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23 May 2024 – Paula Vennells

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Paula Vennells

PAULA ANNE VENNELLS (continued).

Questioned by Mr Beer (continued)

Sir Wyn Williams: Yes, Mr Beer?

Mr Beer: Thank you, sir. Good morning, Ms Vennells.

Paula Vennells: Good morning, Mr Beer.

Mr Beer: Yesterday, aside from the seven general topics that I dealt with in the morning, we addressed two issues of substance: one was the complaints made by subpostmasters and others about bugs, errors and defects; and then, secondly, we looked at remote access in the afternoon.

Paula Vennells: Mm-hm.

Mr Beer: Can I turn to my third topic of substance then, which is the Second Sight investigation and the Complaint and Mediation Scheme.

Paula Vennells: Okay.

Mr Beer: I’d like first to look at the process by which Second Sight were chosen, and Deloitte were not, to conduct an investigation. Can we look, please, at POL00180209. It will come up on the screen for you. If we look at the foot of the page there’s an email of Simon Baker – you’re not on this chain – to Susan Crichton and Lesley Sewell of 6 June 2012, and he says:

“Susan, Lesley

“Attached is Ron’s proposal.

“My view is we make it clear to Alice/Paula the distinction between the work Ron is proposing (an independent review of past cases) and the Horizon Forensic Audit (the Deloitte proposal) and put it on the agenda to discuss tomorrow”, which would be 7 June.

At this stage, were you aware that there were two contenders for the undertaking of some form of investigation, review, or audit?

Paula Vennells: From the documentation I can see that’s the case. I couldn’t recall it at the time and I think I say in my statement that the Deloitte work, which was named Project Spire, was not something I remembered but I can see there were those two alternatives being discussed.

Mr Beer: Can you remember the distinction between them, ie what was proposed to be done by Second Sight and what was to be done by Deloitte?

Paula Vennells: No, I can’t recall the distinction but I can see it from what was being said here, and I don’t know, to be honest, how much I remembered that – how much I understood that distinction at the time. Looking at the documents, they’re clearly very different, the Project Spire document is a forensic investigation of the Horizon system –

Mr Beer: Sorry to interrupt, by forensic investigation of the Horizon system, is that captured by these words here, “forensic audit”?

Paula Vennells: Yes, and I’ve just read that, and I’ve used “forensic” because I’ve just seen it on there. I would have said a detailed investigation of the Horizon system.

My concern at the time, my priority at the time, was to choose an organisation whom I felt would relate best with the subpostmasters who had been raising their claims.

Mr Beer: As it’s described here, the work that Second Sight were proposing, by contrast, was a review of past cases?

Paula Vennells: Yes.

Mr Beer: Okay. Can we see what happened then, please. POL00233736. Now, this is a timeline that has been prepared after the event of the events which led to, and happened in, the course of the Mediation Scheme. But it’s the best and only record, I think, we’ve got of what happened on 7 June, the day following the email that I’ve just read to you.

Paula Vennells: Right.

Mr Beer: Can we look, please, at page 3. Do you see, in the box that’s at the bottom of the screen there, it’s recorded that, on 7 June 2012, a meeting is held between you, Alice Perkins, Susan Crichton, Alwen Lyons and Simon Baker where the Deloitte and Second Sight proposals are discussed –

Paula Vennells: Yes.

Mr Beer: – and Second Sight was chosen as the preferred supplier?

Paula Vennells: Yeah.

Mr Beer: Why was Second Sight proposal preferred to that of Deloitte?

Paula Vennells: I think, because of what I’ve just said earlier, from my own – my own recollection is that I felt very strongly that we needed an organisation who would be able to work well with subpostmasters. I was concerned that any one of the Big Four, Deloitte being one of them, may have come across too corporate and wouldn’t necessarily have had the understanding of running a Post Office and small retail businesses.

I don’t recall, which is why – sorry, let me finish what I was saying. I don’t recall looking at the proposals in detail at the meeting.

Mr Beer: That’s what I was going to ask.

Paula Vennells: Right.

Mr Beer: Rather than which might be preferred by subpostmasters –

Paula Vennells: Yes.

Mr Beer: – how it might look, going to one of the Big Four; was the substance of what each organisation was going to do a relevant consideration?

Paula Vennells: I don’t recall that. I don’t – and the reason I feel sure about that recollection is that when, in preparing for today, I looked at what was called the Project Spire document, I was quite surprised about the detail in it, and one of my reflections now is that, actually, that would have been a very good piece of work to have done because it may have brought more data to the fore than we knew.

Mr Beer: That’s a question that I’m going to turn to in a moment.

Paula Vennells: Sorry.

Mr Beer: Is the short point that the Second Sight review was much narrower in scope, in that it was proposed that the system should be reviewed by looking at a sample of past cases –

Paula Vennells: Yes, I believe that’s the case.

Mr Beer: – rather than auditing the Horizon system as a whole?

Paula Vennells: Absolutely the case, in terms of my view today. I don’t believe we went through that particular angle of discussion in the meeting.

Mr Beer: Is that right? What would you say to the suggestion that a deliberate choice was made to pick a proposal that was much narrower in scope, that only looked at a sample of past cases, rather than auditing the Horizon system as a whole?

Paula Vennells: Oh, well, from a personal point of view, I’d say that was absolutely not the case. I have no recollection of that at all.

Mr Beer: You agree, I think, cutting to the chase, that it would have been preferable, looking back now, had Deloitte been chosen, because their proposal may or even would have brought to the surface, if carried through to its conclusion, many of the issues that were subsequently discovered?

Paula Vennells: I think the operative word is “may”. I have reflected on that, whether Deloitte would in fact have surfaced some of the other important areas that Second Sight did, I don’t know, because I think one of the other outcomes of this has been the right decision – was looking at the contract, and that may not have surfaced through the Deloitte work, which was particularly focused on the system itself.

Mr Beer: Can we look, please, at the terms of reference or at least an early copy of the terms of reference that were settled for Second Sight, POL00096576. If we just blow that up, please, you’ll see that this is a Second Sight document and it is a:

“Proposal to carry out an Independent Review of past fraud and theft cases in order to determine whether the facts support the business’s findings and the charges bought against individuals.”

Then if we go to the detail on page 5, please. Can you see that the proposal is for a case review and “This case review will include the following tasks”, said Second Sight:

“[Selecting] a representative sample of cases that have led to prosecutions/court appointed restitution. The sample needs to cover cases:

“Where defendants claim they didn’t take any cash;

“Where assertions have been made that ‘The system’ (ie Horizon) caused the shortage (include old and new versions of Horizon if possible) [and]

“Which have been taken up by MPs.”

If you look at the second to last bullet point:

“Study and selectively test the ‘Horizon’ system in order to find any ‘Black Hole’, Program Bug, etc, that might have caused mysterious shortages.”

What’s described there, selecting a representative sample of cases that led to prosecutions or court-appointed restitutions and then study and selectively test the Horizon system in order to find bugs, for shorthand, that may have caused mysterious shortages, was exactly what was needed, wasn’t it?

Paula Vennells: Yes.

Mr Beer: It didn’t happen though, did it?

Paula Vennells: The work that Second Sight – well, the Post Office and Second Sight – did over this quite a long period of time didn’t come to a final conclusion, no.

Mr Beer: It didn’t, and we’re not talking about the Mediation Scheme yet –

Paula Vennells: Right.

Mr Beer: – because that was a second piece of work, essentially; we’re talking about the events that led to the Interim Report in July 2013, that’s what this proposal is about. A representative sample of cases that led to prosecutions was not selected, was it?

Paula Vennells: I don’t recall the cases that were selected. Looking at this today, I don’t recall the narrow focus on prosecution and court-appointed restitution. My recollection is that we were looking at a broad sample of cases, of which some were cases with criminal convictions. I thought it was broader than that. I don’t recall it as being that narrow.

Mr Beer: We’ll see how things got changed by the Post Office –

Paula Vennells: Right, okay.

Mr Beer: – in the events which happened, ie over time. Would you agree that, if what is described here, in those two bullet points that I have identified, had, in fact, been undertaken, again, there is – to use the “may” word – a possibility that the decade that followed, until faults in Horizon and the miscarriages of justice identified by the Court of Appeal, may have been discovered earlier?

Paula Vennells: I think that is a possibility. I saw, in the Inquiry documentation, that there is a piece of advice that Susan Crichton sought from Richard Morgan QC, where he said that he thought – that the advice was that the Post Office really shouldn’t get into this at all because it would be a no-win situation.

Mr Beer: It would open the floodgates?

Paula Vennells: It would open the – well, I think he made two conclusions, from memory. That was one and I can’t remember what the other one was but my reflection, as I read this recently, was that, first of all, I didn’t know that she had taken that advice and it came up later, a year later, when she and I had a conversation about her wanting to leave the business, and I suspect we may come on to that. But when I look at that advice now, I think it is a great pity that we didn’t know about that because we may have approached this differently.

Mr Beer: Can you explain why, ie had you – and I think you mean the Executive and the Board –

Paula Vennells: Yes, yes.

Mr Beer: – known about Richard Morgan’s advice, you may have approached things differently in what way?

Paula Vennells: In that we may well have focused completely separate – understanding the advice he gave that we may have focused very differently on the – what we called in shorthand the “criminal cases” because that needed – they needed to be reviewed differently to others that were not criminal cases, and what we ended up with was a scheme that tried to respond to a variety of different cases and themes.

Mr Beer: Let’s look at what the Post Office did in relation, in particular, to criminal cases. That document can come down, please.

Turn to a couple of days after the meeting of 7 June, to 9 June, POL00096606.

If you forgive me one moment.

If we look at the foot of the page, please. There is an email from Alice Perkins of 9 June, at 9.36, to you, and she says:

“Following a conversation with Alwen yesterday, and given that I am away now for a few days, I thought I should let you know before I went where I stand on which cases should be in or out of this review.

“I have given this more thought since yesterday.

“I am clear that we should include ALL the MPs’ cases, irrespective of whether they have been decided in court. If we try to draw a distinction here we will be accused of picking cases to suit ourselves and being vulnerable on the ones we omit. We’ll have a row about that instead of moving the issue on.

“On reflection, I don’t buy the argument that we would somehow undermine the court process by doing this. There are plenty of ways in which people can go over ground which has been settled in court, and if there weren’t, no one would ever be able to get a conviction overturned. And if (which we don’t believe) there were new evidence in a case which had been decided, we would want to do, and be seen to do, the right thing by that.”

Then, if we scroll up the page we see you replying in the bottom part of the page, which I think is about admin, essentially, and then –

Paula Vennells: I think it says I wasn’t part of the discussion, doesn’t it?

Mr Beer: Yes.

Paula Vennells: Yes.

Mr Beer: Then if we go a little bit further up, Alwen replies to you, and I think to you alone:

“Paula in case Susan doesn’t pick this up as she is in Berlin and before you speak to Alice. The issue that came to light with the list of MP cases was that they included the Mishra …”

I think that’s Seema Misra.

Paula Vennells: Yes.

Mr Beer: “… you will remember the case and the publicity she went to prison and had her baby whilst in there. The husband got publicity through radio and press. Susan’s anxiety and she raised this at the meeting with Alice before you joined was whether now contacting her to tell her we review the case would be a red rag to a bull.

“Alice feels this is the business pushing back unnecessarily and she feels this has happened throughout the process and she is having to keep pushing us!

“Susan is getting external advice on the effect [that] this would have on cases which have been [brought] through the courts.”

There’s quite a lot in there. Did you agree with Alice Perkins that all cases should be included in the independent review, even if they involved criminal convictions?

Paula Vennells: Yes, I wasn’t making any distinction.

Mr Beer: Did you agree with Alice Perkins that the business was pushing back unnecessarily against that?

Paula Vennells: I don’t think I knew that and so I – the bit of admin that we skipped over is I say that I’ll call Alice, which I did, and I think she explained to me the conversation that she had had and, from what I’ve seen in documentation, clearly, there was an awful lot of consideration going on about what should and shouldn’t happen, which I was not in the loop on.

Mr Beer: Who would be the business that was pushing back unnecessarily against the Chair?

Paula Vennells: Well, the only thing that I can think is relating back to this piece of advice that Susan sought from Richard Morgan, which was very clear advice to her and one assumes that she would have – she was in a – she discussed it in a meeting and one assumes that that must have alerted to her to maybe needing to take different approaches with cases like Mrs Misra’s, for instance, but I wasn’t involved in those conversations.

And I’m not sure – there is a further pushback – I can’t remember if it is before this or after – where the terms of reference which are prepared by, again, I think Susan, refer to defence documents and Alice comes back and says “No, it should be all of the documentation”.

Mr Beer: So the business here “pushing back unnecessarily”, you take to mean shorthand for Susan Crichton?

Paula Vennells: For the Legal Team, yes, I think it was Susan Crichton and Hugh Flemington who were at the meeting.

Mr Beer: It says that this has happened, or it is Alice’s view that this has happened, throughout the process. Was that a view that you were aware of: that the business was pushing back unnecessarily against a review throughout the process?

Paula Vennells: Not until I spoke to Alice, which I did, I think, on the Saturday morning. I was concerned and so, you know, if a Chairman raises issues like this, I wanted to know what had arisen.

Mr Beer: Did you think that Mrs Misra’s case should be included in an independent review?

