resisting legal claims … will you agree to this?”
I think the answer came back no –
Lord James Arbuthnot of Edrom: It did.
Mr Beer: – from Paula Vennells. You make the point in paragraph 20 that you won’t be standing at the next general election and so some of the MPs have agreed that Kevan Jones would take over your role in the group. You say at the end of paragraph 20:
“In any event I could not continue negotiating with you because I have lost faith in the Post Office Board’s commitment to a fair resolution of this issue. I shall be pursuing the need for justice … in other ways.”
I think you made a press release on that day as well?
Lord James Arbuthnot of Edrom: I think I did.
Mr Beer: POL00101690, under the heading “MPs lose faith in Post Office Mediation Scheme”, you’re reported in the second paragraph as saying:
“The scheme was set up to help our constituents seek redress and maintain the Post Office’s good reputation. It is doing neither. It has ended up mired in legal wrangling, with the Post Office objecting to most of the cases even going into the mediation that the scheme was designed to provide. I can no longer give it my support. I shall now be pursuing justice for subpostmasters in other ways.”
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Did that letter, the conclusions of the letter that you wrote, and that part of the press release that I have read to you, mark the withdrawal on your side of the equation from MPs’ engagement with the Post Office and its Mediation Scheme?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Can I turn to the termination of the scheme by the Post Office and look at page 137 of your witness statement. You say that:
“On 10 March 2015 [you] heard via a Post Office Press Release that the Post Office had sacked Second Sight and disbanded Sir Anthony Hooper’s independent Working Group. [You] thought there was a strong risk that the Post Office would try to suppress [the] Briefing Report [that we have just read], so [you] wrote a letter to Paula Vennells making a Freedom of Information [Act] request …”
Is it right that they replied to the Freedom of Information Act request saying it was exempt from disclosure but they were voluntarily going to give you a copy anyway?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: Why did you think that the Post Office would try to suppress the report?
Lord James Arbuthnot of Edrom: I thought they’d tried to suppress so much else, that I couldn’t trust them to release that.
Mr Beer: Thank you. That can come down.
Now, although there was some desultory correspondence after this, I think the next major event, and for you personally – it was a significant one – was the dissolution of Parliament on 30 March 2015 and your cessation on that day as an MP?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: After that time, is it fair to say that your role in the investigation of Horizon and the Post Office’s conduct changed?
Lord James Arbuthnot of Edrom: Yes, it is. I was no longer an MP and I was just sort of getting involved where I could, but that wasn’t in many areas, because of the Group Litigation.
Mr Beer: You were ennobled in October 2015?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: I think maybe you’re downplaying a little bit your involvement after that time. You address in the balance of your witness statement a range of issues that you did have involvement in, in the eight years since then.
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: They include – I’m just going to list them – the Swift Review, paragraphs 277 to 279 of your witness statement; your involvement in and commentary on the Group Litigation, paragraphs 280 to 308; the emergence of the Clarke Advice and what you did when the Clarke Advice did emerge in November 2020, and you told us earlier that, immediately, you wrote to Lord Callanan, you wrote to the Speaker and you wrote to the Lord Speaker; and you give commentary on the governance of Post Office Limited, governance by the Government, in terms of its management and oversight of the company that it owns, and the approach that ought to be taken by Government to a body which is said to enjoy an arm’s length relationship with the Government?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: You address, finally, your position on the Board of the Horizon Compensation Advisory Board –
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: – and its efforts to secure redress?
Lord James Arbuthnot of Edrom: Yes.
Mr Beer: I’ve galloped through those last topics, which cover a period of nearly eight years, at some pace. Lord Arbuthnot, is there anything else that you wish to say at this point concerning what has been described as a national scandal?
Lord James Arbuthnot of Edrom: I think that with the help of this Inquiry, we are moving belatedly to the right place and so I’d like to say thank you.
Mr Beer: Sir, from my perspective, they are the only questions that I have for Lord Arbuthnot. There are no questions from Core Participants.
Sir Wyn Williams: Right.
Well, first of all, Lord Arbuthnot, I assume that there may be persons in the room who would like to give you the same sort of appreciation that I precluded them from doing yesterday in the case of Mr Bates, so I’m going to ask them to show similar restraint today but that does not mean that I cannot thank you profusely for the efforts you have put in and, in particular, your support for this Inquiry, because it should be known that you were one of the first people to engage with the non-statutory review, which was not welcomed by many people but you thought it appropriate to give it what assistance you could.
So throughout my involvement in this process, I have had nothing but help from you, for which I thank you very much.
The Witness: Well, thank you, sir.
Mr Beer: Sir, thank you. That’s the end of Lord Arbuthnot’s evidence. We’re going to try something that we haven’t done before, which is if I can ask for one of the ushers to escort Lord Arbuthnot from the room and switch remotely to Sir Anthony Hooper.
Sir Wyn Williams: He’s not far away, as I understand it.
Mr Beer: I don’t know whether that’s true or not.
Sir Wyn Williams: You don’t know where he is, in other words?
Mr Beer: No, partly, because it’s all Mr Blake’s area of responsibility.
Sir Wyn Williams: Right.
Mr Beer: If we can just keep everyone seated in the room for a moment, there’s about a five-minute turnaround to get the screen installed, but we’re doing it this way because there’s no point in taking our extended break now, having only sat for 35 minutes.
Sir Wyn Williams: Sure.
(Pause in proceedings)
Mr Blake: Good afternoon, sir, can you see and hear me? I should have said sir and sir. Thank you, sir.
This afternoon’s witness is Sir Anthony Hooper. You have granted, Sir Anthony permission to appear remotely from outside of this country.
Sir Wyn Williams: Yes, and I facetiously said to Mr Beer that Sir Anthony was not too far away when, of course, I meant the opposite, he is quite far away.
Mr Blake: He is, indeed.
Sir Anthony Hooper
SIR ANTHONY HOOPER (affirmed).
Questioned by Mr Blake
Mr Blake: Thank you very much, Sir Anthony, you should have in front of you, on a screen or beside you, a witness statement –
Sir Anthony Hooper: I do.
Mr Blake: – that has the unique reference number WITN00430100. That is dated 8 March of this year; is that correct?
Sir Anthony Hooper: Yes, I have it before me.
Mr Blake: Thank you very much. Can I ask you to turn to the fifth page, where there is a statement of truth.
Sir Anthony Hooper: Yes.
Mr Blake: Can you confirm that that is your signature?
Sir Anthony Hooper: Yes.
Mr Blake: Can you also confirm that that statement is true to the best of your knowledge and belief?
Sir Anthony Hooper: Yes. Subject to two small corrections.
Mr Blake: Thank you very much, shall we make those corrections now. Where are the corrections in your statement?
Sir Anthony Hooper: Paragraph 7.
Mr Blake: Yes.
Sir Anthony Hooper: In the third line from the bottom, I wrote the figure 25. Since I wrote that statement, I have seen evidence which suggests that the figure should be 15.
Mr Blake: Thank you very much.
Sir Anthony Hooper: In the last sentence I suggest – I say that I thought that none of the mediations had been successful. That is true, that is what I thought, but I have again seen recently documentary evidence which suggests that some had been successful. If so, I knew nothing about it.
Mr Blake: Thank you very much. That statement will be published on the Inquiry’s website in due course and forms part of the Inquiry’s evidence. I am going to ask you some supplementary questions this afternoon.
You’ll be well known to the lawyers in this room as a former Court of Appeal judge, and you also sat as part of that role in the Court of Appeal Criminal Division; is that correct?
Sir Anthony Hooper: Yes, for seven or eight years. Well, for many – for the whole of my career as a High Court judge and as a Court of Appeal judge.
Mr Blake: Thank you. You were a High Court judge before you moved to the Court of Appeal, hearing both criminal and civil proceedings; is that correct?
Sir Anthony Hooper: Yes.
Mr Blake: Before that, you were a practising barrister?
Sir Anthony Hooper: Yes.
Mr Blake: You retired from the bench in 2012 after nearly 20 years on the bench?
Sir Anthony Hooper: Yes.
Mr Blake: Now, amongst other things, you are the Deputy Chairman of the Ethics Council of Ukraine?
Sir Anthony Hooper: I am.
Mr Blake: I am going to begin by looking at a document that pre-dates your appointment. Can we look at POL00158062, please. This is an email chain of 6 September 2013 and, if we scroll down to the bottom of this page, we have an email exchange between Paula Vennells and the Company Secretary, Alwen Lyons. We see there in the third paragraph it says:
“Kay Linnell suggested Anthony Hooper, he does know and is interested in being considered, although we do not know how much he would cost.”
Do you recall being proposed for the role that you subsequently took up by Kay Linnell of the Justice for Subpostmasters Alliance?
Sir Anthony Hooper: Yes.
Mr Blake: Do you recall how it is that you came to be proposed in that way?
Sir Anthony Hooper: I think I remember that Kay Linnell and I were on a professional body together and I think we discussed it.
Mr Blake: Thank you very much. If we scroll up to the top, we have the response from Paula Vennells. She says:
“Really helpful. From what I have heard about Hooper – he sounds a good prospect, [especially] in view of who nominated him, provided we can be reassured that he will be even-handed because of that nomination provenance.”
If we could look at the bottom email, please, if we could scroll down from the bottom of the page to the next page, we’re here in 6 September 2013, over the page, please. There’s one other paragraph that I’d like to draw to your attention and that’s the penultimate paragraph. Alwen Lyons says to Paula Vennells:
“I know Susan [I think that’s Susan Crichton, the General Counsel] thinks we have made a reasonable start but that the wrong chair in the eyes of the JFSA or JA [must be James Arbuthnot] would take us backwards, and if we are going to transition [Second Sight] out of the equation a chair who is strong and will take a decision based on facts whether it will be in POL’s favour or not would be a great asset.”
