Official hearing page

21 May 2024 – Alwen Lyons

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(9.45 am)

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

Sir Wyn Williams: Yes, thank you very much.

Mr Blake: This morning, we’re going to hear from Ms Lyons.

Alwen Lyons

ALWEN LYONS (affirmed).

Questioned by Mr Blake

Mr Blake: Thank you very much. Can you give your full name, please?

Alwen Lyons: It’s Alwen Lyons.

Mr Blake: Ms Lyons, you should have in front of you a witness statement, or at least in a bundle in front of you.

Alwen Lyons: I do, yes.

Mr Blake: Can you see that? Thank you. Is that dated 24 April 2024?

Alwen Lyons: Yes.

Mr Blake: Could I please ask you to turn to the final page, that’s page 90.

Alwen Lyons: Yes.

Mr Blake: Can you confirm that that is your signature?

Alwen Lyons: It is.

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

Alwen Lyons: So I’d like to make some clarifications to that statement, if that’s okay.

Mr Blake: Yes, please.

Alwen Lyons: So I would like to make the following clarification and comments in relation to my statement and, as before, I give this evidence to the best of my knowledge and belief.

Firstly, in my statement, I refer to a meeting with Alice Perkins and Lord Arbuthnot as having taken place on 12 March 2012, this being the date indicated to me by the Inquiry. However, on further review of the material, I can see that this meeting took place on 13 March 2012.

Secondly, it was my belief that Susan Crichton had been General Counsel for the – from the point of separation from Royal Mail Group. However, since submitting my statement, I’ve been made aware that Susan Crichton was actually Legal and Compliance Director from separation and became General Counsel in July 2013.

Thirdly, paragraph 64 and 96 of my statement refer to the Royal Mail Group Internal Audit with a reference number. It has come to my attention that the reference number referred to at these paragraphs and within the index is incorrect. The correct reference number is POL00029474.

Fourthly, paragraph 62 on page 15 of my statement refers to the action log from a Board meeting on 12 January 2012 and the statement suggests that two reports were to be circulated. Having revisited the action log, it states “a report” rather than “two reports”, were circulated to the board.

And, lastly, my statement at paragraph 345 on page 104 refers to my contact with ex-colleagues after my retirement, including, for example, with Paula Vennells. I had forgotten, until reminded recently, that Paula had contacted me in March and in June 2020, via text message and follow-up email in June 2020, to ask if I could help with details for her information to the Select Committee. I believe she called me on two occasions, March 2020 and June 2020, but I do not recall that I was able to provide you with any information. I’ve also been reminded that I met Paula for dinner early in 2020 and I cannot specifically recall what we spoke about. Since retiring, I’ve had a small number of other communications with Paula.

And that is my clarification, thank you.

Mr Blake: Thank you. Subject to those clarifications, is that statement true to the best of your knowledge and belief?

Alwen Lyons: It is.

Mr Blake: Thank you very much. I believe there’s something else you would like to say as well.

Alwen Lyons: Yes, before I give evidence I would like to convey my sincere sorrow that this scandal has happened and, in particular, my deep regret for those wrongfully convicted or accused. These words cannot even begin to put right what has happened but they are sincere.

I cannot imagine how it must have been for subpostmasters whose voices were not – went unheard throughout these years and I want to express my deep and genuine remorse for what has happened.

Mr Blake: Thank you very much, Ms Lyons. The statement you have spoken about is WITN00580100, and that will be uploaded onto the Inquiry’s website.

I want to begin today just by looking at your background. I think you were employed by the Royal Mail Group and the Post Office for some 33 years; is that correct?

Alwen Lyons: Yes, that’s right.

Mr Blake: I think, in fact, your parents ran a sub post office –

Alwen Lyons: They did.

Mr Blake: – and I think your father was the NFSP General Secretary at one stage?

Alwen Lyons: He was.

Mr Blake: You joined the Royal Mail Group in 1984 –

Alwen Lyons: Yes.

Mr Blake: – and you started as a graduate trainee?

Alwen Lyons: Yes.

Mr Blake: You held various roles over the length of your career?

Alwen Lyons: Yes.

Mr Blake: Those included, amongst others, as an Area Manager and then Retail Network Manager between 1991 and 1995.

Alwen Lyons: Yes.

Mr Blake: I think you’ve said in your statement that you were responsible for 180 sub post offices in that role –

Alwen Lyons: I was.

Mr Blake: – and you were involved in what you’ve referred to as to “disciplining” subpostmasters. Can you assist us very briefly with what that may have involved?

Alwen Lyons: So only in as much as if there was an audit at an office, I would have been involved in making the decision as to the future for the subpostmaster or to interview them or just talk to them about what had happened, et cetera.

Mr Blake: You were then Head of the Retail Network for South London between 2000 and 2001?

Alwen Lyons: I was.

Mr Blake: There you headed a team of 18 Retail Line Managers. I think you also heard appeals in relation to the discipline of –

Alwen Lyons: I think – I seem to remember a couple in that time.

Mr Blake: Yes, and that was, of course, during the rollout of Horizon 2000 and 2001?

Alwen Lyons: Yes.

Mr Blake: Do you recall that period?

Alwen Lyons: To the best of my memory, yes, that was when it was rolling out.

Mr Blake: You were then Regional General Manager between 2001 and 2002 –

Alwen Lyons: Yes.

Mr Blake: – responsible for running post offices in the South East region –

Alwen Lyons: Yes.

Mr Blake: – and Head of Direct Manager Branches between 2002 and 2005 –

Alwen Lyons: Yes.

Mr Blake: – with four regional managers reporting to you?

Alwen Lyons: Yes.

Mr Blake: During those various roles and perhaps some others, presumably you had a fair bit of direct contact with subpostmasters?

Alwen Lyons: So not when I was – not when I was General Manager for Directly Managed because those are the Crown Offices, so at that point I would have no contact with subpostmasters.

Mr Blake: But in the other roles I’ve described, so in the ’90s –

Alwen Lyons: In south London –

Mr Blake: – early 2000s, did you have a fair bit of contact with subpostmasters?

Alwen Lyons: So, yes, my team, when I was running South London, they were the Retail Network Managers looking after subpostmasters.

Mr Blake: Did you have any personal experience of using the Horizon system?

Alwen Lyons: Only very – so every Christmas we would go and help in our post offices, so you’d go – you’d have somebody training and then you’d go for the day and use the Horizon system but I didn’t have any experience of balancing the Horizon system.

Mr Blake: When did you first become aware of the Post Office or Royal Mail Group’s prosecutorial function?

Alwen Lyons: I can’t really say when I became aware. I think it was later when we were talking about Sparrow – I didn’t think I realised at the time that we prosecuted.

Mr Blake: So even when you were involved in the discipline of subpostmasters or the appeals from subpostmasters, you weren’t aware that the company was also prosecuting subpostmasters?

Alwen Lyons: So, no, I wouldn’t have been involved with any of the prosecutions.

Mr Blake: But were you aware of that function?

Alwen Lyons: I don’t remember being aware.

Mr Blake: You held various other roles after the Head of Direct Manager Branches and in 2011 you became Company Secretary; is that right?

Alwen Lyons: That’s right, yes.

Mr Blake: I think you held that role until 2017?

Alwen Lyons: Yes.

Mr Blake: Can you assist us with why you were approached in respect of that particular role?

Alwen Lyons: So I – up until that point, I’d been doing separation from Royal Mail Group for about 18 months and we were putting together a new Board with an independent chair, and I had the relevant qualification to be a company secretary, and I had a CIMA qualification and I knew – because of how long I’d worked in the business and my experience in the business, I was approached by Paula Vennells and Debbie Moore to ask if I would like to be Company Secretary.

Mr Blake: What was your relationship with Paula Vennells at that stage?

Alwen Lyons: Well, at that stage, she was the CEO, she was running the company. I think I had a good relationship with her but not a necessarily close one.

Mr Blake: Do you know why you were specifically chosen for that role?

Alwen Lyons: I think Paula, and probably more Debbie, thought I had the experience to carry out that role.

Mr Blake: Did you ever been a company secretary before that role?

Alwen Lyons: No.

Mr Blake: How about the Chair, what was your relationship like with the Chair at that stage?

Alwen Lyons: So I think it was good. It was very professional. I tried to help with Alice’s induction into the business and point her in the right directions when she wanted to go and learn more information about different parts of the business.

Mr Blake: You took on the role in 2011. When were you first aware of subpostmasters experiencing issues with Horizon?

Alwen Lyons: So I believe it was at a board meeting and the issue was raised, I think it was early 2012, was raised by Les Owen, who was a Non-Executive Director.

Mr Blake: We’ve heard, for example, of a 2009 Computer Weekly article. Was that something you were aware of?

Alwen Lyons: Not that I remember.

Mr Blake: In all of the various roles you held within the Post Office over the years before becoming Company Secretary, had you not heard of complaints from subpostmasters experiencing problems with the Horizon system?

Alwen Lyons: Not that I can remember.

Mr Blake: I want to ask you about the role of company secretary. Do you consider that when you took on that role you were fully aware of what the role of a company secretary involved.

Alwen Lyons: No, and before I accepted the role I did some research as to what it would be that I would be taking on. I went to see the Royal Mail Group Company Secretary, had a couple of meetings with him, I also did some research online about what the role was, what the responsibilities were, so that I made an informed decision about whether I thought I should take that role on.

Mr Blake: Were you provided with any training for the role?

Alwen Lyons: So I had some training and some ongoing training after taking the role. I did some, I think, three or four online courses before I started and then, whilst I was doing the role, there was some catch-up, whenever anything changed with the Companies Act or, you know, we needed updating, some – I think it was legal firms that offered company secretaries to come in and have a day with them, and I did, I think, three or four of those.

Mr Blake: I think you’ve said you were accredited by the Chartered Institute of Management Accountants in 1993?

Alwen Lyons: Yes.

Mr Blake: What made you take on that qualification in 1993?

Alwen Lyons: So in 1993 – or just before that because it took me four years to qualify – I was working in the Finance Department of the business, I was the Management Accountant, and to get any further in the Finance Department, you had to be qualified. So I decided this is what I wanted to do and spent four years getting the qualification.

Mr Blake: Was that a qualification that was specific to a company secretary role or a broader finance role?

Alwen Lyons: No a broader finance role. It’s a finance – it’s an accountancy role.

Mr Blake: You’ve set out in your statement at paragraph 29 various roles that were involved with the position of company secretary. I want to take you to the expert report that we have from Dame Sandra Dawson and Dr Steward outlining – it goes into quite a bit of detail about the different roles within a company.

Alwen Lyons: Okay.

Mr Blake: Could we please turn to EXPG0000006, please. This the first of their reports. Could we please turn to page 23. I’m just going to take you to a few sections of the report to see if it accords with your understanding of your role. If we look 2.2.9, it says:

“The Chair, with the support of Company Secretary, is responsible for ensuring that all committees have sufficient support to conduct their business effectively, eg with timely and appropriate papers and minutes.”

Do you agree with that description of the role?

Alwen Lyons: Yes.

Mr Blake: Do you think you fulfilled that role?

Alwen Lyons: I believe so.

Mr Blake: If we turn over the page to 24, 2.2.17, please – it’s the bottom of page 24, thank you. It says:

“Chairs are accountable for running the Board, ie for ensuring that the Board …”

Then it goes through various different accountabilities of the chair:

If we look at (f), it says:

“With the Company Secretary, ensuring that movement on and off the Board is accompanied by appropriate induction (training and familiarisation with duties of Board [members] and company strategy, operations and risks) and exit (confidentiality, equipment, access controls) procedures.”

Do you agree that was one of your roles?

Alwen Lyons: Yes.

Mr Blake: Do you think you fulfilled that role?

Alwen Lyons: I believe so.

Mr Blake: Could we turn to page 29, 2.2.33. There’s a detailed section on the role of a company secretary. It says:

“A Company Secretary is an officer who is appointed by the company’s directors to advise the board on all governance matters and codes.”

Do you agree with that?

Alwen Lyons: Yes.

Mr Blake: Do you think you fulfilled that?

Alwen Lyons: I do.

Mr Blake: “They will normally seek to ensure compliance with the company’s legal obligations. Their accountability is to the Board and the Chair to ensure that all appropriate governance measures are brought to the Board’s attention. As regards the functioning of the Board, they are technically independent of the CEO, and accountable to the Chair. However, as an Executive colleague (and in a sense subordinate to the CEO) they need a very good working relationship with the CEO, who is likely to be very influential in their relationship.”

Do you agree with that summary?

Alwen Lyons: I do, yes.

Mr Blake: Again, do you think you fulfilled that role?

Alwen Lyons: I do.

Mr Blake: One more, also on the same page. There are various accountabilities that are set out there at 2.2.34:

“A Company Secretary’s accountabilities normally include:

“Maintaining the company’s statutory books, including registers of directors and shareholders;

“Working with Chair to ensure that all Board members are aware of their duties and powers;

“Providing secretarial services to the Board and all its committees, including arranging meetings, minuting meetings;

“Working with the Chair on the Board agenda; and

“Arranging participation of non-Board members for specific items in Board discussions (including handling sight of relevant minutes, timing of Board appearances, follow up).”

Do you agree with those duties?

Alwen Lyons: Yes.

Mr Blake: Do you think you fulfilled those?

Alwen Lyons: I think I did, yes.

Mr Blake: I think at one stage in your statement you refer to part of your role as being a conduit?

Alwen Lyons: Yes.

Mr Blake: But it does see as though it is more of a substantive role than simply a conduit to the Board; do you agree with that?

Alwen Lyons: Oh, yes, definitely.

Mr Blake: Was your role – and we’ll come on to look at a number of documents over the years – was it wider than is described here, taking forward, for example, certain strategic matters for the CEO and chair?

Alwen Lyons: So at times, it was wider and – but always coming back to the Board. So I was – if I did other things, it was mindful that I was doing them on behalf of and for the Board – and the Chair, sorry, and the Chair.

Mr Blake: I mean, that’s quite an important distinction. Do you think that you were pursuing those objectives for the Board or for the Chair?

Alwen Lyons: I think both.

Mr Blake: Do you think that the Board had sufficient oversight of that work?

Alwen Lyons: I think they did. I think they did at the time.

Mr Blake: Can we please, while we’re on this report, turn to page 102. There’s one more reference there to a company secretary. It’s at the bottom of the page. This is a table that sets out various changes over time. That there refers to the Walker Review of the banking crisis, which:

“… proposed changes to the Combined Code to strengthen the principles of stewardship and greater challenge in financial services, which were taken on by other sectors. Proposals for all large listed companies included:

“Embedding a ‘culture of challenge’ into Boardroom behaviour.”

Then over the page, we see there at (b):

“Providing adequate support for [Non-Executive Directors] typically from the [company secretary].”

Did you see that as part of your role?

Alwen Lyons: I think providing adequate support for the non-execs, definitely.

Mr Blake: Do you think you fulfilled that role?

Alwen Lyons: I believe so.

Mr Blake: One of the roles involves minuting Board minutes.

Alwen Lyons: Yes.

Mr Blake: Can you assist us with what experience or what training you had in respect of that skill?

Alwen Lyons: So I believe that one of the training courses I did before I took up the role was in minute taking. So it was an online course and it was in minute taking.

Mr Blake: Can you assist us with who the provider was –

Alwen Lyons: I’m sorry, it’s too long ago. I can’t.

Mr Blake: The Post Office was wholly owned by the Government?

Alwen Lyons: Yes.

Mr Blake: To what extent did you consider the corporate governance rules of a commercial company to apply to the Post Office?

Alwen Lyons: So, clearly, the Post Office did not have to comply to all of those rules but I saw those rules as best practice and so I would have looked at those rules and thought “Which of these are relevant for us?”, and I would have discussed – if it was necessary, would discuss that with the Chair.

Mr Blake: What, if any, difference did you see in the governance of a publicly listed compared to a publicly owned company?

Alwen Lyons: I think we had a difference – a different type of governance because we had governance through to the Government and, therefore, we had, for instance, a non-exec that was a Shareholder Executive representative. So in some ways there was additional governance in terms of how we were responding.

Mr Blake: What role did you see the Government or the Civil Service playing in the governance of the company?

Alwen Lyons: So they were our shareholder. So, in my eyes, a very important role and having that Shareholder Executive NED on the Board was very important.

Mr Blake: What, if any, conflicts of interest did you see between the ownership of the Post Office by the Government?

Alwen Lyons: So the only conflicts of interest in Board meetings that I remember – and all Board members gave a declaration at the beginning that they would speak up if there was a conflict of interest – the only conflict of interest I remember was that the Shareholder Executive wasn’t in the room when we were discussing funding and areas that we were going to negotiate with the Government. I don’t see any others.

Mr Blake: We spoke about the prosecutorial function –

Alwen Lyons: Yes.

Mr Blake: – of the company?

Alwen Lyons: Yes.

Mr Blake: Where did you consider oversight and accountability for the investigation and prosecution function to lie within the company?

Alwen Lyons: So I certainly didn’t it lying with company secretary because I had no input to any prosecutions. I would have thought it would have lie – laid with the Legal Team.

Mr Blake: Do you recall any specific mechanisms for reporting and feedback, in that respect, to the Board?

Alwen Lyons: So there was – so the Board heard – had litigation reports sent to them at – not at every Board meeting, I think quarterly or they would come to the Board. And I think that’s the way that the significant litigation was passed to the Board.

Mr Blake: Who would you expect to have fed back to the Board in that respect?

Alwen Lyons: So I would have expected that to be the General Counsel.

Mr Blake: We’ve seen – and I don’t know if you saw Ms Crichton’s evidence – but General Counsel wasn’t, in fact, a member of the Board?

Alwen Lyons: No, she wasn’t.

Mr Blake: Was that something that you considered?

Alwen Lyons: So I think it was something that Alice considered but it was her decision that she wouldn’t – that General Counsel would not be a member of the Board or even attend Board meetings.

Mr Blake: What was your view on that?

Alwen Lyons: I don’t think I had a view either way. If the Chair wanted and the Board wanted the General Counsel in the room, that would be fine. When I was – so I worked to the General Counsel, so the General Counsel was my boss, until Chris Aujard came along and, because he was an interim, I then worked to Paula for about nine months and then when Jane MacLeod came along I worked again for the General Counsel. So I am not sure that it would have changed the Board at all to have the General Counsel there.

Mr Blake: Because you were on the Board?

Alwen Lyons: Well, I wasn’t on the Board; I was attending the Board meetings, yes.

Mr Blake: Is that why you don’t believe it would make a difference: because you attended?

Alwen Lyons: Yes.

Mr Blake: How about the contract and personnel management? Where do you consider the oversight and accountability for the contractual and personnel management of subpostmasters to have laid within the company?

Alwen Lyons: From my memory, I believe it sat in Network. So there was a Network Director and I believe that that responsibility would have sat with them.

Mr Blake: Again, do you recall any specific mechanisms for reporting in that respect?

Alwen Lyons: No, not that I can recall.

Mr Blake: Who would you have expected to feed back to the Board?

Alwen Lyons: From the Network?

Mr Blake: Yes.

Alwen Lyons: I would have expected the Network Director to have come to the Board.

Mr Blake: To have attended the Board?

Alwen Lyons: No, to – so the way that the Board meeting worked was you had your Members of the Board and myself in the Board meetings, and then when executive members were coming along to give a presentation or share a paper or whatever, they would come to that specific part of the Board meeting.

Mr Blake: Where did you consider oversight and accountability of issues relating to the Horizon system to have laid?

Alwen Lyons: So if we’re talking about Horizon, as in the computer system, I would have – I believed that lay with the CIO because I believe they had the relationship with Fujitsu.

Mr Blake: Do you recall any specific mechanism for reporting and feedback in that respect?

Alwen Lyons: So I think the CIO did come to the Board on a few occasions, not only talking about Horizon, talking about the wider IT.

Sir Wyn Williams: Sorry, I may not have quite caught the acronym. Did you say “CIO” or “CEO”?

Alwen Lyons: CIO, sorry, sir.

Sir Wyn Williams: That’s what I thought.

Mr Blake: So Chief Information Officer.

Alwen Lyons: Yes, Chief Information Officer.

Mr Blake: That was Lesley Sewell at the time?

Alwen Lyons: Yes.

Mr Blake: How would you judge whether something needed to be brought to the Board’s attention?

Alwen Lyons: So I would check with the Chair. If something came to my attention that I believed that either the Chair or the Board would – should know, I would check with the Chair and she would – or he when it was Tim – they would generally say, yes, this needs to be sent to the Board. It was something that could come to a Board meeting, then I would generally check the agenda with the Chair – not generally, I always checked the agenda with the Chair because it was the Chair’s agenda, and I might have had input from executive members saying, “I need to bring this paper to the Board”, or whatever, and I would – the Chair and I would sit down and look at the agenda and say – agree the timings and agree the agenda.

Mr Blake: Would you be, effectively, a conduit to the Chair for that purpose?

Alwen Lyons: Yes, yes. So – I mean, some areas came seasonally because you’d have a budget and some came quarterly, some came when the exec wanted to raise or discuss something with the Board, and I would amalgamate all these into an agenda, go and see the Chair and say, “This is what needs to come to this board meeting, are you happy with all those things coming?”, and we’d agree timings.

Mr Blake: I now want to move on to the separation of Royal Mail and the Post Office.

Alwen Lyons: Okay.

Mr Blake: You’ve said that you were involved before you became Company Secretary –

Alwen Lyons: Yes.

Mr Blake: – in that role. Separation itself occurred shortly after you became Company Secretary.

Alwen Lyons: Yes.

Mr Blake: Did you have any concerns about being appointed to such a significant role during that period –

Alwen Lyons: No.

Mr Blake: – that period of great change?

Alwen Lyons: No, I believed I could represent the business well. I knew the business well. I knew Royal Mail well because I had been managing the Royal Mail contract for the few years before that. So I didn’t have any concerns, no. It was a tough few months because – well, it was a very serious issue that was happening.

Mr Blake: What committees or formal groups were you a member of in respect of the decision making for separation?

Alwen Lyons: So there was one formal meeting, where I think – where it was the Government, myself and Royal Mail, and I think Royal Mail were represented by McKinseys, as their consultant, and I would go to that meeting. I think it was weekly and, as we got nearer to separation, it became more regular.

We would have morning conference calls, which lasted about an hour, and then, in terms of me taking that information back into the Post Office, I would – I cannot specifically remember who sat on which committees but the Post Office had a Separation Working Group where I would bring the information back from the large committee and say, “These are the areas we’re discussing and this is where Royal Mail wants to go, and this is what I’ve told them where we are but I need more information from the experts in the business”, if you like, because we talked about every single aspect of the business and how it would be affected by this separation.

Mr Blake: You’ve said that you discussed every aspect of the business.

Alwen Lyons: It felt like it.

Mr Blake: To what extent was there discussion about the Horizon system?

Alwen Lyons: So I honestly do not remember there being specific discussion about the Horizon system. I do remember there being discussion about IT and I went – because we were talking about splitting the IT systems, and I’m not sure that happened on the date of separation because I think – I seem to remember that Lesley came to the Board to talk about separation later. So not everything separated on 1 April 2012, because it would have been impossible to do that, and the separation actually carried on probably for another two to three years.

Mr Blake: What discussion, if any, was there about the prosecutorial function from what you can remember?

Alwen Lyons: I don’t remember any discussion about that.

Mr Blake: So there were discussions about lots of things but not the two matters that are quite important to this Inquiry?

Alwen Lyons: Well, not that I can remember.

Mr Blake: Were you involved in developing the governance structures at the Post Office that would follow the separation?

Alwen Lyons: Only in terms of the Board.

Mr Blake: What do you recall of significant changes that you –

Alwen Lyons: So coming – so Post Office always had a Board but it wasn’t an independent Board and, after – and the reason that the Board was put in place before separation was that, otherwise, Post Office was also – was almost negotiating with its boss because Royal Mail was its boss.

So they wanted to split the Board and give us an independent Board before separation so that Board could then have the governance, and I was involved with that governance in terms of helping Alice set up the Board, finding Non-Executive Directors and all the things that have to happen before you set up a Board.

Mr Blake: Were you involved in the development of policies and procedures in respect of governance or was it more structural?

Alwen Lyons: More structural.

Mr Blake: Could we please turn to POL00179491 and this is a chain of emails that relate to the investigations and prosecution function within the Post Office and the drafting of a Memorandum of Understanding. Could we start on page 4, please. It’s the second half of page 4 and on to page 5. There’s an email here from John Scott, who is the Post Office Head of Security to Mike Young. Do you recall who Mike Young was?

Alwen Lyons: So Mike Young was, I think, the Chief Information Officer at the time.

Mr Blake: Thank you. He says:

“Mike [this is 6 March 2012].

“We believe we’re close to an agreement.

“There have been a number of debating points, but are now down to the last two:

“Number 1

“[Royal Mail Group] Security focus primarily on investigations and prosecution with a view for compensation via the courts and then supported by crime prevention post-apprehension. They seek to allow further theft/crime to continue in order to be able to identify and apprehend the offender for such prosecution. Post Office Security will support this approach in most circumstances, but cannot agree on every occasion which has been discussed.”

Then, if we go down the page over to the next page, you have the second debating point, number 2.

“[Royal Mail Group] Security wish to take the prosecution lead for offences committed against [Royal Mail Group] products, including Post Office employees and/or agents. Post Office Security position is that the lead/parent organisation of the employee/agent apprehended should take the lead for prosecution (in line with their HR and Prosecution Policy and will be the organisation most likely to have the evidential material in which to support a prosecution).”

If we go over to page 3, please, the bottom of that page, John Scott forwards the email to a number of people and you’re one of the named people there. Do you recall this discussion?

Alwen Lyons: I don’t recall this discussion, no.

Mr Blake: Why would you have been copied into a discussion relating to the Investigations MOU; was that –

Alwen Lyons: I think purely because of my separation role. So on here you’ve got a lot of people who were part of that separation team, if you like, from Royal Mail as well as Post Office.