Paula Vennells: I wasn’t even involved in the conversation about that. My view was that all the cases that had come forward through Lord Arbuthnot and then – and thereafter from other MPs, we were going to review all of the cases.

Mr Beer: Did you share Ms Crichton’s concerns recorded here that even contacting Ms Misra –

Paula Vennells: No.

Mr Beer: – would be a red bag to a bull?

Paula Vennells: No.

Mr Beer: Did you know that Post Office was getting external advice on the effect that bringing such cases within the review would have?

Paula Vennells: Well, clearly I did, in sense that Alwen mentions it in the final line on this email. I don’t, at that stage, think I would have asked more about it, because the situation was resolved, in that all of the cases were going to come in. If Susan was seeking advice on something of a legal nature, (a) I would expect her to do that and then I would listen to whatever that advice was.

Mr Beer: Do you know what external advice the Post Office did take regarding the effect of including cases like Seema Misra’s in the independent review?

Paula Vennells: I don’t think so. I certainly didn’t see the Richard Morgan advice.

Mr Beer: I don’t think there was a written advice; there was a meeting with him.

Paula Vennells: There was a meeting note, right. I don’t think I did, no.

Sir Wyn Williams: Have you got a date readily to hand to remind me of when that was, Mr Beer?

Mr Beer: Given a moment I probably could.

Sir Wyn Williams: I’m sure we’ll find it between us, don’t take yourself out of your stride.

Mr Beer: Thank you.

Did you know the substance of the advice, the external advice that was given?

Paula Vennells: No, no, not until I read it in preparation for the Inquiry.

Mr Beer: Did you, and therefore the Board, take the – not take the advice given, as you now know, by Richard Morgan KC, into account, in deciding the scope of Second Sight’s review?

Paula Vennells: No, I don’t believe – you would have to ask Alice Perkins but I don’t believe that Alice Perkins or the Board knew of that advice. But Susan had had a conversation with Alice that I was not involved in, so it’s possible it was shared in that meeting, but I – my understanding is not.

Mr Beer: Thank you.

Can we move on into 2013, please, and look at POL00100200. This is a minute, I think, from, as we can see, David Oliver to you, copied to others, of 5 February 2013. Can you explain who David Oliver was, please?

Paula Vennells: David Oliver I believe was on a short-term contract – maybe a year or two – he was either a consultant with PA Consulting or had left them and came to the Post Office and was working on the Project Sparrow work. In fact, looking at the list – what date is this, please?

Mr Beer: 5 February 2013?

Paula Vennells: 2013. No, I – no, he was a – working on the Sparrow project.

Mr Beer: He sends this minute to you and others, regarding, essentially, options that the Post Office could take to deliver the scheme in a timely fashion. You can see that there –

Paula Vennells: Yes.

Mr Beer: – under “Summary”:

“We identified three broad courses of action that might be taken to improve the ability of Post Office to successfully deliver the Mediation Scheme in a timely fashion …”

Can we look at page 2, please, and scroll down to what was the third option, “Plan C”:

“Contingency plan to replace Second Sight if they refuse to work on the Scheme under Terms which Post Office find acceptable.

“Engagement of a professional accountancy firm such as Grant Thornton to replace Second Sight entirely. It is possible that Second Sight will refuse to work under the proposed terms of engagement from Post Office and that they may attempt to insist terms that neither you or the Board can accept. In this scenario, they may either walk away from the Scheme or Post Office may have to end their engagement.”

Was it the case that, despite their appointment in mid-2012, no terms of reference or terms of engagement had been settled by February 2013 for Second Sight?

Paula Vennells: I don’t know about terms of engagement. I do know that terms of reference were drawn up. Engagement, I don’t know. That wouldn’t have been something that I had been involved – I would have been involved in.

Mr Beer: By this time, was it anticipated that Second Sight would refuse to work under the terms of engagement that the Post Office required?

Paula Vennells: It seems to say so here. I don’t recall being aware of that, presumably, until this was presented to me and I’m not entirely sure what that refers to.

Mr Beer: Do you know which of these options was chosen? Do you want to look back at option A and B, please –

Paula Vennells: Yes, yes.

Mr Beer: – on page 1, please. A was clarification of Second Sight’s engagement.

Paula Vennells: Yes. I think A and B, actually. My recollection at this stage is that there were concerns from the team that very few cases had been reviewed. We were – the time was being extended and, therefore, the cost extended and I think that was the main concern: is that the work, for whatever reason, wasn’t being completed and I was given a number of options. I’m sorry, I don’t remember the discussion, but my sense is that it was – we wanted Second Sight to see this work through. It would have been difficult to stand somebody else up, I think, and, anyway, they had the commitment of Lord Arbuthnot and the MPs.

But I do think we brought in or changed the way they worked in some way to help them but I may be confusing that with the Mediation Scheme because this issue of time and cost overrun was a fairly frequent topic of conversation.

Mr Beer: Can we move forward to later in 2013, still before their Interim Report was produced, by looking at POL00098437 and looking at page 2, please. If we just look at the foot of page 1, we’ll see an email from Mr Bates to you of 21 May 2013, and he says:

“Hello Paula.

“It has been a while since we met at James Arbuthnot’s office, but at that time you did say that if I had any concerns I should contact you directly, hence the reason for this email.

“Would it be possible for Kay Linnell and I to meet you? You will recall that Kay is an independent forensic accountant who, on behalf of JFSA, has been monitoring the work that Second Sight has been undertaking.

“The main purpose of the meeting is to ensure that you have been receiving the full details of what has been occurring with the Second Sight investigation. Bearing in mind what has been discovered so far, I for one am surprised that we haven’t yet met to discuss the implications. Whilst I appreciate that the majority of the issues began under previous regimes and you have expressed a genuine willingness to address the concerns that JFSA has been raising, these issues are still continuing. I have little doubt it is now feasible to show that many of the prosecutions that [the Post Office] has pressed home should never have taken place, I believe this is a view shared by Kay.”

At this point in time, did you understand why Mr Bates was saying that it was feasible that many prosecutions that the Post Office had undertaken should never have taken place?

Paula Vennells: I don’t believe I did because we were still – the work was still very much a work in progress.

Mr Beer: Had any of the ‘in progress’ work been fed back to you, ie provisional views, what it was showing, early themes, emerging issues?

Paula Vennells: Not that I can recall with any clarity, because I remember being surprised about – I think, slightly – what is the date of this, please?

Mr Beer: 21 May.

Paula Vennells: May. Maybe not too long after this but, as we were approaching the production of the Interim Report, I remember being surprised about some of the conclusions that were being reached because the criticisms from Post Office were that their work hadn’t been taken into account. So I think, at this stage, possibly not, other than feedback that the work was going too slowly and Post Office’s input either hadn’t taken place or Second Sight – there were concerns being raised, perhaps, that Second Sight were not taking account of it.

Mr Beer: Would you have been very concerned, reading an email like this, that the person representing a key stakeholder, JFSA, was saying that the prosecutions, and many of them that the Post Office had brought, ought never to have taken place?

Paula Vennells: I was concerned to get the email from Alan, certainly. The point he’s making about the prosecutions was the point that the JFSA had made for, I now know, for a number of years but that wasn’t new news to me at this stage.

Mr Beer: Is that how you would have thought of it: that this is just Mr Bates saying something that he’s always said?

Paula Vennells: No, not at all. I think that I went back to my team and said – because I had said to Mr Bates that, you know, if he needed to, he should get in touch. So I don’t know if there’s documentation on this but I’m pretty sure I went back to the team and said, “What should we do about this? You know, I’ve offered to meet Mr Bates, what is your view?”

Mr Beer: Had you been given any inkling that anything had emerged that might undermine the safety of convictions?

Paula Vennells: No.

Mr Beer: If we go to page 1, please, we’ll see your reply. If we scroll up, you say, second paragraph:

“I am happy to meet … but cannot make [the] suggested date …”

Then the third paragraph:

“My understanding is we are too early in the investigation to suggest that things have been discovered which call into question the integrity of the system or the validity of [the] prosecutions, and to suggest that at this stage would be wrong.”

In order to say that, you must have been told, would this be right, the stage at which the investigation had reached and whether it was possible to say that the integrity of the system or the validity of prosecutions had, even at that stage, been called into question?

Paula Vennells: Yes.

Mr Beer: Who were you getting that feedback from?

Paula Vennells: At this stage, I would have talked to whoever was leading the work on this, so Susan Crichton, Alwen Lyons – I can’t remember who else – Simon Baker, presumably David Oliver, whose name we’ve seen.

Mr Beer: So were you then getting feedback on the state of the investigation by Second Sight, in order to be able to say, essentially, “Mr Bates, you’re jumping the gun”?

Paula Vennells: I’m almost certain that when I got Alan’s note that I went to the team and said, “I’ve had this note, what’s the current status?”, and, as I say here, “I would like to meet with Mr Bates”. So I suspect that’s where I got that information from.

Mr Beer: You say in the last paragraph:

“I have been advised that Second Sight have now agreed that the focus over the next few weeks will be on three specific cases … and the meeting [might be a] more productive [one] once that work has been completed …”

Do you know how it came about that what started as a debate between the choice of Deloitte conducting a full forensic audit of Horizon, Second Sight conducting a review of past cases that would be a representative sample, but include some testing of the integrity of the Horizon system, ended up with focusing on three cases?

Paula Vennells: My recollection is that the team – what I can recall is frustration from the team that the work Second Sight was doing had moved away from focusing on individual cases to development of themes and what they were trying to do at this stage – and Second Sight, as well, to be fair – was to try and corral this back into a piece of work, which could have a report which could be fed back to the MPs, before we got to recess, in just number of – small number of weeks after this. That was my recollection and that was a – to misuse a word in this context – that was a theme that ran through, which was that Second Sight were focusing on themes, rather than on individual cases and, at some stage, we will come on to how that then developed into spot reviews, which I think came after this.

Mr Beer: So was it the Post Office, in your view, or Second Sight that narrowed focus down to a very small number of cases?

Paula Vennells: My view is it was both because both Second Sight and the Post Office had a commitment to Lord Arbuthnot and the MPs to get some work out for people to look at, and we were now very – not quite a year but sort of ten months into this. That’s my recollection.

Mr Beer: Were you aware of a view amongst the lawyers and, in particular, Susan Crichton, that “if we review a large number of cases, that might open the floodgates to damages claims by subpostmasters” –

Paula Vennells: No.

Mr Beer: – and that a less risky approach would be to just pick the cases in which the MPs happen to be interested in?

Paula Vennells: No, I don’t remember that at all.

Mr Beer: Can we go to the – this slightly out of order but it’s in order to answer the Chairman’s question from earlier – Richard Morgan KC advice. It’s POL00006484. The date says 12 June 2012. I think this is the advice – we’ll see in a moment that it’s recorded as a note of an in-person conference – of which you weren’t aware –

Paula Vennells: That’s right, yes.

Mr Beer: – and, to the best of your knowledge, the Board was not aware?

Paula Vennells: No, I don’t believe so. The only possible – the only person who could possibly be aware might have been Alice Perkins in that conversation Susan had had. But, actually, looking at the date of this, I think this comes afterwards, doesn’t it?

Mr Beer: Yes. If we look at the second bullet point:

“The proposal to instruct an independent expert to prepare a report on the … system is the highest risk response to the issue.”

Was that view communicated to you?

Paula Vennells: No.

Mr Beer: In fact, a decision had been made, it seems, already, at the meeting of 7 June 2012, not to instruct an expert to prepare a report, a forensic audit of the Horizon system, hadn’t it?

Paula Vennells: The decision had been made to go – in my head, to go with Second Sight, for the right reasons.

Mr Beer: The note records “What will it achieve?”, and I’m not going to attribute any of these words to anyone because, when he gave evidence, Mr Morgan took the point that it’s not clear that it’s him speaking –

Paula Vennells: Right.

Mr Beer: – here and it doesn’t necessarily represent his advice; it could be anyone speaking:

“What will it achieve? It will not be able to address any of the civil/criminal cases dealt with under ‘Old Horizon’.”

Was that advice communicated back to you, that an independent report couldn’t look at civil or criminal cases dealt with under old Horizon?

Paula Vennells: No.

Mr Beer: “Will it seek to review particular cases? If so, which ones?”

Then what might be said to be the important paragraph is the third one:

“Whatever the findings of the expert report it will not resolve the problem. [The Post Office] will be ‘damned if they do and damned if they don’t’. If the findings are that there are no issues with Horizon people will see that as a ‘whitewash’ …”

Then this:

“… whereas if the findings are negative that will open the floodgates to damages claims by [subpostmasters] who were imprisoned for false accounting and Access Legal [that’s part of Shoosmiths] will part to pursue … the civil cases they are currently sitting on.”

Was that view communicated back to you as relevant to decision making, “If we commission an independent report, which comes back with negative conclusions, people who have been imprisoned might bring claims against us” –

Paula Vennells: No, absolutely not.

Mr Beer: – “and that that would be a reason not to commission an independent report, because it might find out things that entitle people to question their convictions or bring damages claims against us”?

Paula Vennells: No, I didn’t know about this.

Mr Beer: Did that ever form part of your decision making, “We best not ask for the Deloitte report because, if it discovers too much, we may face damages claims”?

Paula Vennells: No.