Just looking at that paragraph, were you aware, when you started, when you were approached for the position, about the thinking regarding Second Sight and the possibility that they might be transitioned out of the equation.
Sir Anthony Hooper: Not at all.
Mr Blake: Would that, in any way, have affected the approach that you took to the role?
Sir Anthony Hooper: Well, it would have made the whole mediation process undoable, if I can use that word.
Mr Blake: Why was that?
Sir Anthony Hooper: Well, they were a central part of the process.
Mr Blake: Thank you. I’m going to move on to the terms of reference for the Working Group that you chaired. Can we look at POL00022307, please. Thank you. These are the terms of reference for the Working Group. Very briefly, can you just introduced the Working Group to the Inquiry and just tell us what its purpose was?
Sir Anthony Hooper: Well, the background, of course, was the Second Sight Report and earlier investigations and, if you look not at this document but the other document which emanated from the Post Office they were saying that they believed the Horizon system to be robust, but they were prepared to hear from, through this scheme, from subpostmasters, who took the view that it was not robust. It had serious failings.
So it was a scheme designed to see whether or not the complaints from many SPMs about the workings of Horizon were substantiated or not.
Mr Blake: How would that relate to, for example, mediation?
Sir Anthony Hooper: Well, I think that was the second part of it, is that I think the Post Office said, at least, that they wished to settle or might wish to settle some of the claims, so having gone through the procedure of the scheme, then there was an opportunity to mediate. I mean, if I can deal with it very, very briefly, we had about 150 applications, the applicants completed what was called a case questionnaire. That was looked at by Second Sight to see whether or not it contained sufficient information for an investigation, and that sometimes was sent back. That was often prepared by legal advisors who received some funding for that from the Post Office.
If the Second Sight were happy with the case questionnaire, we admitted them into the scheme. That was followed by the Post Office carrying out an investigation and producing a report. That report then went to us, and to me, and to the members, but to Second Sight, and Second Sight then prepared what was ultimately to be called a CRR, a case final – a case report.
I can deal with the problems later but that was the scheme and then there would be a decision as to whether to mediate, the Second Sight would give its view as to whether this was suitable for mediation, and then there would be a vote on it. And there were only two members of the scheme, namely the Post Office and the JFSA, in the form of Mr Alan Bates, and so, if the two of them couldn’t agree, I had to reach a – I had the deciding vote, and we can look at that if you wish to do so, the whole problem of the mediation.
Mr Blake: That’s a very helpful introduction and, in light of that, we can skip through the terms of reference quite quickly. We have on our screens at the moment paragraphs 1 and 2 which sets out the scope and the members. If we scroll down the page, please, we have the objectives of the overall scheme.
Then, over the page, we have the role of the Working Group. At the bottom we have you named as the independent chair, and then, over the page, please, as you’ve just said, paragraph 7 sets out the decision-making process where members shall attempt to agree all decisions unanimously but if a decision can’t be reached then it goes to a vote and you had the casting vote in the event of disagreement.
There’s one paragraph I would like to ask you about in respect of the terms of reference and that’s paragraph 2.4, which appears on the first page.
It says at 2.4:
“In conducting Working Group business, Post Office may act in a manner that promotes its own interests. Likewise, JFSA may act in a manner that promotes the interests of applicants.”
Are you able to assist us with how you understood that provision?
Sir Anthony Hooper: I don’t think I ever did understand it.
Mr Blake: Did you understand the process to be an adversarial process, a cooperative process or something else, in theory?
Sir Anthony Hooper: In theory a cooperative process.
Mr Blake: So paragraph 2.4 wasn’t intended to set up some sort of adversarial process with each side pursuing their own interests?
Sir Anthony Hooper: No. It may have been explained to me at some stage why it was there, but I have no recollection now why it was there, and reading it, it doesn’t make much sense to me. It’s pretty obvious that the Post Office are going to look after its own interests and the JFSA would do likewise.
Mr Blake: We looked – we started today in September 2013, when your name was first mentioned. These terms of reference, we’ll see, were finalised in March 2014. In between your appointment and the finalisation of these terms of reference, what was your initial work? What did that involve?
Sir Anthony Hooper: I don’t think my work ever changed. I didn’t know that I hadn’t – I had forgotten that these were much later, but the way I ran the scheme as the Chairman was exactly as I have described, and we started working as soon as we got knowing in what, October 2013, November.
Mr Blake: Thank you very much. I’m going to take you to an email exchange in January 2014, so relatively early on in the scheme. Can we look at POL00301427, please. This is a discussion between lawyers at Cartwright King and Bond Dickinson can we please start by looking at page 4 – 4 and over to 5.
It’s 16 January 2014. This is a discussion between Harry Bowyer at Cartwright King and Andrew Parsons at Bond Dickinson and they’re referring to various case studies. If we scroll down the page we can see the beginning of the chain actually starts with an email between Andrew Parsons and Martin Smith. Thank you very much.
It seems as though they’re preparing case summaries for you in January 2014. What was the purpose of those case summaries?
Sir Anthony Hooper: I think these are quite outside the scheme, if I’m right in remembering, and please may I remind you that this happened a long time ago. As I remember, there were about four cases in which – which had gone past the charge stage and were to go to trial, and I obviously was concerned, not really in my position as a Chairman, but simply as someone who wanted to make sure that there were no wrongful convictions. So I think I asked to look at the case summary and I think I suggested that it would – I would hope that these four cases would be dropped. That’s my memory.
Mr Blake: Thank you very much. Could we scroll up, please. That is consistent with this email that’s currently on screen, where Andrew Parsons refers to, for example, four cases where:
“… it would be useful to set out the next steps in the investigation process and when we expect a summons to be issued.”
Sir Anthony Hooper: I should add – I’m sorry to interrupt you – I should add that the JFSA was aware of these prosecutions, and was anxious, wanted to know what was going on, and I think I said “Well, look, I’ll do my best to see what – see if I can give any help in this area”, but I was really outside the terms of reference of the scheme.
Mr Blake: Thank you. If we could scroll up, we see a response from Harry Bowyer and, in respect of a number of cases, he refers to the potential need for an expert to be instructed so we see there the case of El Kasaby, and he says:
“Were this is an English case and I was prosecuting I would probably be happier with an expert instructed.”
If we scroll down, the case of Kaur, he says:
“The only way out is an attack on Horizon for which we will need to instruct an expert.”
Then Darren King, he says:
“Again the obvious way out is an attack on Horizon and an expert will be necessary.”
Thank you. Can we go on to the email before in the chain, that’s on page 3, please. There’s a response to those summaries from Andrew Parsons of Bond Dickinson. He says, as follows:
“Would it be possible to incorporate these comments into the case summaries so that this information can be passed to Tony Hooper? This will probably need a little rewording/bit more contextual information given that Tony is not aware of the issue with the Horizon expert as yet.”
Now that appears to be a reference to the issues that had been identified relating to Gareth Jenkins and Mr Clarke’s advice of the summer of 2013, which is well known to this Inquiry, and that advice raised issues with bugs, errors and defects that hadn’t been disclosed by Mr Jenkins when giving his evidence.
Were you aware at that stage, so January 2014, of any issue that the Post Office that with their Horizon expert?
Sir Anthony Hooper: To the best of my recollection, I was never aware of the issue around Gareth and it wasn’t until I read the papers sent to me for the purpose of making this witness statement that I learnt about him and Simon Clarke’s advice, for example.
Mr Blake: Would you have expected to have been told about that issue in the role that you had for the Working Group?
Sir Anthony Hooper: Well, I think if there was going to be total transparency, I ought to have been told or the Working Party ought to have been told that they had abandoned a witness who had given evidence or made statements in a number of criminal cases and that they had abandoned him because he stated something that there were no problems with Horizon, which, as I understand it, reading the papers, was simply not true. So yes, I would have liked to have known it. I’m not sure how much I could have done with it but would like to have known it.
Mr Blake: If you had been told that on 21 January 2014, how would it have affected the work that you were undertaking in the scheme, for example in relation to convicted individuals, subpostmasters, and the mediation of those cases?
Sir Anthony Hooper: Yes, it – I’m sure it would have done. I mean, we did look at convicted SPMs and, obviously, I suppose it would have helped me to know that. But it would depend a bit more on the facts of the individual case.
Mr Blake: Thank you. I’m going to look at some meeting notes. Can we start with POL00100335, please. This is a note of a meeting of 24 February 2014 with Paula Vennells and Chris Aujard of the Post Office. Can you assist us, paragraph 1 refers to it being an off-the-record meeting. Do you recall the background to this meeting, who asked for it and who asked for it to be off the record?
Sir Anthony Hooper: No.
Mr Blake: Were those kind of meetings with the Post Office typical, expected, or something else, for meetings to be one-on-one without, for example, the other members of the –
Sir Anthony Hooper: Oh, no, I made it clear to the Working Group that I was, from time to time, meeting Paula Vennells.
Mr Blake: Thank you. If we could look at paragraph 2, I’m going to just read out some of the second half of that paragraph, it says there:
“It was also explained that the cost of the scheme was currently running at around £5 million, and that [Second Sight] had estimated the compensation costs could be up to £50 million. The scheme had therefore moved a long way from its initial positioning as something the outcome of which in many cases might be an apology and/or a small gratuitous payment.”
What do you recall in relation to the reference there to the cost of the scheme being far greater than it had been anticipated?
Sir Anthony Hooper: Well, I think, again, from memory, conversations about a small gratuitous statement, I think I made it clear that it wouldn’t – it would be much more than a small gratuitous payment in some cases.
Mr Blake: Did you understand, when you took on the role, that it would be something less significant or more significant than had been anticipated?