Mr Blake: If we look from the bottom of page 1 over to page 2, please, there’s a response from Tony Marsh, who is the Group Security Director at the Royal Mail Group; do you remember Mr Marsh?

Alwen Lyons: I do, yes.

Mr Blake: You’re still copied in here.

Alwen Lyons: Yeah.

Mr Blake: He says:

“Colleagues

“The conference call will take place. The main issue has been unflagged changes made by [the Post Office] in returned documents”, et cetera.

If we scroll down, I am just going to read that paragraph that begins “It is inaccurate”. He says:

“It is inaccurate and disingenuous for John to state [it quotes, I think, the bit that I’ve just read] ‘RMG Security focus primarily on investigations and prosecution with a view to compensation via the courts and then supported by crime prevention post apprehension. They seek to allow further theft/crime to continue in order to be able to identify and apprehend the offender for such prosecution’, as he does in his associated email of 6 March to Mike Young. If this was the basis of John’s briefings to Mike Young then some of Mr Young’s mornings explicable briefs and positions may now be better understood. [Royal Mail] Security naturally pursues a strategy of prevention, deterrence, disruption and detection, with prosecution and asset recovery a key element of the deterrence approach. [Royal Mail] Security would never seek to prolong offending behaviour, as this would exacerbate losses to the organisation and its customers, impact negatively on customer satisfaction and public perception and might result in an offender facing increased penalties, which would in itself be an affront to natural justice. Any suggestion to the contrary is unprofessional and does John little credit.”

Do you recall tensions between the Investigations and Security branches of the Royal Mail and the Post Office?

Alwen Lyons: So I didn’t at the time. Having read this now, it’s very clear that there were tensions between the two of them and, yeah, it’s very clear.

Mr Blake: If we scroll up to page 1, please, in the middle email, there is an email from you to Susan Crichton. You say:

“Mike would have stamped on this very quickly.”

Alwen Lyons: So my response there was that, if Mike thought that he was not being presented with all the information by John, he would have very quickly gone and sorted that out, basically.

Mr Blake: So are you there saying that Mr Marsh is wrong or –

Alwen Lyons: No, no, no. I’m saying – so, from what we’ve just heard, my understanding is that Tony Marsh is saying that John Scott has misrepresented something to Mike Young and my point here is that – and Mike’s on that email chain – Mike would have very quickly stamped on that and gone back to John and said, “I’m being given the wrong information here”.

Mr Blake: Did you know John Scott at this time?

Alwen Lyons: Yes, I knew him.

Mr Blake: Did you have a view on his abilities?

Alwen Lyons: I didn’t know him well enough to have a view on his abilities, really. I just knew him as a colleague in the business.

Mr Blake: If we scroll up we see a response from Susan Crichton, and she says:

“Oh no it’s all Lesley needs at the moment.”

Can you assist us with that at all?

Alwen Lyons: No, and is that – so –

Mr Blake: Lesley Sewell is copied in to –

Alwen Lyons: Are we assuming Lesley is John Scott’s boss? I don’t know the hierarchy so I don’t know what Susan’s referring to here.

Mr Blake: You have no recollection of this particular chain?

Alwen Lyons: No.

Mr Blake: Thank you. That can come down.

In terms of taking over the prosecution and investigation functions from the Royal Mail Group, did you have any training, were you given any training, on the particular legal and regulatory obligations on the Post Office as a prosecutor?

Alwen Lyons: No.

Mr Blake: Were you aware of, for example, the ongoing duties of disclosure?

Alwen Lyons: No.

Mr Blake: Did you give the Board or enable the Board to have a briefing on their duties as a prosecuting body?

Alwen Lyons: So I believe there was, I think it’s later, though. There was discussion at the Board around prosecution but not at the start of them becoming a Board, no.

Mr Blake: So there was discussion, I think, once the Horizon issues –

Alwen Lyons: Yes, yes.

Mr Blake: – are raised in the Board but, in terms of them taking over an entirely new function, are you aware of any briefing about their duties?

Alwen Lyons: Not that I’m aware of.

Mr Blake: Who did you consider was responsible to ensure that the Board had systems in place so that they were aware of their legal and regulatory responsibilities?

Alwen Lyons: So it would have been – in terms of governance, it would have been myself, along with the Chair.

Mr Blake: Do you see any issue there?

Alwen Lyons: I think it would have been helpful – knowing what I know now, it would have been helpful if the Board had had a briefing on the prosecutions.

Mr Blake: Do you reflect on that as a personal failing?

Alwen Lyons: It wouldn’t have been for me to provide that but I should – I could have gone and asked for whoever was now taking over the prosecutions to come to the Board and explain prosecutions to the Board.

Mr Blake: It wouldn’t have been for you to provide the training or the briefing itself?

Alwen Lyons: No, no.

Mr Blake: But as somebody who was responsible for the governance function within the Board, do you take some responsibility for not having that briefing?

Alwen Lyons: Yes, I have to.

Sir Wyn Williams: Earlier to Mr Blake, when he was asking you about when you first realised that either Royal Mail or Post Office exercised a prosecution function, you gave me the impression – and I’m not saying that in any critical sense – that you were not actually aware that that function was being exercised by either until a date after separation. Now, on the face of it, that may be quite surprising, given that something as important as prosecuting is passing from Royal Mail to Post Office.

So could we just revisit your best recollection of when you were aware that, first, Royal Mail, if at all, secondly, Post Office, were actually exercising a prosecution function?

Alwen Lyons: So, sir, I’m not sure in that email – and we’d have to bring it back up, if it suggests that we are prosecuting and, if it does, then that’s something I missed or –

Sir Wyn Williams: Well, I’m not too concerned –

Alwen Lyons: Okay.

Sir Wyn Williams: I don’t think it does, subject to Mr Blake correcting me, but I’m more interested in the fact that there’s going to be a transition from Royal Mail prosecuting people to Post Office prosecuting people and, from what you’ve told me, so far at least, there was simply no discussion, amongst any of the senior people, of which you were aware, that this was going to happen; now, is that right?

Alwen Lyons: No, I’m saying I wasn’t aware. There was discussion between senior people, clearly, because we’ve just – and Mike Young, who was the Chief Information Officer, he would have owned this and there must also have been a handover in the Legal Team with lawyers coming over from Royal Mail to Post Office. My comment earlier was that – and I still would, I think, stick to that, I wasn’t aware of the detail of the – of us prosecuting. I – so the assumption I made until later, when I found out about it, was that it was – that we were using external – the police or whoever to do those prosecutions.

Mr Blake: When you referred to “senior people”, I mean, we’re concerned really today, principally, with the Board.

Alwen Lyons: Yes.

Mr Blake: Do you think if the Board had known about it you would have known about it?

Alwen Lyons: I think so.

Mr Blake: So we’ve seen emails with Mike Young in, John Scott in, about Investigations Memorandum of Understanding –

Alwen Lyons: Yes, yes.

Mr Blake: – as an example. If that had reached Board level and there had been discussion about the prosecution function at Board level, you would have known about it?

Alwen Lyons: It would have been in the minutes, yes.

Mr Blake: Well, I suppose Board level doesn’t necessarily mean formal board discussions.

Alwen Lyons: Oh, okay. So I still believe I would have known about it because the general practice was that anything going out to the Board was sent via me, so that we could keep an understanding of what’s being sent to the Board because, otherwise, it wouldn’t be – it would not be good governance if anybody could send anything to the Board.

Mr Blake: Do you find it surprising or unsurprising that that kind of matter wouldn’t reach Board level?

Alwen Lyons: Well, a lot of things that happened through separation and the agreements between Royal Mail and Post Office didn’t – I don’t believe went to Board level because there would have just been too many of them. However, this is, you know, an important issue that the Board, I believe, should have been aware of and I’m not sure they were.

Mr Blake: I now want to ask you about your lines of reporting –

Alwen Lyons: Yes.

Mr Blake: – because you’ve given some evidence about that, that you reported to two General Counsels: first, Susan Crichton –

Alwen Lyons: Yes.

Mr Blake: – second, Jane MacLeod. There was this period in between the two where Mr Aujard was Interim General Counsel. Am I right in saying you didn’t report to Mr Aujard; during that period you reported directly to the CEO?

Alwen Lyons: That’s right.

Mr Blake: Were you the most senior officer to be reporting to the General Counsel?

Alwen Lyons: I mean, the General Counsel also had a Head of Legal and other people in their teams, so I wouldn’t have considered myself any more senior than some of those people but I was the only officer of the Board reporting to the General Counsel.

Mr Blake: Can we please have a look at WITN10010102. This is an organogram that has been produced as an exhibit by Jane MacLeod. We can see there at the top, POL Board and your position is on the top right-hand side, “Company Secretary”?

Alwen Lyons: Yes.

Mr Blake: We then see below that, the structure that falls underneath the Chief Executive and then the General Counsel. If we have a look to the left-hand side, it says there company secretary, prior to 2016, reporting directly to the Chief Executive; is that wrong?

Alwen Lyons: That’s wrong. So there was a period in 2016 which was when Chris Aujard was General Counsel, and it’s only for that period that I reported to the Chief Exec.

Mr Blake: Then we see on the right-hand side of that Company Secretariat and Company Secretary and the line going there to General Counsel; is that more of how you saw – other than that temporary position –

Alwen Lyons: Yes.

Mr Blake: – that’s where you saw your reporting line?

Alwen Lyons: Yes.

Mr Blake: Is it in any way odd that you were a member of the Board but reporting to somebody who was not a member of the Board and who is considerably below the Board?

Alwen Lyons: So I didn’t consider it odd. It didn’t change the way I behaved or – on a day-to-day basis. It didn’t – although I was a member of the General Counsel’s team, I considered myself also a member of the Chair’s team and a member of the Board’s team. So, no, I don’t think it changed the way I behaved, that I was a member of the General Counsel’s team.

Mr Blake: Who would induct the General Counsel? We’ve seen a bit of movement during this period.

Alwen Lyons: Yes. So that would have been the outgoing General Counsel. I believe that Susan would have done the induction for Chris Aujard, and Chris Aujard would have done the induction for Jane MacLeod.

Mr Blake: Did you oversee that at all?

Alwen Lyons: No.

Mr Blake: There’s quite a lot of movement at quite an important time –

Alwen Lyons: Yes.

Mr Blake: – for the Inquiry. I mean, just to give you a very brief timeline, we have the separation in April 2012.

Alwen Lyons: Yes.

Mr Blake: We have the Second Sight Interim Report in July 2013. We have various important advice, Mr Clarke’s Advice on Gareth Jenkins in July 2013 –

Alwen Lyons: Yes.

Mr Blake: – Mr Clarke’s Advice on the retention of materials, the “shredding” advice in August 2013?

Alwen Lyons: Yeah.

Mr Blake: We have Susan Crichton leaving towards the latter half of 2013 –

Alwen Lyons: Yeah.

Mr Blake: – Mr Aujard taking his position in October 2013. Throughout the later period so 2014, you have issues with the Mediation Scheme and then you have Jane MacLeod taking over in January 2015.

Alwen Lyons: Mm-hm.

Mr Blake: How were those 2013 issues, from Susan Crichton’s time, passed to somebody like Jane MacLeod? How would the company ensure that that institutional knowledge from 2013 moved to the person who took on the role in 2015?

Alwen Lyons: So my understanding is that that the – so the briefing from Susan to Chris Aujard, I believe Susan did that, and she would also have had at the time a Head of Legal, who would presumably have – not that I have any knowledge – but would have briefed Chris Aujard on the legal issues that are – that are going on with the company. I don’t specifically remember – or I don’t believe that I was involved in that briefing, although I must have briefed him about the Board because that was my role.

Mr Blake: But you don’t recall being responsible in any way for that passing of information?

Alwen Lyons: No, not at all.

Mr Blake: Thank you. That can come down.

I want to move on now to your early work on what I’ll call Horizon issues.

Alwen Lyons: Okay.

Mr Blake: We see some emails. The first one I’ll look at is March 2012. That’s POL00096052. It’s an email chain of 13 March 2012. It’s an email from Alice Perkins to Paula Vennells, Susan Crichton, you and Lesley Sewell. The subject is “James Arbuthnot” and it says:

“Alwen will do a note of the meeting for you and attach on a personal basis, a document which [James Arbuthnot] gave me. I won’t duplicate that but would like to talk to you about this once you’ve had a chance to read them and what follows.

“I think [James Arbuthnot] genuinely wants to seek a resolution to the difficulties concerned and is willing to believe that we will do the right things. There is a real prize for us in finding an effective way of convincing him and his fellow MPs that things are as they should be. He believes that this will quieten down Private Eye and would prevent proposed escalation, eg adjournment debate etc. To do this, we might commission a new independent review of the Horizon related questions (my thought) or invite him accompanied by someone from Computer Weekly to visit the Model Office and be shown how Horizon works (his suggestion) or something else altogether.

“I promised to go back to him once I had the chance to consider all this. I would like to do so by Easter or at least have fixed a further meeting by then.

“I am asking Glenda to set up a further meeting to discuss this amongst ourselves in the next couple of weeks.”

So there’s a small group here who are discussing James Arbuthnot and what looks like what ultimately becomes Second Sight’s investigation.

Alwen Lyons: Yes.

Mr Blake: Why were you part of this group?

Alwen Lyons: Well, so Alice is – I went with Alice to visit James Arbuthnot and this is the note she’s asking for about that meeting. I believe Alice wanted me to be involved when she couldn’t be around, almost as her ears on anything that was discovered.

Mr Blake: Do you think that that is part of the role of company secretary or is that something else?

Alwen Lyons: I think it is part of the role of company secretary to flag up issues to the chair, if they arise and you have to be part of the conversation to enable you to flag those issues up.

Mr Blake: Were you there simply to listen or to provide a substantive contribution?

Alwen Lyons: So I think I was – when Alice was in the room, I was there to listen and take a note and support her and, therefore, the Board. When she wasn’t in the room, I would contribute but I always did so thinking that I’m here representing Alice and the Board.

Mr Blake: Could we turn, please, to POL00107712. We’re now on 11 April. If we could start on page 3, please. There’s an email from yourself to Rod Ismay, and you say:

“Rod, can we have the file on this office as well. I will ask Glenda to organise an urgent meeting with the four of us to go through both files to see if there are similarities. If Oliver and James are coming it would be great to be able to look at the keystrokes which caused this and explain why they happened.”

So this is relating to Oliver Letwin, so we’ve now got James Arbuthnot and Oliver Letwin –

Alwen Lyons: Yes.

Mr Blake: – and you’re asking Rod Ismay to provide you with a file; is that right?

Alwen Lyons: Yes.

Mr Blake: Do you recall this?

Alwen Lyons: Don’t recall it but, from reading it now, yes, I –

Mr Blake: I think it’s the case of Ms Merritt –

Alwen Lyons: That’s what I was doing –

Mr Blake: – that was being raised by Oliver Letwin?

Alwen Lyons: Yes, yes.

Mr Blake: A few questions in relation to this. I mean, first of all, were you then taking a slightly more proactive role?

Alwen Lyons: So I believe I was trying to get all the people that were inputting to the notes for Alice and Paula for this meeting to provide information, so that a note could be written. That’s my belief of what’s going on here.

Mr Blake: Reference here to looking at the keystrokes which caused the issue.

Alwen Lyons: Yes.

Mr Blake: You had, by this stage, worked at the Post Office and Royal Mail for a very considerable period of time.

Alwen Lyons: Yes.

Mr Blake: You had worked with subpostmasters?

Alwen Lyons: Yes.

Mr Blake: You had, as you say, used Horizon but never balanced on Horizon?

Alwen Lyons: Yes.

Mr Blake: What did you mean by “keystrokes”?

Alwen Lyons: What I meant by this was that we’re going to talk about two cases. What I would have liked to see was the accounts for those two cases, which show the – all the transactions, the keystrokes, that have gone into those accounts so that we can somehow find out where a discrepancy has happened, where a mistake has happened. So that’s what I mean by “keystrokes”.

Mr Blake: Keystrokes implies some sort of recording of every single move that a subpostmaster makes?

Alwen Lyons: Yes, yes.

Mr Blake: What was your understanding of the information that was available to either subpostmasters or to the Post Office, in that respect?

Alwen Lyons: So my understanding, at this point, and – was that a subpostmaster could see everything in their account and they would be able to look at their account and look at all the transactions and understand what had happened.

Mr Blake: Did you understand that they could look at the transactions or the keystrokes because those are two different things, aren’t they?

Alwen Lyons: Okay, so, in my head, I was – so I don’t differentiate between those two things. That’s maybe because I’m not as IT literate, or whatever, but what I thought I was saying here was I would like to look at the keystrokes for each transaction. So –

Mr Blake: So every step that led up to the transaction –

Alwen Lyons: Every step, yes, yes.

Mr Blake: Did Mr Ismay or anybody come back to you and say that’s possible or not possible?

Alwen Lyons: Not that I can remember. I think we got a – I think we got the files through that we needed to put together the brief for the two MPs.

Mr Blake: Did you, at this stage, know what ARQ data was?

Alwen Lyons: No.

Mr Blake: Do you recall looking at what you understood to be the keystroke data at that time or the transaction data?

Alwen Lyons: So I didn’t look at this in any detail. The people who were providing this would provide this for the report for the MPs. I didn’t have the knowledge to be able to challenge any of these reports.

Mr Blake: Could we turn to POL00057656, please. This is a note from 3 May 2012 discussion on James Arbuthnot and Oliver Letwin meeting. This is your note, I think your name is at the bottom of it.

Alwen Lyons: Yeah.

Mr Blake: Do you recognise it?

Alwen Lyons: I don’t recognise it but it clearly is my note.

Mr Blake: It has there “Present: Alice, Paula, Susan and Alwen”, so a very small group: Chair, Chief Executive, General Counsel and you?

Alwen Lyons: Yes.

Mr Blake: “On 17 May, we have [James Arbuthnot] and [Oliver Letwin] arriving at 10.30 with [Oliver Letwin] leaving at 11.30 and [James Arbuthnot] leaving at 12.00:

“The best outcome of this meeting would be a position where they believe our evidence in their individual constituent’s cases and support how we are handling the current situation.

“Longer term, once they are assured by the review of Horizon they could ‘help’ to win others round.”

If we scroll down on the same page, one of the bullet points says as follows, it says:

“Explain the old and new Horizon systems and that any live system review would have to be on the new system, although we have an audit trail of every keystroke in the old system kept for 7 years.”

There’s again there the reference to “keystrokes”.

Alwen Lyons: Yes, yes.

Mr Blake: Was that a term that the other attendees at this meeting would have used or is this your wording?

Alwen Lyons: So this is my note of the conversations in the meeting, so I don’t know whose words those are in the meeting. So I don’t know what the others in the meeting knew and I don’t know who mentioned “keystrokes”, if it was me or someone else. I don’t have a recollection.

Mr Blake: Do you recall anyone ever challenging that term or anyone explaining the level of information that was or was not available to the Post Office?

Alwen Lyons: No.

Mr Blake: Were you aware of costs involved in obtaining what we know as ARQ or audit data?

Alwen Lyons: No, at this – I didn’t know what ARQ data – or what it was called or whatever.

Mr Blake: Thank you. Could we please turn to POL00180773. We’re still in 2012. If we scroll down, there’s an email from Hugh Flemington. So if we – yeah, that’s fine. Thank you. So it’s Mr Pardoe to Hugh Flemington, Susan Crichton is copied in. It’s then forwarded to you by Hugh Flemington slightly above but we can stick with this email to start with. Did you know Mr Pardoe?

Alwen Lyons: Yes.

Mr Blake: So he says it’s related to “Wincor ATM Log Fault”, and he says:

“As per our conversation I have been advised that a contract termination issue has been passed, by former [subpostmaster], to Shoosmiths in regards to alleged Horizon issues and an erroneous entry in an ATM log (not a Horizon log).”

It gives the details:

“Brampton SPSO Barnsley.

“Contract termination due to an aged debt of £20,000 – former [subpostmaster] claims ATM/Horizon was at fault for the loss in as much as a transferred to ATM figure doubled up (matter dealt with by conduct and not prosecution) …

Whilst in summary the former [subpostmaster] was not operating the ATM reconciliation correctly, she is alleging that the Horizon system and ATM machine generated the loss and that she has been the innocent victim in this matter.”

If we scroll up, please, we have Mr Flemington sending you and Ms Crichton that email and saying:

“So a possible ATM issue rather than Horizon this time …”

Your response was:

“This isn’t the only ATM one though so we need to be careful we don’t make that the next computer system they want a forensic review of!!”

Can you assist us with why you were being copied in and why this correspondence was taking place with Mr Flemington?

Alwen Lyons: So I don’t know why I was copied in by Hugh. So I don’t know.

Mr Blake: We’ve seen your involvement with James Arbuthnot –

Alwen Lyons: Yes.

Mr Blake: – with Oliver Letwin.

Alwen Lyons: Yes.

Mr Blake: By this stage, were you taking more of an active role in those discussions regarding potential litigation, for example, we see here the mention of Shoosmiths, which is a law firm?

Alwen Lyons: Yes, I don’t believe I had any involvement in the Shoosmiths issues but this – it may well be that Hugh thought, because of the James Arbuthnot and the MP meetings, that it was – you know, it mentions Horizon, so I needed to be included.

Mr Blake: Your comment there that “[We have got] to be careful we don’t make that the next computer system they want forensic review of”, was that reflective of a general view in the company; was that something that was simply your own view?

Alwen Lyons: So I think that – I think – I must have known at the time, and I don’t recall now, but I must have known at the time that there were ATM – there were issues with the ATM reconciliations and how those numbers got put into Horizon. But it was a completely separate system, so I don’t know why I made that comment. You know. No, I don’t know.

Mr Blake: Could we please turn to POL00180830. We’re now just over a week later, 28 June, on page 2, please. Hugh Flemington sends Paula Vennells an email.

“Hi Paula

“I just wanted to flag this court case to you.

“We have civil (not criminal) case in court tomorrow where we have already had an admission from the subpostmaster that she owed us the money. Tomorrow sees us try to put a charge on her property so if she ever sells it we (hopefully) get paid back out of the scales proceeds.”

Then it gives a brief history, and it says:

“She started out as a [subpostmistress] in 2008 and seems to have had balancing issues from the start. She closed temporarily in 2010 due to ill health and finally for good in 2011. We never terminated her because of her illness. She resigned in June 2011 but it seems by November 2011 we had noticed losses (10k). The husband then makes various allegations. However the subpostmistress offers a debt management payment which we reject (only £5 per month). We issued court proceedings for the whole debt in [February] this year and the subpostmistress admitted the debt! We then took the steps to place a charging order on the property to try to ensure we actually see the money if we ever sell their property.”

Mr Flemington proposes as follows, he says:

“I think we proceed with the hearing.”

Over the page, please, on page 3 at the top of page 3 he says:

“I don’t think we should agree to any adjournment application as it will just encourage more debtors to play the system and use these tactics to slow down our ability to recovery. They will all jump on the bandwagon. We will however need to manage the PR side and Alana has already been briefed by Chris our litigator.”

If we scroll down it details the complaint by the subpostmistress’s husband it’s the fourth pull up there, halfway through that, it says:

“Mr Etheridge appears to have blamed the ATM for the losses, but he never sets out any specific allegations. He also refers to a lack of adequate training and at one point appears to blame staff members for entering inaccurate detail on to the Horizon system. No specific allegations are made about the Horizon system itself. He also accuses the business of failing to provide adequate support.”

If we scroll, please, to page 1, the bottom of page 1, Hugh Flemington sends this email to you, Paula Vennells and Susan Crichton. So, again, the same small team that we saw before:

“For your information only – update on this one for you:

“The hearing went ahead last Friday and we were granted a ‘Final Charging Order’ over Mrs Etheridge’s … house.

“The district judge made it clear this doesn’t mean [the Post Office] can force her to sell her property. It just protects [the Post Office’s] position if she ever does sell.”

The bottom point says:

“Apparently Mr Etheridge turned up to court with a bundle of papers, including correspondence with his MP. We have not had sight of this bundle but have requested a copy …”

If we scroll up, please, there’s a response from Ms Vennells, she says:

“Hugh: Thank you very much. Just so I’m clear, does this mean we got the outcome you wanted, ie no adjournment and future repayment of the debt?”

His response is as follows:

“Yes, we got the outcome we wanted and we have the flexibility not to press it further etc if we ever want to be ‘caring’, etc.

And yes we are looking at the whole area of prosec [I think that’s prosecutions] etc and things like economic cut-off levels below which we don’t chase etc.”

Can you assist us with why you were copied into this email?

Alwen Lyons: So I – again, I don’t know why I was copied into this email. It may well have been because that enabled them to update Alice, I don’t know. I don’t remember updating Alice from this email, so – I don’t remember this email but I would imagine it was because it was Horizon issue and Hugh – or Hugh felt that I needed to know about it.

Mr Blake: It looks as though, from the summer of 2012, the Post Office was looking into the whole area of prosecution –

Alwen Lyons: Yeah.

Mr Blake: – and things like economic cut-off levels, so perhaps not going after the smaller cases?

Alwen Lyons: Yes.

Mr Blake: Is that something, as Company Secretary, would have been relevant to your role as Company Secretary?

Alwen Lyons: No, I think Susan Crichton as General Counsel was the person leading on that. My only role would have been if and when it came to the Board, so at – the board were – it was explained to them what decisions the business were making.

Mr Blake: Would it be of relevance to the Board that the whole area of prosecutions was being rethought at that stage?

Alwen Lyons: So I don’t know if the Board knew that at this point and my expectation would be that, when we have something to tell the Board, we would then take that to the Board and say, “This is what we’ve considered and this is the changes we would want to make”.

Mr Blake: Do you recall following that up at all, asking any questions at this stage about the business looking at the whole area of prosecutions?

Alwen Lyons: I don’t because I would have seen there that Susan was picking that up.

Mr Blake: Would you have independently taken anything forward to the Board or would you have relied on Susan Crichton to raise it as an issue with you?

