Official hearing page

14 May 2024 – Mark Davies

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(9.44 am)

Mr Blake: Good morning, sir, can you see and hear me?

Sir Wyn Williams: Yes, I can, thank you.

Mr Blake: Thank you very much. This morning we’re going to hear from Mr Davies.

Mark Davies

MARK RICHARD HANSELL DAVIES (affirmed).

Questioned by Mr Blake

Mr Blake: Thank you very much can you state your full name, please.

Mark Davies: My name is Mark Richard Hansell Davies.

Mr Blake: Thank you very much, Mr Davies. In front of you, you should have a witness statement in a bundle. Can I ask you to turn to the first page, is it dated 10 April 2024?

Mark Davies: It is.

Mr Blake: If I could ask you to turn to the signature page, that’s page 52; is that your signature?

Mark Davies: It is.

Mr Blake: Is that statement true to the best of your knowledge and belief?

Mark Davies: It is. I have two amendments, if I’m able to draw the Inquiry’s attention to them.

Mr Blake: Absolutely.

Mark Davies: In paragraph 55 – apologies, 56, I refer to a document, “This document is an email chain between myself and senior board members”, that should read “colleagues” not “senior board members”, and it then says, “discusses media coverage around Horizon issues and SS’s Part Two Report” that should be “SS’s Interim report”.

Mr Blake: Thank you.

Mark Davies: Then in paragraph 117, there’s a sentence which reads “All criminal cases have been reviewed by external legal teams”, and I recall, having seen Brian Altman KC’s evidence, that, of course, his – the review which led from his review was going back to 2010.

Mr Blake: Thank you very much. That witness statement has the URN WITN09860100. And will be published on the Inquiry’s website shortly.

Sticking with your witness statement, please, could we have that up on screen and turn to page 5. I’m just going to go through a few passages. Page 5, paragraph 14. Thank you. The bottom half of that paragraph says as follows, it says:

“While much has been written and said about my [Post Office] colleagues, I wish to pay tribute to those with whom I worked in communications, who were professional at all times. I have no doubt we could have done more, but I am proud of the steps taken to seek to change to a more open culture, a mission which was led by Paula Vennells as CEO and supported by the Executive.”

Over the page, please, to paragraph 17:

“The decision to open up the business to external scrutiny, and subsequently to seek to mediate cases, were the actions of a business which took its responsibilities to its people very seriously. These initiatives, and others, were led with, in my opinion, integrity and care by Ms Vennells and with the support of the Board.”

Paragraph 27, page 9:

“In my view, the Board and Executive were diligent and effective in dealing with the issues relating to Horizon.”

Paragraph 35, please, at page 13 the final sentence there on that page, if we could scroll down, please, it says as follows:

“Any concern that the system did not work properly was taken extremely seriously for the very reason that it was so fundamental to so many people.”

Paragraph 57, please, at page 21:

“The culture being developed in the business by Ms Vennells and Alice Perkins was around three values – care, commitment and challenge – and there was serious intent behind these words.”

If we scroll down, please, to paragraph 60. At the bottom of that paragraph, you say:

“Angela van den Bogerd was key to this work and an energetic advocate of delivering commitments to continuous improvement, such as through the Branch User Forum, improvement programme and the Post Office Advisory Council.”

Paragraph 88, please, on page 32. You say there:

“As noted above, [the Post Office] had at the time a Press Office Team which would lead on all press inquiries, reporting to me. They were a high performing and high quality team.”

If we could move towards the end, please, page 51, paragraph 145, you address, in turn, each of the senior members of the team. At 145, you say about Ms Vennells:

“The leader I knew was one who that deep integrity and who was guided by deeply held personal values. She seemed to me to place these values at the forefront of her consideration of these issues. She was sincere in the efforts she led to try to reach conclusions. It was her and Alice Perkins, as Chair, who insisted on the business investigating in detail.”

147, about Alice Perkins, you say:

“Alice Perkins as Chair of Post Office also, it seemed to me, wished only to find a way to resolve these issues appropriately and sought to do so tenaciously and with great care and an eye for detail.”

Paragraph 148, please. You say:

“I would also like to mention Angela van den Bogerd. I found her to be incredibly committed to public service and to the Post Office. She was detailed, thorough and empathetic. She was also, it seemed to me, committed to getting to the truth, hampered by [a] lack of the information we now have to hand.”

Is it fair to summarise your evidence in those paragraphs that I’ve read out as painting a picture of a Communications Team and a Senior Leadership Team that was committed to opening up to challenge?

Mark Davies: Yes, that’s fair.

Mr Blake: Can we please turn to POL00380985. It’s an email that the Inquiry has seen before, dated 2 July 2013.

Sir Wyn Williams: It hasn’t reached my screen yet, Mr Blake. Oh sorry, it’s about to, I think.

Mr Blake: Thank you. This is the email from Paula Vennells to yourself and others, in answer to the question:

“What is a non-emotive word for computer bugs, glitches, defects that happen as a matter of course?”

Her answer is, from her husband:

“Exception or anomaly. You can also say conditional exception/anomaly which only manifests itself under unforeseen circumstances …

“Does that help?”

Your response was:

“I like exception [very] much.”

Was renaming “bugs” part of a culture that was open to challenge at the Post Office?

Mark Davies: No, I mean, the background to this email was that we were concerned, in fact, that “bugs” sounded like too sort of slangy a word, and we wanted to be really serious about how we approached these issues, and the reality of Paula Vennells talking to her husband, who I believe works in that industry, was that she had thought it would be worth asking him what his view might be, did so, and I thought that “exception” had the due seriousness about it.

Mr Blake: Mr Davies “what is a non-emotive word for computer bugs”; it doesn’t say, “What is a non-slangy word”, does it?

Mark Davies: No, it doesn’t.

Mr Blake: The suggestion there is that you’re looking for a word that doesn’t evoke emotions?

Mark Davies: I think I read the email as around, you know, how could we find a more appropriate way to describe bugs or glitches or defects in a way that was in line with a sort of IT industry way of speaking.

Mr Blake: Can we please look at POL00297030, same day, 2 July 2013. The bottom of page 1, please. An email from yourself to Martin Edwards “Re: PV & AP brief”; who was AP?

Mark Davies: Sorry could you just repeat the question?

Mr Blake: Who was “AP”?

Mark Davies: Sorry, apologies, Alice Perkins.

Mr Blake: So there’s a brief for Paula Vennells and Alice Perkins. It says:

“The speaking note needs to be firmer – we want to make clear our position and underline our view that no evidence to support the systemic failures.”

If we go over the page, please, to page 2, the fifth paragraph, you say as follows:

“We shouldn’t call the user group a ‘Horizon’ user group – makes it appear that we are acknowledging issue with Horizon – branch management user group?”

Was the suggestion of removing the word “Horizon” from the user group part of a culture that was open to challenge at the Post Office?

Mark Davies: No, I think what’s happening in this email is this is after the Second Sight Interim Report, which found no evidence of systemic issues and we – but very serious issues around the way in which training and support was – well, not being delivered to postmasters. So I think that’s why we thought, given that this was a wider issue than the computer system at that time and in the context of that time, “branch management user group” felt to me – and I think it eventually was called the Branch User Forum, but I may have recalled that incorrectly – but that seemed to be a more accurate description of what we were seeking to do.

Mr Blake: “… makes it appear we are acknowledging issue with Horizon.”

Aren’t you removing that word to avoid the suggestion that there is an issue with Horizon?

Mark Davies: Well, at the time it was very clear to us that there wasn’t an issue with Horizon because the Second Sight Report had said that there were no systemic issues and we wanted to be really clear that what we were talking about was a very deeply held commitment to improving the way in which we supported postmasters and all of those people who used the Post Office system.

Mr Blake: Can we turn to POL00162068. We’re now on 23 September 2013, same year. Can we please turn to the bottom of page 4, please. This the email we’ve seen from Alan Bates to Paula Vennells, Susan Crichton, Angela van den Bogerd and others, and he said:

“This afternoon I received followed email, it is a prime example of the thuggery being exerted on defenceless subpostmasters (as [the Post Office] deny legal representation) by arrogant and uncontrolled Post Office personnel.”

He forwards the email that says:

“Hello Alan

“I am writing on behalf of my son-in-law Martin Griffiths who has recently been in touch with you about the treatment doled out to him by the hierarchy at the crown office in Chester.”

If we scroll down, please, it says:

“This morning he drove off to work, got out of his car and walked in front of a bus.

“He is dangerously ill in hospital at Liverpool, the Post Office had driven him to suicide.

“All the family are [in] hospital, I am alone waiting by the phone for further news of him.

“I would urge you to publicise this, another incident that has been caused by the Bully Boys at the crown office.”

If we turn to the top of page 4, please, bottom of page 3, there is an email from yourself in response, and you say:

“Thanks – Susan, given the potential media element please can we line up a specialist media lawyer in case we need urgent advice this evening?”

Was instructing a “specialist media lawyer”, when Martin Griffiths, at that point, was dangerously ill in hospital, part of a culture that was open to challenge at the Post Office?

Mark Davies: This was a deeply tragic and terrible case and everybody at the Post Office, when we read that email, was deeply, deeply shocked and a number of conversations took outside of email about it and, obviously, the natural human instinct of every single person who heard about that story was to be deeply, deeply shocked. In terms of specialist media lawyer, my role within the Post Office was to be the Communications Director, and there was a very strong likelihood of communications media coverage in relation to this tragic case, and I was very conscious of the media guidance that exist around the reporting of suicide or – as it appeared in this case – attempted suicide and wanted to make sure we had somebody on hand who would give us some guidance about those matters.

Mr Blake: Was lining up a specialist media lawyer really intended just to deal with the way that Mr Griffiths is described: the suicide issue? Was it not protecting the Post Office from negative publicity?

Mark Davies: My thinking in lining up the specialist lawyer was around the point around the guidelines in terms of reporting suicide.

Mr Blake: Were you aware of those guidelines?

Mark Davies: I was aware of them but not to a very detailed degree, which is why I wanted to have some more advice on it.

Mr Blake: Are they complicated?

Mark Davies: They’re not complicated, no, but I think it’s – it was the right thing to do, from a – in terms of my role, it was the right thing to do to potentially line up specialist advice.

Mr Blake: Can we look at POL00101361, please. We’re now into 2014, 11 September 2014. Can we turn to page 3, please. There is an email from a postmaster, Bryan Hewson, referring to a report on BBC Radio 4:

“Post Office’s Horizon computer system subpostmasters having lost their positions and ‘including a handful who were imprisoned’.

“Tuesday evening.

“Scoured [the Post Office] website for official statement – couldn’t find it – I must have missed it Media pages – the press release must be there – nothing listed – started to think I had imagined the news on the radio.”

“Wednesday …

“‘Warm-up’ consisted of hearing staff talking of seeing local TV news [regarding] Post Office Horizon, innocence, jailed, lost businesses.

“My staff were in a state of shock and disbelief and anger at how people like them and their friends could have been accused of theft, lost their homes or even worse sent to prison.

“I was half prepared to meet my staff’s reaction. I gave reassurance as best I could:

“New management at the top [Paula Vennells]

“New policies of openness, transparency & honesty working together across the whole organisation, as per last Forum meeting in London.

“Wednesday night.

“Scoured [the Post Office] website for another hour – no statement found … my best efforts.

“Why was this handled this way?

“To ensure the stated policy of openness transparency etc is fully implemented as designed, ie nice sounding words that will never permeate even within Head Office/Support Centre London?

“Why was there not a Memoview as a minimum means of communicating simultaneous with the Press briefings?

“As Michael knows Angela, in the last few weeks I have been trying to support branches with Mail’s coaching. Please do not underestimate the blow to counter staff’s and branch owner’s morale of the ‘news’ broadcast on Tuesday.

“I intend bringing this matter up under [any other business] at today’s meeting and am hoping this note will allow time for an appropriate answer to be given.”

Page 2, please, it’s an email from yourself to Angela van den Bogerd and others, at the bottom of the page, please, and you say:

“I will email Bryan. I appreciate the point but I am not prepared to make a decision based on feedback from one source. If we had pushed messaging out, thousands of people who didn’t hear the coverage would have been alarmed and worried and I don’t believe that doing that would be in anyone’s interests.”

Was not addressing a BBC Radio 4 story about imprisoned subpostmasters part of a culture that was open to challenge at the Post Office?

Mark Davies: This was one case of where there had been media coverage around these issues and it was always a very fine judgement as to whether to effectively do a piece of communications, internal communications, to the whole Network, which was around 11,000 branches and 30,000/40,000 people, when, in fact, it was a piece of coverage that was a one-off. I think, you know, I may have got that one wrong and I do remember ringing Bryan Hewson about it and talking him through it. I think, as I say, they were very difficult lines to get right.

What we did make sure was that all of our field teams and everybody in the NBSC, the business centre that – the helpline effectively, that was set up to support postmasters, had lines, had had positions to take, if those issues were raised with us and I think, as I say in a separate email there, we hadn’t had a huge amount of questions about the issue, but I accept it’s a fine line and I accept I might have got that one wrong.

Mr Blake: Thousands of people who didn’t hear the coverage would now hear it, if you had made a statement, wouldn’t they?

Mark Davies: Well, yes, and the reason, because, of course, this is 2014, where we’re acting in good faith on the basis that we don’t believe there are systemic issues with Horizon, where we have 50,000 people using the system every day, and we have a number to clients and not to mention of course the millions of customers who came to the Post Office, and one of the considerations was not creating something which would lead to people being concerned about their Post Office business in whatever form that took. Obviously, that’s the context in which we were operating at the time, where we weren’t – where we didn’t believe there were systemic issues with the system.

Mr Blake: POL00162598, please. We’re now in 10 August 2015, second half of the page, please, an email from yourself.

“Dear all

“This note is designed, following a [group executive] discussion today, to set out why we are not proposing to put up an interview for Panorama on Horizon.”

We will come back to the substance of this document but, if we scroll up, there’s a response from Paula Vennells. She says:

“I agree completely – I have no wish to give any legitimacy to Panorama and our statement should make that clear. Where we can give an objective view, eg in other media then fine.”

Was that part of a culture that was open to challenge at the Post Office? Not putting up somebody for interview on Panorama?

Mark Davies: Again, this was a very fine line. We had initially planned to put an interviewee up for the Panorama programme but ultimately decided not to because the programme was clear that it intended to go into individual cases and we weren’t prepared to do that at the time, largely because those cases were being looked at by the CCRC.

Mr Blake: POL00174418, 18 August 2015. This is after the Panorama programme. If we scroll down to the bottom. There is an email to you from you Elena Nistor. Were you aware she was the internal Audit Manager at the Post Office?

Mark Davies: Mm.

Mr Blake: Yes? She says:

“Hi Mark,

“The programme last evening was indeed damaging and I think highlights again the questions about the Horizon systems and if it is true there were bugs within the system?

“I know our external auditor raised couple of years some issues regarding the change management process for Horizon.

“Would you have time for a 15-minute chat this week at any point …”

Your response:

“Hi Elena

“Thanks for this. It’s certainly the case that in the cases referred to us, there has been no evidence at all of Horizon being the reason for any losses in branch. Indeed losses have been clearly the result of individual action.”

No evidence at all; clearly the result of individual action: was that part of a culture that was open to challenge at the Post Office?

Mark Davies: It was the position as we understood it at the time, following the Second Sight Report.

Mr Blake: What we have seen here from 2013 onwards is, year after year, the same mantra. As director of communications, were you responsible for pursuing that mantra?

Mark Davies: Not at all. In fact, we did number of things that were very open. For instance, you referred to Panorama, we did a two-hour briefing for Panorama journalists on the record with myself and Angela van den Bogerd and other colleagues as well. When the Second Sight Report was published in 2013, we published it on our website, with a press release. I went on the Today Programme in, I think, 2014, apologies if that’s not the correct date. It was always a final balance and the role of a Communications Director is to find that balance, and sometimes we got it right, sometimes we got it wrong. But certainly our intention, throughout, was to be as open as possible on these issues.

Mr Blake: Renaming bugs; removing the word “Horizon”; not giving interviews, evidenced over number of years: do you really think that is evidence of a culture of openness at the Post Office?

Mark Davies: I think when balanced with some of the other things we did that I just mentioned, I think it – I’m certainly not saying it was the perfect approach to communications, for sure. I have made many mistakes, just as we all have, but I do think that we did our very, very best to be open and transparent on these issues.

Mr Blake: Let’s go back to your witness statement, please, page 10, paragraph 28. You say:

“In relation to my role specifically, what we could not accept – in the context of what we knew at the time – was inaccurate media coverage which damaged customer and postmaster confidence in a key delivery system.”

Moving on, please, to paragraph 94, that’s page 34, you say there:

“Given the lack of interest from the vast majority of journalists, and the apparent lack of impartiality on the part of some of those covering the issue, we believed we were acting in good faith and appropriately based on the context of what we knew at the time.”

Paragraph 108, please, page 39. You say there about Nick Wallis:

“Mr Wallis is a journalist who has covered these issues for many years and has been clear in his view that Post Office was in the wrong – that is his right, of course, but it naturally influenced the way we engaged with him, though we were always – I believe – helpful and courteous.”

Paragraph 113, please, page 40. You say there:

“It was clear to me that the programme would be very damaging to [the Post Office’s] reputation because it would be extremely difficult to ensure balance and impartiality.”

This is a witness statement that you have written this year. Weren’t they – Mr Wallis, Panorama – the ones who actually got it right?

Mark Davies: Obviously, we now know a huge amount more than we did back then about the Horizon system and I would actually just like to say how very, very, sorry I am that this issue has caused so much pain and anguish to so many people over so many years, and particularly sorry that I and Communications have played a part in prolonging that pain and anguish. When we were operating in relation to Panorama and Mr Wallis and other journalists who approached us on these issues, we always acted on good faith, based on the information we had at the time.

Mr Blake: That wasn’t the question I was asking. The question I was asking was: weren’t they the ones who got it right?

Mark Davies: As I said, we now know from the court judgments of Lord Justice Fraser that the situation was far more difficult than we ever thought, so yes.

Mr Blake: Throughout your witness statement, you refer to “inaccurate media coverage”, “lack of impartiality”, “difficult to ensure balance and impartiality”. Where do you acknowledge that, in fact, those who you are complaining about got it right?

Mark Davies: I don’t think I did acknowledge that in the statement.

Mr Blake: Can we please have a look at POL00173770. Can we turn to the second page, please, the bottom of the second page, an email not yet sent to you but it is in due course forwarded to you:

“Hi both – Matt has been contacted by a producer at BBC Panorama [this is the 2013 programme] which is considering running a programme on the Horizon/Justice for Subpostmasters issue.

“To inform their decision on whether to run with the programme or not, he’s keen to talk to someone at the NFSP in more detail about our take on the issue and about our experience of Horizon more broadly.”

So they have contact with the NFSP. If we scroll above, we can see eventually, at page 1, it’s sent to you. Halfway down the page, please, and you say:

“This was never funny but is now beyond a joke!

“We really need Portland …”

That’s Portland Communications, is it?

Mark Davies: That’s correct.

Mr Blake: “… to earn their money now with some innovative and interesting ways of getting us back on the front foot. I am not sure what we’ve had from them.

“We need some other voices in this, the journalism is appalling.”

Could we please look at POL00101345. The email in the middle of the page is from yourself to Paula Vennells. Five paragraphs down, you say as follows:

“To your point regarding your fellow commuters there is this, I think: the media reports were skewed to present the picture the journalists wished to present – that of the corporate beast trampling on the downtrodden subpostmaster. This kind of campaigning journalism is always likely to capture sympathy and it’s why they do it that way. For the reasons set out above it wouldn’t be in our interests to get into a detailed debate on the report.

“The problem we have is that journalists with an agenda are always going to believe Second Sight ahead of us.”

Can we please look at POL00101629. 5 December 2014. If we scroll down to the bottom of page 3, please:

“… Nick Wallis called regarding an interview with Paula on Horizon for BBC News/One Show. They would like to do this tomorrow or over the weekend.

“Basically, they have got wind of a letter that Paula sent to a number of MPs regarding [the Post Office’s] position on the mediation system. The MPs are expected to release a response over the coming days which will bring a large degree of information on scheme into the public domain. He hasn’t seen the letter but hopes to by the time the interview takes place. The interview will question the integrity of the system and the claims of the [subpostmasters] involved.”

If we scroll up, please. There’s an email from Melanie Corfield on page 2 to yourself and also to Ruth Barker. About 4 paragraphs down, she says as follows, she says:

“We can go back to Nick to reiterate previous points we have made about confidentiality of scheme, inappropriateness of interview but offer statement along the lines pasted below? After all he is essentially asking Paula to respond to something that hasn’t even happened yet (ie the response to her letter!). While Nick is still fishing around we need to avoid giving him anything new? Happy to discuss. I am in a meeting this [afternoon] and I know you are involved in another issue. I have to leave promptly tonight for a commitment but around in the morning.”

You respond, in fact, you forward it to Belinda Crowe, the bottom email, thank you, and you say:

“Read the chain from the bottom including the Nick Wallis call note. Sounds like [Members of Parliament] might do something as a collective shortly. If that happens we need to think again about whether to agree to an interview – me, not Paula. Otherwise it could end up back in Parliament.

“I pretty much agree with Mel’s view here, but we might need to be ready to change approach.”

Then the response from Belinda Crowe is:

“Can we speak at some point about this on Monday?”

Then you send an email, your response to her. You say:

“I called. I’ve just seen [Nick Wallis’] latest email. I am tempted to offer an interview in which we simply say in response to questions:

“‘The BBC is asking us to break the confidentiality of a mediation scheme, the workings of which were agreed by all parties. This is an intolerable position. We have gone over and above the responsibilities we have as a business. In two and a half years there has been no evidence etc …’

“If I stick to that line, what is the proposal with doing an interview? I appreciate you may think I am sliding but I can’t sit and take this garbage much more.”

Turning, please, to POL00102062, 23 January 2015, if we scroll down, please. You’ve written an email, it’s a note, and you say:

“I’ve written the below for no reason other than it made me feel better.”

We will come back to this email but you say as follows:

“It’s fascinating to be part of a conspiracy. To be at the heart of a corporate cover up. But frustrating too, when the reality is a hard story to tell, and some distance from the picture painted by a determined band of at adversaries.

“In our case, we are up against a campaign group, a few journalists (mainly from the BBC) and some MPs. And you have to hand it to them: they know what they are doing in terms of mounting a campaign. It’s just that –whisper it quietly – all is not what it seems.”

One final email, before I get to the question. POL00111699, much later on, 21 February 2019, an email from yourself to Paula Vennells and others. You say as follows:

“Our external communications strategy on this is to minimise negative coverage by holding the robust line we have deployed throughout. In doing so we have thus far succeeded in minimising coverage in the mainstream media. Throughout the trial we have been measuring sentiment among external audiences – the trial has had no discernible impact in terms of increasing external interest in this issue.

“There are a group of journalists who have staked their professional reputations on campaigning on behalf of those who have now taken us to court. They – and one in particular – drive most of the periodic increases in external coverage. We have sought to engage with this group but there is an unwillingness to engage with our side of the story. That is regrettable, of course.”

You then say:

“Private Eye has also featured the issue regularly, claiming Post Office has knowingly covered up evidence of what it calls the ‘deep dodgy’ Horizon system. We believe the content in Private Eye is almost certainly provided to it by one of the ‘campaigning’ journalists who have staked their reputation on proving that Post Office has conspired to see otherwise innocent people jailed or penalised.

“By holding our line and not giving the story further oxygen, we prevent the issue going the channels above and while of course it is uncomfortable when we face negative coverage it has never reached the stage of a media onslaught as seen on other such issues facing organisations such as ours.”