Sir Anthony Hooper: Well, I mean, they were very early days when I took on the role, what I knew about the – we now – is the Post Office scandal, came from reading Private Eye, Computer Weekly and, obviously, following what Lord Arbuthnot – now Lord Arbuthnot – and his fellow MPs were saying. I had very knowledge other than that. So I wasn’t in a position at the outset to say it would be a small amount or a large amount. But when you look at the figures involved, the one I mention in my statement, 60,000, it wasn’t likely to be a small payment.
Mr Blake: To what extent were costs matters that were raised by the Post Office in conversations you had with them over the years, the cost of the scheme?
Sir Anthony Hooper: Well, I – I’m sure, from time to time, they complained about the cost of the scheme, but that wasn’t the cause of our problems.
Mr Blake: We started today by looking at that reference to Second Sight and the possibility of taking them out of the equation. By the time of this meeting, the 24 February 2014, can you assist us with the relationship between Second Sight and the Post Office, so far as you saw it?
Sir Anthony Hooper: I don’t think it had really – we’re still in 2014. So I don’t think it had really broken down at this stage. It broke down later. I told you how it worked. So the Post Office would produce an investigation report, and then Second Sight became disenchanted and very critical of those investigating reports and criticised them, and then we would send it back to the Post Office to try to improve. The other side of the coin was that, when Second Sight produced its case review report, the Post Office were very critical of the contents of the report.
I also was concerned, in the case of both the Post Office and the Second Sight Reports, that we weren’t really looking at the loss. I wanted to follow the money. I wanted to know what was the loss and how could that loss have occurred. So working, in a sense, together, the reports gradually improved. But, as the Post Office became opposed, many of the Second Sight Reports they thought they were going too far out, they criticised the Second Sight. I mean, the one that’s referred to in the papers is when Second Sight said false accounting is a less serious offence than theft, and that, I see in all the papers, led to all kinds of lawyers being involved but that’s exactly what I’d said in a meeting.
So there were just – conflicts gradually grew and grew and grew and grew, until we were finally closed down in March 2015. So I can’t tell you at what stage it disintegrated it was slow disintegration.
Mr Blake: I’ll be taking you through some of the meeting notes to see that disintegration. If we could start on this document and look down at paragraph 4, please. The discussion between yourself and Paula Vennells. You say there – it says there that:
“TH [that’s yourself] agreed that [Second Sight] were very resource challenged, and it would be difficult for them to meet the current timetable.”
Can you assist us with the reference to resource challenges, please?
Sir Anthony Hooper: Well, you will know better than I am. Second Sight were two people and then they brought in I think one, possibly more, assistants. We had 150 cases coming through. Two people who would find it very difficult to turnaround the case review reports as well as doing their work on the case questionnaires, in the time that we wanted them to do it.
Mr Blake: Was that because there were more cases than anticipated? Or because Second Sight had been instructed with, for example, too few individuals assisting them?
Sir Anthony Hooper: I can’t tell you about the second. I’m sure we had much more work than was anticipated.
Mr Blake: Then –
Sir Anthony Hooper: They were a very small company and I praised them for all the work that they did and obviously I worked closely with them, but there was no way they could keep up.
Mr Blake: Did the number of cases take you by surprise?
Sir Anthony Hooper: Not really, in the sense that I just didn’t know. I didn’t know how many would come forward.
Mr Blake: The paragraph continues:
“That said, [your] view was that Second Sight were trying to be objective and that they had a difficult path to tread, in that in order to their job properly (In [your] view) they would need to express an opinion on the merits of each claim. In [your] view, this was something that they found hard to do.”
Just pausing there, can you assist us with that, please?
Sir Anthony Hooper: These were very complex and difficult cases that we were looking at, and that they were looking at and, throughout the whole of the time of the mediation scheme, the Post Office were maintaining, over and over again, that the Horizon system was robust. There was nothing wrong with it. So when you were producing a report, when you’re looking at an applicant’s case, it’s understandable that you would want to say something about the merits.
As I say in my witness statement, I tried to make it clear to Paula Vennells and to the Chairman that the Post Office case didn’t make sense, and I felt that throughout, and no doubt Second Sight did. It didn’t make sense that reputable SPMs appointed by the Post Office, after an examination of their characters, would be stealing these sums of money.
It didn’t make sense, in particular because within a matter of days of any quote “alleged theft”, they had to balance the books. It just never made sense. I made that point over and over again.
Mr Blake: Can you assist us with how you made that point? Was it in discussions, one-to-one discussions, in groups?
Sir Anthony Hooper: Yes, yes. But it was absolutely obvious.
Mr Blake: Who did you communicate that to?
Sir Anthony Hooper: Well, Paula Vennells and – I’ve forgotten the Chairman’s second name.
Mr Blake: Was it Alice Perkins?
Sir Anthony Hooper: Yes, that’s right. Yeah. But it’s why Lord Arbuthnot and the MPs got involved, because it didn’t make sense.
Mr Blake: Continuing, sticking with that paragraph:
“Some concern was expressed by [Paula Vennells] and [Chris Aujard] that [Second Sight] were had not in their correspondence come across as independent, and may be unduly influenced by the need to satisfy certain MPs.”
Was that a view that was communicated to you?
Sir Anthony Hooper: Apparently I – was I at the meeting?
Mr Blake: Yes, this was the meeting with you.
Sir Anthony Hooper: Well, they may have been said. I would have refuted it completely. They were being very independent, they were just coming to conclusions which the Post Office didn’t like.
Mr Blake: Thank you. Paragraph 5, various options were discussed, and it seems as though the Post Office were suggesting number of different options: one was terminating the scheme; (ii) restructuring the scheme; (iii) augmenting Second Sight’s resources, (iv) reworking the process in the scheme, and streamlining it.
Then we move on, it says:
“TH’s strong contention was that [the Post Office] should take no precipitous action until such time as [Second Sight] had produced, say, five reports, and until we had seen their thematic report. He noted the adverse PR consequences of terminating the scheme and also offered to make himself available to talk to the Board to explain why he considered this approach appropriate, should that be necessary or desirable.”
Do you recall saying that? Is that a fair reflection of the words that you spoke?
Sir Anthony Hooper: Very much so. Very much so I thought it was ridiculous to close down the scheme at this stage when we were still at the very early stages. You can see from that paragraph, Second Sight hadn’t produced as many as five reports. We were waiting for that. So we’re very early days and to close it down would have been ridiculous.
Mr Blake: You are perhaps today more animated than that paragraph suggests. Is that because the paragraph is downplaying the words that you spoke, or were you more measured in your discussions that are expressed?
Sir Anthony Hooper: I’m not – I’m not always very – I’m not always very measured.
Mr Blake: Do you think, in that meeting, you spoke as forcefully as you are speaking today?
Sir Anthony Hooper: I don’t know. I’m prepared to take this strong contention. That’s good enough. I was opposed to closing the scheme down at that early stage.
Mr Blake: We note there that you have offered to talk to the board to explain. Were you ever taken up on that offer? Was it ever suggested to you that you could speak to the board?
Sir Anthony Hooper: No, sadly I wasn’t. I think, looking back at it all, it was a shame I didn’t say I’d like to speak to the board. I’d like to give over to the board – who I knew was giving Paula Vennells a hard time – I’d like to get over to them the fundamental implausibility of the Post Office case.
Mr Blake: You say they were giving Paula Vennells a hard time. What was your understanding of that?
Sir Anthony Hooper: Well, I remember her saying, well, the board were looking for more, you know, were concerned about the cost, they didn’t think it was going anywhere. Their view, Horizon was robust, there was nothing wrong with Horizon. These were all – these cases had no merit. I’m putting it in very general terms. That was the feeling I got from her, whether rightly or wrongly.
Mr Blake: Were any names mentioned in that regard?
Sir Anthony Hooper: If they were, I certainly couldn’t remember today.
Mr Blake: Moving on to paragraph 7, it says:
“The quantum of compensation payments was discussed.”
I think this is the paragraph that you were referring to earlier. It says that you noted that the applicants’ questionnaires often painted a very distressing picture where there had been a loss of livelihood and other losses. Your view was that should the evidence show that the Post Office had not acted properly, then the amount of compensation payable could be quite material.
It says:
“[Note that] this contradicts the legal advice obtained by [the Post Office] from [Bond Dickinson] which categorically states that the maximum loss [the Post Office] could expect to pay would be limited to 3 months ‘pay’ under the [subpostmaster’s] contract. It was not entirely clear whether [you] had in mind criminal cases only when [you] made those comments.”
What did you have in mind when you made those comments?
Sir Anthony Hooper: Both, both civil and criminal. If someone had been sued, what was the man who went to the High Court and was ordered to pay £300,000 of costs to the Post Office? I can’t remember the exact case. But all those who had lost their livelihood, I didn’t think it was the result was going to depend on some minute reading of a contract.
Mr Blake: Did you make that clear in that meeting or in other meetings?
Sir Anthony Hooper: I made it clear that there would probably have to be substantial payments. I mean, when one looks at the newspaper today, we’re talking about over 500,000.
Mr Blake: Was the advice from Bond Dickinson ever shared with you? Were you ever told that the Post Office expected to pay far less?
Sir Anthony Hooper: Well, I’ve just obviously – I don’t remember. I probably was told that they had not expected to pay a lot. I was probably told that. I don’t think I saw any Bond Dickinson advice, and I don’t know how – what they founded that advice on.
Mr Blake: I’m going to move to a number of meetings of the Working Group. Can we start with POL00026656, please. We’re now on March 2014.
We see there, if we scroll down, that’s when the terms of reference were agreed. Was it likely that there were several meetings before this meeting or was this the first official meeting?
Sir Anthony Hooper: I would have thought there must have been meetings before March. I’d be very surprised if that was the first meeting.