Mr Beer: To your knowledge, did that ever form part of any discussion or decision making at Board level?

Paula Vennells: No, and, as I say, in the meeting where we took the decision to go with Second Sight, I don’t remember looking at two separate sets of documents and comparing and contrasting.

Mr Beer: The foot of the screen that’s being displayed:

“A less risky approach is to agree to take the relevant MPs privately through particular cases in which they are interested.”

Was that ever communicated back to you?

Paula Vennells: No.

Mr Beer: Thank you. Can we return to where we were in the chronology, which was the following year, June 2013, by looking at POL00098789. If we scroll down and look at the message from Alwen Lyons, it’s dated 28 June 2013.

We are getting quite close here to the date of the production of the Second Sight Interim Report, aren’t we –

Paula Vennells: Yes.

Mr Beer: – which we know was published on 8 July 2013?

Paula Vennells: Yeah.

Mr Beer: It’s quite difficult because of the way the text has been printed on this email but, if you look at the fourth bullet point, Ms Lyons says to you that she is going to spend time with Janet; is that Janet Walker?

Paula Vennells: Yes.

Mr Beer: Remind us who Janet Walker was?

Paula Vennells: Janet Walker was the Executive Assistant for Lord Arbuthnot.

Mr Beer: “… 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 [Lord Arbuthnot] 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 our concern 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 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.”

Then, if we scroll up, please, we’ll see your reply, sending on to Alice Perkins, second paragraph:

“You will see below Alwen’s proposed next steps. It covers all the ground …

“Alwen and I are staying close … and I’m expecting an update later this [afternoon]. So no need to bother you today.”

On what basis did you understand the Post Office had determined that Second Sight were not using all of the evidence that the Post Office had given them?

Paula Vennells: From conversations with the team involved in the work.

Mr Beer: Second Sight were getting it wrong, they were –

Paula Vennells: No, I don’t think –

Mr Beer: – not looking at the evidence?

Paula Vennells: I beg your pardon. No, I’m sorry, I didn’t mean to cut across you. No, I don’t think that is what I was told. What I was told is that they hadn’t – because this had run on too long, they hadn’t yet had time to take account of the Post Office’s view in the investigations they were doing. That’s my recollection of what I was told, not because they were getting it wrong or –

Mr Beer: Was there any –

Paula Vennells: – sorry, I beg your pardon, they may have been getting it wrong because they hadn’t yet taken account of the input from the Post Office.

Mr Beer: Was there a suggestion in what you were told that Second Sight were biased in their approach?

Paula Vennells: No, certainly not at this stage. My very clear recollection is that this was simply, to describe it more colloquially, the team felt it was unfair because Post Office hadn’t had the opportunity to contribute yet into – whether that was true or not, I didn’t check that with Second Sight but what I was told is that the work was so far behind that Second Sight had yet to take account of the Post Office’s input.

Mr Beer: Was the sense of unfairness conveyed to you?

Paula Vennells: Frustration, I think.

Mr Beer: By who?

Paula Vennells: Alwen, certainly, was one of the main people I spoke to; Susan; and, I think, David Oliver, but that’s only – I’m only remember, by having seen his name today.

Mr Beer: What evidence were you told that the Post Office had provided to Second Sight that they were not using or taking account of?

Paula Vennells: I can’t remember today, I’m sorry. They were looking at number of cases, is my understanding, and these cases raised different issues. So it would have been whatever data the Post Office needed to present about the issue that was being investigated.

Mr Beer: Were you told that Second Sight were trying to, in the words of the email, keep everyone happy?

Paula Vennells: I was told that – and I knew, I think, because we had agreed to fund Kay Linnell to support the JFSA – I was told that they – I think, if I’ve remembered the timing correctly – that they had been asked by Lord Arbuthnot to keep the JFSA happy and I don’t think we had any problem with that, until the team began to raise these questions that, perhaps, because of that, Second Sight were not looking at the Post Office work. But I’m probably now speculating too much, to be fair.

Mr Beer: Did you tell Second Sight that they were being unfair on the Post Office by not taking account of the evidence that the Post Office was giving to them?

Paula Vennells: I didn’t have regular conversations with Second Sight. I was running the organisation. I wasn’t closely involved in the detail of this work. I’m sure, if I – I’m not sure if I spoke to them at this time but I would have had no problem sharing that piece of information.

Mr Beer: Did you tell Second Sight about the Post Office’s concerns about its approach or alleged approach of keeping the JFSA happy?

Paula Vennells: I don’t believe I spoke to Second Sight.

Mr Beer: Did anyone, to your knowledge, say, “You’re not treating us fairly, you’re trying to keep the subpostmasters happy and you’re not looking at our evidence”?

Paula Vennells: I would hope that the Post Office team – sorry, first of all, I don’t think the Post Office team would have said, “You’re trying to keep the subpostmasters happy”, I may be wrong on that, because that feels too strong a view in one direction. This whole point was to look at the subpostmasters’ cases. But I think the team would undoubtedly have said to Second Sight, “There is more information here to be taken account of”.

Mr Beer: Can we look a little more deeply at the move to select a small number of cases by looking at POL00144687. This is the previous month. If we look at page 2, please, and scroll down, an email between Simon Baker and Second Sight, with Alwen Lyons copied in, not you at this stage, but it’s about a meeting, and I think this is the meeting that we’ve just seen Post Office was going to try and get cancelled.

Paula Vennells: Right.

Mr Beer: “Ron

“Just to ensure that we’re on the same page, Paula would like to say we have agreed the following with Second Sight, can you confirm you agree:

“The investigation reports on 2-3 MPs’ cases by Summer Recess (or more).

“By using the 2-3 cases you will answer the question: have systemic defects in the Horizon system resulted in the wrongful conviction or suspension of subpostmasters.”

By this stage, had the proposal that we saw, first thing this morning, to examine a representative sample of cases been abandoned?

Paula Vennells: Not on my understanding.

Mr Beer: How did it come about that, by late May, the Post Office was proposing that, by looking at two to three cases, Second Sight could answer the very big question: have systemic defects in Horizon resulted in the wrongful conviction or suspension of subpostmasters?

Paula Vennells: I’m not sure but, when the report was produced, as the Inquiry knows, one of the conclusions was that, so far, no systemic defects had been found. So whether, as a result of the broader work – so Second Sight had been working –

Mr Beer: Sorry, could you repeat that answer, please?

Paula Vennells: Yes. When the Second Sight Interim Report was published, one of its initial conclusions was that, so far, no systemic issues had been found with the Horizon system.

Mr Beer: Just stopping there, that’s two months after this.

Paula Vennells: Yes. But I’m getting to answer your question, if I may, because, to have reached that conclusion, which, in a sense, is what point 4 refers to here, referring back to point 2, you couldn’t reach that conclusion on two to three cases, so how could you do it on two to three cases? Because of the other work they had done. They were working through different themes, as I understood it, so potentially through that work.

Second Sight had been working on this for ten months now, they hadn’t just done two to three – well, they hadn’t even done two to three cases in that period of time.

Mr Beer: Why was the proposal to limit the report to determining whether systemic defects in Horizon had resulted in wrongful convictions on the basis of two or three cases?

Paula Vennells: I don’t know. I wasn’t involved in the conversation. I believe, from other documentation I’ve seen, that the recommendation was to choose two of the three – I don’t think this was the word but “hardest” cases, so not cases that would have present the Post Office in the best light but cases which could have been used to challenge the Horizon system, and then do that work-through. There is some documentation on this somewhere else.

Mr Beer: How could two or three cases possibly answer the question: have systemic defects in Horizon generally resulted in the wrongful conviction or suspension –

Paula Vennells: They couldn’t. They could not possibly do that, and I wasn’t involved in this conversation but, by this stage, there was an urgency to have a report produced that showed that some work was at least in progress, and I –

Mr Beer: You say you weren’t involved in this conversation. This email says you want to say this:

“… Paula would like to say the following …”

Paula Vennells: Yes.

Mr Beer: Did you want to say that, “By looking at two or three cases, we can answer the entire question of whether systemic defects had resulted in the wrongful conviction of subpostmasters”?

Paula Vennells: I was absolutely not, to be completely clear, trying to drive a conclusion from Second Sight that they would not have given – I don’t –

Mr Beer: That’s an answer to a different question.

Paula Vennells: No, I realise that but I don’t recall the background – so I didn’t write this email. I wasn’t copied in this email. I don’t recall a conversation where I consciously possible, because it wouldn’t be consciously possible, to come to a conclusion on systemic defects as a result of two to three cases.

Mr Beer: Isn’t that exactly what happened, Ms Vennells, that the Second Sight Report addressed a very small number of cases, it contained the sentence about “no systemic defects” and then, forever after, the Post Office paraded that conclusion?

Paula Vennells: It did come to that conclusion in its Interim Report. There is no way that the Post Office – first of all, there is no way that I would have want to persuade Second Sight on something they were not prepared to say and I don’t believe Second Sight would ever have agreed to that. If they came to that conclusion in their Interim Report, that was their conclusion.

Mr Beer: Isn’t that what the Post Office wanted to drive them to, and isn’t this the evidence of such driving?

Paula Vennells: The Post Office most certainly wanted the reassurance that the Horizon system could be relied upon. That has been the objective all the way through this. At no stage, did I get the sense that anybody in the Post Office was going to be able to influence Second Sight over what conclusions they came to. I would be very surprised if that was the case here.

Mr Beer: Did you receive, or the Board receive, any advice as to the appropriate scope of an investigation by Second Sight, as to the nature and extent of any investigation that would be required in order to determine whether there were systemic defects in Horizon?

Paula Vennells: The only information I and the Board had was contained in the terms of reference of the work that Second Sight were doing, which is what we looked at earlier.

Mr Beer: Ie “We, the Post Office, need to engage somebody to produce a report whose conclusions are respectable and truly provide us with the answer as to whether or not there are systemic defects in Horizon”?

Paula Vennells: Yes.

Mr Beer: You think that’s the report they produced?

Paula Vennells: Second Sight’s didn’t produce the report that Project Spire, under Deloitte, could have produced. Second Sight responded to the terms of reference, which were greet with them. This work was approached from the point of view of trying to resolve postmaster cases. That was the genesis of it, that was the initial conversation with Lord Arbuthnot and Alice Perkins.

Mr Beer: Can we move forwards, please –

Sir Wyn Williams: Before we do, Mr Beer, can I just be clear about what you are saying about this email, Ms Vennells.

As I read it, it is a request by Mr Baker to Mr Warmington that four matters are agreed, and it reads as if he is making that request on your behalf, all right?

Paula Vennells: Yes.

Sir Wyn Williams: That’s how it reads.

Paula Vennells: It does read that way.

Sir Wyn Williams: So what is your evidence to me about whether Mr Baker was accurately representing what you had told him in this email?

Paula Vennells: Firstly, Sir Wyn, I don’t recall the conversation with Simon Baker –

Sir Wyn Williams: Right.

Paula Vennells: – at all. I rarely met with Simon and, if I did, it was usually with Susan or Alwen. But it sounds as though, at some stage, a conversation was had and I may have accepted that – you could – this email could have been produced one of two ways, couldn’t it, or multiple ways. I could have said, “This is what I want”, or he could have said to me, “This is where we’re at, we think that actually we will get two to three MP cases done”, and I may well have said, “Will that help us answer the question about are there systemic defects in the Horizon system?”

I wouldn’t have known, personally, from any of – because I wasn’t involved in the work or conversations with Second Sight, point 4 about whether they could have said no or not, at this stage. So I can only assume that has come from a conversation with Simon Baker and/or somebody else.

Sir Wyn Williams: Thank you.

Mr Beer: Can we move forward couple of days to POL00098317.

This a briefing for you for the meeting that was proposed to be held between you and James Arbuthnot on 23 May; can you see that?

Paula Vennells: Yes, yes.

Mr Beer: It says, under “Key Message”:

“We are concerned that the investigation is overrunning, that the findings will not be definitive and there will be no satisfactory outcome to the ‘Horizon question’ – for MPs or the Post Office.

“We would like to discuss ways to more clearly define the scope so we get a definitive outcome within reasonable timescales.”

Then under the heading “Background”:

“2.1. When the Post Office commissioned Second Sight the expectation was that the investigation would review a small number of MPs’ cases (6 to 12 cases).”

Firstly, does that represent your recollection of the Post Office’s expectation when Second Sight were being instructed?

Paula Vennells: I don’t remember today but we were talking to Lord Arbuthnot and, I think, two or three other MPs, so that’s entirely possible.

Mr Beer: Do you know why it was the Post Office’s expectation that a smallish number of cases, 6 to 12, would be the limit of Second Sight’s review?

Paula Vennells: Presumably because that was the number that was being discussed at the time.

Mr Beer: Discussed by who?

Paula Vennells: With James Arbuthnot and the team working on it. I don’t recollect 6 to 12 cases, as a particular number, because what I remember is that the number increased as more MPs raised cases.

Mr Beer: You remember the Second Sight proposal that we looked at. Its suggested scope of work was to review –

Paula Vennells: Yes.

Mr Beer: – a representative sample of cases in order to answer the question of whether there had been wrongful convictions.

Paula Vennells: Yes.

Mr Beer: Was that the Post Office’s understanding, when it was commissioning Second Sight, that that’s the work it would be undertaking?