Alwen Lyons: So I would have relied on Susan Crichton.

Mr Blake: Sir, that is probably an appropriate moment to take our first morning break.

Sir Wyn Williams: All right. What time, 11.10?

Mr Blake: Thank you very much.

Sir Wyn Williams: Fine.

(11.00 am)

(A short break)

(11.11 am)

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

Sir Wyn Williams: Yes, I can, yes.

Mr Blake: Sticking with the summer of 2012, can we please look at POL00180986, please. If we could please turn to page 2, 19 July 2012. We have an email here from Ian Henderson of Second Sight to Susan Crichton, and there is a draft policy statement regarding what by then is the Justice for Subpostmaster Alliance submitted cases. Mr Henderson says:

“This is probably way off but this is the sort of briefing note that Janet and I discussed this afternoon.”

Can you recall who Janet was?

Alwen Lyons: So Janet was James Arbuthnot’s PA or Executive Assistant, actually.

Mr Blake: Thank you.

Alwen Lyons: It was Janet Walker.

Mr Blake: The statement, the draft statement, says as follows:

“[The Post Office] has agreed that the Office of the Right Honourable James Arbuthnot should contact Alan Bates and the Justice for Subpostmasters Alliance and request that [they] submit approximately 5 of their best cases for interpreter rem by Second Sight Support Services Limited.”

So this is the beginning of Second Sight’s work on those cases. There is a section at the bottom that addresses individuals bringing their cases to the attention of Second Sight and to James Arbuthnot, Second Sight were proposing a system whereby subpostmasters could provide information without fearing that that information would be used to prosecute them. The draft announcement says, as follows, it says:

“[The Post Office] also recognises that some members of the Justice for Subpostmasters Alliance may have concerns about submitting cases for independent review by Second Sight where even basic case information is communicated to [the Post Office]. Whilst [the Post Office] cannot provide any form of immunity from prosecution in respect of information held by [the Post Office], in recognition of the concerns expressed by the JFSA, [the Post Office] agrees not to take any prosecution action relating to information provided by JFSA without the agreement of the Board of [the Post Office] and to deal with each case submitted in a sensitive manner.”

Just pausing there, by this stage, undoubtedly you were aware that the Post Office carried out a prosecution function?

Alwen Lyons: Yes.

Mr Blake: Could we please turn to the first page, the bottom of the first page. There’s an email from Susan Crichton to you and Mr Baker. She says as follows:

“Alwen and Simon – can we discuss, Ian produced this at my request because Kay Linnell (forensic accountant) make much of the fact that she had been contacted by a number of current subpostmasters who had issues with Horizon but were too frightened to contact [the Post Office] because of the consequences … obviously we want to be able to review these current cases but I said that we could not give a blanket undertaking not to prosecute so this is the result. What do you think?”

Why is Susan Crichton contacting you and Mr Baker?

Alwen Lyons: I think she’s contacting me because it mentions the Board. So, in the proposal, it mentions that the Board could be – could almost sign off cases being allowed into the scheme, into –

Mr Blake: I think the proposal was that they wouldn’t prosecute without the authority of the Board?

Alwen Lyons: Right, yes. So I think that’s why Susan has included me in this.

Mr Blake: If we scroll up, we have your response. You say:

“Don’t really like the Board being involved but can’t see any way round it. My concern is that this becomes the route for misbalances and cases that could be sorted by Angela or Rod and their teams will use this route for [business as usual].”

Susan Crichton says:

“Thought we could substitute ExCo?”

Is your understanding of that that she is intending to replace the Board with the Executive Committee in terms of that authorisation?

Alwen Lyons: Yes, that’s my understanding.

Mr Blake: Thank you. Then you respond and say:

“Yes, I think so if possible.”

It was only, at that stage, five cases that were being looked at by Second Sight. Why did you not want that to go to the board?

Alwen Lyons: Because it might not have stopped at five, and it didn’t feel to me, as if it was a Board decision.

Mr Blake: Were issues such as misbalances seen as principally matters for the Executive Committee and below, at this stage?

Alwen Lyons: So I think the misbalances – I think that Angela was doing – had already started a piece of work looking at improving support and I’m – I would have expected misbalances to go through there, rather than to come to the Board.

Mr Blake: Was this, we see your response there, was that a decision you made on your own?

Alwen Lyons: I don’t know. I may well have run this past Alice. I have no evidence that I did that but I may well have done.

Mr Blake: It certainly appears from this email that you were acting as some sort of filter mechanism for the Board; is that something that you would routinely do?

Alwen Lyons: So if anybody had come to me and said, “We would like the Board to do this”, I would general have gone to the Chair and said – not necessarily to do with this, to do with anything in the business – I would have gone to the Chair and said, “Do you think this is appropriate for the Board? Is it the right level?”, and we’d have had that discussion.

Mr Blake: In this particular case, you’re not sure whether you did that or not?

Alwen Lyons: I can’t remember.

Mr Blake: Perhaps if we scroll down slightly on this page, we have the email from Susan Crichton to you at 10.58, your response at 2.51. Is it likely or unlikely that you would have had a conversation between those hours?

Alwen Lyons: I can’t say. If Alice had been in the office, for instance, I may well have popped into her office and said, “Alice, can I just run this past you?” I –

Mr Blake: I mean, you refer there to, for example, “My concern is that this” –

Alwen Lyons: Yes, I’m not saying – and it may well – if I had talked to Alice, I may well have said I have spoken to Alice and she believes this, so I can’t say one way or the other whether I spoke to the Chair.

Mr Blake: Given that it doesn’t say, “I spoke to Alice”, and given that it says “My” –

Alwen Lyons: Then – sorry.

Mr Blake: Is it more likely or less likely that this is something you decided on your own?

Alwen Lyons: I can’t really say but I think it’s probably more likely because I would have put it in the email if I’d spoken to Alice.

Mr Blake: Thank you. Can we turn to POL00143704 and the bottom of the first page. We have an appointment reminder or place holder, “Room 108 and by [conference] call”, and the attendees required: Susan, that’s Susan Crichton; then you; Simon, Simon Baker; Ron and Ian, that’s Ron Warmington and Ian Henderson. Did you have regular meetings at this stage with Second Sight?

Alwen Lyons: So yes, there were regular meetings with Second Sight.

Mr Blake: How regular were they?

Alwen Lyons: I can’t really say how regular. But we had a lot of contact with them.

Mr Blake: Why were you a required attendee?

Alwen Lyons: So, again, I think it would have been because I went to the initial meeting with Alice and all the things flowing from that, and Horizon was now – we’re coming up to, I think, the Second Sight Interim Report.

Mr Blake: We’re still in 2012?

Alwen Lyons: Oh, okay, sorry.

Mr Blake: We’re still some way off?

Alwen Lyons: Some way off that, okay. So I think I was included in things because of the initial contact with Alice and that’s why I was included and was invited to meetings and –

Mr Blake: You weren’t just invited; you were a required attendee?

Alwen Lyons: Oh, yes, I –

Mr Blake: That suggests that you had –

Alwen Lyons: Sorry, I didn’t mean to interrupt –

Mr Blake: There are only a very small number of people, three people from the Post Office. It is suggested that you played more than just, for example, a note-taking role?

Alwen Lyons: No, I did take part in these meetings.

Mr Blake: Yes. Could we now move on, then, to 2013 and could we start with POL00184716. This is February 2013. If we scroll down, please, there’s an email from Mr Warmington to Susan Crichton. I think you’ve said in your witness statement, it’s paragraph 163, that you were involved in ensuring that Second Sight’s questions were addressed by the most appropriate person?

Alwen Lyons: Yes.

Mr Blake: Here we have a complaint from Second Sight in relation to the information that’s being provided by the Post Office. Mr Warmington says as follows, he says:

“Susan:

“As previously reported, Ian and I are getting seriously concerned about whether [the Post Office] is getting to grips with issues that we are raising. Only Angela van den Bogerd seems to have grasped the need to really dig into these assertions and join with us (Ian and I) in our efforts to seek the truth. An air of defensiveness still seems to dominate here and we don’t seem to be able to get the message across that there is no future in [the Post Office] simply trying to ‘defend its patch’ by constantly refuting – with scant effort or evidence – every allegation that we put forward.”

Was that a complaint that you recognised at the time?

Alwen Lyons: So I’m not sure I do – or I did. I can’t remember this specific email but I think my role here was to try and find the right people that could help Second Sight get what they needed I don’t think – at this point, they are sharing what they need, I think they’re sharing the allegations with us but I’m not sure we’ve seen any evidence at this point. I think we’re just responding to allegations.

Mr Blake: Yes.

Alwen Lyons: And, therefore, maybe it appeared we were defensive.

Mr Blake: If we scroll up, please, we then have a response from Susan Crichton to you, and she says:

“Can we have a chat about this when you get a moment?”

Do you recall speaking with Susan Crichton about concerns that were being raised by Second Sight about an air of defensiveness at the Post Office.

Alwen Lyons: I don’t. I don’t recall.

Mr Blake: Why would Susan Crichton want to talk to you about the content of this email?

Alwen Lyons: I don’t recall this email. I don’t know what she wanted to talk to me about. It could have been that she wanted me to help put some more pressure on people to be providing Second Sight with the information they needed.

Mr Blake: Was that part of your role?

Alwen Lyons: I did chase people for people, yes, I did chase.

Mr Blake: At whose instigation?

Alwen Lyons: So, at whose – so I believed that the Chair had agreed to this – the Second Sight review – the Chair wanted it to go ahead and my belief was that I had to help it as much possible to get to the information it needed as quickly as possible. So why am I doing this? Because I – in my – I believed I was expected to do that because we’d signed up to Second Sight doing this review.

Mr Blake: Expected by who?

Alwen Lyons: By the Chair and by the – you can’t say the business because that’s not an entity but, ultimately, by the Chair.

Mr Blake: We’ll also see in due course complaints from Second Sight that they were being provided with large amounts of irrelevant information. Is that a complaint that you recognise?

Alwen Lyons: I don’t remember that. No, I don’t remember that.

Mr Blake: Let’s turn to POL00185741. There’s a note of a meeting with Second Sight, 11 March 2013. Are these your notes?

Alwen Lyons: Does it say at the bottom?

Mr Blake: It doesn’t have a name at the bottom.

Alwen Lyons: Unlikely, I think, but they could be.

Mr Blake: Attendees, we have you and Simon Baker with Mr Henderson and Mr Warmington. Were you the most senior Post Office representative at that meeting, would you say?

Alwen Lyons: Yes, probably.

Mr Blake: If we scroll down, we have “Items discussed”. One of them is the John Armstrong case:

“Very simple incident.

“Occurred last year.

“Customer wanted to pay for a phone bill, while it was being processed there was a power failure.

“Horizon backed out the transaction – without communicating this to the subpostmaster.

“For the first time we have evidence Horizon has done something without reporting to the subpostmaster.

“These incidents seem to be limited to power or communication failures.

“Some evidence that subpostmasters have raised these type of issues with the Post Office but Post Office have fobbed off the subpostmaster (eg of letter from Andy Winn).

“We expect to receive this spot review by the end of the week.”

This seems to be the first evidence that they have seen of – that Horizon could do something without a subpostmaster knowing that it was being done; do you agree with that?

Alwen Lyons: So this must be Second Sight’s note because they are – the way it’s written. So I don’t know exactly what happens when there’s a communication failure. I always believed that a report was generated by Horizon to tell the subpostmaster what had happened, what had gone through and what hadn’t. So I’m unclear about how I would have responded to Second Sight saying this.

Mr Blake: If your position before this meeting was that the subpostmaster would be able to see what went wrong – and we saw this morning your reference to, for example, keystrokes and that kind of information?

Alwen Lyons: Yes, yes.

Mr Blake: You are here finding out that, for the first time, there is evidence that Horizon has done something without reporting it to the subpostmaster. That must have been quite a significant moment for you, mustn’t it?

Alwen Lyons: So I would have wanted to see the evidence of what they’ve got here, what Second Sight are saying add I don’t remember seeing any evidence.

Mr Blake: Do you remember asking for the evidence?

Alwen Lyons: I don’t.

Mr Blake: Do you remember doing anything about this particular information?

Alwen Lyons: I don’t, because I think I would still have believed that the subpostmaster could see this disconnect.

Mr Blake: We have a meeting with Second Sight where you are the most senior attendee from the Post Office where you are being told, for the first time, that they have evidence that Horizon has done something without reporting it to the subpostmaster. Must that not have been a very significant moment in your career?

Alwen Lyons: So as I say, I still believed that the subpostmaster could see this and I would have – I should have asked for more evidence, and I don’t believe I would have done. I wasn’t – although I was the most senior person here, I’m not the IT person here, Simon is. So I would have expected him to have also picked up on this.

Mr Blake: Second Sight were your independent investigators –

Alwen Lyons: Yes.

Mr Blake: – who had been appointed by the Post Office to carry out an independent investigation. Whether you, somebody who wasn’t familiar with IT, thought or didn’t think that the system could do something, you’re here being told that, in fact, it can do something without telling a subpostmaster?

Alwen Lyons: So yes, that is a serious issue. I don’t remember in Second Sight’s Interim Report it having this.

Mr Blake: That’s further down the line. We’re now only in March 2013.

Alwen Lyons: Yes, yes.

Mr Blake: But do you recall raising it …

Alwen Lyons: I don’t, no.

Mr Blake: If we look down, there are actions and it says:

“Alwen to discuss with Alice the confidentiality conditions of the MPs meeting and her status/role at the meeting.”

Can you assist us with the “her status/role at the meeting”; is that your role or Alice’s role at the meeting?

Alwen Lyons: Alice’s role, I’d have said.

Mr Blake: I think you’re the only one who’s listed here to be having a conversation with the Chair. Were you, at this meeting, effectively the route between Second Sight and the Chair?

Alwen Lyons: Well, I suppose I was always the route between Second Sight and the Chair. I was the route of anything and the Chair.

Mr Blake: Do you recall a conversation with Alice Perkins following this meeting?

Alwen Lyons: I don’t.

Mr Blake: Could we please turn to POL00186290. We’ll start at the bottom of the first page, 10 April 2013, Simon Baker emails to you and to Susan Crichton. Again, it’s that team of three:

“Susan, Alwen

“Next Wednesday morning … I have scheduled an offsite meeting with the three of us to get some thinking time to cover the following points …”

He sets out there the various points. He says:

“Ian is holding the date in his diary. Ron can’t make it in person, but could join us on the phone.”

So it seems as though they’re trying to schedule a meeting with Second Sight, Ian and Ron; do you recall that?

Alwen Lyons: No I don’t recall that specific meeting.

Mr Blake: If we scroll up, please, we have a response from you. You say:

“This isn’t in my diary …”

I think that must be:

“… I am [perhaps ‘meant’] to be with Alice in [Wednesday] morning.”

Alwen Lyons: Yes.

Mr Blake: If we look at the top email from Susan Crichton to you:

“Alwen are you going to be with her all morning. Simon and I need some time with you to work out the strategy for taking this forward, and your input was key as we need to decide how we deal with the aftermath of the [James Arbuthnot] meeting and how to take this forward.”

It seems from that email that Susan Crichton has formed the view that your input is key in those meetings; is that something you would agree with or not?

Alwen Lyons: Well, it is key because they want to decide in the aftermath of the James Arbuthnot meeting, so it’s key because, again, they want my input, clearly, and it would be input with the Board in mind and with things in mind that – because that’s the position I came from.

Mr Blake: You say with the Board in mind?

Alwen Lyons: Or, sorry, with the Chair in mind.

Mr Blake: With the Chair in mind?

Alwen Lyons: Yes, not the Board.

Mr Blake: So this is, again, with the background, if we trace it back to where we started this morning with the meeting with James Arbuthnot, the meeting with Oliver Letwin –

Alwen Lyons: Yes.

Mr Blake: – you were, in your view, acting on behalf of the Chair in these meetings that followed with Second Sight?

Alwen Lyons: Yes.

Mr Blake: Had you been asked to carry out that role by the Board?

Alwen Lyons: No.

Mr Blake: Did you see your role as acting in this role as Company Secretary, or as something else?

Alwen Lyons: I don’t think you could say it was the traditional company secretary role. I think it was wider than that.

Mr Blake: Wider or separate to that?

Alwen Lyons: I think – still think it was predicated on the Chair and going back to supporting the Chair and being the Chair’s ears and eyes in the business, if you like. So I think it was still supporting that role.

Mr Blake: In your training to become company secretary, was part of that training informing you that you were to be the Chair’s ears and eyes on the business?

Alwen Lyons: So I think there was something about facilitating the Chair – the chair’s connection with the business, and – but this is a long – quite a long time ago now. I can’t specifically remember what was in that training.

Mr Blake: But did you see it as part of your role as Company Secretary to be attending these kinds of meetings and to be pursuing objectives on what you understood to be on behalf of the Chair?

Alwen Lyons: No, I think it was wider than my traditional Company Secretary role.

Mr Blake: Was that something you ever discussed with the Chair, “Why am I performing a job that is not, in fact, the job of a company secretary?”

Alwen Lyons: I can’t remember having that conversation with the Chair. I had weekly one-to-ones with the Chair and the Chair would have known I was doing this work, so – but I don’t specifically remember asking her “Do you want me to do this work on your behalf?”

Mr Blake: But did you have any concerns that you’re being asked to do a role that is, in fact, not the role of a company secretary?

Alwen Lyons: I don’t think so at the time.

Mr Blake: Looking back at it now, do you think you were being asked to do a role or carrying out a role that was not, in fact, your role?

Alwen Lyons: I think, as time went on, and this became – there was more to do in this role, if you like, I am sure there were times when I thought then, “This is a lot of work on top of my traditional company secretary role”, and I probably think the same now.

Mr Blake: Why were you being asked to do this role?

Alwen Lyons: I think some of it was about herding the business to try to get them to respond to questions and information for Second Sight. So I think I was being asked to facilitate the independent – getting information to the independent review.

Mr Blake: Could we please turn to POL00186602. We’re now on 7 May 2013. At the bottom of the page, Mr Baker emails Angela van den Bogerd, Susan Crichton and you, and he says:

“I would like to release the Spot Reviews to Second Sight tomorrow evening. Any chance I could have your comments or approval by the end of day tomorrow?”

If we scroll up we have your response, which is:

“You already have my sign off Simon.”

Why, again, as Company Secretary, would you need to sign off the provision of spot reviews to Second Sight?

Alwen Lyons: So I don’t remember this email but I think what’s – when the spot reviews were put together, there were certain people that owned parts of the spot review because they were subject experts in those areas. So, for instance, Angela would have owned anything to do with the Network, Lesley would have owned or – would have owned anything to do with IT and so I don’t think there were any specific areas that I had to sign off because I wasn’t the subject matter expert, which is why I’m saying – I think why I’m saying to Simon “You’ve already got my” – “I’m happy for you to send these but you need everybody else’s input first”.

Mr Blake: You’re not saying there, “You don’t need my sign off”, though –

Alwen Lyons: No.

Mr Blake: – you’re saying, “You already have my sign off”?

Alwen Lyons: Yes, yes.

Mr Blake: Why would you have needed to sign off the provision of information to Second Sight?

Alwen Lyons: So – and I can’t remember this email, as I say, but I don’t think I am signing off the information. I think I’m signing off “This is what the spot reviews looked like and, if it’s not me providing information and detail in that area, that person should be signing it off, not me, but I am happy for this to go to Second Sight”. I don’t think I’m signing off the detail.

Mr Blake: No, but Mr Baker is saying, “I would like to release the spot reviews to Second Sight”, can he have your comments or approval and you say, “You already have my sign off”. It certainly reads as though you are signing off the release of the spot reviews to Second Sight. My question is: why would you, Company Secretary, need to sign off the release of the spot review to Second Sight?

Alwen Lyons: So, as I say, I can’t remember this. It may well have been that Simon and I have had a conversation about the spot reviews and I’ve said to him “When you’ve got all the information, then, you know, it doesn’t need my further sign off. You’re getting information from all these people”. But I’m –

Mr Blake: It doesn’t say, “You don’t need my sign off”, it says, “You already have my sign off”.

Alwen Lyons: So then I would have said that to him face-to-face. That’s what I’m assuming. I am assuming this – there hasn’t been another email where I’ve signed this off. This is, I think, I’ve had a conversation with Simon which says, “The spot reviews need to get to Second Sight”, and he’s going and asking for information is right in the spot reviews, and I’ve already that the conversation which said, “Yes, we need to get these to Second Sight”. But that’s just me surmising when reading this now.

Mr Blake: Why, as Company Secretary, would you need to sign off the provision of information to Second Sight?

Alwen Lyons: So, as company secretary, I don’t think I did have to sign it off.

Mr Blake: Thank you. Could we turn to POL00029588. The second half of the page, please, is an email from Gareth Jenkins to Mr Baker. So by 16 May 2013, did you know who Gareth Jenkins was?

Alwen Lyons: I did, yes.

Mr Blake: How did you know who he was?

Alwen Lyons: Mainly from these emails.

Mr Blake: Can you recall when you first approximately came into contact, was it in this context?

Alwen Lyons: I think so, yes.

Mr Blake: Was it gathering information for Second Sight?

Alwen Lyons: Yes.

Mr Blake: Yes. The subject is “Balancing issues in 2010”, and he’s setting out there, I think, what we know as the receipts and payments mismatch issue. I’ll just read to you a little bit from that email. He says:

“If the clerk presses Cancel … and on the rollover screen then presses Rollover again, then the Final Balance report will have Receipts/Payments mismatch (Total Receipts not equal to Total Payments) which will ultimately lead to a Non-zero Trading Position on the Branch Trading.

“If the clerk does not check the Final Balance report, he/she may not be aware that the report has a Receipts/Payments mismatch.”

So the net effect is that the subpostmaster might not be aware that there is, in fact, a receipts and payments mismatch.

At the bottom of this page, he says:

“One of the situations that we are taking as a result of the Local Suspense problem we found this year is to put some further checks in for ‘situations that should never happen’ that related to that problem and to raise an alert if they do.”

The reference there to “situations that should never happen”, did that strike you at all? We will see that you are copied in to that email. Is this is an issue that caused you any concern as at 16 May 2013?

Alwen Lyons: So the way I’m reading this that the mismatches should never happen, so the –

Mr Blake: Should never happen?

Alwen Lyons: Yes, should never happen. So the piece above where the final report mismatch, that’s the way I’m reading that, is that, in the future, those things should never happen.

Mr Blake: But, also, that things have occurred that shouldn’t happen and that wouldn’t necessarily be visible to a subpostmaster?

Alwen Lyons: But where is – you see, I can’t see anywhere here that it’s not visible to the subpostmaster.

Mr Blake: Well:

“If the clerk does not check the Final Balance report, he/she may not be aware that the report has a Receipts/Payments mismatch.”

Alwen Lyons: But it’s in the final balance report.

Mr Blake: Yes.

Alwen Lyons: I’m not for a moment saying that it’s right but I’m saying, when I read this, my belief was that the clerk could still see the mismatch.

Mr Blake: But would it be of concern to you that Mr Jenkins from Fujitsu was identifying that there were situations that should never happen, that didn’t necessarily have an alert and that, in future, one of the actions they were taking was to put in some further checks for such problems and raise an alert if they did occur; did that cause you any concerns?

Alwen Lyons: So – and I can’t remember reading this but, reading it again, the way I think I would have read this was: this has happened, it was clearly wrong that it happened, it does appear in the balance – so, that’s the first thing I would have picked up from here – however what he’s saying is, in the last paragraph here, “But we have put something in place so this should never happen again”, and that there will be another alert, alongside, you know, the mismatch that – that is visible, “We will give another alert to the subpostmaster”. That’s the way I’m reading it.

Mr Blake: That is how Simon Baker communicates it above. If we scroll above, we can see an email from Mr Baker to Lesley Sewell and you, saying:

“Lesley, Alwen

“Brief overview of the problem encountered in 2010 below.

“The reassuring point, for those looking for comfort, is that in this case Horizon’s monitoring systems automatically picked up the anomaly.”

“For those looking for comfort”, but were you in any way concerned by the contents of that email?

Alwen Lyons: Well, I think I would have been concerned – I can’t remember the email but I think I would have been concerned that this had happened in the first place.

Mr Blake: Yes.

Alwen Lyons: That would have caused me concern but I think – I don’t think I was looking for comfort. I think that the rest of the email would have given me comfort that (1) the subpostmaster can see it happening and, secondly, now that it has happened, Fujitsu would put something in place to ensure the subpostmaster could see it.

Mr Blake: Why was Mr Baker emailing just you and Lesley Sewell on this issue?

Alwen Lyons: I don’t know. Are we both – if you go down further down, are we both on the email further down?

Mr Blake: No.

Alwen Lyons: No, so he’s sending this on to us, okay. I don’t know why, whether I was chasing something for someone. I understand why Lesley would be on there because she’s the Chief Information Officer. She’s the conduit with Fujitsu, so it’s right that she should be on there and whether this is me chasing something or – I don’t know.

Mr Blake: Do you want to try and see if you can think about why only two people from the Post Office were copied into that email, or sent that email, and it was you and Lesley Sewell? We’ve heard that Lesley Sewell was Chief Information Officer but why you?

Alwen Lyons: I really don’t know. Maybe I’m the only person that doesn’t know about this yet.

Mr Blake: Is it likely you would have discussed that with the Chair or the Chief Executive?

Alwen Lyons: So I do know – and I cannot remember the date but I do recall that there was a conversation with the Chair about bugs because – and before the Second Sight Report. So there was that conversation. Whether it was predicated on this email, I cannot remember.

Mr Blake: In terms of Mr Jenkins, you said that you became familiar with him around this time?

Alwen Lyons: Yes.

Mr Blake: Were you aware that he had given evidence in criminal prosecutions?

Alwen Lyons: No.

Mr Blake: Were you aware that he’d given evidence in any court proceedings?

Alwen Lyons: No, not that I remember.