Email, after email, after email, blaming the journalists, isn’t it?

Mark Davies: Well, with the benefit of hindsight, they absolutely – some of them look ludicrous, I agree.

Mr Blake: Had you ever asked yourself “Might we, in fact, be the baddies”?

Mark Davies: I have asked myself that question; I’ve asked myself many, many questions over this issue many, many, many times, over the course of the last few months, over the course of the last few years and throughout the whole period I was dealing with these issues. We really believed that we were doing the right things. We’d appointed Second Sight to lead an investigation, which we thought was the right thing to do. We then create a mediation scheme because we wanted to give people the opportunity to raise the issues that they had. We advertised for people to come forward to the scheme, the Mediation Scheme, using our communications channels to do so. You know, we held a two-hour briefing with Panorama. We published a press release, et cetera, et cetera.

We’d really tried and the context is that we really believed that we’d tried to do the right things.

Mr Blake: Were you absolutely blinkered –

Mark Davies: No.

Mr Blake: – at this time? Who is the one journalist who is mentioned in this email?

Mark Davies: That would be Mr Nick Wallis.

Mr Blake: Did you at any time think, actually, there might be something in what he’s saying?

Mark Davies: Of course. As I’ve said, I asked myself the question many, many times and I regret that I didn’t ask more questions. I wish I’d pushed harder, I wish that I’d been perhaps as hard on and as assertive with our supplier as I was with Panorama and with journalists at times, for sure. Of course, I’ve asked myself those questions many, many times and will continue to do so. I have a huge amount of regret over this issue and will always have that regret.

Mr Blake: Looking at those later emails that I’ve shown you, the emails addressing journalists, attacking journalists, were they part of a culture of openness?

Mark Davies: I think it’s unfair to take a few emails as symptomatic of what the broader environment that we – that I led in the Communications Team at the Post Office. I’ve always been hugely committed to openness and transparency with journalists. I was a journalist myself for 14 years. I’ve got a huge amount of respect for journalists and journalism. On this particular issue, absolutely, I was assertive. As I say, I regret that I was as assertive as I was but, ultimately, I’m not a technical expert, I’m not a legal expert. I had to operate based on – in good faith, on the information that I had to hand at the time and did so in that way.

Mr Blake: They’re not just a few emails, are they, though, because the emails that I’ve shown you are over several years: emails from 2013, emails from 2014, emails from 2015. Emails from before the Second Sight Interim Report, emails from after the Interim Report, and they all have a very similar line about them, don’t they?

Mark Davies: They have a very line in the sense that we felt that the actions that we were taking, the appointment of Second Sight, the setting up of the Mediation Scheme, the openness that we showed to Panorama in the initial stages of our engagement with Panorama, we felt that those issues were not being fully recognised. For instance, with Panorama, we felt that it would have been helpful if they’d have spoken to the National Federation of SubPostmasters, who represent – represented 6,000 postmasters at the time and who, I think as the Inquiry is aware, didn’t, at the time, didn’t have any concerns about the Horizon system, and it felt as though the journalists had an agenda and that that agenda was to say that the Post Office was in the wrong. Obviously, context and hindsight tells us that we were in the wrong and I deeply regret that that’s the situation.

Mr Blake: Do you think that the Post Office did enough investigating of its own to look into the problems with Horizon?

Mark Davies: Well, self-evidently, I don’t think enough investigation went into it. It’s not really a question for me as Communications Director.

Mr Blake: But you were communicating that very message, weren’t you, that Horizon was robust, nothing to see here. Surely you can have an opinion as to whether the Post Office carried out enough investigations and, frankly, whether you personally looked into matters enough?

Mark Davies: No, well, I mean, clearly not enough investigation went on, because issues have emerged in the course of the last few years that have shown that Horizon was far more – had far more faults, far more bugs in it than we ever realised and ever understood at the time. So, absolutely, for whatever reason the correct levels of investigation didn’t take place. I agree with that. Do I – as I said, I regret deeply that I didn’t do more to question internally. I always insisted that our Communications Team, we weren’t just effectively a postbox for information. If colleagues told us something, we would scrutinise it and push back. I wish we’d pushed back harder, I wish I’d pushed back harder.

Mr Blake: I’m going to move on to the topic of Second Sight. Can we begin with POL00164510. This is an email from Hugh Flemington to Alwen Lyons, you, Rodric Williams, Jarnail Singh and Lesley Sewell:

“1. We have a new criminal case starting in [that’s Birmingham] next Monday [and that’s a matter we have seen with other witnesses]. Jarnail to get [Cartwright King] up to speed using Alwen to enable [Cartwright King] to say something to the judge regarding bugs [the Post Office] have found and disclosed ([the Post Office] have found them, not [Second Sight] – that’s an important PR point) …”

Just pausing there, and we’ll see it often repeated that Post Office had found the bugs, were you aware, as to whether it was Gareth Jenkins or the Post Office who had notified Second Sight about bugs in Horizon?

Mark Davies: I may have been aware. I don’t recall.

Mr Blake: Do you ever recall asking anybody whether it was correct that the Post Office found the bugs and notified Second Sight?

Mark Davies: I recall that I was told that Post Office had found the bugs and told Second Sight. I don’t recall whether I questioned that or not. I would like to think I did but I can’t possibly recall whether I did or not.

Mr Blake: So:

“… using Alwen to enable [Cartwright King] to say something to the judge regarding the bugs [Post Office] have found and disclosed ([the Post Office] have found them, not [Second Sight] – that’s an important PR point) …”

To what extent is a PR point relevant to a Crown Court judge?

Mark Davies: Well, that would be a question for – sorry, who is this email from?

Mr Blake: It’s from Hugh Flemington?

Mark Davies: That would be a question for Mr Flemington. I would place a Crown Court judge very high above a PR point.

Mr Blake: “… and fact that a [Second Sight] Interim Report may be coming out before the MPs summer recess (16 July) to offer judge the chance to adjourn the case. That just makes us look open and transparent and seems the prudent thing to do.”

Number 2:

“Mark D – could we prepare an ‘on the offensive’ [communications] statement to go out on Monday – and we send out letters to relevant affected [subpostmasters/ ex-subpostmasters] of the 14 bug on Monday too?”

Now, this is something that we’ve seen with other witnesses: there were these two bugs, what were referred to there as the 64 and the 14 bugs and there are letters that are going out to affected subpostmasters; do you recall that issue?

Mark Davies: I recall the issue in relation to the Second Sight Interim Report. I don’t, in all honesty, recall this specific – I mean, I’ve seen this email since it was disclosed, obviously but I didn’t – when I saw it this time, it didn’t ring a bell.

Mr Blake: It says:

“Mark D – could we prepare an ‘on the offensive’ [communications] statement …”

Do you think it was appropriate to prepare an “on the offensive” communications statement when the Post Office was notifying subpostmasters or former subpostmasters of those two bugs?

Mark Davies: As I say, I don’t recall this email. I don’t find this language particularly – I’m not keen on that.

Mr Blake: What would you have understood “on the offensive” to have meant?

Mark Davies: Well, I suspect he’s suggesting that we do a proactive press release of some kind to set out these issues but I honestly don’t recall what actually happened as a result of this email.

Mr Blake: “This comms statement to include:

“[The Post Office] found the bugs and told [Second Sight] (ie [Second Sight] didn’t find them).

“[The Post Office] are being open about them.

“Get [Fujitsu] to confirm bugs don’t affect the transaction data.”

There’s then a Board meeting, a couple of days later. Can we please look at POL00021515. We may see other Board minutes. You’re down in attendance. Were you regularly in attendance at Board meetings?

Mark Davies: I attended Board meetings on a fairly regular basis but not routinely.

Mr Blake: Who invited you to those Board meetings generally?

Mark Davies: I would generally be invited, well, by the Chair, but Paula would have passed on the request.

Mr Blake: Did you have a personal relationship with the Chair?

Mark Davies: I think, as is known to the Inquiry, I worked for a time for the Chair’s husband.

Mr Blake: That was Jack Straw?

Mark Davies: That’s correct.

Mr Blake: Was she your link to the Post Office: did you join because of her or …?

Mark Davies: I heard about the vacancy at the Post Office and applied. I went through a rigorous recruitment process, which involved, I think, two or possibly three assessment interviews plus an assessment day. I’d certainly heard about the vacancy through my connection but –

Mr Blake: Which connection, sorry?

Mark Davies: Through the fact that I’d previously worked for Jack Straw.

Mr Blake: Who told you about the vacancy?

Mark Davies: I don’t recall.

Mr Blake: How do you recall that you’d heard about it through that connection?

Mark Davies: I think it was – I was approached. I honestly can’t remember, Mr Blake. I think I was either approached by a headhunter, potentially, or it could have been that it was mentioned to me by Mr Straw. I honestly can’t recall.

Mr Blake: If it was through the connection then it wouldn’t have been a headhunter, would it?

Mark Davies: I think – well, obviously, the headhunter – if it was a headhunter, and I genuinely can’t recall, they would have recalled that I’d worked – or they would have known that I’d worked for Jack Straw and that Alice Perkins was the Chair of Post Office.

Mr Blake: Returning to these minutes, at this particular meeting, is there a lawyer present?

Mark Davies: No.

Mr Blake: Do you recognise any IT specialists present?

Mark Davies: No.

Mr Blake: If we scroll down, please, there is a section on Horizon. I’m just going to read a couple of paragraphs from that:

“(a) The CEO apologised for the short notice in keeping the Board update but explained that issues had arisen over the last couple of days. She gave an update on the Horizon review which was being undertaken by Second Sight and their Interim Report which was to be presented at a meeting of MPs on 8 July. The investigation to date had found no systemic issues with the Horizon computer system but had highlighted areas for improvement in support areas such as training.

“The CEO explained that the Horizon, like any large computer system, would occasionally have anomalies and two were known of over recent years. The business had dealt with these anomalies to ensure no subpostmaster was out of pocket and these anomalies had not affected any of the cases which Second Sight had reviewed. Second Sight had been told of these anomalies and they would include them in their report.”

Over the page, please:

“The CEO was concerned that the report from the independent forensic accountants was not as factual as expected and could lead to loose language at the MP meeting.

“The Board asked the Business to challenge Second Sight to ensure changes were made to the report where possible and asked the Business to prepare their communication to combat any inaccuracies.”

We have there:

“Action:

“CEO/Mark Davies.”

Why were you personally tasked with changing the report of an independent investigation?

Mark Davies: I don’t think I was. I think the action that refers there in (d) is to the business to prepare their communication to combat any inaccuracies. I don’t believe that – and I certainly didn’t take it that I was being asked to challenge Second Sight to ensure changes were made to the report –

Mr Blake: Do you recall seeing any copies of the report before it was published?

Mark Davies: I don’t recall. I don’t recall.

Mr Blake: Do you recall making any proposals to change a draft of the report?

Mark Davies: I’m as certain as I can be that I didn’t.

Mr Blake: Do you think it is unusual, given that the context, that the only two named people for action here are you and the CEO?

Mark Davies: Is it possible to just scroll back to who was in attendance at the meeting, Mr Blake, if possible?

Mr Blake: Yes.

Mark Davies: I’m surprised, looking at that list of attendees, that Susan Crichton wasn’t there at the time because my understanding or my recollection is that she sort of held the relationship with Second Sight at that time. So I’m surprised that she’s not listed as being present.

Mr Blake: Do you recall the relationship with Susan Crichton and the Board at this time?

Mark Davies: No, I don’t.

Mr Blake: Are you aware of any reason why she might not have been present at the Board?

Mark Davies: I’m not, no.

Mr Blake: Have you heard any suggestions relating to why she might not have been at the board?

Mark Davies: No.

Mr Blake: Can we please look at POL00296941. This is a draft briefing to Paula Vennells of 1 July, so the same day. Is this a document you recall?

Mark Davies: Only since I’ve seen it disclosed for the Inquiry. I may have seen it when it was first produced but I cannot recall if I did or not.

Mr Blake: If we scroll over the page, it’s a briefing on the Second Sight review, Interim Report. Is it likely that you would have seen this at the time?

Mark Davies: I think it’s likely.

Mr Blake: Could we please turn to page 6, bottom of page 6 into page 7 is the “Forward Strategy”:

“Plan A: Meet [James Arbuthnot] and try to persuade him to postpone his meeting with Second Sight on Tuesday, 9 July.

“If not successful, Plan B: We are preparing a full communications strategy and will consider rebuttal and tactics in line with an approach aimed to minimise reputational impact to Post Office Limited.”

Do you recall there being this Plan B?

Mark Davies: Absolutely, in terms of the Second Sight Report, as with any major report, which would have had external focus, I would have been asked to come up with a – to work with my team to produce a communications strategy and I think that’s – you know, that’s not unusual at all.

Mr Blake: It certainly reads as though Plan B is to go against Second Sight; do you agree with that?

Mark Davies: No, I don’t agree with that. On the contrary, actually, I do recall at the time I was extremely keen that we were very open about the Second Sight Report. I can’t say whether it was my idea that we published the Second Sight Report externally but I certainly was very supportive of that, as I was supportive of issuing a press release to go on the same day as the Second Sight Report being published.

Mr Blake: Rebuttal and tactics sound very much like the plan was to rubbish Second Sight’s findings?

Mark Davies: That’s absolutely not correct.

Mr Blake: If we scroll down, please, we have “Key Messages”. It says for you to “review and amend as necessary”, so it’s likely that this did land on your desk?

Mark Davies: Oh, very likely, yeah.

Mr Blake: “With respect to the 62 Branch and 14 Branch anomalies”, points to be made are, for example:

“We found the anomalies …

“The anomalies were detected, resolved, and we communicated the problem to subpostmasters.”

Do you recall who was responsible for developing these points?

Mark Davies: Well, my team would have been – I and my team would have been responsible for developing the – a press release based on the report, but not – so where it says there, “With respect to the 62 Branch and 14 Branch anomalies”, we would have been asked to take these points into consideration as we developed a press approach, a press release, which I think was then – well, I know was then developed. Obviously, that wouldn’t be done in isolation of the wider business, as no piece of communications ever was done in isolation of the wider business; it would have been a collaborative approach across the business, including obviously Legal, IT, Network, Security, et cetera, et cetera, and I’d imagine, in this case, although obviously it’s – I think it’s 11 years ago, I imagine Fujitsu – we would have liaised with the Fujitsu Press Office as well, which we did as a matter of course on these matters too.

Mr Blake: Can you assist us with that? You say as a matter of course. So you had a counter part at Fujitsu that you liaised with?

Mark Davies: Yeah, of course. So the Post Office – it might help the Inquiry if I just set out briefly what the Post Office Communications Team comprised of. I mean, it comprised of a Press Office of, I think, four or five press officers, a Stakeholder Management Team, who worked with MPs and councillors and other stakeholders, an Internal Communications Team which, obviously, was responsible for internal communications with our colleagues, our employed colleagues but also our franchised colleagues and the postmaster community as well, and then the people who put together the website and other elements too.

So whenever a report such as this one – and there were many reports and press initiatives during the time I was at the Post Office – were developed, they would effectively come to us – whichever part of the business was leading on the issue, would come to us and say, “We need a press strategy, a media strategy and an internal communications strategy for it, as well”. So we would then work with whichever part of the business that was to put together the relevant materials. So it might be a press release, it might be an internal communications piece and I think, for the Second Sight Report, or from my recollection, is, and I’m sure it’s the case, that we produced a press release but we’d have also produced internal communications materials as well, to talk to the business to tell the story of what was happening in relation to the Second Sight Report.

Sorry, does that help?

Mr Blake: Well, Mr Davies, the impression that you’re giving is certainly one where you were just effectively carrying out the orders of others within the business but we saw at the Board that you were, actually, specifically tasked with the response, weren’t you, at Board level?

Mark Davies: Specifically tasked with the response in terms of creating the communications package, absolutely. I –

Mr Blake: So it wasn’t just a press release. It wasn’t anything – part of your usual day-to-day work. This was a Board level direction for you to personally direct the response to the Second Sight Interim Report?

Mark Davies: I think it’s really important to say that the media response, so the creating a press release, creating an internal communications messaging, I think to go back to the Board meeting. It is absolutely not the case that I was tasked with trying to persuade Second Sight to change their report. That did not happen. What did happen was I was tasked with creating a press media communications response, absolutely.

Mr Blake: You were mentioning Fujitsu. Who did you liaise with at Fujitsu?

Mark Davies: I don’t recall – sorry, you did ask me that question, apologies. I don’t recall specific names and most of the communication between my team, the Press Office Team, would have been directly between my Press Office Team and the Fujitsu Press Office team and, obviously, Fujitsu like any other organisation, like the Post Office, has its own media team.

Mr Blake: Did you have somebody you could pick up the phone to at Fujitsu?

Mark Davies: I don’t recall names but I dealt with the Director of Communications, I think it was, at the time. I don’t recall names, though, apologies.

Mr Blake: Would you feed them technical questions, for example?

Mark Davies: No, I mean, most of the sort of day-to-day questions on technical matters would go via my Press Office, our Press Office, the Communications Press Office, absolutely. I didn’t get involved in dealing with technical questions myself. But any technical questions that were being fed to Fujitsu would also be fed through the IT Team as well. So it was a collaborative approach. There wasn’t a sort of separate set of people asking questions and then another set of people asking questions, if that makes sense.

Mr Blake: Given that you were responsible for the strategy, why do you say that you weren’t getting involved with the technical matters? Wasn’t that quite an important part of your job?

Mark Davies: Well, essentially, we would be – the Second Sight Report would be presented to us and we would then take that report and then build out a press release from the report, and then, in doing so, liaise with other colleagues within the Post Office and also with Fujitsu. So we wouldn’t be taking raw material ourselves and creating material ourselves; we would be building out from the existing report.

Mr Blake: Can we look at POL00029627. This is the very next day, and it’s a later draft of the same briefing note. Can we look at page 6, please, the bottom of page 6 into page 7. So we see at the very bottom the forward strategy the wording has slightly changed there because Plan A, it now says, “This is unlikely to be successful”. So by the day after the board meeting, it seems as though the likely scenario is that you’re going to have to prepare a full communications strategy. Do you recall that?

Mark Davies: I really don’t recall the interplay between the meeting with Lord Arbuthnot, as he is now, and the communications strategy. I don’t recall those two things being connected. I think our intention always was that we would publish the Second Sight Report.

Mr Blake: Do you think it may be surprising that, by that stage, your plan was to rebut and develop tactics in respect of a firm of independent investigators that had been instructed by the Post Office to carry out an independent investigation?

Mark Davies: No, because rebuttal and tactics would refer to what questions we might receive off the back of the Second Sight Report, so we would receive questions relating to the report. So we would therefore have – and where it says, “Rebuttal” that effectively means a Q&A, a set of question and answers that we would expect to be asked by journalists or others. “Tactics” is really about whether we would do TV interviews about it? Would we do radio interviews about it? Would we put out an internal communications plan? Would we contact MPs, other than Lord Arbuthnot? Those sort of considerations. So it doesn’t strike me as surprising.

Mr Blake: Aiming to minimise reputational impact on Post Office in respect of an independent report – I’ll go back to the questions that I was asking first today, which is: do you think that was part of a culture of openness?

Mark Davies: I think that managing reputational risk for any large organisation, such as Post Office, is a fundamental part of a Communications Team, along with facilitating responses, along with informing key audiences about new products, about the performance of the business, et cetera, et cetera. Minimising reputational risk is part and parcel of communications – the communications profession.

Mr Blake: Thank you, sir. That might be an appropriate time to take our morning break.

Sir Wyn Williams: Yes, by all means.

Mr Blake: Thank you very much.

Sir Wyn Williams: Let me just check.

Mr Blake: I think 11.05.

Sir Wyn Williams: Yes, 11.05.

(10.52 am)

(A short break)

(11.05 am)

Mr Blake: Thank you, sir.

Can we please turn to POL00189880. We’re on the same day, 2 July 2013, and you have drafted a statement, and you are seeking comments from various people. Could we please look at the statement, it’s POL00189881. I’m just going to read to you from the statement quite a lot of text that I will go through. It starts:

“DRAFT Post Office statement on Horizon system.

“An interim review into concerns around the computer system used in the Post Office branches has concluded that there are no systemic issues in relation to the system, the Post Office has announced.

“The review – undertaken independently by Second Sight Support Services Limited in consultation with the Post Office, James Arbuthnot MP and Justice for Subpostmasters Alliance – addressed four cases raised by MPs.

“It found no evidence of any systemic failures in the system. The Post Office now plans to invite the JFSA to work with it and Second Sight to complete its review of [further] cases …”

If we scroll down, please. It says:

“As a result, Post Office Limited plans to create a User Forum to explore these issues with the JFSA and other interested parties. The User Forum will be chaired by Post Office Chief Information Officer Lesley Sewell.”

Just pausing there, is that User Forum the forum that was originally going to be described as the Horizon Forum?

Mark Davies: I think so.

Mr Blake: It then says:

“During the course of the Second Sight Review, the Post Office – assisted by its supplier Fujitsu – has engaged with Second Sight to provide evidence around the use of the Horizon system.

“This included details of where accounting shortages or overpayments have occurred as a result of minor issues in the system. This amounted to two sets of transactions – one impacting 62 of the Post Office’s 11,800 branches between March and October 2010 and the other affecting 14 branches due to an anomaly with accounting entries for 2010/11 being incorrectly reproduced in 2011/12 and 2012/13 …

“The accounting anomalies in these cases were picked up by the Horizon system, Post Office proactively informed subpostmasters and any losses – however minor – were reversed.”

You then have an announcement from Lesley Sewell, it says:

“Lesley Sewell said: ‘We are grateful to James Arbuthnot MP for his support for the Second Sight Review, and to Second Sight themselves for their work.

“‘The Post Office takes its responsibilities – whether to customers, subpostmasters, staff or taxpayers – very seriously and it is right that we took the steps to ensure that claims about the Horizon system were reviewed.

“‘Having done so, Second Sight has confirmed that there are no systemic issues in the computer system. We will of course continue to work with them, and with the JFSA, to examine other cases put to us’”, and it continues.

At the time you drafted this statement, had you read the Second Sight Report?

Mark Davies: I’m sure I had, yes.

Mr Blake: Can we please turn to page 1 of this document and also bring on to screen alongside it the Second Sight Interim Report, and that is POL00099063. So we now have on the left-hand side the Second Sight Report. Can we please turn to page 5 on the left-hand side, page 5 of the Interim Report.

Thank you very much. If we could scroll down to 6, thank you:

“Did defects in Horizon cause some of the losses for which subpostmasters or their staff were blamed?”

It says:

“There is still much work to be done on the cases Second Sight has been asked to investigate. We have concluded in one of the four spot reviews [so a quarter of the reviews carried out] covered by this Interim Report that, although the Horizon system operated as designed, the lack of timely, accurate and complete information presented to the subpostmaster was a significant factor in his failing to follow the correct procedure.

“In that incident, shortcomings in the branch’s primary and fallback telecommunications equipment exposed a weakness that led to a poor counter-level experience both for the [subpostmaster] and his customer.”

It then refers to another spot review and then at 6.4 it says:

“In the course of our extensive discussions with [the Post Office] over the last 12 months, [the Post Office] has disclosed to Second Sight that, in 2011 and 2012, it had discovered ‘defects’ in Horizon Online that had impacted 76 branches.”

Over the page, please. Thank you.