Paula Vennells: If that is what was in the final terms of reference, yes.

Mr Beer: The speaking note or briefing carries on:

“MPs have now submitted 29 cases and JFSA have submitted about 20 cases.

“It is unlikely that the investigation, no matter how London it runs, will conclude anything definitive; as the remit has become blurred, different stakeholders have different expectations, and the evidence is open to interpretation.”

Was that a view that you held at the time?

Paula Vennells: I didn’t have a view on the work because I wasn’t closely associated with it. So I would take the view that I was given by the experts who were doing the work at the time.

Mr Beer: So you would subscribe to or be willing to repeat that view expressed in 2.3?

Paula Vennells: Not necessarily. I mean, if I was given information I would usually ask questions about it. I don’t know what I did with this brief at the time.

Mr Beer: The suggestion that any investigation would conclude anything definitive, was that your understanding at all?

Paula Vennells: No, I don’t think it was my understanding at all – at any time throughout this, and the Inquiry will see there is further documentation where I have – I’m exhorting the Post Office and Second Sight to move through the cases because I wanted the cases looked at. There was at this time, actually, a potentially helpful issue, a number of cases had come through, I think, from MPs and there was some debate about whether there was sufficient information and quality of information to be able to do any work on them at all, and that was Second Sight’s view, they went back to those cases and in some cases they couldn’t produce information. So whether that was part of this point, I don’t know.

Mr Beer: Did the Post Office subsequently present Second Sight’s Interim Report as a definitive view that there were no systemic errors or failures in Horizon?

Paula Vennells: The Post Office presented it sometimes definitively and sometimes less so, yes. There are –

Mr Beer: Do you know how that came about, given what is recognised by this note at this stage?

Paula Vennells: No, I think what happened is that, when the Interim Report was published, and it said it was an Interim Report and so far it had found no systemic issues with Horizon, that was reported sometimes in communications saying “So far they had found none”, and there is documentation where I am asked about, or maybe I offered the view that, actually, the qualification was “so far”, and there are other communications, which may simply be inconsistency of communication, I don’t know, which simply says that they had found nothing systemic.

Mr Beer: Just above the heading “Proposal”, 2.6:

“The investigation has been running for a year and to date no evidence of systemic failures has been found.

“Proposal

“James Arbuthnot to request Second Sight to complete the investigations on two to three MP cases – selecting the ones they feel best indicate systemic problems.”

Paula Vennells: That was the point I was trying to make earlier. Thank you.

Mr Beer: How would an individual case indicate systemic problems?

Paula Vennells: I don’t know that I can answer that question. It couldn’t, could it?

Mr Beer: It’s a bit tricky, isn’t it?

Paula Vennells: It’s very tricky, yes.

Mr Beer: This was a briefing to you of what you should say and seek to achieve in a meeting with James Arbuthnot, yes?

Paula Vennells: Yes.

Mr Beer: Had you signed up to this idea, by this time at least, then, that James Arbuthnot should be asked to persuade Second Sight to wind their investigation up on two to three cases and those two to three cases would answer the question, “Have systemic defects resulted in the wrongful conviction of subpostmasters?”

Paula Vennells: Could you ask the question again, please. I’m sorry.

Mr Beer: Yes. Had, by this stage, in readiness for the meeting with James Arbuthnot on 23 May 2013, you signed up to the idea that he would be asked to persuade Second Sight or request Second Sight to wind their investigation up on the basis of two to three MP cases, answering the question “Have systemic defects in Horizon resulted in the wrongful conviction of subpostmasters”?

Paula Vennells: I don’t believe so because we had committed to a larger number of cases. There were significantly more cases now in – I was going to say the scheme but we’re not yet into the scheme, but now in the project. This was an Interim Report and I don’t think there is any evidence that I thought that was the case. My understanding was that this – we had made a commitment to the MPs and, all of the way through this, I wanted all of the cases looked at.

Mr Beer: We’ve seen now an email that attributes to you a suggestion that you wanted to agree this with James Arbuthnot, and a speaking note or a briefing note saying the same thing.

Paula Vennells: It doesn’t say that I – I’m trying to wind the scheme up, which I think was your question.

Mr Beer: Okay. They should focus on answering the question, “Have systemic defects in Horizon result in the wrongful conviction of subpostmasters by reference to two to three cases?”

Paula Vennells: Yes, so –

Mr Beer: Was that your view as to what should happen?

Paula Vennells: No. At no stage did I make the link that you have just led me to make between these two to three cases and being able to reach a view on the system, and being able to complete the whole piece of work. This is what I was very aware of, is that this was an interim review coming up and that there were more cases to go through the scheme.

Mr Beer: The link is made right here in this document, isn’t it, in paragraphs 3.1 and 3.2?

Paula Vennells: It is and, as I mentioned earlier, before the document came up, my understanding was that, from the work Second Sight had done, presumably around the thematic work, where they had been looking at a number of cases, and they’re now being asked to take two or three cases, which may or may not show whether subpostmasters had been wrongfully convicted.

Mr Beer: Can we move forwards – sorry.

Paula Vennells: I was not trying to close anything down. It’s really important that I say that.

Mr Beer: Can we move forwards, please, to closer to the introduction of the Interim Report, POL00099003, an email from Martin Edwards. Can you explain who Mr Edwards was at this time, July ‘13?

Paula Vennells: Martin Edwards was my Chief of Staff.

Mr Beer: He emails you on 4 July with a draft for the Board. He says:

“[Hopefully it is] not too long, but it’s difficult not to open some of these issues without providing a reasonably full explanation.”

So what follows, is this right, is a draft email that you were to send to your Board?

Paula Vennells: Yes.

Mr Beer: Is that right?

Paula Vennells: Yes.

Mr Beer: Then beneath the dotted line, we see the draft email:

“I wanted to send you a brief email to update you on where we are with the Second Sight investigation.

“We have been engaging closely with [Second Sight] throughout the week to understand the position they intend to take in the Interim Report and emphasise our concern that their findings must be even handed and grounded in the facts. In line with our discussion on Monday’s Board call, we understand they have not found any evidence yet of systemic issues with the Horizon system (and it should be noted that this is based on a detailed review of their four ‘best’ cases in terms of compelling evidence).”

So, by this time, I think you had drawn a link between a review of a small number of cases, it’s got up to four, and whether there were systemic issues with Horizon.

Paula Vennells: Yes, but I hadn’t drawn that link. I think – the way I read this is that is what the team had understood from Second Sight.

Mr Beer: What, Second Sight were prepared to say that there were no systemic issues with Horizon, generally, on the basis of looking at –

Paula Vennells: Well –

Mr Beer: – four cases?

Paula Vennells: – that appears to be the case but, as I’ve said, they also were doing wider work by this stage.

Mr Beer: What was your understanding at this point of what “systemic issues” meant?

Paula Vennells: I’m not sure, as I say in my statement, that I was able to make an informed decision on that. Second Sight themselves, I think, refer to it as something that might have a broad impact across the post offices or across the system, I can’t remember, but you will have a reference, and so –

Mr Beer: Was there – sorry.

Paula Vennells: – sorry – and so my assumption, if they felt they could reach this conclusion from a small number of cases, was that perhaps – but this is my reflection today, I don’t think I had the reflection at the time – was that perhaps they had seen something in those cases that could have occurred elsewhere but I’m really – I’m speculating to try and help answer the question that I didn’t ask at the time.

Mr Beer: Was there a shared understanding between you and the Post Office Board as to what “systemic issues” meant?

Paula Vennells: I don’t think the conversation ever happened.

Mr Beer: Was there a shared understanding between you and the Post Office team that were leading on the work with Second Sight –

Paula Vennells: No.

Mr Beer: – as to what “systemic issues” meant?

Paula Vennells: No.

Mr Beer: Was there any discussion over what “systemic issues” meant?

Paula Vennells: I don’t recall one, no.

Mr Beer: Thank you.

Sir, it’s 11.00. May we take a morning break until 11.15.

Sir Wyn Williams: Yes.

Mr Beer: Thank you.

(11.00 am)

(A short break)

(11.16 am)

Mr Beer: Ms Vennells, can we turn, please, to some documents that may provide some insight into your approach and decision making in relation to the Post Office’s decision not to review all past convictions, in the light of what was emerging from Second Sight. Can we look, please, at POL00099056.

If we look at the bottom of page 1, please. If we just look at the top of the page, I think we’ll see who this is sent to: Lesley Sewell, Martin Edwards, Mark Davies, Alwen Lyons, Susan Crichton.

Paula Vennells: Mm-hm.

Mr Beer: Go back to the bottom of page 1, please:

“[Thanks] for your inputs today. Susan I need your thoughts on the note below especially 1) and 2) please and the questions at the end of the mail.

“I think we have the following which is a variant:

“1) a working party over the next three/four months. This comprises [the Post Office] working collaboratively with the JFSA and does three things …”

Just stopping where we are at the moment, I think you knew, is this right, of the likely content and conclusions of the Interim Report, this is two days before it was published, and you’re now working out the next steps?

Paula Vennells: I think that’s right, yes.

Mr Beer: The working party:

“Firstly explores the [Second Sight’s] (8) themes for improvement (can we get less than 8?) and agrees how they can be implemented.

“Secondly, looks at the remaining past cases with the JFSA (and MPs if they wish) to see if either further themes or new evidence emerge.”

Then this:

“Thirdly, our external lawyers review all prosecutions in the past 12/18 months since [the Post Office] has been independent of [Royal Mail] in the light of the [Second Sight] findings. The JFSA/[Post Office] Working Group reviews the findings. (Why would they not review all cases of false accounting, eg over the last 5-10 years, especially where amounts have been ‘small’? I assume ‘large’ amounts would be less likely to get away with saying they were muddle-headed and not helped? But could we review all? It’s the false accounting charge [James Arbuthnot] was most concerned about.)”

Then if we scroll on, please, over the page. I’m going to skip over 2 and 3 for the moment and look at 4:

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

You say:

“… can we draft this into something I can send to Alan Bates …”

Yes?

Paula Vennells: Yes, yes.

Mr Beer: Last paragraph:

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

Just going back to the first page, please, at the foot, the point 3:

“… our external lawyers review all prosecutions in the past 12/18 months …”

Then you asked the question:

“Why would [the external lawyers] not review all cases of false accounting over the last 5-10 years …”

Why was the proposed review to be limited to prosecutions in the last 12 to 18 months?

Paula Vennells: I don’t remember and, if I might just add, in case there’s any confusion, the description “muddle-headed” was one that Mr Bates had used. That wasn’t a word – and I had picked that up. But, in terms of answering your question specifically, I can’t recall why 12 to 18 months. There was a question raised by the Board at some stage as to –

Mr Beer: These are your proposals, though?

Paula Vennells: No, I think this is – I believe this is me pulling together a number of suggestions that had come in over a period of time from different colleagues.

Mr Beer: You have drawn them together –

Paula Vennells: I have tried –

Mr Beer: – and said “We’ve got the following, which is the variant”, and you’ve said, “Can this be drawn up into a document that can be sent to Alan Bates”?

Paula Vennells: Yes, and what I’m doing here, I think, is showing with colleagues, have I – the way I worked and they worked in an iterative process, is have I understood what – you know, does this seem a sensible way forwards?

Mr Beer: So you were going to propose that the lawyers review all prosecutions in the past 12 to 18 months?

Paula Vennells: No, I wasn’t proposing that. I had been given that information, I think, by somebody else.

Mr Beer: Okay, who had given you the information?

Paula Vennells: It could only have been Susan.

Mr Beer: Why were they proposing the past 12 to 18 months?

Paula Vennells: That I’m not sure, and what I was just trying to say is that the Board had asked at some stage, but I’m not sure if it is at this point, whether the company – and this also in Alice Perkins’ statement – had conducted any prosecutions which had relied solely on Horizon because there was a concern, clearly, because of the issues that were being raised by Lord Arbuthnot, that the Board didn’t want to be taking prosecutions until the various investigations had been seen through.

But I don’t know whether that was anything to do with this particular point. The person –

Mr Beer: What –

Paula Vennells: If I have collated this from – information from colleagues, that could only have come from Susan, I think.

Mr Beer: You drew this up as a collection of what had been said to you –

Paula Vennells: Yes.

Mr Beer: – or passed to you, and you were happy to put it forward as a proposal, subject to the questions that you asked.

Paula Vennells: Yes, I think we were trying to find a way through, post-the Interim – the Interim Report was about to be published and we still had numbers of cases that needed to be reviewed and we were trying to find – and what actually happens is this is moved on a couple more stages – was a solution that would get us through the other cases that would work for the JFSA.

Mr Beer: So what was the logic of the proposal to review prosecutions in the past 12 to 18 months?

Paula Vennells: I’m afraid I can’t remember, and I can see that I’m asking, in a sense – I don’t put it that clearly – but I’m saying “Why would they not review all the cases”?

Mr Beer: It says “review all prosecutions in the past 12 to 18 months since [the Post Office] has been independent of [Royal Mail]”. Was that seen, in your discussions with the people involved, as the important point of distinction: we’ll only go back to the point of separation, ie April 2012?

Paula Vennells: No, I think that is my point about the question that was raised in the Board, because the Board had only been in place post – since the Post Office had been independent of Royal Mail.

