Official hearing page

10 May 2024 – Roderick Ismay

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(9.44 am)

Sir Wyn Williams: Before you start, Mr Beer, I’ve been asked to advertise In Your Own Words, and it’s particularly addressed to members of the public who may not yet have participated in it. We started the project or, to be more precise, the Secretariat started the project – I don’t want to claim any credit for this – in March and there’s been a good deal of response to it. But I’d like more response and I simply want to tell you that, in the premises now, we have what we might call a collection box, where those people who visit the Inquiry and who wish to participate in telling me about their experiences, can fill in the questionnaire and deposit it in the collection box, and that might be an easy way of people to participate if they are at the Inquiry.

Obviously, if they’re not at the Inquiry, I would still encourage them to use all the other available means of participating but, if you happen to be at the Inquiry and you haven’t yet done it, I’d be grateful if you’d fill in the collection box, so to speak.

Mr Beer.

Mr Beer: Thank you very much, sir. May I re-call Rod Ismay.

Roderick Ismay

RODERICK MARK ISMAY (re-sworn).

Questioned by Mr Beer

Sir Wyn Williams: Mr Beer, I think it may be appropriate, given what you have told me about the various possible lines of questioning, if I give Mr Ismay the warning about self-incrimination.

Mr Beer: Sir, yes.

Sir Wyn Williams: You may have heard me give this warning to other witnesses but let me give it to you. It’s not really a warning, Mr Ismay, it’s a direction about how we might proceed.

Under our law, a witness at a public inquiry has the right to decline to answer a question put to him by any lawyer who is asking questions, and the right to decline answering a question arises if there is a risk that the answer to that question would incriminate the witness. We call it, in shorthand form, the privilege against self-incrimination.

I have decided that fairness demands that I remind you of that privilege before you resume your evidence. However, it will be for you to make it clear to me that, in respect of any question put to you, it is your wish to rely upon the privilege against self-incrimination. If, therefore, any questions are put to you by any of the lawyers who ask questions or, for that matter, by me, which you do not wish to answer on the grounds that the answers might incriminate you, you must tell me immediately after the question is put. At that point, I will consider your objection to answering the question and, thereafter, rule upon whether your objection should be upheld.

Are you represented by a lawyer here today?

The Witness: Yes.

Sir Wyn Williams: Right, well, that being the case, if any doubt arises in your mind as to whether you should invoke the privilege and you wish to be assisted by your lawyer, then, in all probability, I will permit you to do that before we go any further. But, again, you must tell me that you wish to consult with your lawyer so that I can consider whether that’s appropriate in the circumstances.

Do you understand all that, Mr Ismay?

The Witness: I understand, yes, thank you.

Sir Wyn Williams: Thank you very much. Mr Beer?

Mr Beer: Thank you, sir.

Good morning, Mr Ismay.

Roderick Ismay: Good morning, Mr Beer.

Mr Beer: As you know, I ask questions on behalf of the Inquiry. You last gave evidence before the Inquiry on 11 and 12 May 2023, nearly a year ago to the day. You’ve kindly since provided a second witness statement, dated 10 April 2024, which is 48 pages long. It should be in front of you in a hard copy. Can we turn to that, please. Its URN is WITN04630200 and if you turn to the –

Roderick Ismay: It says “0100” on it.

Mr Beer: That’s the wrong witness statement, then.

Roderick Ismay: Oh, that’s the first witness statement. Oh, right, okay, I’ve got you. “0200”, yes.

Mr Beer: If you turn to the 48th page, please, you should see a signature?

Roderick Ismay: Yeah.

Mr Beer: Is that your signature?

Roderick Ismay: That I see my signature, yes.

Mr Beer: Are the contents true to the best of your knowledge and belief?

Roderick Ismay: Yes, they are.

Mr Beer: Thank you very much. That can be put to one side.

I’m going to start, Mr Ismay, with what might be a significant topic, deal with that and then deal with issues chronologically.

The first topic is the extent to which the Post Office was aware, in July 2013, of the three bugs referred to in the Second Sight Interim Report, okay? I think you know that the Second Sight Interim Report of 8 July 2013 referred to three bugs in Horizon: the receipts and payments mismatch bug; the suspense account bug; and the Callendar Square or Falkirk bug. Correct?

Roderick Ismay: I can certainly remember through all the documents the first two of those bugs you’ve mentioned. I remember the name of the third one from the other matters. I couldn’t recall that those three items were in Second Sight’s report but I’ve come across all three of them mentioned in the documents, yes.

Mr Beer: Okay. In fairness, the third bug wasn’t named as the Callendar Square or Falkirk bug in the report; it was referred to as a third bug?

Roderick Ismay: Right, okay. I’m familiar with lots of correspondence that refers to the two bugs and talks about a 62 and a 14, which are the first two of the matters that you mentioned there.

Mr Beer: Yes, but, in any event, you know that the Second Sight Report referred directly to the first two: the receipts and payments mismatch bug and the local suspense account bug?

Roderick Ismay: Yes.

Mr Beer: Thank you. I want to look at some material, please, exchanged shortly before the publication of the report about knowledge within the Post Office of those bugs. Can we start with POL00060572 and it will come up on the screen for you. This is an email of 30 June, you can see at the top, from Jarnail Singh, and then underneath the date the “To” list: Hugh Flemington, Alwen Lyons, Mark Davies, Rodric Williams and Lesley Sewell. You’re not a copyee on this, yes?

Roderick Ismay: Yes, I see that.

Mr Beer: This is a week before the Second Sight Report. He says:

“Further to our conversations and emails on Friday afternoon, I would like to confirm the following …”

He says he thinks it’s unhelpful to reference to “Bug 14” because it suggests there’d been 13 previous problems.

Then if we go down to number 5, please:

“Simon Clarke, prosecution counsel, and Martin Smith [of Cartwright King] spoke to Gareth Jenkins on Friday, 28 June. He told them that he had only volunteered information about two bugs present in the system to Second Sight. He also told them that those bugs would not have affected the integrity of the data being used in [a case] the Samra prosecution. If I may speculate here a little here, Gareth Jenkins only told Second Sight of two bugs, the Post Office only knew of two bugs. It seems, therefore, unlikely that they would find any other bugs without Gareth Jenkins knowing about it due to the mechanics of the system reporting and the checks and balances already built into the system. It looks likely that Second Sight’s Report will focus on these two bugs.”

Do you agree, just reading this now – I know you weren’t a copyee on the distribution list – that Mr Singh is implying that the Post Office knew about the first two bugs as a result of Mr Jenkins informing Second Sight about them?

Roderick Ismay: I don’t know. Show me – show me that part of it.

Mr Beer: Paragraph 5, the one I’ve just read.

Roderick Ismay: Oh, right. Well, he’s certainly saying that Gareth Jenkins has told Second Sight of the two bugs.

Mr Beer: Yes. What about more broadly? Can you recall at the time of the weeks before, in the run-up to the publication of the Second Sight Report, was information coming out like this, that Second Sight were going to refer to two bugs?

Roderick Ismay: I don’t know.

Mr Beer: You can’t remember?

Roderick Ismay: I can’t remember and I don’t know whether that was coming out. My recollection or involvement in it was various spot reviews and some questions wanting some kind of subject matter expert input that myself and my team would have come forward with. I can’t remember conversations about these two bugs.

Mr Beer: Okay, that can come down. What about when the Interim Report was published on the 8 July? Do you recall that the approach that the Post Office took to the Second Sight Report was that it was revelatory of the two bugs?

Roderick Ismay: No, I can’t recall how it did respond to it. I can’t recall a sense of saying something was revelatory or not. I don’t know how the Post Office did respond to the Second Sight Interim Report at that time.

Mr Beer: Do you not remember being involved in a process –

Roderick Ismay: Yeah –

Mr Beer: – which –

Roderick Ismay: – I remember being –

Mr Beer: – just let me finish – being involved in a process in the run-up to the publication of the report which sought to discover “What did we know about the bugs and how high within the organisation did such knowledge go?”

Roderick Ismay: No, I – I don’t recall going through that. I know there’s lots of evidence that you’ve sent me with many different dates on it, I think going back earlier than that, where there was internal knowledge of the receipts and payments mismatch item, and in terms of what do I remember knowing at the time about that, I think there’s some documents that you’ve shown me, and you’ve given me so many documents I can’t remember what document has got what date in it that I’ve read out of the sort of couple of thousand pages that I’ve been looking at in the last couple of weeks. So I don’t feel that I can say what I remember happened then, but I do know that I was involved in lots of work that would be sort of subject matter expert contribution to things to do with the various discussions that were going on to help Second Sight prior to that date.

Mr Beer: I’m just talking about on publication day and after publication day. Can you recall whether the Post Office’s public-facing position was “These two bugs they’ve referred to, we’ve known about those for ages and we dealt with them appropriately at the time”, or, “This Second Sight Report is revelatory of the bugs to us”?

Roderick Ismay: No, I can’t recall whether the Post Office response was either of those but I would think, in my mind, if I was kind of looking at these at the time, that I would have thought “Yes, I was aware that that receipts and payments mismatch bug was identified some time earlier and I’d understood that it had been fixed some time earlier, as some of the other evidence shows”, but, I’m sorry, as regards the specific time of the date of – the date in 2013 that you’re talking about, I can’t remember what was going on that day, no, sorry.

Mr Beer: Okay, let’s look at the receipts and payments mismatch bug –

Roderick Ismay: Right.

Mr Beer: – then and turn to your knowledge of it and your involvement with it in the years before July 2013.

Roderick Ismay: Yeah.

Mr Beer: Can we start, please, with POL00028838. This is a document with which we are very familiar and I’m therefore not going to take the Inquiry through it. Can I ask you some limited questions about it. Can you see the group of attendees on the first page there?

Roderick Ismay: Yes, I can, yes.

Mr Beer: This is a group of people who either had met when this document was written or were to meet when this document was written for the purposes of a meeting in early October 2010, and it’s about the receipts and payments mismatch bug. Okay?

Can you see on there Andrew Winn, Andy Winn?

Roderick Ismay: Yes, I can.

Mr Beer: Was he one of your team?

Roderick Ismay: Yes.

Mr Beer: Did he report to you?

Roderick Ismay: He didn’t directly report to me, but he was a member of my team, yes. Yes.

Mr Beer: How many grades of management were there between him and you?

Roderick Ismay: One.

Mr Beer: He said, when he gave evidence to the Inquiry, that he reported back to you about this meeting concerning the receipts and payments mismatch bug. Is he correct in what he said there?

Roderick Ismay: I don’t know. I don’t know whether he reported back to me straight after that meeting but I know in some of the other evidence documents there’s things, I think, in the middle of October where I attended something to do with this. I don’t know what conversations Andy came to me before that but Andy was somebody who generally would – with a concern for matters, and his very role was to resolve challenges and sort of issues and experiences that subpostmasters got.

His Relationship Manager role was very much about that and he would often come to me with things that he looking at and trying to resolve, to the benefit of a subpostmaster, so we would speak a lot. I can’t remember whether he came to me on this specific item or not. I’m sorry.

Mr Beer: If we look at page 3, please. Can you see that there are three proposals there –

Roderick Ismay: Yes.

Mr Beer: – as solutions –

Roderick Ismay: Yeah.

Mr Beer: – to the existence of the bug, yes?

Roderick Ismay: Yeah.

Mr Beer: Solution One, Two and Three, which have kindly been highlighted.

Roderick Ismay: Yeah.

Mr Beer: Do you agree the choice between those solutions, ie which one to take, was a very significant decision to take?

Roderick Ismay: Yes, that would be very significant. My understanding had always been that there was no scope to have what you’d call direct entry to Horizon and I would not want there to have been the possibility to have direct entry to Horizon. So the range of options that we’ve got there, there’s clearly one that is a very unpalatable one.

Mr Beer: So just before we get on to the unpalatable option, number 1, my questions at the moment are focused on just choosing between Solutions one, two and three was a significant choice?

Roderick Ismay: Well, yes, yes, there is a significant – yeah, yeah.

Mr Beer: And the kind of thing that Mr Winn ought to have come back to you on?

Roderick Ismay: Yes, and he may well have. I’m sorry that I can’t remember it but I think – I expect that Andy would have – yeah, have wanted to seek and share such a topic. I can’t remember whether he did but I know that in his care he would have wanted to.

Mr Beer: Okay, now you said – I think you volunteered – that one of the choices was unpalatable because it revealed the possibility of a form of remote access, in which branch accounts could be altered remotely, essentially, yes?

Roderick Ismay: Yeah.

Mr Beer: I think you said it was your understanding, so it would have been your understanding in October 2010, that that wasn’t a possibility?

Roderick Ismay: That’s correct, yeah.

Mr Beer: So, if you had been told about Solution One by Mr Winn, that would have been news to you, that there was a form of remote access by Fujitsu in which they could tamper with branch accounts and change data in them without a subpostmaster’s knowledge; that would have been news to you?

Roderick Ismay: That would have been news to me, yes, yeah. I think that would have – so let’s say, linked to some other evidence that’s in there, and one of the things that I challenged about changes to a report later on, there were a number of misunderstandings that, for example, transaction corrections, which my team would issue to branches, there were situations where people within Post Office would sometimes say, “Well, doesn’t a transaction correction directly influence a – the branch accounts?”, which it did not.

But there were misunderstandings about some other things and, therefore, you know, there had been that thing that I think is in the Zebra report, a suggestion of Products and Branch Accounting having direct access to a branch’s accounts, which it did not because we just issued TCs for a branch to accept. There were some misunderstandings of what the teams did.

So I think there’s a later document on this one where I’ve written an email that’s in the pack, where I’ve used some wording like “We would not want this kind of functionality to exist and we would not want” – and I think the word is something like –

Mr Beer: I’m going to come to that, don’t worry, Mr Ismay.

Roderick Ismay: Yeah.

Mr Beer: Just focusing on this document at the moment –

Roderick Ismay: So I don’t know whether that functionality actually existed. Fujitsu were saying, “Do you want us to write a manual entry to the system?” I don’t know whether they actually had the functionality built to do it or not.

Mr Beer: Would you agree that this document makes clear, firstly, that Fujitsu could tamper with branch accounts remotely and, secondly, they’d be able to do so without the branch being able to see it?

Roderick Ismay: Well, it’s certainly setting out that – yes, but, as say, whether they’d got the functionality to or not, I don’t know, or whether they were thinking they could build something to give them the functionality, I don’t know.

Mr Beer: This doesn’t speak about it conditionally –

Roderick Ismay: No.

Mr Beer: – “If Fujitsu have this facility, then they could do this”?

Roderick Ismay: No –

Mr Beer: This speaks as if they could do it?

Roderick Ismay: Yeah, this don’t speak to the conditionality, the other document that you’ve said you’re going to come to later on does have an element of conditionality and that conditionality would have come out of sort of correspondence and discussions and things that IT had said to me about the system.

Mr Beer: So if Mr Winn had either shown you this document or told you about Solution One, by October 2010 you had knowledge, would you agree, of a form of remote access by Fujitsu which could change branch data without knowledge or agreement of a subpostmaster?

Roderick Ismay: Yeah, this document, if I’ve seen this, would have alerted me to say that Fujitsu –

Mr Beer: Thank you.

Roderick Ismay: Yeah, yeah.

Mr Beer: Can we move on, then, please. POL00055410.

If we scroll down, please, you’re not included on this chain. It’s an email from Mr Simpson to Rob Wilson, you remember him as being a senior lawyer within Post Office?

Roderick Ismay: Yes, yes.

Mr Beer: Thank you. He says:

“I am forwarding you the attachments above in relation to a series of incidents, identified by Fujitsu this week, whereby it appears that when posting discrepancies to the local suspense, these amounts simply disappear at branch level and a balance is shown.

“The above includes Fujitsu’s initial analysis and proposed solution/s, whilst the other documents the outputs from various meetings held this week. My concern is around the proposed solution/s, one or more of which may have repercussions in any future prosecution cases and on the integrity of the Horizon Online system.”

If we scroll up, please, we can see that was forwarded to two other lawyers, who I think you would have probably known: Juliet McFarlane and Jarnail Singh?

Roderick Ismay: Well, I recognise the names now from the documents, yes. Jarnail, I knew his name from when I was there. I don’t recall Juliet’s name but yes, yeah.

Mr Beer: One of the documents, the first one, the receipts and payments note, that’s the document I’ve just shown you, okay? Can you see the attachments there?

Roderick Ismay: Right, that was the document we were just –

Mr Beer: That was the document we’ve just looked at.

Roderick Ismay: Yeah.

Mr Beer: The other one is a document called “Loss Discrepancies” and was a report prepared by Mr Gareth Jenkins about the receipts and payments mismatch bug.

Roderick Ismay: Right.

Mr Beer: Did any of this is three people, Rob Wilson, Juliet McFarlane or Jarnail Singh, get in touch with you around this time, 8 October 2010, after they received this email about the bug and the implications for the integrity of the Horizon system and prosecutions?

Roderick Ismay: I can’t remember any of them coming to me at that time.

Mr Beer: Given that one of your team, Andrew Winn, had been in the meeting.

Roderick Ismay: Yeah, yeah.

Mr Beer: None of them, so far as you recall, got in touch with you?

Roderick Ismay: I can’t recall them getting in touch. I’m sorry if they did but I can’t recall them.

Mr Beer: We saw on the last occasion that you gave evidence that you were quite extensively involved in administering and in making decisions about disclosure in the Seema Misra case, about whether an expert would have access to the premises in order to view documents or conduct tests; do you remember that?

Roderick Ismay: I remember that topic. I wasn’t involved in issues of disclosure. What I got, and the questions they asked me for were that Andrew Winn had come to me with a message thirdhand from somebody else who said that somebody wanted to come and do a visit to Chesterfield. The question in the previous witness session was along the lines of why was I, you know, not happy about that, because that was the narrative that Andy Winn had used, and I replied that there were so many reviews going on in the Product and Branch Accounting Team, for business efficiency, Royal Mail separation, loads of things going on, I wasn’t excited about the prospect of another visit coming in and –

Mr Beer: Who’s a defence expert –

Roderick Ismay: Yeah –

Mr Beer: – who was proposed to come in?

Roderick Ismay: Yeah, so I wasn’t – so I don’t think that I stopped another expert coming in. I wasn’t happy about the prospect of somebody else coming in, and that was the question before, but as we had extensive dialogue on that before, I think, if the – if the Post Office lawyers had agreed with another party, that that review should happen, then that visit needed to happen.

But, no, I did not get – and I don’t recall, I don’t think anybody came to me to say, from the Legal Team, “This visit needs to happen”. I got a thirdhand message that came via Andy from somebody else, which didn’t excite me at the idea of another review, as I say, when we’d got, pre-privatisation, lots of reviews going on. So I don’t think that I blocked a visit and I don’t think that I was involved in disclosure either. Disclosure wasn’t for me to be doing disclosure.

Mr Beer: Okay. You had had some involvement in the Seema Misra case, to the extent you’ve just described?

Roderick Ismay: Yeah, I don’t think I’d got any involvement other than that third-hand message that somebody wanted to make a visit.

Mr Beer: I’m just asking at the moment, given that Andy Winn was one of your staff –

Roderick Ismay: Yeah, yeah.

Mr Beer: – and had been present at that meeting, the early October meeting –

Roderick Ismay: Yeah.

Mr Beer: – and, given that you had had some involvement in the Seema Misra case, did any of these three come to you when they received documents about Seema Misra, or potentially about Seema Misra’s case, and the receipts and payments mismatch bug?

Roderick Ismay: Right. So I can’t remember them coming to me and, given the quality of (unclear) documents I’m sure if they had they would have emailed me and you would have found such an email but I can’t remember them coming to me.

Mr Beer: Can we look, please, at POL00055418. This, again, after 4.00 on the Friday, before the trial starts on the Monday. It’s from Mandy Talbot, do you remember her?

Roderick Ismay: Yes, I remember Mandy Talbot, yes.

Mr Beer: What do you remember as her role and function?

Roderick Ismay: She was some sort of, I don’t know, Head of Legal. She was either a Post Office or Royal Mail senior lead on some aspect of legal activity. I can’t remember whether it was criminal or civil, but, yeah.

Mr Beer: We can see it’s an email at 4.09 on that Friday afternoon to Mr Singh, and copied to Mike Granville and to you. What function did Mike Granville perform at this time, October 2010?

Roderick Ismay: I don’t know at that exact date but my recollection of Mike’s role was that he’d got a stakeholder relations role, which would have worked with, what do you call it, BIS or one – one of the Government departments that would be the shareholder, I think, for Post Office. So I think Mike’s role was in regulatory relations and links with that department.

Mr Beer: We know from other evidence that, shortly after this email is sent, Mr Singh either prints out, or somebody using Mr Singh’s log-in details prints out, the attachments to the email we’ve just looked at, do you understand –

Roderick Ismay: Yeah, right.

Mr Beer: – detailing the receipts and payments mismatch bug?

Roderick Ismay: Right.

Mr Beer: So shortly after this. This email says:

“Mike and Rod [ie the pair of you as copyees] are also very interested in any developments at the trial next week which impact on Horizon. You promised to let me know if anything unfortunate occurred in respect of Horizon. Please can you copy Rod and Mike into any messages. Incidentally I assume that you have briefed external relations. Can you let us know who you have briefed because Mike and Rod may wish to have input into any story relating to Horizon. They may give you a call on [a number] for an update. Incidentally Postmasters for Justice met with the Minister this week and were accompanied by Issy Hogg and the lady from Shoosmiths.”

You see there it says “You promised to let me know if anything unfortunate occurred in respect of Horizon”, following “You being very interested in developments at trial next week which may impact on Horizon”; were you very interested in developments at the trial of Seema Misra?

Roderick Ismay: I think that this follows on probably a couple of months after the report that has become known as the Ismay Report, and there’s other –

Mr Beer: The 2 August 2010 report?

Roderick Ismay: Yes, so this is like – what is this, two or three months after that? So probably, in light of having compiled that report, I probably did have a kind of a focus on, well, are there some other things being said here?

Mr Beer: Why does that follow, that you’d written a report that you told us last time –

Roderick Ismay: Yeah.

Mr Beer: – consistently with your instructions from David Smith –

Roderick Ismay: Yeah.

Mr Beer: – was to present one side of the coin on Horizon’s integrity. Why would you be concerned with whether there existed another side of the coin?

Roderick Ismay: Right, so there were several things and some other examples I didn’t see where I’ve been asked to input to other articles, responses to articles. So the number of times that people were approaching me for input, I’d have probably wanted to be abreast of what was happening because I seem to have been approached for all sorts of things.

In respect of that report, I would like to just clarify, I – and in my witness statement, I didn’t say that I was asked to do a one-sided report. Under intensive questioning, I did respond that it could look like a one-sided report but, to be clear, my recollection wasn’t that Dave asked me to produce a one-sided report, my recollection –

Mr Beer: We’ve got a recording of what you said on the last occasion –

Roderick Ismay: But my –

Mr Beer: – which has been transcribed, you having given evidence on oath; are you changing your evidence?