It says:

“The first defect, referred to as the ‘Receipts and Payments Mismatch Problem’ impacted 62 branches. It was discovered in September 2010 as a result of Fujitsu’s monitoring of system events … The aggregate of the discrepancies arising from the system was £9,029 …

“The second defect, referred to as the ‘Local Suspense Account Problem’, affected 14 branches and generated discrepancies totalling £4,486 …”

Then it says this, at 6.7 onwards:

“[The Post Office] was unaware of the second defect until a year after its first occurrence in 2011, it reoccurred and an unexplained shortfall was reported by a [subpostmaster].

“[The Post Office’s] initial investigations in 2012 failed to reveal the system defect and, because of the cause could not be identified, the amount was written off. Fujitsu looked into the matter in early 2013 and discovered, and then corrected, the defect.

“It seems, however, that the shortfalls and surpluses that occurred at the first occurrence (in 2011) resulted in branches being asked to make good incorrect [accounts].

“[The Post Office] has informed us that it has disclosed, in witness statements and English courts, information about one other subsequently-corrected defect or ‘bug’ in the Horizon software.”

Now, on the right-hand side, can we please scroll down to the passage that begins with “This included details”. Thank you.

In your draft press release, after having read the Second Sight Report, you say as follows:

“There included details of where accounting shortages or overpayments have occurred as a result of minor issues in the system. This amounted to two sets of transactions … “

You say:

“In the first of these cases, 17 subpostmasters were … affected – and later reimbursed …

“In the second set of cases, the total impact was xxx.

“The accounting anomalies in these cases were picked up by the Horizon system, Post Office proactively informed the subpostmasters and any losses – however minor – were reversed.”

Is that correct?

Mark Davies: It would seem that that’s not correct, in that draft press statement.

Mr Blake: Because they weren’t picked up, in some cases, for a significant period of time?

Mark Davies: It appears that that statement has, to some degree, sort of, you know, collapsed a load of different elements into one, and yeah, it would appear to be inaccurate, that.

Mr Blake: There’s also no mention there of the additional bug, is there?

Mark Davies: No.

Mr Blake: On the left-hand side, if we scroll down to frequently reported issues, they set out at 7.2:

“The following issues have been reported to us by multiple subpostmasters as being of particular concern about the Horizon system:

“A multi-product system that is far more complex and demanding than, for example, that found in a typical high street bank;

“Multiple transactional interfaces …

“Unreliable hardware leading to printer failures, screen misalignment … and failed communications links;

“The complexity of end of Trading Period processes …

“Inexperienced trainers and gaps in training coverage;

“The lack of some form of onsite supervision and quality control …

“The receipt of centrally input, overnight ‘corrections’ and other changes allegedly not input by subpostmasters or their staff;

“Inadequate Helpdesk support, with responses that are ‘script based’ and sometimes cause further or greater problems;

“[Post Office] Investigation and Audit Teams that have an asset recovery or prosecution bias and fail to seek the root cause of reported problems;

“A contract between subpostmasters and the Post Office that transfers almost all of the commercial risk to the subpostmasters, but with decreasing support being provided. In its risk/review decision making, [the Post Office] benefits from any savings, while subpostmasters may suffer increased risk.”

Are those concerns of Second Sight reflected in the draft announcement that I have just taken you to on the right-hand side?

Mark Davies: They’re only reflected in the sense that we highlight the need for improvement in terms of training and support, et cetera, et cetera, and the response to be to create the user forum to look into those issues and others and, of course, I suppose the other thing I’d say is that we also intended, and did, publish the entire Second Sight Report. So all of those things, as set out, were on the record, on the public record.

And, by its nature – sorry to continue – by its nature the press release was a summary, if you like, of the overall report.

Mr Blake: You’ve already accepted it was an inaccurate summary in relation to bugs, errors and defects in the system?

Mark Davies: Yeah, I hope that that’s a – that’s a draft press statement. I obviously haven’t seen the final press statement. I don’t recall it. I hope those anomalies, those mistakes, would have been picked up. If they weren’t, then that’s a matter of really grave respect, as opposed to –

Mr Blake: Your evidence was that you drafted it having read the report that is on the left-hand side of our screen.

Mark Davies: Yeah.

Mr Blake: It’s pretty clear that you are putting a very positive spin on the Second Sight Report, aren’t you?

Mark Davies: I think it’s a summary of the report.

Mr Blake: Well, it’s not a summary; it’s an inaccurate summary, of, the Report, isn’t it?

Mark Davies: Well, there are points in there that I would, if I was writing it again, I would be absolutely much clearer about, yeah.

Mr Blake: Not clearer. There are points in there that are just wrong, aren’t there?

Mark Davies: Yes.

Mr Blake: If we stick to the left-hand side and scroll down, please, to paragraph 8 on page 8. Left-hand side, “preliminary Conclusions” – so a big header “Preliminary Conclusions”:

“This is an Interim Report and there is much work still to be done. Any conclusions reached at this point will need to be updated in the light of new information that arises as the investigation continues.

“Our preliminary conclusions are:

“(a) We have so far found no evidence of system wide (systemic) problems with the Horizon software …”

If we look at the right-hand side and scroll up to the top of that page, please, you will recall, I read it out, it says:

“An interim review into concerns around the computer system used in Post Office branches has concluded that there are no systemic issues in relation to the system …”

Then it says in the third paragraph:

“It found no evidence of any systemic failures in the system.”

Does your proposed statement say anywhere that there was much work still to be done?

Mark Davies: No. I say Second Sight has called on the Post Office to examine its information technology training support, but no.

Mr Blake: Does it say anywhere that the conclusions are preliminary?

Mark Davies: No. It describes it as an interim review, but no.

Mr Blake: Does it say anywhere that the suspense account problem took years to correct?

Mark Davies: No.

Mr Blake: Does it say anywhere that there was a third bug in the system that was identified?

Mark Davies: No.

Mr Blake: Is the word “defect” or “bug” used anywhere in your statement?

Mark Davies: Sorry, I don’t recall how we referred to them, if it’s possible to scroll down?

Mr Blake: Absolutely.

Mark Davies: I presume not but …

Mr Blake: I mean, for example:

“This included details of where accounting shortages or overpayments had occurred as a result of minor issues in the system. This amounted to two sets of transactions …”

I mean, do you think that your draft statement that was drafted after reading the Second Sight Report was in any way an accurate reflection of what Second Sight had found?

Mark Davies: I think if I was writing it again, I would write it more – I would be more – I would be clearer.

Mr Blake: Is that because you would now be more ethical than you were at the time?

Mark Davies: No.

Mr Blake: You have entirely removed the sting from the report, haven’t you?

Mark Davies: No, I don’t believe so and I think, again, I’d say that, because we were publishing the report itself, in its entirety, I think it’s reasonable to say that the report would therefore be in the public domain.

Mr Blake: You were working for a company that was wholly owned by the Government. Did you think that it was appropriate in those circumstances to spin the report in this way?

Mark Davies: I reject the word “spin”. I wasn’t seeking to spin. I don’t recall whether this is the final press release that we issued. I don’t know what processes it went through after this point and it probably went through a number of different colleagues. I was seeking, probably too hurriedly, to put together a summary of the report but absolutely doing so in the full and certain knowledge that we would be publishing the full report. So it would be there for the public and others to make – to draw their conclusions.

Mr Blake: Mr Davies, I won’t use the word “spin”. Did you think it was appropriate to lie, the way that you have on the right-hand side, in the press release?

Mark Davies: I think – I don’t believe that I’ve lied there.

Mr Blake: Do you think, working for a company that was wholly owned by the Government, that that is an appropriate press release to have drafted, having read the report on the left-hand side?

Mark Davies: I think if I’m guilty of anything there, it’s of being sloppy. I’ve never lied in my entire career and I certainly didn’t lie at any point during this – over this issue either.

Mr Blake: Can we please return to an email we looked at this morning, it was POL00297030, and if we look at page 3, please. If we scroll down, we can see that Susan Crichton has sent around a brief of Paula Vennells and Alice Perkins, 2 July 2013. So the same day.

If we scroll up, please, it’s a brief for a meeting between Alice Perkins and Paula Vennells and Lord Arbuthnot that has been produced by Alwen Lyons and Susan Crichton, just prior to the release of the Second Sight Report.

If we scroll up, please, to the bottom of page 1, so this is an email from you – I took you to it this morning – where you say:

“The speaking note needs to be firmer – we want to make clear our position and underline our view that no evidence to support systemic failures.”

If we scroll down, please, you say:

“On training, we need to be very careful about language – the current version is too loose – this is your point about not leaving any glimmer which suggests that cases might need to be reopened. So we need to acknowledge that training can always be improved (rather than our training must be improved – important difference) and need to follow that with further statement that there is no evidence of systemic failures.

“The brief needs to make clear that none of the 14 or the 62 impact on the spot reviews in the Interim Report and are therefore not relevant to the Interim Report.”

This the passage I took you to earlier:

“We shouldn’t call the user group a ‘Horizon’ user group – makes it appear as we are acknowledging user issue with Horizon – branch management user group?”

You then say a bit further down:

“It may be worth setting out three overall ‘rocks’ for the two of them to return to:

“[1] there is no evidence in the Interim Report to support any suggestion of systemic failures.

“[2] this is a system which deals with six million transactions a day or more than 40 million a week, and is used by more than 50,000 people every day.

“[3] we must be satisfied that when the report is released it truly reflects the position – the Post Office business is too important to do many people for either to be questioned unfairly.

“Another point which needs bringing out is the public money point. We do have a duty to protect public money and where there’s wrongdoing, we must act. It would be entirely wrong if we did not. We want to support our people and we will make sure that we do everything we can to improve training and support in order to ensure that their stewardship of public funds questioned be questioned.”

This is more than just drafting of a press release, isn’t it? You are here carrying out the task that was proposed at the Board meeting, to take forward the entire strategy with regards to the response to the Second Sight Interim Report?

Mark Davies: Can I clarify, this email is related to the speaking note for Lord Arbuthnot; is that right?

Mr Blake: Yes.

Mark Davies: So it’s not in relation to the press release?

Mr Blake: No. Well, it’s the same day and it follows the Board meeting the day before, where you’ve been tasked with, you say, a communications response.

Mark Davies: Mm.

Mr Blake: But is does very much seem as though, by 2 July, you were getting involved in the company’s response?

Mark Davies: Oh, I mean –

Mr Blake: You weren’t simply issuing press releases; you were actually involved in developing a strategy for the company and developing here “rocks” to return to.

Mark Davies: Mm. I mean, the company’s position would be the position as set out in the press release. They weren’t separate pieces of work. So –

Mr Blake: So the press release would lead the company’s position?

Mark Davies: It would.

Mr Blake: Do you think that was appropriate?

Mark Davies: Well, that draft – I haven’t seen the final press release that was issued. I would, you know, if that draft release that we’ve seen was the final release, then clearly not and I take full responsibility for that. But, in terms of the sort of broader company position, as set out here, there was no evidence in the Interim Report to support any suggestion of systemic failures and we were operating at the time with no indications at all from the 6 million transactions every day and the 50,000 people using it that there was an issue with the system, and it was really important – really, really important – that, you know, for a business as important as the Post Office to so many millions of people – so many millions of customers but, obviously, also clients, as well, not to mention postmasters, that we were absolutely clear about our view at the time about the Horizon system, which leads to the public money point as well, and I think those four rocks are reasonable and justified in the context of what the report had told us.

Mr Blake: Mr Davies, shouldn’t a company sit down, develop its strategy and then the Communications Team communicate that? What’s happening here is the Communications Team are developing the corporate strategy. In fact, the Head of the Communications Team is developing the rocks to rely upon, aren’t you?

Mark Davies: No, that’s not the case at all. It’s not how Communications Teams operate and certainly not in my experience anyway. Obviously, the Communications Team has a significant part to play in the development of the position that the company would take externally and, of course, responsibility for issuing press releases for developing press releases and for making suggestions and strategic and tactical elements of any external communication is obviously a fundamental part of the Communications Team. That doesn’t mean that it operates separately from the rest of the business and it certainly didn’t at the Post Office. I’m putting my two penn’orth in here, if you like. I can’t recall where we ended up with the final press release but it’s certainly the case that, obviously, you know, communications was an influential part of a wider company structure, of course, which included IT, Network and, obviously, the CEO and others as well.

Mr Blake: You see there’s not very much involvement in the IT Team in these kinds of messages, is there? That might have been useful but it’s the –

Mark Davies: Well, I think –

Mr Blake: – Communications Team developing the rocks.

Mark Davies: Apologies, I didn’t mean to interrupt. I think the IT Team would have absolutely been involved in developing the position. I think Lesley – Lesley Sewell – was on that initial draft press statement and, obviously, I would never want a Communications Team to put out information that was incorrect from an IT perspective.

Mr Blake: Can we please turn to POL00190546, starting at page 2. You are there sending internally a draft letter to James Arbuthnot:

“… following the meeting this morning. Alwen is writing up her notes so we may flesh it out further, but grateful for immediate thoughts and amendments please.”

Were you present at that meeting with James Arbuthnot?

Mark Davies: I don’t recall. I did attend at least one meeting, I think, with Lord Arbuthnot, but I don’t know if it’s this specific one.

Mr Blake: If we scroll up, please, to the bottom of page 1, Susan Crichton has provided some comments. If we scroll up to the very top, you say as follows:

“Thanks for all the comments on the letter. I have attached a third draft which I hope is final. It has added an important section on the exceptions which I need clearing and comments from all those copied, tonight or first thing tomorrow if possible please (and sorry).”

“Exceptions”: is that bugs?

Mark Davies: Yes.

Mr Blake: Who did you expect on that copy list to be the person to help you clear the section on exceptions?

Mark Davies: Well, Lesley Sewell is – was the CIO at the time. That would be – she’d be the person that I’d expect there, yeah.

Mr Blake: Can we please turn to POL00190547 and this is the draft letter that is attached to this email, to Lord Arbuthnot:

“Thank you for your time yesterday. I felt it was a very useful meeting and thought it would be helpful to follow it up by putting together this note of the key points.”

Scrolling down, there’s a section on “The Second Sight review and next steps”:

“As you know, the draft report we expect to receive on Friday represents the conclusion of the interim review by Second Sight into four specific cases. We will of course take on board its findings where it is possible to do so. In particular, we are keen to work even more collaboratively with the [Justice for Subpostmasters Alliance] to conclude the Second Sight review. We believe this is critically important.”

Just pausing there, do you think that was an honest reflection of the company’s position at that time?

Mark Davies: In the sense of wishing to work collaboratively with the JFSA and others to conclude the Second Sight review?

Mr Blake: Yes.

Mark Davies: Yes, I do.

Mr Blake: If we go over the page, we have the section on “Exceptions”, otherwise known as bugs:

“We discussed the small number of exceptions or anomalies …”

I mean, the very first document I took you to was the email from Paula Vennells who had spoken to her husband, who suggested the terms “exceptions” or “anomalies”?

Mark Davies: Mm.

Mr Blake: That’s that language now incorporated into your corporate documents and draft letters?

Mark Davies: Mm.

Mr Blake: Do you recall doing that intentionally?

Mark Davies: I don’t recall doing it intentionally. Clearly, I’ve – I have done.

Mr Blake: “… small number of exceptions or anomalies which Post Office had brought to the attention of Second Sight during its review and which had been dealt with in the appropriate way, namely that they were picked up by the Horizon computer system, corrected and subpostmasters were contacted where it was relevant to do so.”

Was that right?

Mark Davies: I think that’s correct.

Mr Blake: I mean, we saw earlier how long it took to correct those issues.

Mark Davies: Mm.

Mr Blake: Do you think that is – again, I know you object to the word “spin” but do you think that is a full and frank description or summary of what happened?

Mark Davies: Oh, I think this is a summary of a meeting with Lord Arbuthnot. In the context of a summary, I think this is fair.

Mr Blake: We then, if we scroll down, get to a section on remote access, “Access to live data”; did you draft this section?

Mark Davies: I can’t recall if I drafted that section or not.

Mr Blake: Reading the words there, is it likely that you draft that section?

Mark Davies: I think it’s unlikely.

Mr Blake: You sent around the first draft letter to James Arbuthnot following the meeting. This is a draft of that letter. Why do you think it’s unlikely that you drafted that section?

Mark Davies: I suspect that, in drafting the letter, I’ve probably talked to colleagues in the IT Team to – on this specific issue around access to live data and incorporated their response on this particular issue around remote access into it.

Mr Blake: So, in fact, is your evidence that you are likely to have drafted it but just with input from others?

Mark Davies: Yes.

Mr Blake: You say:

“Finally, during our meeting you also asked us about an email which has been brought to your attention having come up during the Second Sight review. I have looked into this and can provide you for the following on this issue.

“The email Ms Read to Second Sight alongside many others after they requested email access to the system testing team based in Bracknell.

“The email in question was sent by a junior Business Analyst … to a wide distribution list, including some members of the test team. [It] contained the following words:

“‘Although it is rarely done it is possible to journal from branch cash accounts. There are also [Product and Branch Accounting] concerns about how this would be perceived and how disputes would be resolved’.

“Second Sight have asked us whether this indicates that the Bracknell team had access to live data. This is not the case.”

If we scroll down, it says:

“It is not possible to automatically send accounting updates from the POLSAP system to the Horizon system. If changes do need to be made, this can only take place with the agreement and acceptance of any change by the relevant subpostmasters (what we call the transaction correction process). In the case discussed in the email, there was no change in the subpostmasters cash position, therefore no [transaction correction] would have been required.”

Who do you think provided you with this information?

Mark Davies: I can’t recall. Apologies.

Mr Blake: Are you able to assist with which department provided you with that information?

Mark Davies: Well, it would have been from within the IT Team. So, I mean, I think Lesley Sewell’s team would have been the team that would have input into that part of this – of what is a draft letter for, I assume, for Paula to send to Lord Arbuthnot.

Mr Blake: Did you yourself carry out any investigations or enquiries, further than asking the IT Team?

Mark Davies: Well, insofar as I asked the IT Team for their position in response to that section in italics on the page, I mean, they were the – you know, I have asked the question of a technical team in response to that specific question around Product and Branch Accounting concerns, and that’s the response I have received, and I’m not a technical expert; I’m a communications expert, and so I had to rely on what I was told.

Mr Blake: Can we please look at POL00115973, please. We are now on 6 July 2013, if we scroll down, perhaps we can start on the bottom of page 3. Saturday, 6 July, you’re emailing Paula Vennells and you say:

“Hi Paula

“I think this points to the need for our package of measures to include two and possibly three new initiatives:

“1. A Branch User Forum – for existing users to share views, discuss issues, examine processes etc. Chaired by ExCo reporting to ExCo. But this doesn’t cover historic issues (ie the JFSA and MP cases) so we could also have (2).”

  1. is:

“A working party, to use Alan’s phrase, to complete the MP and [Justice for Subpostmaster Alliance] cases. This could ‘take over’ the Second Sight review (perhaps involving them but perhaps not as they have effectively ‘cleared’ Horizon, the remit of their Inquiry).”

Just pausing there: did you really think the Second Sight Interim Report had effectively cleared Horizon?

Mark Davies: It’s a very broad summary of what they found.

Mr Blake: It’s a wrong summary of what they found, isn’t it?

Mark Davies: Well, their preliminary findings were that there were no systemic issues with Horizon and I think –

Mr Blake: Does that clear Horizon?

Mark Davies: I think that’s probably why I’ve put it in inverted commas in an email.

Mr Blake: “This would involve the JFSA and us working collaboratively on the remaining cases.”

If we scroll down, please, thank you.

“3. A review by a Mike O’Connor or Patrick Burns figure to consider potential independent levers which could be developed to give [subpostmasters] a means of independent adjudication or (non-statutory) ombudsman.”

Then you say this:

“This package, it feels to me, covers all bases. If it looks ahead to fix internal issues and create independent balancing view, but it also completes the review and has the potential for doing so with [Second Sight] playing a different, or no, role.

“It is also a compelling package for media, which handled carefully, could contain the story.”

It seems there that what you’re doing is making proposals to take matters forward for the company to contain the story. You’re making substantive proposals for the conduct of the Second Sight or post-second Sight way forward.

Mark Davies: I’m absolutely making proposals. The Second Sight Report contained some really disturbing elements in terms of the way in which postmasters had been treated, in terms of training and support, and there was a huge amount of concern within the business about that and a huge amount of concern and desire to try to fix it, to try to change the way in which we operated as a business, and so what I’m doing there is actually putting forward proposals for starting to deal with that and there was ongoing discussions within the business about how we might address those things.

Is it possible to scroll back up to the two points above?

Mr Blake: Yes.

Mark Davies: So, you know, yes, absolutely, a Branch User Forum to look at some of the issues that had been highlighted by Second Sight, and that was set up. A working party, to use Alan’s phrase, well, I think in a way what happened there was that we created the Mediation Scheme. And then, on the third point, if it’s possible to scroll down, a review. Well, I guess that covers the – it’s sort of covered by the Mediation Scheme as well and we were looking at whether – and it was one of the things I thought might be of interest – was whether we created some kind of ombudsman for the Post Office in order to look at cases where issues had come up. And I think it’s entirely appropriate for me, as a member of the executive of the Post Office, to put forward suggestions and proposals for taking things forward.

In relation to Second Sight, whether they played a different or no role, it was clear, once the report was published and the Post Office Minister made a statement in Parliament, that she was very clear that Second Sight should continue and so I think that became an academic point.

“It is also a compelling package for media”, well, that is true. You know, it showed – that doesn’t mean it’s been created in order to satisfy a media demand but it is a compelling package in the sense that it shows the business doing the right thing or seeking to do the right things off the back of the Second Sight Report.

Mr Blake: It looks very much as though what you are creating here is effectively a PR package; would you accept that?

Mark Davies: Not at all, no. Not a PR package, it was an attempt to resolve the issues that had been raised by Second Sight.

Mr Blake: It seems to be a package, that penultimate paragraph, where it doesn’t involve Second Sight, that, in fact, you’re now seeking to move away from Second Sight?

Mark Davies: There was a – well, it’s not a question of whether I was looking to move away from Second Sight. There was discussion within the business about, “Well, what do we do now second Sight has reported? Do we continue?” But, as I say, once the report was published and there was a statement in Parliament about it and the Post Office Minister then made it very, very clear that she wished Second Sight to continue, it, for me, became an academic point because there was no way that we would want to continue, in my view, with any kind of scheme, and, of course, what happened out of these discussions, and I’m not taking credit for what happened from these discussions – from this email, which then led to the creation of the Mediation Scheme, did involve Second Sight. So it was not PR package at all; it was a package aimed at delivering and addressing the issues that had been raised by Second Sight.

Mr Blake: It may be suggested that this is effectively a communications plan or scheme that’s dressed up to look like it’s assisting subpostmasters.

Mark Davies: Well, the outcome was the creation of the Mediation Scheme and I don’t think the Mediation Scheme was anything like the way you describe it.

Mr Blake: Were you concerned about the fate of those who had been prosecuted by the Post Office?

Mark Davies: There was obviously a debate within the Mediation Scheme about whether the Mediation Scheme could look at the criminal – the cases that had been through the courts and it was clear that mediation wasn’t something that could reverse criminal conviction. Obviously, that then played out over the course of the next couple of years.

Mr Blake: Mr Davies, if I could stop you there –

Mark Davies: Apologies.

Mr Blake: – I’m asking about this particular point in time: were you concerned about the fate of those who had been prosecuted by the Post Office?

Mark Davies: Well, of course. If there was a claim of a miscarriage of justice, of course I was concerned, yes.

Mr Blake: Can we scroll up, please, to the bottom of page 2. We have a response from Martin Edwards, who is the Chief of Staff to Paula Vennells. He says:

“Hmm, the boundaries between these groups are getting quite blurred and confusing (at least in my mind!).”