Mr Beer: You ask in brackets, “Why would they [the external lawyers] not review all cases … eg over the last 5-10 years?” Why were you asking that?

Paula Vennells: I assume because that seemed a fairly sensible question, which is why would we be restricting ourselves to a particular time period.

Mr Beer: That’s logical, isn’t it?

Paula Vennells: If we were trying to do this properly, why wouldn’t we do all of them, yes.

Mr Beer: If we are doing this properly and fairly, why wouldn’t we look back at all cases of false accounting?

Paula Vennells: Yes.

Mr Beer: Was that done?

Paula Vennells: No, in terms of what we know today, clearly not. The scheme was opened to 150 cases that came forwards and the Post Office advertised across the Network for any postmasters who wanted to come into the scheme and have their cases reviewed. So my understanding at the time is that we were open to however many postmasters came forwards but, in terms of specifically the Post Office Legal Team and its lawyers, going back and looking at all the cases, that wasn’t the work that was in place, and I wouldn’t –

Mr Beer: Why wasn’t it put in place? Here you’re suggesting that the Post Office itself, through external lawyers, proactively review all cases of false accounting going back up to a decade –

Paula Vennells: Yes.

Mr Beer: – and you’ve, I think, accepted that that would be the fair and proper thing to do; why didn’t the proper and fair thing to do get done?

Paula Vennells: I can’t remember whether you have any further documentation that would see what answer I got to that.

Mr Beer: We’ll come to the answers –

Paula Vennells: Yes –

Mr Beer: – the narrow answers and, essentially, we’re going to find out that Mark Davies, the PR guy, said it’s very dangerous.

Paula Vennells: I don’t remember that. I was asking the question to do this work the right way and my understanding and acceptance of what was proposed, which was accepted by the MPs and everybody else involved, was that the Mediation Scheme was the right way through. I think we see other documentation that sees cases go to the CCRC, there is documentation that says cases can’t be resolved through mediation and the scheme, and they would need to go through the Court of Appeal. The fact I can recall those, I suspect there was a wider discussion around this at some stage.

Mr Beer: Do you agree that your nascent idea here of a review of all prosecutions of false accounting, if it had been carried into effect, may have avoided a lost decade until miscarriages of justice were discovered?

Paula Vennells: It may well have done. It may well have done.

Mr Beer: Do you think the failure to carry into effect the idea that you posit here was a missed opportunity?

Paula Vennells: At the time, I and the Board, and everybody else involved in what succeeded after this particular point – sorry, wrong word – what took place after this particular point, felt that that was completely the right way to do this. We were concentrating on individual cases.

Mr Beer: You say that such a review, especially where cases have been small, because “‘large’ amounts would be less likely to get away with saying they were muddle-headed”; what do you mean by that?

Paula Vennells: I’m not entirely sure now. You can see from the way these questions are asked that I am operating in an area of business, ie the legal sphere, that I, at the time especially, was very naive about and didn’t understand. So I am asking questions because one of the roles of a chief executive is to not sit on questions – is to not stay quiet on things you don’t understand. Sometimes you ask questions and they sound stupid but it’s the right thing to do because you need to ask those questions and I am not entirely sure here whether I was assuming that large amounts of false accounting might point more to crime than not. I don’t know.

Mr Beer: Can you help us as to why you would come up with that idea: a person accused of false accounting in relation to a small amount of money may be more likely to deserve or need a review of their conviction versus a person accused of false accounting a large amount of money?

Paula Vennells: I don’t think that’s what I’m saying. I think what I’m saying is that if – so, first of all, I’m asking questions and I don’t understand this. I think what I was asking is that, if somebody had committed false accounting over a long period of time and had, therefore, reached a large sum – and I realise today, and I regret what I’ve said, that – and I understand very much today why subpostmasters were driven to do this but, at the time, my naive assumption was that, if somebody was false accounting on a regular basis over a long period of time and accumulated a large amount false accounted, that might give an intention of something that was perhaps more planned than where an amount might have been an occasional example.

Mr Beer: Okay, can we look at Mr Davies’s reply, POL00099055, foot of the page.

“Hi Paula

“Could we have a word at some point today to discuss this and specifically how far we go in terms of the wording below? I’m sending this just to you at this stage.

“I am very concerned that we may get to a position where we go so far in our commitments that we actually fuel the story and turn it into something bigger than it is. I am not at all complacent about the issues, but there is real danger in going too far in commitments about past cases.

“[This is] for two reasons:

“First the substance of the report doesn’t justify this response. Indeed the response is at such a level that our current media strategy would mean there would be some coverage, but not very much … If we say publicly that we will look at past cases … whether from recent history or going further back, we will open this up very significantly, into front page news. In media terms it becomes mainstream, very high profile. It would also give [James Arbuthnot] a very strong case for asking for a Parliamentary statement from BIS.

“My second concern is the impact that this would have more broadly. It would have the ‘ballistic’ impact which AB fears. It [would] lead to a very public narrative about the very nature of the business, raising questions about Horizon (the reality of what [Second Sight] has found would be misunderstood) and having an impact on public views about the [Post Office] and really widening the issue to the whole network.”

Do you agree Mr Davies is here giving you personal advice on the extent to which past convictions are reviewed on the basis of the extent of the media coverage that each decision might generate?

Paula Vennells: My understanding at the time was that he and, I think, the Post Office generally – and we’ve seen similar comments from the Chairman as well – believed we were dealing with a small number of cases, and the numbers that were coming forward seemed to, at that stage – clearly more came later – seemed to indicate that that was the case. And the Inquiry heard from Mark Davies last week, I think, where he explained – and that was my understanding at the time, that what he was trying to do was to minimise misinterpretation.

It was wrong because, clearly, if past – if all past cases needed investigating, they needed investigating but, at the time, that wasn’t what the Post Office thought and I think what he was trying to do here was, as I say, to minimise misinterpretation and exaggeration in the media.

Mr Beer: Do you agree his first point says you should make a decision about the extent to which you review possible past miscarriages of justice by reference to the extent of media coverage that it will generate?

Paula Vennells: It does say – it could be read that way. That wasn’t my –

Mr Beer: Is there another way of reading it –

Paula Vennells: I wouldn’t have –

Mr Beer: – and, if there is, please explain which words help to read it in a different way. He’s saying, “Don’t go back 10 years or say that you’ll go back 10 years, our current approach would mean there’s going to be some coverage but not very much, the usual suspects. If we say we’ll look back at past cases, we’ll be on the front page”. Isn’t he directly saying –

Paula Vennells: Yes, I can see that that’s what he is saying but my mindset at the time when I received this is that we were working on specific cases that were coming forwards and we opened up –

Mr Beer: No, no, no, hold on, Ms Vennells. The email that you had sent, to which this is a response, posits “Shall we look back 12 to 18 months since separation” –

Paula Vennells: Yes, yes.

Mr Beer: – “or should we go back further?”

Paula Vennells: Further, yes.

Mr Beer: “Why aren’t we going back further, 5 to 10 years?”

Paula Vennells: Yes.

Mr Beer: This says, “You can’t do that, you’ll be on the front page”. That’s a grossly improper perspective, isn’t it?

Paula Vennells: Yes, it is. Yes, it is.

Mr Beer: Do you know why he cut everyone else out of the chain and replied directly to you?

Paula Vennells: No, I don’t.

Mr Beer: Was he a very trusted adviser?

Paula Vennells: He was trusted by all of the team – I mean, as I said yesterday, I trusted all of the team; none of them more than the others.

Mr Beer: Did you remain in contact with Mr Davies after you left the Post Office?

Paula Vennells: I did –

Mr Beer: Did you exchange messages with him about media statements that you might make and the media lines that you might take in the announcement of this Inquiry, for example?

Paula Vennells: I believe the Inquiry has texts that show that. I –

Mr Beer: Even though you’d moved on, he was still advising you into 2020 as the lines to take in your media statements?

Paula Vennells: I had kept in touch with Mr Davies for reasons that were very personal to him and I think he offered that advice at the time.

Mr Beer: To what extent did what Mr Davies advises here affect your decision making?

Paula Vennells: I would never – it was simply not the way I worked – have taken a decision based on the advice of one colleague – never. My way of working was to take as many different views as I possibly could and to involve those individuals in the decision making as much as I possibly could.

Mr Beer: Can we look at the top of page 1, please, and your reply:

“Mark, thanks for this, and I don’t think we are too far apart – I didn’t say this would be our media statement but they would need to be aligned.

“You are right to call this out. And I will take your steer …”

You did take the advice of the PR guy, didn’t you?

Paula Vennells: I really don’t remember it relating to the decision –

Sir Wyn Williams: (To audience) Hang on now, please. Thank you.

Paula Vennells: As I tried to say before, my – what we were working to at this stage was numbers of cases going through a scheme and a scheme that was going to be opened up to anybody who wanted to come forwards.

I understand how this reads but I don’t recall making any conscious decision not to go back and put in place a review of all past criminal cases. My conviction, as we were going forwards in this, was that this scheme would enable any case that that want – any postmaster that wanted their case to be reviewed, that this scheme would allow for that.

Mr Beer: You continue:

“There are two objectives, the most urgent being to manage the media. The second is to make sure we do address the concerns of [James Arbuthnot] and Alan Bates, mainly looking forwards (but we should be aware [Alan Bates’] driver is really justice for the past); otherwise they will call for reopening cases.”

Paula Vennells: Yes.

Mr Beer: “It may be that we get to manage [Alan Bates/James Arbuthnot] by playing on the ‘go ballistic’ view: ie I will meet him privately to hear his views about these cases but that we cannot refer to anything in relation to past convictions. Any challenge must go via normal legal routes.”

Is that the way your mind worked at this time: the priority was to manage the media and then deal with the actual substance of issues?

Paula Vennells: The media issue related to, I believe – because we were right on the day or the day before the release of the Second Sight Interim Report, and that’s my recollection, that that is the media conversation that we were having.

Mr Beer: But what we’re talking about here is how far back a review of possible miscarriages of justice should go?

Paula Vennells: Yes, and I’m not closing that down –

Mr Beer: You say –

Paula Vennells: – at all.

Mr Beer: You say there are two objectives, the most urgent being to manage the media.

Paula Vennells: I’m pretty sure that that was in relation to the Interim Report, which was due out any time, which, as the Inquiry has seen and heard from other people, there were issues in that report which the Post Office disagreed with and the team felt Second Sight hadn’t taken account of. That, I think, was the issue that we were talking – so this was a really urgent ‘Today or tomorrow’ issue and then there were the concerns looking forwards –

Mr Beer: No, no, what you’re saying here is, “You’re right, Mark, we will put the past behind us. We won’t look at past cases. We’ll focus on the future”.

Paula Vennells: That isn’t what happened. That simply isn’t the case because the scheme was open to past cases. There was no time limit or –

Mr Beer: The burden was put on the subpostmaster to prove their case, wasn’t it?

Paula Vennells: The scheme was open to any postmaster who wanted to bring their case forwards. It was advertised in various ways to encourage people to come forward. There were other conversations going on at the same time as this exchange, with colleagues, and it was very clear that any cases that included criminal convictions would need to go through the Court of Appeal and the normal legal routes.

I don’t think I understood any more about the legal side of things to have got involved in anything more complex than that. I believed very sincerely that the scheme we were putting in place would help.

Mr Beer: Do you accept that this exchange of emails shows that, in making decisions as the substance as to what the Post Office should do, ie whether it, itself, should seek to review whether there had been past miscarriages of justice, you took into account the views of your media adviser, as to the extent to which your decision would meet with front page news?

Paula Vennells: I do not recall that being – I see what is written here. There were other conversations going on at the same time. The highlighted paragraph isn’t as clear as what you’re saying. I do not think – and I would not have taken, personally, any decision on review of historic cases. That was not my role. I wasn’t qualified or competent to do that. I did not take that decision.

What I was trying to do, at this stage, was to find a way forwards through the cases that had come into the Post Office and to encourage more to come forwards, which would have enabled any case to go through normal legal routes if the Post Office couldn’t help it.

Mr Beer: What did you –

Paula Vennells: So no, I absolutely don’t accept that I took a decision to not review past criminal cases based on a media outcome. I didn’t take any decision on that. I wouldn’t have been able to do so and it was – would have been such an important decision that would have had to have gone to the Board.

Sir Wyn Williams: Can I just ask – and this may be entirely my fault, so I preface it by that – but I’m not clear that, as of 6 July or 7 July, or this period of time, this discussion of how to approach the issue of past cases is taking place in the context of Second Sight continuing its investigative work beyond the Interim Report or in the context of the idea of a mediation scheme. Do you understand the distinction I’m trying to draw?

Paula Vennells: Not entirely. Would you –

Sir Wyn Williams: Well, as I see it, in simple terms, Second Sight began by investigating in the context of a number of cases –

Paula Vennells: Yes.

Sir Wyn Williams: – and, after their Interim Report, somehow a transition took place so that what I will call a mediation scheme emerged. I’m not sure, as of this date, ie at or about the time when Second Sight was to produce its Interim Report, whether the discussions of how to deal with past cases was in the context simply of Second Sight moving forward with their investigations or, by that stage, in the Post Office’s mind, that was at an end and something new was emerging?