Mr Blake: Could we look turn to POL00186943, please. If we could look at the second of those emails, 21 May 2013, so shortly – the previous email that we looked at was 16 May; this is 21 May. This is from you to Alice Perkins and the subject is “James [Arbuthnot] meeting”. You say:

“Alice I wanted to apologise for the lack of clarity at the meeting today. Paula and I have had a conversation about the way forward and the need to ensure Second Sight are working to their terms of reference, finding out the facts and not focusing so much on keeping the [Justice for Subpostmasters Alliance] on board.

“The [Justice for Subpostmasters Alliance] issue will be picked up in the wider stakeholder piece which Paula and I have already discussed with Mark and Martin Edwards about.

“I have spoken to Second Sight and also to Susan who is contacting Second Sight this evening to reiterate our concerns and to ensure that they are focused on delivering the 2-3 MP cases before the summer. Which they promised me they would do.

“I would like to clarify one point as I realised that you and Paula were both disappointed with the time which has elapsed since the exchange of letters between James and [Justice for Subpostmasters Alliance] written on 16 April and felt we should have moved things on.

“I should explain that we were not copied in on these letters but received them from Second Sight as blind copies two weeks after they were written. This has made reference to them very difficult, and managing the ongoing timelines and agenda challenging.

“I believe the call with James on Thursday and a subsequent meeting after recess will help us understand his position in moving this to closure, and also enable us to drive the agenda more proactively.”

Can you assist us with why – first of all, what do you recall of the James Arbuthnot meeting, very briefly, that took place on 21 May?

Alwen Lyons: The one after this?

Mr Blake: No, the one that you’re apologising in relation to.

Alwen Lyons: So I’m – I think this is – I can’t specifically remember but I think this is the – a pre-meet for a James Arbuthnot meeting, and it’s – this – so I don’t think James was at this meeting. I think this is a meeting with Alice and Paula, and presumably other relevant people who are – you know, Mark might have been there, I don’t know who was there, but I don’t think James Arbuthnot was in this meeting.

Mr Blake: Thank you. So this was a pre-meeting before a meeting with James Arbuthnot?

Alwen Lyons: That’s my understanding.

Mr Blake: You seem to be concerned, requiring an apology for a lack of clarity. Can you assist us with why you were apologising?

Alwen Lyons: I don’t remember this meeting but if I’ve apologised for a lack of clarity it’s likely that Alice has left the meeting not very pleased with how it has gone, basically. And I think it may be something to do with the copy of the letter, which we – I allude to further down and that she would have expected us to have done more, if we’d had that letter since the 16 April. So I suspect that we didn’t get as far in this meeting as we would have hoped to get.

Mr Blake: There also seems to be some concern that has been raised about Second Sight working outside of their terms of reference, for example. Do you recall concerns being raised by Paula Vennells regarding Second Sight working within their terms of reference?

Alwen Lyons: So I think – and I think the – later on, we’ll probably get to it – the Board were also concerned about the speed at which Second Sight were producing evidence and I think, certainly for Alice, I think Alice, when we started the review, wanted a forensic review to look at the Horizon computer. That’s what I think, and you’ll have to Alice and you’ll no doubt have a chance to do so, but that’s my belief, that Alice wanted to know that the computer worked, basically.

And what was becoming more apparent was that Second Sight were looking in a much more wider frame than “Does the computer work?”, and I think that’s what these conversations were about.

Mr Blake: You’re apologising there. Is that something you regularly did to Alice Perkins; is that something unusual, something that stood out?

Alwen Lyons: I wouldn’t have said it was regular but I – if I did feel that something hadn’t gone as well as I would have wanted it to go for the Chair, then I would apologise because it’s, you know, it’s easy to apologise and say, “I’m sorry, Alice, we didn’t have as good a meeting as we had hoped to have today”.

Mr Blake: If we group we can see Alice Perkins’ response, she says:

“Thank you for saying all this. Characteristically straightforward and frank.

“I think it would be worth having a chat about this at some point soon. There are some things to learn from it.

“In the meantime, we must get into a different gear on this issue. We stood to gain a huge prize from embarking on this … “

Just pausing there, what did you understand to be the “huge prize”?

Alwen Lyons: So again, it’s her words but I think she was talking about an opportunity to show that the computer, Horizon, was – had integrity. I think that’s where she is coming from and to be able to show to the MPs – because Alice’s main concern was the MPs – was to show to the MPs that – what had actually happened.

Mr Blake: “… huge prize from embarking on this though it was never going to be easy. We have almost blown it on more than one occasion and if it goes wrong it will be hugely damaging. Too bad if we find substantive things which are wrong. But if what goes wrong is self-inflicted, that would be inexplicable.

“This is not all down to you by any means but I do think in practice you have a pivotal role of only to bring things to my attention – which you have sometimes done.”

What did you understand by that?

Alwen Lyons: Well, again, you’d have to ask Alice what she meant by that but I took from that – again, from rereading the email – that we were taking too long to do things. I mean, it’s interesting, in Alice’s head, you know, if we find substantive things wrong with the computer, then let’s find those things wrong with the computer and have proper evidence there’s things wrong with the computer and put them right. That’s sort of what I’m reading from this.

Mr Blake: What did you understand by “self-inflicted” to have been? It seems to be a criticism of yourself or –

Alwen Lyons: I don’t think it is. Well, it might have been. I don’t think it is. I think it’s that the business has not provided things and has not – and it’s an independent review, so it’s not a case of, you know – because I know the word “managing” that review has been used at a later stage in the Board. It’s not a case of managing that review; it’s enabling that review to get to a place that review needs to get to and get to it quickly.

I’m not reading that as personal to me but I could be wrong.

Mr Blake: She then says:

“This is not …”

I’ve put the emphasis on the word “all”:

“This is not all down to you by any means but I do think in practice you have a pivotal role …”

What did you understand by “of only to bring things to my attention”?

Alwen Lyons: I think it should be “if only”.

Mr Blake: “If only to bring things to my attention”?

Alwen Lyons: So that’s me coming back to the fact that the things I was doing, I was doing on behalf of Alice and, here, she’s making it very clear that, you know, the role that you need to bring things to my attention.

Mr Blake: Then she says “which you have sometimes done”?

Alwen Lyons: Yes, yes.

Mr Blake: Would you have read that to mean not always?

Alwen Lyons: Not necessarily. It’s a bit damned with faint praise, isn’t it, really?

Mr Blake: Do you read this email or did you read this email as a bit of a telling off from the Chair? I mean, you’ve apologised in the email below and it’s not just “Thank you very much for apologising”, it’s then just raising some concerns about something that could be hugely damaging to the business?

Alwen Lyons: So, yes, I would have had taken this as a telling off from the Chair.

Mr Blake: Is it something that you recall that stands out in memory, being criticised by the Chair of Post Office?

Alwen Lyons: As I say, I didn’t remember this email, so it couldn’t have stood out for me.

Mr Blake: Do you remember significant tensions towards the end of May 2013 with the Chair, in respect of the Second Sight investigation?

Alwen Lyons: Not between myself and the Chair, no. I don’t remember that. Whether there were other tensions with other people –

Mr Blake: Do you recall increased pressure at this time in the business in relation to the work that Second Sight were carrying out at the time?

Alwen Lyons: Yes. Yes, I do.

Mr Blake: Do you recall concerns that the Second Sight investigation could be hugely damaging?

Alwen Lyons: So Alice is saying, “If it goes wrong it will be hugely damaging”; I don’t think she’s saying that it’s going to be hugely damaging.

Mr Blake: “We have almost blown it on more than one occasion …”

Alwen Lyons: Yes.

Mr Blake: “We stood to gain a huge prize from embarking on this …”

Alwen Lyons: And I think this is all about how long it’s taking and the clarity of Second Sight in Alice’s mind looking at the computer. I think that’s what she’s talking about here, but I –

Mr Blake: Was there increased pressure coming from above during this period, in light of Second Sight’s investigation seemingly, potentially causing problems for the business?

Alwen Lyons: Who do you mean by “from above”?

Mr Blake: Entirely up to you.

Alwen Lyons: Oh, okay. Well, there’s pressure here from Alice, isn’t there, because I can see it in this email, that this meeting has not gone very well, I’ve apologised because I knew she left the meeting not very happy and she’s come back and explained why she wasn’t very happy, in terms of tensions between – yes, there was pressure, there was clearly pressure, we were doing a lot of work, trying to get Second Sight to do a place where they could do the Interim Report, trying to get them to focus on evidence, and there may well have been pressure, you know, or – between Alice and Paula. I don’t know.

Mr Blake: Could we please turn to POL00105632. This is the very next day, 6.00 in the morning, an email from you to Paula Vennells, copied to Martin Edwards, Mark Davies and Susan Crichton. You say:

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

“I do not think that is a phone call conversation but needs to be aired at some point with James, I would suggest at your meeting.”

“Our move away from ‘There are no bugs in Horizon’”; who is “our”?

Alwen Lyons: So I think this is talking about a brief for James’ meeting and I can’t remember who was putting that together. It may have been Martin Edwards, it may have been Mark Davies. I can’t remember and I’ve – this is me saying – this is me saying, in the brief – I’ve obviously read the brief for James and, in the brief for James, we are silent on there are no – you know, we are silent on the fact that we have found bugs.

So I believe this is me saying we need to be upfront here and we need to be honest and we need to say we have found some bugs in Horizon, and well, as you can read.

Mr Blake: “’… but they are found and put right and no subpostmaster is disadvantaged by them’ …”

Alwen Lyons: That’s – sorry.

Mr Blake: How could the Post Office say that or be confident in that?

Alwen Lyons: Well, I think what I’m saying here is we need evidence that we can – if we want to say these things, we need evidence that they are 100 per cent true and the same – you know, the same true of or have been wrongly suspended or pros – if we want – if we’re going to say to James anything on bugs, we need to be absolutely clear that that statement is true, that they’ve been found, put right and no subpostmaster is disadvantaged by them.

Mr Blake: But aren’t you saying that is what James needs to be told?

Alwen Lyons: No, I’m saying –

Mr Blake: You’re saying it’s not in the brief, there isn’t anything in the brief for James –

Alwen Lyons: Yes.

Mr Blake: – that has our new line, our new line being not that there aren’t bugs in Horizon but that there are bugs, that that arises in every computer system, but they are found and put right and no subpostmaster is disadvantaged by them. That was the new corporate line, it seems from this email.

Two questions, really: where did that corporate line originate from and, secondly, how could you be confident that that was correct?

Alwen Lyons: Well, I wasn’t confident that was correct. I’m asking the question here. I’m not saying, “Put these two things in the brief for James”, I’m saying the brief for James needs to cover bugs and, if we have the information that says we can say that sentence, in parenthesis, and the final sentence, if we have that information, that should be in James’ brief.

I’m not – I –

Mr Blake: Where are you saying, “If we have that information”?

Alwen Lyons: I’m saying it would be good to say but –

Mr Blake: No, you’re saying, “It would be good to be able to go on and say ‘or has been wrongfully suspended or prosecuted’”. You weren’t sure you could go that far but it does seem from this email that you thought you could at least say that they’re found and put right and no subpostmaster is disadvantage by them, or have I misinterpreted that email?

Alwen Lyons: I personally think you’ve misinterpreted that email but, you know, I can’t specifically remember sending this email. I do know I would not have wanted anything to be in a brief for anyone that wasn’t an accurate piece of information.

Mr Blake: So where are those words that are quoted here from?

Alwen Lyons: I can’t remember but they are quoted. I don’t think they’re my words.

Mr Blake: Well, you are proposing the addition of “or has been wrongfully suspended or prosecuted”, aren’t you?

Alwen Lyons: I can’t remember if those are my words or if I’m saying “It would be good to be able to say, ‘or have been wrongly suspended or prosecuted’ but we mustn’t go on and say that if it isn’t true”.

Mr Blake: Where is that in that email?

Alwen Lyons: Well, it’s not written but no one – I don’t believe that we would have put that in a brief if we didn’t – if we hadn’t checked it. Susan is on this email so –

Mr Blake: It wasn’t in the brief, though?

Alwen Lyons: It wasn’t –

Mr Blake: “Paula, the only thing that is not in the brief for James is our move away”, and the move away is not “There are no bugs”, but now “There are bugs but they’re found and put right and no subpostmaster is disadvantaged by them”.

Alwen Lyons: Yes, yes.

Mr Blake: Where, in this correspondence, does it suggest, in any way, that that might not actually be accurate and that that needs to be looked into?

Alwen Lyons: Well, it doesn’t, in this correspondence. However, I do not believe that it would have been included in a brief if we weren’t sure that it was right.

Mr Blake: How can you be so sure?

Alwen Lyons: I can’t be. I can’t be. This is an email from me to Paula saying “The only thing that’s missing out of James’ brief is a comment on bugs, and I would like it also to be clear about prosecutions”. But I’m not – this is not saying just put these in the brief without anybody checking anything.

Sir Wyn Williams: Can I tell you, Ms Lyons, how I read it, which I think is very similar to Mr Blake. First of all, you were saying there’s nothing in the brief about a move in the Post Office position from “There are no bugs in Horizon” to “There are known bugs in every computer system”, et cetera, all right? My reading of that is not least buttressed by evidence I’ve heard from other sources, that, by this stage, that was the Post Office’s position, either because Second Sight had tipped them the wink or, more likely, because there were people in Post Office who knew, of course, that there were bugs in Horizon by this stage. All right?

So that’s the Post Office line, which you identify as not being in the brief. Then you go on to say, “And it would be good” – in other words “if we can” – “can we say ‘or has been wrongfully suspended or prosecuted’”, where I accept that the inference to be drawn from that is you’re only going to say if it’s accurate but you’re hoping that it can be said, all right?

Then, just as a matter of detail, I think, from previous emails, it’s clear that there was to be a phone call conversation with Lord Arbuthnot on 23 May, if you go back to the previous emails, you’ll see that, and you saying it’s not appropriate to have this in a conversation but, rather, in a meeting, which is going to take place at some future time.

That’s as I read it, Ms Lyons. Have I got that hopelessly wrong?

Alwen Lyons: No, I think that’s helpful. Thank you.

Mr Blake: Is it helpful or accurate?

Alwen Lyons: It’s helpful because I can’t now say what was in my mind in 2013 but, reading that, I would say that it’s accurate to the way I’m reading it now.

Mr Blake: The “or has been wrongfully suspended or prosecuted”, was that something you were aware the Post Office had confirmation of, or was –

Alwen Lyons: I wasn’t sure, so that’s why I was asking.

Mr Blake: Do you recall anybody coming back to you and saying that’s accurate or not accurate?

Alwen Lyons: I don’t and I don’t know if that ended up in the brief, and with – if we felt comfortable to say that.

Mr Blake: It’s quite a significant shift in the Post Office’s position at this time from “No bugs” to “There are bugs”. Was that something that was raised at Board level at this time?

Alwen Lyons: I can’t remember if it was raised at Board. I do remember it being raised with the Chair but I would have to check minutes about the Board, but – and it was a shift. It was – you know, until that time, I naively didn’t think there were bugs in Horizon.

Mr Blake: So that was quite a significant moment in time, this shift?

Alwen Lyons: Yes, I think it was.

Mr Blake: If it isn’t contained in, for example, Board minutes, at that particular time, what would you have to say about that?

Alwen Lyons: Well, I think it – I think it should have come to the board. It certainly – the Chair, it certainly went to the Chair, and I cannot remember whether we had a conversation about it, and about it coming to Board. Clearly it came to Board when the Second Sight Report came to Board. But that’s later.

Mr Blake: Yes.

Thank you, sir. That might be an appropriate moment to take our second morning break.

Sir Wyn Williams: Yes. What time shall we resume?

Mr Blake: 12.25, please.

Sir Wyn Williams: Yes, by all means.

Mr Blake: Thank you very much.

(12.13 pm)

(A short break)

(12.25 pm)

Mr Blake: Thank you, Ms Lyons.

Could we please turn to POL00098655. Moving on to 21 June 2013. This is an email from you to Paula Vennells and Lesley Sewell, and copied to Susan Crichton. So, again, that small group of individuals who have been in a number of emails that we’ve been looking at today:

“Paula

“As you medicinal remember [James Arbuthnot] is hosting a meeting on 8 July where [Second Sight] are going to present their interim findings to MPs and [Justice for Subpostmasters Alliance], on 3 MP cases.

“We had a call with Second Sight today and have now put in place calls every day from next Tuesday to take us through to their report being ready.

“There are still risks with what the report will say. Not around the system but around the wider issues eg training and support (which [Second Sight] are counting as part of the Horizon operating model).

“I am sure that there will be enough in the report for JFSA to cause mischief if they want to with the media, and Ruth is involved in updating the comms plan.

“[Second Sight] have a call with James on 2 July and you have a call with him on the 3rd and we should know in advance what the report will say and therefore what they are likely to say to James.

“Things will get clearer next week but my biggest concern at the moment is if the review focuses on training, et cetera, how the [Justice for Subpostmasters Alliance] will respond. I think you can make some positive noises to [James Arbuthnot] on the 3rd including improvements in training and support and also our idea of a Horizon user group made up of existing subpostmasters who use the system.

“I will get an update in the diary for us and Lesley on Wednesday next week.”

It seems, by this stage, so 21 June 2013, even, you are having quite a significant role in matters relating to the Second Sight investigation.

Alwen Lyons: So I cannot remember this email. I think this email – and I can’t remember it specifically – might be me putting down on paper what a group of people have discussed. So I think this might be me going to Paula and saying, “Right, as you remember, we’ve got this meeting”, and so I don’t think these are only my words but I’ve got no evidence of that.

Mr Blake: “I am sure there will be enough in the report”; “My biggest concern at the moment” – the penultimate paragraph “Things will get clearer next week but my biggest concern at the moment”; “I think you can make some positive noises to [James Arbuthnot]”. I mean, there’s no “We” in that email is there?

Alwen Lyons: No, I accept that and it’s written in the first person so it’s me saying this to Paula, I accept that.

Mr Blake: Do you accept, irrespective of whether you remember the email, don’t remember the email, that, by the summer of 2013, you were clearly not just collating documents for Second Sight; you were having some strategic input on the response to Second Sight?

Alwen Lyons: I think I was trying to put in place a journey to the Interim Report and trying to understand who is seeing who, when, and when we needed to brief people, and whatever. So yes, I am trying to lay out how we get to the Second Sight Interim Report.

Mr Blake: “I think you can make some positive noises to [James Arbuthnot] including improvements in training and support …”

I mean, that’s not simply laying something out, is it? That’s making a positive suggestion to the CEO as to how she should respond to the Second Sight Report?

Alwen Lyons: Well, she will have seen what we’ve seen. So, in the paragraph above where it says that there are no issues around – not issues around the system but around training and support, that’s what we were being told at the time, and what I’m saying to Paula here is that there are things that she can discuss with James about how things are being improved and are being changed.

Mr Blake: Ms Lyons, isn’t it now time to reflect on your work on the Second Sight issue in the summer of 2013 and accept that you had more of a significant role than is reflected in your evidence so far?

Alwen Lyons: So I did have a role with Second Sight, yes. I don’t believe I collected any information for them because I wasn’t an expert in that field. So my role was much more almost – and, again, it’s the “facilitating” word – my role was much more facilitating Second Sight, helping them get what they needed to get and then, when meetings were coming up, laying out what was needed to happen. And, yes, here I’m obviously – I am saying to Paula “These are the areas for the meeting with James”.

Mr Blake: Are you providing advice to the Chief Executive as to how best to respond to the Second Sight Report?

Alwen Lyons: I don’t think – no, I don’t think I am. I think the Chief Executive would have made her own decision as to how to respond to the Second Sight Report.

Mr Blake: She may make her own decision but are you providing her with advice?

Alwen Lyons: I’m saying that there are areas for positive noises for James Arbuthnot, for instance, yes, I am, and that she can talk about training and support. So if that’s advice, then yes, this email is advice.

Mr Blake: You say “if that’s advice”; is that advice or is that not advice?

Alwen Lyons: Yes, that’s advice.

Mr Blake: Can we turn to POL00188912. This is an email we will return to on the issue of remote access but I want to look at something else. It’s the bottom email from Simon Baker, again very small distribution list, to you, Susan Crichton and Lesley Sewell. Subject “Second Sight Call”, and it’s number 2, “Bugs in Horizon”. This is a call, a very animated call with Ron and Ian:

“Bugs in Horizon: They are concerned that [James Arbuthnot] is or has been told by Post Office that there are no bugs in Horizon, and that is what [James Arbuthnot] believes and when Second Sight inform him that there were bugs, and subpostmasters accounts were affected it will go ‘viral’ amongst MPs and the press – my suggest here is that Paula gives this news to James first and explains to him why this isn’t a problem. We may also want to go to the press first on this, as part of are overall message, to get out our message out first.”

If we scroll above, there’s a response from you but that relates to the remote access issue, which I’ll return to shortly.

So Mr Baker has raised the issue of bugs in Horizon, James Arbuthnot at this stage, so we’re now 24 June 2013, and Lord Arbuthnot isn’t aware that the Post Office accepts that there are bugs in the system. Do you agree with that?

Alwen Lyons: So is this email before or after the one that we talked about earlier?

Mr Blake: Could we scroll down, please. We’re going in order, in date order, so –

Sir Wyn Williams: It is after.

Alwen Lyons: So it’s after. In that email, we’ve already said that the brief for the James Arbuthnot meeting, I’ve already raised the fact that there’s nothing about bugs in that brief and shouldn’t there be.

Mr Blake: Yes, so that was 23 May.

Alwen Lyons: Right, okay.

Mr Blake: We’re now 24 June, so we’re a month later, Second Sight are concerned that James Arbuthnot still is of the opinion that there are no bugs in Horizon; do you recall this email?

Alwen Lyons: I don’t recall this email and, given the email earlier, I would have thought that James Arbuthnot would have known.

Mr Blake: Who would have told him?

Alwen Lyons: Well, it was a brief for Paula, wasn’t it? Paula was going to see James Arbuthnot and I thought that what we said was that we would change the subpostmaster – sorry, we would change the Post Office “There are no bugs in Horizon” to “There are bugs in Horizon which”, et cetera, et cetera.

Mr Blake: Is your evidence today that that would have been communicated to James Arbuthnot in May 2013, when you sent that email?

Alwen Lyons: Well, I have no evidence as to whether that happened. But that’s what I thought the email we were discussing earlier was suggesting.

Mr Blake: Would it have been of concern to you if it hadn’t been raised with James Arbuthnot in May 2013?

Alwen Lyons: Yes, because I think that’s what I’m trying to say in that email. I, you know, I wanted it to be raised with him, and I also, if it was true, wanted the prosecution piece to be raised with him.

Mr Blake: Because of its significant impact?

Alwen Lyons: Absolutely.

Sir Wyn Williams: Just as a matter of timeline, because, as you will have appreciated, I think, I’m quite interested in the points that we’ve just been discussing, in that May email of the 23rd, you suggest it wouldn’t be appropriate to tell Lord Arbuthnot about it in a telephone call which was occurring that day but you anticipate, in effect, that it will be told to him in a face-to-face meeting. So the question becomes: was there a meeting between Lord Arbuthnot and anybody in the Post Office, but presumably Paula Vennells, between 23 May and 24 June?

Alwen Lyons: I haven’t got that evidence. I don’t know.

Sir Wyn Williams: Right. Fine.

Mr Blake: Can we please turn to POL00371710. We’re on 28 June now, if we could turn to the second page, please. The bottom of the first page, top of second page. It’s an email from Gareth Jenkins to Lesley Sewell and the subject is “My witness statement for the MISRA case”. It says:

“Lesley,

“Attached is my final Witness Statement for the Misra case. This was heard in Guildford Crown Court in October 2010 and concerned West Byfleet Post Office.

“Page 14 covers my response to a problem that had been identified in an earlier case (that involving Lee Castleton who took [the Post Office] to court for unfair dismissal which he lost).

“Do you need me to dig out anything more on this? I think the key point is that Horizon did have bugs has been discussed in court and [the Post Office] still won the case.”

So just to remind ourselves, we have the local suspense account problem, that’s the 14 branch issue, said by Second Sight to have occurred from 2011.

Alwen Lyons: Okay.

Mr Blake: We have the 64 issue, the receipts and payments mismatch issue: 64 branches, said by Second Sight to have been discovered in September 2010.

We have here reference by Mr Jenkins to the Seema Misra case which was October 2010 and he is accepting that – well, he is highlighting there that there was reference to a third bug in that case, the Callendar Square bug. Do you recall that issue?

Alwen Lyons: So, I only recall it having now read this email and having listened to some of the Inquiry.

Mr Blake: If we scroll up, we can see Mark Davies responding to this. Lesley Sewell has forwarded it to you, Martin Edwards and Mark Davies. Mark Davies said:

“This is massively important.

“Is there also a possibility that all incidents – 14 and 64 – have been referenced in court?”

Then if we scroll up, we have a response from you. You say:

“I would have thought the 14 is unlikely as it is too recent. Hugh can we check, or is it quicker to ask Gareth Lesley.

“I will certainly be sharing this with Janet on Monday.”

Then Lesley Sewell said:

“Will ask …”

I think that’s Fujitsu?

Alwen Lyons: Yes.

Mr Blake: Were you concerned at this stage about whether there were additional bugs, which might call into question the evidence that Mr Jenkins gave in the Misra case or in other cases?

Alwen Lyons: So I’d had no knowledge of more bugs. I just knew the three bugs that were being talked about.

Mr Blake: Yes. So we knew the two that went to Second Sight, and then we have here the reference to the third, the Callendar Square bug –

Alwen Lyons: Yes, yes.

Mr Blake: – being referred to by Gareth Jenkins. Did that not raise your concerns about the reliability of the Horizon system?

Alwen Lyons: So we had been provided with – and I think there was a document somewhere, which is a brief for Paula, which went through what happened, the risk, how it was put right, et cetera, et cetera, and I think I knew – that’s what knew at this point.