He then says, at the bottom there:

“We also need to think about how the review of past cases by our external lawyers plays into the messaging (if at all). Certainly not something we would put in our proactive media statement I would have thought, but would we refer to this in meetings as an avenue if pushed by MPs or JFSA?”

There is then a detailed follow-up from Paula Vennells, if we scroll up to page 1, please. This is all happening very late at night. She is responding at 10.46 on 6 July, and she says as follows:

“I think we have the following which is a variant …”

She works off your three suggestions but she adds some more:

“1) A working party over the next three/four months this comprises [the Post Office] working collaboratively with the JFSA …”

Then if we scroll down, she has there:

“Thirdly, our external lawyers review all prosecutions in the past 12/18 months since [the Post Office] has been independent of [Royal Mail] in light of the [Second Sight] findings. The [Justice for Subpostmasters Alliance/the Post Office] working group reviews the findings.

“(Why would they not review all cases of false accounting, eg over the last 5-10 years, especially where the amounts have been ‘small’? I assume ‘large’ amounts would be less likely to get away with saying they were muddle-headed and not helped? But could we review all? It is the false accounting charge [James Arbuthnot] was most concerned about.)”

Over the page, please, (2) is setting up the review, the kind of review you talked about.

(3), the future introduction of an ongoing branch user group. Then she says as follows, a fourth:

“A statement that although the system has proved to have no systemic issues, and our training, support processes and helplines have worked for most of the 50-60,000 colleagues over the past decade, we are nonetheless genuinely sorry that some of our subpostmasters who were struggling did not feel that we offered them sufficient help and support when they needed it and that we are grateful to the [Justice for Subpostmasters Alliance] and [James Arbuthnot] for highlighting the issues. Many are historic and already improved but we are always open to new ways to improve how we do business to ensure the [Post Office] stays as trusted and effective in its communities as it ever was.

“Last thought: if we can draft this into something I could send to Alan Bates ‘in confidence’, it would get us to a better place in agreeing the press statement and way through with [James Arbuthnot] on Monday. Could Martin try and corral views into a draft by Sunday early [evening]? The more I speak with him the better I feel it would be.

“Susan, would we ever ask the lawyers to consider reviewing past prosecutions? Is that what we are talking about in 1) above but simply not using the terms? If not, why would it be different? Of our 500 prosecutions, how many are false accounting? (For clarity these are open questions – just want to know the answers, not an indication that I want us to do so.)”

If we scroll up, please, to the very first email in the chain, it’s an email from yourself to Martin Edwards at 11.39 pm. So, having read that – email from Paula Vennells was 10.46 – you say:

“Hi

“Mind if I try to draft this? Feel I need to keep a line through the media handling – and to be honest we are in danger here of going way too far.”

It seems very much from this email that you are trying to direct the response to the issues raised by Second Sight and that you, in fact, are trying to formulate an approach that was less than that that was wanted by Paula Vennells; is that right?

Mark Davies: No, I don’t think that’s right. I mean, I’m talking to Martin, who was obviously her Chief of Staff, on this, and Martin – I’m not sure what Martin said in response but, certainly, we worked together very, very closely on all of these matters. So, no, it wasn’t the nature of the way in which we worked together that certain people would seek to try to direct the way in which matters were handled at all.

Mr Blake: Paula Vennells was there suggesting that “our external lawyers review all prosecutions in the past 12/18 months”. And your response to that email is that “We are in danger here of going way too far”. What did you mean by going way too far?

Mark Davies: Well, I don’t recall what I meant by that 11 years on, but the idea of reviewing criminal cases certainly wasn’t something that I thought was a bad idea; I thought it was an extremely good idea.

Mr Blake: Can I ask you to have a look at that email below, if we scroll down. Just have a look at that email and if you could let us know what it is that you thought was going way too far.

Mark Davies: I can’t recall what I felt was going way too far and nor can I recall what the purpose of this – and you may be able to remind me – what the purpose of this particular discussion is. Is this around a media release or the letter to James Arbuthnot? I’m not totally clear. I think it’s a general discussion about the steps that we might want to take as a result of the Second Sight Report.

Mr Blake: We can turn to page 4.

Mark Davies: Sure.

Mr Blake: There’s an email from Paula Vennells to Alan Bates about the way forward, 6 July. She says:

“Alan, thank you for the note. Yes, I thought the meeting with James was positive too. My main concern is still how we manage the publicity, to avoid – as you said – it ‘going ballistic’.

“We had a useful conversation regarding a statement from James with quotes from you and me …”

So it’s developing a response to that meeting following the meeting with James Arbuthnot and Alan Bates.

Mark Davies: Thank you. That’s – thank you.

Mr Blake: Does that assist you with identifying how it was that you were concerned that you were going too far or the Post Office was going too far?

Mark Davies: I genuinely don’t recall where I feel that that’s going would too far.

Mr Blake: The Second Sight Report was then finalised on 8 July 2013. Can we please now turn to POL00191689. We are on 11 July. If we could scroll down, please. There’s an email from you, it seems to yourself. Is it likely that you were just saving it or could you have been sending it to a wider audience that were bcc’d in, or?

Mark Davies: I don’t recall, I suspect from the email above that Susan had asked me for a summary of how the Second Sight Report had been received in terms of the media, and I’ve probably written an email to do that and then sent it to myself. I’m not entirely sure why I –

Mr Blake: It looks as though they were different email addresses –

Mark Davies: It may have been that they were on my personal email and then sent it to myself, yeah.

Mr Blake: “Horizon report – media and Parliamentary report

“Our strategy in relation to media coverage was to seek to contain coverage to those outlets which have followed the issue for some time. Supported by an external agency, Portland Communications, we were successful in doing so. This meant some high profile coverage on the BBC News at 10 on Monday and on Radio 4’s Today Programme, but beyond this, and a small piece in Metro, there was no other mainstream media coverage of the report. The news cycle in relation to the report lasted little over 12 hours … This is highly satisfactory, all the more so as no national newspapers followed up on the story (though we are currently dealing with a Telegraph enquiry).

“We decided not to accept interview requests from the BBC on the basis that doing so could give broadcasters a new line on which to run the story.”

I will return, again, to, that question I asked you this morning: do you think that that is part of an open culture?

Mark Davies: I think it’s very much part of a communications Directorate’s responsibilities. There’s a number of elements to what the communications profession is about, informing facilitating, but also minimising reputational risk, and one of the issues, as I said before, we were super – extremely concerned about was the potential damage that stories around the system being faulty could cause to customers, to postmasters, to clients, and so minimising negative media coverage of the report was part of what my job was about.

Mr Blake: “We were also proactive in challenging inaccuracies and contacted the BBC Legal Team through our external lawyers to register concerns over misleading headlines. This was successful in changing headlines and rebalancing coverage.”

Do you think that it was appropriate for the BBC Legal Team to be contacted by your external lawyers in order to change headlines?

Mark Davies: Where headlines were misleading, absolutely, yes.

Mr Blake: Can we please turn to POL00161960, 12 July. If we scroll down, please – sorry, scroll up slightly. 12 July 2013, it’s an email from you to Paula Vennells and you’re proposing, I think, a line:

“How about:

“As you know, the report into Horizon was published on Monday. While there was significant coverage on the BBC, the news cycle for the issue last little over 12 hours and there was little other coverage. We have, however, been contacted by the Telegraph which is planning a follow up piece.

“We expect this article to be significant, featuring case studies of those who believe they have been wrongly disciplined/convicted. We have worked hard this week to get our message across, including a pledge to meet with any subpostmaster who feels they have been poorly treated, but I do expect there will be negative comment. Specifically we are being asked to apologise to subpostmasters: without a final report, I judge that this would not be the right course of action.”

Why would it have to wait for a final report to apologise to subpostmasters?

Mark Davies: Well, I think – and there’s another email, I think, that you may come on to where we talk about whether or not to issue a blanket apology, and I think that’s the answer to the question, in a sense, is that, at this point in time, in July 2013, we’re in a situation where we believe the system is working well and effectively, and, yes, people are making complaints about it. We are offering to meet with anyone who feels that they’ve been poorly treated and I think that was the right thing, absolutely the right thing, to do. But to issue a blanket apology, based on what the evidence was at the time, wouldn’t have been the right course of action.

Mr Blake: So were you, as the Communications Director, on 12 July 2013, advising Paula Vennells, the Chief Executive that she should not apologise to subpostmasters?

Mark Davies: That’s what – yes.

Mr Blake: It says “without a final report”. I mean, was it your view at that time that you might be able to influence the report to water down Second Sight’s findings, perhaps to limit their involvement to reduce the amount of information that Post Office provided them, so it might mean that an apology wasn’t necessary?

Mark Davies: Not remotely.

Mr Blake: From that point on, was there any genuine attempt to actually assist Second Sight?

Mark Davies: Absolutely, as far as I know. I mean, I didn’t have dealings directly with Second Sight but my understanding always was that we sought to be cooperative and support Second Sight’s work.

Mr Blake: I’m going to take you to two documents before we break for our second break of the morning. Can we look at POL00192075, 15 July 2013:

“I have been reflecting on our conversation on Friday around Horizon.”

This to Paula Vennells:

“The danger in reputational terms is that the issue rumbles on without conclusion both before and after the ‘final’ Second Sight Report. This could really damage the business and hamper NT.”

NT?

Mark Davies: Network Transformation.

Mr Blake: Thank you:

“We need somehow to take the sting out of it, in advance of the report.”

So Second Sight haven’t yet reported but you want to take the sting out of what might become their final report:

“We are taking the right steps in looking to the future (with the Working Group, User Forum and independent adjudicator).

“But none of those will go far enough to address the damage which some believe they have suffered. These cases will continue and the noise will be louder as the [Second Sight] process concludes …

“So I wonder whether something like the following would work:

“We create an independent panel to oversee cases where a subpostmaster feels lack of training or support contributed to an issue …

“We proactively invite people to submit their cases to the panel …

“The panel is chaired by a QC or perhaps a former MP/peer.

“It hears evidence from a [subpostmaster] and [the Post Office] on the training and support elements and reaches a ‘judgement’.

“Evidence is made public.

“We allocate funding to compensate in cases where training and support judged to have fallen short …”

It looks there as though you are now trying to direct things away from Second Sight and their investigation and to, instead, focus on the training and support?

Mark Davies: Not at all, no. I think this was a genuine suggestion for an approach that we could take to try to address the issues that were being raised with us. As I said, the statement in the House of Commons that was made, I think on the day that the Second Sight Report was published, in which the Post Office Minister, Jo Swinson, said that she was extremely keen that Second Sight continued, for me, that made that position academic, which is why I think I don’t refer to Second Sight here because I think whatever anybody in the business wanted or didn’t want at that point, a commitment from the Minister in the House of Commons was really, really important. So I think, you know, as I say, these cases will continue and the knowledge will be louder as the Second Sight process concludes, and I don’t think there was any remote possibility that Second Sight wouldn’t be involved further, following that commitment from the Minister.

Mr Blake: You have emailed that document again to a wider group. Could we please look at POL00192329. If we start on page 3, at the bottom of page 3, Susan Crichton is emailing Andrew Parsons and says:

“Andy, our Comms Director at [the Post Office], Mark Davies, is keen to explore the concept of mediation (I will send you his thoughts separately) who is the bets person at [Bond Dickinson] to discuss this with and when could we do it?”

If we scroll up, we can see, on the first page, you’ve resent the email that I just read you to Susan Crichton, Andrew Parsons and a team of lawyers.

It does seem as though key planks of the Post Office policy were being driven by your communications objectives; would you agree with that?

Mark Davies: No, I wouldn’t agree with that. It was being driven by a desire to take action based on the Second Sight Report. I’d had some experience of seeing mediation in a previous role, when working in Government, and thought that, potentially, mediation might be a way forward in this instance, and that’s why I suggested it, and I think, as a member of the executive, it was entirely reasonable for me to do so.

Mr Blake: If we look down, scrolling down on that email, it looks very much as though you’ve decided that the message here on in would focus on the lack of training or support rather than the Horizon system; do you agree with that?

Mark Davies: No, I don’t agree with that because, obviously, Second Sight were continuing with their work on the system, but the lack of training and support that they raised was deeply, deeply shocking. I remember vividly talking to Paula Vennells about it when on the train home from work one day, and it was really, really shocking. She talked about the need for some kind of reconciliation process and I thought she was absolutely right about that because it was just not the kind of business that we were seeking to be. So that’s where that thought came from. You know, obviously communications was my day-to-day, my bread and butter, but I was a member of the Executive with responsibility for the broader direction of the organisation and this was an idea that I put forward.

Mr Blake: So Second Sight’s findings in relation to training and support were shocking, were they?

Mark Davies: They were.

Mr Blake: Were they so shocking that you included them in detail in the press release that followed the Second Sight Interim Report?

Mark Davies: We published the report and they were clear in there, and it was clear in the press release that we said that we were – they’d identified that training and support wasn’t adequate and we, of course, took the decision to publish their report so it was there on the public record.

Mr Blake: Did you properly convey the shock that you and Paula Vennells had in relation to the Second Sight Interim Report’s findings in that press release?

Mark Davies: With hindsight, no.

Mr Blake: Sir, that might be an appropriate moment for us to take our second morning break.

Sir Wyn Williams: Yes, by all means. What time shall we –

Mr Blake: Can we be back at 12.20, please.

Sir Wyn Williams: Fine. Thank you.

(12.07 pm)

(A short break)

(12.20 pm)

Mr Blake: Thank you, sir, can you see and hear me?

Sir Wyn Williams: Yes, I can, thank you.

Mr Blake: Thank you.

Mr Davies, we’re going to move now to 2015. Could we please look at POL00150869. This is 23 January 2015, if we scroll down, an email from you to a number of people within the Post Office. You say as follows:

“All

“I have been thinking about the question we will get about why we won’t let [Second Sight] look at everything – to which the obvious answer is there is no evidence of a problem – and how can we demonstrate no evidence of a problem.”

Then you say, “Could we get details of”, and you set out various things to look at.

You said before that you were committed to the Second Sight investigation and their final report. It does seem there as though you are trying to justify not letting your independent investigators make up their own minds as to what they should see; do you agree with that?

Mark Davies: I think there were elements that I was being advised that we wouldn’t want Second Sight to have access to, and I was concerned about that because, obviously, to your very point, it appears that we’re not therefore giving them access to everything and so, I think, I was just trying to look – to think of ways in which we could address that issue.

Mr Blake: Who are you saying advised you that Second Sight shouldn’t look at everything?

Mark Davies: Well, I don’t recall, I just don’t recall the – don’t really recall the background to this email, if I’m very honest.

Mr Blake: So were you, as at 2015, still committed to supporting Second Sight and their investigation?

Mark Davies: We were absolutely committed to trying to find whether there were systemic issues with the system and to support Second Sight in doing their independent investigations of all of the cases and their role within the Mediation Scheme, for sure, yeah.

Mr Blake: That sounds like a very careful answer to the question. Were you committed to supporting Second Sight in carrying out their investigation?

Mark Davies: I personally had no reason not to be supporting them, no.

Mr Blake: Let’s go back to a document that we saw earlier this morning, POL00102062, 23 January, and it’s – if we scroll down – your feelings as at 23 January:

“It’s fascinating to be part of a conspiracy. To be at the heart of a corporate cover up. But frustrating too, when the reality is a hard story to tell, and some distance from the picture painted by a determined band of adversaries.

“In our case, we are up against a campaign group, a few journalists (mainly from the BBC) and some MPs. And you have to hand it to them: they know what they are doing in terms of mounting a campaign. It’s just that – whisper it quietly – all is not what it seems.

“Yes there has been a Parliamentary debate. True, earnest journalists have presented breathless exposes on TV and radio. And indeed, the campaign group are nothing if not determined.

“But, you know, we’ve looked and we’ve looked. And looked again. We’ve had legal teams look. We’ve turned ourselves inside out trying to see if somehow, somewhere we’ve got things fundamentally wrong. We’ve questioned ourselves, prepared and open-minded to find scandal, error, systemic failure. I sometimes wish we had: it would all be water under the bridge by now.

“The issue is our computer system, the one we use to record six million transactions every day. Around 140 people think that it – or the associated processes around it – have caused them to experience financial loss in their branch.

“Bear in mind that almost half a million people have used the system since we introduced it more than a decade ago. Without problems (and we know that because if there were problems our subpostmasters, and the Federation which represents them, are rightly quick to tell us when we get things wrong).

“But we take the complaints we’ve had seriously, so we set up an inquiry. When that found no systemic problems, but suggested that our training and support had failed at times, we set up a Mediation Scheme to give people with complaints a chance to highlight issues. We invited people to come forward and xxx did so we then paid for them to get professional advice on making their case.

“Each of those cases has been reinvestigated, a minority … to be exact, were cases where people had been convicted.

“In some of the cases we have taken part in mediation, and in some we reached an agreement: admitted that in training and support we didn’t do enough.

“But in others we are standing firm. I’ve read many of the investigations. And we are right to stand firm. I’m sorry if that sounds unpleasant but it is just, I am afraid, the right thing to do.

“Of course it is really sat when people have faced challenges in their lives. Some of those with complaints have letters homes, gone bankrupt. But it doesn’t follow that the Post Office is responsible for those situations. As one complainant acknowledged in a letter he sent us for publication following conviction, urging others not to do what he did. He’s since changed his position and blames the losses he faced on our system.

“I can’t, though, provide more details. Each case is confidential – not a unilateral decision but an agreed position with those representing the individuals who have brought cases.

“This amounts, according to some of those who are as certain as they can be of our culpability, to secrecy. Despite our having shared literally thousands of pages of details of each case. None of which, by the way, has suggested any systemic problem.

“That hasn’t stopped MPs and journalists presenting the picture as they see it. That is their right, of course. It’s just that it is only part of the picture. And the missing bits tell a very different story.

“A story, as I said at the beginning that, because we are doing the right thing, we can’t tell. Which is hard.

“But that’s how it is at the heart of this corporate cover up.”

What was the purpose behind writing this?

Mark Davies: I don’t recall. I think I – it was an email that I wrote, I think potentially thinking maybe we could publish it or seek to publish it somewhere. I mean, obviously it looks absurd and ludicrous in the context of what we now know. I don’t think it ever was published anywhere else. I’m not sure what my colleagues thought about it.

Mr Blake: So that’s 23 January, and your view there was that the Post Office was alleged to be part of a conspiracy and that they were a determined band of adversaries set against it. Was Second Sight at that time part of the determined band of adversaries?

Mark Davies: I don’t think so no.

Mr Blake: Could we please turn to POL00117054.

If we scroll down, please, on that first page, you have an email from yourself to Paula Vennells, 26 January, so a couple of days later. You say:

“Hi Paula

“I hope you don’t think I’m being too strong here, but I think Patrick’s description of Second Sight is about right given their behaviour in recent weeks. They are, I am sure, colluding with JFSA rather than acting as independent players. I’ve never come across anything quite like this and I have challenged the team but, having done so, I’m now certain of it. Quite why this is the case I am not sure: perhaps their heads have been filled with the notoriety/attention they are getting, but I’m afraid to say that there is coalition campaigning against us, and they are part of it.”

Would you like to revisit for the answer you gave me a moment ago?

Mark Davies: Yes, thank you, I appreciate you – thank you for bringing that to my attention and the dates, absolutely right, and that does underline a concern that we started to have around Second Sight as to whether they were effectively working as independently as they should have been.

Mr Blake: Those are strong words that follow a very strongly worded think piece in that email that we’ve seen.

Do you think your memory has played tricks on you a little bit in terms of your recollection of the approach to Second Sight?

Mark Davies: Sorry, can you –

Mr Blake: Well, it looks very much like, by January 2015, the Post Office did not consider Second Sight to be an appropriate body to be investigating them?

Mark Davies: Oh, I think you’re right and I haven’t, in terms of the previous email – which I think you said was 24 January –

Mr Blake: 23rd?

Mark Davies: – absolutely, my recollection there has been incorrect. I absolutely did have those concerns in January 2015.

Mr Blake: Paula Vennells responds in the email above saying:

“How many often the [Second Sight] reports have you personally read?”

It looks as though that’s a reference not to the Interim Report but, in fact, to what we know as the CRR reports.

Mark Davies: Mm.

Mr Blake: We can’t find a response to that email on file. Are you able to assist us with whether you responded and, if so, how many of the reports you had personally read?

Mark Davies: I don’t recall if I responded directly to that email. I did read a significant number. I couldn’t give you a – it would be wrong to guess at a number but I read a number of them, yes.

Mr Blake: At that point in time, what did you understand Ms Vennells’s opinion on Second Sight to have been?

Mark Davies: I can’t recall.

Mr Blake: Was the view that you shared below one that was commonly held within the senior leadership of the Post Office?

Mark Davies: There was definitely a concern, yes.

Mr Blake: Did any particular individuals strike you as being particularly prominent in that concern?

Mark Davies: I don’t recall, particularly.

Mr Blake: I want to now move on to a number of specific broadcasts and the Post Office’s response to those broadcasts, starting with the BBC coverage of the Second Sight Report in September 2014. Could we, please, look at POL00101329. If we look at the bottom of the page it’s an email from 9 September 2014 from you – sorry, if we could – yes, that’s fine:

“Dear all

“Further to my note on Friday, a report on the leak has been broadcast within the last few minutes on BBC Radio 4. It is inaccurate and clearly will be challenging these inaccuracies.

“We will circulate a fuller update.”

So this is the leak of the Second Sight Interim Report, is it?

Mark Davies: No, because we published the Second Sight Report and that was in 2013.

Mr Blake: Yes, this is 2014; so what was the leak?

Mark Davies: I don’t recall.

Mr Blake: If we scroll up –

Mark Davies: Sorry to interrupt. If – yes, in fact, if you scroll down, I think he talks about part two “Further to Chris’ update [so this is me] about Second Sight’s ‘Part Two’”, so presumably their Part Two report.

Mr Blake: Yes, the leak of the Part Two Report. Could we scroll up to – there’s a further email from yourself, it says:

“Dear all

“The report has also been carried on Radio 5. We are having robust conversations with the BBC on accuracy issues, and holding on our lines.”

Who would you have been having robust conversations with at the BBC?

Mark Davies: I don’t recall the specific instance but, I mean, in the case of a Radio 5 report, we would have been in touch with their Newsgathering department, the news desk, essentially, at BBC Radio 5 Live.

Mr Blake: When you say “we”, is it likely that would have been you personally or somebody else?

Mark Davies: Apologies, it would be likely one of my Press Office team.

Mr Blake: Do you recall the robust conversations that were had on this occasion?

Mark Davies: I don’t recall this particular instance. It may be that there are other emails that will help to remind me.

Mr Blake: There’s another email on the same day. Let’s look at POL00101337. It’s the bottom of the first page, please. It’s an email from you to – is that the Communications Team or the Press Team?

Mark Davies: It’s – yes, it’s – well, it’s – and Legal. So Press Team, Nina, Ruth, Melanie, David Oliver was, I think, a programme manager on the Mediation Scheme, Chris Aujard was General Counsel and Jessica and Piero were both from the Legal Team.

Mr Blake: You say as follows:

“Hi

“Please specifically challenge suggestion that we ‘acknowledge’ there were faults with Horizon – this is straightforwardly inaccurate as below.”

This is the form of words:

“‘It wasn’t dishonesty by people like Noel, so the Post Office at least in this independent report that they commissioned, acknowledging here that these, around 100, 150 subpostmasters who are now pursuing claims against the Post Office may not have been at fault’.”

So that’s a transcription from the Radio 4 broadcast and you are asking your team to challenge the suggestion that the Post Office acknowledge that there were faults with Horizon.