Paula Vennells: No, I think – that’s a helpful question. I think there was a process of evolution. So –

Sir Wyn Williams: Sure, but I wanted to try and pinpoint –

Paula Vennells: Yes, I’m trying to think through what – Second Sight had done the work it had done up to the publication of the Interim Report. There was still a number of cases that hadn’t been looked at, which needed to be continued. I had been disappointed about the way the Post Office team hadn’t worked as well or been able to contribute to the work Second Sight had done and I say that I would like us to work collaboratively with the JFSA, who still had a very serious vested interest in that.

And a proposal was made to form a working party – I think was the word that was used – and that was, I recollect, an attempt to work together to go through the remaining cases. At some stage – and, as we were going through this, because it was an iterative process, people were contributing ideas as to how this might play out, I had a conversation with Susan – and this I remember very clearly because I can remember where it was – I’d arrived home at this – and I was standing on the station and she called me and Susan suggested that a way of bringing – the trouble is I now know what didn’t happen – but some of these cases or these cases to a conclusion would be to introduce mediation.

What she said was that – and, again, this is in the documentation somewhere – is that mediation – that sometimes what was needed in cases is for people to hear the Post Office apologise and say it was sorry that it got things wrong or for the Post Office to explain to a subpostmaster that perhaps they had done something wrong, and that, once the cases had been reviewed through this working party process, that might then be a way to reach some finality on those cases.

What was also talked about at the same time was that, if this was a good thing to do, which clearly it was, the Post Office then needed an ongoing process, possibly an adjudication process and external ombudsman, on a permanent basis, so that, if this type of challenge arose again, there was an external appeal process, if you like, for subpostmasters to go to.

And the thing that I’m missing, Sir Wyn, in telling you all of that, is, if Susan knew – which of course she did, and I wouldn’t have known so well – that criminal cases couldn’t be resolved through mediation – and this is simply a question – did she know that there would need to have been a further review or was her understanding at that time – which is a fact that was later described – that any criminal cases going through the Mediation Scheme would be open to all of the investigation work that was done by Post Office and Second Sight and Fujitsu, which may then give them information to take forward to – through the normal legal routes through the Court of Appeal or the CCRC?

Mr Beer: Ms Vennells, can we look at page 2 of this document, and scroll down. This is your thoughts on the proposal as of 6 July.

Paula Vennells: Yes.

Mr Beer: In direct answer to the Chairman’s question, isn’t it the case that Second Sight were to play no part going forwards?

Paula Vennells: There were conversations about whether Second Sight should or shouldn’t because there were concerns about the fact that this had run on too long and was way over budget, and there – and this, again, is in many documents – there were concerns that they – their work was not, at this stage, sufficiently evidence based.

Mr Beer: Your proposal didn’t involve any role for Second Sight, did it?

Paula Vennells: I’m not sure that’s true –

Mr Beer: Look at the email on the screen.

Paula Vennells: It was a consideration – sorry?

Mr Beer: Look at the email on the screen. Your written proposal did not contain any role for Second Sight, did it?

Paula Vennells: It doesn’t at this stage, because we’re in this process of evolution, say that Second Sight –

Mr Beer: In this process of evolution, it doesn’t involve any role for Second Sight?

Paula Vennells: I’m not sure because I’m not – it doesn’t say that they would or wouldn’t. What it says is that it would explore their themes for improvement and I’m being frank with you that there were conversations about whether – there was criticism of the work that Second Sight had done, but there was equal understanding that they had the support of MPs, notably James Arbuthnot, and that we had committed to do that work. That is a –

Mr Beer: Back to page 1, please. You say:

“You are right to call this out. And I will take your steer. No issue.”

Do you agree this email chain reads as if the PR man has influenced you conclusively as to a decision as to whether or not the Post Office would itself review whether and to what extent there had been past miscarriages of justice?

Paula Vennells: I wouldn’t take that steer on a legal matter from Mark Davies. He clearly – he was talking about – and, again, in the timescales we’re talking about, we’re talking about publicity within the next couple of days as a report coming out, but I wouldn’t have taken a decision on anything at all to do with legal matters from Mark Davies and –

Mr Beer: Okay, let’s see what the – I’m so sorry, I spoke over you.

Paula Vennells: Sorry. It’s fine.

Mr Beer: Let’s see what the IT person was telling you on what to do about looking at possible miscarriages of justice. POL00099056. This is a separate chain, remembering that Mark Davies had just replied to you. This is Lesley Sewell’s reply to your email setting out your proposals. She does include everyone on the chain and doesn’t cut people out.

Paula Vennells: Mm-hm.

Mr Beer: “Paula

“Just a couple of thoughts.

“If we state that we will review the cases since Separation, that implies that there are material findings in the [Second Sight] review and leaves us open to challenge against all cases. It may be better to offer in the spirit of the review and how we have listened to those who have been affected, and how we want to change our business.

“This is the delicate line we are balancing and from memory Susan quoted more [than] 500 cases in the last 10 years. It may be an option to allow [subpostmasters] to come forward and request a review.

“I agree on the points around the working group and user group”, et cetera.

Did you bring into account in your decision making the views that the Head of IT was giving you on the extent to which the Post Office should itself ask independent lawyers to review past convictions?

Paula Vennells: I would have read Lesley Sewell’s email sent to me. I wouldn’t take any decision on legal matters, personally, without the advice of the General Counsel and on something this significant as the Board.

Mr Beer: We can see that you’ve had what the PR expert has been telling you to do about past convictions, and here the Head of IT telling you. I think your position is that you did not see Simon Clarke’s Advices, which address looking at past convictions, until after the Court of Appeal Criminal Division disclosures in late 2020/early 2021; is that right?

Paula Vennells: Yes.

Mr Beer: So you didn’t know that there were lawyers advising on the very issues that you were considering at this time bringing into account the PR man and the IT lady’s views?

Paula Vennells: I had no sight of the Simon Clarke Advices, no.

Mr Beer: You tell us in your witness statement – that can come down, thank you – it’s paragraph 562 – no need to turn it up – that you recall that you were told by Susan Crichton that, due to advice from external lawyers, there was a need for a review to ensure that proper disclosure had been given in previous criminal cases.

Paula Vennells: Yes.

Mr Beer: You say that you had a conversation with Lesley Sewell in which she told you that the Post Office had been advised that the expert witness that the Post Office had used in criminal cases to give evidence about Horizon had failed to mention there were bugs in Horizon, including in the Seema Misra case. You tell us that in your witness statement.

Paula Vennells: Yes, I – yes, that’s right.

Mr Beer: Can we please try to pin down the date on which you had knowledge of a problem with the Post Office’s expert evidence?

Paula Vennells: It’s difficult to find the date exactly. I remember that I – so I learned of it, first, from Lesley Sewell, not from Susan Crichton. What had happened is I passed Lesley in the corridor. She was looking particularly concerned or grumpy about something, and I asked her what was the matter, and she said that she had just heard that – so I don’t know that she said this but I’m assuming from Susan – that the Post Office expert from Fujitsu, whom we had used in past cases, now had to be stood down because he had not revealed – and, as I said yesterday, I think – one or two bugs that he knew about in a case, and – that’s right, I think it was Mrs Misra’s – and the reason that Lesley explained he hadn’t revealed those bugs in that case is that they hadn’t been – Mrs Misra’s was a Horizon Online case and the – sorry, the other way round. Mrs Misra’s case was on Legacy Horizon and these bugs hadn’t come into effect until Horizon Online.

Mr Beer: Ms Vennells, the way you’ve described it there is that Ms Sewell was telling you that the expert had failed to mention bugs in one case, and that was Seema Misra.

Paula Vennells: I think so.

Mr Beer: In your witness statement, you say that she told you that he had failed to give disclosure in criminal cases, including Seema Misra.

Paula Vennells: Right. That’s probably right then. I don’t think –

Mr Beer: Again, can you help us as to the time of this, please?

Paula Vennells: Well, I then spoke to Susan, I think, within a day or so of that conversation. Susan explained more about it, so if you can date when Susan found out, it would have been just before that, because Lesley could only have found out from Susan.

Mr Beer: By this time, and I’ll call it mid-2013, you had been engaged on the issues of Horizon integrity for some time, hadn’t you?

Paula Vennells: From when – yes, yes.

Mr Beer: You knew that there had been prosecutions and that those prosecutions had been founded on evidence from Horizon?

Paula Vennells: Yes.

Mr Beer: When told by Lesley Sewell and then Susan Crichton that there was an issue with the Post Office’s expert evidence that had been relied on to convict subpostmasters, including Mrs Misra, were you concerned?

Paula Vennells: Yes, and I think Susan had – and I think the documentation says this – Susan had – at the time I spoke to Susan about it, she said, I think, that she had already put in chain a review by the external lawyers. And I think the documentation shows that she had done that before the written advice from Simon Clarke came in on the 15th.

Mr Beer: Did you, at the time, join the dots between the debates that we’ve seen you have in emails here with Mr Davies and Ms Sewell, about the extent to which the Post Office should announce that it was going to review past convictions, and the information that you were being given, quite separately, that the Post Office’s expert witness had failed to mention bugs of which he had knowledge in criminal cases?

Paula Vennells: No, I didn’t make that link.

Mr Beer: Why not?

Paula Vennells: I think because my – that the emails from Mark Davies and Lesley Sewell are part of an iterative process as to how we took this important, ongoing piece of work forwards. The conversation with Susan Crichton about the work that became known as the Cartwright King Sift Review was – I think I took as a piece of reassurance that the lawyers were doing what they needed to do in terms of – and I think this is at the stage where I learnt about disclosure – of what they needed to do in respect of disclosure.

What I didn’t know at this stage, to be very clear, was that, by dint of what had happened with Gareth Jenkins, the Post Office had breached its duties as a prosecutor. I don’t think that was mentioned to me at the time.

Mr Beer: Did you never, at any time, connect the long running criticism of Horizon’s integrity, that had been forced upon the Post Office by subpostmasters, for years and years, with being informed that there was a problem with the expert evidence on which the Post Office had relied about bugs?

Paula Vennells: I don’t think I made that connection because it was very specific. The information I was told was very specific, which was that these two bugs were related to Horizon Online. There were two of them which affected – and, by this stage, I knew about them – which affected 14 and 62 post offices, I think, all of whom had been informed or, in the case of the 14, were in the process of being informed, and that the bugs had been fixed and the postmasters had not lost any money as a result of that.

So this was Lesley’s frustration, which was that these were two isolated incidents – I accept now that is incorrect, but that was what I was told – they had been fixed. There is even documentation which refers to them as a “red herring”, and the fact that Susan was going through this Sift Review, to me seemed to be reassuring, rather than concerning.

Mr Beer: Did you ask who this witness was?

Paula Vennells: I don’t believe I knew Mr Jenkins’ name because there is –

Mr Beer: I’m asking: did you ask who was this witness?

Paula Vennells: I think I was told that it was a Fujitsu – someone who worked for Fujitsu, who was very competent on the system.

Mr Beer: Did you ask how many cases he had given evidence in?

Paula Vennells: No.

Mr Beer: Did you ask what was being done in relation to the evidence that the Post Office was concerned about?

Paula Vennells: I’m sorry, ask the question again.

Mr Beer: Yes. Did you ask what the Post Office was doing as a result of its concern that he had failed to mention, in cases, knowledge of bugs?

Paula Vennells: I was told that we were gong back looking – or that Cartwright King were going back looking at cases. So I –

Mr Beer: Why were they doing that, if it was a red herring?

Paula Vennells: I understood that that was the obligation that one had to do: was that any case that he had given evidence in needed to be given this evidence around these two bugs, even if it didn’t affect those cases.

Mr Beer: Were you told that he was an unsafe witness?

Paula Vennells: No.

Mr Beer: Can we jump forwards, please, to October of this year, October 2013, and look at POL00382001, at the foot of page 1, please. An email from you to Alice Perkins, signing out:

“Hi Alice, don’t worry about the lateness of this note – I am clearing the tray before signing out …

“Couple of updates:

“Sir Anthony Hooper/Sparrow: very positive phone call on Friday pm. No issue at all re Hillsborough; he is going to send a file note.”

Then:

“My concern re Sparrow currently is our obligations of disclosure, re an unsafe witness (the representative from Fujitsu made statements about no bugs, which later could be seen to have been undermined by the [Second Sight] report). We do not think it is material but it could be high profile.”

Is the “unsafe witness” that you’re referring to there the same person that Lesley Sewell and Susan Crichton had referred to –

Paula Vennells: Yes.

Mr Beer: – earlier?

Paula Vennells: Yes, yeah.

Mr Beer: Had they described him as an “unsafe witness”?

Paula Vennells: I don’t know where – I only saw this disclosure recently, so I haven’t had a chance to go back and see whether – an unsafe witness is not a term that I would have used. So – and the other thing that –

Mr Beer: You did use it.

Paula Vennells: Yes, sorry, the word that – the adjective “unsafe” is not something that – in relation to the word “witness” is quite a specific description, and I’m not sure that that’s something that I would have just used coincidentally. And when I looked at this email, this is some considerable time, so this is three months after I found out about Mr Jenkins being stood down. So I don’t know whether, at this stage, I had been given more information about him or not. I mean, it says –

Mr Beer: Sorry, it’s six days after Mr Altman did his general review?

Paula Vennells: Right.

Mr Beer: A document which I think you say you weren’t told about –

Paula Vennells: No.

Mr Beer: – or didn’t see?