Mr Blake: But you’re receiving in June 2013 an email from Gareth Jenkins attaching a statement from a criminal case in which he made reference to the Callendar Square bug, presumably that was relatively new news to you, the Callendar Square bug?

Alwen Lyons: Well, I’m getting the timeline is quite difficult, because I don’t know – because there were three cases in the Second Sight Report, there were two and then the other one was mentioned –

Mr Blake: Yes.

Alwen Lyons: – and I don’t know at which point they became clear to us, and I think this document that was done for Paula – and I don’t know what brief that was for – had all three in them. So if it was in there and it was before this, then I would have known about them.

Mr Blake: So around 28 June, you were aware of three bugs, one of which as we’ve seen, Gareth Jenkins gave evidence relating to in the Misra case?

Alwen Lyons: I believe so.

Mr Blake: So were you and those around you concerned at this time about the potential implications of that?

Alwen Lyons: Of there being three bugs?

Mr Blake: Yes, and of Mr Jenkins having provided evidence in criminal proceedings?

Alwen Lyons: So –

Mr Blake: You can take those two separately.

Alwen Lyons: Okay.

Mr Blake: So first the bugs.

Alwen Lyons: So the bugs, I went from believing there were no bugs to believing there were – being given evidence there were these three bugs and that they had been dealt with and I was given some comfort that they’d been dealt with properly. So I didn’t know that there were any more bugs and I would have expected Lesley, or whoever, to have told us if there were or if there was the potential of more.

Mr Blake: Could we please turn to POL00031352. If we start on page 3, please. This is the same day, 28 June. An email from Simon Baker on page 3, please, the bottom of the page. He emails Gareth Jenkins, you’re copied in directly to that email to Gareth Jenkins. He says:

“Gareth

“You mention discussing the Falkirk bug in the Misra case today, are there any other examples where bugs have been discussed in court.”

If we scroll up, please, he says:

“Simon,

“I’m not aware of any other specific bugs being discussed in court (either related to Horizon or [Horizon Online]).

“The Falkirk bug was first raised in the Castleton civil case and was then picked up on for a number of subsequent criminal cases even though it was irrelevant to those environments. Defence experts were using it as an example that Horizon has had bugs.”

If we scroll up, you respond and you say as follows, you say:

“The question was really about whether the defect had been spoken about in open court other than in the Misra case as it helps that it was in the public domain and not ‘covered up’ in any way.”

Mr Jenkins responds to you and he says as follows:

“Alwen,

“I understand the bug was spoken about in the Castleton case (I wasn’t personally involved). It was definitely spoken about in the Misra case where it was interrogated about [its] length. Other cases where it was mentioned were settled out of court as far as I know.”

Isn’t the penny beginning to drop now, with the reference to cases being settled out of court that have raised that particular bug?

Alwen Lyons: No, not – no because I think cases were settled out of court.

Mr Blake: Why might they have been settled out of court?

Alwen Lyons: I don’t have any information about why cases were settled out of court, I just knew that some cases were settled out of court.

Mr Blake: Did that cause you to think about whether, in fact, there might have been something in their allegations?

Alwen Lyons: I’m sure there were lots of different reasons why they were settled out of court. I didn’t have that information, so …

Mr Blake: Did you ask anybody for that information?

Alwen Lyons: No, I didn’t.

Mr Blake: If we scroll up, we have another response, you say:

“Thanks Gareth. Can we get the witness statement for Castleton please Hugh. Thanks, Alwen.”

Then Hugh says:

“Jarnail – can you get Castleton case details please [as soon as possible] as Alwen has asked for.”

Then we have a response from Jarnail Singh. I’ll read to you just some extracts from the response. He begins by saying:

“In criminal trials both the prosecution and defence put their case to the jury. Who make a decision ‘beyond all reasonable doubt’ on finding it the defendant guilty, jury do not give reasons for their verdict and it is not possible to ask the jury the basis and details upon which they made their decision. On occasion particular point can be inferred.”

Did you understand what’s meant there?

Alwen Lyons: Yes, I think so.

Mr Blake: What did you understand by that?

Alwen Lyons: Just that you – so I understand what he’s saying is that we can’t get a reason why a case that a jury sees gives their decision.

Mr Blake: He says:

“This is the only criminal trial where a jury has been required to consider in detail the integrity of the Horizon system.”

He summarises Seema Misra was a subpostmistress at West Byfleet. He says about halfway down the second paragraph, he says:

“The jury’s verdict showed that it was sure that computer error played no role in the case. There has been no appeal against conviction.”

He says:

“We instructed our own expert, Gareth Jenkins, from Fujitsu. This was a turning point in the case.”

About halfway thorough paragraph 4 he says:

“In a nutshell his final conclusion was this: he hadn’t found any problem but there still might have been a problem that he and Jenkins [this is talking about the defence expert] might have missed. The jury clearly rejected this as wishful thinking after considering all of the evidence in the case.”

He says at 5, about halfway down:

“It provides a rigorous analysis that is woefully absent from the vague and illogical complaints about Horizon that are reported in some sections of the media. The judgment referred briefly to a real computer problem that had emerged at the Callendar Square office in Falkirk. Gareth Jenkins to investigate this problem. He provided a detailed summary of the problem in his witness statement … He also explained in that statement why he concluded that it was irrelevant to Mrs Misra’s case.”

Were you satisfied by the explanation that was provided by Mr Singh?

Alwen Lyons: Well, he was – yes, he was the expert. He was, you know, he was – I’m not a lawyer. He was the lawyer. He was the expert, so, yes, I was satisfied.

Mr Blake: Can we please turn to POL00144909. The second page, please. We’re now at 28 June 2013 and you email Paula Vennells “Next steps on Horizon issues – update”:

“Paula

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

“Mark is putting in place external comms …

“We have a call with [Second Sight] this afternoon …”

It’s the fourth paragraph I’d like to just read to you:

“I am going to spend time with Janet [Janet Walker, James Arbuthnot’s Chief of Staff] at 9.00 on Monday morning, she says she can give me as long as it takes. My approach will be to try to get to understand the status of the review and the risk to James and us of an incomplete Interim Report. I will share the fact that [Second Sight] are not using all the evidence they are being given and are our concerns is that their approach to try and keep everyone happy is not how we would expect a forensic accountant to behave. I do think this is the right place to share the ‘bugs’ we have found and how we have dealt with them, which is why the report from Rod/Lesley checked by Legal and Mark is important. My objective is to get Janet to a place where she also wants the meeting to be cancelled. I am also going to mention the timing of the report aligned with the funding and James’ unhelpful comment to Jo about ‘unfair convictions’. I will have to play this meeting a bit by ear!”

The comment there, “I do think this is the right place to share the bugs we have found and how we have dealt with them”, your evidence to the Chair earlier was that you thought that that had already been dealt with by Paula Vennells after the meeting in May.

It certainly reads here as though you are, in fact, going to be the bearer of that bad news; is that right?

Alwen Lyons: So certainly it sounds – I’ve said I will tell them how we’ve dealt with them. So it could – it could well be that I had not remembered this and that this is the first time that we’ve talked about bugs. It could also be that Paula had shared it and I’m just sharing the detail of the bugs but, reading this now, I think I was expected to share the detail about the bugs.

Mr Blake: Why is it that the Company Secretary is fulfilling the role of communicating that important shift in the Post Office’s position?

Alwen Lyons: So I was seeing Janet because she and I had had a good relationship from the first meeting with Alice and, if Janet had any issues, she would contact me and I would try and help sort out any things for her that were for James. You would have to ask others why I was expected to do this.

Mr Blake: Which others?

Alwen Lyons: Well, you’d have to ask Paula because I would have thought Paula would have wanted to speak to James.

Mr Blake: You say, “I do think this is the right place to share the bugs”?

Alwen Lyons: Because it looks as if we haven’t shared them yet.

Mr Blake: Yes.

Alwen Lyons: So I’m going, “Look, we have to share this information about bugs and I’m seeing Janet”.

Mr Blake: You had a good relationship with Janet Walker –

Alwen Lyons: Yes.

Mr Blake: – and it was your advice that now was the time to share that information, not with James Arbuthnot himself, but with the person who you had a good relationship with?

Alwen Lyons: Well, I don’t think I was under any misillusion that if I shared it with Janet it wouldn’t be shared with James, you know, I –

Mr Blake: Were you being used as the bearer of bad news by the company?

Alwen Lyons: Possibly. But it’s me suggesting I do this. It’s me saying I do think we need to share this with Janet and, therefore, James before the Second Sight Report comes out.

Mr Blake: We started today looking at the expert report and the role of the company secretary?

Alwen Lyons: Yes.

Mr Blake: Where in the role of the company secretary does this kind of a role come in?

Alwen Lyons: Well, it doesn’t.

Mr Blake: Why were you doing it?

Alwen Lyons: Because, in this instance, I was trying to get the information about bugs out to Janet and, therefore, to James, and, if no one else was seeing them before the Second Sight Report, then I needed to do that.

Mr Blake: I mean, we’ve seen email after email about bugs, direct liaison with Gareth Jenkins by this stage, you are meeting up with the assistant to the key Parliamentarian?

Alwen Lyons: Mm-hm.

Mr Blake: Why, as I say, is the Company Secretary being tasked with all of this or, even if you’re not being tasked, why is the Company Secretary doing this work?

Alwen Lyons: So I’ve explained that, originally, the connection with James and with Alice was through James, and that’s how I had a relationship with Janet. We’ve also seen emails where Alice is saying that, you know, I needed to be involved in things and needed to feed back things to Alice when things arose.

Mr Blake: Feeding back to Alice absolutely would fall under that job description that we looked at –

Alwen Lyons: Yes, yes, yes.

Mr Blake: – the role to communicate –

Alwen Lyons: Yes, yes.

Mr Blake: – to the Chair. This not communicating anything to the Board. In fact, it’s the very opposite, isn’t it? It’s communicating something to an external party?

Alwen Lyons: Yes.

Mr Blake: Why is the Company Secretary doing that?

Alwen Lyons: Because I had the meeting with Janet and I didn’t want to go to that meeting and not tell her about the bugs that I now knew about.

Mr Blake: Why were you attending a meeting with Janet?

Alwen Lyons: So I was attending a meeting with Janet because I – it was my – I had the connection with Janet and I was attending this meeting with Janet in advance of the Second Sight Interim Report, and it was to – and I’m going from memory here – but I believe this meeting was to understand how both James and the Post Office and Second Sight were going to align the following week and understand how this report was going to come out and how we were going to deal with it.

Mr Blake: Was it a strategic choice to break the news to a friendly face, to somebody not as senior as James Arbuthnot, somebody who assists him; not directly from the Chief Executive to the Parliamentarian but from you to his assistant?

Alwen Lyons: I don’t believe that’s a choice that I made. I believe I got to this point and I was saying “At the meeting on Monday, I think I have to share what we know about bugs”. I wasn’t willing to go to this meeting and see Janet and talk about how we move towards a Second Sight review without talking to her about bugs.

Mr Blake: “My objective is to get Janet to a place where she also wants the meeting to be cancelled.”

Alwen Lyons: So I’m – I believe that is the meeting that James has got with Second Sight –

Mr Blake: Yes.

Alwen Lyons: – and the reason for that is that this was now – it wasn’t the Interim Report we had here; it was an incomplete report. And you can see from above that Second Sight hadn’t used all the evidence, there were gaps in the report and the reason I’m saying that James – there is a risk with James having this meeting with Second Sight is because the Second Sight Report at this point is not accurate, it’s incomplete.

Mr Blake: Isn’t this a highly strategic move that you are advising on here: when to tell the Parliamentarian, the objective to get the subsequent meeting with Second Sight cancelled; that’s well beyond your role as Company Secretary, isn’t it?

Alwen Lyons: Absolutely, and it’s beyond – we – I could not tell Janet that the meeting needed to be cancelled. I needed to explain to Janet that this was an incomplete Interim Report, that not all the facts were in it, that there was evidence lacking and, if James went ahead with his meeting with Second Sight, there was risk that he would be – that he would be misinformed. That’s all I’m doing here and then it would be for Janet and James to decide whether the meeting should be cancelled. I didn’t want them to go ahead not knowing that the report was incomplete.

Mr Blake: I’m just going to take you to two very brief documents before we break for lunch. Could we just turn to POL00296821. If we turn over to page 2, this is an email from Andrew Parsons to Rodric Williams providing detail about a particular bug.

“Mrs Wall was terminated in September 2011. The first ‘14 Bug’ error in her branch occurred after she was terminated”, et cetera.

So it was relating to what was at that time referred to as the “14 Bug”.

Could we group please, Hugh Flemington says, “Useful”. Then Mark Davies says:

“Can we change the way we are referring to this please as a matter of urgency?”

If we look above, we have a request from you to Mark Davies, Hugh Flemington and Lesley Sewell:

“Can we call bugs incidents from now on please.”

That is the same day as the email that we have just been looking at. Why are you, on that day, seeking to rename bugs.

Alwen Lyons: Well, you can see from the email before that I’m calling them bugs and I have no problem with that. Mark Davies, who is the Communications Director, comes out and says “Can we call them something else, please”, and that’s me going out to everybody on that email and saying, “Can we call bugs incidents from now on, please”.

Mr Blake: Was that in your role as Company Secretary or is that in some other role?

Alwen Lyons: That’s just me cascading Mark Davies’ email.

Mr Blake: If we turn, please, to POL00380985. Within a matter of days we have the email that the Inquiry has already seen, 2 July. Paula Vennells seeking an answer to the question:

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

“Answer:

“‘Exception or anomaly’ …”

Who set that particular question, do you recall?

Alwen Lyons: No idea.

Mr Blake: If we scroll above, we have the full distribution list, so you were on that distribution list. Do you remember, at that stage, Paula Vennells seeking a non-emotive word for bugs?

Alwen Lyons: No, I don’t, I just – I just know that we stopped calling bugs “bugs”.

Mr Blake: One final document before we break, POL00029638. This is within a day of that email. If we turn to page 2, please. We have Gareth Jenkins emailing Simon Baker:

“Simon …”

It was about the Callendar Square bug.

“It was first raised in 2005.”

If we scroll down, it says, halfway down that paragraph:

“The problem in business terms was that due to transactions not being visible, [subpostmasters] considered that they had not been input and so re-input the transactions, thus ending up with duplicate transactions and so when the originals came through the following day, the accounts would be in a mess.”

The bottom paragraph:

“This problem was evidenced by a large number of events in the event logs.”

If we scroll up, please. Simon Baker forwards it to you, Susan Crichton, and Hugh Flemington. If we scroll up we have an email from you to Lesley Sewell and Susan Crichton:

“Is this another anomaly it does worry me that the number seems to be going up.”

So the very next day you are then referring to a bug, the Callendar Square bug, as an anomaly. Do you recall using the corporate dictionary?

Alwen Lyons: I don’t but if I had sent the email asking other people to use that word, I would probably start using that word.

Mr Blake: Did you give any thought to why you were now calling bugs “anomalies”?

Alwen Lyons: In my mind, it didn’t really make any difference what we called them but I’d been asked to call them this, so I called them it.

Mr Blake: Thank you, sir. That is an appropriate time for lunch. Could we come back at 2.00, please. Thank you.

Sir Wyn Williams: Sorry, yes. I was mute. Yeah, 2.00.

Mr Blake: Thank you very much.

(1.04 pm)

(The Short Adjournment)

(2.00 pm)

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

Sir Wyn Williams: Yes, thank you.

Mr Blake: Can we please turn to POL00029641.

We’re at 3 July 2013. So the same day, in fact the evening, of the email that I took you to before lunch. If we scroll down, please. There’s an email from Rodric Williams to Rod Ismay and Lesley Sewell and it’s about the local suspense problem. I think – yes, you’re not in this chain, are you? He says as follows, he says:

“All – here’s my summary of my call with Andy Winn …”

I think it’s information about the 14 branch issue:

“The issue first surfaced at the Post Office Finance Service Centre on 6 February 2012, at the close of a Branch Trading period …

“FSC might have proactively contacted the [subpostmistress or subpostmaster] given the size of the discrepancy.

“FSC investigated, saw that it looked wrong, and brought the account back to balance … at no cost to the [subpostmaster].”

It says there:

“Over the next few weeks, as the rest of the branch trading data for the same period was processed, the other 13 branch anomalies were noted.

“Those other branches’ accounts were brought to balance, again at no cost to the subpostmaster.

“This was not perceived to be a significant issue given the small number of branches affected and the small sums involved.”

Then it says:

“On 6 February 2013, the Willen [subpostmaster] contacted [the Post Office] National Business Support Centre to report the same discrepancy in his Branch Trading as the previous year.”

So were you aware that this particular problem was, first of all, reported to the Post Office back in 2012, that it, although they thought they had addressed it, appeared again in February 2013?

Alwen Lyons: So I was aware of this as a bug. So I don’t know how much detail I had on it. It would have been in one of the reports I got about the bugs.

Mr Blake: Not just a bug but a bug that lasted from 2012 on to 2013. If we scroll over the page, it was passed to Fujitsu between 6 and 8 February 2013 and was resolved in April 2013. So were you aware that the 14 branch issue or anomaly was an issue that lasted for well over a year and which was known to the Post Office at the time?

Alwen Lyons: So I think in one of those documents it does explain how it happened, and I think it’s triggered by the date. So it comes – so it happens a year later, if you see what I’m saying.

Mr Blake: Yes.

Alwen Lyons: So I was aware of this bug and I think I had had information about this bug.

Mr Blake: Could we turn, please, to POL00027825. Still on 3 July, same day. There’s an email from Paula Vennells, second email. She says:

“Ignore the note below. Just getting mixed up with mails: I’m sure there are plenty of good reasons but let me ask anyway: could our two documents be shared with [James Arbuthnot]? They are so clear – it might help his understanding.”

Do you recall what those two document were at all?

Alwen Lyons: I don’t. Does it make it any clearer further down the email?

Mr Blake: Well, it’s no the clearer because that email says, “Ignore the note below”, so it may not be.

Alwen Lyons: Oh, no.

Mr Blake: There’s a response from you above, and you say as follows:

“I think it’s risky. It would depend on how open he is with us, if he listens and whether we believe we have convinced him to amend his approach to media, MPs, etc.”

Alwen Lyons: So I don’t remember this email and I don’t know which two documents Paula is alluding to. It could be our media brief, I don’t know.

Mr Blake: So to continue a theme that we were discussing for most of the morning, this is again you being really part of that inner circle, advising Paula Vennells not on whether a matter should go to the Board but should go to James Arbuthnot.

Alwen Lyons: So I think in the run-up to meeting James Arbuthnot, yes, I was involved in that. Because I was the one meeting Janet and I was the one doing lots of the input into James.

Mr Blake: Again, same question as I was asking this morning: what part of the job of a company secretary was that?

Alwen Lyons: Well, it isn’t the part of a traditional company secretary role; it’s a role that seemed to have evolved because I got involved with Alice in the initial meeting with James Arbuthnot.

Mr Blake: Thank you. We’re now quite a way – I mean, we started looking at emails from 2012 –

Alwen Lyons: Yes.

Mr Blake: – so this is a year on. Could we please turn to POL00192017. We’re now on 8 July. If we have a look down the first page, we can see there, at the bottom of the page, please, Sarah Paddison on behalf of Paula Vennells, on 8 July:

“As promised in my previous email, here is a copy of the final draft of the [Second Sight] Report … They took on board the majority of our comments over the weekend, but not all of them. The second attachment is an internal note detailing the remaining aspects of the report which we believe are misleading or factually inaccurate.”

Would you have read the Second Sight Report at that point?

Alwen Lyons: I think at this point I would have just sent the two things that Paula’s asking me to the Board but I do believe I read the Second Sight Report.

Mr Blake: Approximately around this time?

Alwen Lyons: I can’t be sure but I would have imagined I would have done.

Mr Blake: Where there is a report that is relevant to the legal and regulatory obligations of the company, would you generally have read that substantive report?

Alwen Lyons: Yes.

Mr Blake: If we scroll up we see you then forward it to the “Horizon reading room”. Can you assist us with what that is?

Alwen Lyons: So the Board had a reading room, so this could well be a folder within the Board’s reading room.

Mr Blake: How would you decide whether it was something to go to the Board or not to go to the Board?

Alwen Lyons: So here you can see that I’m being told to send it to the Board.

Mr Blake: Yes.

Alwen Lyons: So it would have got sent to the Board. If something – if I wasn’t sure, I would ask the Chair.

Mr Blake: Could we please turn to POL00099149, please. Thank you. Over the page, actually, the second page, we have an email that the Inquiry has already seen from Mark Davies to Paula Vennells. You’re also an addressee and he provides some thoughts on the next steps following the publication of the Second Sight Report and proposes various initiatives. If we scroll up, please, to page 1, we have a response from Paula Vennells. She says:

“Mark, thank you for this.

“All, if you could do something similar – half a dozen points on what you think we need to do next, re your own areas and overall. It will help define next steps. See below.

“Susan, re point one below – do you have a proposal/something in writing as to what the next legal steps are, or is this referring to the general conversation last week re the external lawyers code of disclosure?”

Do you recall an issue with the Code of Disclosure at this point?

Alwen Lyons: No.

Mr Blake: No. It then says:

“I spoke with Alice this morning: as I [explained] (and rightly) Alwen and I need to give an oral update to the Board tonight and she would like a paper tabled and discussed next week at the Board meeting.”

Could we scroll up, please. Susan Crichton says:

“We are working [through] this and will have thoughts later today which can feed in.”

Paula Vennells says:

“… do you mean everyone is [or are there] multiple angles? If so, that’s great, when would be a good time for a call?”

Susan Crichton responds:

“Alwen Hugh and I it was Lesley as well but she has gone to the House of Parliament to help brief Jo S – also Angela is around so will try and get her to help.”

So we saw the first email from Mark Davies. Was it, in your view, appropriate for Mark Davies, the Head of Communications, to have been providing the kind of thoughts that we’ve seen at the end of this chain?

Alwen Lyons: Can we go back down?

Mr Blake: Yes, absolutely. If we scroll down. What was your view of the role of Mark Davies at this particular time, in the response to the Second Sight Report?

Alwen Lyons: My understanding would be that Mark would be pulling together the PR response and all the Communications response.

Mr Blake: There we see some substantive suggestions about the way forward, such as:

“[Second Sight] will have to be involved: they have to position themselves with the MPs as crucial independent voice.

“We need to find ways of supporting them in areas where they do not have expertise …

“That support needs to look with them at all cases brought by MPs”, et cetera.

Alwen Lyons: Mm.

Mr Blake: Did you have a view at that stage about whether it was or wasn’t appropriate for the Head of Communications to be inputting in that way?

Alwen Lyons: I know that Mark had a lot of contact with MPs and I think that was maybe part of his role, as well, so maybe that’s why he’s picked up the MP piece. I think he’s just sending some thoughts and saying, you know, “These are my thoughts, what do you think?”

Mr Blake: If we scroll up we have, in the first email, a meeting with you – at the very top of the page, please – you, Hugh, and Susan Crichton. What do you recall of those conversations?

Alwen Lyons: So I don’t recall those conversations. I would imagine that, if Alice has asked for a call and Paula wants to give her a verbal update that evening and she wants a Board paper, I’m seeing my job here as coordinating that verbal update and then the Board paper.

Mr Blake: If we scroll down, the reference to the update to the Board, it says:

“… update to the Board tonight …”

Sorry, if we scroll down to the bottom of that page, there:

“… I need to give an oral update to the Board tonight and she would like a paper tabled …”

Do you recall there being a conversation with the Board that night?

Alwen Lyons: I don’t but, if Alice has asked for it, it probably happened.

Mr Blake: If we turn to POL00027573, these are some minutes of a Board meeting on that day. You’ve referred to this in your witness statement. It addresses an entirely different topic. It’s the 2013/2020 strategic call.

Alwen Lyons: Oh right, yes.

Mr Blake: If we scroll down, we can see. So that’s a conference call held on 9 July and we can scroll down it, there’s no mention – and you’ve said in your statement – there of any Horizon related issues?

Alwen Lyons: No.

Mr Blake: Would that have been the moment to have raised those issues or was that a separate call?

Alwen Lyons: So I think – no, this is a completely separate call, and I think this would have been earlier in the day.

Mr Blake: Thank you. Do you think it’s likely or unlikely that, if there was a call later that day, there would be minutes of that call?

Alwen Lyons: I think it’s likely there would be a note of the call, not necessarily minutes, unless it was – it was convened as a Board meeting.

Mr Blake: Who would have taken the note of the call?

Alwen Lyons: It would likely to be me.

Mr Blake: Thank you. Could we please now turn to POL00297607. We’re moving on now to 11 July. If we could scroll down, please. So this is 10 July, and the top one is 11 July, and this is an email that relates to Gareth Jenkins and Rodric Williams is saying here to the external lawyers at Cartwright King, copying in Susan Crichton and others:

“Do you have some suggested wording for how we break the [and we think that’s ‘Gareth Jenkins’] news to [Fujitsu], including why it is a problem for you from a criminal law perspective?”

If we scroll up, please, on the 11th, it’s an email from Martin Smith at Cartwright King to Rodric Williams, Susan Crichton copied in:

“Simon is preparing a further advice about Gareth Jenkins as agreed. However he touched on the [Gareth Jenkins] point in his earlier advice on the 8th.”

You’re not copied into this correspondence. Were you aware, at this time, of concerns within the Post Office about the reliability of Gareth Jenkins?

Alwen Lyons: No.

Mr Blake: Can we please turn to POL00145427. If we scroll down, please, this is the next day, 12 July. So the bottom of page 1, into page 2. We have an email there, Susan Crichton to you, subject is “Board Paper for circulation”:

“Alwen – if you can bear to read it quickly [please] do as I am tired … of it!”

If we scroll up, please, the response from you:

“Sorry I know you don’t want to but I have change the recommendation and a few bits are you happy.”

We will come to look at the changes that are made.