Mark Davies: No, I’m asking them to acknowledge that, where they say the Post Office is acknowledging here that these 150 subpostmasters may not have been at fault, and that wasn’t what the report had said.

Mr Blake: Well, it says, “So the Post Office at least in this independent report that they commissioned, acknowledging here that these postmasters who are now pursuing claims may not have been at fault”; is that wrong?

Mark Davies: Yes, the Post Office wasn’t, at that point, acknowledging that those around 150 subpostmasters may not have been at fault.

Mr Blake: Was the independent report that they commissioned acknowledging that those who are complaining may not have been at fault, in the second report by Second Sight?

Mark Davies: I don’t recall whether the Second Sight Part Two Report said that but, certainly, we weren’t acknowledging that at that point.

Mr Blake: Another report of the same day POL00101365, please. If we scroll down there’s an email from yourself to Paula Vennells, and you say:

“Hi Paula

“The coverage is essentially accepting that we now accept through the report that there are issues with Horizon. It is sloppy journalism in the extreme. I have spoken direct to the journalist to (robustly) correct the impression he is creating and we are also talking to BBC Newsgathering. I’ve had a huddle with Chris and the lawyers and we hold that in our back pocket as potential action if coverage doesn’t change.”

Did you really think that the Second Sight second report didn’t suggest that there were issues with Horizon?

Mark Davies: Not systemic issues.

Mr Blake: Was there an allegation within that quote that we just saw before about systemic issues, is anybody dealing here with the question of systemic issues?

Mark Davies: I think that previous quote was saying that we acknowledge that the 100/150 subpostmasters may not have been at fault and, at that point, we weren’t acknowledging that.

Mr Blake: In your email here, “The coverage is essentially suggesting that we now accept through the report that there are issues with Horizon”. How is accepting that there are issues with Horizon sloppy journalism in the extreme? They were right, weren’t they?

Mark Davies: They were. There were the issues that were published in the Second Sight Report but, in terms of systemic issues, which was the allegation at the time made against the Post Office that, at the time, we didn’t have evidence to support, I think that was – that was a fair position to set out.

Mr Blake: Mr Davies, you’re clinging to the word “systemic”, and we see that in a number of emails: “No systemic problems, no systemic problems”.

Do you think you clung too closely to the word “systemic” when, quite plainly, Second Sight were saying that there were issues with Horizon?

Mark Davies: I don’t think so because I’m not a technical expert and I’m not a legal expert, and every conversation that I had within the Post Office throughout the time I was at the Post Office suggested to me that there were no systemic issues and so, all of the conversations I had with my colleagues in the IT Team and elsewhere, and all of the – there simply wasn’t the evidence to support that there was a systemic – there were systemic issues with Horizon.

Mr Blake: Who is –

Mark Davies: As far as we could see –

Mr Blake: – suggesting there are systemic issues with Horizon?

Mark Davies: The coverage from most of the journalism that we had was saying that the Horizon system was, quotes, “dodgy” and could have been leading to losses in branch and we simply didn’t, at that time, have the evidence to support that, other than –

Mr Blake: It could lead to losses in branch, couldn’t it?

Mark Davies: I beg your pardon?

Mr Blake: It could lead to losses in branch. You knew that much, didn’t you?

Mark Davies: We knew and we’d identified those two or the Second Sight Report had identified those particular issues, beyond that, we were faced with a system that seemed to be working very well, with 50,000 people using it every day processing thousands of millions of transactions every year and the NFSP, the Federation of SubPostmasters, assuring us that, from their point of view, that – they weren’t slow in complaining when there were issues that they wanted to complain about.

Mr Blake: Mr Davies, these are lines are repeated in year, after year, after year, that the Inquiry has seen in document, after document, after document. Why can’t you, in September 2014, simply accept that Second Sight had identified issues with Horizon – and you still don’t seem to be able to accept that today?

Mark Davies: I obviously, in hindsight, I accept that there were issues with Horizon and I deeply regret that we spent so long saying – delivering lines that turned out to be incorrect. That pains me grievously that we were in that position. I’ve never went into my job in any particular form as a journalist or in the years that I’ve been a Communications Director, ever sought to mislead, ever sought to not tell the truth to journalists. So I was saying what I believed to be the situation in good faith at all times.

Mr Blake: But you repeated today a number of times “systemic issues”. All that you are raising here is that the coverage is essentially suggesting that there are issues with Horizon. Why couldn’t the Post Office accept that there were issues with Horizon?

Mark Davies: I think you have to see this email in the context of that specific quote that we talked about in the previous email, where the journalist had said that the Post Office was acknowledging that we may have been at fault in relation to 100 to 150 cases and, of course, at that time, the Mediation Scheme was ongoing and we were seeking to work through cases, through the Mediation Scheme. And we’d entered into a process of confidentiality with people as well. So, to our minds, we were continuing with the investigation, and we were continuing to work towards finding the truth, getting to the truth.

Mr Blake: Let’s go back to the quote. It’s POL00101337, page 2. This is a direct transcription from BBC Radio 4, second page, please:

“It wasn’t dishonesty by people like Noel, so the Post Office at least in their independent report that they commissioned, acknowledging here that these, around 100, 150 subpostmasters who are now pursuing claims against the Post Office may not have been at fault.”

What is wrong with that?

Mark Davies: I think my reading of it at the time was that the statement was saying that the Post Office was acknowledging that around 100 to 150 postmasters had had a strong case to suggest that we were at fault and that wasn’t the position at the time. Clearly, with hindsight, everything has changed, and the context is really, really important but that’s certainly how I –

Mr Blake: Why does it need hindsight to read the words that are there on the page, that simply says “may not have been at fault”; that was right, wasn’t it?

Mark Davies: Not at that point.

Mr Blake: They may not have been at fault. May. It’s a pretty low threshold, wasn’t it?

Mark Davies: I think the point we were objecting to, which I think the journalist accepted in the end, was that the Post Office was acknowledging, at this point, that around 100 to 150 subpostmasters may have had a case and they were pursuing those particular claims at the time.

Mr Blake: I’ll move on to POL00 –

Sir Wyn Williams: Before you do, Mr Blake, let me understand this. We are here talking, are we, not about the Interim Report of July 2013 but something that came after it? When the words “independent report” are being used, that isn’t a reference back to the 2013 report? It can’t be because there was no mention of 100 or 150 subpostmasters in that? So this is something that came after it. Have I got that right?

Mark Davies: Yes, sir.

Sir Wyn Williams: Right. So is it the second report written by Second Sight or what?

Mark Davies: It’s the second report, sir, yes.

Sir Wyn Williams: Right. In that second report, did Second Sight say that 100 to 150 subpostmasters are pursuing claims against the Post Office on the basis that they may not have been at fault?

Mark Davies: I don’t recall, sir, whether that report specifically made that point. The point –

Sir Wyn Williams: Well, that’s what this extract appears to be saying, doesn’t it? Because it wasn’t saying, in fact, the Post Office, in its own document, had made this acknowledgement, because it says that “the Post Office, at least in this independent report that they commissioned, acknowledged”. There’s a big difference.

In effect, I am repeating Mr Blake’s question to you: what was inaccurate about it, if indeed the report suggested that 100 to 150 subpostmasters were pursuing a claim on the basis that they may not have been at fault?

Mark Davies: My reading, sir, at the time of this particular transcript was that it was suggesting that the Post Office acknowledging here that these claims may not – these subpostmasters may not have been at fault.

Sir Wyn Williams: Well, we can all, I’m sure – and I don’t mean this as a criticism of you at the moment – read words in slightly different ways, but, to my way of thinking, it is simply saying that, in an independent report which the Post Office has commissioned, they, if you like, the Post Office, may be acknowledging, et cetera, all right? But it’s making it clear, surely, that it’s coming from an independent report and quoting from it?

Mark Davies: I think that’s fair, sir.

Sir Wyn Williams: All right. Thank you.

Mr Blake: Can we please turn to POL00117183, 7 March 2015. If we scroll down we can see you have sent a number of documents to that distribution list. If we go up, there’s a response from Angela van den Bogerd. I think the documents, essentially, announce the end of the Working Group and the completion of the Second Sight investigations. She responds to you and she says:

“I have seen Jane’s comments already and have nothing further to add on the two letters.”

That’s a letter to Jo Swinson to Adrian Bailey, Members of Parliament:

“However, I do have on the press statement and my suggested changes are in red. These might not be the right words but I want to indicate that we haven’t simply gone through the motions rather we have done so with our eyes wide open.”

Then there’s a quote:

“‘This has been an exhaustive and informative process which has established that there are no system-wide problems with our computer system and associated processes. We will now look to resolve the final outstanding cases as quickly as possible’.”

Was that correct?

Mark Davies: The quote from Angela?

Mr Blake: Yes.

Mark Davies: I think so, yes. I mean, this, I think, is a report that the Post Office itself published in March 2015.

Mr Blake: Had it established that there were no system-wide problems, the second of the Second Sight Reports?

Mark Davies: That was certainly the view within the business, yes.

Mr Blake: But was it correct?

Mark Davies: To the best of my knowledge, it was correct at the time.

Mr Blake: Moving on to the Panorama programme in 2015 and the Andrew Bridgen debate in Parliament, also around the same time, could we please look at POL00117433. This is an email from you to Alwen Lyons. You attach a note below on the BBC Panorama and the Post Office. Is this an internal note, yes?

Mark Davies: Yes, I think this was probably intended for the Board, if – yeah, because I’ve sent it to Alwen, who was Company Secretary, I think it was intended for her to send to the Board so that they were in the picture.

Mr Blake: “I wanted to let you know that next week we expect further adverse media coverage (and a debate in Parliament) in relation to the Post Office and our Horizon computer system.

“The BBC plans a Panorama programme on 29 June while Andrew Bridgen MP has secured a short debate in the House of Commons on the same day.”

It says:

“We expect allegations to be made which suggest that we pressure people to plead guilty to criminal charges, have not provided appropriate information to investigators, have the ability to remotely access and alter branch accounts and have not investigated whether Horizon could be to blame for losses in branch accounts.

“We are engaging vigorously with Panorama. We provided a two-hour briefing earlier this month. It has become clear, however, that they plan to continue to make damaging allegations based on individual claims, and have interviewed Second Sight in doing so.”

It says:

“We are not currently planning to appear on the Panorama programme. This is because it plans to focus on three individual cases and we do not believe it is right to break the confidentiality we agreed when we set up the Mediation Scheme.

“It is also the case that those featured in the programme have asked the Criminal Cases Review Commission, an independent body, to examine their prosecution case. That is their right and we will cooperate fully with any requests made of us: what we won’t do is indulge in a public debate while that review is being conducted.”

Those two final paragraphs that I’ve read to you, were they an accurate reflection of the picture?

Mark Davies: The two – beginning with “Not currently planning” –

Mr Blake: So were you not currently planning to appear on the Panorama programme, simply because it was focused on the cases and because of the criminal cases review?

Mark Davies: We’d initially considered appearing and we had started to make arrangements to do so, but it became – and we had a two-hour briefing, as this note suggests, with the Panorama journalists where we very openly answered obviously any question that they had. It became quite clear after that briefing that they particularly were going to focus on individual cases, and we strongly felt that – I felt, and others in the organisation as well, felt that because the CCRC was involved and because of the confidentiality process that we’d agreed to through the Mediation Scheme, that it would be wrong to have a debate about individual cases on the TV rather than in the appropriate place.

Mr Blake: We saw in 2013 emails from you saying that “We don’t want to appear on the Panorama programme because we don’t want to give it material”, effectively –

Mark Davies: Yeah.

Mr Blake: – to assist it in taking further lines to take. Was that part of your thinking on this occasion?

Mark Davies: Sorry, can you repeat the question?

Mr Blake: We saw earlier today an email from 2013, I think it was, that suggested that you shouldn’t appear on Panorama back then because to do so would give them material?

Mark Davies: Yes, I think that was a separate – so in 2013 they’d made a tentative, I think, enquiry, actually through the NFSP, as to whether they might make a – suggesting that they might make a programme about these issues. I’ve never really connected the 2013 email with the actual Panorama programme that went out in 2015. The decision to not appear on the programme was taken for the reasons that I’ve set out there, that we didn’t want to discuss individual cases and it would have been – we felt it would have been inappropriate to do so. I felt it would have been inappropriate and I think that was a view shared across the business.

Mr Blake: Was it not part of your media strategy, though, to not put somebody up for interview if it could help prevent the story from becoming a story?

Mark Davies: It’s certainly a consideration.

Mr Blake: Is that reflected in this note?

Mark Davies: It doesn’t appear to be reflected in the note, but I think it would be widely understood to be a consideration, yeah.

Mr Blake: Can we turn to POL00174380, 5 August 2015. This is from you to yourself but it may be a group email that you’ve hidden the addresses from, perhaps:

“You will remember that I was in touch a couple of months ago about a programme being planned by the BBC’s Panorama programme, (not to be confused with Signed, Sealed and Delivered documentary which I am sure you will all be tuning in for at 9.00 pm on BBC2 this evening!) on the Horizon system.

“I wanted to drop you a quick line to let you know that – regrettably – Panorama has returned to the subject and plans a programme on 17 August. This will clearly contain damaging yet unsubstantiated allegations about the Post Office.

“The Communications Team continues to engage robustly with Panorama and we will do everything we can to protect our business and its reputation.”

Could I please turn to POL00162652. If we please turn to page 4., I believe a subpostmaster emailed in regarding the BBC broadcast on 19 August 2015 and we have here your response. You say:

“Dear Amjed

“Thank you for your email about the BBC programme which was broadcast on Monday night.

“I am really sorry that it concerned you so much. I also understand that. It painted a very worrying picture.

“I would like to reassure you on a few points.

“Firstly, the programme was very one sided …

“Secondly, I can assure you that the allegations made are untrue. The Horizon system is efficient and effective while the business takes its approach to prosecutions seriously: we do prosecute where there is evidence of wrongdoing but we never prosecute anyone for making innocent mistakes.

“There is no evidence in the cases featured on Panorama of issues in the Horizon system being to blame.”

Do you think it was right to send such a strongly worded response describing the allegations as “untrue”?

Mark Davies: I don’t think I say anything there that we didn’t say in our statement to the programme.

Mr Blake: If we scroll up, he responds on page 3, he says:

“Yeah I understand what [you’re] saying but if the BBC [are] saying that innocent people [are] getting prosecuted then that scarce the living daylights out of me.

“They must have some evidence to broadcast the programme?

“Also the BBC said that the Post Office has their own laws regarding punishment?”

If we scroll up you respond, you say:

“Hi Amjed

I think Angela is going to call you but just to reassure, the BBC has not seen all the evidence in the cases it featured. We don’t have our own laws – we have to meet the very high standards of the courts and we prosecute very rarely.”

He follows up again, at the bottom of page 2 and says:

“Yeah but I don’t understand why the Post Office doesn’t come forward and give their evidence or are they hiding something?

“I am going to call Angela [tomorrow] morning and have a talk.”

If you scroll up, you say:

“Good idea Amjed. I can assure you we try really hard to get our position across! But we can’t talk about individual cases publicly. This is the statement we issued …

“I [do] hope you have a good conversation … “

Do you think take that that was a fair reflection by the Post Office on the Panorama broadcast? Somebody who was clearly concerned about the implications and you have said, as I say, in strong terms “I can assure you allegations made are untrue, there is no evidence of cases featured in Panorama of issues in the Horizon system being to blame”.

Do you think the Post Office looked into that sufficiently before producing rebuttals such as that one?

Mark Davies: I do, I mean, I’m reflecting to Amjed the statement that’s linked there, that we gave to Panorama – our response to the Panorama programme, and I don’t know if he spoke to Angela, I hope he did. I think it was a fair reflection of the position, as we understood it at the time, in the context of what we understood at the time.

Mr Blake: One more document before we break for lunch. It’s POL00162672, 16 September 2015. Who are the recipients here?

Mark Davies: This would be Paul and Jonathan, who were the – they were responsible for the website, the internal website, and also a document called In The Loop, which was a kind of internal news document that we used to send out regularly and we would occasionally send out one-offs, and Alana Renner was Deputy Communications Director.

Mr Blake: You say:

“Hi

“Please can we schedule the note below for a convenient moment over the next few days for an In The Loop?”

So this to communicate to everybody who works at the Post Office or …?

Mark Davies: Senior managers.

Mr Blake: Senior management:

“You will recall that in August, the BBC broadcast a Panorama programme in which very serious allegations were made about the actions of the Post Office.

“In short, it was alleged that some postmasters were prosecuted over losses in branch when in fact there was no evidence to support such action. The suggestion was that the losses were caused by flaws in the Horizon system (despite the absence of any evidence to support this allegation in the cases referred to).

“We made clear at the time that these allegations were not true and that the programme was highly misleading. We also had some grave concerns about the way in which the programme was prepared and whether our position was properly reflected, given the BBC’s duty to ensure coverage is fair and balanced.

“I wanted to let you know that this week we have submitted a formal complaint to the BBC about the Panorama programme. This followed a meeting I held with the BBC’s director of news and current affairs and the editor of the Panorama programme.

“Please let your teams know about this: it is important that colleagues across the business are aware that we are highly active in seeking to defend the business’s reputation in the face of these unsubstantiated allegations.”

We have, by that point, had the Second Sight Interim Report and the Second Sight Second Report. Do you think that you looked into and enquired about the issues with Horizon sufficiently and reflected sufficiently in order to so strongly rebut the BBC Panorama broadcast?

Mark Davies: I do, yes.

Mr Blake: Thank you, sir. That might be an appropriate moment for lunch.

Sir Wyn Williams: All right. What time shall we start up again?

Mr Blake: Can we come back at 2.00, please?

Sir Wyn Williams: Yes, fine.

Mr Blake: Thank you.

(1.01 pm)

(The Short Adjournment)

(2.00 pm)

Mr Blake: Good afternoon, sir. Can you see and hear me?

Sir Wyn Williams: Yes, I can, thank you.

Mr Blake: Thank you very much.

Moving on to a new subject and that is advising in respect of the Group Litigation. Can we begin, please, with POL00162572, the bottom of the first page. This is 6 August 2015. It is just before the 2015 Panorama programme. It seems as though you’re circulating to Melanie Corfield and Mark Underwood a draft letter to Alan Bates, and you say:

“Hi

“What do you reckon? Would this work? I must say I am quite taken with it.”

The letter begins:

“As you know, a Panorama programme is due to air on Monday in relation to the Post Office and the Horizon system. At the same time we are writing to applicants in the Mediation Scheme to urge them to engage with us to arrange a time for mediation to take place.

“I know the [Justice for Subpostmasters Alliance] is urging applicants not to take part in mediation. That is your right, of course, and you have your reasons for taking this position.”

Just pausing there, that’s a phrase we see in quite a lot of your emails, or press releases or drafts. We see “that is your right, of course”. Is that an equivalent of you saying, “You’re wrong, we don’t agree”?

Mark Davies: No, it’s not saying that at all. It’s saying everyone has their right to take their position as they see fit.

Mr Blake: You then continue:

“I wanted, however, to write to you to urge you to reconsider the position”, and you set out various reasons.

If we scroll up to the top, Mark Underwood responds as follows, he says:

“My biggest concern is that this ‘recognises’ the [Justice for Subpostmasters Alliance] and since closing of the [Working Group] …”

“WG”, is that Working Group?

Mark Davies: Yes.

Mr Blake: “… we have made a conscious decision to try to avoid recognising them and their power to seemingly orchestrate applicants’ decisions.”

Were you aware of that conscious decision to try and avoid recognising the JFSA?

Mark Davies: I don’t really recall.

Mr Blake: “Whatever we have sent in the past has been manipulated and has been the springboard for conspiracy theories so at the moment I would be minded not to send the letter to JFSA, especially as [Alan Bates] will, as a disengaged applicant, will be receiving his own letter anyway which covers a lot of the similar points. My other thought is that we did end up sending it, I think sending it to all applicants would be dangerous as not all would be represented by the JFSA and it would promote JFSA to them.”

Can you recall, as at August 2015, a concern about recognising the JFSA and about sending potential applicants their way?

Mark Davies: I don’t really recall that, I’m afraid, I’m sorry.

Mr Blake: Moving on. POL00025509. We’re now in June 2016, and this is the terms of reference for the Postmaster Litigation Steering Group. It explains there that, at 1.2:

“The Postmaster Litigation Steering Group is established to coordinate Post Office’s approach and response to the Claim, and therefore brings together representatives from affected teams in the business as set out below …”

Can you recall whose idea the Postmaster Litigation Steering Group was?

Mark Davies: I can’t recall whose idea it was.

Mr Blake: Do you know how often it met?

Mark Davies: I think it met – it’s the one chaired by General Manager Network?

Mr Blake: Can we scroll down?

Mark Davies: Yeah, I think – so Tom Moran chaired it. So I think maybe – I can’t really recall but I think it probably met weekly or at least fortnightly.

Mr Blake: Is this the body through which significant matters in the litigation would be discussed and strategy discussed?

Mark Davies: It was certainly the sort of coordinating group, if you like, that would come to together to assess what was, you know, the latest developments, et cetera, et cetera.

Mr Blake: I want to look now specifically at the recusal application. Could we please turn to POL00157065.

So this is going on quite a bit in time, we’re now on 17 March 2019. Jane MacLeod emails Alisdair Cameron, as follows, she says:

“Al

“I have ready to send to the Board the following …

“Draft paper from me … which recommends the recusal application and retaining counsel on the basis I proposed to you yesterday.

“Lord Neuberger’s preliminary advice.

“Advice from [Womble Bond Dickinson] …”

It says:

“Lord Grabiner has commented this afternoon (not to be repeated):

“‘Treat this as my broad “yes that is okay’.

“I’m still wading through the treacle of this mad judgment. I don’t understand what he thought he was doing or what he thought he was supposed to be doing. The constant repetition of the mantra that he wasn’t deciding anything outside of the common issues is hardly credible. I’ve yet to get to the many other matters but I can see from Gideon’s note and from the various quotes that it just gets worse’.”

Then she says as follows:

“I have discussed stakeholder and comms issues with both Mark and Patrick. They both acknowledge that this will be difficult to manage and will cause significant noise in more than one quarter, however, they are both supportive of a strategy that delivers the best legal outcome for Post Office.”

What do you recall of the conversation you had with Jane MacLeod?

Mark Davies: Well, my recollection is largely, as effectively set out here, in that she updated me on the potential proposal to apply for recusal and asked me for my view as to how that would – what sort of reaction that might provoke in external communications terms, so in terms of the media or, indeed, wider stakeholders, MPs, et cetera, et cetera.

Mr Blake: Can you recall what her personal view was?

Mark Davies: I can’t recall her personal view, no.

Mr Blake: Why do you think it was that the Communications Director, you, would be involved in the decision as to whether to seek the recusal of a judge or not?

Mark Davies: I think it’s not really a question of whether I was involved in the decision; I think it was a question as to whether – as to the business assessing what the potential reaction externally, in media terms and MP terms and other stakeholder terms, might be, as part of a process of reaching a decision a very – clearly very difficult and challenging finely balanced decision.

Mr Blake: Can we turn to POL00021563, please. This seems to be a Board meeting. Was it unusual to have these attendees at this particular – at the board meeting?

Mark Davies: Sorry, unusual to have?

Mr Blake: We see a number of attendees from Norton Rose, we see –

Mark Davies: Sure, sure.

Mr Blake: – Jane MacLeod attending as well. Do you recall this being a particularly noteworthy meeting at all?

Mark Davies: I recall that it was – I think it was a – effectively a special meeting to consider the recusal question.