Paula Vennells: No. Does he use the term?

Mr Beer: Not precisely. But, in any event, you understood that there was an issue by the date of this email –

Paula Vennells: Yes.

Mr Beer: – concerning disclosure that related to an unsafe witness, correct?

Paula Vennells: Yes.

Mr Beer: That related to him making statements about there not being bugs in Horizon?

Paula Vennells: That was my understanding.

Mr Beer: So you understood by this time that there was an issue about the reliability of the Fujitsu expert evidence about there being bugs, ie the absence of them –

Paula Vennells: Yes.

Mr Beer: – and not merely about the presence of bugs that had been revealed by the Second Sight Report?

Paula Vennells: That’s what it says here, yes, yes.

Mr Beer: Yes. You say:

“We do not think it material but it could be high profile.”

If the issue of the expert evidence in criminal cases was not material, why would it be high profile?

Paula Vennells: I suspect this is the media aspect again, which is the worry that something could be taken out of context. I’m not entirely sure because I don’t – whether I was given this information very quickly, because I’m clearly going somewhere, and Martin Edwards is briefed to give Alice more detail, I don’t – I’m really – I just have no recall of this at all.

Mr Beer: Who is the “we” in that sentence?

Paula Vennells: I can only imagine that this has come from – well, it – yes, possibly Susan Crichton, the Legal team.

Mr Beer: Where is it recorded that what it was alleged that Mr Jenkins had failed to do, or had done, was not material?

Paula Vennells: I don’t know. I would not have personally been able to make that statement without getting it from someone who knew. I didn’t understand about, as I now do, about the nature of an expert witness.

Mr Beer: There existed at this time the Simon Clarke Advice –

Paula Vennells: Yes.

Mr Beer: – of 15 July 2013, which addressed, page upon page, this very issue, the materiality –

Paula Vennells: Oh, I’m sorry. I think I’ve just remembered. I’m sorry, I didn’t mean to cut across you.

Mr Beer: You go ahead.

Paula Vennells: The – I think Cartwright King had said that – because they had obviously, by this stage, done a number of checks across subpostmaster cases, and I think they had said that the disclosures were a fairly small number, and that that may be what this is relating to.

Mr Beer: So “material” means “not many”?

Paula Vennells: It could be that, yes.

Mr Beer: As I was saying, there existed at this time, the Simon Clarke review of 15 July 2013, on this very issue, the materiality of what Gareth Jenkins had said in witness statements and to a court in oral evidence, but you hadn’t been given it –

Paula Vennells: No.

Mr Beer: – the Advice?

Paula Vennells: No.

Mr Beer: Did you even know that external lawyers had been instructed to advise on the very issue that you’re debating?

Paula Vennells: I – do you mean in the sense of the Cartwright King review?

Mr Beer: No. The materiality of what Mr Jenkins had said or had failed to say?

Paula Vennells: I don’t think so.

Mr Beer: Do you know where you got the idea that we do not think it – ie the expert witness making statements about there being no bugs in Horizon – from?

Paula Vennells: I’m sure there’s – there’s something in the documentation about numbers of cases. I was not personally involved in any of this at all. I mean, I wasn’t working with the external lawyers doing the review, so I couldn’t have known what they did or didn’t think and, therefore, it can only have come through the Legal team, or possibly Martin. I mean, it is possible that Martin was briefed by – but, again, he would have had it through the Legal team.

Mr Beer: Isn’t the “material” comment here another reference back to the supposed red herring, rather than about numbers?

Paula Vennells: I don’t think so.

Mr Beer: Why not?

Paula Vennells: Well, only in the context that – no, I don’t – that isn’t what I understood, and there is certainly something in documentation somewhere that makes the statement that the lawyers, Cartwright King, did not think that there would be a large number of cases where the disclosure needed to be made.

Mr Beer: Can we go back, then, to mid-July 2013, but probably after the break.

Sir, can we say 12.30, please?

Sir Wyn Williams: Yes, certainly.

(12.17 pm)

(A short break)

(12.30 pm)

Mr Beer: Thank you, Ms Vennells.

Can we pick up in mid-July 2013, please, by looking at POL00100702. This is a letter from the CCRC, directly to you, of 12 July 2013. If we just look at it:

“Horizon computer system:

“The [CCRC] is an independent body … Our purpose is to review possible miscarriages of justice in the criminal courts of England, Wales and Northern Ireland and refer appropriate cases to the appeal courts.

“For obvious reasons, we have read the recent media coverage concerning the Post Office Horizon computer system with interest. Clearly, it would be very useful for us to have more information directly from the Post Office, especially accurate information as to number of criminal convictions that might be impacted by the issue and what action is proposed, or being taken, in that respect.

“We see that the [AG] was called upon on Tuesday to set up an enquiry and we are in contact with his office about that.

“In essence, the Commission’s role in this is likely to relate to anyone who is convicted of a criminal offence (in England, Wales or Northern Ireland), where evidence from the Horizon computer system is relevant, where (i) they have already tried to appeal against that conviction or (ii) they were convicted at a Magistrates’ Courts following a guilty plea.

“I look forward to receiving your reply.”

This must have been a very unwelcome development.

Paula Vennells: I remember receiving the letter from the CCRC. I don’t remember personally regarding it as unwelcome.

Mr Beer: It arrived at a time at which you would have been told, is this right, by Susan Crichton, about the need to review past convictions?

Paula Vennells: I would think so, yes.

Mr Beer: It would have arrived at a time when you’d been told by Susan Crichton and Lesley Sewell about the concern about the Fujitsu expert witness’s evidence to the courts, including in the Seema Misra case?

Paula Vennells: Yes.

Mr Beer: A letter like this does not land on the doorstep of the CEO every day of the week, does it?

Paula Vennells: No.

Mr Beer: Would you agree that the right and honest thing to do would have been to let the CCRC know about the Post Office’s concerns over Gareth Jenkins?

Paula Vennells: What I did with this letter was to ask Susan to reply as the legal expert in the organisation.

I don’t believe I would have given her direction as to how we should reply to it and, for clarity, I wouldn’t have either instructed her to leave things out.

Mr Beer: The right and honest thing for the Post Office to have done would be to let the CCRC know and know promptly over its concerns about the truthfulness and reliability of the evidence that Gareth Jenkins had given to court, wouldn’t it?

Paula Vennells: Yes, it would.

Mr Beer: That didn’t happen for years and years, did it?

Paula Vennells: I understand that to be the case now, yes.

Mr Beer: Given what was on your mind, what you’d said to Alice Perkins a couple of days before this, in the email that we saw, did you think, “We need to say to the CCRC what we know about Gareth Jenkins”?

Paula Vennells: I don’t think we’re looking at the same timescale. The email that I sent to Alice Perkins was in October. This is July.

Mr Beer: I’m talking about the – I’m sorry, the exchange with Lesley Sewell and Mark Davies, my mistake.

Paula Vennells: I’m sorry, so what was the question?

Mr Beer: Yes. In the light of the exchanges you had with Mark Davies and Lesley Sewell about the extent to which we have to go back and look at previous convictions, up to 500 of them, for false accounting, and the conversations you’d had with Lesley Sewell and Susan Crichton about the person you now know to be Gareth Jenkins, do you think the right thing to have said in response to the CCRC was, “We have got concerns about a key witness in a number of our cases”?

Paula Vennells: Yes – assume – yes, I sound slightly hesitant because I wouldn’t have known what we – my – let me step back.

My understanding and expectation is that, when the Post Office received something like this from the CCRC, that it should respond in the fullest way possible, to be transparent about whatever it was that needed to be shared with the CCRC.

Mr Beer: Can we turn forwards, please – in fact it’s a couple of days before this – to POL00407582. This is an attendance note of 10 July. You’re not present. It seems to be between Susan Crichton, Hugh Flemington and Simon Richardson. Can you recall who Simon Richardson was?

Paula Vennells: Yes, he was the – one of the partners from Bond Dickinson who had worked on Post Office work for quite some time.

Mr Beer: If we scroll down, please, to 6. Thank you. I should just read the introduction to this:

“There was then something of a general discussion around how they were going to manage the additional complaints and resourcing. Essentially where we got to … was quite a lengthy brainstorming session …”

Then 6:

“The real worry was around the Fujitsu expert who appeared to have known of some of the problems but not referred to them in his report or statement even though they could be dismissed. There are non-disclosure issues here. They are looking at replacing that expert with somebody else.”

Then 7:

“There was generally an overall defensive air and the Board are also feeling bruised.”

Stopping there. By this time, was it the case that the Board was feeling bruised? This is 10 July.

Paula Vennells: These are Simon’s words, I certainly don’t – well, he’s reflecting a conversation he’s had with two colleagues at the Post Office.

Mr Beer: Yes.

Paula Vennells: I – it’s not an adjective I’d have used in respect of the Board. The Board were feeling very frustrated, I don’t know about bruised –

Mr Beer: Frustrated about what?

Paula Vennells: That the Second Sight Interim Report had not – according to colleagues, had not taken account of the Post Office’s factual evidence against issues that were raised and criticisms made of the Post Office and, secondly, that it had taken too long and was continuing to run up budgets that – to levels that had not been expected.

Mr Beer: Do you think that’s what this might be a reference to, their feeling bruised?

Paula Vennells: I can’t think what else it would be a reference to the Board were very frustrated by the criticisms in the Second Sight Interim Report, which, at that stage, they were told, were, at least in some cases, according to the team, unfounded because Second Sight hadn’t had sufficient time in preparing it to take on board the Post Office’s evidence.

Mr Beer: The note continues, seemingly on the basis of what your two colleagues, Susan Crichton and Hugh Flemington, said:

“There are tensions between people and that includes Alice Perkins (the Chair), Paula Vennells and [Susan Crichton].”

At this time were there tensions between Alice Perkins, you and Susan Crichton?

Paula Vennells: There had been some difficult conversations. I can’t remember exactly. Alice – well, we were all frustrated by the report. Alice felt frustrated by it. She could not understand – and, again, there’s documentation on this – as to why we had ended up in – why the business, as she put it, that ended up in the position that it had with a report that hadn’t taken account of Post Office’s input and conclusions seemingly reached or suggested – to be fair to Second Sight, they’d said it was an Interim Report.

I had been challenged over that and there was going to be more challenge to come a couple of days after this in a Board meeting, and I don’t know what – at this stage, I don’t know what conversations had taken place between Alice and Susan. Certainly, Susan and I had discussed about how we were going to – we’d had conversations about the first draft of a Second Sight Report, which I think she went back to talk to them about, and some changes were made but nothing substantive. And it was a difficult time.

Mr Beer: Were there tensions between you and Alice Perkins?

Paula Vennells: I don’t recall that – she had been critical. I mean, Alice was a very straightforward Chair and I generally took feedback pretty well and, again – forgive me for repeating the phrase – but there is documentation on that as well. I’m sure she gave me some fairly straightforward feedback about why this had taken so long, why it was over budget, why the report contained things that the Post Office felt were inaccurate.

Mr Beer: The minute continues:

“I said [that’s Simon Richardson] that I thought the Minister had dealt with the questions extremely well and looked in control of the brief. Evidently she had [the Post Office] in to tear them off a strip for not putting someone up earlier in the day for interviews on radio and TV. I said my view was it was a good thing no one was there. It was a no win given the nature of the complaints and some are subpostmasters who were generally reporting rather wild stories of what had gone on. However, I understood the political imperative of somebody being put up. [Susan Crichton] said she would pass my comments [on] to the Comms Director.

“However, I told them that my view was they need to be much more on the offensive about this, this was a new management team who that put in place a new independent report and were dealing with the problems. The Chair [Alice Perkins] seems to have been taken by surprise by the reaction and the noise generated. [Paula Vennells] may be sensitive around some of these issues happening on her watch as the Network Director. I said that I still thought there were positive messages to deliver and people just need to get into a different mindset. She said that [Paula Vennells] had asked about what I knew and she might pass on my comments to her. I said I was happy to talk to [Paula Vennells] since we knew each other from another difficult project in the days when they were a subsidiary of [Royal Mail Group]”, et cetera.

In your approach to the reaction to the Second Sight Report, were you sensitive that some of the issues it addressed happened on your watch as Network Director?

Paula Vennells: No, I wasn’t.

Mr Beer: The note says that the real issue here, the real worry, was around the Fujitsu expert, who appeared to have known some of the problems and not referred to them in his report or statement. There are non-disclosure issues here. Was the result of this meeting fed back to you?

Paula Vennells: I don’t believe so.

Mr Beer: Would you be surprised that members of your team were having this in-depth and frank conversation about Gareth Jenkins being the real worry that was facing the Post Office –

Paula Vennells: Yes.

Mr Beer: – after the Interim Report, and yet this information not being fed back to you nor indeed to the Board?

Paula Vennells: Yes, I would be surprised at that.

Mr Beer: How has it come about that they’re having this very frank conversation with somebody with whom you have a history, as is referred to here, Simon Richardson, and you never get to know about it?

Paula Vennells: Oh, my history with Simon Richardson was one case that we sat on at Royal Mail Group where we were on an appeal panel and working with him a long time ago on Post Office closures, but I hardly met with Simon.

Mr Beer: It’s recorded here that, “She said that Paula Vennells had asked about what I [Simon Richardson] knew”.

Do you know what that’s a reference to?