Roderick Ismay: No, I’m not changing my evidence but what I’m saying is, in my evidence, I said that I was approached for the reasons – for assurance, given that Dave had evidently seen questions being asked about Horizon and would have been saying “Well, why does the organisation feel that Horizon would? What are the reasons for assurance?” And I acknowledged in that previous attendance that it could be seen to have looked one-sided because it did look one-sided, but I wasn’t asked to produce a one-sided report; I was asked for the reasons for assurance, given that Dave was a new Managing Director, which –

Mr Beer: Okay, we’re getting a bit distracted. I’m asking you why, three months after then – sorry, two months after then, you had a continuing interest on any developments that might impact on Horizon?

Roderick Ismay: Well, I think just because I was so often being approached for things about it.

Mr Beer: Were you seen as something like the go-to guy on defending Horizon?

Roderick Ismay: No, I think I was seen as a subject matter expert about branch accounts and processes and was approached regularly for that. Just in the way that, through the Second Sight process, I or my team were the subject matter experts on things and so were approached regularly with questions.

Mr Beer: Were you not very interested, in fact, to see whether anything came out at the trial that undermined your one-sided – your myopic report?

Roderick Ismay: I don’t think so.

Mr Beer: Did Mr Singh, in fact, get in contact with you in the course of the Misra trial?

Roderick Ismay: I don’t think he did, and that goes back the things about having that third-hand message before it about somebody coming to Chesterfield. I don’t recall any other approaches, no, I don’t recall that.

Mr Beer: This is moving on beyond the third-hand message. This is an email to Mr Singh and to you, essentially hooking you up and telling Mr Singh that he should get in contact with you if anything unfortunate occurred in respect of Horizon.

Did he get in contact with you about the receipts and payments mismatch bug that had been discovered on this – so far as the documents show, so far as he was concerned – Friday afternoon.

Roderick Ismay: I don’t think so and I can’t remember him approaching me on it, no.

Mr Beer: Did you have an interest in the Misra trial to see whether anything about the receipts and payments mismatch bug came out?

Roderick Ismay: No. No, and when – I think when the Misra trial was proceeding, it was a name that sort of came out of the blue to me as a case name. So it wasn’t something that I was looking at. I know – I think one of my team was invited –

Mr Beer: Just to stop you there. When did it come out of the blue?

Roderick Ismay: Well, I don’t know, but the case with the request about “Can somebody come to Chesterfield”, the third-hand thing, came out of the blue, and the date that that happened was on whatever the correspondence was that we’ve had from Andy Winn in the previous packs. So …

Mr Beer: Would you agree that, if this is right, you maintained a continuing interest in Horizon and, in particular, an interest in the Seema Misra trial?

Roderick Ismay: I think because I was approached so often, as I say, as a subject matter expert on stuff, I was probably interested in Horizon. I don’t think that I was – and this isn’t – this is no disrespect to the individuals in that case because the outcome of all the cases is awful – but I don’t think I was kind of looking at that specific case for any reason, no.

Mr Beer: In the third line, it says:

“Can you let us know, [Mr Singh], who you’ve briefed, because Mike and Rod may wish to that have input into any story relating to Horizon.”

Was that correct: that, at the point of the Misra trial, you wanted to have input into stories relating to Horizon?

Roderick Ismay: I don’t know at that exact date but, clearly, there’s a number of things where I’ve had an input into either complaints or responses to articles in the press, which we’ve seen elsewhere and that you might come on to in some other items. So I have – and other evidence shows that I have had some input into some responses to articles. I can’t remember at this particular date whether I wanted to.

Mr Beer: Were you seen at this period of time as somebody who should have their hand on the Post Office tiller, guiding what was said and not said about the Horizon system?

Roderick Ismay: No, I don’t think so.

Mr Beer: Why would you want to have input into stories relating to Horizon?

Roderick Ismay: Well, I was seen with the Product and Branch Accounting back office finance role as often having a subject matter expert view on things to do with Horizon.

Mr Beer: Can we move forward, please, to November 2010, the following month, and look at POL00294684. Can we see that Antonio Jamasb was emailing you, amongst a group of other people, the proposed attendees, an invitation to a meeting on 15 July (sic)?

Roderick Ismay: Yeah.

Mr Beer: The subject was to be the “Receipts and Payments resolution”. Can you see that under “Subject”?

Roderick Ismay: Yes.

Mr Beer: Thank you.

Roderick Ismay: I can see the bit to resolve discrepancies generated by branches and I can see the attachments called receipts and payments, yeah.

Mr Beer: If you just look at the subject line, which is highlighted about five in –

Roderick Ismay: Oh, sorry.

Mr Beer: – “Receipts and Payments resolution” –

Roderick Ismay: I’ve gone further down, sorry. Yeah.

Mr Beer: If we just go over the page and scroll down, the message concludes in the penultimate paragraph:

“We are looking for you as senior stakeholders to agree [an] approach as a way forward.”

Roderick Ismay: Yeah.

Mr Beer: Go back to the first page, please. Those proposed attendees, would you agree that they are, you included, senior stakeholders?

Roderick Ismay: They are all part of the management, not directors. Many of them aren’t reports to directors but they’re probably Senior Managers in different parts of the organisation, yes.

Mr Beer: So a fair description of senior stakeholders in this issue?

Roderick Ismay: Yeah, yeah.

Mr Beer: Thank you. It says, as you said:

“The aim of the meeting is to discuss a working group proposal: to resolve discrepancies generate by branches following a specific process during the completion of the trading statement.”

Then, if we go over the page, please, we’ll see a series of solutions set out, One, Two, and Three, which I think you’ll recognise.

Roderick Ismay: Yes, they were in the previous document, weren’t they?

Mr Beer: Yes, they were in the October 2010, the month before, document –

Roderick Ismay: Yeah.

Mr Beer: – for the meeting at which Andy Winn had been present, yes?

Roderick Ismay: Yeah.

Mr Beer: You’ll see that Solution One is presented in exactly the same way, yes?

Roderick Ismay: Okay.

Mr Beer: Yes?

Roderick Ismay: It looks like it.

Mr Beer: So, by this time, if Andy Winn hadn’t drawn your attention to that record of the meeting or told you about Solution One, you were, at this time, would you agree, fixed with knowledge that Fujitsu could tamper with branch accounts remotely and that they could do so without the branch being able to see it.

Roderick Ismay: Yeah, yeah, it looks that I was specifically being approached there, yeah.

Mr Beer: Those facts, do you agree, blew a hole through your Ismay Report of 2 August 2010, in which you said there were no backdoors in the Horizon system?

Roderick Ismay: That is – yeah, that – yeah –

Mr Beer: Yes, so what did you do about it?

Roderick Ismay: Well, I didn’t issue a new report.

Mr Beer: Why not?

Roderick Ismay: Because I hadn’t been asked to and, as I’ve put in the comments at the end of it, we didn’t have a terms of reference for it. I was asked to, at short notice, to produce reasons for assurance for the system and it was a one-off report.

Mr Beer: You knew you had new information that showed that a part, a significant part, of your August 2010 report was wrong, didn’t you?

Roderick Ismay: Yes, I can see this does show that part of that report was wrong –

Mr Beer: A significant part of the report was wrong. The “there are no backdoors in Horizon” part was just wrong, wasn’t it?

Roderick Ismay: Yeah, yeah.

Mr Beer: So why didn’t you do anything about it?

Roderick Ismay: Well, because, evidently, lots of people were aware of it from this and I wasn’t tasked with doing an ongoing updated report. I was – my – as you can see from the annual appraisal document that we’ve got in this pack, you can see the number of things that I was involved in, of which this was a very small part of a wide range of things and, so, in hindsight – absolutely, in hindsight – I wish I’d done something to respond to this but, at the time, with loads of competing pressures, sadly this one didn’t lead me to do what, in hindsight, I would wish I would have done to have responded to it.

But I was doing many, many – and I know this doesn’t – this won’t satisfy subpostmasters impacted by all of this – but I’d got loads and loads of different competing priorities, pre-privatisation going on and efficiency reviews in my team, and so, sadly, I didn’t do something on the back of this. I wish I had but I didn’t. And I was exceedingly busy with loads of other competing priorities.

Mr Beer: Or was it that you were happy for your myopic report to stand, that said there were no backdoors into the Horizon system?

Roderick Ismay: No, I think I’d moved on from that report and I wouldn’t have called it a myopic one. I realise, looking at it, it does look like that but it wasn’t intended to be.

Mr Beer: There are no records that we’ve got, I think, of the decision that was made at this 15 November 2010 meeting.

Roderick Ismay: Right.

Mr Beer: Do you know which solution was adopted?

Roderick Ismay: No, but I know that there was a letter that, in the end, I was asked to sign that went out to affected branches. I don’t know whether it was this – if I get me numbers right, and forgive me if I get me numbers right, but I think this was the one that we’re talking about that was affecting 62 branches.

Mr Beer: Yes.

Roderick Ismay: There was an issue that affected 14 branches. I know I did sign a letter that went out to affected branches to explain how, whichever of those issues was resolved – and I don’t know if it was this one or the other one, or whether I might even have been involved in a letter to both – both situations. But I’m surprised that’s not appeared as a document somewhere, that letter.

Mr Beer: That can come down. Thank you.

Can we look at what else you were doing in November 2010, and look at POL00120561. This is an email from Mr Granville, who, at the footer, gives his job title as Head of Regulation Strategy –

Roderick Ismay: Right.

Mr Beer: – if we just go up to the top, so the same month, about a fortnight after that meeting – to, amongst other people, you and Paula Vennells. The subject is an “Update on JFSA and Horizon issues and urgent response needed for [the Department of Business, Innovation and Skills]”. There’s an attachment, which is a response to the Department of Business, Innovation and Skills for them to reply to JFSA, and Mr Granville says he’s:

“… sending this note around to provide an update on the issues related to JFSA and to ensure concurrence with the line that I am taking back to [Business, Innovation and Skills].”

By way of “Background”, this is just by way of context for you:

“You will all be aware of the allegations that the JFSA has been making about the integrity of the Horizon system and the associated processes that [the Post Office] uses in terminating contracts. There have also been various legal cases relating to individual subpostmasters being prosecuted for theft/false accounting where the JFSA have had some kind of involvement (the most recent being Ms Misra, West Byfleet, where the ex-subpostmaster was recently found guilty of theft). As you are [also] aware Channel 4 were also looking at the subject in the summer – although nothing has yet come of this.

“Our approach throughout has been to robustly defend the integrity of the Horizon system.”

So that’s the background. Then Mr Granville says:

“However [The Department of Business, Innovation and Skills] continue to be interested in this issue. They have had a succession of MPs writing in to the Minister on behalf of constituent subpostmasters referencing the JFSA’s allegations and the JFSA have also written directly to the Minister on several occasions. As a result of this pressure, back in September, Ed Davey agreed to a meeting with the JFSA and whilst at the meeting the Minister listened and didn’t commit to any actions [the Department of Business, Innovation and skills] thereby maintain an ‘involvement’ in this issue.”

Then this:

“As a result of this and to follow up the [Department of Business, Innovation and Skills] meeting with the JFSA, Mike Whitehead recently met with Rod Ismay, Lynn Hobbs and myself and went through some of the points that JFSA raised at the meeting with BIS plus a few more of the recent MP letters that have been received on the subject.”

Is that right, that you recently met with officials from the Department and went through points raised by the JFSA about Horizon?

Roderick Ismay: I can’t remember meeting with Mike Whitehead and BIS but I’ve got a lot of respect for Mike Granville and, if he said that I did, then no doubt that I did but I can’t recall the meeting.

Mr Beer: Do you remember discussing the Seema Misra case with officials at BIS?

Roderick Ismay: No.

Mr Beer: How was the Seema Misra case viewed by Post Office at this time, after she had been convicted and sent to prison?

Roderick Ismay: I don’t know.

Mr Beer: Was it not seen as a great victory which vindicated the robustness of Horizon?

Roderick Ismay: I don’t know. I know that in some of the other evidence documents there’s been some things that, rightly, in other hearings, people have said, “Oh, I wish I hadn’t said that”. There’s been various congratulatory emails went around after it, I think, but I don’t know how it was judged now.

Mr Beer: Remember those answers for about 20 minutes’ time, Mr Ismay.

Can we scroll down under “Response”, second paragraph under “Response”:

“However, the key point I’d like to draw to everyone’s attention is that BIS are looking for general lines to go back to the JFSA. BIS accept [the Post Office’s] assurances about the integrity of the system …”

Just stopping there. Was that your state of understanding at the time: that the Government was accepting assurances given to it by the Post Office about the integrity of Horizon?

Roderick Ismay: I don’t know what the Government was accepting at that time. I did a report that I understood was for internal purposes to Dave Smith. I can’t remember meeting with BIS but I certainly don’t know what the Government’s perspective was on it. Evidently, there were senior people who were meeting with these departments but I can’t recall meeting with them and I was surprised, and I apologise if I did receive Dave’s email with these five points in or nine points prior to the report that I compiled, that’s got called the Ismay Report, but I don’t remember those narratives and those people that were being talked about there.

I produced what I – my recollection was, as an internal report for a new Managing Director, and I don’t recall something that – which is in the documents that – either in the Rule 9 or Rule 10 has been shared with me that does refer to, I think, some ministers. But I didn’t think I was party to that and I don’t recall that.

Mr Beer: He continues:

“[The Government does not] want to intervene in that area but they do have some concerns about some of the ways in which our disciplinary processes might be perceived.

“To take this issue forward, a suggested approach is to be robust on our current system and procedures – but also to make reference to some work being undertaken …”

Then, at the foot of the page he says:

“In the attached document the relevant extract looks like this …”

Then if we go over the page, please, to the bold system, he has essentially cut in to the email something from the attachment, ie the proposed text to go back to the Government with; can you see that?

Roderick Ismay: Yes, I can see that, yes.

Mr Beer: So what he’s essentially saying to you, amongst others, is, “Is it okay if we say this to the Government?”, yes?

Roderick Ismay: Yeah, yeah.

Mr Beer: “The Horizon system and accompanying contractual processes remain fully robust. Their integrity and sound basis have been demonstrated over many years, and they have underpinned the provision of effective and sustainable service to Post Office customers. [Post Office] refutes the unsubstantiated allegations made by the JFSA.”

Would it be fair to describe that as the usual line: that Post Office say that the system is fully robust?

Roderick Ismay: I think so, yeah.

Mr Beer: Then if we scroll down, please. Postscript:

“I have just had Mike Whitehead on to me saying that Ed Davey is coming under ‘extreme pressure’ to respond to cases that he has received. I will send to Mike the extract of the information in the attached document on the three specific cases referred to us by BIS but I know he will come back to us asking for something on the ‘way forward’ …”

If we can look, please, at the document that’s attached, relating to the three specific cases, can we look at page 7, please, of this. He addresses here the Mrs Misra case; can you see that?

Roderick Ismay: Yes. Yes, I can.

Mr Beer: If we just scan through it, please, and then if we keep scanning, and keep scanning. Then, second paragraph from the bottom:

“The case has now been before the courts, and Mrs Misra was found guilty after a full jury trial … been sentenced to 15 months [imprisonment, I think that is] by the judge taking all due regard to judicial guidelines. It is probably inappropriate to comment about the detail of the trial … worth pointing out the defence for Mrs Misra did use an IT expert with regard [to] comments on the Horizon system and a clear decision was arrived at by the court.

“[Mr] Singh … explains the charges were …”

Then they’re set out.

Then if we go over the page, please, second paragraph, there’s a confiscation hearing. Some information about the standard of proof. Lots of adjournments, whilst Mrs Misra’s solicitors kept asking for more and more evidence, which was supplied, it is said:

“It is probably inappropriate to comment to the MP about the detail of the trial [but point out that an IT expert was used] and a clear decision was arrived at by the court.”

There’s nothing in here about the receipts and payments mismatch bug, is there?

Roderick Ismay: No.

Mr Beer: There’s nothing in here, take it from me, in the rest of the briefing to the Government, about the fact that Fujitsu can tamper with branch accounts without the subpostmaster being able to see that they’ve done so, is there?

Roderick Ismay: No. No, there isn’t.

Mr Beer: Did you raise that point?

Roderick Ismay: I don’t know.

Mr Beer: You knew about that, as you’ve accepted, having been at the meeting on 15 November 2010. When you received this email, “This is what we’re going to brief the Government”, did you think to say, “Hold on, I’ve got some new information”?

Roderick Ismay: No, I don’t think I did. In hindsight, I can see that I probably should’ve but I don’t think I did, no.

Mr Beer: Can we look, please, at POL00088956. This is an email exchange in the next month, December 2010 and it’s quite a complicated chain, this email. But the essentials of it, if we scroll down, please, to the email at the foot of the page, are Lynn Hobbs – you remember her, don’t you?

Roderick Ismay: Yes, I do.

Mr Beer: What function did she perform?

Roderick Ismay: She was some sort of a leader within Post Office Network team.

Mr Beer: Is emailing John Breeden, yes? You remember him?

Roderick Ismay: Yeah, I can’t remember his exact –

Mr Beer: Contracts’ Manager –

Roderick Ismay: Oh, yeah.

Mr Beer: Saying:

“This the last email exchange I had with Mike Granville about the BIS meeting [I think that’s the one we’ve just referred to]. The attached documents are what Mike was proposing sending to BIS and I commented as below. I am also forwarding two further emails, one from Rod Ismay, which is the final report he produced.”

Then, over the page, please:

“The second from Mike Granville with a document that was sent to BIS in advance as a briefing …”

Then can you see she’s cut in to the email there –

Roderick Ismay: Yes.

Mr Beer: – an email to you, yes –

Roderick Ismay: Yeah.

Mr Beer: – which looks to have been written either, as I think we established on the last occasion, before your report was finalised or after your report was finalised, but most probably before?

Roderick Ismay: I don’t know, I’d say it was most probably before my report. I would think that this email probably related to that thing where you’ve showed me a table that was undated but a meeting in the 15 November. So, and now I – looking at this, I imagine that Lynn was probably – one of her team was perhaps at that meeting and had said to Lynn that that was one of those three options that came up but they were after – they were after my report. They were not before the Ismay Report.

Mr Beer: You told us on the last occasion that this email here that’s cut in to this email chain was a really important statement because it was explaining that things could be written into the branch system, which you had said in your report could not happen?

Roderick Ismay: Yeah.

Mr Beer: So this statement here from Lynn Hobbs undermined your report, yes?

Roderick Ismay: Looking at it now, yes, I can see that undermines my report.

Mr Beer: You agreed on the last occasion that your report was founded on the incorrect assertion that branch systems could not be amended or written into remotely and it ought to have been corrected, yes?

Roderick Ismay: I did say that. That report was written before this, I think and, at the time, my understanding was that there wasn’t remote access, when I did that report that’s become known as the Ismay Report. Yes, looking at it in hindsight, I might wish that I’d revisited it, but I was asked at short notice to produce a report with a load of other competing priorities going on, and didn’t produce a report, wasn’t asked to produce a report, I’d just been asked to produce a one-off to help Dave understand the other context, that, if he sees these allegations in the press, what are the other reasons why people think the system works?

Mr Beer: So I think you agreed on the last occasion that your report was founded on a false assertion that ought to have been corrected in the light of this email here, if this was received after you’d written your report?

Roderick Ismay: Well, in hindsight, yes. It would have been probably helpful to have notified people that this other matter has come to light that wasn’t in there but, in the context of everything that I was doing, I don’t think it occurred to me to do that at the time.

Mr Beer: A bit beyond helpful, maybe essential?

Roderick Ismay: Yeah, yeah.

Mr Beer: Can we look, please, at – and this is a document we didn’t have last time – POL00120475. This is written by you on 29 November 2010, yes?

Roderick Ismay: Yeah, this is the one that I referred to earlier.

Mr Beer: Yeah.

Roderick Ismay: Yeah.

Mr Beer: You say:

“This note is to respond to some recent concerns about data during branch balancing processes.

“In draft as yet to ensure it makes sense to those not so closely involved …

“The issue [is] sometimes known as the ‘Receipts and payments mismatch’ …”

Yes?

Roderick Ismay: Yeah.

Mr Beer: “[It] has come up in some recent emails. There have been several business discussions about how to resolve it and an option had been referred to which, if adopted, would have led to adjustments being made direct in Horizon.”

That shows that you had clocked, you had realised –

Roderick Ismay: Yeah.

Mr Beer: – you that completely understood the significance of Solution One –

Roderick Ismay: Yeah.

Mr Beer: – doesn’t it?

Roderick Ismay: Yeah.

Mr Beer: “For clarity, whilst this was (for completeness) flagged as an option, my understanding is that it has always been rejected as it would undermine the longstanding principle that all entries in Horizon be initiated or authorised by the branch.”

So it seems that you had an understanding, by late November 2010, that Solution One, essentially covert, remote access, had been rejected?

Roderick Ismay: Yeah.

Mr Beer: “It is undoubtedly possible with any IT system that special mechanisms could be developed to adjust users systems and data, however, [Post Office] colleagues have remained satisfied.

“(A) that [Post Office] would not wish this facility to be built for Horizon, and

“(B) that there are segregations of duties and change management controls which would prevent Fujitsu from deploying such functionality.”

Dealing with (A), why were you speaking about a facility being built, if the documents, as we have seen, had revealed to you that the facility already existed?

Roderick Ismay: Well, the way this thing is written, like we used the word “conditionality” earlier, this written as if, at the time, I’d got some perception in writing this that perhaps it hadn’t been built, that it was an option that would require some build.

Mr Beer: Where had you got that perception from if the documents that we’ve seen that you were passed made it clear that there was no conditionality, it wasn’t an “If Fujitsu could do this, it would be a bad thing”, it was, “They could do this thing”?

Roderick Ismay: Well, I can only think that it would have come from a conversation with IT, but most – there was a lot of things that my team in the Finance Service Centre or Product and Branch Accounting, as it was called, there were a lot of things that, for our own SAP system we were always asking for things to be changed, and most things would always get aired as well, “You can do this but we’ve got to build it”. So I would have been quite used to a concept of being given a number of options, but all of them would have got a conditionality of “But we’ve got to do something to enable this thing to happen”.

Mr Beer: Then you go on to (B), that there are segregations of duties and controls which would prevent Fujitsu from deploying such functionality.

Roderick Ismay: Yes –

Mr Beer: That speaks as if the thing already exists but it’s tightly controlled?

Roderick Ismay: No, I think that’s saying that, in the Post Office change management processes, there was segregation of duties so that, if you were trying to propose a change to something, there’d got to be independent approval of the proposal to do that thing, so –

Mr Beer: It doesn’t say that, Mr Ismay –

Roderick Ismay: No, that –

Mr Beer: It says there would be if this facility was built, built into it, segregations which would prevent Fujitsu from deploying it. It speaks as if it already exists, doesn’t it?