Mr Blake: If we scroll down, please, we have a summary of the discussion with Lord Grabiner, and we have Jane MacLeod there reporting about the call that had been held, that:

“[He] had reviewed the Common Issues Judgment and understood how it impacted on the current and prospective trials. He noted that the judge had received several warnings about allowing inadmissible materials but had chosen to do so and as such had behaved improperly and was wrong as to the law. It was an unusual case which was unusual procedurally.”

If we go over to page 4, please, about halfway down, it says there:

“Mark Davies’ view was sought from a communications and stakeholder perspective.”

Who did you see as the stakeholders?

Mark Davies: Well, it would be the – I suppose all of the people involved in this issue from the JFSA through to MPs and peers, others, but obviously the broader media, as well. I think it was, you know, a general question as to how this decision would effectively land, if you like, in those different quarters. So I gave my view, which I think, notwithstanding it was likely to generate some adverse publicity, but, obviously, it wasn’t a decision that should be taken based on, you know, how it would be received in the media or among stakeholders.

Mr Blake: Were you often called upon to give a stakeholder perspective?

Mark Davies: Yes, it was part of my job.

Mr Blake: Do you count subpostmasters as stakeholders?

Mark Davies: Yes. I mean, both in terms of the NFSP, so the representative body, the JFSA, so individual subpostmasters themselves. Obviously there were different sorts of different groups of postmasters. There was obviously the Crown branches that we owned or the Post Office owns, there was the large main Post Office branches, there were the local branches. So, absolutely yes.

Mr Blake: It might be suggested that the decision to seek the recusal of the judge was quite an aggressive litigation tactic. Can you see how, if the stakeholders were subpostmasters, it might actually be in their interests not to take such a tactic?

Mark Davies: Not to take recusal?

Mr Blake: Yes, as in might it have been in some stakeholders’ interests not to have approached the litigation in that way?

Mark Davies: Absolutely.

Mr Blake: Did you make that clear?

Mark Davies: Absolutely.

Mr Blake: So you explained to the Board on this occasion that they might want to consider the interests of subpostmasters?

Mark Davies: Well, I mean, I don’t recall the conversation, I really don’t. I do remember that it was, you know, obviously a very finely balanced decision and there was no question that such a significant step would have caused a significant amount of media and other interest, and a part of that would be a stakeholder reaction from within the subpostmaster community that would undoubtedly be concerned, at the very least, about such a decision.

Mr Blake: Protecting the business long term, presumably also included protecting the interests of subpostmasters?

Mark Davies: Absolutely.

Mr Blake: Was that something you communicated to the Board?

Mark Davies: I can’t recall the conversation.

Mr Blake: If we turn over the page, we can see that:

“After careful consideration of all the arguments, each Director present and participating in the decision, supported a resolution of the Board that an application should be sought for the judge to recuse himself from the case …”

Can we please look at POL00359871. If we look at the bottom email, please. Can you assist us, was this an announcement of some sort that you were drafting?

Mark Davies: So this looks like we’d been asked to make a – to draft a statement on the decision that the Board had reached to recuse, to – sorry, to seek application to recuse.

Mr Blake: You say:

“We have reflected in great depth on the long and detailed judgment from the first trial. After serious consideration and following advice from external legal counsel not previously engaged on these issues, we have decided to seek leave to appeal the findings.

“Furthermore, we will today also be making an application for the sitting judge to be recused from the ongoing and upcoming trials. We are acutely aware of the significance of this application, but (based on the [evidence] we have received) we have serious reservations about the judge’s ability to remain impartial in ongoing and future Post Office hearings.

“We do not take this action lightly. However we passionately and firmly believe that this application is in the best interests of Post Office customers, postmasters and their staff and the communities who rely on our network and services every single day.

“We will take urgent steps to address the criticisms made in the judgment about aspects of the Post Office’s practices and behaviour but have confidence in our position and defence of this group litigation.”

If we scroll up, please, Patrick Bourke responds and says:

“I think this is much better – preserves the tone, but much shorter. Two immediate observations – can we reintroduce the fact that we are making operational changes following the judgment, so we can’t be accused of burying our head in the sand; and I might be tempted not to use the word ‘passionately’, not because I disagree with the sentiment, but because I wonder whether, again, someone might say this is an emotional reach which just goes to show how incapable we are of being objective and open to the possibility of our being wrong … or some such.”

Can you recall how high up within the organisation this particular press release or statement went?

Mark Davies: Well, it wouldn’t have been signed off without it going, I imagine, certainly to the Executive, to the Group Executive and probably to the Board as well.

Mr Blake: Can we turn to POL00269602. You have, by this stage, if we turn over to the second page, I think, circulated the draft.

Mark Davies: Yeah.

Mr Blake: This is 21 March, 9.43 am to Jane MacLeod, and you say:

“As the application for recusal will be made this morning and likely to be public by lunchtime, we have prepared the statement below with input from Portland and Legal Team.”

How often would you involve Portland Communications?

Mark Davies: Well, over the course of the period I was at the Post Office, it would depend whether they were working for us at that particular time. They were a public affairs communications agency who, I think, had been brought in to work with us on this particular issue at this particular time. They’d been – worked for us previously on different briefs and as had other public affairs organisations. But, obviously, on a statement as important as this one, we would absolutely get their view on it.

Mr Blake: You say:

“I would like to send to the board and BEIS/UKGI for information and we will also prepare internal and stakeholder communications.”

Then Jane MacLeod responds on the first page, if we scroll up, she says:

“Try this … (Al off copy).”

Can you recall why Alisdair Cameron was removed from the copy?

Mark Davies: I can’t recall, no. I mean, I think – and I think I recall that Jane and I spoke about obviously needing to have a statement prepared for this announcement and I’m pretty sure we spoke either that day or the previous day very early in the morning, which was then the basis of the statement that she has then amended here. Mr Cameron, at the time, was the Interim Chief Executive, I think, or perhaps – I can’t quite recall but Paula Vennells was – had either left by that point or was away because of family – for family reasons.

So Alisdair was the acting CEO, so it’s possible that she removed him just to ease his inbox while we made final changes before we then went to him with the final proposal.

Mr Blake: We scroll down she has struck through the following, it says:

“We will continue to make operational and other improvements, including those raised by the judgment, in the interests of our customers and postmasters.”

She struck through as follows:

“… including those raised by the judgment. The applications we will be making [have made] reflects, however, our overall confidence in the legal position relating to our defence of this Group Litigation.”

Then she has also struck through below. Were you aware of any concern on her part about the confidence in the legal position?

Mark Davies: Not that I recall, no.

Mr Blake: I want to move now to the Horizon Issues judgment. Can we please turn to POL00281725. We’re now on 28 August 2019. If we could have a look at the bottom email, Melanie Corfield emails, there’s a zip file of documents for the recipients to look at. I’ll come back to the top email, I just want to take you to a couple of the underlying documents. Can we please look at POL00023606. This is one of the attachments, this is number 5. There are, as I say, a large number. Were you involved in the drafting of this?

Mark Davies: No.

Mr Blake: Who would have been involved in the drafting?

Mark Davies: Melanie led on the drafting. This was preparatory work for a judgment, so, obviously, at this point, we didn’t know what the judgment would say but it was work we would do as a matter of course, really, to prepare for judgments or – judgments or indeed any kind of event that was about to take place that affected the Post Office. We’d obviously prepare, have pre-prepared material.

Mr Blake: Were you Melanie Corfield’s manager, supervisor?

Mark Davies: I wasn’t her direct manager but she was part of my team, absolutely, yeah.

Mr Blake: It looks as though there is a call script being prepared for you or it says, “Mark Davies [to be confirmed]”?

Mark Davies: Yeah.

Mr Blake: If we go over the page, please, one of the points to make, it says:

“We should be reassured that the view of both independent expert witnesses who gave evidence in the litigation is that all the indications are that Horizon is robust, comparing well with similar systems across retail and financial service sectors which have to be highly reliable.”

There’s another attachment. Can we please turn to POL00023623. In very similar terms, there’s a video script. It says, “Delivered by Mark Davies [to be confirmed]”.

Were you going to be on camera making a statement or what is this for?

Mark Davies: Well, again, this is preparatory work for the judgment. We didn’t know when the judgment would be handed down so these scripts, pieces of communications were being prepared in anticipation of the judgment being handed down and, of course, would be revised and amended, subject to, of course, the finding, which, of course, self-evidently at the time, we didn’t know the what judgment would be. So I think the “Delivered by Mark Davies TBC” is a possibility that I might have done that video but it’s entirely possible that somebody else might have done it.

Mr Blake: The second bullet point says:

“The judgment raises a number of issues [and criticisms] but what I want to do straight away is reassure you about that we can have confidence in the overall robustness of Horizon and that it compares well with systems used by other retail and financial services companies each day. Both independent experts, for Post Office and the claimants in the case, on opposite sides of the litigation, confirmed this.”

Then if we go back to the email we were looking at before, that’s POL00281725, we have comments to Melanie Corfield from Andrew Parsons, the lawyer at Womble Bond Dickinson, and he says as follows, he says:

“The one repeating message throughout the documents is that Horizon is robust because both experts say so. This is correct as at today, but if the judge finds that Horizon is not robust then he will likely have found a reason to sidestep or disavow the expert evidence. In those circumstances then I’m not sure this comms message will hold water. It may be worth working up an alternative comms package on the basis that the Judge throws out the expert’s views.”

Just pausing there, as at 28 August 2019, was it unclear within your team that – were you not aware, within your team, should I say, that a possibility was that the judge could actually find that Horizon was not robust?

Mark Davies: Oh, of course. I mean, it was entirely possible. I mean, Andrew Parsons is right to raise these issues.

Mr Blake: Did they come as a surprise to you?

Mark Davies: Not at all. I mean these were preparatory – as I say, documents that were being prepared in advance of any announcement so we had to think through well, what sorts of materials will we need for that judgment? So they would be prepared as drafts but then, obviously, once the judgment had come in, would be revised extensively to be in line with that judgment, effectively ripped up and started again. So Andrew was – Andrew’s quest – Andrew’s point about the one repeating message – “If the judge finds that Horizon is not robust, then he will likely find a reason to sidestep or disavow the expert evidence, in those circumstances I’m not sure this comms message will hold water” – he’s completely right about that and Melanie and all of those who were preparing this package would have been similarly aware but were working based on what they understood at the time.

Mr Blake: Was Mr Parsons quite involved during the litigation, in feeding into these communications messages?

Mark Davies: We always sought to make sure that – because communications messages are not just produced by the Communications Team; they’re produced by Communications Team and then in collaboration with other teams across the organisation and Mr Parsons was – and external organisations as well, and Mr Parsons was part of that broader group of people dealing with the litigation. So, you know, he’s right to raise the point but it would have been a point that we would have all said, “Well, yes, that’s right Andrew, we totally hear what you say”, because we’re not just going to put out what we want to put out, we’re going to see what the judgment says and, of course, the judgment would have said something very different. We would have torn up those materials and started again.

Mr Blake: We see also a further comment on the paragraph below.

Mark Davies: I beg your pardon, sorry?

Mr Blake: We see a further piece of advice on the third paragraph on the page as well.

Mark Davies: Mm.

Mr Blake: I want to move on to issues of non-disclosure in the litigation. Could we please look at POL00112596. This is an email halfway down from Ben Foat on 2 October 2019. He emails Nick Read, Alisdair Cameron and you. He says:

“A disclosure issue has arisen in respect of the [Group Litigation Order] Horizon trial for you to be aware. It appears that Post Office failed to disclose potentially relevant documents in those proceedings. You will recall that we are currently awaiting the Court’s judgment in respect of those proceedings.”

If we look at the top of the page, you say that you will brief the Comms Team as discussed. Do you recall this issue?

Mark Davies: I absolutely recall the email from Ben and it was obviously a – I think there’s another email that’s been disclosed from Alisdair Cameron, which I think captures very –

Mr Blake: Let’s have a look at that, shall we? It’s POL00112591 and this is Alisdair Cameron’s response. He says:

“Ben I read this with real distress, it is horrendous. Of course we must tell the court immediately now we know. The narrative should be very clear that Fujitsu told us one thing and have now told us something else and we have at all times told the court what we believe to be true.”

He says:

“Fir FJ [I think that might be ‘For Fujitsu’] we have time to make decisions but this is the third time they have misled us or changed stories and I think we have to follow that logic. So, what is the appropriate response? Do we need to insist that a third party review and test their evidence?”

In your witness statement you have been very complimentary about Paula Vennells, about Angela van den Bogerd, about Alice Perkins. I don’t believe that there is a mention in complimentary terms about Alisdair Cameron. The openness that you have been discussing seems evident in this 2019 email. Why haven’t you praised Alisdair Cameron in the same way?

Mark Davies: There’s no particular reason for that. He captures in this email extremely well the sense of distress and anger that there was when we got that email from Ben. I worked closely with Alisdair, a huge amount of admiration for him.

Mr Blake: I’m going to move on to the topic of remote access now. Could we please begin with POL00028062, and this the Deloitte report of 23 May 2014. It’s page 31 I’d like to look at. When did you first become aware of this report?

Mark Davies: I don’t think I’ve ever seen this report but I was aware of Deloitte obviously having done the work, I guess probably around the – I don’t know exactly when. I’d be guessing.

Mr Blake: Okay. If we scroll down we can see some passages from the report. The Inquiry has seen these number of times, I will speed through them. The first is:

“A method for posting ‘balancing transactions’ was observed from technical documentation which allows for posting of additional transactions centrally without the requirement for these transactions to be accepted by subpostmasters … Whilst an audit trail is asserted to be in place over these functions, evidence of testing of these features is not available …”

Third bullet point says:

“For ‘balancing transactions’ … we did not identify controls to routine any monitor all centrally initiated transactions to verify that they are all initiated and actioned through known and governed processes or controls …”

The final bullet point:

“Controls that would detect when a person with authorised privileged access used such access to send a ‘fake’ basket into the digital signing process could not be evidenced to exist.”

You say that you were aware of the report in broad terms. Can you recall when you first discussed the report with anybody?

Mark Davies: No, I can’t recall that.

Mr Blake: Were you aware of the significance of the report?

Mark Davies: No I wasn’t. I don’t think I ever saw this report and, certainly, this is – obviously I saw it when it was disclosed to me but I didn’t see it at the time.

Mr Blake: Could we please look at POL00308968. I’m going to look at a series of emails discussing the issue of remote access. This one is from Melanie Corfield to you in December 2014, so the same year as that report. She is sending an email regarding various comms lines. Then if we look halfway down, there’s a section on remote access. She says:

“I am working on the dismissal of the ‘remote access conspiracy’ theory. It is so totally loony and need right words to explain that.”

Was that a view that was shared within your team, that the remote access issue is a loony conspiracy theory?

Mark Davies: They’re not the words I would have used.

Mr Blake: Did you respond and say, “It’s not a loony conspiracy theory”?

Mark Davies: I don’t think so, no. I mean, I think we – as I understood it, remote access in whatever form had been used in a very limited amount – I think maybe one case and so, in a sense, we – where we were being told or believed – people believed that the Horizon system didn’t work as it should do and that money was being lost through – in branches as a result, it didn’t seem to make much sense that remote access would be the cause of that. We were unclear who would be seeking remote access to branch data and why they would be moving money around using that, so it seemed unlikely.

We were told there was a basement facility at the Bracknell headquarters of Fujitsu, where men in plain clothes were accessing the system and moving money around, and it all felt – it didn’t feel like the kind of organisation that we knew we were part of.

Mr Blake: We’ve seen various emails from yourself talking about conspiracy theories in very similar terms to the words used there. Was there a culture in your department that made it okay for those who worked under you to refer to these kinds of issues as totally loony?

Mark Davies: No, there wasn’t.

Mr Blake: Can we please look at POL00162285. It’s an email of 30 January 2015, very early in the morning 7.29 in the morning, from Paula Vennells regarding the upcoming appearance at the Select Committee.

“Dear both, your help please in answers and phrasing those answers, in prep for the [Select Committee]:

“1) ‘is it possible to access the system remotely? We are told it is’.

“What is the true answer? I hope it is that we know this is not possible and that we are able to explain why that is. I need to say no it is not possible and that we are sure of this because of xxx and that we know this because we have had the system assured.”

Did those words stick out for you at all?

Mark Davies: They stick out in the sense that Paula was seeking to get absolutely to the bottom of whether or not remote access was possible or not because she needed to be able to explain exactly what the position was.

Mr Blake: It might be suggested that the words there “I need to say no it isn’t”, was, in fact, an instruction to look for material that tended to go against remote access?

Mark Davies: That’s categorically not the case.

Mr Blake: “2) ‘you have said that this is such a vital system to the Post Office, what testing do you do and how often? When was the last time?’”

So there are two separate questions: one on remote access and the second on testing. It says:

“Lesley, I need the facts on these – I know we have discussed before but I haven’t got the answer front of mind – too many facts to hold in my head! But this is an important one and I want to be sure I do have it. And then Mark, to phrase the facts into answers, plus a line to take the conversation back up a level – ie to one of our narrative boxes/rocks.”

That’s the reference to rocks. Do you recall I took you very early on to an email in which you outlined three rocks? It certainly looks like Paula Vennells there is referring to the rocks that you developed.

Mark Davies: No, not those rocks. “Rocks” was a phrase that Paula would use from time to time. She obviously, when she was doing a Select Committee or some other kind of interview she would often say: what are my three rocks? What are the three key facts in this particular issue? So it was a phrase she used regularly in all sorts of contexts.

Mr Blake: Can we turn to POL00150992. We’re still in the early hours. It’s the top email, Lesley Sewell – it’s not sent to you but we’ll see in due course what happens. Lesley Sewell says:

“Julie/Dave …”

Who are Julie George and Dave Hulbert?

Mark Davies: As far as I recall, they were colleagues of Lesley’s in the IT Team.

Mr Blake: Lesley says:

“I need some help with both of these.

“Julie: the first is for you. This really is in the back of the Deloitte review.”

Now, looking at that now, do you understand that to be a reference to the Deloitte report we just looked at?

Mark Davies: Yeah.

Mr Blake: She says:

“This is fairly urgent as Paula is preparing for Select Committee next week.”

Was there a conversation between Lesley Sewell and yourself about the Deloitte review at this stage?

Mark Davies: I can’t recall with any certainty. It’s entirely possible but I can’t recall. I had many conversations with Lesley.

Mr Blake: POL00386587. We’re moving from 7.35 to 8.11 in the morning. Lots of activity first thing. If we look at the top email – thank you – so from Melanie Corfield to you and Jane Hill. She says:

“Thanks Mark. We are already well covered on (1) – it’s in the existing brief (remote access IS possible but we have strong line on conditions for that).”

Do you recall that the initial response from your team, Melanie Corfield in your team, was that remote access is possible?

Mark Davies: In certain circumstances, yes. Yeah.

Mr Blake: POL00162287. 8.29 in the morning, halfway down – thank you – we have Lesley Sewell emailing you and saying:

“I’ve got my guys pulling something together, then we should catch up.”

You see that’s why I asked about the Deloitte report because Lesley Sewell has, straight after receiving the email from Paula Vennells, referred to it being in the Deloitte report. Then it seems as though there was a proposed catch-up. Do you recall whether there was or wasn’t a catch-up around that time?

Mark Davies: I don’t recall, I’m sorry.

Mr Blake: If we scroll up to the top, we have an email from you saying:

“Hi

“Ta. There are lines already which Mel can send you – then we should review.”

Again, suggestive that there was some sort of collaboration –

Mark Davies: Yeah.

Mr Blake: – I don’t mean that in a negative way but between you and Lesley Sewell?

Mark Davies: So no, it would be a case that the lines that Mel had referred to on the previous email, which we already had on this issue, making sure that those lines were still correct, based on what Lesley and her team would – the work that they would do.

Mr Blake: If there were something significant like we’ve just seen in the Deloitte report, would you have expected Lesley Sewell to have brought it to your attention?

Mark Davies: Yes.

Mr Blake: Can you recall having any conversation about it?

Mark Davies: Beg your pardon?

Mr Blake: Can you recall having any conversation?

Mark Davies: I can’t. I can’t recall the conversation with Lesley on this subject. I mean, I’m sure I had many conversations with her on the subject but I don’t recall a specific one on that day.

Mr Blake: Could we please look at POL00031538, page 3. It’s an email from Dave King at the bottom, the Senior Technical Assurance Manager; do you recall Mr King?

Mark Davies: No.

Mr Blake: He says:

“Julie, I have answered as best I can but I understand that Kevin Lenihan is also getting the information from Fujitsu (I do know these have been answered for the lawyers and Deloitte when they were looking at this):”

So again, another reference to Deloitte there. It says:

“The system has remote access only for Fujitsu support personnel through a support gateway against which all activity is monitored.

“All transactions are written to an immutable audit trail at the point of completion and it is from this store that any evidential information is obtained.”

So that looks like confirmation that remote access is possible for Fujitsu support personnel?

Mark Davies: Mm-hm.

Mr Blake: Do you agree with that?

Mark Davies: I do.

Mr Blake: If we scroll up, there’s an email – it’s that email at the top, so if we could scroll slightly further up – an email again from Dave King to Julie George, and he says as follows:

“There is no remote access to the terminals in branches. The only access channel is through the support network for software updates etc. There is nothing stored on the terminal all transactions are committed at the data centre. It is not possible to instantiate a remote desktop session on a terminal and undertake transactions as if it were being done at that terminal.”

So that seems to be confirmation that you won’t see, for example, a cursor moving or anything along those lines; do you understand that?

Mark Davies: I think so, yeah.

Mr Blake: Then if we scroll up on that page, we can see that Lesley Sewell forwards that to you on 30 January. She says:

“Mark

“Please see below.”

Then if we scroll up, please, we see your response as follows. You say:

“Hi

“I’m still really confused about this – Dave says below:

“There is no remote access to the terminals in branches.

“The only access channel is through the support network for software updates. There is nothing stored on the terminal all transactions are committed at the data centre. It is not possible to instantiate a remote desktop session on a terminal and undertake transactions as if it were being done at that terminal.

“This seems to conflict with our lines where it says that ‘it is possible to add to transactions to make a correction’.

“We need (obviously) to be absolutely certain on all this. Help!”

If we scroll above we have response from Julie George which says:

“As I understand it … Kevin Lenihan is pulling this all together for Melanie to make sure there is only one version and one comms route.”

Could we please turn to POL00151050. It’s the third page, please. Thank you. The third page. It’s an email from Mark Underwood at 3.50 pm, and he is emailing, is that James Davidson and Kevin Lenihan, and he says:

“Hi Kevin my proposed answer to the first question below (it can be sent in its entirety to Mel and she can pick and choose). Though this will need to be signed off by James as accurate.”

Then if we scroll down:

“In terms of [Question] 1

“This question often phrased by applicants and Second Sight is:

“‘Can Post Office remotely access Horizon?’

“Phrasing the question this way does not address the issue that is of concern to Second Sight.”

This seems to be a stock answer that was prepared for the Second Sight Report; is that correct?

Mark Davies: I think that’s correct. That looks correct, from looking at these.

Mr Blake: “… issue that is of concern to Second Sight and applicants. It refers generically to ‘Horizon’ but more particularly is about the transaction data recorded by Horizon. Also the word ‘access’ means the ability to read transaction data without editing it – Post Office/Fujitsu has always been able to access transaction data, however it is the alleged capacity of Post Office/Fujitsu to edit transaction data that appears to be of concern. Finally, it has always been known that Post Office can post additional correcting transactions to a branch’s accounts but only in ways that are visible to subpostmasters. It is the potential for any hidden method of editing data that is of concern.”

Another question:

“Can Post Office or Fujitsu edit transaction data without the knowledge of a subpostmaster?