Mr Blake: Can we please turn to page 4, where there is reference to the Second Sight Report. So you’ve talked us through already the process that is involved, where there is a Post Office investigation report – first a questionnaire then a Post Office investigation report, and then the final report is a Second Sight Report; is that correct?
Sir Anthony Hooper: Yes. Bearing in mind that, as we processed – progressed, the – we sent the report back to the Post Office to deal with the complaints made by Second Sight and we sensed the Second Sight Reports back to Second Sight to meet the complaints made by the Post Office. So it wasn’t an easy, smooth process.
Mr Blake: It says there:
“The Working Group had agreed, as a temporary procedure for the first three or four Second Sight Reports, that it would review the reports alongside the Post Office investigation reports, to satisfy itself that the package of information would provide the mediator with what was necessary for a successful mediation.”
Sir Anthony Hooper: Yes.
Mr Blake: Then it refers there to Second Sight Reports, and these are things that we will see over the course of this phase of the Inquiry, reference to M numbers. Those are the reports that are produced by Second Sight, are they?
Sir Anthony Hooper: Yes.
Mr Blake: Or the case reference –
Sir Anthony Hooper: No, M was the number of the applicant.
Mr Blake: Thank you, and –
Sir Anthony Hooper: And I should add, I think it is clear somewhere in the papers, that it was not our task to look at merits.
Mr Blake: It says there that:
“As a result of a discussion, the Working Group greet that the Second Sight Reports need to be revisited”, and it sets that out there.
Can you give us your initial impressions of both the Second Sight Reports and the Post Office investigation reports as to their qualities?
Sir Anthony Hooper: I think that’s a very hard question. I wanted the Second Sight Reports, as it says there, in (a), to really concentrate on the losses and the surplus so that the mediation – the mediator could understand what was the amount of money involved. So I was stressing that. In the case of the Post Office reports I’m sure I was critical of those from time to time, as to not being clear as to what they were saying. But the Post Office reports, essentially, was “Nothing wrong with Horizon, this is either theft or carelessness”.
Mr Blake: Thank you.
Sir Anthony Hooper: That was all – I haven’t got one in front of me and haven’t looked at one for years but my memory of the last – the conclusion was always there’s nothing wrong with Horizon, Horizon robust, this must be either theft or some form of carelessness. Or …
Mr Blake: Can we turn to POL00026643, this is another meeting of the Working Group. We’re now on 13 March 2014. That’s, if you look over – if we turn over the page it has the date there. On that page the second page, if we scroll down we can see the various cases and their status. It seems as though extensions had been granted in a large number of cases. And if we scroll, keep on controlling down –
Sir Anthony Hooper: Let’s just stop there for a moment. So that is M005, Investigation Report by the Post Office, extension granted, because they weren’t ready to do it, that was not the first extension. We spent a lot of our time trying to hurry the process up but, being realistic, we had to give extensions, both to Post Office and you’ll see also to Second Sight. I don’t –
Mr Blake: Absolutely. If we scroll down we can see comments from Alan Bates below – it says “AB”, I believe that’s Alan Bates:
“… noted the number of extensions being requested by Post Office and queried whether that was at odds with the approach being taken by professional advisers. [Angela van den Bogerd] is looking into how this process can be made more efficient, but some cases are taking longer to investigate due to the complexity of the issues raised.”
What did you recall –
Sir Anthony Hooper: No, and the next – sorry, if you could read the next sentence.
Mr Blake: It says that you pointed out that the Working Group had not declined any extension request made by professional advisers, only required that such requests should be put to the Working Group to consider before the expiry of the deadline and, in that regard, the Post Office and professional advisors are being dealt with in an even manner. You say that:
“… the Working Group will expect to see progress with Post Office investigations next week.”
Sir Anthony Hooper: So that shows you that we were giving extensions to the professional advisers who were not keeping to our time limits, extensions to the Post Office and extensions to Second Sight.
Mr Blake: In your view and to your recollection, were they fairly equal in terms of it was all parties equally seeking extensions? Did one seek more extensions than the other? Were you unhappy with one more than the other, or were they all equally in the same position?
Sir Anthony Hooper: Well, at this stage, you’re dealing with the investigation reports. As we move through the minutes, you’ll see that the investigation reports were complete and then we were giving extensions to Second Sight. I don’t think there was any question of favouring one rather than the other. We were just doing our best, all of us, to try to get these things complete.
Mr Blake: Did the complexity take you or others by surprise, the length of time that was required?
Sir Anthony Hooper: No, I don’t think it did. Some of these cases went back to 2005/2006. So there was an absence of paperwork perhaps on both sides, where SPMs had lost paperwork, obviously, had given up. There was difficulties with the paperwork in the Post Office. Again, I mean the criticism, as we all know, is that when the SPMs originally made their complaints years ago about their – this sudden loss that appeared, that that wasn’t properly investigated and that’s almost certainly right.
But the consequence was that when we came to look at it there weren’t the documents that one might have expected to be there if they had been properly looked at.
Mr Blake: So was one of the difficulties and one of the delays caused by a failing in the original investigation by the Post Office Investigators, rather than an investigation during this mediation process?
Sir Anthony Hooper: Well, I know that now, because I’ve read the judgment of Mr Justice Fraser, and I know that there were these PEAKs and KELs available which were not looked at at the time, error logs. I don’t know if I knew that during this – during the Mediation Scheme and, obviously, I’ve learnt a huge amount following my ending – ending my chairmanship.
Mr Blake: If we can scroll over to the next page, page 4, there’s one entry I’d like to ask you about it says there, the first bullet point:
“AH had prepared a note setting out a proposed structure for Second Sight’s reports. The [Working Group] discussed the note and agreed it was helpful.”
So it seems as though you produced a note in order to assist Second Sight with the structure of their reports?
Sir Anthony Hooper: Yes. It’s to be helpful because if a – I was looking at it from the point of view of a mediator. A mediator looking at a report wants to have it in a sort of structured way, so that he or she can understand what the issues are. Second Sight were extremely busy, they were overloaded, and I was doing my bit to try to help to get their reports in a way that would be easily understandable and readable by the mediator.
Mr Blake: Thank you. Can we please look at an email that’s UKGI00002221. It’s an email from Richard Callard of the Shareholder Executive, dated 25 March. I’m just going to read to you that first bit of that first paragraph, which follows – it’s a read out of a meeting with Paula Vennells, so between Paula Vennells and the Shareholder Executive. It says:
“Apparently chair Tony Hooper has sent the Second Sight Reports back to them to be rewritten – he considered them to be substandard and unsubstantiated …”
Then it says:
“… (not sure those were his precise words but the sentiment was certainly there). And Tony Hooper has also decided to give [Second Sight] his idea of what the general framework paper should cover, so clearly his faith in [Second Sight] is waning. Whilst we could capitalise on this Paula is a bit worried [about] forcing this point too much (ie we should let him draw his own conclusions, he might start to rebel if he feels he is being pushed in that direction).”
Is that a fair and accurate reflection of your position, do you think they’ll –
Sir Anthony Hooper: Not at all. Not at all. I did not think they were substandard. I didn’t think they were unsubstantiated. I didn’t – my faith in SS was not waning. I just thought the reports could be written more clearly.
Mr Blake: Do you recall a discussion with Paula Vennells on those issues at all?
Sir Anthony Hooper: There probably was.
Mr Blake: Can you assist us with why you consider it may be that there’s a difference in opinion between the two of you regarding that discussion?
Sir Anthony Hooper: I can’t help you. I know there’s one meeting where I expressed – I’m recorded as having expressed some concern as the Second Sight going outside the ambit. I don’t remember why I said that. I don’t remember what led me to say that. But I had faith in Second Sight right until the end. I just wanted them to make reports that were more easily readable for the mediator.
Mr Blake: We saw –
Sir Anthony Hooper: And I wasn’t concerned with the merits. Don’t forget – I doubt I would have said “unsubstantiated” because I wasn’t concerned with the merits; I was concerned with the form.
Mr Blake: We saw at the very beginning of your evidence today that mention to trying to transition Second Sight out of the equation. By this stage, so March 2014, were you aware of the Post Office’s intentions towards the continuation of Second Sight?
Sir Anthony Hooper: No, not at all. No, I didn’t know that they – no. I mean, I knew that the Post Office were very unhappy because they didn’t like the conclusions that were being drawn.
Mr Blake: Can we please look at UKGI00019286, please, and it’s letter of 16 April 2014 from Alan Bates to Jo Swinson, the then Minister for Postal Affairs. He there expresses some concerns about the progress of the Initial Case Review and Mediation Scheme. If we perhaps look at just a few extracts from the third page, we see there it says:
“Yet to date, [the Post Office] 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.”
To what extent at that stage did you agree with the words that were said there?
Sir Anthony Hooper: I’m assuming that Alan is right when he says they hadn’t finalised a single case report at that point but they certainly did in 2014 and 2015, finalise many reports.
Mr Blake: Well, we’ll see references in due course to matters speeding up or progress being made but, at this particular stage, so April 2014, so the spring of 2014, did you have concerns about the speed of the Post Office in producing their case reports?
Sir Anthony Hooper: Yes, of course I did. We all did. That’s why we gave them time limits, we granted extensions, we listened to their (unclear), we put a considerable degree on – of pressure on the Post Office to finalise their reports, as we were to do later, when we put considerable pressure on Second Sight to finish theirs and, indeed, as we did with the advisers, we put pressure on them to bring the material that we needed.
Mr Blake: If we scroll down, please, to the fourth paragraph, he says there:
“To me, and trying to be objective, the main hold up is with [the Post Office]. At the time of writing, not one case report by them has been complete and submitted to Second Sight in a way that Second Sight can complete its own Case Review Report. As [he] mentioned earlier, [Post Office] first became aware of the details … from September 2013, but [they] are constantly seeking extension”, et cetera.