Roderick Ismay: I think you could read it with conditionality or not and I think that there will be people who will look at it one way and there will be people that look at it another way and I think that the fact I’ve written this thing with conditionality in it must have meant that I’d got some feeling of conditionality when I was writing that. And, as I’ve said, I’d got lots of changes that I was often asking for, for my team, for POLSAP systems and there was always an element of conditionality of “Yes, we can do A, B or C but all of them we’re going to have to modify something and get approval to do that thing for it”.

So I was very used to being given options, all of which would require some action ahead of them. I know the narrative in here doesn’t say that but one writes what one writes and, in hindsight, you can wish there was all sorts of things that you’d written into it and I’m giving you the wider context of what I think would have influenced my thinking, and that wider context hasn’t all been written in here, but this Inquiry is trying to help to understand the wider context that things were written in.

So I’m giving you had context of options always had some conditionality on the build to them. I realise you can read it and say “Odd, it doesn’t say that”, but that is the wider context that change management processes operated in. If you’re given three options, usually all of them need something to do with them.

Mr Beer: You carry on:

“The specific ‘R&P’ issue [receipts and payments mismatch issue] has arisen from a non-compliant series of user actions in branch.”

Roderick Ismay: Yeah.

Mr Beer: So you, you’re blaming the subpostmasters there, aren’t you?

Roderick Ismay: Not – no, I think what –

Mr Beer: What does –

Roderick Ismay: What –

Mr Beer: What does “non-compliant series of user actions” mean?

Roderick Ismay: Well, you’ll see in the other documentation around the receipts and payments mismatch that there was a sequence of events that were trading periods and balancing periods, which mean weeks and months, I think, you would expect to do a certain sequence of events to close down a period and roll into a new riot. “Non-compliant” might be an unhelpful way of describing it but branches knew what to do, or training should have helped branches to understand what to do for the sequence of events to close down your trading periods and roll into a new period.

The analysis on this case, which is well documented in another piece of evidence, I think one that Gareth had written on it, shows that branches did something that was an unexpected routine, ignoring something and doing something different to what the routine should be that all the other branches were following, and which training material, I think, would have told people to do about rolling new periods. So it’s not –

Mr Beer: So this was an attempt, this email, wasn’t it, to cover up your own, and indeed the Post Office’s, knowledge of remote access, wasn’t it?

Roderick Ismay: No, I don’t think it was.

Mr Beer: Did you understand the importance of the remote access issue in relation to claims against or prosecutions of subpostmasters?

Roderick Ismay: Oh, yeah, I understood it. If remote access existed, then I understand that that’s, you know, that’s a really bad thing. We don’t want that. And I was very clear in future things as well, such as when we had an aborted tender for another IT supplier, that one of my inputs into requests for that was always there must absolutely not be an ability for remote access; subpostmasters must be absolutely in charge of the creation of the entries that go into their system. I’m sorry that –

Mr Beer: You were in possession now of two sources of information, the Lynn Hobbs email and, at the very least, the meeting on 15 November, that undermined the narrative that you’ve just described?

Roderick Ismay: Well, I don’t know if it had been built, I don’t know if the functionality existed. As I’ve said, my recollection of stuff was that there was always a conditionality of, if something is not working and you’ve got to do changes for it, you’ve always got to do something to enable –

Mr Beer: Just stop there Mr Ismay, if you may. Do you agree (a) that the document that was exchanged in October 2010 included no conditionality in it?

Roderick Ismay: That document didn’t use conditional wording.

Mr Beer: Do you agree (b) that the three solutions that were set out in the email of 15 November 2010 included no conditionality in it?

Roderick Ismay: I agree that those documents didn’t. But this one I’ve written, which would have come from conversations with IT, does include it. So I’ve got different documents in a similar time frame.

Sir Wyn Williams: But I’m sorry, option one, which is where all this started with, was revealed at a meeting between Post Office and Fujitsu.

Roderick Ismay: Yeah.

Sir Wyn Williams: Fujitsu must have said at that meeting “We can do it”, ie access remotely, in some form or another. Functionality had nothing to do with it after that, did it, because they told you they could do it? When I say “told you”, I mean told the Post Office.

Roderick Ismay: Yeah.

Sir Wyn Williams: So whatever may have been chatted about in the IT Department of the Post Office is completely irrelevant because all they had to do was to recheck, if necessary, with Fujitsu, “Can we do it or not?”

Roderick Ismay: I should have gone back and said “So does this functionality actually exist” because Fujitsu could have sat there and said “We can turn the screens orange”, the screens weren’t orange but they could have sat there and said “We can turn the screens orange”, and they would have had to do something to make them go orange.

Sir Wyn Williams: All right. Okay, thank you.

Mr Beer: Just look at the top of the email, four paragraphs in. You say in the third paragraph there had been several discussions about how to resolve it, and an option which, if adopted, would have led to adjustments being made direct in Horizon. Then in the fourth paragraph, you say:

“Whilst this was flagged as an option … it’s always been rejected.”

Not “It’s been rejected as an option because Fujitsu would have to build some functionality in the system to allow the very thing to happen and we don’t want that to happen”, do you? You’re saying “It’s there on the table but we’ve rejected it as an option”?

Roderick Ismay: Well, those words aren’t there but I don’t know, at the time, whether that functionality did exist or didn’t. It’s clearly been said in there and referred to. Whether it needed building or not, I don’t know. I don’t know and I’m sorry. I don’t know.

Mr Beer: You knew that a subpostmaster facing prosecution, if they knew about the possibility of such remote access, would be able to say to a court “There’s scope for doubt as to the cause of the alleged shortfalls in the system. They emanated not from me, but from the system”, didn’t you?

Roderick Ismay: Well, I wasn’t thinking about disclosure, I don’t think, in these things. I know a lot of this matter is talking about disclosure matters but I was looking at internal control environments and things, not about what should or shouldn’t be disclosed. Disclosure wasn’t something that was my role, my responsibility in there, and so I wouldn’t have been looking at these documents through a concept of – which I probably wouldn’t have understood at the time – what are the requirements of disclosure?

I’m learning quite a lot about them through the context of this Inquiry but I wouldn’t have been thinking, “Oh, what’s the disclosure aspect of this?” That just wasn’t my – I was not the lawyer. I was not the disclosure person. I was unaware of some of the aspects of disclosure and I’m learning about them now.

Mr Beer: Do you recall that, by March 2011, a number of different parts of the Post Office were involved in the response still to the receipts and payments mismatch bug?

Roderick Ismay: There’s lots of people in those emails, yeah.

Mr Beer: I’m moving forward now, Mr Ismay, to March 2011. Let’s look at an email that might help you. POL00029611. You’ll see at the top of the page there that this was a chain sent on to you in June 2013, and we’re going to come back to that later because that’s just before the publication of the Second Sight Report.

Roderick Ismay: Okay.

Mr Beer: I’m going to suggest in a moment that this is part of the backwards look –

Roderick Ismay: Oh, right, okay.

Mr Beer: – to see what we knew and who knew about the receipts and payments mismatch bug. So you got this eventually.

Roderick Ismay: Okay.

Mr Beer: But if we go down, please, thank you, if we just scroll up to get the email header. We can see from Mr Russell, who is a Commercial Advisor within Service Delivery, he sends an email out to Lesley Sewell. You’ll know she was Head of IT, yes?

Roderick Ismay: Yes.

Mr Beer: Can you see Andy McLean; do you know who he was?

Roderick Ismay: He was – I think his title was Head of Service Delivery.

Mr Beer: “Quite a lot of info here but I will outline what we agreed.

“Word documents attached are the letters going out to branches on Monday. They have been approved by Legal and [Product and Branch Accounting], (Andy Winn) and [Service Delivery, Tony Jamasb]”, I think that is, yes?

Roderick Ismay: Yeah.

Mr Beer: “I ran Mike [Granville], Mike [Young] and Andy [I’m not sure who Andy M is] through the detail last week. We have agreed to write all of the losses and repay the gains via subpostmaster pay. We have a document from Fujitsu on what happened. This provides audit trail and shows what happened for a branch … I am awaiting clearance from Network (Anita Turner) [in relation to] how to approach [the Federation].

“Matt Hibbard …”

Do you know who he was?

Roderick Ismay: Yes, he was a direct report to me at some point, yes.

Mr Beer: “… was happy for the process and the Fujitsu document as Rod [I think that’s you] was off. Andy Mac has taken action from Mike [Young] to ensure we maintain closer links with [Product and Branch Accounting and you]. Tony is already working on issue management and how P&BA raise issues with [Service Delivery], and this will help [Service Delivery] to formally raise and resolve them with Fujitsu.

“Both Mikes were keen we use this as a positive, eg old Horizon would not have picked this up, yet the logs in Data Centre, and Event alerting meant we picked this up, and can demonstrate what has happened …

“We are writing to branches … with walk through of the detail as required.”

Yes?

Roderick Ismay: Yes.

Mr Beer: So it’s quite a cast of people that knew about, at least at this time, the receipts and payments mismatch bug: IT, with the references to Sewell and Young; do you agree?

Roderick Ismay: Yes.

Mr Beer: Network, in relation to Anita Turner, yes?

Roderick Ismay: Yes.

Mr Beer: Product and Branch Accounting, with a reference to you and Hibbard?

Roderick Ismay: Yes.

Mr Beer: The Live Service and Problem Team, the reference to Mr Jamasb, yes?

Roderick Ismay: Yes.

Mr Beer: And Commercial, because this email is from Mr Russell, yes?

Roderick Ismay: Yes.

Mr Beer: Also that Legal were aware; they’ve approved the letters that are going to go out to branches, yes?

Roderick Ismay: Right yes, yeah.

Mr Beer: This acknowledges that old Horizon wouldn’t have picked this up, yes?

Roderick Ismay: Yes. That’s what it says, yes.

Mr Beer: Was that your understanding at the time, that, if this receipts and payments mismatch bug or something similar had been present in Legacy Horizon, it would not or may not have been picked up by the system?

Roderick Ismay: I don’t know. I don’t know if that was the thought process I went through or not.

Mr Beer: If that was the case, would that not provide a question or raise a question mark over Horizon data that had been relied on in past prosecutions?

Roderick Ismay: Well, I see what you say. I don’t know whether that occurred to me or to anybody else in this at the time. I think there was some of these issues, this – well, this issue and that other one, that got fixed, I think we would have had a focus on that was a failure at the time, it’s got fixed, we’ve moved on, now we’re going back and pulling out correspondence around that fix. But I think mine and my team’s thought process would have moved away from this.

We were being invited to come back to share documents related to it but I think once the fix had been done and these letters had been gone out, we’d have moved on to many of the others topics we were dealing with.

Mr Beer: This email was forwarded to you at the time –

Roderick Ismay: Yeah.

Mr Beer: – by Lesley Sewell, we can see that if we scroll up?

Roderick Ismay: Yeah.

Mr Beer: On 7 March 2011. Then two years and three months later, you were forwarding it to Simon Baker and Susan Crichton, yes?

Roderick Ismay: Yes, yes.

Mr Beer: That was in the context of the Second Sight investigation, wasn’t it?

Roderick Ismay: I don’t know, the timeline would say it is. I don’t know why, but, yes, the timeline would say that.

Mr Beer: Presumably because of a need to investigate who knew what and when about the receipts and payments mismatch bug?

Roderick Ismay: Well, I don’t know. It could have been that or it could have been that the Second Sight Report, rightly, and Second Sight would have been alerted to this issue and the other issue and, therefore, I think there was probably questions being asked of “Well, let’s just explain do we all understand what this topic was that’s going into the report? So you could be right. I don’t know whether it was about who knew or whether it was what exactly was this topic because it would – and we’ve seen something somewhere else, where it’s about, “How do you kind of put a plain English description on this?”

I don’t think a lot of people would have understood what on earth this receipts and payments issue was. So I think there were often questions about accounting processes where people would say, “Can you just explain that again? Where’s that thing that explains what this was?” So you might be right. I don’t know. I don’t know.

Mr Beer: So if either of us is right, either it’s a chain which seeks to explain what the problem was –

Roderick Ismay: Yeah.

Mr Beer: – or a chain which seeks to explain who knew what and when?

Roderick Ismay: Yeah.

Mr Beer: You were able to access it in 2013, just before the publication of the Second Sight Report, and forward it to Simon Baker and General Counsel, yes?

Roderick Ismay: Yes, I can’t remember what date the Second Sight Report was. I know you said earlier but, yes, I’ve forward this to those people to, yeah.

Mr Beer: Thank you.

Sir, that’s an appropriate moment. I’m not sure what time your clock says.

Sir Wyn Williams: Well –

Mr Beer: I’ve got two different times on the go here.

Sir Wyn Williams: I’m saying 11.05.

Mr Beer: Can we break until 11.15 then, please?

Sir Wyn Williams: Sure.

Mr Beer: Thank you.

(11.05 am)

(A short break)

(11.17 am)

Mr Beer: Thank you, sir.

Mr Ismay, can we turn, please, to POL00296795. We’ll see that this is an email of 28 June 2013 from Andrew Winn, forwarded to, amongst other people you, with a couple of attachments, the receipts and payments notes and, I think, an Excel document maybe, yes?

Roderick Ismay: Yes.

Mr Beer: If we just look at the chain, then, by going back to the foot of page 2 and the top of page 3 – a bit more, thank you. Andrew Winn forwards on 28 June to the Duty Manager a document, and says:

“I found problem [he gives a number] which was assigned … Not sure if this is the problem or not from the description.”

Then underneath it:

“The first mail I can find from Tony …”

That’s Antonio Jamasb:

“This is the first … I can find from Tony referring to this.

“Lesley Sewell needs a summary of the issue … when Fujitsu first alerted [the Post Office] and when this was first escalated as a major incident.”

Then if we scroll up, please, Emma Langfield, part of the Branch and IT Systems Team, says to Mr Winn – and eventually, as I say, this is forwarded to you:

“There has been significant archiving … so we cannot access the full incident history … from our personal emails we have determined the following.

“The call was raised with the Service Desk on 1 October 2010.

“Initial conference call with Fujitsu and [Product and Branch Accounting] as was for discussion of the issue and assessment of the impact was scheduled for Monday, 4 October at 1.00 pm. This delay was due to details from Fujitsu on issued being experienced needing to be shared.

“The incident was logged on remedy Monday, 4 October 2010 during the conference call at 1.00 pm.

“Following on from the initial call, a follow up was scheduled for 4.00 pm.

“I would say the 1.00 pm call was a sense check of the information collated from Thursday, 29 September (documentation of Fujitsu investigations created by Gareth Jenkins) and Friday, 1 October branch lists. Tony and I agree that the 4.00 pm call was the first initiation of the major incident process our reasoning being that from this a working group – from this call a working group was formed to manage the incident to resolution.”

Then she attaches some material.

If we scroll up, please. It’s forwarded to you and, amongst others, Simon Baker. Would the fact that this chain about knowledge of and escalation of the receipts and payments mismatch issue forwarded to Simon Baker mean to you that this was related to or relevant to Second Sight’s work?

Roderick Ismay: I can’t remember what Simon Baker was doing. I know of him and I think he’s in various other documents, as part of Second Sight, isn’t he? And so, if – and, sorry, I can’t remember out of the thousands of pages you’ve given me – but if Simon Baker was in the Second Sight work then yes, yes.

Mr Beer: If Second Sight, you agree, had seen the meeting note of October 2010, the email of 15 November 2010 or any similar documents, they would have found out that Fujitsu could tamper with branch accounts without the subpostmaster knowing, wouldn’t they?

Roderick Ismay: Yeah, clearly, we had that earlier conversation but, yes, they would have thought that, yes.

Mr Beer: To your knowledge, were those documents which revealed that Fujitsu could tamper with branch accounts without the subpostmaster knowing sent to Second Sight?

Roderick Ismay: I don’t know.

Mr Beer: When you received this, did you have any responsibility for ensuring that the material was sent to Second Sight?

Roderick Ismay: No.

Mr Beer: Who had that responsibility?

Roderick Ismay: Well, I think that the relationship with Second Sight was being managed out of the Legal Team. Simon, if he’s involved in it, may have come in as a project manager to assist in that. I was being involved from a point of view of a subject matter expert responding to things like the suspense accounts, which we may well talk about, and some of the spot reviews. So I – and I can only remember meeting with Second Sight once – sorry if I met with them more – but I wasn’t the main interface with them.

Mr Beer: You know that Second Sight spoke about remote access through the prism of Simon (sic) Rudkin having given an account –

Roderick Ismay: Right, yeah, yeah.

Mr Beer: – of visiting a basement in Fujitsu, Bracknell headquarters –

Roderick Ismay: Yeah.

Mr Beer: – and witnessing something, which to him looked and smelt like remote access, yes?

Roderick Ismay: Yes.

Mr Beer: Do you know why the documents that we’ve looked at, that revealed knowledge by Post Office of the facility for such remote access, were not revealed to Second Sight –

Roderick Ismay: No. No I don’t.

Mr Beer: – and, instead, there was a denial of his account?

Roderick Ismay: I can only think because there was so many things going on and so many documents but it’s a fair question. I don’t know why it wasn’t.

Mr Beer: At all events, when Second Sight were looking into the issue of remote access, you didn’t ensure that they were given the attachments to this email or the documents that we looked at earlier, revealing that such remote access was possible by Fujitsu?

Roderick Ismay: No, no.

Mr Beer: You said that Legal, to your mind, had the responsibility for dealing with issues of disclosure to Second Sight. Would that include Rod Williams, who is included on this chain?

Roderick Ismay: I think so, I’m not exactly sure what the sort of lead point of contact was but I think it was Legal or a Project Manager assigned to the matter.

Mr Beer: So the short point, is this right, that correction of your report back in 2010 does not occur when you are given documents that reveal Fujitsu’s facility for remote access and, in 2013, when Second Sight are reporting, those documents don’t get revealed either?

Roderick Ismay: No, that looks to be the case, yeah.

Mr Beer: Can we move forwards, please, then. POL00098797. Thank you. Can we look at the second page, please. We’re here, very shortly before publication, this isn’t an email exchange including you but it does concern you.

Roderick Ismay: Yeah.

Mr Beer: It’s between Alwen Lyons and Paula Vennells, of 28 June 2013, and the next steps on Horizon issues update reads:

“Paula

“Rod Ismay and Lesley [Sewell] are working the detail of the 2 bugs, to understand them and then get them into language that is clear and can be communicated.”

Is that right, that, shortly before the Second Sight Report, you were working on the detail of the two bugs to understand them?

Roderick Ismay: Well, I can’t remember my timeline of things but, clearly, there are bits of correspondence in here that say that, so yeah.

Mr Beer: Were you part of a team that was seeking to recreate Post Office’s corporate knowledge of the two bugs that the Second Sight Report was going to break into the open?

Roderick Ismay: Well, I think, looking at this, that I would have had corporate memory and understanding and so was somebody who could try to put into plain English something to explain to other people who might have had no involvement or might not even – I don’t know even know if some people were kind of employed or in roles at an earlier point in time. So yes, I would get asked and this looks like an example where I would have been asked to help to narrate and summarise what a particular thing was that had happened before and, in this case, this – these particular bugs, yes.

Mr Beer: When you were putting it into plain English, did you include, within the plain English, the fact that you had found out, you knew, that Fujitsu could tamper with branch accounts without a subpostmaster knowing?

Roderick Ismay: I don’t know. I don’t know whether what I put together said that or not. I don’t know.

Mr Beer: There is no document of which the Inquiry is aware of you ever having said that.

Roderick Ismay: Right. I don’t know.

Mr Beer: That can come down. Thank you.

Stepping back, do you agree that in 2010 and 2011 the receipts and payments mismatch bug was known across every major relevant department in the Post Office, including the Legal Team?

Roderick Ismay: Yes, it looks like it was, yes.

Mr Beer: Do you agree it was known about by number of senior Post Office employees within those departments?

Roderick Ismay: Yeah, it looks like it, yeah.

Mr Beer: Do you agree those senior Post Office employees had been brought in, in 2010 and 2011, to consider the options available to rectify the bug?

Roderick Ismay: Yeah, looks like it, yeah.

Mr Beer: Do you agree there was, at the time of the Second Sight Report, an investigation, a look-back, to see who had known about the receipts and payments mismatch bug and how high within the organisation such knowledge went?

Roderick Ismay: Yeah, it looks like it, yeah.

Mr Beer: Do you agree, despite that investigatory work, the Post Office took a position that the bug had been discovered or revealed by Second Sight, as a result of a disclosure made to it by Gareth Jenkins?

Roderick Ismay: It looks like it, from the bits of evidence that you’ve shared with me, where I think something says that Gareth revealed it to – not to Fujitsu – to Second Sight.

Mr Beer: Do you know, additionally, that Second Sight themselves were asking the question of the Post Office in 2013, in the run-up to the publication of their report: who, within Post Office, knew about the receipts and payments mismatch bug?

Roderick Ismay: No, can you ask me that question again?

Mr Beer: Yes. We’ve looked at what the Post Office, in fact, knew.

Roderick Ismay: Right.

Mr Beer: We have looked at the extent to which that was revealed to Second Sight.

Roderick Ismay: Yeah.

Mr Beer: I’m asking a related question. Do you know that, in 2013, Second Sight themselves were pursuing the same question that I’m pursuing now: who within the Post Office knew about the receipts and payments mismatch bug?

Roderick Ismay: Oh, right. No, I don’t know.

Mr Beer: Can we look, please, at POL00029618. Can we start, please, with page 2. Scroll down a little bit. Ron Warmington to Simon Baker, under the heading “Two Systems Defects”, on 25 June 2013:

“Simon.

“This is the draft section of the report dealing with the two defects. Please let me know if I’ve got anything wrong. I’m afraid that the [Post Office]/Fujitsu reports on the defects don’t cover everything I need to know. I also need to know whether, after the defects were detected the subpostmasters who had made good shortages that they should not have made good were reimbursed and if so how many months later. I think you said they were all reimbursed in due course.

“Also, the first report (on the receipts and payments problem) mentions, on 2 of 30, ‘this will assist in explaining the issue to senior management and, if necessary, the press’. Can you please let me know whether, when and who (at Board level) was informed about this defect (and also the later local suspense defect) and whether any press release was issued in respect of either of them? [And] can I see a copy?”

Yes?

Roderick Ismay: Yes.

Mr Beer: So Mr Warmington for Second Sight was asking, essentially, how high within the organisation knowledge went –

Roderick Ismay: Yes, I can see that.

Mr Beer: – of both bugs, yes?

Roderick Ismay: Yes, I can see that, yes.

Mr Beer: If we scroll up, please. Mr Baker replies:

“I will get back to you tomorrow. I need to double check a few things first.”