Then this is the response from Susan Crichton, which I took her to in her evidence, where she says:

“Hi you must have read my mind whilst I was walking the dog I suddenly thought it wasn’t a good idea to mention ‘bugs’ so have changed that and also found another couple of typos – the recommendation is much better.”

So we saw there that the day before, and the day before that, there’s that chain of emails relating to the Gareth Jenkins issue.

Alwen Lyons: Yes.

Mr Blake: You are in contact with Susan Crichton, who was involved in the Gareth Jenkins issue. Did Susan Crichton, at this point where you are discussing a Board paper for circulation, mention concerns about the reliability of Gareth Jenkins?

Alwen Lyons: No, I do not remember ever seeing any concerns about Gareth Jenkins or the Clarke Advice, or at all.

Mr Blake: Thank you. The paper that was sent to you is POL00145421. Perhaps if we turn to page 3 and if we could keep page 3 on screen, at the bottom of page 3, please, so the “Recommendations”, and then could we please also bring up on screen your amended version, and that is POL00145426.

Do you recall in that email chain you had told Susan Crichton that you had amended the “Recommendations”?

Alwen Lyons: Yes.

Mr Blake: So this, on the right-hand side, is the original version. If we look on the left-hand side, if we could turn, please, to page 3 of that version, we can see there that the “Recommendations” is now changed. It was originally:

“The Board is asked to:

“Note the update and action set out above;

“Consider whether the Post Office cease criminal prosecutions;

“Request the Audit and Risk Committee to oversee the actions set out above.”

It’s now changed to:

“Note the update and actions set out above;

“Decide whether the Audit and Risk Committee should consider the position of the Post Office as a Prosecuting Authority alongside its … work in September …”

So that second recommendation, the explicit recommendation to consider whether the Post Office cease criminal prosecutions has been removed. Can you assist us with why that was removed?

Alwen Lyons: So the ones on the left, they are the ones that were –

Mr Blake: That’s the updated version that you returned to Susan Crichton on the left.

Alwen Lyons: Okay.

Mr Blake: The right-hand side is the version you were sent by Susan Crichton originally.

Alwen Lyons: So I can’t – I only saw these two papers this morning.

Mr Blake: Yes.

Alwen Lyons: I can’t really help with why I suggested the ones on the left and not the ones on the right.

Mr Blake: The one on the left reflects the ultimate version that went to the Board.

Alwen Lyons: Okay.

Mr Blake: Do you recall, in July 2013, discussions about whether the Post Office ceases criminal prosecutions?

Alwen Lyons: I don’t. Is that in the main body of the report?

Mr Blake: So that’s 8.2, the “Recommendations”.

Alwen Lyons: So I – no, I can’t remember.

Mr Blake: Did you get involved – I mean, is this a typical example of you getting involved in what recommendations were made to the Board; is this unusual; is this something we might see elsewhere or not?

Alwen Lyons: I can’t really comment. I’m – having only seen this this morning, I don’t know why those two things change or why I thought the left one was a better update for the Board or a better part of the Board paper.

Mr Blake: The question really was about whether that was something you would typically do, to amend recommendations to the Board or to –

Alwen Lyons: No.

Mr Blake: No. So if you had made that change, would it have been an unusual change to have made?

Alwen Lyons: I think so, yes. I mean, not this particular paper but people did send me Board papers, you know, and ask for my advice on how I thought that would land with the Board and whether I thought that was enough information or whether they needed to take information out but I don’t specifically remember this one.

Mr Blake: Do you have any recollection at this time of the Board’s views on ceasing prosecutions?

Alwen Lyons: I don’t, I’m sorry.

Mr Blake: Could we please turn to POL00191966. This is the same day, 12 July. This isn’t an email that went to you but this is just to assist us with the timeline of where we are. Rodric Williams is sending to Andrew Parsons, external lawyer, and a team of internal lawyers, the attached:

“… which sets out the high level issue which Cartwright King (our criminal law solicitors) has identified with the Fujitsu evidence Gareth Jenkins has been providing in support of the criminal prosecution cases conducted for Post Office Limited. A more detailed note should arrive on Monday, which I will forward to you once I have it.”

So, again, we have there, that’s the Gareth Jenkins advice that you referred to –

Alwen Lyons: Yes.

Mr Blake: – that you say you didn’t know about –

Alwen Lyons: No.

Mr Blake: – at the time.

We just had an email chain about discussing a paper for the Board. Is that a matter that you would have expected to have gone to the Board had you known about it?

Alwen Lyons: Absolutely.

Mr Blake: Could we please turn to POL00099200.

Same date, 12 July, you are there emailing Susan Crichton and Paula Vennells and you’re providing them with a timeline. So this is events that are going to happen over the next week or so, I think; is that right?

Alwen Lyons: Yes.

Mr Blake: Yes. So on 15 July:

“… Decide who’s going to lead going forward.

“16th – Paper and discussion with the Board.

“16th – meeting with [Second Sight] and External Lawyers …

“17th – [you] to call AB …”

Is that Alan Bates?

Alwen Lyons: I assume so.

Mr Blake: “… re toxic cases and set up a face-to-face to understand which cases he believes are in this category and a quick talk through, with [the Post Office] lead.”

Can you assist us with what “toxic cases” is a reference to?

Alwen Lyons: So I can’t specifically but I think I was saying that I would call Alan Bates and talk about the specific cases that he thought needed to be discussed face to face as – well, the Second Sight review – so they hadn’t done their Interim Report yet, have they, or had they? Sorry, I’m a bit –

Mr Blake: Not yet.

Alwen Lyons: – a bit confused by the timeline here.

Mr Blake: Sorry, they have. Sorry, yes.

Alwen Lyons: They have?

Mr Blake: Yes.

Alwen Lyons: Okay. So – and I’m –

Mr Blake: So we’re still going chronologically.

Alwen Lyons: Okay. Okay.

Mr Blake: There’s been a discussion of the Board paper, which is entitled “Update following the publication of the report”, and that’s the discussion between you and Susan Crichton.

Alwen Lyons: Yes.

Mr Blake: We have on the same day, an email from Rodric Williams circulated internally and to Mr Parsons about those Gareth Jenkins concerns. We’re still on the same day, so after the report, and this is the timeline going forward.

Alwen Lyons: So I can’t remember this and I’m reading it now and thinking what would I have meant? I would imagine the contact with Alan Bates would be to find out which cases – because we’ve looked at spot reviews, five spot reviews, from JFSA but we haven’t looked at individual cases, although some were in the spot reviews. So I think this is me going to Alan Bates and saying, “Which are the other cases that we need to talk about and to bring into the next piece of work?”

Mr Blake: Thank you. Looking at this timeline, on the 15th, that’s, in fact, the day of Simon Clarke’s substantive advice on Gareth Jenkins.

Alwen Lyons: Yes.

Mr Blake: The very next day, there is a proposed paper and discussion with the board on Horizon issues.

I’d like to turn now to POL00122552. I’m going to skip to the 15th, so that’s the date to decide who’s going to lead, going forward.

If we scroll down over the page to page 2. This is the day of the Jenkins Advice. Susan Crichton is emailing Cartwright King lawyers, and you’re copied into this. She says:

“Martin – we have received the attached from the Criminal Cases Review Commission should you draft reply on our behalf or should we refer them to you to reply on our behalf?”

If we scroll up, Mr Smith from Cartwright King responds, you’re copied in:

“I have asked Simon to draft a response tomorrow morning.”

That’s Simon Clarke from Cartwright King.

Then the email above that from Mr Flemington sent to the others but copied in to you:

“Thanks Martin

“Presumably we need to give off the signals that we are proactive, doing all the right things [regarding] writing to people to keep the [Attorney General] and [Criminal Cases Review Commission] calm. Hopefully if they see that they may leave us to it for the moment.”

So this is, presumably, a very significant period of time in your career. You’ve received a letter that the Second Sight Report has been received, you’ve now received a letter from the Criminal Cases Review Commission. Do you agree with that, that it was quite a significant moment?

Alwen Lyons: So the problem I have here is I did not see the – I don’t believe I saw the Clarke Advice.

Mr Blake: Yes.

Alwen Lyons: And yet, clearly, people are responding – the rest of these people on this email have seen the Clarke Advice and are responding about how they are – how, because of the cases, they’re going to take them back to the CCRC and – but I’m not a lawyer. I do not know what needs to go to the CCRC, so I’m not – I haven’t got the detail behind what’s going on here.

Mr Blake: But you have a board meeting the next day?

Alwen Lyons: Yes, and – sorry.

Mr Blake: Does that flag to you, the CCRC writing to you, that there might be some serious issues with cases that the Post Office has prosecuted?

Alwen Lyons: So I would not have the detail of that. Susan Crichton and the Legal Team would have the detail of that and my expectation would be, if there’s something in there that the board needed to know about, the Board would be told the next day.

Mr Blake: They would be told by Susan Crichton?

Alwen Lyons: Yes.

Mr Blake: Yes. Could we please turn to POL00021516, and these are the Board minutes of 16 July 2013. We see there that you are in attendance, if we scroll down, please. The one person who is not in attendance at this Board meeting is Susan Crichton. Do you recall why Susan Crichton wasn’t invited into that Board meeting?

Alwen Lyons: So was there a legal paper at this Board meeting?

Mr Blake: Well, if it assists, her evidence was that she was kept out of the meeting.

Alwen Lyons: So is this that – I do remember that meeting.

Mr Blake: Yes.

Alwen Lyons: This is that meeting; yes?

Mr Blake: This is that meeting.

Alwen Lyons: Okay. So I – my practice was that I would go to the executive member who was coming to the Board to present and I would give them an approximate time when they needed them to be standing outside the door, basically. When the moment came for us to deal with their paper, I would stand up, go to the door, invite them in and they would come and present their paper and, at the end of their presentation, I would get up, take them to the door, and bring the next person in, if there was a next person.

At this Board meeting – and our boardroom had frosted glass, so you could see if there was someone outside. At this Board meeting, Susan was waiting outside to come in and, as we started the Board – it’s not the first issue, I don’t think.

Mr Blake: No, we could scroll down. Horizon update is page 6.

Alwen Lyons: Okay.

Mr Blake: We had seen previous correspondence that identified Susan Crichton as the relevant person to speak to that issue.

Alwen Lyons: Yes, so at the relevant point in the Board meeting, I stood up and walked towards the door and was asked to hang on a minute, to sit down because there was going to be, I assumed, a discussion before Susan came into the room. I mean, that did happen sometimes, if the Board wanted a discussion on the paper before the executive member came in, that did happen. So I was asked to sit down –

Mr Blake: I could ask you to stop there: who asked you?

Alwen Lyons: I believe the Chair but – yes, I believe the Chair because it would have been the Chair who would have said they needed to have a discussion.

Mr Blake: Okay. So it was Alice Perkins?

Alwen Lyons: I believe so.

Mr Blake: Thank you.

Alwen Lyons: So I sat back down as I was asked to do and then this part of the meeting progressed. I do believe that – and I don’t know at what point but, at some point during this Board update, I believe I said to the Chair “Do you want Susan in the room because she has the detail?”, and I was told “No”.

Mr Blake: This was a significant meeting because, as you have just explained, the CCRC have written to you the day before, you were copied in to that. We have seen that Ms Crichton was receiving very significant advice in relation to Gareth Jenkins. What explanation was given for her not being called into the room to address Horizon issues?

Alwen Lyons: So I think in the minutes it says that – if we just scroll down a bit. Oh, no, sorry, it’s here. It’s at (b). So the Board were concerned that the review opened the business up to claims and the Board asked if Susan Crichton as General Counsel was in any way implicated. So, as this conversation was going on and I was taking my notes, I assumed that it was because of that that Susan hadn’t been invited into the room.

Mr Blake: Yes. Did anybody say why?

Alwen Lyons: No.

Mr Blake: Was there any discussion?

Alwen Lyons: No.

Mr Blake: Let’s read a little bit about what it says emerged from the meeting so (a):

“The CEO explained that although the Second Sight Report had been challenging it had highlighted some positive things as well as improvement opportunities.”

So was it just the CEO who was addressing these issues, from your recollection?

Alwen Lyons: So from these minutes, and I believe, the CEO then took over responsible for delivering this paper.

Mr Blake: Then:

“(b) The Board were concerned that the review opened the business up to claims of wrongful prosecution. The Board asked if Susan Crichton, as General Counsel, was in any way implicated in the prosecutions …

“(c) The Board expressed strong views that the business had not managed the Second Sight review well and stressed the need for better management and cost control going forward.”

Now, minutes don’t always reflect precisely what is said at a meeting. Can you assist us with that comment? Was there a particular – there’s a reference there to the business had not managed Second Sight well. Was it business that was the subject of their concern? Were there named people?

Alwen Lyons: So I think – I believe, if there had been named people, I would have put those in the minutes. So I think the “not managing Second Sight well”, and you can see there the cost control, I believe the Board thought – and I can’t speak for them individually, obviously, but, from this minute, I believe that the Board thought the Second Sight review was taking too long and that they weren’t focusing in on what the Board had originally thought they were going to focus in, which was basically the computer.

Mr Blake: You were somebody who was, as we’ve seen, quite involved in liaising with Second Sight. Was there any criticism of you in this meeting?

Alwen Lyons: Not that I can recall.

Mr Blake: Did you infer any criticism of you?

Alwen Lyons: I can’t remember there being any criticism.

Mr Blake: Did you infer or was there any criticism of any specific named individuals?

Alwen Lyons: Well, only the Susan Crichton bit at the top. Can we go down a little bit further?

Mr Blake: Yes.

Alwen Lyons: Because they then go on to say the Board accepted it was an independent review but they still thought the business hadn’t managed that review well.

Mr Blake: There’s lots of reference to, “the business, the business, the business”, did they really just speak in terms of the business or was there comment on the performance of particular individuals?

Alwen Lyons: Not that I can recall.

Mr Blake: We have there “ACTION: Susan Crichton”. Was it normal for somebody to be listed as the action point, having not attended the meeting?

Alwen Lyons: No, this is really unusual. It’s really unusual that someone was left outside the door. It’s really unusual for someone to get an action point without being in the room.

Mr Blake: It being so unusual, why is there no reference to that fact in the minutes itself?

Alwen Lyons: Well, there’s reference that she is not in the room.

Mr Blake: Where’s the reference to her –

Alwen Lyons: Because she’s not on the list. She’s not named as – there would have been, at the beginning, “Susan Crichton, General Counsel, joined the meeting”. So –

Mr Blake: But we have – if we scroll up to page 1, if we scroll down, we have “Apologies for Absence”, we don’t have Susan Crichton’s name there?

Alwen Lyons: No.

Mr Blake: “In Attendance”, we have who is there. We don’t have any reference to who is sitting outside the room waiting to be called in and there isn’t any reference throughout these minutes to the fact that the Chair had asked for Ms Crichton not to be called in. Is that something you would expect to find in the minutes of a Board meeting?

Alwen Lyons: No, no, I wouldn’t.

Mr Blake: So if somebody had been asked to attend but had been kept outside, you would not expect that to be minuted in the minutes?

Alwen Lyons: So I wouldn’t have expected it to be, no, because the Board minute is what happened in that room and she didn’t come into the room, and that’s – now the Board minutes were agreed by the Chair, were agreed by the Board at the following Board meeting, so if anyone was uncomfortable with that, they would have said so.

Mr Blake: But it wasn’t just that she wasn’t at the meeting; it was, as you’ve said, somebody specifically asked during the course of the meeting for her not to come in.

Alwen Lyons: Yes.

Mr Blake: Is that not a notable event that should be minuted?

Alwen Lyons: I don’t think so but, clearly, it could have been minuted differently but the Chair and everyone who checked these minutes were happy that this was the way it was minuted.

Mr Blake: But you’re the Company Secretary?

Alwen Lyons: Yes.

Mr Blake: Are you responsible for the minutes or not?

Alwen Lyons: Yes, I am responsible for the minutes.

Mr Blake: Could we turn to page 6, please, and have a look again at the Horizon update. Did you, in this meeting, mention having received a letter from the Criminal Cases Review Commission?

Alwen Lyons: No.

Mr Blake: No. One of the things that you said to me earlier was that the General Counsel didn’t need to attend all of the Board meetings because you were personally in the reporting line. Did you consider whether, at this particular meeting, you should say something?

Alwen Lyons: I didn’t think I had the knowledge to say anything. I could have told them about a letter but I couldn’t have told them what that letter meant or what we were going to do about that letter. So I didn’t have the expertise to raise that.

Mr Blake: Irrespective of the CCRC issue, we’ve seen email, after email, after email copied to you, sent to you, asking for your opinion, relating to James Arbuthnot, relating to Second Sight. Did you not think that Susan Crichton not being in that meeting, you were actually quite an appropriate person to address the Board on this issue?

Alwen Lyons: So I think the appropriate person to address the Board was the CEO, was Paula Vennells, because she’s addressing the Board and has most of the updates that I would have had.

Mr Blake: Do you think that you had provided her with the sufficient information to speak to all of those issues?

Alwen Lyons: I’m not sure the CCRC, because that had happened, you know, the same – the day before or the same day or whatever but I believe that Paula would have known the other issues with Second Sight and with, you know – but that’s my recollection now.

Mr Blake: Could we just return to the first document that we saw this morning, and that’s the expert report, EXPG0000006, please. It’s page 30. It’s the bottom of page 29 into page 30, please:

“The Company Secretary’s accountabilities normally include …”

Then we have (e):

“Arranging participation of non-Board members for specific items in Board discussions (including handling sight of relevant minutes, timing of Board appearances, follow up).”

Do you think you failed in that on this occasion?

Alwen Lyons: No, I don’t. I had arranged for Susan to be there at the correct time to give her presentation to the Board and I was stopped from getting her into the room by the Chair. So I actually do think I was doing what it says here.

Mr Blake: Do you think that not raising any concerns about that, knowing that Susan Crichton was very well placed to speak to the Horizon issues, was in any way a failing on your part?

Alwen Lyons: So I can’t specifically remember but I think I will have raised – I would have raised concerns with that after the meeting with Alice and possibly Paula.

Mr Blake: You would have raised concerns?

Alwen Lyons: I believe I would have done. I can’t specifically remember but, having gone through that meeting, where clearly Susan had been excluded from the meeting, I would have raised that, I believe, with the Chair and with Paula.

Mr Blake: What did you say?

Alwen Lyons: I can’t remember, I specifically can’t remember.

Mr Blake: I mean, it’s quite a significant moment in time –

Alwen Lyons: No, absolutely.

Mr Blake: – both for your professional career but especially for this Inquiry. Do you recall any conversation with Paula Vennells or Alice Perkins?

Alwen Lyons: I can’t recall any specific conversation but my belief is that, if I’d – if that had happened, I would have spoken to especially the Chair about how that meeting had been run and that someone was standing outside waiting to deliver a report.

Mr Blake: We know that Board work doesn’t just occur at those formal Board meetings.

Alwen Lyons: No.

Mr Blake: There are number of people who attended that meeting, and a number of Non-Executive Directors, for example. Did you have discussions over lunch, over dinner, over a drink, over some other social activity with any of them, raising concerns about how that particular meeting was conducted?

Alwen Lyons: Not that I can remember.

Mr Blake: Did you have any discussions with them about the growing picture at the Post Office, concerns about the Criminal Cases Review Commission?

Alwen Lyons: Not that I can remember.

Mr Blake: Do you think that the board or members of the Board were kept properly up-to-date and informed of those developments?

Alwen Lyons: Well – and I don’t know if, you know, if it’s chronologically is – if it’s in this order, but I wasn’t appraised of the Clarke Advice, and I don’t believe that I – well, I don’t believe I sent the Clarke Advice to the Board so, therefore, the Board were not appraised of the Clarke Advice. So things should have been sent that weren’t, I think.

Mr Blake: Who do you place responsibility for that on?

Alwen Lyons: Well, it has – it has to be anyone who knew about the Clarke Advice. I mean, I don’t know who the Clarke Advice was shared with, whether it was shared with the Chair, whether it was shared with Paula. All I know is that I don’t believe I received it and I was not asked to send it to the Board. So I don’t know who made the decision for it not to go to the Board but I don’t believe it ever went to the Board.

Mr Blake: Can we turn to POL00192758, please.

Sir Wyn Williams: Before we do, Mr Blake, there’s just one aspect of the minutes that I would like to go back to, if I may.

Mr Blake: Absolutely. Those minutes are POL00021516.

Sir Wyn Williams: If we go to the section dealing with the Horizon update, which I think is page 6.

Mr Blake: Yes.

Sir Wyn Williams: So under (b) the specific question is raised as to whether Ms Crichton was, in any way, implicated in the prosecutions, and then there’s a report of what followed. Could we now go to (e), please, over the page. There’s an explicit reference there, is there not, Ms Lyons, to the Board asking Ms Vennells if she had considered changing the person leading for the business. All right?

Now, the person leading for the business, we’ve been told, was Ms Crichton; was that your understanding?

Alwen Lyons: Yes.

Sir Wyn Williams: So is that the reason she was excluded from the meeting because, in effect, she was going to be criticised?

Alwen Lyons: Possibly. Possibly.

Sir Wyn Williams: Thank you. Yeah, over to you, Mr Blake.

Mr Blake: Is it a little odd that she’s not mentioned by name in the – I mean, you said that if somebody had been mentioned by name it would be in the minutes. It’s a bit cryptic, isn’t it, the “person leading”?

Alwen Lyons: I don’t think anything was meant by that. I think that – I don’t think it was – I can’t remember these minutes and I don’t think it was changed, you know, anybody said, “Oh that shouldn’t be mentioned by name”. So I can’t remember.

Mr Blake: Can we now turn to POL00193019. I’m going to skip out that other document.

We’re now moving to 30 July 2013 and an email from Simon Baker, you’re copied in there:

“All

“You will shortly receive an invitation to a Horizon Investigation Risk workshop.

“The purpose of the workshop is to identify, quantify and produce mitigation plans for the risks associated with the Horizon investigation and related activities, including an improvement project to respond to the findings.”

Do you recall the Horizon Investigation Risk workshop?

Alwen Lyons: I don’t, I’m afraid. I don’t think I was a member. I think I was just being told it was happening.

Mr Blake: Thank you. Can we turn now to POL00193585. This is advice from Bond Dickinson on the risks principally to the directors of the company. Do you recall this advice?

Alwen Lyons: No.

Mr Blake: One of your responsibilities, I think, as Company Secretary, involved looking out for the kinds of risks that are discussed in this document –

Alwen Lyons: Yes.

Mr Blake: – is that right? If we look over the page, please, we can see section there “Risks to Post Office”:

“Prosecutions and convictions

“As noted above, where circumstances warrant, Post Office prosecutes subpostmasters who have acted criminally. The basis of these prosecutions is often found in the transaction records recorded in Horizon. As a result of Second Sight’s investigation/Interim Report, Post Office is reviewing all its criminal prosecutions over the last three years to identify any cases where a conviction may be unsafe.

“In particular, the expert evidence of one Post Office witness, Dr Gareth Jenkins of Fujitsu, may have failed to disclose certain historic problems in the Horizon system. Under the criminal prosecution guidelines, Post Office has an obligation to disclose this previously undisclosed information to subpostmasters’ defence counsel. Post Office is required to make these retrospective disclosures where the additional information … may have undermined a prosecution case or assisted with an accused’s defence.”

By this stage, that is August 2013, were you aware of concerns about the reliability of Gareth Jenkins?

Alwen Lyons: So I didn’t – I do not believe I saw this advice. I don’t believe I sent this advice to the Board.

Mr Blake: Because, over the page on page 3, there’s a section on D&O risks, and it says:

“We have considered whether a claim could lie against a director or officer of Post Office. We think this is unlikely, as it will be difficult for a subpostmaster to pierce the corporate veil. Most of the above claims, if brought and if viable, would be against Post Office Limited as a company. Nevertheless we can envisage the following possible scenarios involving directors and officers …”

They set out there the possible claims that could be brought. Now, we saw in those Board minutes that we looked at a concern amongst the Board of their potential liability for matters arising from –

Alwen Lyons: Yes, yes.

Mr Blake: – Second Sight’s Report. This seems to be an advice that addresses those very risks. Why do you think it is that this wasn’t brought to your attention if it wasn’t?

Alwen Lyons: I have no idea because this is exactly what the Board were asking for.

Mr Blake: Do you recall the Board ever receiving that kind of advice?

Alwen Lyons: So I believe there was a paper, I think written by Chris Day, about a D&O risk, but I do not think the Board or – I certainly did not receive – I don’t believe I received this and I don’t believe I sent it to the board. Again, I can’t say if any Board members saw this advice, as in the CEO or the Chair. But –

Mr Blake: Separately, as at that time, so August 2013, were you personally aware of the concerns about the reliability of Gareth Jenkins’ evidence?

Alwen Lyons: No. Because this document would have made that very clear, as well.

Mr Blake: Yes. Thank you. Can we please now – we’re going to move on to autumn 2013. Could we please look at POL00146545. If we could start at the bottom of page 2, the bottom of the page. We have an email from Jarnail Singh to you, saying:

“Alwen

“For criminal prosecution and civil litigation cases it is essential for Post Office to instruct expert witness to produce expert reports on the impact of Second Sight’s Interim Report on the Horizon system. Please find attached both CV from Professor Kramer and Professor Dulay from Imperial College London who have agreed to undertake the expert witness work.”

If we scroll up we see a response from you saying:

“I think Lesley and Hugh should sign this off. Lesley from an IT perspective, that these CVs will mean they will understand and be able to explain Horizon.”

At this stage, where Jarnail Singh is specifically contacting you about two potential new experts, were you aware of concerns about the reliability of Gareth Jenkins.

Alwen Lyons: So, at this stage, I knew that we – I knew the business was not using Gareth Jenkins any more because I think something came up as an ARC meeting and we talked about finding an expert witness, but there was no explanation as to why we were no longer allowed to use Gareth Jenkins or if he’d retired, or – I didn’t know that information. But we were asked – the Board asked for this specific thing to happen, for us to go and find, and to find out how much it would cost as well, because that was the other issue that came up in the ARC.