Then, if we scroll down to the penultimate paragraph, he says:
“At a recent [Working Group] meeting chaired by [you], 2 case reports that [the Post Office] were preparing for submission to Second Sight, were analysed in order to examine whether the format of the report met the requirements … During the in-depth discussion and analysis of the data and evidence, it was abundantly clear to me, and I think many others at the table, that if any investigation had taken part at the actual time of the incidents then the outcome would have been very different in certainly one, if not both cases.”
Was that a view that you shared at that point?
Sir Anthony Hooper: I can’t remember about those two cases but it’s certainly a view I shared. But I’d like just to go back to what you quote before. I did not feel, do not feel, that the Post Office were dragging their feet in preparing the reports. They were very difficult to prepare. I often talked to Angela van den Bogerd and others about the complexities, I tried to help, to see how we could speed things up, but I would not like it to be thought that I agreed with Alan in the sense that they were deliberately dragging their feet. That was not the situation. There was too much work.
Mr Blake: Thank you. Can we look at POL00203701, please. This is an email exchange with Second Sight in April and into May of that year. If we start with the final page, please, page 4. You seem there to be mediating between Second Sight and others in the sense that you say halfway through your email there that, as you’ve said before, if they’re dissatisfied with a Post Office report, then they should explain that in their report where they’re dissatisfied and leave it to the mediator. Can you assist us there with your concerns?
Sir Anthony Hooper: I think trying to speed things up. The danger was that we’d just go back and forth. Second Sight would criticise the Post Office report, then the Post Office would look at it again and make a change, and then it would come back again, and I think probably what I was trying to do there was move things on by saying, look, if you’re not happy with it, explain why you’re not happy with it, and then leave it to the mediator. I think I was trying to speed things up. That’s, I believe, what I was trying to do.
Mr Blake: If we scroll up we see a lengthy response from Ron Warmington of Second Sight, and he explains, for example, he gives a couple of different case references on page 2. If we stop there, M054, if we look at the very bottom of this page, he says that in that case – if we scroll down, please, it’s the very end of the page now, so if we could scroll down a little more:
“This regrettable delay is a direct consequence of [the Post Office] failing to conduct a proper investigation, either at the time, or when preparing its [investigation report].”
Then he refers to another one, M127, where the report contains a lot of brand new material and much of it poses new questions:
“… some of which, as it happens, we’ve already put to the applicant, but there may need to be other questions that will need to be answered.”
Can you give us a sense of the various frustrations on all sides with regards to the scheme and the speed at which things were being actioned?
Sir Anthony Hooper: Yes, of course.
Mr Blake: If we look at the first page, you say to –
Sir Anthony Hooper: I mean, that page is just typical of the debates we were having, and of the complications of trying to sort things out.
Mr Blake: I think if we scroll to the first page you say that you’d like to draw that specific email to the attention of the Working Group.
Sir Anthony Hooper: Yes, I – yes, that’s right. Didn’t I put a copy of the email before the Working Group so that we could discuss it?
Mr Blake: Absolutely and, in fact, I’ll take you to the minutes of that Working Group, and that will be the final document I take you to before we take our mid-afternoon break. Can we just look at POL00043627, please. There are a number of matters raised at this particular meeting in May 2014. It begins by discussing the draft part one report that had been tabled by Second Sight.
You can see there a number of generic points made by the Post Office, they say:
“The starting point for the report did not ring true as a draft was set up as a supporting document for the thematic report and that was not the purpose of the document.
“Opinions should be taken out of this document and moved into the Second Sight thematic report.”
The penultimate one says:
“There are sections of analysis and conjecture in the document which need to be moved to the part 2 report, where again they will need to be supported by evidence.”
Can you give us a sense of the strength of the Post Office’s feeling towards that first draft report by Second Sight?
Sir Anthony Hooper: It’s accurately reflected there. They were unhappy with it.
Mr Blake: What was your view?
Sir Anthony Hooper: I was an independent chairman, I was not in a position to make an assessment. I was trying to be independent. So I would want to listen to what Second Sight said about it.
Mr Blake: Can you give us an idea of the atmosphere within the meetings themselves by this stage and was there a sense of –
Sir Anthony Hooper: No, I think generally civilised, generally. You know, there was no shouting or arguing. People were making their points. But, you know, we look at all this stuff in great detail but the Post Office would not budge from their position that the Horizon system was robust. If you take that as your starting point, that there is nothing wrong with Horizon, then anything which tends to criticise the way that the Post Office handled a particular case or how – the evidence supporting a particular applicant’s case, it’s going to be criticised because it’s got to be wrong. Why has it got to be wrong? Because, in the view of the Post Office, there’s nothing wrong. The system is robust. We now know it wasn’t robust.
Mr Blake: We can very quickly look at the second item agenda over the page, which is a case M022. It says there that:
“The Chair opened the discussion by inviting the Working Group to comment on the report’s style only and not on content.”
Below that it sets out various concerns that the Post Office raised about that particular case study. They say:
“The report was not of satisfactory quality.”
If we scroll down they say:
“Neutral language needs to be used throughout the whole document.
“The document needs to clearly balance the evidence used without any counterpoint brought forward – this is often absent at the moment.”
If we scroll down over the page, they say:
“Scope of the report goes beyond Second Sight’s area of expertise (for example commenting on whether a case was suitable for police investigation).”
Is this is an example, as you’ve just said, of a mindset that is – assumes that there is no problem with the system and, therefore, finds fault in the underlying reports, or is there something else.
Sir Anthony Hooper: No, that’s my view. If you take the view that there is nothing wrong with Horizon, then any criticisms of the way that an applicant’s case was handled are likely to be not met with favour by the Post Office. What was not happening, as I make clear in my report, as I understand it, there was never an in-depth investigation of Horizon. What we were doing here was looking at individual cases. But because of the age of the cases, sometimes, because of the many complications, you weren’t going to find the smoking gun in any individual case. That was the problem throughout.
Mr Blake: Very briefly, just before per we break, if we scroll down, we can see there, as you’ve said, the correspondence between yourself and Second Sight is referred to there.
Sir Anthony Hooper: Right.
Mr Blake: So that email chain –
Sir Anthony Hooper: It’s exactly the other side of the picture.
Mr Blake: Yes. If we scroll down, you also addressed at that meeting page 4, the bottom of page 4, the correspondence between Alan Bates and the Minister, which we’ve just been looking at as well.
The Post Office there seemed to raise a number of concerns about that letter, if we scroll down, they felt that he had broken the confidentiality, factual inaccuracies, et cetera, and then Mr Bates comments on that below.
Second Sight comment below that. It says:
“In closing the Chair commented that he felt that Alan had not been fair to Post Office over their investigation reports and he would write to that effect.”
Can you assist us with that? I mean –
Sir Anthony Hooper: I did. I felt that and I told Alan that I thought that he’d been a little unfair, not about – we’re not talking here about the merits, we’re talking about procedure. I thought it was not fair to say that the Post Office were unduly delaying their investigation reports. I felt the Post Office were seeking, insofar as each individual report is concerned, were seeking to deal with it in the time that they needed. So I didn’t think Alan had been fair to them and I said that.
Mr Blake: There are –
Sir Anthony Hooper: I was right because, later on, the Second Sight had huge – we had to grant them numerous extensions because, again, the amount of work that was involved but this is nothing to do with the merits. This is all to do with procedure.
Mr Blake: With regards to procedure, were the various positions quite entrenched by that stage, or were –
Sir Anthony Hooper: Well, I spent my time over the, what, 18 months I was chair, trying to resolve these issues as well as I possibly could.
Mr Blake: What did you see as the barriers to resolving those problems or the principal barrier to resolving those problems?
Sir Anthony Hooper: The barrier was that the Post Office would not accept any problems with Horizon, therefore nothing could really happen. I mean we could look at an individual case and say, well, maybe there ought to be some compensation or a mediator could say that but, if you don’t accept any problems at all with Horizon, then how can you resolve these individual cases?
Now it’s not for me to say when Post Office realised that there were, I read lots about it, at what stage they knew what and how much they knew. That’s nothing to do with me. All I’m saying is that this Mediation Scheme couldn’t ultimately succeed because the Post Office were saying there was no problem with Horizon. And now we know, as I quote in my statement, the admissions, for example, before the Court of Appeal Criminal Division where Mr Altman, now King’s Counsel, admitted gross failures in the Horizon system. None of that came out during the Mediation Scheme.
Sir Wyn Williams: The impression I get, Sir Anthony, is that, on day 1, shall we say, the Post Office had an entrenched view as to the robustness of Horizon and, by the last day of the scheme, that view had simply remained unchanged.
Sir Anthony Hooper: Absolutely.
Sir Wyn Williams: Yeah, okay.
Mr Blake: Thank you very much, sir.
Can we take our mid-afternoon break now and come back at 3.45, please.
Sir Wyn Williams: Yes, of course, thank you.
Mr Blake: Thank you very much.
(3.34 pm)
(A short break)
(3.45 pm)
Mr Blake: Sir, can you see and hear me?
The Witness: I’d like to add something to my last answer in reply to the Chairman’s comment.
That approach affects everything. So, even if the Post Office were to accept that the investigation could have been done better back in 2006 or ‘10, when it was done, it made no difference because Horizon was right. So, even if they made the investigation, Horizon was perfect, so it would have made no difference. And that spills over into the criminal cases, which, as we know from the decision of the Court of Appeal Criminal Division, where prosecutors would make it a condition to accepting a plea of false accounting, that there was no criticism of the Post Office? Why? Because the Horizon system was perfect. Thank you.
Mr Blake: Thank you very much. In light of the evidence you have already given this afternoon I’m going to speed through very quickly the rest of the chronology of the Working Group, so we can move on to some small issues of differences in legal opinions.