Then scroll up, please:

“Just got this from Ron. I can get back to him on most of the questions but your help on who in the Post Office knew about it. I know from the email that Rod sent that Mike Young knew but don’t know if it went any higher.”

Then scroll up. Lesley Sewell replies:

“I don’t know if it went any higher than Mike, Andy Mc also managed service at the time …

“I can’t say if we said anything to the press.

“Other points – our Board at the time would have been Royal Mail as we didn’t have an independent Board. Paula [Vennells] would have been Network Director at the time with Dave Smith as MD.”

Were you made aware of this search for information at the time by Second Sight, how far up did corporate knowledge of the receipts and payments mismatch bug go?

Roderick Ismay: I don’t think I was. My recollection of what I was doing with Second Sight was, like I said, responding to questions about the suspense account and specific spot reviews.

Mr Beer: You see this is 25 June 2013, yes?

Roderick Ismay: Yes.

Mr Beer: Can we look, please, at POL00029611, the chain that we looked at earlier; do you remember?

Roderick Ismay: I remember you had this email up earlier, yes.

Mr Beer: This is dated 19 June 2013. Was this part of a search for how far up the organisation knowledge went?

Roderick Ismay: I don’t know. I think what we talked about earlier was that it was either that or it was an attempt to describe what the issue was, and I don’t know which was the case.

Mr Beer: Thank you. That can come down.

Can I turn to the local suspense account bug. Were you involved in work conducted in June 2013 to create a timeline of events concerning the discovery of the bug and the Post Office’s response to it?

Roderick Ismay: If I’ve got the bug right, then I think I was. I think there was other correspondence where I was asking Gareth Jenkins if he could construct a sort of a column or analysis of what things would look like at each stage of it. So if that’s the one you’re asking about, then yes.

Mr Beer: Can we look, please, at POL00029641.

If we scroll to the foot of the page, please, 3 July 2013, an email from Rodric Williams to you and Lesley Sewell, copied to others, “Timeline for Local Suspense Problem”:

“… here’s my summary of a call with Andy Winn.”

He was to amend or correct as necessary:

“Issue [we’re talking about the local suspense bug here] first surfaced at [the Post Office] Finance Centre on 6 February 2012, at the close of a branch trading period.”

Yes?

Roderick Ismay: Yes.

Mr Beer: Then second bullet point from the bottom:

“Not perceived to be a significant issue given the small number of branches affected …”

Then last bullet point:

“A subpostmaster contacted NBSC to report the same discrepancy in branch trading as the previous year.”

Yes?

Roderick Ismay: Yes, I can see that.

Mr Beer: So the timeline suggests that the first that the Post Office knew of the bug was 6 February 2012, yes?

Roderick Ismay: Yes, it looks like that, yes.

Mr Beer: We can see from this email that the Post Office knew that 13 other branches were affected but didn’t regard the issue as significant, given that number of branches being involved, yes?

Roderick Ismay: Yeah.

Mr Beer: And that then, in 2012, they didn’t pass the problem to Fujitsu but only did so when, a year later, the same problem came up again, yes?

Roderick Ismay: Well, I don’t know whether there was any reference to Fujitsu earlier or not –

Mr Beer: I should have gone over the page.

Roderick Ismay: It’s not included in this timeline, clearly.

Mr Beer: Just go over the page, please. I should have read you this:

“NBSC passed this on to Fujitsu.”

Yes?

Roderick Ismay: Right, yeah.

Mr Beer: Can you help us as to who within the Post Office knew about the suspense account bug, following its discovery in February 2012?

Roderick Ismay: No, I don’t know who knew about it, no.

Mr Beer: In 2013, when, amongst other things, you were copied in on this email, did you make it clear to your line management or to anyone else that the Post Office had first discovered the suspense account bug in February 2012, actually a year before Fujitsu knew anything about it?

Roderick Ismay: I don’t know whether I did that. I don’t know.

Mr Beer: To the extent that the Post Office suggested on and after publication of the Second Sight Report that it knew about the local suspense account bug because of Second Sight’s investigation, that would be wrong, wouldn’t it?

Roderick Ismay: Sorry –

Mr Beer: To the extent that the Post Office made a suggestion that it only knew about the local suspense account problem because Second Sight were revealing it to them –

Roderick Ismay: Yeah, that would be wrong.

Mr Beer: – that would be wrong?

Roderick Ismay: Yeah, we clearly knew about it. I don’t know how many people knew about it but the Post Office and me clearly knew about it before that, yeah, from these emails, yeah.

Mr Beer: It would be incorrect, a false impression to create, that it was Mr Jenkins revealing these issues to Second Sight, rather than the Post Office already knowing about them for years?

Roderick Ismay: Well, it seems – I don’t know why Gareth, as opposed to Post Office, I don’t know why the sequence of events of who raised it with them was what it was. I don’t know if Second Sight had asked the question had there been some bugs that were known about? And, for example, my Ismay Report did refer to certain things in there that would have predated these. If Second Sight had asked, I would have thought the Post Office would have responded and not waited for Gareth to respond. So I don’t know who raised something first or not with Second Sight.

Mr Beer: Can we turn to the Callendar Square or Falkirk bug. That document can come down, thank you. Were you aware in June and July 2013 that the Post Office had known about the Callendar Square bug right back in 2006?

Roderick Ismay: I’m aware now, looking at all this information. There’s so much – and I used to get 200 emails a day – I can’t remember what I got at a time and what the dates were, but I can see, I think, from some other evidence that you’ve shared, that Post Office knew of something else back in – whether it was 2005 or 2006, and if that’s – is that what the Callendar Square bug was?

Mr Beer: Yes.

Roderick Ismay: Right, yeah.

Mr Beer: We can look at it at FUJ00083721. If we scroll down – thank you – Anne Chambers to Mike Stewart, about Callendar Square in 2006. Yes?

Roderick Ismay: Yes. I don’t know which company they worked for, though. Are they both Post Office or Fujitsu people or?

Mr Beer: Can you help us, please, as to your knowledge of how high within the organisation knowledge of the Callendar Square or Falkirk bug went in 2006?

Roderick Ismay: Sorry, I’ve got no idea.

Mr Beer: When did you first become aware of it?

Roderick Ismay: I don’t know when I first became aware of it and, if you hadn’t shared all this information with me, I don’t think that the name would even have been in my head. So I could any go from whatever dates, documentation is in here. I’m sorry but I’ve got so many, many things that I was involved in, I can’t remember. Sadly, even with the gravity of some of these issues, I can’t remember them.

Mr Beer: Thank you. That can come down.

Were you aware of a move at about the time of the Second Sight Interim Report, in fact in the months leading up to it, that senior management in the Post Office decided to move from a position that there were no bugs in Horizon to a position saying, “Yes, there may have been some known bugs but none of them, in fact, disadvantaged subpostmasters”?

Roderick Ismay: I can’t remember that but I can clearly see it in some of the correspondence that you’ve shared with me or that I’ve seen on social media in the last few days.

Mr Beer: Were you party to discussions that, “We need to pivot our position corporately from the ‘No bugs’ position to ‘Yes, there are bugs but it’s just like every computer system; it had bugs in it and has bugs in it, but none of them disadvantaged subpostmasters in any way’”?

Roderick Ismay: I don’t know if I was party to that but I would – sat here now, I would say, yeah, all systems have got problems in them.

Mr Beer: I’m talking about the pivot, the change in approach?

Roderick Ismay: Right, okay.

Mr Beer: Were you party to discussions and decisions that this is what the Post Office needed to do in the run-up to Second Sight?

Roderick Ismay: I don’t know, I can’t remember that I was but I don’t know.

Mr Beer: Can we look, please, at POL00105632. This is the end of May 2013. It doesn’t include you on the distribution list. It’s from Alwen Lyons to Paula Vennells, copied to others. “James brief”, and I think this is in readiness for a meeting with James Arbuthnot MP:

“Paula the only thing that is not in the brief for James is our move away from ‘there are no bugs in Horizon’ to ‘there are known bugs in every computer system this size but they are found and put right and no subpostmaster is disadvantaged by them’. It would be good to be able to go on and say ‘or has been wrongly suspended or prosecuted’.”

Again, were you part of a team or a group of people that discussed moving from position A to position B?

Roderick Ismay: I can’t recall being part of one, no. I was involved in all sorts of meetings on all sorts of different topics with all sorts of people, so, sorry, but I can’t remember being one.

Mr Beer: You can’t recall being part of a group or a team that were essentially giving instructions or giving information to managers and directors above you that we need to pivot here, we need to change direction?

Roderick Ismay: I can’t remember being part of that, no.

Mr Beer: Okay, that can come down. Thank you.

Were you aware, after the publication of the Second Sight Report on 8th July 2013, of legal advice being given by an employed barrister called Simon Clarke?

Roderick Ismay: No. I’ve read – and I know he’s been here recently, so I’ve seen all sorts because I’ve happened to look at some things, but I don’t think that I can remember any involvement or awareness of either him or the other gentleman, whether I’ve had documents – Mr Altman, I don’t think either of them were things that I don’t think I’d got any involvement or awareness of.

Mr Beer: I’m not, in the interests of time, going to take you to Mr Clarke’s Advice of 15 July 2013.

Roderick Ismay: Right.

Mr Beer: It sounds as if you’re now familiar with it. Essentially, he said that the expert from Fujitsu, Mr Jenkins, upon whom reliance had been placed by Post Office in written witness statements in a series of cases and who had given evidence orally in one case, Seema Misra’s, his evidence was fatally undermined, that he couldn’t be used as a witness in relation to any more prosecutions concerning subpostmasters because he’d breached his duties to the court in failing to reveal his own knowledge of bugs, errors and defects. Okay?

Roderick Ismay: Yes, so I’ve seen that. I’ve read the two reports which have been shared with me and the Rule 10 which cover that, yes.

Mr Beer: Is this something of which you ought to have been made aware at the time?

Roderick Ismay: Well, I wasn’t leading prosecutions or disclosure, so I’m not sure that it is something that I should have been made aware of. You can say that I did that report, collated that report, back in 2010 but I moved on and my job was covering all sorts of stuff of managing a broader finance service centre, putting in accounts payable functions and other things, and my job was kind of further away from all of this. So I don’t think that there was a reason that should have been made aware of it because I didn’t have a role, other than being called back for subject matter expertise on spot reviews and the suspense accounts.

Mr Beer: I’m not suggesting that you had any responsibility for prosecutions –

Roderick Ismay: Right.

Mr Beer: – or that you needed to be told about it in that capacity.

Roderick Ismay: Right, of course.

Mr Beer: But you, as an individual, were continuing to place reliance on what Gareth Jenkins had told you, weren’t you?

Roderick Ismay: Well, Gareth did lots of things supporting our POLSAP system, as well, so he was somebody who did various change deliveries for lots of things on central finance systems. So he was somebody that my team had a lot of dialogue with. My team wouldn’t have been relying on him, because we weren’t leading prosecutions. We wouldn’t have been relying – what he did or didn’t do in court wouldn’t have been a matter for the operation or running of my team. It’s just – it was a separate thing, totally.

Mr Beer: You’d relied on him in your report, hadn’t you? In one of your appendices you essentially cut and paste or exhibited –

Roderick Ismay: So in that –

Mr Beer: – what he had said about the integrity of Horizon, hadn’t you?

Roderick Ismay: Well, I have somewhere – yeah, is that in my 2010 report?

Mr Beer: Yes –

Roderick Ismay: Right, yeah, yeah, I’ve included something from him in that, yeah.

Mr Beer: Would you accept that the information from Mr Clarke and as supplemented by Mr Altman, who had concluded that Mr Jenkins was a tainted witness and his position was untenable as a witness, amounted to an acknowledgement that the Post Office’s evidence as to the integrity of the Horizon system was unsafe, didn’t it?

Roderick Ismay: Yes, it does. But you’re referring to my report as well in there, and my report was an internal document not something that was part of a court case. I’d prepared something that was for internal use at the MD’s request, not knowing the wider context of how this was suddenly going to become such a pivotal thing people keep referring to in lots of contexts.

Mr Beer: At all events, you were not made aware of either Mr Clarke’s advice or Mr Altman’s general review?

Roderick Ismay: No, I don’t think I was, no. I don’t think I was.

Mr Beer: Thank you. Can we turn to some broader issues, please, and look, firstly, at your witness statement at paragraph 7, please.

Sir Wyn Williams: I take it you mean the second one?

Mr Beer: Yes, second witness statement, please. Thank you. Paragraph 7, which is page 3.

You’re here dealing with, in this part of your statement, your recollection of your involvement and giving instructions in relation to the Cleveleys case involving Julie Wolstenholme, yes?

Roderick Ismay: Yes.

Mr Beer: You say, in the fourth line:

“My recollection is that I asked members of the IT Directorate what their view was about such articles and that Cleveleys came up in that conversation, with the IT directorate firmly of a view that the criticism was unfounded.”

Yes?

Roderick Ismay: Yes.

Mr Beer: You say a few lines further on:

“My recollection … is that the Post Office Head of IT, Dave Smith, did not agree with these opinions and he disagreed with the validity of the approach adopted by the IT expert to reach their opinion. Rightly or wrongly, I trusted that internal opinion, from someone I understood to be an expert on Horizon.”

So you’re essentially saying there, if I can summarise, that you became aware of an expert report prepared in the Cleveleys case. You, instead of accepting what was in that report, took your view from the Head of Post Office IT, Dave Smith, who you trusted.

Roderick Ismay: Yes, yes. I don’t know whether I’d read the particular reports there, although there’s clearly an email where I forwarded one of them and asked somebody else if they’d got the other one but I – yeah, I relied and they probably – the organisational culture was that you don’t all try to second guess what somebody else is doing in the management team. I trusted somebody who I understood was an expert who’d overseen the sort of implementation phases and Go Live of that system.

That may have been wrong, in hindsight, I accept. Maybe I should have been more sceptical but, yeah, I trusted Dave, IT Dave’s judgement at that time.

Mr Beer: Why were you involved in the Cleveleys case at all?

Roderick Ismay: Well, I don’t – I’m not sure that I was involved in the Cleveleys case. I think, in my role in risk, because I could see these comments being made in press cuttings, I think I approached Dave to ask him about well, what do you think about these things I can see in the press? And I think he would have then raised Cleveleys in response to that, to say, “Well, particular topics were raised in that one and it was just totally unfounded”.

So I think that was – I think that was the context of which I became aware of the Cleveleys case. I wasn’t involved in the – wasn’t kind of involved in the case; it was an awareness of it, I think.

Mr Beer: I mean, you tell us here that you, a little further down the page after the second bit of highlighting, you escalated counsel’s opinion to David Miller?

Roderick Ismay: Yeah.

Mr Beer: Why were you doing that? What had that got to do with you?

Roderick Ismay: Well, I think something had been sent to me, there’s some sort of email in the pack that indicates the Finance Director wasn’t there at the time, somebody had been trying to share something with him, so they came to me and, given that the Finance Director was on holiday, I think, at that time, or he certainly wasn’t there, then, whatever it was that people were trying to escalate to the Finance Director, I must have decided, well, in his absence, I’m going to escalate this to the Chief Operating Officer because this is something that clearly was intended for director level.

Mr Beer: You say, if we go over the page, please, to page 6, paragraph 12, that your understanding was that:

“… there had been a large team of experts involved in developing the Horizon system, that it had undergone extensive testing and that the independent consultancy, Gartner, had reported positively on the deployment of the system. I do not believe I took any further action in relation to the concerns raised in Mr Coyne’s report nor [were you] asked to. The organisation responsibilities agreed for [you] at the time focused on Financial Services regulatory compliance”, et cetera?

Roderick Ismay: Yes.

Mr Beer: “If the Horizon system was a priority, it would have been a responsibility for IT.”

Yes?

Roderick Ismay: Yes.

Mr Beer: Why did you decide that the Gartner report and its contents were more reliable than another report, that of Mr Coyne, that raised issues about the integrity of Horizon?

Roderick Ismay: Perhaps because of false reliance on the tone from Dave Smith, where I think Dave – I mean, I would have had no idea what consultancies had been involved when Horizon was deployed but I think it would have been Dave that raised with me that there was this report, this analysis that Gartner did and, in hindsight, yeah, you can look at it and say, “Well, what happened about looking at Mr Coyne’s” –

Mr Beer: What was the approach taken at the time to Mr Coyne’s report? Did anyone investigate the concerns raised in Mr Coyne’s report?

Roderick Ismay: Well, I presume, from the way that Dave, IT Dave Smith, replied to me at the time, that he didn’t – he thought that the approach to it and the conclusions were inappropriate. I presume that he’d looked into what Mr Coyne had said.

Mr Beer: Can we move forwards in time, please, and look, please, at POL00326799, and start by looking at page 4, please. This chain of emails – sorry, if we can scroll down, please – sent by Andy Hayward, and if we scroll up, please. Thank you, stop there.

In February 2010, from Andy Hayward to Mandy Talbot and, amongst others, you – can you see that –

Roderick Ismay: Yes, I can.

Mr Beer: – with the subject heading “Challenges to Horizon”, yes?

Roderick Ismay: Yes, yes.

Mr Beer: It says:

“Following our conference call today …”

So it seems like at the end of February 2010 you had a conference call about challenges to Horizon:

“… below is a brief summary of the agreed key activities to progress next steps …”

Yes? Can you see that?

Roderick Ismay: Yes, I can.

Mr Beer: Then, if we scroll down to number 2:

“Information security (SL&DK) …”

Do you know who that is a reference to: sue Lowther perhaps?

Roderick Ismay: I would imagine it’s Sue Lowther and Dave King.

Mr Beer: Okay, Dave King, okay:

“… to conduct initial investigations and provide terms of reference outlining remit and requirements to carry out a full investigation, (resource, timescales and any associated ancillary costs). (NB agreement by all that with [Dave King] and our ‘banking consultant’, we have far more expertise and knowledge than anyone else likely to pus for this initial piece of work).

Then 3:

“Subject to the agreement of 2, conduct full investigations into integrity issues, with conclusions/ report to be provided. Once investigated and conclusions drawn, gain external verification to give a level of ‘external gravitas’ to the response to these challenges. (Recommend Ernst & Young as the most suitable partner to complete this … [to be advised]).”

Then if we scroll up, please:

“Can we make sure that Rob Wilson is kept appraised …”

Yes? Then scroll up a little further, please, just to the first line of Mr Wilson’s reply:

“If it is thought that there is a difficulty with Horizon then clearly the action in the memo is not only needed but it is imperative.”

Can you help us, there’s a reference there to a conference call having taken place on that day, 26 February 2010. We haven’t got a minute of it, and this is the best evidence, I think, that we’ve got as to what was discussed and what happened. Can you recall joining a conference call about Horizon integrity issues in February 2010?

Roderick Ismay: No. I was involved in loads of conference calls. There’s some weeks I was back-to-back on conference calls all week but, what they were, I’m sorry, you know, you could ask me where I’d gone on holiday that year and there is all sorts I can’t remember from then. I can’t remember being on a call about challenges to Horizon but, clearly, I’m cc’d on something I’m referring to it, so I must have been, but I can’t remember the –

Mr Beer: Do you know what prompted a decision to conduct a “full investigation” into Horizon integrity issues?

Roderick Ismay: No.

Mr Beer: If we just go back down to look at what the agreed actions were said to be. Keep going, please. There, stop.

Under 2:

“Information security … to conduct initial investigations and provide terms of reference outlining remit and requirements to carry out full investigation …”

So it was going to be, it seems, a pre-investigation to settle the terms of reference and remit of a full investigation, yes?

Roderick Ismay: Yeah.

Mr Beer: 3, then “conduct full investigation into integrity issues”. Can you help us, what would have prompted a decision to conduct a full investigation into integrity issues?

Roderick Ismay: Well, I don’t know what prompted it. I can only assume that, because of allegations being made in cases, that it must have been a response to that.

Mr Beer: Was such a full investigation carried out?

Roderick Ismay: I don’t know.

Mr Beer: You would know if one was, wouldn’t you?

Roderick Ismay: Well, possibly. As I say, there are so many things that were going on, so many reviews of different things, but I can’t remember one and I think the tone of what you get further down from Rob Wilson seems to lead on to kind of challenging the review.

Mr Beer: Yes, he says, “Plainly it’s got to be done but”, and then he lists, I think, five buts, yes?

Roderick Ismay: Yes, so I don’t know – I don’t know if an investigation –

Mr Beer: You know very well that no investigation was carried out and, instead, what happened was you were asked to report and provide a one-sided view, weren’t you?

Roderick Ismay: Oh, no, so I was asked to – I was asked to put the reasons for assurance in a context where a new Managing Director had heard allegations, and my recollection is being asked to put together “Well, what’s those other reasons that – why do management feel confident about the system?” And that was a gathering of – and it wasn’t an audit, it wasn’t a testing of stuff. It was gathering assertions of why – what elements of the training infrastructure, the call centre environment, other things that are well documented in that report were reasons that one might have confidence in the system. That was what I was asked to put together and what I did.

So you’re probably right, there probably was no review on the back of this one and maybe it – you know, further down the line when Dave came in and asked “I can hear all this in the news, what’s the other side of the story?”

Mr Beer: You, according to this email chain, had been part of a conference call –

Roderick Ismay: Yeah.

Mr Beer: – the outcome of which was to set up a train of events that would have led to a full investigation of Horizon’s integrity with external verification. Agreed?

Roderick Ismay: Yeah, yeah.

Mr Beer: I’m asking you to help us: what happened to that agreement?

Roderick Ismay: I don’t know. Sounds like nothing happened.

Mr Beer: Can you help us as to why? Was it Mr Wilson’s intervention?

Roderick Ismay: I presume so. I don’t know.

Mr Beer: Did you understand Mr Wilson’s intervention?

Roderick Ismay: Well, looking at it now –

Mr Beer: If you scroll up to it, just to remind you.

Roderick Ismay: Yes, let’s see what was his intervention. Let’s see it again.

Mr Beer: Scroll up, thank you. So the first line is:

“If it’s thought there’s a difficulty then not only is a full investigation needed but it’s imperative.”

Then he sets out what I’ve described as five buts.

Roderick Ismay: Yeah.

Mr Beer: “The consequence will be that to commence or to continue to proceed with any criminal proceedings will be inappropriate.”

That’s But 1. You can read the rest of that paragraph to yourself.

Paragraph 2:

“What is being suggested is that an internal investigation is conducted. That will be disclosable as undermining evidence on the defence in the cases proceeding through the courts.”

That’s But 2:

“Inevitably the defence will argue that if we are carrying out investigation, we do not have confidence in Horizon and, therefore, to continue to prosecute will be an abuse of process”, But 3.

“Alternatively, we could be asked to stay the proceedings”, But 4.