Mr Blake: Did no one ever ask the question: why aren’t we using our own expert?

Alwen Lyons: So I think in – I think it says somewhere that we can no longer use, and I don’t remember ever it being asked “Well why?”

Mr Blake: Ever asked or ever asking?

Alwen Lyons: I don’t remember ever asking. If someone says to you “We’re no longer doing that, we’re doing this, go away and sort that out”, we were doing the “Go away and sort that out”.

Mr Blake: You had personally liaised with Gareth Jenkins –

Alwen Lyons: Yeah.

Mr Blake: – over a number of years; was it not surprising you were moving on to new experts?

Alwen Lyons: Well, I’d had probably a dozen emails from Gareth Jenkins when I was asking for things. I didn’t know Gareth, I don’t think I’d ever met Gareth, so I didn’t read anything into it, apart from we need a new expert witness.

Mr Blake: Moving on to POL00146548, please. On page 1, there’s an email from Hugh Flemington, if we scroll down, to Lesley Sewell and you – thank you, sorry, if we could scroll up – topic being “Experts Horizon issues”. He says as follows:

“Susan was minded to slow this down: Brian Altman (our über QC) may recommend that [the Post Office] cease prosecuting altogether – therefore why waste time and money committing to this person. This piece of work is not widely known within [the Post Office].”

Were you aware at that time of a piece of work that had been requested of Brian Altman, now KC, relating to potentially stopping prosecuting altogether?

Alwen Lyons: I can’t remember it.

Mr Blake: Would it have concerned you that somebody described as the Post Office’s “über QC” was advising on a significant matter relating to prosecutions and that wasn’t widely known?

Alwen Lyons: So I – so what I thought we were chasing here was a new expert witness and that’s the piece of work that I thought I was helping to coordinate by getting the CVs looked at or whatever. Now Susan is saying we might not be doing this any more. I mean, I think in an earlier document, there’s something about ceasing prosecutions. So I’m not surprised that we are considering ceasing prosecutions but, if we are going to prosecute, we need a new expert witness.

Mr Blake: Was that discussion, so the issue that was not widely known within the Post Office, was that known at Board level, do you think?

Alwen Lyons: I can’t remember if it was ever taken to Board that Brian Altman was doing this work.

Mr Blake: Again, it’s a small group of people, similar group to the emails that we’ve seen over the years in 2012 and into 2013. Is it surprising that, at this stage, you still are not aware of concerns that were raised about Gareth Jenkins?

Alwen Lyons: Well, unless someone had shared that with me, I wouldn’t have been aware. You know, a lot of the people on these emails are the lawyers. I wouldn’t have been aware unless someone told me.

Mr Blake: Okay, I’m going to now move on to 2014. Could we please turn to POL00147542. I’ll just go to a few documents from 2014 and then we’re going to move on to a separate subject of remote access.

Alwen Lyons: Okay.

Mr Blake: We have the second email from Alice Perkins to yourself. We’re now in March 2014, and it relates to the Audit and Risk Committee papers, and she says:

“I can’t attend this meeting but I was looking at the papers to see the post-mortem/lessons learned from Horizon/[Second Sight] stuff. I thought we were told at the board last week that it was on the agenda for this meeting? What am I missing – braincells or paper or neither?!”

Then you forward that to Belinda Crowe, and say:

“I need to go back on this. I thought you had discussed the delay on this with her.”

Can you recall the context of this discussion?

Alwen Lyons: So, again, I’m assuming here but I’m reading these emails and I’m thinking that, on the original ARC agenda there was a piece on there about Horizon/Second Sight post-mortem or whatever we want to call it, lessons learned, and that Alice was expecting that to be on the agenda and was expecting a paper. I clearly have taken it off the agenda on the advice of Belinda because it’s either not ready or whatever. I’ve sent the papers out without it, and Alice is saying, “Well, where’s the paper on Horizon/Second Sight?”

I wouldn’t have sent that paper, I don’t believe, unless I thought that Belinda had had this conversation with Alice because I knew, because I’d been in the Board the week before, and I knew that Alice was expecting this to come to ARC.

Mr Blake: Thank you. One final document before we move on, and that’s POL00147834.

We’re still in 2014, we’re in March 2014 and you are there giving thoughts on advice received from Linklaters. Can you assist us with why you were there giving your thoughts on –

Alwen Lyons: So I would only have given my thoughts, I think, if I’d been asked and, because I’m sending it direct to Chris, I assume I was asked by Chris, rather than Chris and Paula, but clearly I’ve sent it to both of them, and I have gone through the Linklaters advice and given them – I’ve been asked for my opinion, I think, on how the Board will respond to the Linklaters advice, and that’s what I’ve done here. But it’s only my opinion. I don’t – the Board might not have responded like this. It’s just my opinion.

Mr Blake: I’d just like to go through a few of those and, if we could bring up on screen alongside it, the Linklaters advice, and that is POL00107317, please. Thank you.

So if we could turn to 1.2 on the left-hand side, so that is, I think, the second page. Thank you. So the Linklaters advice, do you recall the circumstances in which the Linklaters advice had been sought?

Alwen Lyons: So I think the Board had asked for advice on the subpostmaster’s contract and – the subpostmaster’s contract and whether the subpostmaster’s contract enabled the Post Office to get money back from the subpostmasters over losses. I think that’s – and that’s me paraphrasing it but …

Mr Blake: They say on left-hand side:

“The relationship between subpostmasters and the Post Office is governed by the standard form contract which, according to its terms, allows the Post Office to recovery losses and is terminable on three months’ notice without the need to specify a reason. The relationship between the subpostmasters and the Post Office is one of principal and agent and the subpostmasters are not employees. There is no broader duty of care which would extend the contractual duties owed by the Post Office in any respect relevant to the issues in this Report.”

Your comment is as follows, it’s 1.2:

“… said in this way this is exactly the heavy handed big business [versus] small subpostmasters that James [Arbuthnot] thinks we are guilty of.”

Alwen Lyons: Mm-hm.

Mr Blake: So it’s talking about the relationship between subpostmasters and James Arbuthnot is concerned that it’s a heavy-handed relationship. Was that shared amongst the Board? Are you summarising here what you think the Board’s views are or are they your own views?

Alwen Lyons: So this was shared with Alice, certainly at her first meeting with James, and I can’t remember whether she shared that – she gave an update to the Board. I’m not sure – I can’t remember whether she shared that with the board or if at any of the other meetings that we’ve seen today, whether it was mentioned. Sorry, I’ve –

Mr Blake: Was that a concern though. I mean, was it something you ever discussed with the CEO, the Chair, senior executives, about a heavy-handed big business versus small subpostmaster relationship?

Alwen Lyons: So I think it might have been a concern for the chair because of the conversations that she’d had with James. Wider than that, I can’t really say.

Mr Blake: Okay. 1.4:

“Absent such proof that Horizon is not working as it should, the Post Office should be able to recover losses which the Horizon records indicate are owing on an individual [subpostmaster’s] account. If the Post Office is entitled to recover losses, then there can be no question of a consequential loss claim on the part of the [subpostmaster] relating to their recovery …”

You say:

“… the Board will be in different places, NM …”

Is that Neil McCausland.

Alwen Lyons: Yes.

Mr Blake: So he was a non-executive?

Alwen Lyons: He was, he was the SID as well.

Mr Blake: The –

Alwen Lyons: Senior Independent Director.

Mr Blake: Thank you:

“… will say good then we can put the lid back on the can of worms and pay very little. AP …”

That’s Alice Perkins, is it?

Alwen Lyons: Yes.

Mr Blake: “… will be more concerned about political optics.”

Is this an insight we get into the different positions on the Board on paying money to subpostmasters or recovering money?

Alwen Lyons: These are just my thoughts of how I think they would respond. So, you know, they may have responded very differently. So these are just – you know, this is how I think they will respond when they read this document and Alice was always concerned about the political optics and making sure that we took account of what MPs were saying, et cetera, et cetera, and Neil was much more pragmatic, I suppose, about, you know, how do we take this forward.

Mr Blake: The suggestion, though, being that he was also concerned about not paying very much.

Alwen Lyons: I think everyone, I think the whole Board were concerned about the cost.

Mr Blake: Thank you. If we scroll down the left-hand side to 2.3:

“Importantly, Jo Swinson, the Parliamentary Under Secretary of State for Employment Relations and Consumer Affairs, noted that there was no evidence of a systemic problem with Horizon. This has also been the Post Office’s conclusion on the information so far available to it. We know that there is, so far as we understand it, no objective report which describes and addresses the use and reliability of Horizon. We do think that such a report would be helpful, though there is a decision to be made about how broad and/or thorough it needs to be.”

Your comment on that, if we look on the right-hand side is:

“[It’s] unhelpful, because it suggested that we should have taken a different route, and commissioned such a report rather than use Second Sight, so why didn’t we.”

Alwen Lyons: So – sorry.

Mr Blake: No, you carry on, please.

Alwen Lyons: So that comment there is how I think – my thoughts of how I think the Board will respond because we’ve already had, in a Board meeting, the suggestion that business hasn’t managed Second Sight and it’s all taking too long and – et cetera, et cetera. So I think 2.3, because 2.3 on the left-hand side is suggesting that we need to do a more in-depth report to address the use and reliability of Horizon, I think the Board will be frustrated because they thought that’s what they were getting with Second Sight.

Mr Blake: Thank you. If we stick with the left-hand side and scroll down, let’s go to 5.30. It’s page 8. Thank you. So 5.30 says:

“It is the reliability of the Horizon system as a matter of principle which is important. If there are doubts about the reliability of the system then this could obviously impact on the Post Office’s ability to claim losses since it calls into question whether such losses exist at all. This is the fundamental question and one which has not yet been satisfactorily addressed.”

You say:

“… this will worry them as we have said all along that there is no systemic issue with Horizon, this may make them think there might be an issue and why hasn’t the business undertaken a proper forensic review/audit.”

So you had here received advice from Linklaters questioning whether, in fact, the Post Office had properly looked into the reliability of Horizon and you were concerned that that would worry the Board?

Alwen Lyons: Well, it’s sort of the same point as 2.3, that we talked about earlier, is that this is now saying that we need a proper forensic review of Horizon before we can say it has integrity.

Mr Blake: If we scroll down, please, to 5.55. This is the last paragraph we’ll look at in this document. 5.55:

“The Post Office in its capacity as a prosecutor has duties of disclosure which extend beyond the date of conviction in any particular case. [Then it cites a case there] it was observed that private prosecutors are subject to the same obligations to act as a ministers of justice as the public prosecuting authorities. Any material in the possession of Post Office which might cast doubt on the safety of any particular conviction ought therefore to be disclosed to the convicted party.”

Your comment on that is:

“This will cause concern again as it reopens the [Post Office] as a prosecutor, even if that is not what is being said.”

So is it fair to say that, as at March 2014, you were concerned that the Board would not be happy with the Linklaters advice, both because it raises issues with the reliability of the Horizon system, the fact that there hasn’t been a comprehensive report addressing Horizon and also that it raised issues relating to the Post Office’s prosecution role?

Alwen Lyons: So as I’ve said, this email is me assuming what the Board will think. So that’s a bit dangerous but that’s me assuming that’s what they will think, and what I’ve tried to do in the report is highlight the areas that I think will cause concern for the Board. And the main concern, I think, is that the Linklaters report seems to be saying “This is all fine, you can reclaim monies, et cetera, et cetera, however you have to prove first Horizon’s integrity”.

And I think, firstly, the Board thought we were doing that with Second Sight and that’s clearly not enough. So what I’ve tried to say – and the prosecution – the prosecutor piece – because this 5.55 is referring to the Clarke Advice and Gareth Jenkins. Well, I hadn’t seen that, I didn’t believe the Board had seen that, so I’m not – when I say “reopened the PO as a prosecutor”, I’m not reading that as the Clarke Advice; I’m reading it as, you know, Post Office has a capacity as a prosecutor and I believed we were already doing some work to understand how we would change that.

Mr Blake: Looking back now at when that report ultimately went to the Board, do you recall concerns that you had expressed in that email arising or not arising?

Alwen Lyons: I honestly can’t remember.

Mr Blake: Okay, thank you.

Sir, I only have one more topic to address before handing over to Core Participants but I think that might be an appropriate time to take our mid-afternoon break.

Sir Wyn Williams: Certainly. All right. So we’ll resume again at 3.30, okay.

Mr Blake: Thank you very much.

(3.16 pm)

(A short break)

(3.29 pm)

Mr Blake: Thank you.

Moving on to the topic of remote access. Could we start with POL00029589, please, second page, please – over the page – an email from Paula Vennells to you. She says:

“Alwen, thanks for the various documents coming through! An enormous volume. Hopefully, you will be reaching the end soon.

“How did the call go [this morning] [regarding James Arbuthnot] with [Second Sight]? And has Janet been in touch?”

If we go over the page to page 1 at the very top, we have an e-mail from you to Paula Vennells. You say:

“Okay here goes

“Good call with [Second Sight] but James has definitely caused confusion with his cases or themes or topics etc.

“[Second Sight] have agreed they will look into 3 cases, they will tell JFSA which 3 cases to keep them on board but [Second Sight] are choosing which.

“One of these will be dealing with the issue of remote access to a subpostmaster’s account, which James specifically raised.

“I have just spoken to Lesley who has engaged Fujitsu today and is confident that within a week they will provide evidence about access and audit trails etc.”

“Lesley and I will meet [Fujitsu] on the third to go through this, and then if we are comfortable go through with [Second Sight] and [Fujitsu] on the 6th, so let the technical people can discuss the detail.”

So as at May 2013 you were aware of a specific interest in the issue of remote access?

Alwen Lyons: Yes.

Mr Blake: Could we look at POL00029590, on the second page. We’re now in June, 4 June, an email from Martin Edwards, Chief of Staff to Paula Vennells. He says:

“… as you know, Paula is seeing Alice tomorrow. She asked if you could provide an update on the latest state of play with James Arbuthnot et al.”

Your response is above that. I will just read to you a couple of passages from your response. You say:

“SS [Second Sight] are now working on the 3 cases as agreed which include the Rudkin case, where he alleges that he heard someone at Fujitsu state they could alter a subpostmaster’s account.

“Lesley and I had a meeting with Fujitsu this week and they are providing for us an audit trail of adjustments which can be made centrally which they say happens very rarely, so we are waiting to see that and the controls in place. However they suggest that what Rudkin heard was testers [from Horizon Online] referring to test data and not the live environment. This would be good if we could prove it.

“The plan is to look at the audit trails and then have a joint meeting with us, [Second Sight] and Fujitsu.”

So you’re specifically there raising the issue of Mr Rudkin’s case and remote access to Paula Vennells or Paula Vennells’ Chief of Staff.

Alwen Lyons: Yes.

Mr Blake: POL00029601. We’re moving to 11 June now, and this is an email from Ron Warmington of Second Sight, in advance of a call the next day. He says:

“I’m afraid only two of the seven documents that you’ve enclosed seem to be relevant to SR005 …”

That’s Mr Rudkin’s case –

Alwen Lyons: Yes.

Mr Blake: – the remote access case:

“The other five (in themselves excellent) documents that were enclosed all relate to [Horizon Online], which, as is explained in Gareth Jenkins’ … affidavit was rolled out between January and September 2010. They are therefore irrelevant to SR005 …”

Do you remember this morning I was mentioning an email from Mr Warmington that was concerned with overdisclosure of irrelevant material.

Alwen Lyons: Yes, yes.

Mr Blake: Then if we scroll down, he raises a concern, he says:

“Luckily, we have picked up this basic error at this point and not while presenting our Interim Report to a roomful of MPs.”

Over the page, please:

“I’m really looking forward to tomorrow’s call. But we need to produce something that is crisp, easy to understand, and that absolutely NAILS this really serious allegation once and for all.”

Do you recall Second Sight being determined to get to the bottom of that remote access issue as well?

Alwen Lyons: Yes, I think they were but I think the business were as well.

Mr Blake: If we move on to 24 June, that’s POL00188912. This is an email I took you to earlier but I said I’d come back to it. If we scroll down to the second email, it’s Simon Baker to you, Susan Crichton and Lesley Sewell. He’s had a call with Ron and Ian, SR005, so the same case, the Rudkin case:

“[They’re] Very unhappy (and angry) with our response to SR005 – ‘Post Office haven’t answered the questions, just spouting out the same old line’. We need to sort this out in the next few days. I have taken the action provide them focused information which should provide them what they need. Although I am concerned about the time I have to gather it.”

The response above from you, you email Lesley Sewell and say:

“Lesley I think you’re going to have to get involved in the Bracknell one or we are going to lose the argument.”

So you’re escalating it there with Lesley Sewell?

Alwen Lyons: Yes.

Mr Blake: Do you recall Second Sight being unhappy and angry at this stage?

Alwen Lyons: Only from documents that I’ve been sent from the Inquiry. I didn’t – I didn’t recall this specifically but all I’m doing here is saying, you know, “Second Sight clearly are not getting what they want, Lesley, you own the relationship, you’ve got to get involved”.

Mr Blake: Thank you. Then we have the Interim Report that was ultimately produced, that’s POL00099063, and that’s 8 July 2013. This is their Interim Report. If we look at page 12, it addresses Mr Rudkin’s case, spot review SR05. If we go over the page, 1.7, for example:

“It is unfortunate that, due to the length of time that has elapsed … neither [the Post Office] nor Fujitsu were able to identify any individual who met with the [subpostmaster] …”

Then they refer to managing to find an email proving that the meeting took place:

“Unfortunately, due to a change in email systems, emails from 2008 have yet to be provided to us, but [they] have reviewed”, some of the relevant material.

Then if we look down at 1.14, this is how they end their review into Mr Rudkin’s case. They say:

“We are left with a conflict of evidence on this issue and our enquiries are continuing, particularly in light of the new information confirming that the meeting on 19 August 2008 did in fact occur.”

So concerns prior to Second Sight’s Interim Report raised by Second Sight about the lack of information or lack of clarity on the remote access issue, and, in fact, there’s no greater clarity by the time they’ve produced their Interim Report. They make clear that it’s still up in the air.

Alwen Lyons: Yes.

Mr Blake: Is that your understanding?

Alwen Lyons: Yes.

Mr Blake: Moving on in time, please, to 30 April 2014, could we please look at UKGI00019321. This is a Board meeting, which you are in attendance. If we could please turn to page 6, there’s now reference to the Deloitte report. Do you recall discussion about the Deloitte report?

Alwen Lyons: I do, yes.

Mr Blake: Was one of the purposes of the Deloitte report to assist with that issue of remote access, to get greater clarity in that?

Alwen Lyons: So I think the main purpose of the Deloitte report, from my memory, was that, whereas the Linklaters report had said – had given us information about the contract, it was predicated on that Horizon had integrity. So I believe the Deloitte report – and there were two halves, I think, because one was up to – one was older – one was new Horizon and then there was some look at old Horizon but that came later, but I believe the Deloitte report was asked for to fill that gap.

Mr Blake: Was one of those gaps in corporate knowledge to do with the remote access issue?

Alwen Lyons: So I can’t specifically remember that but it may well have done.

Mr Blake: Do you recall getting any greater clarity after the Interim Report on that very issue?

Alwen Lyons: After the Interim Report?

Mr Blake: Yes. So we’ve seen the Interim Report –

Alwen Lyons: Yes.

Mr Blake: – ended up without any –

Alwen Lyons: Without any – yes – so, no, I don’t think the interim report moved us forward at all.

Mr Blake: So we have here the Board discussing the Deloitte report. This in advance of the Deloitte report, and it says:

“The Board welcomed Lesley Sewell … and Gareth James [who was a partner at Deloitte], to the meeting. Chris Aujard also rejoined the meeting.

“The Chairman thanked Gareth James for his draft report and explained that there were a number of people who were sceptical about Horizon. The Board were concerned to know the truth about the reliability of the system. Deloitte’s views would need to be expressed in such a way that they would persuade reasonable lay people.”

It might be suggested that that last sentence there is suggestive of trying to direct Deloitte in a particular way, to persuade people. Is that your understanding of those words?

Alwen Lyons: No, my understanding of that is that it needs to be written in such a way as people can understand it and that’s what I’m reading into that. So make it accessible is – I think.

Mr Blake: Thank you. Then (e):

“Chris Aujard explained that several of the subpostmasters who were challenging Horizon had made allegations about ‘phantom’ transactions which were non-traceable. Assurance from Deloitte about the integrity of the system records logs would be very valuable.

“The Board asked what assurance could be given pre-2010 when the different Horizon system was in use. It was agreed that Gareth James would produce and cost a proposal for additional work to enable assurance for the wider system, including pre-2010.”

There was then a further Board meeting that followed the report, can we please turn to POL00021525. That is the Board meeting of 21 May 2014. Do you recall that Board meeting?

Alwen Lyons: I’m not – no, not in detail.

Mr Blake: I’ll take you to the relevant part. So it’s page 9. There’s a section on Sparrow. We see there, if we scroll down, reference there to the draft executive summary of the Horizon Assurance Review having been circulated to the Board.

I want to see how these minutes were drafted.

Alwen Lyons: Okay.

Mr Blake: Could we turn to POL00384388, please. It’s the second page. It’s an email from you to Chris Aujard and Belinda Crowe. Thank you very much.

This is 23 May, so we’ve seen there the meeting itself was 21 May. Presumably, the minutes themselves are not typed up on 21 May; there is a process that follows that meeting.

Alwen Lyons: Yes.

Mr Blake: We’re now on 23 May, which is the date that the Deloitte report was actually produced.

Alwen Lyons: Okay.

Mr Blake: So that is what we refer to as the final Deloitte report, although I think, on the front, it says that it’s a draft for discussion, or something along those lines. You are emailing Chris Aujard and Belinda Crowe and you say as follows:

“It’s a bit smoke and mirrors but here are the minutes, comments ASAP please.”

Now, I think in your witness statement you’ve said that there’s no issue with the words “smoke and mirrors”, you didn’t mean anything by it; is that correct?

Alwen Lyons: Well, clearly, it’s very unprofessional and I shouldn’t have put it in the email. I seem to recall that when I left – when I escorted Belinda and Chris out of the meeting, because the conversation had been quite cyclical in terms of Sparrow, and Belinda, I believe, turned to me and said, “Oh, good luck with minuting that”, and I’d said to her, “It’s a bit smoke and mirrors”, and I stupidly had carried the conversation on to this email but it’s unprofessional and it shouldn’t have happened.

Mr Blake: But, I mean, “smoke and mirrors” is suggestive of in some way misleading?

Alwen Lyons: Yeah, no, that’s not what I meant and my minutes were not misleading.

Mr Blake: What you are doing, though, is you’re sending to Belinda Crowe and Chris Aujard draft minutes that they are then amending?

Alwen Lyons: So my practice was that I would take verbatim notes wherever possible and when the conversation was cyclical and that was quite – that became quite difficult, but they were taken, I would then draft the minute, and it would be sent out to the executive member or – Belinda wasn’t an executive member, but the executive member who was responsible for the input to that part of the meeting. They would then give their input. I would then get that back and I would revisit my verbatim notes to check that, actually, their input had come to the meeting first, and that it was accurate. So that was my practice and then, after that had happened, the minute would go to the Chair for their input.

Mr Blake: If we scroll up we can see that Belinda Crowe has responded, and she says:

“Comments from me but Chris will need to agree. We are going to be speaking shortly.”

If we scroll down we can see, now they’re in a slightly different colour, I think, the comments. We might be able to see them if we scroll down, please, under “Sparrow”. Can you see? It’s a little difficult to see but the comments seem to be in a slightly less dark format.

Alwen Lyons: Okay.

Mr Blake: So it has been amended here as follows:

“It was reported that [and then] the draft executive summary of the Horizon Assurance Review prepared by Deloitte had been circulated to the Board. Chris advised that it was anticipated that the full review would be available to the business on Friday, 23 May and that he would circulate it to the … Board …”

It’s this addition I would like to ask you about:

“… as soon as possible but only when he was satisfied with its drafting and clarity of expression; it was agreed that he would escalate within Deloitte if he had concerns about the quality of the product.”

Now, that was added on the day that, in fact, that Chris Aujard and Belinda Crowe received the report itself, so they are amending minutes referring to a report that they have now received.

Alwen Lyons: I didn’t realise that.

Mr Blake: No. Do you see an issue with that?

Alwen Lyons: I would if I didn’t believe that I went back to my verbatim notes and checked them.

Mr Blake: I mean, is it possible that those words that are highlighted there were not actually spoken at that meeting?

Alwen Lyons: Well, we do say that we want them to be clear, don’t we, we want them to be understandable?

Mr Blake: Sorry, it’s the second –

Alwen Lyons: Yes, yes.

Mr Blake: So it’s him saying, in essence, that he would escalate to Deloitte if he had concerns about the quality of the product and the Board might not be receiving it when he receives it.

Alwen Lyons: Yes. I – with hindsight, knowing that they received the report on the same day, that might be an issue, if Belinda and Chris are responding to this having read the report, then that’s a completely different mindset to just responding to this as this is what they believe they told the meeting. I do think I would have gone back and checked my verbatim notes and, if they hadn’t – if this hadn’t been in there at whatever – you know, whatever level, I would have gone back and challenged Chris and Belinda. I don’t remember doing that.

Mr Blake: Are the number of changes unusual?

Alwen Lyons: So …

Mr Blake: If we scroll down, we can see more over the page as well.

Alwen Lyons: So this – there was a lot of information being put in by Belinda and Chris, who obviously wanted as much information in here as possible.

Mr Blake: Or wanted to direct how the minutes would read?

Alwen Lyons: Well, you know, I think – I believe I went back and checked my notes and a lot of this information might have been in their report, and my practice was not to regurgitate the report in the minutes because the Board had the report. So –

Mr Blake: They didn’t yet have the report, though, did they?

Alwen Lyons: They brought a report to this meeting, didn’t they?