“Post Office confirms that neither it nor Fujitsu can edit transaction data without the knowledge of a subpostmaster.

“There is no functionality in Horizon for either branch, Post Office or Fujitsu to edit, manipulate or remove a transaction once it has been recorded in a branch’s accounts.”

So it looks as though that actually pre-dates the other information that we’ve seen, because that is, as we’ve discussed, a response to applicants and Second Sight.

Mark Davies: Mm.

Mr Blake: If we stick with this email chain and go to page 1, please. If we scroll down, there’s another response from James Davidson, who’s actually, I think, from Fujitsu, the Post Office Account. He says as follows:

“I have just seen this as was working in another mail to you which I have posted below.”

He posts the original draft that he was going to send:

“Having looked again at the request from Paula, it appears that the fundamentals around this question (remote access) are not understood. I suggest that Paula is briefed along the lines of the following.

“1) No transaction data is held locally in any branch.

“2) Subpostmasters directly manage user access and password setting locally …

“3) Once a transaction has been completed, there is no functionality (by design) for transactions to be edited or amended. Each transaction is given a unique number and ‘wrapped’ in a digital encryption seal to protect its integrity. All transactions are then posted to a secure and segregated audit server.

“4) On approval, there is the functionality to add additional transactions which will be visible and have a unique identifier in the audit trail. This is extremely rare and only been used once since Go Live of the system in 2010 (March 2010).

“5) Support staff have the ability to review event logs and monitor, in real time, the availability of the system infrastructure as part of standard management process.

“6) Overall system access is tightly controlled via industry standard ‘role based access’ protocols and assured independently”, et cetera.

Could we please turn to POL00151049. That email is then forwarded to you by Lesley Sewell, at 5.28 pm on 30 January. Can you see, if we scroll down, we can see that email; do you agree with that?

Mark Davies: Sorry, yes.

Mr Blake: Can we turn to POL00029812. This is an email from Melanie Corfield just over an hour after confirmation had been provided that it was possible. If we scroll down, we can see we’re there at 6.17:

“Thanks again to everyone. This all provides the reassurance needed for Paula in my view [regarding] any [questions] that come up on this. If we get more queries on any aspect I will let you know.”

By the end of January 2015, was it all a little bit muddled at the Post Office, with regards to remote access?

Mark Davies: I don’t think so.

Mr Blake: What do you think the position was?

Mark Davies: That remote access was potentially possible in certain circumstances.

Mr Blake: Could we please turn to POL00029849. This is Second Sight’s Part Two Report of 9 April 2015. Could we please turn to page 30. So we were looking at January 2015 before, we’re now in April 2015. Halfway down the page, this is a section on “Transactions not entered by the subpostmaster or their staff”. 14.4 says:

“One applicant to the scheme had given evidence relating to the facility in the Bracknell office …”

They say at 14.5:

“Our review of those files has been inconclusive, possibly due to just one month of data being provided, rather than the 12 months requested. We believe that it is essential to examine contemporaneous documents from the relevant time, in order to form a reliable, evidence based, conclusion on this important aspect.

“Several applicants have stated that they believe (or suspect) that their branch terminals have been, or can be, accessed remotely or that their branch data can be amended without their knowledge or approval. Post Office have denied that it is possible to:

“‘amend branch data remotely’.”

If we scroll down, please, to 14.10, they say:

“In our Interim Report we referred to a software bug in Horizon that had impacted a small number of branches. We have recently discovered two further documents that describe in more detail how the Post Office handled this issue. In both of these documents a process is described that involves directly altering branch data. The fix for this error reported in the document named ‘Correcting Accounts for “Lost” Discrepancies’, created by a senior engineer at Fujitsu in September 2010 …”

It says:

“The data can be corrected by adjusting the appropriate Opening figures and BTS data that relates to the current TP. This will result in the discrepancy needing to be processed when rolling over into the next [trading period].

“I propose that if we are to do this then we take a copy of the data for one branch and check out the proposed changes on a test system and then roll over the branch on the test system to ensure that the discrepancy is handled correctly before we attempt to correct live data.”

Then it says at 14.11:

“This document refers to correcting live data, a procedure that Post Office has denied was possible. Of potential significance is the fact that this was not just an internal document made available to a small number of Fujitsu employees, as the copy we were provided with was printed out by the head of Post Office’s legal prosecution team in October 2010.”

So you’ve said that, looking at those earlier emails, it was sufficiently clear to the Post Office that it was possible in certain circumstances to access the data remotely. It seems as though on 9 April 2015 it was certainly unclear to Second Sight and they didn’t feel they had received enough information from the Post Office; do you agree with that?

Mark Davies: I think this is Second Sight’s Part Two Report, I think I’m right in saying.

Mr Blake: Yes.

Mark Davies: And I think I’m also right in saying that Post Office, shortly after this report, we did a full response to the Second Sight Part Two Report, which maybe you’re going to take me to. We’re obviously in some very deep technical territory here. I’d really be keen to see what the Post Office’s response had been in its response to this particular part of the Second Sight Report.

Mr Blake: But the response that you gave me before was quite simple, quite straightforward, quite clear to understand that it was possible in certain circumstances. We have here a question mark being raised by Second Sight and I want to take you now to a response that you gave to the Panorama programme in the same year, in June 2015. Can we please look at POL00317548. It’s page 10, please. Sorry, if we could start at the bottom of page 9. So we have an email here from you, 16 June 2015. So two months after that Second Sight Report. Matthew Bardo and Connor Spackman, who were they?

Mark Davies: They were Panorama researchers/reporters.

Mr Blake: “Many thanks for your email of late Friday afternoon and for the further detail it provides in terms of the ground you wish to cover in your programme, and for Matt’s follow-up. My apologies for getting back to you slightly later than I had planned.

“As you know, I remain puzzled and concerned that the BBC did not see fit to raise the majority of these issues and the very serious allegations within them with us when we met your colleagues at our offices last Tuesday.”

You then go on to address a number of matters. If we could scroll down, and onto page 11:

“As we made clear in the lengthy session we had with your colleagues last Tuesday, we are not prepared to engage in a public debate about cases.”

If we scroll down, it says:

“It follows that I will not be addressing each and every point raised in your email. Happy, I am happy to respond more thematically as follows …”

You address issues such as prosecutions, if we scroll down you address Horizon, and it is here and over the page that I’d like to take you to. You say as follows:

“Post Office cannot edit, amend or otherwise alter branch data remotely; it can add a transaction to a branch account – this is, naturally, subject to rigorous authorisation protocols and carries a unique identifier code rendering it immediately distinguishable from any other transaction.”

Were these your words?

Mark Davies: This would have been – this email would have been – obviously, it’s my words, it’s my email. We would have put it together as a team and with IT as well.

Mr Blake: The words used there are “Post Office cannot edit, amend or otherwise alter branch data”.

Were those words chosen carefully?

Mark Davies: All the words were chosen carefully.

Mr Blake: Were they chosen intentionally because you knew that Fujitsu could edit, amend or otherwise alter?

Mark Davies: No.

Mr Blake: How can you be so confident in that?

Mark Davies: Because there may be errors in this email but I know that I never set out to intentionally mislead at any point in my career at Post Office or indeed any point in my career ever. So that’s why I can be confident. Now if there’s a mistake in this email, I can only apologise for it.

Mr Blake: Responding to Panorama, after the Second Sight’s Part Two Report, when they had raised concerns about it, wouldn’t you want to be 100 per cent sure that every single word on remote access was very carefully used?

Mark Davies: I would, yeah.

Mr Blake: Do you think that there was a failing here?

Mark Davies: I’d like to see the statement that we issued to Panorama in advance of the programme. This is not that. This is an email to the researchers. I’d be keen to see what we said in that statement. I hope that we were absolutely correct in what we said in that statement but we certainly didn’t intend to mislead if we did.

Mr Blake: I want to now return to 2016. Could we please look at POL00029994, please. We’re still on the topic of remote access. At the bottom email, we can see 21 July 2016 from Mr Parsons, he says:

“All

“Please find attached the proposed wording on the remote access issue – for discussion on our call at 6.00 pm today.”

Do you recall being involved in the issue of the wording of remote access for the Group Litigation?

Mark Davies: I do.

Mr Blake: If we scroll up, please. Rob Houghton has reworded the statement, and I’ll read to you the final sentence. It says:

“We believe, given the above methods open to the Post Office to deal with errors in a branch’s accounts, the use of this access to amend a branch’s accounts would be rare however Post Office is making enquiries adds to whether it has ever happened.”

Your response is at the top of the email:

“All

“Assuming Rob’s additions are the underlined elements, I’m not keen on the final sentence.”

So it looks as though you weren’t keen on providing the claimants in the litigation with a sentence that, if we scroll down, read as is highlighted there. Do you recall not being keen on that final sentence?

Mark Davies: I don’t recall that, no. I don’t recall that. I think, reading the sentence, it just looks a bit unclear. I think I’d want it to be much clearer. But I don’t recall.

Mr Blake: You weren’t a lawyer?

Mark Davies: No.

Mr Blake: Was it unusual for the Communications and Corporate Affairs Director to be commenting so carefully on wording that was going, please, used in either a legal correspondence or legal pleading?

Mark Davies: I don’t think it was inappropriate.

Mr Blake: Do you think you were qualified in respect of remote access to provide such opinions?

Mark Davies: Not in the technical sense, no, absolutely not.

Mr Blake: Do you think you had carried out enough investigations into the matters that, as we saw in that earlier email, you were slightly confused by?

Mark Davies: I wish I’d carried out more. I wish I’d asked more questions about remote access. I wish I’d got more into the detail of it.

Mr Blake: Do you think you should have got more into it when confronted by Panorama?

Mark Davies: As I say, I think I’ve just answered the question.

Mr Blake: Can we please turn to POL00029998. If we scroll down, please. There’s still discussion about draft forms of words, and you say as follows:

“Would it help to include ‘whether this particular form of access’ in final sentence which emphasises that we’ve never actually been asked about super users but are going over and beyond to establish [the] position?”

If we scroll up above, we can see the form of words that you are commenting on. It’s an email from Andrew Parsons. He says:

“Mark – I am happy with your suggestion.”

We can see it there. So we have:

“Database and server access and edit permissions is provided, within strict controls, to a small, controlled number of specialist Fujitsu personnel. The use of these permissions is logged but rare. Enquiries are continuing as to whether this particular form of access could be used to affect a branch’s accounts, and if so, whether this has happened.”

Is it odd that you, the Communications Director, was having such a direct role in formulating words that were going to be used in litigation relating to remote access?

Mark Davies: I don’t think it was odd and I think, if anyone had any concerns, they would have been raised with me but, no, I don’t think it was odd.

Mr Blake: If we scroll down on that page, you say, in respect of the issue of a superuser, “emphasises that we’ve never actually been asked about super users but are going over and beyond”. I mean, is that right? Wasn’t superuser something that was very much an issue for a number of years?

Mark Davies: I’m afraid I don’t recall.

Mr Blake: Can we please turn to POL00030002. There are various email threads – there are two email threads. Can we please start page 3 of this thread. If we scroll down there’s an email from Andrew Parsons to you. He says:

“In response to your question in the other email thread about seeing everything we have said about ‘remote access’, we don’t have a central log of everything [the Post Office] has said on remote access. However, the language used in the email reference below (attached again) is reflected of the language used by [the Post Office] towards the end of the scheme.”

If we scroll up, please. We have an email from you at the top, and you say:

“I am stuck with a live issue at present. My uneasiness on this issue is why we can’t give a firmer position on the super user point before we reply?

“I suspect I know the answer but the current wording leaves us vulnerable and we would need to look at what we have said publicly … before we commit the position.”

What did you mean by “I suspect I know the answer”?

Mark Davies: I don’t know. I mean, I think this email is about me wanting to make sure we are absolutely firm in telling the truth.

Mr Blake: It looks as though you are concerned that the answer might be bad for the Post Office?

Mark Davies: No, I don’t think so.

Mr Blake: If we scroll up, please. We have there an email from Thomas Moran to Mark Underwood, you’re copied in. He says:

“Mark/Andy. Please can you set out the timeline for approving this text (eg Deloitte, [Fujitsu]) if this is necessary.”

Again, another reference there to Deloitte.

If we look at the top, a response from Andrew Parsons. He says:

“I think we have agreed the wording on the Post Office side. Tony has already signed off. I’ve sent the wording to both [Fujitsu] and Deloitte and asked for comments by [close of business] tomorrow.”

If we scroll up to the first page, Mark Underwood says:

“I have been through the scheme chronology and reviewed the statements made by Post Office [regarding] remote access. Please find attached what I feel are the key statements made publicly.”

Jane MacLeod then responds and she says:

“Thanks Mark this is helpful (ish!).

“To all on this email chain, please do not forward this email to anyone else as it is critical that we maintain privilege around it.

“Given the statements that Mark has collated, can we please reference the advice from Fujitsu that we have relied on in making these statements (for example did we show [Fujitsu] the drafts of these before making them etc?), as clearly there is a gap between these and what we now understand may be the case.

“Andy, once this is available will you please consider whether this affects the legal risk and approach? Mark D (and others) – we need to consider the positioning around the current wording in light of these statements.”

Did that raise any concerns with you?

Mark Davies: I am sure it did. I don’t recall – I mean, obviously, I’ve seen the email since it was disclosed but I think it underlined to me that we were seeking to make sure that we were getting the right position, the correct position, before the courts and that, if we’d made mistakes, errors in the past, we would correct them because that was the intention.

Mr Blake: Could we scroll up, please. What did you understand by that first sentence:

“To all on the email chain, please do not forward this email to anyone else as it is critical that we maintain privilege around it.”

Was there a concern on Jane MacLeod’s perspective that this could be bad for Post Office in the litigation?

Mark Davies: I think you’d have to ask Jane MacLeod that.

Mr Blake: We have here an email from you saying:

“I am away as of tonight so perhaps we should speak this afternoon?”

Do you recall speaking to Jane MacLeod about it?

Mark Davies: I spoke to Jane almost every day so I don’t recall that particular conversation.

Mr Blake: What do you recall of her concerns, if any, in relation to this issue?

Mark Davies: Like everyone I worked with at the Post Office, she was very, very determined that we told the truth, that we were accurate in what we told – certainly, what we told to the courts and what we told to the media.

Mr Blake: Could we please look at POL00245978. We’re now in November 2016. The bottom email is an email from Andrew Parsons. I don’t think you’re copied in at that stage. It reads as follows, it says:

“The key substantive area is section 9 on remote access (in particular, Rob, I’d be really grateful if you could review this section).

“Following feedback from Deloitte, we cannot definitively say that [Post Office] (as distinct from [Fujitsu]), never had the ability to change Horizon data because Deloitte and the current staff at [Fujitsu] just don’t have enough knowledge of Old Horizon to confirm this.”

So it looks as though, in fact, even that earlier statement that was given to Panorama was now proving to not be correct; do you agree with that?

Mark Davies: That would seem to be the case. They’re saying that we cannot definitively say that Post Office never had the ability to change Horizon data, yeah.

Mr Blake: This was a point made in an early draft but it has now been removed.

“We have (I hope) now found formulation of words that avoids having to overly throw [Fujitsu] to the wolves and avoids any risk of waiving any privilege in any documents, but still gives us a fair story to tell. We have also toned down the admissions of making incorrect statements, though they are still there. I hope this might make it easier to get this letter cleared through [the Group Executive] and [Fujitsu].”

Do you recall issues or concerns being raised at group executive level regarding the wording that would go to the claimants in the Group Litigation? On the issue of remote access?

Mark Davies: I recall a deep sense of frustration at this point, that, again, it appeared that we’d not – that we’d made misleading statements based on what we’d been told at the time, and I do remember the frustration and anger that that created, yes.

Mr Blake: If we scroll up to the first page, Thomas Moran then emails the group. He says:

“My overall conclusion is that could very well have serious implications on the proceedings and we absolutely have to make sure we are briefing and securing the support of the right people internally before issuing.

“As I’m the lucky man with the responsibility for this as the [Steering Group] Chair …”

You were still on the steering group at this point?

Mark Davies: Yes.

Mr Blake: Yes:

“… I must ask that we get this properly reviewed by Mark Davies and also Angela who I don’t think are on the list. In particular we need a full assessment and media plan based on the worst case consequences in place before sending.”

Do you think that it was important to get a media plan in place before sending to the claimants in the litigation an admission that there had been incorrect statements made in respect of remote access?

Mark Davies: I think it would always be right, and Tom was right, I think, to raise the – that as a factor. It’s certainly not the determining factor and it’s not the most important factor but there would undoubtedly have been media implications from this situation. So it’s understandable, I think, any organisation in a similar place would have had come up with a media plan to address it.

Mr Blake: Could we please look at POL00024991. This is the attached document that is being circulated and addresses remote access. If we look over the page at 1.5 and 1.6, we can see what they’re now saying. They say at 1.5:

“… Post Office may have made some incorrect statements, but refutes any suggestion that it ever did so deliberately or did so to mislead or deceive.”

The comment is:

“Not sure about this sentence – I don’t believe you’ve answered inappropriately in the past.”

I don’t think that’s right, is it?

Mark Davies: I don’t know who’s making that comment in the brackets.

Mr Blake: That doesn’t seem right, does it?

Mark Davies: Sorry?

Mr Blake: It doesn’t seem right that you hadn’t answered inappropriately in the past, I mean, the Post Office had answered inappropriately in the past, hadn’t it?

Mark Davies: Well, answered – I mean people have made – delivered answers based on what they understood to be the case at the time and, as a result, those statements were incorrect.

Mr Blake: So those words in brackets, do you disagree with them?

Mark Davies: I don’t know where they’ve come from.

Mr Blake: Do you disagree with them?

Mark Davies: Inappropriate? I mean – I think I do disagree with them. I mean, the next sentence, “The Post Office personnel responsible for those statements believed the statements when they were made”, and that’s the position.

Mr Blake: “What was said reflected what they understood the position to be after making relevant enquiries. Unfortunately, they did not pick up on the issue of Fujitsu administrator access as Post Office would have liked. This is a matter of great regret, but it does not mean that Post Office exhibited wilful blindness to reckless indifference to the truth of those statements. (I think this is too much). Can we not just say.

“The Post Office responded appropriately to the question of whether transactions could be altered by Post Office without the postmaster’s knowledge – the answer to this question is consistently the same – it is not possible. Expanding on this – it is possible for [Fujitsu] to access the system through administrator access, which they have confirmed. This is not unusual and is in common with any other organisation. You would need to discuss with them their ability to modify transactions; our expert assessment would say that this is extremely difficult but theoretically possible.”

Was there a certain defensiveness amongst your steering group as to making full admissions on remote access?

Mark Davies: I don’t think so, no. I don’t think there was defensiveness. I think there was frustration but not defensiveness, no.

Mr Blake: Could we please turn to POL00024982. Page 2, please. At the bottom of page 2, it’s almost midnight on 28 November, Jane MacLeod is emailing Paula and Al Cameron:

“Following discussions with our QC and Bond Dickinson this afternoon, the following is the recommended language to be included in the response to Freeths in the wider section on remote access:

“‘At each stage, Post Office ascertained the position to respond to the questions it believed it was being asked. With the benefit of hindsight, some of Post Office’s statements may have been incorrect in light of what has since been identified in relation to Fujitsu’s administrator access rights … But Post Office refutes any suggestion that it ever made false statements”, et cetera.

It says at the bottom:

“The challenge has been to balance the risk of adverse publicity ahead of the court process (Post Office’s concern) with the need to be open and transparent with the court in admitting that certain of the information we provided previously on this issue could be construed as ‘wrong’.”

Scrolling down. It says:

“Given Mark D had other commitments today, I am taking him through this wording early tomorrow.”

Did you see that as the problem facing the Post Office, if we scroll up slightly, “The risk of adverse publicity versus the need to be open and transparent with the court”?

Mark Davies: No, I don’t agree with that. I think the most important thing was ensuring we were open and transparent with the court.

Mr Blake: If we could scroll up, please, there’s then a conversation, I think, you then see at – I think you’re then chased for it and then, at the very top, page 1. You say, “Apologies”, you read through and you are content.

One more document before we have our break and that’s POL00163124. This is earlier in the day. Could we please look at the bottom email from Jane MacLeod. That’s the email we just saw. If we scroll up, we have a response from Melanie Corfield to you, and she says as follows:

“Very slight suggested tweaks as discussed (highlighted attached). I think the context and language around the difficult parts are very good though in portraying the ridiculousness of the claims about ‘remote access’ so I don’t think we should worry too much.”

We’re now in November 2016 and Melanie Corfield is again emailing you very frankly with her views that the claims about remote access are ridiculous. Was that a view that was shared in your team at that time?

Mark Davies: No. I wouldn’t use the words that she’s used.

Mr Blake: How is it that that far down the line, after everything we’ve seen, after confirmation in emails from Fujitsu, after various discussions about forms of words, lack of clarity about remote access, that the Communications Team, the team that you led, is still describing those remote access claims as “ridiculous”?

Mark Davies: I think it’s a question that you would have to ask Melanie.

Mr Blake: Well, you were her boss, effectively, weren’t you?

Mark Davies: (The witness nodded). I didn’t regard them –

Mr Blake: She is having no difficulty in expressing that view to you. We’ve read email, after email, about conspiracies and the press being unfair. Did you still think, in November 2016, that the claims about remote access were ridiculous?

Mark Davies: Not ridiculous. I found it difficult to put a claim about remote access, which I think we had ascertained had been used once against the weight of the accusations that were being made against the Post Office.

Mr Blake: You yourself had found it very difficult to even understand the answer at one stage about remote access.

At paragraph 88 of your witness statement, page 32, you’ve described, I think, the press team as “a high performing and high quality team”. Looking at that email and looking at a similar email from Melanie Corfield in relation to these issues, do you still maintain that they were a high performing and quality team?

Mark Davies: I do.

Mr Blake: Thank you, sir. That is a convenient moment to take our mid-afternoon break.

Sir Wyn Williams: All right. Until when?

Mr Blake: Could we come back at 3.37 minutes, if possible? We have quite a bit to get through, still.

Sir Wyn Williams: Okay, fine.

Mr Blake: Thank you very much.

(3.21 pm)

(A short break)

(3.37 pm)

Mr Blake: Thank you, sir. Going to move on now to a number of different topics. Starting with action at the Board level. We’ve heard a lot of evidence about Simon Clarke’s Advice on the reliability of Gareth Jenkins. That was dated 15 July 2013. When did you first know about that advice?

Mark Davies: I couldn’t recall with any certainty.

Mr Blake: Do you recall it ever being mentioned at Board level?

Mark Davies: Almost certainly, yes. Whether I was at the Board meetings when it was referred to, I couldn’t be certain.

Mr Blake: Almost certainly yes, you’re assuming?

Mark Davies: That it was referred to at Board level?

Mr Blake: Yes.

Mark Davies: It would undoubtedly have been referred to at Board level, yeah. I didn’t attend the Board every – excuse me, I didn’t attend every Board meeting.

Mr Blake: Why are you so sure it was referred to at Board level?

Mark Davies: Because it was an important piece of the picture.

Mr Blake: Simon Clarke’s Advice on the shredding of documents or destruction of documents, that was dated 2 August 2013. Can you assist us with when you first knew about that?

Mark Davies: I’m sorry, I can’t help on that.

Mr Blake: Brian Altman’s general review, which concluded that Gareth Jenkins was tainted as a witness, that was dated 15 October 2013; do you recall seeing that at all?

Mark Davies: I recall hearing about it, yes.

Mr Blake: Would that have been around 15 October 2013?

Mark Davies: It would have been around then, yeah.