“The potential impact is much wider for the Post Office, in that every office in the country will be seen to be operating a compromised system with untold damage to the business”, But 5.

Then scroll down, please:

“To continue prosecuting … offenders knowing that there is an ongoing investigation could also be detrimental to the reputation of my team. If we were to secure convictions in the knowledge that there was an investigation, we would be open to criticism and appeal to the Court of Appeal, who would be highly critical of any prosecutor’s decision to proceed in the knowledge that there could be an issue with the evidence.”

Is it those five things that stopped an independent investigation in its tracks?

Roderick Ismay: I don’t know. Probably.

Mr Beer: Well, you’ve been party to a decision to carry out an investigation that was going to be independently verified. You must have thought “Well, hold on, why isn’t this happening? This is quite a big piece of work. Horizon integrity would be on the line. Are we going to do it or not”?

Roderick Ismay: I think we’ve got so much – in hind – I mean, this is massive, this whole topic of Horizon, obviously, in the context of this Inquiry and what happened to people, but there were so many things that were going on in changes within the organisation, that this would have been one of many things leading to possibilities of reviews for stuff.

My team and the Finance Service Centre, or Product and Branch Accounting, as it was called, probably at the time of this email, were constantly subject to reviews of different things, and so a meeting suggesting a review here, there would have been lots of meetings about lots of different reviews that were going on and, sadly, in the context of all of those different reviews going on, not everything went ahead. My team was relentlessly subject to reviews, ahead of pre-privatisation, ahead of efficiency reviews, continual headcount reduction targets, just relentless reviews that were going on in my team.

Mr Beer: Sir, that’s an hour or so gone. Can we take the second break until 12.20, please?

Sir Wyn Williams: Yes.

Mr Beer: Thank you.

(12.09 pm)

(A short break)

(12.20 pm)

Mr Beer: Thank you, sir, good afternoon.

In my excitement, Mr Ismay, I went too fast through some of the Cleveleys material. Can we just go back a little bit and look at a few more documents on that.

I’ve asked you so far about how you responded to the Jason Coyne report –

Roderick Ismay: Right, yes.

Mr Beer: – and the assurance you took from Post Office’s own IT?

Roderick Ismay: Yes.

Mr Beer: Can we look at some documents at the time, please. POL00158511. We can see from the top of the page there that this is a chain of emails which was eventually sent to you in July 2004, yes?

Roderick Ismay: Yes.

Mr Beer: If we look at the foot of the page, please. We can see an email from Carol King to Jim Cruise, who was the lawyer in the case, acting on behalf of the Post Office, and she says:

“I have read the notes and spoken to Jennifer Robson about this case and wonder if you could clarify something for us please? If we were to settle (and we are not stating at this point that we will) could we ask for this to be without prejudice and settle without admitting that Horizon was at fault. There have been a number of postmasters who have not been able to use the equipment though trained fully at the time of installation and it has frequently been used as an excuse for errors. We would not want this case to set a precedent for similar cases in the future.”

Carol King, was she part of your department at that time?

Roderick Ismay: Not at that time. When I took over the Product and Branch Accounting team, I don’t know, it was couple of years after that, she was part of my team then but not in 2004. I think I was managing the Branch Audit Team then and Carol wasn’t part of that team.

Mr Beer: If we scroll up, we see at the top to of the page that this email chain was sent to you, she says:

“Rod

“As before.

“Cheers

“Carol.”

Roderick Ismay: Yeah.

Mr Beer: It appears that Carol King asked was asked by you to send her this correspondence, wasn’t she?

Roderick Ismay: Yeah, looks like it, yeah.

Mr Beer: That, late July 2004, was at the time that a settlement was taking place, wasn’t it, of the Cleveleys case?

Roderick Ismay: It looks like settlement was going on. Well, no, the settlement correspondence is March, in this email, so that thing to me is three months later. I don’t know when the settlement was going on but that email was four months later.

Mr Beer: If we go back down the page, the part about subpostmasters not having been able to use the equipment, despite being fully trained and using that as an excuse for errors and not wanting the Cleveleys case to set a precedent for similar cases in the future, was that a concern of yours?

Roderick Ismay: Well, I don’t know. I think – I expect that me corresponding with Carol would have come about for the same reasons as me looking at press cuttings and saying to Dave “What’s going on with these allegations here”, and, similarly, I probably said to Carol, because we were – well, she didn’t report to me, we were based in the same building, I probably said, “Well, I’m new, what was this case? What was Cleveleys? Or what is Cleveleys?”

Mr Beer: But weren’t you involved, in July 2004, with taking the lead in getting a settlement agreed within the Post Office?

Roderick Ismay: I don’t know, was I?

Mr Beer: I’m finding out at the moment why these questions were being asked in March 2004 about a concern that settlement of the case might set a precedent. Was that something you were concerned about?

Roderick Ismay: I don’t know. I don’t know whether I was but I can see from other correspondence that’s related to this in the packs that I’ve had, that there was a concern that there’d been a lack of document retention and, if I’m referring to the right case, such that Post Office couldn’t respond to something because there was no documentation going back, and it looks like it led to a request to Fujitsu to retain documentation for longer.

So me looking at it, it looks to me like, yeah, Post Office weren’t wanting to set a precedent but, because there was a case where they’d got no documentation to refer to, to support the case they were making, not that they were confirming there had been a problem with the system. They just couldn’t get the old documentation back.

Mr Beer: If we go to the top of the page and just remember the date –

Roderick Ismay: Yeah.

Mr Beer: – 26 July at 5.09.

Roderick Ismay: Yeah.

Mr Beer: Can we look, please, at POL00142503. Can we see the same date, 26 July –

Roderick Ismay: Yeah.

Mr Beer: – about half an hour later, yes –

Roderick Ismay: Yeah.

Mr Beer: – 5.48 pm? An email from you, and just help us with who all of the people are on the distribution list?

Roderick Ismay: So the “To” list, so I think Donna Parker was the PA, I think, to Dave Miller.

Mr Beer: He was a director?

Roderick Ismay: So David Miller was Chief Operating Officer, I think, he was a director. I think Donna was his PA.

Mr Beer: Yes.

Roderick Ismay: Mandy, you know, in Legal; Tony, Head of Security; and Carol managing a team –

Mr Beer: We’ve discussed?

Roderick Ismay: Yeah.

Mr Beer: The subject is the Cleveleys case?

Roderick Ismay: Yeah.

Mr Beer: You say:

“Donna – as discussed here is the correspondence re the legal case.

“The first arrow below contains a note from Group Legal today … This is counsel’s opinion.

“The other arrow sections below contain some more background from Carol King …

“In summary we suspended Mrs Wolstenholme. We claimed for the value of these losses … she counterclaimed … Within her claim was an ‘experts opinion’ which was unfavourable concerning Horizon and Fujitsu.

“We have lodged £25,000 in court but she has no legal representation and is pursuing the full amount. Goes to court next month.

“Mandy – Peter Corbett is on holiday. I am now escalating it to Dave Miller …

2tony, please can you advise who is leading …

“Carol, thanks for your correspondence …”

I think that’s the correspondence we just looked at:

“… please do not circulate this any further than is necessary than to support Dave and Group Legal with the case.”

You were taking a coordinating role here, weren’t you?

Roderick Ismay: Well, I think the email that’s off the bottom of the screen refers to the Finance Director not being there, and what I’ve said earlier was I think I was forwarding this to the Chief Operating Officer in the absence of the Finance Director. Probably, if this was indeed about a decision about making a settlement, I’d expect that would have been something of the gravitas of going up to an authority that would have been at a director level to approve –

Mr Beer: Where was the authority to settle level?

Roderick Ismay: Well, I don’t know but I would expect that something of this significance – and I’ve seen in some other correspondence reference to – which I can’t remember what the settlement amount was but I’ve seen some other correspondence that says that it was over 100,000, and I’m sure that would have been something that would have been requiring a director to sign that off. I don’t know what the delegated authority levels were but I think it would have required that.

Mr Beer: Again, why were you taking a coordinating or central role here in this case?

Roderick Ismay: Well, I think this came to me because the Finance Director wasn’t there.

Mr Beer: You say at the end:

“… do not circulate this any further than is necessary to support Dave and Group Legal …”

Why was that?

Roderick Ismay: Well, I don’t know why I’ve said that in there. I think probably there’s a sensitivity to names and not wanting wider audiences to be aware of, you know – take even Mrs Wolstenholme’s position in there. I doubt we’d have been wanting to have a name of somebody in wide circulation around the organisation in respect to them.

Mr Beer: Is this effectively you seeking authority for settlement?

Roderick Ismay: No, I think I’m escalating it up – I wouldn’t – I didn’t have a budget. I managed the – I think, at that time, I was managing the branch Audit Team, so my budget would have been the payroll costs of the branch Audit Team, and the costs of running its database. I wouldn’t have had a budget and be responsible for the settlement they’d made in a case. So I’d be escalating this to somebody who would be the budget holder for such a case.

Mr Beer: Mr Ismay, you appreciate that I’m investigating why your footprint –

Roderick Ismay: Yeah, yeah.

Mr Beer: – or your fingerprints are on a number of Horizon integrity cases –

Roderick Ismay: Yes.

Mr Beer: – across time?

Roderick Ismay: Oh, yes, yeah.

Mr Beer: And I’m asking at the moment why are you here? Why are you involved here?

Roderick Ismay: Well, I think for the reasons that I’ve articulated there.

Mr Beer: Okay, can we move to a different series of cases then and look at POL00184236. Look at page 2, please. We’re in the following year. An email from Mandy Talbot to, amongst other people, you – can you see that –

Roderick Ismay: Yes, I can.

Mr Beer: – under the heading “Challenge to Horizon” –

Roderick Ismay: Yeah.

Mr Beer: – can you see that?

Roderick Ismay: Yeah, I can see that, yes.

Mr Beer: Mrs Talbot summarises the facts of the Castleton case; can you see that?

Roderick Ismay: I can see this is about the Castleton case, yes.

Mr Beer: Then if we scroll down, a summary of Mr Bajaj’s case; can you see that?

Roderick Ismay: Yes, I can see that.

Mr Beer: If we scroll on, please, some “Issues”:

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

Then under “Suggestions” – do you see that?

Roderick Ismay: Yes.

Mr Beer: If we scroll down, please, to number 5:

“Identify current numbers of [Post Office] or Fujitsu staff who can provide statements in the two current cases which (a) validate the system (b) explain the Horizon process from end-to-end and (c) explain why each and every point made by the Defendants is irrelevant or can be explained.”

Again, why were you involved at this stage?

Roderick Ismay: So I think at this point, when I joined Post Office I took over a team that included the Branch Audit Team, for a brief period of time I’d also got the Investigation Team with me, and I think at the time of this case – so I wasn’t close to the detail of particular cases but my understanding – and I realise this changes in light of what other attendees at this hearing have said – I understood, and it was shared with me in the witness – in the pack for the previous hearing, that there was a branch in this correspondence where the Auditors went in and the safe door was open, the doors to the branch were open and a whole chain of events which somebody has now said “That was a template, I shouldn’t have used that template for it”.

But I was in a position where I’d got the Investigations and Audit Team reporting to me, they were saying they’d had reasons for going to a particular branch, they’d had findings when they were at the branch and then, suddenly, we were on the receiving end of a counterclaim, when there was lots of evidence or evidence that the Post Office believe was evidence of there having been a loss in the branch.

Mr Beer: Mr Ismay, can I just try and cut through things and ask: why were you being asked, through the distribution of this email chain to you, to contribute to the suggestions made by Mandy Talbot?

Roderick Ismay: Possibly because Tony Utting reported to me at that time, who is in that chain. So it would be quite common that somebody would be cc’d – if you were in a bit of correspondence, your boss might be cc’d in it as well –

Mr Beer: So a lawyer is raising two cases in which subpostmasters have separately –

Roderick Ismay: Right.

Mr Beer: – made accusations –

Roderick Ismay: Yeah.

Mr Beer: – about the reliability of the Horizon system –

Roderick Ismay: Yeah, yeah.

Mr Beer: – and she says “We need to identify people in Post Office or Fujitsu who can explain why each and every point they’ve made is irrelevant or can be explained”.

Roderick Ismay: Yes.

Mr Beer: Is that the approach that Post Office took, generally?

Roderick Ismay: Well, I think –

Mr Beer: If somebody raised a problem –

Roderick Ismay: Right, yeah.

Mr Beer: – we need to explain why it’s irrelevant or can be explained away?

Roderick Ismay: I’m not sure that that was the case but, clearly, I can see in hindsight we didn’t listen and I’ve said in my statement there was a failure of listening to –

Mr Beer: Failure of?

Roderick Ismay: Organisationally, a failure of listening to the allegations that were being made.

Mr Beer: Would you agree that the way that that’s formulated in paragraph 5 is particularly close minded or deaf?

Roderick Ismay: That does look close minded but the – but people in the organisation, just like my conversation with Dave Smith, had got a lot of misplaced – perhaps misplaced confidence, misplaced faith in Horizon, but lots of things about the whole way it had been designed, rolled out, tested, test environments, lots of stuff that would have been reasons that made the organisation and individuals in it more assured about the system.

Mr Beer: This formulation in paragraph 5, do you agree, presupposes that the Horizon system had no issues or bugs within it, doesn’t it?

Roderick Ismay: Well, it’s looking for people who can provide statements to validate the system. Well, yes, so, to – so, in point C – I guess point C does say that, yes. Yeah.

Mr Beer: How did the Post Office, in fact, satisfy itself that the system had no bugs in it and why each and every point made by defendants was either irrelevant or could be explained away?

Roderick Ismay: I would think either because, if an allegation about the system was quite clear, then maybe that could be explained as not an issue for certain reasons. Often, I think the response was, well, Horizon must be wrong, and it wasn’t pinpointing, well, what is it that’s wrong? So my involvement in awareness of cases was often more about the high value cases, so we’d be talking like six-digit cases that were going through, and we’d have a belief that there were indicators of – suspicions that had caused Auditors to go out to a branch, were often what were confessions at branches when the Auditors went out there.

And, as I’ve said in my statement, I would talk to subpostmasters and representatives of subpostmasters a lot – and I know there will be listeners who don’t believe what I’m about to say – but I felt passionately about subpostmasters and did a lot to try to make stuff easy for subpostmasters to do their work. I was absolutely passionate about it. And, as I’ve said in my statement, I’d got people from the NFSP and other multiple partners who were confident that they were users of the system, their staff were users of the system, and they weren’t experiencing the issues that – they weren’t experiencing the issues that were being raised or feeling that there were issues to be raised.

So this may be wrong and this, just like I could have had misplaced confidence in what Mr Smith was saying to me, but when you’ve got representatives, trade union representatives of subpostmasters and individual subpostmasters saying, “I don’t have a problem with the system, it works fine for me”, that, possibly wrongly, amplified itself to lead to a view that, well, the majority of cases where there’s an allegation about the system – it can’t be right, you know –

Mr Beer: Is the truth of the matter –

Roderick Ismay: I can see that’s wrong but there was that amplification of lots of people saying, “The system works for me”, many, many.

Mr Beer: Is the truth of the matter revealed by the sentence two paragraphs above, “Suggestions”, where Ms Talbot says:

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

That’s an irrelevant consideration, isn’t it, in whether or not we investigate fairly and impartially whether there is substance in the complaints made?

Roderick Ismay: Yeah –

Mr Beer: Do you agree?

Roderick Ismay: A case should be looking at the individual in the case and hearing what’s going on in there. That should be separate to the specifics of that case. Commercially, the fact is an organisation would be concerned about that but that should have been kind of separate to the case, yeah.

Mr Beer: Bringing that into account is the tail wagging the dog, isn’t it?

Roderick Ismay: Well, it does look like that, yeah.

Mr Beer: Can we see what was done about this and look at POL00142539, remembering we were just then at the end of November, 23 November 2005; we’re now in the early part of December 2005.

Roderick Ismay: Okay.

Mr Beer: This is a record of a meeting in Coton House in Rugby; can you see that?

Roderick Ismay: Yes, I can. Yeah.

Mr Beer: Or it’s an agenda for such a meeting.

Roderick Ismay: Right.

Mr Beer: Can you see, second down, Marie Cockett?

Roderick Ismay: Yes.

Mr Beer: Did she report to you?

Roderick Ismay: She didn’t at that time. When I took over Product and Branch Accounting, which I think was the following year, she was a report to me then but I think I took over Product and Branch Accounting in March or April or June 2006, I think. So she wasn’t – so I don’t think she was a report to me then because I didn’t have P&BA then.

Mr Beer: Graham Ward reported to Tony Utting, didn’t he?

Roderick Ismay: Yes. I think so, yes. Yeah.

Mr Beer: Can you see the purpose of the meeting is set out under “Background”, under the heading “Horizon Integrity”?

Roderick Ismay: Yes.

Mr Beer: “There have been several recent cases where subpostmasters have cited errors in the Horizon system as explanations for discrepancies in their accounts – either as part of a challenge against the termination of their contract or challenging the right to recover error notices/transaction corrections from their remuneration.

“Recently, a letter was published in The SubPostmaster asking readers to send in details of incidents where they believe Horizon caused errors in their accounts. Lawyers acting on behalf of a subpostmaster currently in dispute with the Post Office have written stating they are contemplating a joint action on behalf of number of current and former subpostmasters. This would challenge the accounting integrity of the Horizon system and Post Office’s right to make transaction corrections and recover resulting debts based on Horizon data.

“In one past case (Cleveleys) Post Office settled out of court following an adverse report on Horizon’s potential to cause errors from an expert appointed by the court. Fujitsu [said] that the report was not well founded, but Post Office and Fujitsu were not able to persuade the expert to change it.”

Then if we go down, please, “Meeting purpose”:

“To review the above issues and recommend …

“1. Who manages dealings with subpostmasters and their lawyers relating to actual or potential civil cases? What processes are required to identify as early as possible those cases that [have] a Horizon aspect? Who needs to be involved, and how they will be coordinated?

“2. Are new processes required with Fujitsu to obtain data, analysis, reports or witness statements for civil cases?

“3. Is there a need for an independent expert to be appointed in advance who could on request provide evidence to the court in such cases? If so what exactly would the expert’s role be, what qualifications and qualities are needed, how would we go about appointing one? What preliminary work would be required to get the expert ‘up to speed’?

“4. Who will act as client briefing external lawyers …”

Then over the page:

“5. What are the budget implications …”

Would you agree that, on the face of this, that’s a rather open minded and fair approach to the issue of how do we respond to complaints about Horizon and its integrity that we are now facing?

Roderick Ismay: Well, it looks like it wants to look at that. I’m surprised that some of the roles aren’t clear, though, where it says who leads on particular things, because I would have thought that was clear.

Mr Beer: But it’s asking a series of sensible questions, isn’t it?

Roderick Ismay: Go back up to it.

Mr Beer: Yes, please. Bottom of page 3, please.

Roderick Ismay: Thank you. Yes, yeah, yeah.

Mr Beer: It’s saying, “What information do we need from Fujitsu?”

Roderick Ismay: Yes.

Mr Beer: “What data, what analysis, what reports? What witness statements are required?” It’s talking about an independent expert.

Roderick Ismay: Yes.

Mr Beer: So it’s not the close-minded approach that we saw previously, is it?

Roderick Ismay: No. No.

Mr Beer: Were any of the people on page 1 required to report back to you? If we just go back to page 1, please, at the top.

Roderick Ismay: I don’t know if people were required to report back to me.

Mr Beer: Would you expect any of them to report back on a meeting like this to you, given your involvement, in particular, in Cleveleys and the Castleton case?

Roderick Ismay: Well, I think my involvement in those was not as a prime lead on those cases. So Cleveleys, I’ve said I have seen press cuttings that led me to ask questions to Dave about IT systems, and so what was this case that was raising these things, and what do you think about the IT expert’s opinion that’s come back on that?

So, yes, I did ask about that case and the other case, but that was two cases and there were lots of cases that were going on and I was doing it lots of other things. So this is significant, the Horizon integrity, but Horizon integrity was a matter for the IT Team to make sure that the system was robust. So there would be representatives who might have been in teams that I would manage who would go to meetings now and again, again, as subject matter experts to contribute to something, but it wouldn’t necessarily mean that the line manager needed to get a report of every meeting that everybody went to.

So, in the big context of where we are today, yes, it looks like something that should have been reported to me at the time. With lots of people going to lots of meetings, it wasn’t the case that one would expect everybody to report back to their line manager about there they’d been to. So in the context of where we were back then, I’m not sure whether it would have been something that should have been reported back to me.

Mr Beer: Can we look at the minutes of the meeting, please. POL00119895. We can see the attendees that in fact went to the meeting.

Roderick Ismay: Right, yeah, right.

Mr Beer: Were any of those in your team?

Roderick Ismay: Well, as I say, at some point, which I think was later than this, Marie became part of – or I took over the team that included Marie. I think possibly Alvin was probably part of my team at that time, I think.

Mr Beer: Thank you. Can we go to page 4, please. I’m not going to read all of the minutes, apart from paragraph 4:

“Appointing an external expert is likely to give the best results in court. The expert will need to be able to testify both on overall status of Horizon and related systems and on the analysis of data relating to individual cases … may be needed for the Castleton case after 7 February. Therefore discussions with Fujitsu should be initiated on the role, terms of reference and access to Fujitsu staff and information for such expert advice should be obtained from Peter Corbett on the desirability of using our external auditors to provide such an expert, even though such a person may be seen as less independent by a court.”

Then “Specific Actions”, can you see number 5:

“KB …”

I think that’s Keith Baines, yes?

Roderick Ismay: Um –

Mr Beer: “… to discuss the need for and [terms of reference] of an external report with Fujitsu.”

Roderick Ismay: Right. Yeah.

Mr Beer: Was the result of this meeting fed back to you –

Roderick Ismay: I don’t know.

Mr Beer: – ie –

Roderick Ismay: I think there’s another bit of correspondence that does suggest it was but I’m not sure. I’ve got so many documents in my head, I’m not sure.

Mr Beer: In any event, in late 2005, were you aware of a decision having been taken that the appointment of an expert who was external to Post Office and Fujitsu, who was independent, was likely to give the best results in court and should, therefore, be commissioned?

Roderick Ismay: I don’t know. I can’t remember that. But I wouldn’t dispute that, that an independent expert would be an appropriate thing to carry gravitas and independence in a court case. Whether I knew that at the time, I’m sorry, I’ve got so many documents and so many things in my mind, I’m not sure whether I did or I didn’t, but it would make sense.

Mr Beer: Yes, apologies for the number of documents. In the Inquiry, we like to give people full disclosure.

Roderick Ismay: Yeah.

Mr Beer: When he gave evidence, Mr Utting said that “Mr Ismay [you] should have approached Peter Corbett, the Finance Director, on where to go with this list of actions”. So we asked him –

Roderick Ismay: Right.