Mr Blake: They had an executive summary at the meeting.

Alwen Lyons: Yes.

Mr Blake: The report would follow and the words that were inserted were to the effect that they wouldn’t necessarily receive the report straight away.

Alwen Lyons: Right. So this does look as if there’d been a lot of additions. However, I would – my practice, as I say, was to go back and check my verbatim notes and, if I hadn’t heard this at the meeting, I would have gone back to Chris and Belinda and said, “Actually, you didn’t say any of this, you can’t just have them in the minutes”.

Mr Blake: Thank you. Let’s look at the report very quickly. It’s POL00028062. It’s page 31. Did you read the Deloitte report?

Alwen Lyons: So I’m not sure that I saw the long Deloitte report and, therefore, I’m not sure the Board saw the long Deloitte report.

Mr Blake: Given that you had a governance aspect of your role –

Alwen Lyons: Yes.

Mr Blake: – why would you not have read the Deloitte report?

Alwen Lyons: Because I’m not sure it was given to me.

Mr Blake: Having read it now, is it not a document that you recognise?

Alwen Lyons: I don’t recognise it.

Mr Blake: Can we turn to page 31, please, and it’s the bottom there. I don’t know if you’ve seen me go through this or anybody go through this with other witnesses but it’s (g):

“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:

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

The final one:

“Controls that would detect where 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.”

Looking at those now, are those matters that you would have expected to have been brought to your attention, given to your involvement in the remote access issue?

Alwen Lyons: Yes. I mean, the first one there is interesting because it doesn’t – the first one there doesn’t say “without the knowledge of the subpostmaster”, because – it says the subpostmaster hasn’t got to accept them but it doesn’t say without the knowledge of the subpostmaster. So I believed at this point that the subpostmaster could see everything in their account, every – you know, like I spoke about earlier, keystroke, every transaction and, even if they were sent a transaction correction and – the process changed because they used to have to accept them, even if they were sent them and now we don’t have to accept them, they would still see them.

That was my understanding at this point. However, I do not remember seeing the long Deloitte report. I remember the Board summary, which came to the Board at a later date.

Mr Blake: That’s what I would like to ask you about, that summary, and the way that that was drafted. Could we please turn to POL00346391, page 2 and into page 3. You’re copied in here, an email from Chris Aujard to Paula Vennells and others.

“Dear all – Following the 2 longish calls that I have had with Deloitte today, they have now come back in the email below with a revised statement of the ‘deliverable’ that they are proposing to produce for us … If the general consensus is this is okay, I would propose to ask Alwen to circulate the email to the Board with following message from me …”

Do you recall a process by which Deloitte were going to be drafting effectively a summary of the report, or –

Alwen Lyons: From reading these emails, yes.

Mr Blake: Yes, but do you recall it at the time?

Alwen Lyons: Ah –

Mr Blake: We have below that the email from Gareth James, which sets out deliverables:

“These seek to create a shorter document for you (intended for Board circulation) which focuses on certain key (and most relevant) aspects of our wider work to date.”

Could we please turn to POL00346396. There is then on that page we see an email from you to Paula Vennells:

“Paula do you want this to go to the Board this evening as written by Chris, or should it wait until he has answered the questions in the morning.”

She says:

“We should certainly [refer to the] pre/post as otherwise it will look like we’ve forgotten it.”

Do you recall an issue relating to, I think, Legacy Horizon and Horizon Online –

Alwen Lyons: Yes, yes.

Mr Blake: – and not enough detail on that issue?

Alwen Lyons: Yes, because Deloitte were, in fact – I think they’d been asked to do two – to do one report but then tell us how they – whether they were able to and how much it would cost to do a report on Legacy Horizon.

Mr Blake: Thank you. Could we turn to POL00346406, this is a very early in the morning email from Chris Aujard, 30 May – you’re copied in – to Gareth James at Deloitte:

“We have discussed at some length the need to provide as much comfort as possible in respect of the period prior to 2010. For clarity, could you kindly confirm that you still propose to do this?

“2) On the question of the audience for the document, this is principally the Board in the first instance; as discussed we will however, want to be able to use any high level conclusions you may reach as a foundation for the release of the Linklaters advice – at this stage we are not sure what form we would need your conclusions to be expressed in …

“3) The proposed timings do not work … for us …”

It seems as though there was some anger towards Deloitte about the time that it was all taking; is that correct, was that your recollection?

Alwen Lyons: Yes, yes, sorry.

Mr Blake: I’ll summarise, really, where we get to from there. There is then produced the summary for the Board and the summary does not set out the information that I’ve taken you to before about remote access.

Alwen Lyons: Okay.

Mr Blake: Do you recall the summary being provided and any discussions about how that summary would be drafted and whether it should or shouldn’t include more detail or detail about remote access?

Alwen Lyons: I don’t recall that and I haven’t seen any papers that suggest I’m part of that conversation.

Mr Blake: Thank you. I’m going to move on now very quickly to the Swift Review. Could we please bring up on screen POL00153835. We’re on 18 December 2015, an email from Mark Underwood to you. Over the page, please, or down to the bottom, and the top of page 2. There we go.

“Hi Alwen,

“Thank you for providing Patrick with the minutes for the Sparrow Sub Committee meetings and the extracts from other Board meetings relevant to Sparrow. I will forward these on to Jonathan Swift QC this afternoon. As one would expect, numerous papers and reports are cross-referenced in these minutes.”

Can you recall assisting with the provision of information to Jonathan Swift?

Alwen Lyons: Not specifically but now that I’ve seen this, yes, I can recall that.

Mr Blake: Can you recall ever reading his report, his ultimate report?

Alwen Lyons: I don’t think I ever saw his report.

Mr Blake: Did you ever discuss his report or the drafting of his report with any senior executives at the Post Office?

Alwen Lyons: No.

Mr Blake: Would a report of that nature be something that you would expect to know about or to be told about, or to read?

Alwen Lyons: So can I just clarify, is this the report that Tim Parker, when he became Chairman, was asked to –

Mr Blake: Yes.

Alwen Lyons: So I never saw this report and I don’t remember Tim Parker ever sharing that report with the Board.

Mr Blake: So you were, to some extent, involved in the provision of information?

Alwen Lyons: Yes.

Mr Blake: Do you remember any other involvement, other than that?

Alwen Lyons: No.

Mr Blake: Did you ever discuss it with the Chair?

Alwen Lyons: So I believe the Chair made it very clear that he’d been asked to do this independently and, therefore, there was no discussion about it.

Mr Blake: Thank you.

Very finally, your resignation. Could we just turn to POL00021549. 25 July 2017, we have a Board meeting and it’s at page 4:

“(e) The CEO explained that the decision …”

Sorry, it’s at that meeting, in fact, that:

“The CEO explained that the decision not to prosecute agents if they could use the Horizon system as a defence would be reconsidered once Deloitte had completed their work on Horizon and could be used in court as an expert witness.”

Was this also the meeting at which you retired? Yes, if we go over to page 7, so at that same meeting where there was discussion about not prosecuting agents, it has “Resignation and Appointment of the Company Secretary”. Can you briefly assist us with the reasons for your retirement –

Alwen Lyons: So they were –

Mr Blake: – or resignation –

Alwen Lyons: – personal reasons because we’d had two bereavements in the family, close family, and one very ill person in my close family, and I needed to be at home supporting them, rather than commuting up to London.

Mr Blake: Thank you.

Sir, those are all of my questions. There are some questions from Mr Jacobs and also from Ms Shah on behalf of the National Federation of SubPostmasters.

Sir Wyn Williams: All right.

Mr Blake: Shall we start with Mr Jacobs.

Questioned by Mr Jacobs

Mr Jacobs: I’d like to take you to a document, please, POL00058155.

While that’s waiting to come up, I should tell you I represent a large number of subpostmasters, subpostmistresses and assistants who were affected by this scandal and are represented by Howe+Co.

So this is a document about a story, and all will be made clearer. Could we go, please, to page 2 of 3 at the bottom of that page. It’s an email from Hugh Flemington – if we could scroll down – 24 July 2012 to Susan Crichton, you and Simon Baker:

“This the story text which J put together [and we can see that ‘J’ is Jarnail Singh] following our meeting last week. Any comments, please, before we release it?”

So the story from Mr Singh is entitled “Second Sight Review Draft”. To summarise it, the first paragraph says that Post Office are going to undertake a review; second paragraph says Second Sight are going to be instructed and it will focus on cases raised by Members of Parliament, and that JFSA want their own forensic accountant to monitor the work of Second Sight, that accountant is Kay Linnell.

But I want to focus on the third paragraph, please, so if we could maybe highlight that. I’ll read:

“All of the above is accepted based on the terms of the Review being carried out, but it must be stressed that this is not an acknowledgement by the Post Office Limited that there is an issue with Horizon. The Horizon system is working properly, robust and is being used up and down the country …”

Then importantly:

“… when the system has been challenged in the criminal courts, it has been successfully defended.”

I want to ask you about that last statement, “When the system has been challenged in the criminal courts it has been successfully defended”, and what I want to suggest is that that is not true; would you agree?

Alwen Lyons: So, at this point, I would have – as Mr Singh is the criminal lawyer, I would have accepted that that what he was telling me was the truth.

Mr Jacobs: You would have accepted that it was or wasn’t true?

Alwen Lyons: Was the truth at that point because he’s telling me that this is what’s happened in the criminal courts.

Mr Jacobs: Well, were you aware that Suzanne Palmer, who is a client who we represent and who was one of the case studies in an earlier phase of this Inquiry, had been acquitted by a jury in Southend Crown Court in January 2007, and she had asserted in her defence that the Horizon system had prevented her from challenging any Horizon figures which she hadn’t agreed. There had been, at her trial, a jury question directed at the Post Office to the effect of “What is Mrs Palmer supposed to do if she didn’t agree it or doesn’t agree with the figure that Horizon produced?”, and the Post Office had been unable or unwilling to answer that question. So an acquittal in relation to a subpostmistress who challenged the Horizon system in January 2007. Quite a significant event.

Alwen Lyons: Yes.

Mr Jacobs: Is that something that you were aware of?

Alwen Lyons: So I don’t believe I was aware of that.

Mr Jacobs: Okay. Moving on, and you may give the same answer, but I need to put it to you. Also in 2006, in Northern Ireland, in Dungannon court, Maureen McKelvey, another one of our clients, was acquitted by a jury and, in her trial, it came to light that an Area Manager had experienced problems with balancing on the Horizon system at Ms McKelvey’s branch terminal and she had maintained, right from the start, that the losses that were alleged were due to errors on the computer system. Is that something that you knew about?

Alwen Lyons: Not that I remember, no.

Mr Jacobs: Now, the Inquiry – you may or you may not know this – has heard evidence from the Post Office Investigators in both of those cases, Ms Allan and Ms Winter, and they not only attended the hearings, attended those trials, they gave evidence against our clients and they were present when the jury delivered their verdict. Is that not something that you knew?

Alwen Lyons: No.

Mr Jacobs: Did you consider, or did Ms Crichton consider, or did Mr Baker consider, that it would have been appropriate before accepting this statement or putting this out that there should be some fact checking that went on?

Alwen Lyons: Absolutely. I would have expected – if there was any doubt in this last sentence here from Mr Singh, I would have expected other members of the Legal Team to challenge that, either Mr Flemington or Ms Crichton, and to say this is not a correct statement.

Mr Jacobs: Well, if we could just go up to page 2 of 3 at the bottom, please, so just scrolling up slightly, you will see that you wrote an email to Simon Baker, and it says:

“Simon can you go to Alana with this request for the ‘story’ [Post Office’s story] as they are the experts.”

Who was Alana?

Alwen Lyons: Alana was Mark Davies’ deputy in the Communications Team.

Mr Jacobs: Okay. Why did you call it the “story” with speech marks?

Alwen Lyons: So I’m referring to what Mr Flemington said further down in the email and I’m not reading anything else into that at this point.

Mr Jacobs: Okay, well, if we could move up, then, after your request Mr Baker wrote to Alana Renner, copying you in with Mr Flemington and Ms Crichton:

“Please can help us craft our message around the Second Sight review. We need to combat the assertion that the review is acknowledgement that there is a problem with Horizon.

“Jarnail has drafted some words below. Do they strike the right tone?”

So what we see here is the purpose of the story is to stop anyone saying that Post Office are acknowledging that there’s a problem with Horizon.

Alwen Lyons: I think it’s important here that, in the Second Sight review, Horizon was used as a more generic term than just the computer. So here I don’t know if Simon is saying problem with Horizon as the computer, rather than the wider Horizon. Clearly, the wider Horizon is also very important.

Mr Jacobs: Okay. If we could then scroll up to the next email, which is Ronan Kelleher, 27 July 2012 at 11.27, so he writes to Simon Baker, you’re copied in again, and he says:

“As this message will most probably find its way into the media, we need to get the message across from the start that we continue to have full confidence in the robustness of the Horizon system and … I suggest the following tweaking to the proposed wording from Jarnail.”

If you scroll down to the bottom of that letter, the “tweak”, so to speak, and then you can see the final sentence; it’s not part of a sentence, it’s a sentence on its own:

“When the system has been challenged in criminal courts, it has been successfully defended.”

So the expert, as you put it, looked at this, looked into this and, when it was came back and it was given a sort of final draft treatment, that sentence remained, didn’t it?

Alwen Lyons: Yes, and that’s appalling.

Mr Jacobs: Then, going up to the top, then, we’ve got – or the second from the top email:

“Ronan

“That works. Thanks.

“Simon.”

So everything seems to be fine with that. Then the last email in the chain, which was Jarnail Singh to Hugh Flemington, there’s been some redaction there but we can see your name and –

Alwen Lyons: Yeah.

Mr Jacobs: – Susan Crichton’s name:

“Dear Hugh, Susan Alwen

“You have seen the final draft of ‘our story’ can this now be released to our agents and counsel for consistent approach and submissions when there is [I think that’s probably a typing mistake]

“Challenges to the Horizon.

“Regards

“Jarnail.”

So the question I wanted to ask you is who are “our agents” who this was going to go out to?

Alwen Lyons: I don’t know who he means by “our agents”, unless its subpostmasters.

Mr Jacobs: So other subpostmasters?

Alwen Lyons: Yes, that is what I’m assuming but –

Mr Jacobs: Then, perhaps more troubling, this was going to go out to counsel. Surely that means that this was going to be used by barristers in cases against subpostmasters?

Alwen Lyons: Well, that’s why I’m – I said it was appalling.

Mr Jacobs: Do you accept, having said that it was appalling, that Post Office knew, must have known, that there had been Horizon acquittals and deliberately put out a false account to cover that up?

Alwen Lyons: So I don’t know who, on this email chain, would have known. Whether Mr Singh knew, I don’t know. But, you know, you would have imagined that the lawyers on this email chain would have known about the prosecutions brought against subpostmasters.

Mr Jacobs: Thank you. The date of this, 31 July, you were the Company Secretary at that point, weren’t you?

Alwen Lyons: I was.

Mr Jacobs: Did you present the story or show the story to the Board?

Alwen Lyons: I cannot remember doing so but I may have shared it with Alice.

Mr Jacobs: Okay. I’m just going to see if I have any more questions.

Finally, can you explain why it was called “our story” in inverted commas?

Alwen Lyons: I think it’s because right at the beginning of the email, Hugh Flemington unfortunately calls it a “story” and that’s continued all the way up the email, and I think that’s why.

Mr Jacobs: So it’s a deliberate use of words, isn’t it?

Alwen Lyons: Yes, it’s deliberate in this email but, in terms of “our story”, I think it’s just saying what’s – what do the Post Office want to say about this? That’s …

Mr Jacobs: I have no further questions. Thank you.

The Witness: Thank you.

Sir Wyn Williams: Thank you.

Mr Blake: We have Ms Shah from the NFSP, she’s assured me she’s going to be seven minutes, and then we have, briefly, Ms Patrick as well.

Sir Wyn Williams: Right, okay.

Questioned by Ms Shah

Ms Shah: Good afternoon, Ms Lyons, can you hear me?

Alwen Lyons: I can, yes.

Ms Shah: I represent the NFSP at this Inquiry. I’m going to be remembering to sections of your witness statement but this does not need to be brought up unless you wish to review these sections.

So we saw in your witness statement that your parents ran a sub post office and I think that your father was also a previous General Secretary of the NFSP from 1980 to 1991; is that correct?

Alwen Lyons: That’s correct, yes.

Ms Shah: In paragraphs 32 and 33 of your witness statement, you describe your role as including the disciplining of subpostmasters. This Inquiry has heard a great deal about the overzealous, aggressive and intrusive way in which audits and investigations were carried out with an attitude of guilty from the outset, terminology used such as “offender reports”; in fact you would have been part of that way of working, wouldn’t you?

Alwen Lyons: No, I don’t believe so. I mean, I had no part of the investigation procedures or – I was the Area Manager or the Retail Network Manager between ‘91 and ‘95, as you say in paragraph 32. I spent most of my time trying to help subpostmasters and support them. If something happened, which meant that there was an issue at an office, I believe that I would approach things in an even-handed way and would have listened to the subpostmaster as well as listening to investigation or whatever.

Ms Shah: So you wouldn’t accept that, given that we have heard about this culture of guilty until proven innocent, that, given your family background in a sub post office and the family background in the NFSP, there is not much empathy being shown in this disciplining of subpostmasters when you were in your role?

Alwen Lyons: So I’m saying that I don’t agree with you in terms of my empathy with subpostmasters. In ‘91 to ‘95, the Investigation part of the business was in Royal Mail Group and that was a very different culture to how we dealt with subpostmasters and tried to help subpostmasters during this time. So I would really disagree that I was heavy-handed with subpostmasters at all.

Ms Shah: Okay. At paragraph 49, of your witness statement, you talk about your role as Head of Directly Managed Branches. What was taking place during that time with the disciplining and/or prosecutions of Crown Office personnel?

Alwen Lyons: So it was a very different regime because they were employees not agents and there was an HR process, which meant that, if someone at an office – there was a problem with someone in a Crown Office, then they would be part of the – they’re employees so they would be dealt with very differently than subpostmasters.

Ms Shah: How about prosecutions?

Alwen Lyons: I can’t remember any prosecutions but I might have – I might have misremembered that but I can’t remember any prosecutions specifically about Horizon issues.

Ms Shah: In your role, what discussions did you have with unions who represented Crown Office employees about the approach to disciplining and prosecutions, albeit you can’t remember any prosecutions regarding Horizon specifically?

Alwen Lyons: So I had a lot of discussions with the CWU about the people issues and trying to work with them, actually, to try and make sure that our people were looked after as well as, you know – so I had lots of discussions with the CWU.

Ms Shah: So, from your knowledge in your various roles which have been discussed today, can you describe the differences in the level of disciplinary action and sanctions between subpostmasters and Crown Office cases?

Alwen Lyons: So, at this point, I wasn’t dealing with subpostmasters at all. I believe in the Crown Office cases, if someone had a loss on the counter, they would be – I believe they could have so many losses within so many months of time. I can’t remember specifically but they would have – they would get some additional training, maybe, if they were new or – they would have support because, in a Crown Office, you’ve got a branch manager standing there who can be helping them with any issues on the counter.

Ms Shah: So are you aware of the reason for the differences between Crown Office staff who are employed and self-employed, small business people, as to the level and attitude towards disciplinary action and/or sanctions?

Alwen Lyons: So they were on a very different contract, so that’s why it was different: one was an employee and one was an agent.

Ms Shah: So would your evidence be that it’s nothing to do with the ability to recovery funds from subpostmasters?

Alwen Lyons: I don’t believe it was.

Ms Shah: Okay. At paragraph 360 of your witness statement you say that your pride in working for the Post Office is now tainted by what has happened. Do you not understand or accept your own either active or passive role in what has happened?

Alwen Lyons: Yes, I do understand that. That’s why my 34 years at the business, which I was very proud of when I left, is tainted, and it’s very difficult because, you know, something that you are very proud of like that, it’s suddenly not right to be proud of it any more.

Ms Shah: Would you accept that, given your family background in a sub post office and your family background in the NFSP, it might be said that you took the saying “poacher turned gamekeeper” to the extreme?

Alwen Lyons: I find that quite offensive, actually. My family background, I think, enabled me to understand some of the issues that subpostmasters were going through and, at no point, did I think I was, you know, “poacher turned gamekeeper”. I believe that, through all my career, I did a lot to help subpostmasters.

Mr Blake: Thank you, sir. It’s Ms Patrick.

Sir Wyn Williams: Is that it, Ms Shah?

Ms Shah: I’ve got a few more short questions, sir. Sorry.

Would you accept that you shut your mind to the consequences of everything you knew and ought to have taken further and that directly or indirectly led to subpostmasters being wrongly prosecuted?

Alwen Lyons: So in hind –

Sir Wyn Williams: I don’t think the witness can answer that because she wasn’t in any relevant post at any relevant time to this Inquiry when people were being prosecuted.

Ms Shah: Okay, sir.

Okay. Would you agree that your actions, directly or indirectly, led to organisations and unions such as the NFSP and the CWU being misled to keep their concern to a minimum and avoid them putting their support behind the JFSA?

Alwen Lyons: So I don’t believe my actions did that. I believed that I was acting in good faith. I believed that – the information I was given from experts within the business and I relied on that information. If I had a regret, it’s that I relied on information from people who I considered to be experts without demanding more proof.

Ms Shah: That concludes my questions. Thank you.

Sir Wyn Williams: Thank you, Ms Shah.

Ms Patrick.

Questioned by Ms Patrick

Ms Patrick: Thank you, sir.

Ms Lyons, my name is Angela Patrick. I represent a number of subpostmasters who were convicted and have since had their convictions overturned.

You might be glad to hear I’ve only got one document I want to ask you about and it’s about the Deloitte work that Mr Blake has already asked you about. He’s asked you about April and May in the minutes in 2014. I want to look at one document which comes a little after that, which is POL00029733. If we could look at the bottom third of page 1, I’d be grateful.

We can see there, at the very bottom third of that page, we see an email from you, Ms Lyons. Can you see that?

Alwen Lyons: Yes.

Ms Patrick: It’s dated 4 June 2014. I don’t need to read those names but do you accept that’s the Board?

Alwen Lyons: Yes.

Ms Patrick: So it’s a message from you to the Board and it’s forwarding, and we see the header there, “Deloitte Briefing – Message from Chris Aujard and Lesley Sewell”, and it’s marked, “Strictly Private and Confidential – Subject to Legal Privilege”.

The message says you’re forwarding a message from Chris Aujard and Lesley Sewell and you attach the Deloitte briefing.

Just for fullness, if we scroll up a little, we can see the message. It goes over on to page 2, as well. We don’t need to read it all out because it’s quite long – sorry, scroll down. You say:

“Dear All,

“As detailed in the Board update sent last Saturday, please find attached Deloitte’s final draft ‘Board Briefing’, received by us late this afternoon.”

As you go down, it talks about:

“… features of the Horizon system which operate to provide subpostmasters with full ownership and visibility of their branch ledger, and which maintains a complete and accurate audit trail.”

The next paragraph:

“The briefing strives to be succinct and intelligible. However, given the subject matter and scope of the review, it remains somewhat technical.”

There are some bullet points which provide a summary. We don’t need to go to those for now but I just want to ask you one question.

You circulate this message with the attachment and the summary to the Board. Now, you’ve said you didn’t, in April and May, read the Deloitte report, the original version, and I think your evidence is that, until you were shown it by the Inquiry, you hadn’t seen the original report; is that right?

Alwen Lyons: That’s my belief, yes.

Ms Patrick: So you wouldn’t have checked this summary accurately reflected the original?

Alwen Lyons: No, because I wouldn’t be able to do so.

Ms Patrick: You don’t recall asking to see the original at this time?

Alwen Lyons: No, I don’t recall asking.

Ms Patrick: I just want to ask you and to check whether this helps your memory on who might have completed the summary for the Board and helped with the Deloitte summary; now was it Mr Aujard and Ms Sewell who would have asked you to circulate this message?

Alwen Lyons: Can we keep going down for a minute to see who the signatory –

Ms Patrick: Of course.

Alwen Lyons: Yes. So this message has come from Lesley and Chris and that’s who I am circulating it on behalf of. Now, that doesn’t mean I didn’t check with someone before I did that. So I might have checked with Paula, for instance. It doesn’t look as if I checked with Alice. So we were expecting this update from Lesley and Chris, so I’m circulating it on their behalf.

Ms Patrick: Okay. If we scroll up to the very top of this document, we see that you circulate it separately to Rodric Williams. Can you see that there, at the top?

Alwen Lyons: I can, yes.

Ms Patrick: You say:

“Sorry should have cc’d you in as you did all the work!”

Now, you’re circulating a message from Mr Aujard and Lesley Sewell. Can you remember now which of both of them might have asked you to circulate the document?

Alwen Lyons: No, I can’t.

Ms Patrick: You’re forwarding it to Mr Williams, saying:

“… should have cc’d you in [because, essentially] you did all the work!”

Does that help your memory on who was involved in the preparation of the final summary for the Board with Deloitte?

Alwen Lyons: So Rodric was a lawyer and I am reading into this now that he had the connection with Deloitte and that he was – and so I would have said it was Chris Aujard but that’s only because I’m saying here that Rod, a lawyer, did all the work.

Ms Patrick: Thank you, Ms Lyons. That’s all the questions we have for you.

Sir Wyn Williams: Is that it, Mr Blake?

Mr Blake: It is, yes. Thank you, sir.

Sir Wyn Williams: Well, thank you very much, Ms Lyons, for producing a detailed witness statement and for coming to the Inquiry today to answer very many questions. I’m grateful for your participation.

Alwen Lyons: Thank you.

Sir Wyn Williams: So we’ll resume tomorrow morning with Ms Vennells, I take it?

Mr Blake: That’s correct, sir, yes.

Sir Wyn Williams: Jolly good. Thank you.

(4.28 pm)

(The hearing adjourned until 9.45 am the following day)