Mr Blake: When you say “hearing about it”, is that about the review or about concerns relating to Gareth Jenkins –

Mark Davies: About the concerns.

Mr Blake: Can we please turn to some board minutes. That’s POL00021525, 21 May 2014. We have you named further down, as being in attendance for item 14/70. Can we please return to page 6?

14/70 is “Annual Report and Accounts”. So you joined the meeting at that point, and it says:

“The Board received the Annual Report and Financial Statements …”

Can we please look at (f):

“The Board discussed the inclusion of Sparrow in the report and agreed that it should be excluded. However, the Business agreed that it would be appropriate to included a paragraph in the CEO overview to explain the size of the enterprise risk and the major transformation programmes being undertaken, referring back to the risks already highlighted in the CFO report.”

Can you recall the decision not to include sparrow in the annual report?

Mark Davies: I think I referred to this in my statement. I don’t recall the conversation. I was present at the Board for that section because my team and I had responsibility for producing the annual report. I don’t recall the conversation, I’m sorry.

Mr Blake: Do you recall there being a secrecy regarding the Sparrow Project?

Mark Davies: Not at all, no.

Mr Blake: Moving on to external PR terms, you’ve said at paragraph 38 that external PR terms were used as a second pair of eyes; can you assist us as to who in the Post Office was responsible for instructing external forms like Portland or Brunswick?

Mark Davies: That would be me, usually. It would depend to some extent on the nature of the business that we were talking to that firm about, so we might have them support us around a product, a PR launch, in which case, it might be the Financial Services Director or Commercial Director might take the lead responsibility or potentially the Marketing Director as well, obviously used external firms a lot. So, you know, it varied, but I would certainly be involved in most of those cases.

Mr Blake: Can we turn to POL00117079, page 2, bottom half of the page. So this is an email from yourself to, is that members of your team and some others, Patrick Bourke, for example?

Mark Davies: (No audible answer)

Mr Blake: You say as follows:

“The Mediation Scheme was set up in 2013 to give the small number of people with complaints about our system a chance to make their case.

“We have now investigated every single case put to us. It has taken longer than we would have liked. But we can now say with absolute confidence that there are no systemic issues with the Horizon system or associated processes.”

If we look above, Melanie Corfield responds:

“Looks good. We always said we are confident [with the] system though so should we say ‘with even more confidence that Horizon works as it should’.”

Patrick Bourke responds:

“I think we do need to be careful of absolute – if we tie it to these cases (eg absolute confidence that no systemic issues with Horizon causing the problem complained of) – then I think it’s safer.”

Then if we please scroll up, and you say:

“Okay – ‘increased’ then. Can Jane or Mel please send me a note of how Brunswick pitched this opener yesterday?”

It says, as follows, from Jane Hill, she says:

“Brunswick pitched this as follows:

“Post Office serving communities across the UK, 11,500 postmasters [et cetera].

“We’ve spent £5 million investigating concerns …

“Because we need to protect our brand and ensure we have 100 per cent confidence in the system that underpins our business.

“Initial [Second Sight] investigation found no evidence of a problem with Horizon.

“We have now investigate every case.

“50 cases have been mediated or have been passed to mediation.”

What kind of information would you have passed to Brunswick for them to have formulated that pitch?

Mark Davies: I can’t really recall, and I can’t really recall what the purpose of this pitch was around. I imagine we would have given them the Second Sight Interim Report, the Part Two Report, probably the Select Committee briefing that we did for Paula Vennells. When is this, 30 January 2015? Those kinds of documents.

Mr Blake: I mean, “Initial Second Sight investigation found no evidence of a problem with Horizon”, that’s not right, is it?

Mark Davies: No, it’s a shorthand, yeah.

Mr Blake: If we scroll up, from you to Jane Hill, you say:

“Thanks – Mike, please blend these into the pitch drawing out the three key messages we need to get across.”

Was there a danger in involving these external firms that they wouldn’t actually have sufficient knowledge about Horizon and the problems with Horizon and would then make strongly worded statements like the one we just saw?

Mark Davies: Well, I mean, Brunswick or any other external organisation wouldn’t make any statements on our behalf. They would always be working to a brief set by us.

Mr Blake: Would they have sufficient knowledge of years of complaints from subpostmasters and the kinds of information that you at the Post Office were able to access?

Mark Davies: No, but they weren’t brought in to be experts in the substance; they would be brought in to be an extra pair of eyes to bring a different perspective to the conversations that we were having –

Mr Blake: Is there a danger in that because they weren’t privy to the kinds of information that you were privy to, develop lines, and then it seems, as per this email, those lines may risk being blended in with existing lines?

Mark Davies: I’m not sure, there’s no one from Brunswick on these emails.

Mr Blake: Exactly.

Mark Davies: So I’m not totally sure, in all honesty, what this email chain is for and I don’t fully recall it. I know that, obviously, we worked with Brunswick. Of course, there’s absolutely a danger of an organisation which isn’t fully sort of steeped in the issue being brought in but, obviously, the responsibility for ensuring that that doesn’t – isn’t a danger lies with the in-house team. It would be the case, really, in the case of any Communications Directorate bringing in external advice and support that you’d obviously manage that external advice and support appropriately.

Mr Blake: Would that be you?

Mark Davies: It would.

Mr Blake: Can we please turn to POL00111228. This is later, we’re now in 2018, 12 October 2018. It’s from Portland Communications. Portland Communications were instructing in respect of the litigation, were they?

Mark Davies: I think this is them setting out their proposal of what they would potentially do to support us, I think. “Indicative programme of communications”, yeah.

Mr Blake: “This short note sets out an indicative programme of communications … and public affairs supporting the forthcoming Horizon Group Litigation following briefings with [you], Melanie, and the Post Office leadership team.”

If we scroll down:

“Based on this week’s briefings, there are three mean communications pillars we want to work with you to address …”

The first is “an opportunity as well as a threat”; the second is “coordination between legal strategy and corporate communication”; the third is:

“It is vital we proactively engage with political stakeholders …”

Then, at the end, it has a section on cost:

“While we estimate the work required to support your communications during the first trial in November 2018, the work around the judgment and second trial is less predictable and will depend on the coverage and interest we see in the next couple of months.

“As such, we propose splitting the project in two phases. The first phase will cover the first eight weeks of activity, including the preparation and the first trial. We can deliver phase one of this work at a cost of £35,000 … per calendar month, for two months … The price reflects the senior time dedicated to the account”, et cetera.

“For Phase 2, we review the reach to the first trial in December and determine what level of support is required.”

Do you think that it was money well spent? Do you think that it was appropriate for external communications to be supporting your communications during the litigation?

Mark Davies: I think it was entirely appropriate.

Mr Blake: Could we turn to POL00163442. We’re now in January 2019. Jane Hill forwards you an email and the email says as follow, if we scroll down:

“We propose to end our relationship with Portland at the end of January, and commence procurement for PA agency immediately thereafter.

“Reasons to end our relationship with Portland …

“£35,000 a month – very expensive for questionable value …

“The next stage of the GLO will require a greater internal comms element – Portland have no experience with this …

“In the run-up to the Horizon trial, less background knowledge and a fresh perspective would be a benefit, and any good agency would be able to add value.”

Are you able to assist us with why less background knowledge might be of benefit?

Mark Davies: I think always when you’re bringing in external support in the communications environment actually knowing less about the subject is sometimes a benefit because it can bring a fresh – as Jane says there, bring a fresh perspective. The internal comms element is really important in this context because, clearly, here we are in 2019 and I think we’re about to get the Common Issues judgment and internal comms was absolutely critical in that context, particularly with a very complex franchise subpostmaster environment. And Portland, I think by their own admission, would they that internal comms isn’t their speciality at all, so …

Mr Blake: Isn’t there a risk, though, that messages are being developed not just here but over the years by people who don’t have the requisite knowledge and requisite background?

Mark Davies: No, I don’t think that’s risk, because the bedrock of the team remained in place. The in-house team controls the position. It’s organisations like Portland and others, Brunswick we’ve talked about, are brought in to assist and support, not to direct.

Mr Blake: Could we please move on to a different subject and that’s the relationship with the National Federation of SubPostmasters. At paragraph 25 of your statement you say you engaged with the Communications Team at the NFSP. Can you assist us with what their general view was regarding the Horizon system?

Mark Davies: I think the Federation’s general view was that they were satisfied that Horizon worked as it should, that, had there been systemic and very major problems with the system, their members would have been – would have been very vocal about them.

Mr Blake: Could we please turn to POL00174423. We’ve heard a number of communications from the Post Office. Do you think they affected the NFSP’s position or –

Mark Davies: Sorry, could you repeat that? Apologies.

Mr Blake: We’ve seen today number of comms press releases, statements from the Post Office. Do you think they affected the NFSP’s position, their stance on Horizon, or influenced their stance on Horizon?

Mark Davies: I don’t think so. My experience of the Federation was, when George Thomson was their Chief Executive, he wasn’t somebody who could be easily persuaded of a position and there were plenty of times when they were extremely critical of the Post Office and its actions on other subjects.

Mr Blake: Could we please look at POL00174423. It’s the bottom of that email, please. David McConnell emails you and says:

“Hi Mark …”

It’s about the Panorama programme in 2015. He says:

“We have issued the statement below to members – we remain firm on Horizon, you’ll appreciate too we need to maintain the ‘critical friend’ stance.”

If we scroll down, they say, for example:

“Put simply, the NFSP has not received calls from subpostmasters querying Horizon and alleging systematic failings. If there were a widespread problem, our subpostmasters would have made us aware of it. As a result, we have no choice but to conclude that Horizon is a fundamentally safe and sound system.”

If we go to page 1, please. Paula Vennells responds to you:

“A very helpful if ‘politically’ positioned letter!

“George could never be accused of being in anyone’s pocket.

“Great mail to open tonight cared to some from last night.”

Was the Post Office’s relationship with the NFSP too close?

Mark Davies: No, I don’t think so.

Mr Blake: Could we please look at POL00321147. The bottom of the page, please. You email Patrick Bourke and Rodric Williams and you say as follows, and it’s about Sparrow, and you say:

“Separately [Shareholder Executive] met NFSP who raised with them – and worried them – prosecutions approach. NFSP view is subpostmasters are now widely blaming losses on Horizon ‘knowing’ that there will likely be no prosecutions. They also cited a case where a member of staff was accused of theft, blamed Horizon and we are now pursuing the [subpostmaster] for the money despite clear evidence of staff being to blame. Obviously I don’t know any more details.”

This is a conversation you had with Richard C; who is that, Richard Callard?

Mark Davies: That’s Richard Callard, yeah, who was the – who led the Shareholder Executive at the time of this email.

Mr Blake: Did you have any conversation with the NFSP along these lines?

Mark Davies: I don’t recall doing so. I spoke to their Communications Team quite regularly. I spoke to George Thomson, who was their Chief Executive, occasionally, but the Post Office had a specific team responsible for engaging with NFSP, who would have done most of those liaisons.

Mr Blake: Is that view that’s set out there consistent or inconsistent with your understanding of their position at the time?

Mark Davies: Well, broadly so, that they were – that they believed that Horizon was fundamentally sound.

Mr Blake: Could we please turn to POL00357139. This is May 2016 now. Nick Beal, Head of Agents’ Development and Remuneration, emails Mike Granville and yourself and he says:

“Hi both

“Was noisy first thing when the issue arose but I had very few comments through the course of the day. Senior NFSP have been relatively ok – can’t promise there won’t be a reaction from the floor but I am not getting a sense that they are looking to make a big deal of this. George has been consistent on Horizon and am getting no indication this is changing – he was very robust at a regional meeting I was at where a question was asked about the class action.”

Why is Nick Beal sending this message? Is he a route through which you heard the opinions of subpostmasters or the NFSP?

Mark Davies: Nick had responsibility for the relationship with the NFSP. He was the engagement point, if you like, between the business and the NFSP. I can’t be certain but I think this is an email sent during the NFSP’s annual conference – I’m assuming – or maybe from a regional meeting, judging by the text “Can’t promise there won’t be a reaction from the floor”. He was a conduit, I suppose, for NFSP views.

Mr Blake: I’m going to move on to the relationship with ShEx and UKGI. Could we turn up paragraph 21 of your witness statement. It’s WITN09860100, it’s page 7. You say:

“I … worked very closely with Shareholder Executive and UKGI colleagues throughout the period covered by my statement. They understandably took a very close interest in communications and stakeholder issues. I had regular meetings with colleagues from ShEx and UKGI. Relationships were strong and collegiate. There was certainly concern from some in [the Post Office] that their involvement in business issues was sometimes too great and frustration was expressed that this could be time consuming and resource intensive. My view was that ShEx and UKGI were understandably keen to ensure that they were sighted on key issues in order to be able to address ministerial and other concerns, particularly given the acute political interest in a range of Post Office issues. Meetings with ministers and special advisers were regularly held on a range of issues, with ShEx and UKGI always involved.”

Did you believe that there were appropriate boundaries between the Post Office and ShEx or UKGI?

Mark Davies: Yes, I think so and I think I’ve expressed it there: that it was understandable that ShEx and, subsequently, UKGI had a close – wanted to have a close involvement, a close understanding of what was happening at Post Office on a day-to-day basis. It did frustrate some of my colleagues, for sure. But I think that the very nature of the Post Office as a publicly owned business with a huge amount of political interest in it meant that it was inevitable that colleagues from the shareholder would be closely involved.

Mr Blake: Which colleagues did it frustrate?

Mark Davies: I don’t think there was a specific sense, actually Paula Vennells wasn’t frustrated by it, actually. I think some of my more commercial colleagues felt that, you know, we weren’t – that we should have a greater degree of distance from Government but I don’t think that was right. It was a sort of constant debate.

Mr Blake: Could we please look at POL00258672. It’s an email of 30 October 2018 and this relates to attendance at the trial. Page 2, please. Tom Aldred from UKGI says to Patrick Bourke:

“We have previously discussed whether UKGI would attend the trial. I’ve discussed with our Legal Team and they believe there is a real merit in attending – to get a feel for how each side is presenting their case, what the key issues are between them and, sometimes, what way the judge might be leaning.”

If we scroll up, please. Patrick Bourke says:

“I think this is poor judgement to say the least.

“Could you advise whether you agree and that we should remonstrate?”

You respond:

“Very bad idea. Journalists will ask them who they are and then write stories about [the Government] watching over [the Post Office].”

Were you concerned about the Post Office to be seen to be too close to Government?

Mark Davies: I think in this particular case it was more about a concern that it would benefit neither Government nor the Post Office for the perception of the Government watching over, to be found by people.

Mr Blake: We’re looking now at relationship with Government, more broadly. Could we please look at POL00101341. It’s the bottom half of the page, 9 September 2014:

“This is the BBC online report about Horizon. Earlier inaccuracies have now been corrected and our clear line included. We will continue to monitor coverage, although it is pleasingly low on BBC schedules.

“We will update the Board in the morning. BIS are aware and in loop. Jo Swinson has requested a brief for the morning – we are working with Richard Callard on that.”

So you were working with UKGI to produce a brief for the Minister?

Mark Davies: Yes.

Mr Blake: Is that something that regularly took place?

Mark Davies: Yes. I mean, if the Minister requested a brief, then, absolutely, BIS would – sorry, the Business and Industry Department, as it was then – Business and Industrial Strategy, as I think as it was then, Department – would have contacted us, and they would have probably done it through Richard and his team, as the Shareholder Executive, and we would work with them as appropriate.

Mr Blake: Throughout the period that we’ve been talking about today, so 2013/2014/2015, right through the litigation, did you work with UKGI or BIS on briefings for the Minister?

Mark Davies: On a fairly regular basis. I mean, not – I wouldn’t say it was a sort of monthly occurrence but, you know, if a minister requested a brief, obviously BIS would come and ask us for support and help and we would obviously do so.

Mr Blake: Still on relationship with Government and ministers, could we please look at POL00101610. I realise that these emails are broadly in chronological order but they don’t really relate to each other.

Mark Davies: Sure.

Mr Blake: I am just asking you a number of questions to cover off a number of issues for the Inquiry.

This is an email that relates to the meeting with James Arbuthnot in December 2014. If we go down to page 2, the bottom of page 2, please, an email from Alice Perkins, “Subject: [James Arbuthnot]”:

“I initiated a conversation with him on Saturday evening which was cut off … Despite the opportunity for him to pick it up again yesterday, he chose not to do so.”

Over the page, please:

“We moved quickly on to the substance. The main thrust of his argument seemed to be that there big wrongs which we were not acknowledging; in other words the position he held when he first approached me about this in early 2012.”

If we, please, could go to page 1, the bottom of page 1, 1 December 2014, Gavin Lambert says:

“Thank you – yes, I’ll pick up with the team tomorrow.

“I think Mark has also contacted Oliver Letwin which needs to be factored into our plan.”

Then Paula Vennells says:

“Yes in fact spookily I had just opened my emails to ask Mark … where we were on that. In view of James’ reaction, it becomes even more important that [Oliver Letwin] understands we are also trying to brief him personally, otherwise we are just seen to be referring to him in my letter to [James Arbuthnot].”

If we scroll up, please, you say:

“Hi both. I am in touch with Oliver and he has agreed to meet me in Westminster. We after just working through diaries.”

Why Oliver Letwin, in particular?

Mark Davies: I think he’d raised issues on behalf of a constituent, I think, at the beginning of – well, certainly at the beginning of my time at Post Office, and was at one of the meetings, I think, that I’d attended earlier in the – before this email, obviously. He was obviously also a senior – I think, at the time, a Cabinet Minister and we were keen to make sure we did everything we could to brief him and keep him updated.

Mr Blake: Was there an attempt here to, effectively, divide and conquer, briefing Oliver Letwin, trying to keep him on side, because you were falling out with James Arbuthnot?

Mark Davies: No, no, no. It was much more simply about making sure that Mr Letwin – that we briefed him.

Mr Blake: Can we turn to POL00352596, please. I’m just skipping out a few documents because of the time.

The second email on the page. It’s from you to Tom Wechsler and you say:

“We will have to answer the question: will you make the Part 2 report [the Second Sight Report] available to the select committee and I think we should say yes we will”, and you ask for views.

Then, if we look above, Patrick Bourke says:

“As to the report, I am not persuaded we should – they are not entitled to it and, while it may play well on a transparency point, the downstream consequences for endless correspondence about the report’s detail and the decision we’ve taken to be robust I think outweighs what benefit there may be in doing so.”

Do you recall this correspondence?

Mark Davies: Well, I recall it from having seen it – having been disclosed, for sure.

Mr Blake: Do you recall Patrick Bourke taking a different line to you?

Mark Davies: Oh, yes, I do.

Mr Blake: Was there tension there for some reason?

Mark Davies: Oh, not at all, no.

Mr Blake: Perhaps we could look at POL00352632. If we could scroll down, please, Melanie Corfield says:

“Inevitably [Radio 5 Live] are asking, on the back of our statement – are we saying Mr Arbuthnot is wrong? Since he’s standing down I am tempted to just go back with ‘yes’ but I guess that’s unacceptable! Also it’s semantics re the word ‘sacking’.”

This is about the sacking or alleged sacking of Second Sight, and she is going to say:

“‘Mr Arbuthnot’s question could create a very inaccurate impression because we are not suppressing Second Sight’s report or destroying documents’, or something like that.”

If you scroll up, please, it says, from you:

“I suggest we say – we have made the position clear in our report and in our statement. We have published very detailed update. It is regrettable that a misleading impression is being created.”

Do you recall being of the opinion that Lord Arbuthnot was creating a misleading impression, as is suggested in this email?

Mark Davies: I recall the fact that he, I think, had been on the radio and we felt that the words that he’d used had been misleading, yes.

Mr Blake: I mean, I think, reading this chain, it’s about him using the word “sacked”, or Second Sight being sacked; second Sight were sacked, weren’t they?

Mark Davies: Well, we ended Second Sight’s contract, although they continued to work on all of the mediations. As the Mediation Scheme came to an end, they were asked to produce reports on all of the cases.

Mr Blake: Lord Arbuthnot referring to them as having been “sacked”, though, that’s not a misleading impression?

Mark Davies: It’s not really, no. I accept that.

Mr Blake: Do you think, by this time – and we’ve been over this period – there was a feeling within the Post Office that Second Sight, Lord Arbuthnot – we’ve seen your emails about conspiracies – did you think that they were all up against you?

Mark Davies: I wouldn’t say all up against us but it certainly felt as though Second Sight by this point were, you know, they were interviewed by Panorama, et cetera, et cetera. It certainly didn’t feel that they were necessarily acting independently.

Mr Blake: POL00102387. This is a memorandum you’ve prepared for the Group Executive, called “Influencing The New Government”, and you say as follows, paragraph 2:

“Following the general election a new Government will be formed. This is a critical period in the life of a new Parliament, where ministers are both at their most powerful and seeking to develop and shape new policy positions. This therefore presents the Post Office with a window of opportunity within which to set out our position and to influence ministers.”

If we scroll over to page 10, please, it says at the top:

“These considerations are ranked in order of importance in an assessment by the Government Relations Steering Group.”

Were you on that group?

Mark Davies: Yes.

Mr Blake: You were, yes:

“They cover the issues on which we will need to influence Government proactively to support our position, and those which we will wish to seek to shape Government policy into supportive positions (eg Sparrow).”

If we scroll down, we can see there a section on Sparrow. Page 11, please:

“There is likely to be continued, though limited, interest in Sparrow. The recent Select Committee Inquiry concluded with a letter to the Secretary of State and the response was as helpful as we could have hoped for, drawing a line under that particular angle of interest. Any continued interest will be driven by a small group of MPs with constituents in the Scheme. The leaking of Second Sight’s Part Two Report could act as a catalyst for continued media and political interest.

“So while we have had some success in removing Sparrow from the spotlight, there is no guarantee that a new minister won’t seek to win some early political points by revisiting the issue or he or she will undoubtedly come under pressure to do so. We should warn about the risks of this course of action.”

To what extent was it right to seek to remove Horizon issues from the spotlight when that spotlight is being shone by the company’s sole shareholder, the Government?

Mark Davies: Sorry, can you repeat the question? Sorry.

Mr Blake: To what extent was it right to remove or seek to remove Horizon issues from the spotlight, when that very spotlight was being shone by the Government, who are Post Office’s sole shareholder?

Mark Davies: Well, I think, as Communications Team with responsibility for managing reputational risk for the business, it was understandable that I and the team were looking to ways to reduce the way in which this issue, as it was then understood, was in the headlines.

Mr Blake: The Government, though, is your shareholder. It’s not a public statement; it’s somebody who has actually a financial interest in the business. Do you think that it’s appropriate to seek to minimise Sparrow issues to a new Government?

Mark Davies: I think the right thing to do was to explain and to talk to the ministers and to talk to the Government about the situation, and to do so in line with the business’s overall strategy.

Mr Blake: Sir, I think those are all of the questions I have. There are a number of topics I have struck through and I’m sure that people will –

Sir Wyn Williams: Well, Mr Blake, I have run out of steam. So I am calling it a halt, full stop, so to speak.

Mr Blake: Sir, there are just three minutes from Mr Moloney and five minutes from Mr Henry –

Sir Wyn Williams: No, they are never three or five minutes, with the best will in the world and, putting it bluntly, if they are only three minutes and five minutes, we can probably do without them.

So, as I say, I think we’ve heard enough from Mr Davies.

So thank you, Mr Davies, for making your witness statement and for attending to answer many questions today. I am grateful to you.

The Witness: Thank you, sir.

Sir Wyn Williams: We’ll adjourn until tomorrow.

Mr Blake: Thank you, sir.

(4.15 pm)

(The hearing adjourned until 9.45 am the following day)