Mr Beer: – “Who should have made these actions happen?”, and he said you. Is that right?

Roderick Ismay: Well, I wasn’t at the meeting. I didn’t manage most of the people, so no.

Mr Beer: Why would he think it was you who had responsibility on where to go with these actions? Who should make them happen?

Roderick Ismay: Well, I don’t know. I could only imagine that, because I reported to the Finance Director, Peter, who’s named earlier, that perhaps he thought I’d be best able to explain these to Peter. But I wasn’t in that meeting itself, and I don’t know why it didn’t just go from whoever led that meeting to Peter. I don’t know.

Mr Beer: His evidence to the Inquiry was that it was up to you to make the actions from this December 2005 meeting happen, in particular in relation to the obtaining of an expert report.

Roderick Ismay: Well, I genuinely can’t remember that.

Mr Beer: Did you do anything to take any of these actions, and, in particular, the obtaining of an expert independent report about Horizon, forwards?

Roderick Ismay: I can’t remember doing like that but it looks like – well, no. I mean, Gareth is not an independent expert, is he, so no.

Mr Beer: Do you bury the actions in order to avoid Horizon coming under scrutiny?

Roderick Ismay: No.

Mr Beer: Why wasn’t this one taken forwards?

Roderick Ismay: I don’t know. I can only say like I’ve said before, that there were so many, many things going on.

Mr Beer: Were you concerned that an external report might actually uncover problems with Horizon –

Roderick Ismay: No, I don’t think so.

Mr Beer: – that the Horizon edifice might start to crumble?

Roderick Ismay: No, I don’t think so and I think, if there was doubt about the system, then it would be right to have had somebody independent to look at it, so –

Mr Beer: So why wasn’t somebody independent asked to look at it?

Roderick Ismay: I don’t know. But I don’t think that I – I evidently didn’t take these things forward but I’m not sure that I should have been – that I was the person who should be. This was a thing about Horizon system, there were IT representatives who were on that list of attendees, presumably somebody at IT had convened the thing in the first place. I don’t know why they didn’t take that forward and I don’t know why Tony said it was for me, who wasn’t at this meeting, to be the one to take forward actions arising from a meeting that I wasn’t at.

Mr Beer: You did report to Peter Corbett, didn’t you?

Roderick Ismay: Yes, I did. I reported to Peter Corbett.

Mr Beer: He’s right that, if you were to approach anyone for authority, it would be Peter Corbett, the Finance Director, wouldn’t it?

Roderick Ismay: If I was approaching somebody, I would approach Peter but I don’t know why it’s thought that I should be the person who was taking this forward.

Mr Beer: Thank you. That can come down.

At the same time that this was going on, the Castleton litigation was rumbling on, wasn’t it?

Roderick Ismay: That was in ‘05 or ‘06.

Mr Beer: Yes.

Roderick Ismay: Right.

Mr Beer: Across this period.

Roderick Ismay: Right.

Mr Beer: Now, you’ve already answered quite a lot of questions about the Castleton case and, in particular, I think on the last occasion, I asked you about an email from Mandy Talbot, POL00113909. If we scroll down, please, and keep scrolling. So we can see there that’s the end of her email, I think, dated 9 December 2006. If we go back to the first page of the email. I’m afraid it’s in a hard copy. If we go down, please.

Thanks. 9 – did I say December? I meant November. 2006. Can you see you’re copied in there?

Roderick Ismay: Yes, I can, yeah.

Mr Beer: Yes. She says she’s received some very good news about the case?

Roderick Ismay: Yeah.

Mr Beer: Yes?

Roderick Ismay: Yes.

Mr Beer: I asked you about this last time but, if we can just remind ourselves of my questions and your answers, and the point we’re going to come to in a moment is we didn’t have your reply last time to this email; we now do.

Can we have a look, please, at INQ00001064, page 10, please. You will see that I’m quoting on the left-hand side page, page 37 on the internal pagination, line 18, from this email:

“That last line, the last two lines of that paragraph, “the benefit of having a judgment is that the Post Office will be able to use this to demonstrate things to the network and it will be of tremendous use in convincing other postmasters to think twice about their allegations …”

Then I ask:

“… does that reflect your understanding of the Post Office’s approach to Mr Castleton’s case in general?”

You said:

“It doesn’t reflect my recollection of it. However, the language that’s used in that, I would agree, is similar to the language that’s used in the thing that you’ve shown me that’s four or five years later and is not pleasant.”

Roderick Ismay: Yes, yeah.

Mr Beer: You’re cross-referring to the Misra “bandwagon” email there and saying that the language used is not pleasant.

Roderick Ismay: Right, okay. Right.

Mr Beer: I carry on:

“It’s again suggesting that the result from a [civil] case can be weaponised, isn’t it?”

You say:

“Yes.”

Mr Beer: I say:

“‘Postmasters take note, look what happens to you if you deign to take us on’. That was the feeling wasn’t it?”

Then you say:

“I don’t recall that being the feeling but, clearly, that is the – that’s a fair interpretation/description of the sort of tone of those two lines that you’ve referred to …”

Then if we scroll on, please, and then again. Thank you, I think that was the end of it.

Can we turn, please, to POL00158577. Can we look at the foot of the page, please, and just scroll to a bit of the next page, the Mandy Talbot email of the 9 November 2006, “I have received some very good news”, et cetera, okay?

Roderick Ismay: Yes.

Mr Beer: It’s the same email. If we go to the top of the first page, you replied:

“Mandy – I would also support your recommendations – your closing paragraph below captured it very well.”

You say:

“This should be a considerable addition to our armoury in responding to the number of other cases that may have been stirred up by Mr Castleton’s letters into the SubPostmaster Magazine seen. One letter tried to get something like ‘class actions’. He certainly had other agents writing in reply to him and suggesting more cases. Thanks, Rod.”

So, firstly, you were an important voice in giving Mandy Talbot instructions in the case, weren’t you?

Roderick Ismay: I wouldn’t give Mandy instructions but I’ve fed back in a way that I’m not proud of, looking it that reply, but I would not be giving Mandy instructions.

Mr Beer: You say that you support her recommendations, don’t you?

Roderick Ismay: Well, there’s a difference between supporting and instructing somebody. So Mandy must have made a proposal about something and I’ve agreed with it.

Mr Beer: You were an enthusiastic adopter of her advice that the case should be weaponised to use against others, weren’t you?

Roderick Ismay: I think we believed that, when there were shortages found at audit, possibly wrongly, my belief, from what Auditors were saying to me that they’d found, was that, actually, there was a genuine theft of something. So –

Mr Beer: When I suggested on the last occasion that Mrs Talbot was seeking to use the result, weaponise it for other subpostmasters and make them wary of taking the Post Office on, I obviously had no idea that you would say that it would be an addition to your armoury; that’s how you viewed it, didn’t you?

Roderick Ismay: Well, yeah, I mean, that’s what I’ve said. Yeah. Yeah.

Mr Beer: Why did you view the Post Office as having an armoury to be used against subpostmasters?

Roderick Ismay: Well, I don’t know why I’ve used that language there. That’s not pleasant language but I’ve said –

Mr Beer: The last time you were criticising Mandy Talbot for using unpleasant language and, far from you doing that at the time, you gleefully adopted it, didn’t you?

Roderick Ismay: Well, clearly, I have in there and I can’t – I couldn’t remember having said – but you’ve produced this email and I did. So I’m sorry, I’m not proud of what’s in that email but I felt not proud of what you’d shown me before of what other people were saying, and now, evidently, I’ve said something similar.

Mr Beer: Were your answers, that I’ve just read to you, on the last occasion truthful, where you suggested that Mrs Talbot was being unpleasant and that you rather disagreed with what she was suggesting?

Roderick Ismay: Sorry, what do you mean there?

Mr Beer: Well, you said “Well, where Mandy Talbot is speaking about using this case against other subpostmasters” –

Roderick Ismay: Right, right.

Mr Beer: – “to put them off from taking us on, that was unpleasant”.

Roderick Ismay: Yes, that sounded like that and I couldn’t remember the reply that I’d made here and, in light of the reply that I’ve made here, now I can see that, which I couldn’t remember when we spoke before, and say, well, neither of us said something very nice there.

Mr Beer: You wanted to use Mr Castleton’s case as something to be used to suppress complaints from other people who were having trouble with Horizon, didn’t you?

Roderick Ismay: I understood in this case – and I’ve hesitated to use the complete narrative out of the witness statement that was shared with me before – but I understood in this case that the safe doors were open, the office doors were open and somebody came back in a state into the office there, and that there’d been all sorts of audit satisfaction that money had been stolen. So, in hindsight, that may have been totally wrong and what’s been said by the person who had written that witness statement suggests that it was not a reliable witness statement to have been put. But that was the kind of stuff that was influencing my perspective, where we’d got this particular case in this item here.

And, I mean, you may not agree with me but that context of Auditors went to a branch because things – there was some suspicion that led them to go there and when they found all the doors open and the things that were in that statement, that would reinforce, “Well, probably there was a theft had happened”, and so, perhaps wrongly in the whole context of it, that was the context of what was in my mind at the time and, because Auditors would also say, “We’ve had confessions in one of these visits but later on, months down the line, somebody retracted a confession”, that wrongly, perhaps, was amplifying itself into my head to think, “Well, if allegations are being made, it’s a change of response late in the day”, and perhaps is an inappropriate response, and I and others doubted the validity of those allegations that were being made.

In hindsight, we should have been listening to them. It was probably a wrong context but I and others in management were operating on a context where Auditors went to branches because there was some suspicion and the statements that they were getting from them reinforced that suspicion –

Mr Beer: Who was responsible for signing off the expenditure of very high levels of legal costs on civil litigation at this time?

Roderick Ismay: I don’t know but I would expect that would have been up to a legal director at Board level.

Mr Beer: There were costs that had been incurred of some £300,000 on the Post Office’s side –

Roderick Ismay: Right.

Mr Beer: – to seek to recover a debt of £25,000-odd. We’ve heard previously from Alan Cook that it would have been the Network Director – he wrongly named Paula Vennells as being the relevant Network Director at that time – is it right that it would be the Network Director that would be responsible for signing off the expenditure of legal costs, to your understanding?

Roderick Ismay: Well, I don’t know who was. I would have had expected it would have been somebody in the legal line, who would have been responsible for signing legal expenses with something that was of big magnitude. They may well have consulted other people but I would have expected somebody at the legal line to sign off.

Mr Beer: Did the lawyers always have a client, ie a non-lawyer, as somebody that gave them instructions?

Roderick Ismay: I don’t know.

Mr Beer: Were you ever that client?

Roderick Ismay: No. I wasn’t a client – I wasn’t giving lawyers instructions. We debated instruction quite a lot in the last hearing. My understanding is that the lawyers would have been defining what was going on in taking forward these cases, based on the evidence that had come out of audits and been submitted to them, as to whether it was right to take a case forward or not.

Mr Beer: Just as a point of information, if we scroll down, please, we can see, at this is time, November 2006, that Richard Parker was the acting Network Director.

Roderick Ismay: Okay. Right.

Mr Beer: Would he be responsible, to your understanding, for signing off the expenditure of large legal fees?

Roderick Ismay: I’m sorry, I don’t know. Again, I would have thought that the Legal Team would have been responsible for signing off large legal fees but I don’t know whether Richard would or not. I don’t know.

Mr Beer: Thank you.

Sir, it’s 1.10 now, might we break until 2.00 pm, please?

Sir Wyn Williams: Where do we think we’re going this afternoon, Mr Beer? Because I want to be frank with everyone: yesterday took it out of me and I have no intention of sitting beyond our normal finishing time on a Friday which is between 3.00 at 3.30. I just wanted everybody to know that.

Mr Beer: Sir, I’ve given that information to some of the representatives who might want to ask questions already, so they can calibrate their questions accordingly.

Sir Wyn Williams: All right. Thank you.

(1.09 pm)

(The Short Adjournment)

(2.00 pm)

Sir Wyn Williams: As I walked in, Mr Beer, there were smiles in the room, which tends to suggest that people might share my view that we have a truncated afternoon.

Mr Beer: No, they were thinking about an entirely different thing, sir!

Mr Ismay, can we begin, please, where we left off, which is about delegated authority for the management of legal claims and settlement authorities and incurment of legal costs, by looking at POL00294897, please.

This is a freestanding minute of 14 October 2011 and it’s a request for delegated authority, as regards costs of legal action, and it says, “We” – the context of who the “we” is isn’t completely clear but it says:

“We request POL IC approval …”

What would POL IC mean?

Roderick Ismay: That would mean Post Office Limited’s Investment Committee.

Mr Beer: So who was on the Investment Committee?

Roderick Ismay: I don’t know who was on the Investment Committee but I think it probably would have been the Finance Director. I think there would have been a – one of the business partners in Finance, sort of a – somebody who would communicate and kind of challenge budget holders.

Mr Beer: I see.

Roderick Ismay: Yeah, and some of the senior management.

Mr Beer: “We request [Post Office Investment Committee] approval for delegated authority to [Kevin Gilliland] …”

Very careful over the pronunciation there, I understand I have mispronounced it before:

“… to approve the initiation of legal action and subsequent legal costs in the defence of challenges made by Shoosmiths. These challenges are on behalf of former subpostmasters who have been dismissed for financial irregularities and who have challenged the integrity of the Horizon system in their defence. Post Office is at an early stage of action. However, costs of defence for the current ‘Letters before action’ are estimated at [X], current upper estimate of costs, should more cases proceed, is [X].”

Then “Background”:

“Throughout the last 10 years, the Horizon accounting system has been subject to a number of unfounded criticisms in the national press. It has also faced questions in the Houses of Parliament and allegations in court by former subpostmasters and their legal defence teams. Post Office has consistently won its prosecutions, and presiding judges have made statements which had been expected to deter further baseless allegations, however the challenges continue to be made.”

Then under “Current situation”, second paragraph:

“[Post Office] had around 20 cases which it wished to take to court where the defence blamed Horizon. [Post Office] is confident that Horizon is not at fault, however, some of the predicted legal costs outweigh the debts being pursued. [The Post Office] could not economically justify individual cases but to abandon such cases risked giving unwarranted credence to the JFSA’s allegations.

“The counterclaims have now brought these to a head. Post Office Legal now has to defend onerous request from Shoosmiths and consider its response.”

Then underneath “Steering Group”:

“[The Post Office] has now established a steering group chaired by Rod Ismay and involving representatives from legal, IT, Network and Security, with reference to Press Office and other teams as considered necessary.”

Over the page, please:

“The terms of reference [second paragraph] of the group are as follows:

“To propose to the defined business decision makers and subsequently manage, a coordinated litigation plan to address existing challenges and deter future challenges in the most pragmatic and efficient manner. This group to review the status of the overall response and be empowered to make decisions on tactical matters.”

Were you chosen to chair this steering group?

Roderick Ismay: It looks like it, yeah.

Mr Beer: Do you know why you were chosen to chair the steering group to deter future challenges to Horizon?

Roderick Ismay: Well, I think because I’ve seemed to have had an involvement at various points and an understanding of the whole chain of events, and there was quite a rapid turnover of people in different departments and, for better or worse, I seem to have been a person who’s been there through the whole chain of events, whereas most other functions, staff left and joined quite rapidly and that kind of corporate memory was lost in many functions.

Mr Beer: Or was it because you, as we’ve seen in 2005/2006 and again through your report in 2010, were regarded as a pair of hands who would always defend Horizon on behalf of the Post Office?

Roderick Ismay: Well, no, I think I was a common person, as I’ve said, because of that kind of common knowledge through the whole thing. There’s some other stuff that you’ve got as documents that sort of challenge – like, where it said this person needs putting through his paces, there were quite a few things that I had as feedback that I wasn’t a great chair of meetings and that I’d ramble on and drone on about things.

So there were quite a few things, there’s other documents, that one would be quite surprised that I’d be called to lead a group like this.

Mr Beer: Were you equipped to lead a steering committee to run the strategy for litigation?

Roderick Ismay: No.

Mr Beer: Did you run the steering group?

Roderick Ismay: It looks like I was put forward and probably started something here but I think I pretty quickly slipped out of it and other people took this thing forward, as I’ve seen from lots of other documents. I don’t think that I did this for very long.

Mr Beer: Do you remember what you did when you were the leader or chairman of the steering group for litigation?

Roderick Ismay: I can’t remember specifically what I was doing in those forums but I do know that when we had the – what was it called – the letter of action that came in from Shoosmiths, I think I was approached for an understanding of what were the cases that were involved in it because my team, where a case had gone through and there may have been, rightly or wrongly, whatever you call it, a debt that was being chased, often my team would have got the more complete summary of historic cases.

Whereas Legal were focused on cases that were live and future, sometimes the history of what cases happened a few years ago would come to my team because we’ve got a record of former subpostmasters, and I think that would have influenced me being invited to some of these things because of that corporate knowledge that was more complete in my team than some others teams.

Mr Beer: At this time, 2011, were you still maintaining the line set out in your August 2010 Horizon report that Horizon –

Roderick Ismay: I think –

Mr Beer: – integrity was robust –

Roderick Ismay: Yes, I think I was, yes.

Mr Beer: – and its data could be relied on?

Roderick Ismay: Yes, I think.

Mr Beer: So could we would move forward a year, please, to late 2013 and look at POL00146823, and look at the bottom of the page, please, an email from Charles Colquhoun to you of 15 November 2013, under the heading “Sparrow”:

“Rod,

“Just had a meeting on Sparrow. We need a paper to explain the accounting around Horizon at a high level. One of the points I want to make is that Horizon has few errors with clients – does such a paper exist? If not could one be produced next week? High level one.”

Then up the page, you say on the same day:

“Hi. Am on BlackBerry. No [document] to hand today but front page of exec [summary] of paper I did for Dave Smith’s ExCo still holds good …”

So, stopping there, the “front page of executive summary of paper I did for Dave Smith’s ExCo”, that’s a reference to your August 2010 report, isn’t it?

Roderick Ismay: Yes, I think it is, yes.

Mr Beer: You’re saying in November 2013 that the paper, or the executive summary of your Ismay Report of August 2010, still holds good, aren’t you?

Roderick Ismay: Yes, I am.

Mr Beer: Do you think it was right to say, in the light of the knowledge that you had by November ‘13, that what you had written about the integrity of Horizon still holds good?

Roderick Ismay: In light of what we now know in hindsight, no, I wish that I’d been able to write that and say, “But you should note that there were these issues that we’ve now become aware of”, but I think with everything that was going on at the time, I’ve given probably an off-the-cuff response, and, yeah, I hesitate to keep saying I forget things but, even couple of years onwards, there are so many things going on you don’t remember everything that happened but, yes, you’d be right to say it would be better if I had thought of those other – those issues that had arisen and it would be better if this email, if I had put those in it but I don’t think I did think of them, and I clearly didn’t put them in there.

Mr Beer: Mr Ismay, you didn’t need hindsight to say that. By this time, you had gone through the Second Sight process –

Roderick Ismay: Right, yes.

Mr Beer: – and the two bugs that they identified had come to at least your knowledge by then?

Roderick Ismay: Yeah.

Mr Beer: You knew, through all of the documents we looked at this morning, that what you had written about remote access was unsupportable. Why were you still peddling the line in your August 2010 report?

Roderick Ismay: Well, because I’d just got so many things going on and I would have kept referring back to that paper, I think. When somebody comes up at short notice and says, “Ooh, I need a paper about Horizon”, my natural instinct would be to think, “Oh, right, okay, yeah, I did one of those a few years ago, I’ll refer you to that”. I’m sorry –

Mr Beer: Did you knowingly regard that as your guiding star, your report, knowing that, in fact, plenty of information had emerged, to your knowledge, that directly undermined it?

Roderick Ismay: Clearly, other things had arisen that did undermine it but they weren’t resonating in my mind to that level, and that – and I –

Mr Beer: Why weren’t they resonating? Sorry to speak over to you.

Roderick Ismay: No, I understand. Yeah, I’d just got so many things that were going on, and I know that, in the context of this individual huge matter that the Inquiry is looking at, that sounds bad. But I just had so many, many things that I was doing and this sort of email wanting something immediately was a common thing on so many, many topics, loads of people across the Post Office loads of things, want, “Can I have this by today? Can I have this by tomorrow?”

Mr Beer: Mr Ismay, you’re answering my question as if, because of the pressure of the moment, you wouldn’t have realised that things had emerged in the intervening two years that undermined the conclusions of your report. Isn’t the better way to look at it that, over those two years, you would have realised that things had emerged that undermined the conclusions of your report? This wasn’t a snap decision to be made in replying on a BlackBerry, was it? It was a drip, drip, drip over those two years that meant you knew your report had been substantially undermined, didn’t you?

Roderick Ismay: Those things did undermine my report but this is a small number of emails out of hundreds of thousands – or tens of thousands of emails that I was getting and I was being asked to respond to lots of stuff at short notice, and, sadly, sometimes I didn’t put all of the things together that were in there and I did, sadly, kind of constantly have that thing in my mind of, “Well, there were all these reasons for assurance that were articulated, and the, whatever you call it, 14 bug and the 64 bug did get fixed”, and so because technical changes had been done to stop the recurrence of them, sadly they probably went off my radar a bit thinking, well, that’s been sorted, when, in this context, we should have been looking at it, even though they’d been sorted, they weren’t sorted at some point at time, and so, in the kind of whole time frame, we should have still been considering them.

But I think because I was very focused on operational processes of today, how do you keep today’s operation going, I was often looking at, well, if a problem has been convicted, what are we doing about today’s processes? And that focus on today’s processes, I think, was to the detriment of thinking about, evidently, the disclosure of some things that were happening in yesterday’s processes.

I was absolutely, you know, required to be keeping a focus on today’s processes, where the Product and Branch Accounting team was on a constant knife edge of how could its – the daily data processing of what came out of the Horizon system that needed to be converted into a format for clients was constant knife edge of the time to process the files and get that sorted. So I was always, and had to be, very focused on today and the systems that work today. And, sadly, that was to the detriment of issues that I did know about, about systems earlier, but I was very focused on today’s systems and today’s processing.

Mr Beer: Was it that you were proud of your report, and that you continued to trade off it afterwards –

Roderick Ismay: No. No.

Mr Beer: – or you thought your stock in the company had risen because you had written a report –

Roderick Ismay: No –

Mr Beer: – defending Horizon?

Roderick Ismay: No, I’d got lots of reports that I’d written. That report I think I had probably moved on from. I do accept that there’s a thing where, in my annual appraisal, I’ve referred – and you’ve got it, I’ve referred it to the Chairman saying, “Good report”. That had happened but I wasn’t looking at this as my stock. My stock, that I rated myself on and my team, was the satisfaction that we were getting, a regular feedback out of forums, such as with the NFSP and with multiple partners, where those colleagues in the Network were satisfied that the back office efficiency programme and the way we were improving systems, whilst still going through headcount reduction, how we were improving the quality of service in today’s service with that, so that was what I rated myself on.