I’m going to start this afternoon by looking at POL – actually, let’s start with UKGI00002385, please. Very briefly look at an email from June 2014. This is an email, internal email in the Shareholder Executive, if we could scroll down. It discusses a board paper a Post Office Board paper. I don’t need to take you to that board paper, for those that are keeping a note the reference of the board paper itself is POL00205354.
Mr Batten says there:
“The paper references ‘progress is picking up pace’.”
That’s, I think, the evidence you’ve previously given, that things sped up as time went on. He says:
“For POL [the Post Office] this is a catalyst for change, but it presents a difficulty in terms of handling (ie why is [the Post Office] changing now that progress is finally being made, what are they hiding?) It also presumably makes it harder to secure Anthony Hooper’s support for change – particularly, as he suggests, 18 months is not unreasonable.”
Pausing there, were you aware, as at June 2014, of a plan to change the process or commitment by the Post Office or the Shareholder Executive to then change the process?
Sir Anthony Hooper: No, you’ve shown me a discussion I had with Paula Vennells in which mention of change was made but I didn’t know that it went any further than a discussion. I certainly didn’t know that any sort of tentative decisions were being made to make changes.
Mr Blake: Thank you. That continues to say:
“Separately, November 2015 is after the election, which is enticing to ministers who can point to an established process between now and the election.”
Were you aware of any political dimensions to the continuation of the scheme?
Sir Anthony Hooper: Certainly not.
Mr Blake: Can we now, please, turn to POL00148863. We’re now in August 2014. POL00148863. Thank you very much. I believe it should be 8863, POL00148863. Thank you very much.
This is an email from Rodric Williams to you – a Post Office lawyer to you, and it relates to the final version of Second Sight’s part two report, and he says there:
“Further to my email yesterday, we have now received the ‘final’ version of Second Sight’s part 2 Report.”
He says:
“The Report still includes matters that are beyond the scheme’s scope”, et cetera.
So Second Sight had produced a first version which had then be subject to feedback from the Post Office, and they have now produced what is said to be the final version. If we scroll down to the bottom of this page, please, he says as follows:
“I understand that the Working Group’s Terms of Reference provide that where the Working Group cannot reach a unanimous decision, the Chair may define the point of disagreement and call a vote. As a unanimous decision over the report appears unlikely, Post Office respectfully requests that the Chair call for a vote on Thursday’s call on the following resolution:
“1. That the report not be released as currently drafted;
“2. Alternatively, that if the report is to be released as currently drafted, that the Working Group notes Post Office will, as a party not a member of the Working Group, write to each applicant who receives the report setting out the Post Office’s position on the report.”
It goes over the page to say:
“I therefore ask your consent to defer release of the report until next Thursday’s Working Group call so that this resolution can be discussed and voted upon, which will provide Post Office with the opportunity to explain its position and, if appropriate, explore with the Working Group any potential alternatives.”
Can you assist us with what you recall of this issue?
Sir Anthony Hooper: No. I think there’s a minute which we can look at, where this was discussed. But …
Mr Blake: Would you have seen it as within your remit as chair of that group to delay Second Sight’s part 2 report?
Sir Anthony Hooper: Well, if I’m asked by the Post Office to delay it until a few days later, the Working Group, of course I would agree to that.
Mr Blake: I’ll take you to a document that you may be referring to, it’s POL00207914. It’s an email that refers to what ultimately happened and it’s the second substantive paragraph. If we can scroll down please, it says:
“Sir Anthony Hooper, despite our attempts to delay the issue of the report until the Working Group had an opportunity to discuss it (with a view to improving it), he decided that the report should be issued to those applicants and advisers whose cases, in the opinion of Second Sight are referenced to the content of the report. Consequently the report was sent to nine applicants”, et cetera.
It says there that the Post Office wrote to the recipients of the report to advise them that the report was not endorsed by the Post Office.
Sir Anthony Hooper: But was the matter discussed at a Working Group?
Mr Blake: It doesn’t seem to be, it’s certainly not suggested in that email. Don’t have –
Sir Anthony Hooper: I’m surprised it wasn’t discussed at a Working Group before I took that decision but there it is. I may have done.
Mr Blake: Is there anything that you recall of that particular issue?
Sir Anthony Hooper: Well, I obviously recall the issue when I read about it. It was a very hot topic. But as you can see, I think, whether we had a vote or not, I simply can’t remember. But I definitely made the decision that is outlined there.
Mr Blake: Do you recall why you made that decision?
Sir Anthony Hooper: Well, I wasn’t to do with the merits. I was concerned with procedure. I was concerned that Second Sight, they produced their report, and that report goes out.
Mr Blake: Did you have any concerns about the delay of the report or a delay to the report?
Sir Anthony Hooper: I probably did. But I’d like – I would obviously like low look at a minute, if there is one, in which this was discussed, and I can’t remember.
Mr Blake: Can we please turn to UKGI00000032. We’re moving forward now to March 2015, and the end of –
Sir Anthony Hooper: The end, yes.
Mr Blake: – the Working Group. This is a ministerial submission to Jo Swinson, the then Minister. I’m just going to read to you a few extracts from this submission. If we scroll down, please, to the summary at 2 and 3, it says:
“It is becoming increasingly apparent that the scheme is not working in the way it was intended …”
Sir Anthony Hooper: Sorry, who is this from?
Mr Blake: From Laura Thompson, who is, I presume, an official within the department.
Sir Anthony Hooper: Getting her information from the Post Office?
Mr Blake: Well, that’s –
Sir Anthony Hooper: I presume. Not for –
Mr Blake: That’s something I will ask you about.
Sir Anthony Hooper: Yes, all right.
Mr Blake: If we look at paragraph 2, the summary there that’s presented to the Minister, is:
“It is becoming increasingly apparent that the scheme is not working in the way it was intended and is taking too long to progress to mediation for applicants. [The Post Office] report (confidentially) that JFSA are refusing to engage in the Working Group, certain MPs have publicly withdrawn their support … and both JFSA and the MPs supporting them are increasingly critical of [the Post Office].”
Sir Anthony Hooper: Can we take that please line by line?
Mr Blake: Because, of the time, I’d like to read you a few paragraphs and then you can take it –
Sir Anthony Hooper: As long as you don’t think I’m accepting that, what’s said there.
Mr Blake: Absolutely not. In fact, the question I’m going to ask you at the end is the extent to which you accept that it’s accurate or not.
So perhaps we’ll look at a few paragraphs, and then we can revisit this particular page. Paragraph 3 says:
“Whilst the delays are due in some part to the complexity of the cases and the depth of the investigations by both [the Post Office] and Second Sight, they also arise from pressure from JFSA, MPs and Second Sight to widen the scope of the scheme given that there has been no ‘smoking gun’ found to date on Horizon. Second Sight are attempting to explore issues outside their remit (or indeed expertise), such as subpostmasters’ contracts and [the Post Office’s] prosecutions policy, rather than focusing their efforts on the individual cases they were appointed to investigate.”
If we scroll over the page, there are two more paragraphs I will read, paragraph 4 and paragraph 5. Paragraph 4 says:
“From [the Post Office’s] point of view, the investigation and Mediation Scheme has demonstrate that there is no evidence of systemic flaws in Horizon and no evidence that any of the convictions are unsafe. Where [the Post Office] may have fallen down in individual cases is on training and support, and they are addressing those issues which have not already been picked up.”
Paragraph 5:
“[The Post Office’s] board have agreed that, effective from next week, they will announce that [the Post Office] will adopt a presumption of mediating all non-criminal cases remaining in the scheme (except in some very exceptional circumstances). This will render redundant the role of the Working Group so it will be closed.”
Looking at what I’ve just read, is that submission to the Minister accurate or does it accurately reflect the position, so far as you saw it, at that time?
Sir Anthony Hooper: Could you go back to paragraph 2, please?
Mr Blake: Absolutely.
Sir Anthony Hooper: The scheme was working as it was intended. It was taking too long but we were dealing with the problem, putting pressure on both Second Sight and the Post Office to produce the reports that they had to produce. It is not true that JFSA were refusing to engage in the Working Group. What is true is that there was an issue over mediation. The scheme envisaged that Second Sight would produce their report, and then a decision would be made by the Working Group as to whether it was suitable for mediation.
I took the view, originally, that, because the Post Office and the JFSA couldn’t agree as members, that I would opt for mediation if I thought that there was a reasonable chance that mediation would succeed.
Alan Bates and JFSA persuaded me that that was a wrong approach. I looked more carefully at the origins of the scheme and what MPs had been told, and I changed my test to a much wider test.
JFSA refused to take part in the discussions that the rules required us to have as to whether or not there should be mediation. So, effectively, they would absent themselves from the room, which put a lot of pressure on me because I had to try to work out on my own without any submissions from them as to whether it was appropriate to go to mediation. That, as I recollect, is the only time in which they refused to engage, so it was a pretty minor matter and it was being resolved by me exercising a casting vote, and I think towards the end we were more often than not, I was deciding that it should go to mediation and give my written reasons for doing.
It’s true to say, I’m sure, that MPs had publicly withdrawn their support and it’s true to say that they were increasingly critical of POL. I accept that.
Paragraph 3, I find that difficult because, if you’re looking at an individual case, then it’s inevitable that you’re going to look slightly wider. But you see there, there has been no smoking gun. So there was nothing that was strong enough to show that, as we now know, that Horizon was not a robust system and had many bugs and errors and allowed Fujitsu even to change things, change the entries. So I have some sympathy for Second Sight for widening it but that was a matter that could be controlled by me if I felt that they were going too far.
Paragraph 4 – there you are – “demonstrated … no evidence of systemic flaws in Horizon”. Therefore nothing, all convictions are safe, all of which we know now is to be completely rubbish, and the rest is announcing the closure. I was – yes, go on.