Mr Beer: Did you consider it a feather in your Post Office cap that you were able to continually rebut Horizon claims?

Roderick Ismay: No, I know I’ve referred to that in my – in that annual appraisal, but –

Mr Beer: Let’s wait for that question to arise. I’m asking: did you consider it a feather in your Post Office cap that you personally were able continually to rebut Horizon claims?

Roderick Ismay: I don’t think I was responding to allegations from subpostmasters. There was often articles that were coming along and general questions, and I was able to respond with “These are the reasons for assurance about the system, these are the reasons that certain processes and controls work”. I was satisfied that I was responding with those things, I wasn’t taking satisfaction from closing down an individual subpostmaster’s case.

Mr Beer: Can we look, please, at POL00296291. You’ll see at the top it’s the “Pre Year End PDR”, I think that means performance development review – is that right –

Roderick Ismay: That’s correct, yeah.

Mr Beer: – for you for 2012/2013, and this is written by you, yes?

Roderick Ismay: That’s correct, yes.

Mr Beer: Just help us to try to date it, where it says, “Pre Year End PDR”?

Roderick Ismay: So I think the appraisal year in the Post Office was like the financial year to March. So I would probably have written something like this as a pre-year end discussion but I’d have probably had a pre-year end conversation with my boss and I would have submitted that ahead of that conversation, so this would probably have been done in February or March, of – sorry –

Mr Beer: February or March 2013?

Roderick Ismay: Yes, I think so, yes.

Mr Beer: If we look, you say it’s been a “good year” for you. Then, “Highlights of my year”, if we scroll down a little bit, please, do you see three bullet points from the bottom –

Roderick Ismay: Yes, I do, yeah.

Mr Beer: – which is, I think, the thing that you knew I was going to ask you about.

Roderick Ismay: Yeah.

Mr Beer: “JFSA – praise from Chairman for ‘the Ismay Report’ and being able to continually rebut claims.”

Roderick Ismay: Yeah.

Mr Beer: Was the Chairman you were referring to at that time Alice Perkins?

Roderick Ismay: Yes.

Mr Beer: Was it she that praised you for your August 2010 Ismay Report?

Roderick Ismay: Yes, and what I’ve put in the statement –

Mr Beer: When did she praise you for your August 2010 report?

Roderick Ismay: I don’t know, but if I’ve put it in my ‘12/’13 appraisal, it would have been some time between April 2012 and March 2013.

Mr Beer: What did Alice Perkins say to you?

Roderick Ismay: So my recollection of what she’s said in my statement and I think that she said something like “Oh, you’re the author of the Ismay Report, a good report”. I don’t remember her –

Mr Beer: In what context did she say it?

Roderick Ismay: So I think that I was being shown around a building, and I think that we’d just moved from Old Street to Moorgate. I think I’d come down and probably the Finance Director was probably saying “Right, let’s walk you round the building so you can familiarise yourself with the new place we’re in”, and one of the offices we went to was where Alice was, and so I think that when we walked in to her office, I would have been introduced, “This is Rod Ismay”, and, you know – and I think that’s what she said in response to that. I don’t think there was anything more to it than that.

Mr Beer: The second part of the sentence is capable of two interpretations.

Roderick Ismay: Yeah.

Mr Beer: It could mean: (a) that a highlight of your year was being able to continually rebut claims; or it could mean (b) that the Chairman, Alice Perkins, praised you for being able to continue to rebut claims?

Roderick Ismay: Oh, right. Okay.

Mr Beer: Which is it?

Roderick Ismay: I don’t think I’d written it in a sense of that she was praising me for rebutting them. I think I’d written it in the sense of where I was responding to things like press comments and being invited to list out reasons for assurance.

Mr Beer: Why was it a highlight that you were able to continually rebut claims?

Roderick Ismay: Well, because I was being asked “Rod, what are the reasons for assurance about the whole control environment here?” So a positive for me that I was continually able to, in plain English, describe what the control environment was.

Mr Beer: So a matter of personal and professional pride that you can bat claims against Horizon off?

Roderick Ismay: That I was able to summarise control environments in plain English that other people could understand.

Mr Beer: Was the answer to my question: yes, it was a matter of personal and professional pride to you that you were able to bat claims making allegations against Horizon off?

Roderick Ismay: No, it was a matter of pride to me and putting this into it that I was able to describe a controlled environment to give people assurance about it, which did lead to rebutting allegations that were being made in the press, or the organisation felt that it was rebutting those allegations.

Mr Beer: You’ve, in your evidence just now, badged this up about – as relating to press claims?

Roderick Ismay: Yes.

Mr Beer: Yes, you had been the leading member of the litigation steering group, hadn’t you?

Roderick Ismay: Yeah, yeah.

Mr Beer: Is that not what you’re referring to here?

Roderick Ismay: I think I’m referring across the whole gamut.

Mr Beer: So including “I have been able to rebut legal claims consistently – continually”?

Roderick Ismay: I’ve been able to continually explain a controlled environment which would provide assurance for whatever –

Mr Beer: That’s a different thing, Mr Ismay. That’s –

Roderick Ismay: But that’s what –

Mr Beer: That’s “I’m a technical person, and yet I have been able, in plain English, to translate technical knowledge into plain English”.

Roderick Ismay: Yeah.

Mr Beer: That’s not what you’re saying here. You’re saying, “It’s a matter of pride to me that I’ve been able to continually rebut claims”, aren’t you?

Roderick Ismay: One shortens one’s in things, so no doubt there could have been a whole paragraph written for this but, in a few words I’ve got for an executive summary, I’ve only put a few words in, and you’ll see this is one line out of a three-page document where the majority of my time was going on other things. What was I proud of in the year? I was proud of the things that were higher up that list in a rank order coming down it.

Mr Beer: The Ismay Report was prepared in just under two weeks, I think we established last time. You were instructed just before the 21 July 2010 and published to an internal audience on 2 August 2010?

Roderick Ismay: I was given a pretty short turnaround to do it.

Mr Beer: Did you receive feedback from other very senior people in the company, short of the chairman herself?

Roderick Ismay: So I think when I compiled and circulated that report to the addressees on it, I think some of them replied to say, “Thank you”. I don’t know –

Mr Beer: Did you get any pats on the back “Well done, Rod”?

Roderick Ismay: I don’t know what the email said but I think they were along the lines of thank you. I don’t think they were very long emails but there were some thanks came back from some of that audience for sharing that report.

Mr Beer: We’ve seen this morning a series of occasions where people have raised the question “Should we?”, and the answer came back “Yes, I think we should”, get an independent external report into Horizon?

Roderick Ismay: Right, yeah.

Mr Beer: Was your report something that essentially put that issue to bed?

Roderick Ismay: I don’t think my report would have put that to bed. That would –

Mr Beer: Were you asked by any member of the Post Office Board for your own view on whether an independent investigation into the reliability of Horizon should be commissioned after your report?

Roderick Ismay: I don’t know. Maybe we’ve got correspondence about people like Deloitte coming in and looking at something. So I was clearly –

Mr Beer: Did Mr Smith, for example, speak to you about whether it was necessary to get an independent report after yours?

Roderick Ismay: No, so I don’t think that that Dave – I don’t think he came to me and said, “After your report, Rod, we need to do that”, no I don’t think so.

Mr Beer: He has told us there was no merit in commissioning an independent expert or indeed a forensic accountant to test the reliability of Horizon, because your report adopted a clear-cut position on that, at that point?

Roderick Ismay: Well, I didn’t know that he’d said that but my report was not an investigation. My report was a summary of speaking to different people and different teams to say, “Can you explain the control environment? Can you explain training? Can you explain how call centres works, so that I can kind of summarise what are the things that influence our thinking to think we can rely on this system”. So I’d be surprised that somebody would look at that and say, “Ooh, that’s actually an investigation of stuff”, because it wasn’t an investigation; it was a summary of existing understanding.

Mr Beer: So you’d be surprised if somebody looked at your document and thought that it was a balanced and fair representation of all of the evidence?

Roderick Ismay: I imagine in the world that the Post Office was working in, and people probably read things quite quickly and thought, “Oh, that answers something”, without thinking, “Hold on, this isn’t an independent audit that’s been done on this, that might not have gone through the thought process”, and it should have because it wasn’t an audit, it wasn’t challenging whether things were true or not. It was taking assertions from different teams to put into a summary of these reasons in these categories of things that give us confidence about the system.

Mr Beer: Are you saying that people in the Post Office generally read things too quickly?

Roderick Ismay: I think some things probably were read too quickly.

Mr Beer: Why was that? Why did Post Office not contain some slow and careful readers?

Roderick Ismay: I think because the Post Office was challenged with the number of things about the – that its whole financial solvency, the restructuring of its network, deployment of an IT tower strategy to reinvent the whole model of how technology worked across the whole organisation, pay negotiations, constant strikes.

There was all sort of stuff, left, right and centre, that was – all of these things were really big, and so, sadly, I think part of this whole chain of events was – and, you know, this will not be assuring and close things for subpostmasters at all, but there were too many things going on, too many massive things in the organisation and, sadly, I think sometimes that would have led to things not being read or scoped in a particular way, that, in hindsight, one might say “Well, I wish that had been done”.

Mr Beer: Does it amount to this, that, on a number of occasions from 2005 onwards, direct consideration was given to obtaining an expert report that was independent of the Post Office and, on every occasion that was raised, it was rejected?

Roderick Ismay: Well, it looks like it. It looks like there’s been several points, as you say, where consideration has been given and a third-party report hasn’t happened so –

Mr Beer: Instead, your report was commissioned, which I think you’ve accepted was limited and one sided?

Roderick Ismay: It would be – could be perceived and I think I said it could be seen as having been one sided but that was in the context of a new MD who was hearing things in the press and said, “Right, I’m hearing these in the press, how robust is Horizon? What are these other factors that influence management to think in the way that they’re thinking?”

So, yes, it looks one sighted but the very context of it was “I’ve heard the other side of it, please give me that other side of it so a default” –

Mr Beer: Then, between it being written over the following years, a series of events occurred and information was revealed to you which undermined its contents?

Roderick Ismay: Yes, yeah.

Mr Beer: You didn’t correct it –

Roderick Ismay: No, I –

Mr Beer: – but continued to hawk around its conclusions as if they still held true?

Roderick Ismay: Yes, I did and, with all the things going on, yes, I did. Yeah. In hindsight, I might wish that I’d put those R&P issues and others together but, in the heat of the moment with things, no, I didn’t. But I did still take comfort from the controls that were narrated, they weren’t tested but the fact that we’d got all those things around recruitment, around training, around call centres, around escalation processes. All those things did continue to make me think, “Well, there are lots of routes for support and control to be in place”.

Mr Beer: Last topic, please. When you gave evidence in Phase 3 last year, you gave evidence about the Seema Misra “bandwagon” email; do you remember?

Roderick Ismay: I remember us talking about –

Mr Beer: Shall we look at the transcript. INQ00001064. If we can look, please, at page 7, please, and internal page 28, which is bottom right. If we scroll down – scroll up.

I was showing you the Seema Misra email exchange from Jarnail Singh and read the last sentence of it:

“‘It is to be hoped the case will set a marker to dissuade others from jumping on the Horizon bashing bandwagon’.”

I put to you that that was a sentiment with which you no doubt very much approved at the time and you said:

“I’d been involved in collating that thing about the reasons to be assured about Horizon. I would hope that I wasn’t using language like ‘Horizon bashing’. I was focused on reasons for integrity of the system and, clearly, there’s a number of things that have come out that are contrary to the concept of integrity of it, for language like ‘Horizon bashing’ isn’t – well, it’s unpleasant language to use again.”

Yes?

Roderick Ismay: Yeah.

Mr Beer: I think, at the time, we didn’t have your reply to that email but we do now. Can we look, please, at POL00169170. Look at page 2, please. We can see Jarnail Singh’s email at the top of the page there, second paragraph:

“It is hoped that the case will set a marker to dissuade other defendants from jumping on the Horizon bashing bandwagon.”

Yes?

Roderick Ismay: Yes, I can see that.

Mr Beer: Then page 1, foot of the page, David Smith – that’s the David Smith that commissioned you to write the Ismay Report, isn’t it?

Roderick Ismay: That’s the Managing Director.

Mr Beer: MD David Smith?

Roderick Ismay: Yeah.

Mr Beer: He forwards that on to you, even though you were a recipient of it originally, but I think adds in Mike Moores, who wasn’t a recipient of it; Mike Young, who wasn’t a recipient of it; and Paula Vennells, who wasn’t a recipient of it, and says:

“Rod

“Brilliant news. Well done. Please pass on my thanks to the team.”

Then up the page, please. You, I think, send it back, that chain, to all of the people who were included on the original chain and add people in – don’t you –

Roderick Ismay: Yeah, it looks like it, yeah.

Mr Beer: – and say:

“… please note Dave Smith’s [Managing Director] thanks to you all for your work on this important case.

“Dave and the [Executive Team] have been made aware of the significance of these challenges and have been supportive of the excellent work going on in so many teams to justify the confidence that we have in Horizon and in our supporting processes.

“This is an excellent result and a big thanks to everyone.”

So, far from thinking that the language that Mr Singh had used was unpleasant, you jumped on the bandwagon too, didn’t you?

Roderick Ismay: Well, I hadn’t used the word “bandwagon” but I forwarded – as Dave Smith asked, forwarded the thanks and I have referred to the significance and confidence in Horizon, so I –

Mr Beer: You’ve joined in the back slapping.

Roderick Ismay: Yeah, I’ve – yes, I’ve – I have congratulated people for their input to that, yeah, yeah.

Mr Beer: Was it the case that the Executive Team and the Managing Director had been watching the Misra case very closely?

Roderick Ismay: Well, it looks like it. I don’t know how closely they were watching it, but it looks like they were.

Mr Beer: You saw the Misra case, didn’t you, as a vindication of what you had concluded in your report, didn’t you?

Roderick Ismay: No, I think the two things – you can link them but I think they were separate. I didn’t see the Misra case as a justification of my report. I’d done my report and, rightly or wrongly, I might have been kind of assured that there were those reasons in there. The Misra case was a separate thing to that. I wouldn’t see the Misra case as a justification of my report.

Mr Beer: You saw it, at the very least, as a case the outcome of which justified the confidence that the Post Office had in Horizon, didn’t you?

Roderick Ismay: Yeah, that’s what I’ve said. The evidence that went into it must have supported the organisation’s confidence in Horizon and Dave’s asked me to forward those thanks, and I have, to the wider audience who’d – who were in that email.

Mr Beer: Mr Ismay, thank you very much once again for answering my questions.

Roderick Ismay: Okay.

Mr Beer: Sir, the Core Participants have some questions. I think, given the timing of them, it will be acceptable just to sit through until we finish.

Sir Wyn Williams: Right. Who is going first?

Mr Beer: I think Mr Jacobs is first.

Mr Jacobs: I think I’m first, sir. I’m not switched on …

Sir Wyn Williams: I hope you are, in both senses.

Questioned by Mr Jacobs

Mr Jacobs: Mr Ismay, I want to ask you about suspense accounts.

Roderick Ismay: Okay, right.

Mr Jacobs: You deal with that at paragraph 74 of your statement. Can we just quickly put that up on screen. WITN04630200, page 33 of 61, please. While we’re waiting for that to come up – I’ll read it. 74:

“Second Sight posed the question as to whether SPMs may have paid for alleged shortfalls that became profits in POL’s or its clients’ suspense accounts. I was involved in compiling POL’s responses to that question, and POL00025783 included product examples, process explanations and a rationale for why this was considered not to be the case.”

So if we can now go to that document, that’s POL00025783. You might be familiar with this document, Mr Ismay.

Roderick Ismay: I remember lots about suspense – I don’t know that particular document but, yeah, it’ll probably remind me when I see it.

Mr Jacobs: It’ll come up on the screen in a second. So here we have it.

Roderick Ismay: Yeah.

Mr Jacobs: I’ll just go through the summary quickly, just so you will be familiar –

Roderick Ismay: Yeah.

Mr Jacobs: – with it. So reading through:

“Second Sight’s principal concern is that credit amounts in the Suspense Account are absorbed by Post Office as profit rather than being returned to branches to balance out losses in those branches.”

That’s what Second Sight are concerned with –

Roderick Ismay: Yes.

Mr Jacobs: – and that’s what you were addressing.

Roderick Ismay: Yes.

Mr Jacobs: “Whether the cost of the unresolved discrepancy between Post Office and a client (whether held, in the suspense account or otherwise) falls on a branch is not necessarily dependent on the position between Post Office and its client but principally turns on the actions of the branch in following, or not, the correct branch accounting process.”

So the discrepancy is down to whether the subpostmaster or their assistants made an error is what you’re saying here, isn’t it?

Roderick Ismay: Yes, I’m saying there would have been some anomaly in recording something, for example recording a deposit as £20 when it was £10, or something like that.

Mr Jacobs: “As set out in the Post Office’s previous paper, so long as a subpostmaster submits the applicable evidence from their branch records to show that there was no error on their part (that they followed the correct branch accounting processes), the Post Office will not charge that branch (or will withdraw any related charge) arising from a discrepancy even where a client maintains that there is a discrepancy.”

So here, what you’re saying is that the subpostmaster has to prove they didn’t make a mistake in order not to have to pay?

Roderick Ismay: Well, I think the subpostmaster we would expect to provide something because we wouldn’t know what the subpostmaster did. We would any see the record of what the subpostmaster had recorded in Horizon. We would your see the record of what paperwork got sent to the check processing unit, for example.

Mr Jacobs: It’s proving a negative, isn’t it?

Roderick Ismay: Try me again, sorry.

Mr Jacobs: They’ve got to show they didn’t make a mistake in order to get themselves out of trouble?

Roderick Ismay: Yeah, yeah.

Mr Jacobs: Then, finally:

“Post Office’s processes are therefore designed so that subpostmasters are not disadvantaged by the operation of its suspense accounts and, if operated correctly, Post Office will not take into its own profit money that should have been credited to branches.”

So, if the subpostmaster doesn’t make a mistake, Post Office don’t take the cash, effectively?

Roderick Ismay: Yeah.

Mr Jacobs: Right. So now let’s move on because this is really the point I wanted to ask you about. If we go to page 3 in the document, and there’s a section that says, “Credits to the suspense account”, and you can see the penultimate paragraph. If we could just highlight that that begins “Credits in the suspense account that remain unresolved”. So:

“Credits in the suspense account that remain unresolved for 3 years are moved to the Post Office profit and loss and account. Effectively, Post Office absorbs these credits as profit. The operation of a suspense account in this way is standard practice for most businesses.”

This what is you wrote, isn’t it?

Roderick Ismay: Yes, it is, yes.

Mr Jacobs: Now, the point that our clients wanted me to put is that it’s never a profit, is it? Money that is held in a suspense account cannot be a profit, can it?

Roderick Ismay: The money in the suspense account, the examples that I worked through, show that often a client would say that they were owed a certain amount, the Post Office records said a higher amount so, if the client said, “No you don’t owe us that amount of money”, then we did take those amounts to profit, but we would have – in my team, the Product and Branch Accounting team, I know where people would look as many records as they could to try to make calls to individual branches, to find out was this something that should be corrected in an individual branch, so there would have been a lot of work that went on before something –

Mr Jacobs: I accept that, but – I accept that you say that but the main point, the question that I’m asking you, is that what’s in the suspense account is money that might make up for a genuine shortfall, so it would balance to zero and then it wouldn’t show as a positive, or it’s money that belongs to the subpostmaster, because that money was never due because there was an error in the system. Do you see what I’m saying?

Roderick Ismay: Yeah, I do see what you’re saying. I think there’s another “there” within that as well, that, if there that been a shortfall at some point and a subpostmaster had put money in to make a shortfall good and they shouldn’t and then something went the other way, then absolutely the subpostmaster should get that money and because they put money in but, often, I think these things were not that way round and, actually, it’s the customer’s money or the client’s money.

So if, if a thing was keyed in the wrong way, then there was not money that the subpostmaster should take out of the till because, actually, it’s the customers that should have been credited to their bank account.

Mr Jacobs: I’m talking about subpostmasters money here, that’s all I’m talking about because the money that subpostmasters paid in to the Post Office on account of Horizon shortfalls, shortfalls that didn’t exist, that were illusory, that is their money that the Post Office turned into profit and that is what so many subpostmasters are so angry about, that Post Office took their money. It’s a serious matter, isn’t it?

Roderick Ismay: Oh, that’s a serious matter but my understanding was that we’ve looked at the 62 and the 14 branch issues and I thought they were narrowed to those branches only, where things arose in other branches and we could see that Fujitsu confirmed it didn’t relate to those branches, then I think I’ve come back to our expectation that this affected the customer or the client.

The money that’s in the till in a post office, if a subpostmaster has made a shortage good, then yes, there’s a situation that they shouldn’t have had to make that good and they should be entitled to money back. But a lot of errors would arise where something hadn’t been a shortage in the first place and that money is effectively money that, on trust, the subpostmaster has got it in the till, where, actually, it’s customer money en route to a customer’s bank account. It’s not the subpostmaster’s money, it’s not Post Office’s money, it’s customers’ money.

Mr Jacobs: I’ve got the point. Your wording is “The operation of a suspense account in this way” which is it goes into the profit and loss account after 3 years, “is standard practice for most businesses”.

Roderick Ismay: Right.

Mr Jacobs: These were not, Mr Ismay, most businesses?

Roderick Ismay: No, no.

Mr Jacobs: These were financially stricken people –

Roderick Ismay: Yeah.

Mr Jacobs: – who were having to borrow, who were having to find money that they were struggling to find, at the expense, sometimes, of not being able to feed their families. This was an overly rigid corporate approach and, essentially, this took money from the postmasters and ploughed it into Post Office’s own profits. That was what Second Sight and Sir Anthony Hooper wanted to find out, isn’t it?

Roderick Ismay: That’s what they were asking but we believed that the – there’d been a miskey, something like that, in a branch, and we’d done everything we could to try to pin down what was the branch – so the examples I’ve given in here reference to things where, say, cheque paid into –

I’m sorry that I’m speaking too fast, I’ll try to slow down.

We did as much as we could but, if there was no record of what the branch number was and, sometimes, the cheque processing centre, IPSL, they sometimes raised issues where they received, like, a blank envelope with cheques in it and you’ve got no idea which the Post Office was that had sent them, so –

Mr Jacobs: Mr Ismay, I apologise, but we don’t have much time. I just want to take you, finally, because I think this might help you with the answers you’re giving –

Roderick Ismay: Okay, yeah, yeah thanks.

Mr Jacobs: – to paragraph 79 and 80 of your statement.

Roderick Ismay: Right.

Mr Jacobs: WITN04630200. Then I’ll have couple of questions and then I’m finished, okay?