Mr Blake: You say that from what you know now. From what you knew then and the various reports that you had seen, do you think it was fair and accurate to say that the investigation and Mediation Scheme had demonstrated that there is no evidence of systemic flaws in Horizon and no evidence that any of the convictions are unsafe?
Sir Anthony Hooper: Well, that’s a difficult question. Number 1, the Post Office was saying Horizon – there is no systemic flaws in Horizon. Therefore, it follows that there is no evidence that any of the convictions are unsafe. That’s the Post Office view. It is right to say that we did not find the smoking gun. It was found by Mr Justice Fraser.
It was Mr Justice Fraser that looked at this in huge detail with Alan Bates, of course, being the lead claimant in the case. But it’s right to say nothing came out which showed that – we were looking at individual cases, so it wouldn’t have happened. What we now know is that it was only by going right back into original data, error logs, et cetera.
Mr Blake: Was it the purpose of your schemes to identify whether there was or wasn’t evidence of systemic flaws in Horizon?
Sir Anthony Hooper: Yes. I mean, I think it was, because, if you look at the opening lines of the document, it was: the Post Office believe it’s robust and there’s nothing wrong with it; the postmasters don’t agree; this scheme may help to find out which is right. But if you think of the amount of time it took before Mr Justice Fraser gave his last of his decisions, it’s years later, 2019, after weeks of evidence.
Mr Blake: I’m going to move on now to some differences in opinion between yourself and the Post Office and their legal advisers. First, I want to deal with some initial observations on the scheme. Can we look at POL00116136. I’m afraid we’re going to have to take these rather quickly.
Sir Anthony Hooper: Yes, too.
Mr Blake: If we look at – over the page, number 4. Paragraph 4. This is prior to your appointment, so it’s a meeting between yourself with Paula Vennells and there’s discussion of your various attributes for the role. At (c) it says you suggested quite firmly that it might be more appropriate for cases that have been through the courts to be referred to the Criminal Cases Review Commission rather than go through the Mediation Scheme. Very briefly, what was your view as far as that was concerned?
Sir Anthony Hooper: Well, I had not been involved in these cases at all. I’ve told you already what my state of knowledge was, and I thought at that time that probably convictions should go separate way. I changed my mind, we looked at many – a number of conviction cases. So it’s a sort of very first, if you like, view of something before I really got in to understand what was happening, and I didn’t stick to that decision, and nor did the Post Office’s.
Mr Blake: (e):
“In the context of a discussion on the outcomes from the mediation process, he observed that ‘sorry was a good word!’ – we should be prepared to apologise to subpostmasters where appropriate.”
Did you continue to hold that view?
Sir Anthony Hooper: I do. I’ve always held that view. I’ve held that view in so many different cases involving particularly governments who will not apologise at an early stage. Instead of saying, “I’m sorry, something went wrong”, they continue to fight it out, often at huge cost to everybody.
Mr Blake: Can we look at POL00066817, please. It’s an email from Martin Smith to Susan Crichton, to the General Counsel Post Office, and it refers to the note we’ve just looked at. In the second paragraph it assesses – paragraph 4(c) that we’ve just been mentioning and he says there:
“I do not get the feeling that he [that’s you] are suggesting that (all of) the criminal cases should be sent to the CCRC rather than going through the review process which we are presently conducting. I think his suggestion is very much in line with the concerns expressed by Brian Altman QC about the dangers of allowing convicted people into the Mediation Scheme. Brian’s view was that convicted people should instead exhaust such rights of appeal that are open to them.”
Was that the reason that you took that view: that convicted people should exhaust the Court of Appeal –
Sir Anthony Hooper: I didn’t take the view. I changed my view.
Mr Blake: Was that your initial view though? Was it along the same lines as that expressed by Mr Altman or a different reason?
Sir Anthony Hooper: My initial view was expressed at a meeting when I hadn’t been appointed and knew very little about it.
Mr Blake: If we look down, please, it then addresses the issue of the apology, and it says there:
“Brian expressed a concern that the slightest apology to a convicted person or the payment of compensation could indeed give rise to an appeal. He was concerned that Misra [Seema Misra] would use the Mediation Scheme to obtain some sort of concession to allow her to appeal.
“I note from paragraph 4(e) Sir Anthony Hooper observed that “sorry was a good word”. If he intends to use it in relation to any convicted person allowed into the Mediation Scheme, the possibility of a successful appeal may well be increased.”
Can you assist us with your views as to what is written there?
Sir Anthony Hooper: My view, and by at least the middle of 2014, was there was likely to have been serious miscarriages of justice. My initial view that it was very unlikely that these people had stolen money remained. I wanted people who were probably already left prison, people who had suffered so badly, I wanted everyone to get on, identify the miscarriages of justice by one route or another, get their convictions quashed. That’s what I wanted.
Mr Blake: And did you see any concern with giving an apology that it might give rides to an appeal?
Sir Anthony Hooper: You’d apologise because I thought it was all wrong and, therefore, there should be an appeal and the conviction should be quashed. I didn’t want the delay. We’re all aware of the terrible suffering of those who have been convicted. My desire was to try to get things going so that, if someone had been wrongly convicted, that could be dealt with.
Mr Blake: I’m going to –
Sir Anthony Hooper: I wasn’t worried about all the sort of legalese as to how the Court of Appeal would treat an apology. I’m used to many cases where prosecutors have said, “We do not resist the appeal against conviction”, I’m used to that. I’ve sat on many cases where prosecutors have said, “We don’t resist the appeal”, and I would give a short judgment explaining why I was – the prosecutor was right to take that view.
Mr Blake: I’m going to move on to another difference of opinion. That relates to disclosure in ongoing prosecutions. Can we please look at POL00125071, please. It’s the second page, please. It’s an email from Andrew Parsons to Martin Smith, copied in to Jarnail Singh, and he says as follows:
“Are you generally reviewing these applications to see if they give rise to any disclosable material (I expect so – but best to double check!)? This point was raised by Tony Hooper at our meeting last Friday. He also thought that it was ‘obvious’ that as part of its disclosure duties, Post Office should be disclosing anonymised details of each application in prosecutions where Horizon is being questioned. In response, I sat squarely on the fence and said that the applications would be reviewed and proper disclosures made as required.”
Does that accurately reflect the advice you gave?
Sir Anthony Hooper: Yes. Let me explain what I was saying there. One of the arguments that the Post Office used in many of their investigating reports as I remember, is that there is nothing wrong with Horizon and, if there was, we’d have had lots of complaints. What I was saying is the very fact that such a significant number of SPMs had raised the issue of the robustness, the accuracy, et cetera, of Horizon, was in itself a – something that ought to be disclosed. You couldn’t keep on saying, “It’s robust”, whereas there were probably hundreds of people who had accounts of it not being robust. There’s subpostmasters saying “I had £2,000 on the screen, it disappeared. I had 2,000, it doubled to 4,000”. There were lots of those cases.
Now, for the Post Office, that was easy. All they said was “Horizon is robust, those people are wrong”. One of them is a trainer, I think, called Latiff(?), as I subsequently learnt. But what I wanted to say was that there were all these complaints. They can’t all be absolutely without merit. There must be some problem with Horizon. If that be right, then applicants should know. That’s what I was trying to say.
And then I’m aware that there was lots of talk about how I was not following the Attorney General’s Guidelines and this and that but, by all means, show them to me but I was actually trying to get – make sure that – the problem that I always thought was there, although I retained my independence as a mediator, as the Chairman, I always thought “Please, let’s get on and solve these cases”, because I was very fearful.
We can talk about the whole issue of pleading guilty to false accounting, if you want me ask me questions about that and my views on that.
Mr Blake: I will very briefly. Let’s deal with that second point there that Second Sight believed they had lots of information that might be relevant and there’s a discussion there of your advice about them not being under the Post Office’s control for Second Sight –
Sir Anthony Hooper: Yes, well, it turned out I was wrong there. Simon Clarke tells me, I read his – I didn’t read it at the time but I’ve read it since – that POL had a duty to make enquiries of third parties. All I was interested in was getting the information out and, if the Second Sight did it, they’d do it quickly.
Mr Blake: Can we please quickly look at POL00407733, and that’s the Simon Clarke comments that you’ve just been referring to.
I mean, is the difference that we see here that you’re giving advice as to what should be done and what is practical, as opposed to a strict legal position?
Sir Anthony Hooper: I just wanted –
Mr Blake: If we scroll down, sorry.
Sir Anthony Hooper: I feared miscarriages of justice and I wanted everything to be done so that those people could have their convictions quashed before they died.
Mr Blake: We see there in the second paragraph on the screen that Mr Clarke disagreed with the generalised approach to disclosure, and he says:
“The correct position remains that it is the duty of the prosecutor to consider material in light of the test for disclosure and to disclose material that meets that test. The higher courts have long since deprecated the practice of throwing open the warehouse doors and closings everything in the prosecutor’s possession.”
Was your advice to throw out the warehouse doors?
Sir Anthony Hooper: No, it was not. That’s an excuse used over and over again.
Mr Blake: What is your view, then of the position taken with –
Sir Anthony Hooper: The position is quite clear that things that could assist a convicted defendant to show that his conviction was wrong, or the conviction was unsafe, must be disclosed.
Mr Blake: Was it your view that the way to do that or a way to do that was by disclosing anonymised case studies that you had seen that questioned the reliability of Horizon?
Sir Anthony Hooper: That’s what I thought. Rightly or wrongly, that’s what I thought.
Mr Blake: Can we please look at POL00146859.
Sir Anthony Hooper: I’m not saying that Simon Clarke is wrong and all the law stuff, but I was trying to get this thing going. There was – we now know that my intuition that there were serious miscarriages of justice was right. We now know that. At that time, we didn’t know – but I wanted to do the best I could so that people would not die or go bankrupt or whatever it might be, that their convictions would be looked at. In fact, they weren’t looked at until when, 20 – I can’t remember the date – ‘20?
Mr Blake: Can we scroll down on this page, please. Again, it is, as you say, much the same. It’s emails. This from Jarnail Singh from the Post Office and we have another one communicating what is said to be the advice of Brian Altman QC, regarding the disclosure obligations. What do you think caused the difference of approach between yourself and the Post Office, in respect of disclosure of information that had been brought to your attention? Why do you think the positions are so different?
Sir Anthony Hooper: All I can say – I don’t think I can answer that question. Simon Clarke working for – he was counsel. Brian Altman advising the Post Office. I don’t think they saw things in the way that I did but that’s their right.
Mr Blake: What was the difference between you, then, in that approach?
Sir Anthony Hooper: Well, I never saw these advices. I never saw Simon Clarke’s advice. I never saw Brian Altman’s advice. I’ve now read it and I doubt he would be saying what he says in those advices in the light of his later concessions before the Court of Appeal Criminal Division. But then everything seemed all right. There was nothing wrong with Horizon. There’d been no prosecutorial misbehaviour.
Now we know that’s all wrong. We know there was serious, serious faults with Horizon, and we know there was prosecutorial misbehaviour.
Mr Blake: Did you expect the Post Office to be taking advice from external lawyers about points that you had made that we’ve been looking at?
Sir Anthony Hooper: That’s up to them.
Mr Blake: I’m going to move on to 2014 and 2015, and this is the very final piece of advice, and different advice –
Sir Anthony Hooper: False accounting and theft.
Mr Blake: Absolutely. That’s POL00006368, please. In fact there’s one before false accounting and theft, and that’s the approach to mediation, and that’s what we’re looking at. So two final points. One is the approach to mediation and the second is the difference between false accounting and –
Sir Anthony Hooper: Let’s do the second one first.
Mr Blake: Okay. In that case, can I take you to POL00125777.
Sir Anthony Hooper: I mean, I can do it very simply. Second Sight said in the report there’s a difference between false accounting and theft. They no doubt said it because I’d discussed it with them and said. And then there’s a great advice – huge, lengthy advices, as to whether that is right or wrong. But we know it’s right. If somebody is charged with theft of 10,000 and he pleads not guilty to theft and pleads guilty to false accounting, it is a completely different offence, much less serious, because the cause of the loss was not due to the SPM stealing it. It must be due to some other clerical error or something. SPMs would say it was down to Horizon, but some of them weren’t allowed to say that as a condition of their plea, as we now know.
So, in real terms, anyone who has practised criminal law knows that, if I’m charged with theft of 10,000 and offered a plea to false accounting, I’ll accept it, because I’m going to go to prison for theft, and I’m not going to go to prison for false – normally.
Of course, if he’s charged with false accounting of 500,000, that’s a different matter. But on the facts of these kinds of cases, a loss of 20,000, “Plead guilty to false accounting, we’ll drop the theft”.
Mr Blake: Can we please look at POL00006366, and I had planned to take you through various passages of this advice but you’ve read the full advice, I think you’ve read it quite recently.
Sir Anthony Hooper: Yes.
Mr Blake: This is the advice from Mr Altman on precisely that issue.
Sir Anthony Hooper: It’s a –
Mr Blake: Can you assist us with why you consider that it isn’t put in those stark terms that you’ve just given to the Inquiry, in this advice?
Sir Anthony Hooper: Of course it’s right. It’s the same – the penalty is the same, seven years. You can look at sentencing guidelines. You can read your – but I practised criminal law for 20 years, in the Crown Courts, in the Magistrates Courts, and I know that a plea of guilty to false accounting is normally going to lead to a completely different sentence than if I plead guilty to theft. If I plead guilty to theft and I’m in an employee position, I’m in a breach of trust and the sentencing guidelines almost certainly mean that I’m going to have to go to prison.
If I plead to false accounting and say, “Really, I covered it up because I thought it would all get right later. I shouldn’t have covered it up, I’m sorry I did that”, that’s something which the judge is going to look on as huge – as mitigation.
So we can do all the advice and have pages on it but, in real life, guilty to false accounting is a sensible way for someone, whether he’s innocent or not, to get out of the situation.
Mr Blake: Can we look at page 3 of this advice, which quotes the words that were set out in a letter to Second Sight on this issue. The Post Office wrote to Second Sight and said:
“The suggestion that the offence of false accounting is a less serious offence to that of theft is incorrect. Both offences are equal in law: both are offences of dishonesty and both carry the same maximum sentence …”
You have that letter. You have this advice. In your view, what went wrong at the Post Office end to have such a fundamentally different position to the one that you’ve just explained to the Inquiry today?
Sir Anthony Hooper: It’s theoretical. It’s not the real world and, if you look at the real world, the real world is well described in Jane McLeod’s letter. You have a loss of money, you have a false accounting, therefore you charge theft. That’s what she said in one of her letters. And people, whether guilty or not, are likely to plead to false accounting, they don’t want to go to prison and, of course, there was often a requirement to disgorge the money, so it was a very simple and easy way of getting your money back.
Mr Blake: The Chair –
Sir Anthony Hooper: We now know all those convictions are, by and large, unsafe.
Mr Blake: The Chair has to make recommendations in due course and there are those watching this Inquiry who are interested in matters of legal ethics, et cetera. Why do you think it is that a lawyer advising the Post Office doesn’t say exactly what you’ve said today, on the difference?
Sir Anthony Hooper: I don’t think that’s a fair – I don’t think I can answer that question. I’ll leave it to the Chairman.
Sir Wyn Williams: Well, that’s fine and I’m not going to hide this. No doubt we’ll hear from Mr Altman about his real-life experience but I too have practised in Crown Courts for many years and sat as a judge for many years, and my real-life experience is exactly the same as Sir Anthony Hooper’s.
Mr Blake: Thank you.
I’m going to ask the very final questions now. I don’t think I need to ask the difference of opinion in relation to the mediation of cases; that’s set out in the documents.
A question that’s been raised by Core Participants, it relates to the retention of materials from your Working Group. Are you aware of any discussions with the Post Office about their retention of any documentation relating to the work that was being carried out?
Sir Anthony Hooper: It might have been discussed. I certainly wouldn’t remember today.
Mr Blake: One thing that you –
Sir Anthony Hooper: I would hope that they retained all the documents. That’s what I would hope.
Mr Blake: One of the matters that you’ve raised today is about following the money, and that was one of the core issues or approaches that you wanted to take. Were there issues with the production of accounts, for example, showing losses?
Sir Anthony Hooper: I mean, there’s the one about suspense accounts. I couldn’t understand where the money had gone. If a subpostmaster found a loss of 2,000 and paid it out of his own pocket or her own pocket, which they did, or it was taken off future income, where had the money gone? And so I asked, started asking, towards the end of 2014, for suspense accounts because I thought that – I knew that there were suspense accounts. I knew that profit – Post Office, after three years, took out the profits of the suspense accounts and I wanted to know more about it.
I got absolutely nowhere and nor did Second Sight. They repeated it again in 2016. So just because I’m interested, I read Mr Justice Fraser’s decision, insofar as it related to suspense accounts, and he said that when it got to the civil proceedings, the Post Office pleaded that they didn’t understand what suspense accounts were about, an approach which Mr Justice Fraser, in my view rightly, said – disapproved of. So there’s just one example. Where had the money gone?
Mr Blake: Who is it that you had been asking, with regards to suspense accounts, as an example? You say –
Sir Anthony Hooper: The Working Group – you’ll see it in the minutes, you can find it in the minutes, two or three cases where I said “What’s happened?”, and I was told it would take too long or they hadn’t got it, or anything. It’s just one example.
Mr Blake: Thank you very much.
Sir Anthony, it has been a whistlestop tour this afternoon. We have had, unfortunately, rather limited time but is there anything that you would like to add that we haven’t addressed today?
Sir Anthony Hooper: I don’t know. It’s the greatest scandal that I have ever seen in the criminal justice process. We’ve had many miscarriages of justice but nowhere as many as these. We need to re-evaluate how we approach criminal cases of this kind. Something went very, very wrong, and I don’t envy the chairman’s task in trying to find out how it all started. Something went very, very wrong.
I think, in part, it’s a much wider question and that is the obligation of a prosecutor. Because all that a prosecutor has to establish, in deciding whether to indict someone, apart from the public – the good public – test, is whether there is enough evidence to support a conviction. That is a very low threshold. It means that defence have to do a large amount of work to see whether there is some alternative to guilty.
And with the decline in legal aid, with senior Members of the Bar who, in my day, practised – the Criminal Bar – and did so on legal aid, that’s all gone now, or largely gone. I am very worried about the way in which we approach our criminal justice trials. That’s a much bigger question than perhaps needs to be resolved here.
But, underlying all of this are the two – the major defect of miscarriage of justice in the common law across the world, United States, Britain, is non-disclosure, over and over again. I don’t know how many trials I did in the Court of Appeal Criminal Division relating to serious non-disclosure.
Secondly, this notion that all that has to be shown by the prosecutor is a sufficient evidence upon which a jury could convict. Very much.
Mr Blake: Thank you very much.
Sir, do you have any questions before we finish for the day?
Sir Wyn Williams: Thank you very much.
Are there any questions from Core Participants?
Mr Blake: No, I don’t believe so.
Sir Wyn Williams: Well, then, thank you very much, Sir Anthony, for making the time to write a witness statement and to appear to give evidence. I’m very grateful to you.
The Witness: Thank you, Mr Chairman.
Sir Wyn Williams: We will reconvene at 10.00 tomorrow morning, yes, Mr Blake?
Mr Blake: We will. Thank you very much, sir.
Sir Wyn Williams: Thank you.
(4.31 pm)
(The hearing adjourned until 10.00 am the following day)