Roderick Ismay: Okay, yeah.

Mr Jacobs: Paragraph 79, please. So you’re talking about this process, page 36 of 61, 79.

“At the time, based on the general but perhaps misplaced confidence in Horizon and its related processes, and in light of the credits or write offs agreed for the known issues disclosed to Second Sight and referenced in their Interim Report, my recollection is that neither nor POL believed that there were illusory losses nor that SPMs were paying for alleged shortfalls that generated profits for POL.”

Moving down to 80, the last sentence:

“However, I would be less confident to say [what you’re saying] now, with hindsight, in light of the increased concern about Horizon that has risen through this Inquiry.”

Roderick Ismay: Yeah.

Mr Jacobs: My final questions for you are these: you predicated all your responses to Second Sight on the assumption that there could never be any illusory loss because you needed to demonstrate that Horizon was robust because that’s what you said in your report in 2010. That’s what you did, isn’t it?

Roderick Ismay: I did, but we were – we didn’t believe there were illusory losses because we thought the processes worked, and I know there was the 62 and the 14 but we did compensation to those branches to deal with that. So we didn’t think that it applied in other branches.

Mr Jacobs: Let me put this to you, then: you were asked to respond to a legitimate concern and you provided a one-sided view and what you were doing here is you were rebutting, you were not investigating, because you predicated your answers on the presumption that there could not be illusory losses, which suited the Post Office position. It wasn’t a balanced response, was it, Mr Ismay?

Roderick Ismay: It doesn’t look a balanced response but we didn’t believe that there were illusory losses and, therefore, the way of conducting it was to try to summarise some individual product transactions and describe them with a belief that there weren’t illusory losses. I wasn’t doing it to rebut an allegation about Horizon; I was doing to it to describe, if we look at Camelot, if we look at ATMs, if we look at cheques, whatever it was, the products that I’ve now related in the 406-page suspense account document, I and my team, we didn’t believe that there were illusory losses. We just didn’t.

Mr Jacobs: I haven’t got any more questions for you but thank you very much.

Roderick Ismay: Okay, thank you.

Questioned by Ms Patrick

Ms Patrick: Good afternoon, Mr Ismay. My name is Angela Patrick and I act with Mr Moloney KC and Hudgell Solicitors for a number of subpostmasters who were convicted and have since had their convictions quashed.

I want to be very quick. I want to ask you about one document. It’s POL00294931. If we can look midway down the page, if we can scroll down a little to start with, and stop around here, you see, that’s an email from Emily Springford, who we know is a lawyer who is in the Royal Mail Group.

Roderick Ismay: Okay, right.

Ms Patrick: I think you’ve been saying this morning you’re familiar with the Inquiry, you’ve been following some of the evidence. Is this is an advice you’ve seen before?

Roderick Ismay: Well, it’s in my pack, I think, this.

Ms Patrick: Yeah. I’m going to try and take it quickly. I just wanted to check if it was something you were familiar with. If we scroll down a little way, we can see she’s advising on four letters of claim that had been received from former subpostmasters, we’ve talked about them this morning, the Shoosmiths claim of 2011.

Roderick Ismay: Right, okay, yeah.

Ms Patrick: This is 20 October 2011 and she starts talking about document preservation. But if we can roll up a little way, you see there she’s saying:

“Please ensure this communication reaches everyone in your department who has access to, or is in the position to create, documents relating to the issues”, the issues being subpostmaster claims.

Roderick Ismay: Yes.

Ms Patrick: “… arising in these claims. I’ve started a list of teams”, and so on.

If we scroll up a little way, we see, again, she deals with document creation. Sorry, down, into her email a little further, please, over the page. If we go down to “Document creation”, so I can see the end of those bullets, please. Thank you. You see here she is dealing with document creation and she says:

“It is very important that we control the creation of documents which relate to the above issues and which might be potentially damaging to POL’s defence to the claims, as these may have to be disclosed if these claims proceed to litigation. Your staff should therefore think very carefully before committing to writing anything relating to the above issues, which is critical of our own processes or systems, including emails, reports or briefing notes. We appreciate that this will not always be practicable …”

If we go to the bullets she gives some guidance on what she thinks needs to be done to understand whether or not a document might attract legal privilege. She says:

“If the dominant purpose of the communication is not to obtain legal advice, try to structure the document in such a way that its dominant purpose can be said to be evidence gathering for use in litigation;

“Mark every such communication ‘legally privileged and confidential’.”

Then she goes on to give some more guidance. At the end, she says:

“Where possible and appropriate, copy a member of Legal Services into the communication, and make clear that you are doing so to enable them to advise on the content. Please note that copying a member of Legal Services into the communication alone will not necessarily suffice.”

Then just to top it off, she says:

“If in doubt, call Legal Services before committing anything to writing which relates to these issues and contains critical wording.”

She ends by giving some advice on particular documents they want to be sourced and provided to the Legal Team.

Now, if we scroll right back up to the top of the document, beyond the top of Ms Springford’s email and stop there for a moment. Now, this advice that was coming, Mr Ismay, from the Legal Team, on privilege in connection with proposed civil proceedings on the creation of documents which would be critical of Post Office systems, you’d have treated it with some significance, wouldn’t you?

Roderick Ismay: Yeah, yeah.

Ms Patrick: You would have expected anybody else receiving it to treat it seriously?

You’re nodding. The transcriber likes you to say “yes” or “no”?

Roderick Ismay: Okay, yes.

Ms Patrick: Yes. Ms Springford’s advice there she’s giving, it’s meant to be disseminated by those who read it who receive it, trickled down and cascaded through the business; is that right?

Roderick Ismay: (The witness nodded)

Ms Patrick: If we see there, her email isn’t addressed to you, you’re not on the original list of recipients.

Roderick Ismay: Yeah.

Ms Patrick: But, in this document, we can see somehow you’ve received it and you’re forwarding it on. You’re cascading it, you’re sending it to Mr David X Gray?

Roderick Ismay: Yeah.

Ms Patrick: Was he somebody in your team?

Roderick Ismay: I think he was in the IT Team.

Ms Patrick: Yes. So it was being cascaded through the business, wasn’t it?

Roderick Ismay: Yeah, so I expect my boss is in the audience for it, I imagine my boss has cascaded it to me.

Ms Patrick: Okay, by this point, you knew that some subpostmasters had been prosecuted by the Post Office on the basis of Horizon data –

Roderick Ismay: Yeah.

Ms Patrick: – including some who were in the Shoosmiths group?

Roderick Ismay: Yeah.

Ms Patrick: Yeah. Did anybody ever, whether around the time of the Springford advice or later, cascade down to you, and on to your team, any advice, first, about Post Office’s continuing duties as a prosecutor?

Roderick Ismay: I don’t think about duties as a prosecutor, because that’s a matter for the Legal Team to be considering, so I don’t think that people would have approached my team about matters of that –

Ms Patrick: Separately, did anybody cascade in the way that this advice was, any advice to you on the relationship between any duties the Post Office might have as a prosecutor and their relationship between those duties and this Springford advice on the care to be taken in relation to documents critical of Post Office systems?

Roderick Ismay: Well, I don’t think so and I say that because my team weren’t, like, the prosecutor, we weren’t Legal. So I don’t think it would have been relevant to us.

Ms Patrick: Okay. Did you understand that Post Office had continuing duties towards those that they had prosecuted?

Roderick Ismay: I think my understanding would have been that a prosecution had been completed and that was it. I can see now from all the correspondence that I’ve had, that when one has become aware of something that should have been disclosed, then you need to go back. But I think at the time, that wouldn’t have understood disclosure like that.

Ms Patrick: Thank you very much, Mr Ismay. I have no further questions for you.

Questioned by Ms Page

Ms Page: Mr Ismay.

Roderick Ismay: Hello.

Ms Page: Were you the Post Office’s gatekeeper for the remote access secret?

Roderick Ismay: No.

Ms Page: It was your team in Chesterfield that actually signed off when Fujitsu sought approval for tampering remotely with branch accounts, wasn’t it?

Roderick Ismay: We were one of the people approached in that three options paper.

Ms Page: No, I’m talking about when, routinely, Fujitsu would tamper with branch accounts and seek Post Office approval to do so. It was your team that gave that approval, wasn’t it?

Roderick Ismay: No, I don’t think so.

Ms Page: Well –

Roderick Ismay: I don’t think –

Ms Page: – Mr Andrew Winn, when he gave evidence at this Inquiry, admitted it. He said this:

“I could see myself being the voice that would give Post Office Limited approval, yes.”

That’s what he said.

Roderick Ismay: Well, we didn’t think that we’d got – we didn’t think that Fujitsu had got access to do that, then.

Ms Page: Well, Mr Winn has admitted it. He wouldn’t have taken on that role without you knowing about it, would he?

Roderick Ismay: Well, I don’t think he did have that role.

Ms Page: You may remember, Mr Ismay, the last time I asked you questions, I asked you about the Lynn Hobbs email to you and Mr Granville, which told you about the facility to remotely tamper with accounts and I asked you why it had only survived in the form of a cut and paste into another email; do you remember that?

Roderick Ismay: I don’t remember your exact question but I’m aware that thing doesn’t have a date on it and I don’t know why it doesn’t. I don’t know why it’s a cut and paste without a date.

Ms Page: Mr Ismay, you knew that that email had to be deleted, didn’t you?

Roderick Ismay: No.

Ms Page: Not only because it undermined your report, the Ismay Report, but also, more importantly, because you understood that it undermined the safety of all of those past convictions. You knew that, didn’t you?

Roderick Ismay: No.

Ms Page: So you tried to cover your tracks back in 2010, didn’t you?

Roderick Ismay: No.

Ms Page: The only email that you left to posterity was the one that Mr Beer KC took you to this morning, in which you tried to introduce conditionality, as you put it. That’s the only email you left for posterity, Mr Ismay.

Roderick Ismay: No, it’s not and you’ve, through Post Office, have got access to all sorts of documents. I was very meticulous in my file, in that I didn’t delete stuff.

Ms Page: That’s the only one in which you admit your knowledge remote access.

Roderick Ismay: I didn’t go round deleting my history of emails on this topic. So no.

Ms Page: Was that email that introduced conditionality another mini whitewash, Mr Ismay, another attempt at a whitewash?

Roderick Ismay: No, the other thing wasn’t an attempt at a whitewash and this wasn’t either.

Ms Page: In 2011, you made a bit of a slip on this. You’ll have been given the documents about the 2011 Ernst & Young audit and, of course, as a qualified accountant, you’ll understand about audits, won’t you?

Roderick Ismay: Yes, I do.

Ms Page: Well, that 2011 audit made it clear that at Fujitsu there was a failure to keep track of Horizon users and those who could access different parts of the system, yes?

Roderick Ismay: There was a long management letter with those kind of things in, yes.

Ms Page: To put it simply, that was about remote access, Mr Ismay; do you understand that? It was about the controlled environment, as you would put it?

Roderick Ismay: It was about the controlled environment but, having looked at – and I couldn’t remember it until you sent me that document to look at in the Rule 10 pack but I’m not sure if that document in there actually talks about remote access.

Ms Page: It does not use those words –

Roderick Ismay: Does it say that in it?

Ms Page: No, it does not use those words. This is what it says, in the executive summary, in the main area for the management to focus upon, the Post Office Management to focus upon, it says this – I won’t take you to it because it’s short.

Roderick Ismay: Okay.

Ms Page: “This may lead to the processing of erroneous or unauthorised transactions.”

Do you understand the import of that sentence?

Roderick Ismay: Yes, I do, yeah, yeah.

Ms Page: All right, now I’m going to just take you to one document, please. It’s POL00295091 and if, when it comes up we could scroll to the bottom half of page 1, please. From Sarah Hall to you and a number of other people: Chris Day, Mike Granville, Susan Crichton, Mike Young, Lesley Sewell, and copied to David X Gray:

“RMG ARC paper draft re Horizon – urgent for review by [Thursday] midday.”

What it says is:

“The RMG ARC requested a paper on the IT controls and the Horizon claims. With input from various experts this has now been drafted but it is clearly a sensitive area so I attach the draft for your review and comments before it goes to the group for circulation to the ARC.”

She goes on to describe that the meeting is on 8 December, and she talks about their approach, the history of the relationship with Fujitsu, what Horizon does.

“… we in POL are satisfied with the controls around it, then what we have done to improve the EY IT controls audit and then finally the position on the claims.”

All right? So that’s making it clear, isn’t it, that there’s going to be a presentation, in effect, to the ARC committee about these issues that have been raised by the EY audit, yes?

Roderick Ismay: Yes, looks like it, yeah.

Ms Page: All right. Now if we scroll up to your reply, please.

Bearing in mind it’s been acknowledged as a sensitive area, hasn’t it, and what you say is this in your paragraph 1, you are basically commenting on the slides that are going to be shown in the ARC committee and you say this:

“Paragraph 1 – to add a sentence along the following lines ‘The IT control issues identified during the audit did not question the integrity of accounting data in the system. Rather, they were recommendation about the documentation and authorisation of changes to the system and about opportunities for streamlined assurance’.”

Now this, and this is your slip, Mr Ismay:

“The rationale for this is that [the] purposes of ongoing RMG Criminal Prosecution activity, Rob Wilson, (RMG Head of Criminal Law) has advised that were that not the case then current prosecutions would have to be stayed. It is important to make clear EY did not challenge the integrity of accounting data in the system.”

Roderick Ismay: Yes, you’ll see that, and I don’t consider that to be a slip. What I would say is that this refers to the changes to systems, that EY weren’t saying that the accounting data didn’t have integrity in it and so I was then clarifying and forwarding something that Rob Wilson had said before, so if it was the case that this wasn’t identifying errors in the data, we wouldn’t want it to look like it was identifying errors in the data because it hadn’t identified errors in the data, so it wasn’t a slip, it was a genuine forwarding and, for completeness, of input from the lawyer on that, to clarify that EY hadn’t challenged the integrity of the accounting and the data and wouldn’t want somebody to read this and think it was challenging the integrity of the accounting data. So not a slip.

Ms Page: You understood, Mr Ismay, and you were making it clear to the others, that if there were inadequate controls and audit data could not be guaranteed as an authentic record of what had taken place in branch, that there would be massive implications for past convictions. You understood that, didn’t you, and you were making that clear in this email?

Roderick Ismay: But in a context of the EY recommendations hadn’t identified errors in the data. So I was –

Ms Page: Yes, but let’s just concentrate on what you understood and what’s happened here. Having understood that, you’ve spoken to Rob Wilson, yes?

Roderick Ismay: Um, no, I don’t think I did –

Ms Page: You have had spoken to –

Roderick Ismay: – because Rob Wilson, as we’ve seen in earlier documentation, had made that indication in the email that Mr Beer shared a couple of hours ago in the Inquiry. So I don’t think I’ve gone to Rob Wilson on 30 November 2011 to ask him that. I think I’ve recalled that that thing was something that Rob Wilson had said and I’ve referred back to it.

Ms Page: I see. So you’d seen that email chain, had you?

Roderick Ismay: Well, I’ve referred to that same stuff in the Ismay Report.

Ms Page: Yes, okay. Well, there’s a lack of controls, that’s what you understood from the EY report, and the EY report said that that could lead to unauthorised transactions. So that does affect the integrity of the accounts, doesn’t it?

Roderick Ismay: It indicates it could lead to it. They haven’t identified that it did lead to it and I don’t think –

Ms Page: You were giving false comfort here to the ARC Committee, weren’t you, because you were suggesting that there had been no question about the integrity of accounting data when, in fact, the EY report said that there might be unauthorised transactions as a result of the lack of controls.

Roderick Ismay: No, I think I’ve clarified something, and the ARC would have – I imagine the ARC would have got the whole EY reports. So the ARC would be able to read all the things that Ernst & Young had said and have just contextualised this.

Ms Page: You were massaging what the EY report said, weren’t you?

Roderick Ismay: No, I think I was clarifying stuff for the reader on it and –

Ms Page: What’s more, you knew that Fujitsu could and did tamper with branch accounts, use that remote access facility; you knew that?

Roderick Ismay: No. I’ve seen emails that – and that thing about option A, B, C, that refer to that but I don’t know that it had been built and I don’t know that they used it. I don’t know that they used it.

Ms Page: Rob Wilson knew, as well. He had received the email, the same one, with those Solutions One, Two and Three, the Friday before Seema Misra’s trial started on the Monday. He knew and you knew about that facility. This email shows that you and he were deliberately covering up what you knew about remote access –

Roderick Ismay: No.

Ms Page: – and doing so because you knew about the implications for past convictions, didn’t you?

Roderick Ismay: No, and in the answers that I’ve given to you already, I’ve explained why that’s not the case.

Ms Page: Thank you, sir.

Mr Beer: Sir, unusually, I’ve got a couple of supplemental questions, with your permission, and looking very carefully at the time.

Sir Wyn Williams: To be snookered by one’s own counsel, eh?

Mr Beer: I think that was a “yes”.

Sir Wyn Williams: I may not listen! Carry on.

Further Questioned by Mr Beer

Mr Beer: Mr Ismay, it’s a continuation of the theme of knowledge of remote access, and it’s a series of questions that I ought to have put to you earlier but didn’t. It concerns 2014.

Do you remember I asked you about the emerging picture of remote access coming in 2010 in October and November, through the showing to you of Solutions One, Two and Three?

Roderick Ismay: Yes, yes.

Mr Beer: Yes? Then in 2011 as well?

Roderick Ismay: Yeah.

Mr Beer: Then again in 2013. I just want to look at 2014, please.

Roderick Ismay: Okay.

Mr Beer: Do you remember the Project Zebra Report?

Roderick Ismay: Having seen all these documents, it’s kind of bringing that back to my mind, yeah.

Mr Beer: Can you remember what Project Zebra was?

Roderick Ismay: I think it was some sort of – there was a Deloitte review. You’ve sent me – I can’t remember exactly what the document –

Mr Beer: It was a report commissioned by the Post Office –

Roderick Ismay: Yeah.

Mr Beer: – of Deloitte –

Roderick Ismay: Yes, yeah.

Mr Beer: – which, amongst other things, addressed the Horizon system?

Roderick Ismay: Yeah, yeah.

Mr Beer: I’m not going to look at the report; I just want to look at the summary of it –

Roderick Ismay: Right.

Mr Beer: – that was distributed after the report had been delivered to the Post Office. Can we look at POL00031409. Can you see that’s called “Zebra Action Summary”?

Roderick Ismay: Yes, I can.

Mr Beer: Can you see it’s version 0.3, yes, dated 12 June?

Roderick Ismay: Yes.

Mr Beer: Can we then next look at an email, POL00346958. Can you see this is an email of 17 June to you, 9.00 in the morning from Julie George, attaching Zebra Action Summary version 0.3?

Roderick Ismay: Yes, yeah.

Mr Beer: So the report I’ve just showed you?

Roderick Ismay: Yes.

Mr Beer: “I have tried to call you Rod … a summary of draft actions arising from Deloittes recent piece of work on the Horizon systems.

“Clearly … no blame attached anywhere”, et cetera.

Okay?

Roderick Ismay: Yes, yeah.

Mr Beer: Can we look at the action summary that you were sent then, back to POL00031409. Look at page 6, please, and look at paragraph 4.2.2 under “Data Logging”:

“One point raised in the report was that it was possible for someone with privileged access to delete data from specific areas of Horizon. This was always a risk with individuals using admin or power user accounts and is a persistent risk, one that needs to be catered for in almost any organisation.”

A number of witnesses to the Inquiry have told us that they did not realise, on reading the 2014 Deloitte report, a conclusion expressed – it was on page 31 – about remote access and the facility to delete data, a facility owned by people with admin or power user rights. This Post Office summary of the Deloitte report specifically raises that issue, doesn’t it?

Roderick Ismay: It does, and that function shouldn’t exist but it does.

Mr Beer: It specifically –

Roderick Ismay: And –

Mr Beer: – draws to the reader’s attention, out of all of the pages of the Deloitte report, that facility, doesn’t it?

Roderick Ismay: Sorry, this document that we’re looking at, is this something that Post Office has written in response to Deloitte?

Mr Beer: Yes.

Roderick Ismay: Right, okay. Right.

Mr Beer: It’s a summary of actions arising from the Deloitte report.

Roderick Ismay: Right. Okay, right.

Mr Beer: This is a narrative part of it.

Roderick Ismay: Right.

Mr Beer: The point I’m making is that a number of people have said, “We, the Post Office, didn’t spot these paragraphs tucked away in a Deloitte report about remote access. We didn’t realise those until Jonathan Swift pointed them out to us in 2016.”

I’m saying this document here flags that issue up, doesn’t it?

Roderick Ismay: It does, yeah.

Mr Beer: It was sent to you, wasn’t it?

Roderick Ismay: I don’t know, was it?

Mr Beer: We just looked at the email attaching it.

Roderick Ismay: Okay, right. Yes.

Mr Beer: Yeah?

Roderick Ismay: Yes.

Mr Beer: It was sent to you?

Roderick Ismay: Yeah.

Mr Beer: This undermined your report yet again, didn’t it?

Roderick Ismay: Well, yes.

Mr Beer: So what did you do about it?

Roderick Ismay: Well, I don’t think I did anything about it. I don’t remember it. But what I remember about the Zebra Report was the other thing that’s in the evidence where I challenged one of the actions, Action 4A, I think, at the end of the report, where there’d been a misunderstanding that said that Product and Branch Accounting had got the ability to put transactions directly into Horizon, and I said that needs changing because it doesn’t. That’s a complete misunderstanding and I proposed a very onerous alternative piece of work, and I think my focus on this document was that that just leapt out so much to me to say, “You’ve got a misunderstanding in there, that you think Financial Services” –

Mr Beer: Mr Ismay, you said in your report there were no backdoors into Horizon.

Roderick Ismay: In the 2010 report, yes. Yeah.

Mr Beer: This is the fourth occasion on which you were being told there are such backdoors.

Roderick Ismay: Right. Yeah.

Mr Beer: Why did you do nothing on each of those four occasions?

Roderick Ismay: Well, I’m sorry, I think I’ve just got so many things going on, this just hasn’t registered with me either, and that’s no good saying that. That’s not a satisfactory thing, but it didn’t.

Mr Beer: Thank you very much, Mr Ismay.

That was the supplemental topic, sir.

Sir Wyn Williams: Thank you.

So that brings today’s proceedings to an end.

Thank you, Mr Ismay, for making a second witness statement and for coming back to give evidence today. I’m grateful to you.

Thank you to the legal representatives of Core Participants who curtailed themselves admirably.

We’ll meet again on Tuesday. I think it’s Mr Mark Davies on Tuesday?

Mr Beer: That’s right, sir. Full day.

Sir Wyn Williams: Fine. Thank you.

(3.15 pm)

(The hearing adjourned until 9.45 am on Tuesday, 14 May 2024)