Paula Vennells: I don’t. If you’d like to take me back up the email in case there’s something there that prompts it –

Mr Beer: It’s an attendance note but, yes, let’s go back up.

Paula Vennells: It may simply be that I was asking for what Simon’s view was on the work that was underway because he was the partner for the Post Office or had been a partner for the Post Office.

Mr Beer: Again, asking the general question: how is it that two relatively senior members of your team, Susan Crichton, the General Counsel no less, were having this frank conversation with a solicitor and the outcome of it never reached you or the Board, if your evidence is correct?

Paula Vennells: To be honest, I don’t know. Whether Susan – as you’ve heard previously, it was not a process in the Post Office – which was wrong – for advices – if this is considered advice, which in a sense, it is – to be fed back, and the reason I was looking down the list of numbered points was in case any of it was fed back and some wasn’t.

Mr Beer: Is it every day of the week, though, in the Post Office that it is told that the safety of its convictions, its criminal convictions, may be called into question by unreliable evidence given by an expert witness?

Paula Vennells: No, Mr Beer. I agree. It should have been shared.

Mr Beer: You were explaining perhaps why it wasn’t shared because of a convention of not giving counsel’s advice or solicitor’s advice documents to the Board –

Paula Vennells: Yes, yes, it should –

Mr Beer: – but it doesn’t prevent any of the substance being conveyed, does it?

Paula Vennells: No. Yes, I agree. Yes. No, no.

Mr Beer: So what’s at work here, in your view, why is this information not coming up to you? We’ve got Cartwright King through Simon King (sic) advising, on the one hand, you’ve got Bond Dickinson advising here that the real worry is Gareth Jenkins, on the other.

Paula Vennells: My hesitation on this is that I now know much more than I did at the time, so I’m now aware that Mr Jenkins had never been briefed as an expert witness. I don’t know whether this is suggesting that that was part of the real worry or whether the worry that is expressed at point 6 is what the organisation knew already, which was non-disclosure issues, because the Cartwright King review had started by this stage. But I’m afraid I can’t help you why more of that wasn’t shared.

Mr Beer: Thank you. If we move on, the Second Sight Interim Report was, in fact, published on 8 July. The reference, we needn’t show it at the moment, is POL00029744, and it referred to three bugs in Horizon: the receipts and payments mismatch bug; the suspense account bug; and, although it didn’t name it, the Callendar Square or Falkirk bug.

Paula Vennells: Yes.

Mr Beer: If we just look at your witness statement, please, it’s paragraph 253(f) on page 111. If we scroll down to (f), please, you say:

“… I was not made aware between joining [the Post Office] in 2007 and early 2012 that any [bugs, errors or defects] had been identified in Legacy Horizon or Horizon Online.”

Then you say:

“The first that I knew that any [bugs, errors or defects] had been discovered was in mid-2013, when I was made aware for the first time of the [bug] known as the Callendar Square problem in Legacy Horizon, and two [bugs] in Horizon Online … Receipts and Payments Mismatch [and] Local Suspense Account problem.”

Can I ask for your assistance on what your evidence means here. You state in the first sentence that you were not aware until early 2012 that any bugs had been identified in either system and then, in the second sentence, you say:

“The first that I knew that any [bugs] had been discovered was in mid-2013 …”

Paula Vennells: I’m sorry –

Mr Beer: They appear contradictory.

Paula Vennells: Yes, they do. I’m so sorry.

Mr Beer: So what’s the correct answer –

Paula Vennells: The correct answer –

Mr Beer: – to the question when did you first know of any bugs, error or defects?

Paula Vennells: – yes, 2013.

Mr Beer: So why did you say here that it was early 2012 that you were made aware that bugs, errors and defects had been identified in Horizon?

Paula Vennells: I don’t know because the only thing I can think as an explanation is that the local suspense bug was, I think, drawn to the Post Office’s attention in 2012 but nobody knew about that because it had been referred to the NBSC and I suspect this is just a mistake.

Mr Beer: So the corrects evidence is that that represented in the second sentence –

Paula Vennells: Yes.

Mr Beer: – is that right –

Paula Vennells: Yes.

Mr Beer: – and the first is just a mistake?

Paula Vennells: Yes.

Mr Beer: Can we turn to what was said in the run-up to the Second Sight Report to the Post Office’s position on the three bugs.

Paula Vennells: Mm-hm.

Mr Beer: Can we look, please, at POL00105632. Can you see this is an email to you and others from Alwen Lyons re the “James brief”, and she says:

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

Did this represent a move, a shift in position, pre-emptively before the Second Sight Report, from “There are no bugs in Horizon” to the then altered position that’s set out by Alwen Lyons?

Paula Vennells: It was – firstly, I don’t recall – and I think Alwen said this on Tuesday as well – that there had been a line, as it were, that there were no bugs in Horizon. I don’t remember, and I haven’t seen it anywhere, as being used. But it would be completely right for the Post Office, if that was a line that it had used, to correct it.

Mr Beer: I mean, if that’s right –

Paula Vennells: But it wouldn’t have been done pre-emptively because of the Second Sight Report; it would have just been done because it was the right thing to do.

Mr Beer: If that’s right that there hadn’t been a position adopted by the Post Office of “There are no bugs in Horizon”, this email makes no sense?

Paula Vennells: No, I agree and they’re written as “lines” in inverted commas. I can only assume that this came from Mark Davies and the Communications Team. I don’t recall having a conversation about that.

Mr Beer: You tell us in your witness statement – it’s paragraph 389 on page 183, no need to turn it up – that after the receipts and payments mismatch bug and the local suspense account bug came to light, as you put it, in May ‘23 (sic), we no longer lived in a world where no bugs had been found in the system.

Paula Vennells: Yes.

Mr Beer: That was your position and the Post Office’s position up until at least May 2013, that no bugs had been found in the system, wasn’t it?

Paula Vennells: I think that’s right. What I’m trying to say here is that I don’t remember seeing it as a line in communications but, as soon as the – we had discovered these bugs, if we had been saying publicly that there were no bugs, clearly that needed to be corrected.

Mr Beer: In any event, in May 2013, you no longer lived in a world where no bugs had been found in the system?

Paula Vennells: Yes, yes.

Mr Beer: In your position as Chief Executive, was that not very significant information, “We’ve got three bugs or had three bugs in the system”?

Paula Vennells: It is significant. At that stage – it doesn’t make any difference – but there were only two that I knew of and what was very important to me – and the Inquiry can see this from emails that I sent and work that I did – was that – and I can remember saying to Alwen Lyons, actually, that I wanted to demonstrate leadership in this case, this was around the local suspense bug, that it was – that I wanted reassurance that Fujitsu had done as it said, which is that all affected post offices had been identified, that we had looked at whatever the shortfalls were, that post offices had not been held accountable for any of those or that they were held accountable for any losses, that they were all written to, which they were, and so my priority was to make sure that it was dealt with.

In terms of the second bug, the receipts and payments mismatch bug, that, I was told, had been dealt with and – again, it is in documentation – that the post offices affected by that had been written to as well.

Mr Beer: Ms Vennells, you tell us time and time again in your witness statement that, up until May 2013, you had been told time and time again that there were no bugs in Horizon?

Paula Vennells: Yes.

Mr Beer: You had been reassured; it was the basis on which you operated. Isn’t this world changing information for you?

Paula Vennells: Yes.

Mr Beer: “In fact, there were bugs; the previous assurances that I’ve been given were false”?

Paula Vennells: Yes, it was information that changed. The way that I was told about those two bugs was that they were – and I’m not referring to previous exchanges elsewhere, but they were incidents that had been dealt with, they were bugs that had been resolved and that they were red herrings to the work that – and they didn’t affect any of the branches that Second Sight were looking at and the branches that had been affected had been properly supported by the Post Office and the cases had been dealt with.

Mr Beer: Was the answer to my direct question that you had been told repeatedly for six years since you joined –

Paula Vennells: Yes.

Mr Beer: – Post Office that there were no bugs in Horizon? That mantra is key to what you say in your witness statement as to what you did as Managing Director and, previously, as Network Director; it was the consistent message from the business.

Then you’re told “No, in fact, there are bugs in the system”, and you’re telling us, “but they don’t matter, they are just red herring bugs”. Did you explore why you had been given false information in the past?

Paula Vennells: I think, to be really clear on this, because it’s important, I was told that – what I was told was about Horizon – and I’m not splitting hairs on this. I was told that Horizon – that where cases had gone to court, the courts had found in favour of Horizon, that where issues had been raised, I knew, and I say in my statement, that there were always glitches and issues with the system. I knew that from having visited branches, whether it was the egg timer issue or the blue screens or network failures or whatever, so –

Mr Beer: Let’s go back to page 111 of your witness statement, (f) you say:

“… I was not made aware between joining [the Post Office] in 2007 and …”

You’ve told us this should read “mid-2013”.

Paula Vennells: Yes.

Mr Beer: “… that any [bugs] had been identified in Legacy Horizon or Horizon Online. The first I knew that any [bugs] had been discovered was mid-2013 …”

Paula Vennells: Yes.

Mr Beer: So wasn’t it world changing information that, in fact –

Paula Vennells: I’m sorry. Yes, I’m not – what I’m not getting across clearly enough is that this was important but I was reassured at the same time that these bugs had been dealt with.

Mr Beer: Is that reassurance anywhere in writing or is it one of these corridor conversations?

Paula Vennells: I think it is in writing. In the Second Sight Interim Report, both of them are detailed and it explains, I think, pretty much what I said in more detail but the Post Office – that – this I now know was wrong: that the system had identified the issues, that they had been fixed, the Post Office has been informed and nobody had been held accountable for any losses and, where surpluses – and surpluses were left in the hands of the postmasters.

Mr Beer: Given that you’d not been told before mid-2013 about any bugs in the system and you were operating on the basis that there were none, on being told that, in fact, the system did have bugs, would you not have wanted a watertight assurance from Fujitsu that there were no more bugs?

Paula Vennells: I should have asked for that.

Mr Beer: Do I take the answer that you’ve just given to mean, “Yes, I would have wanted assurance but I didn’t ask”?

Paula Vennells: I had – at roughly about the same time or maybe a month before, I’d had a conversation with the Chief Executive of Fujitsu, which –

Mr Beer: Is this the Fort Knox conversation?

Paula Vennells: – yes – which had been based around the allegations that Mr Rudkin had raised –

Mr Beer: That’s a separate issue.

Paula Vennells: It is a separate issue but I’m not a technical expert and I’m dealing with challenges to the Horizon system and I’m working within a context where I’m taking numbers and inputs. I took these seriously and I accepted the explanations that I had been given and I knew that those explanations had been based on – but, again now, this sounds very hollow, in hindsight – on work that had been done by Fujitsu.

Mr Beer: Can we look, please, at POL00090219. This is the press statement that the Post Office put out on the publication of the Interim Report. If we scroll out a little bit, please, you’ll see, in the third paragraph and following, it says “Chief Executive [you] said”, as follows, yes?

Paula Vennells: Yes.

Mr Beer: Did you approve this statement?

Paula Vennells: I would generally. There were occasions when I may not have been able to but, generally, I would – I wouldn’t usually put my name to something that I hadn’t read.

Mr Beer: In particular, where direct quotes are attributed to you in direct quotation marks?

Paula Vennells: Yes.

Mr Beer: We know that the Post Office had been informed of the receipts and payments mismatch bug in September or October 2010; we know that the suspense account bug had been drawn to the Post Office’s attention as an operative problem by at least February 2013; and we know that the Callendar Square or Falkirk bug had been drawn to the Post Office’s attention in 2006.

Do you know why this press statement did not acknowledge that the Post Office had known about each of the three bugs referred to in the Second Sight Report for many years?

Paula Vennells: I don’t remember having any conversation about that, no.

Mr Beer: You’ll see that it, instead, concentrates upon the number of people under the system, the number of branches, the number of transactions?

Paula Vennells: Yes.

Mr Beer: Was that the mantra that the Post Office had used for many years to defend allegations against Horizon?

Paula Vennells: It was a truth and it was an explanation that was overused, and I fully accept that now.

Mr Beer: Thank you. That’s a convenient moment before we move to our next topic, sir.

Could I say, I think it’s 1.05 now, could I say 1.50, please?

Sir Wyn Williams: 1.50.

Mr Beer: Thank you.

(1.07 pm)

(The Short Adjournment)

(1.50 pm)

Sir Wyn Williams: Yes, Mr Beer.

Mr Beer: Good afternoon.

Good afternoon, Ms Vennells.

We’re about to turn to the 16 July Board meeting, 16 July 2013. Before I do so, can I ask you about a couple of issues, essentially turning on this use of the phrase “systemic” or “systemic issues” –

Paula Vennells: Mm-hm.

Mr Beer: – and your understanding of it, Post Office’s understanding of it and what it meant and how it was deployed by the Post Office.

Can we start please by looking at INQ00002021. Thank you. This a transcript of a covert recording of a conversation including Susan Crichton, Alwen Lyons and Ian Henderson about a briefing of you, yes?

Paula Vennells: Yes.

Mr Beer: You’re not on this call.

Paula Vennells: Right.

Mr Beer: The next call we’re going to look at, you are.

It seems to pick up partway through the conversation and I should say this is 22 May 2013. Susan Crichton says that she, I think:

“… had a chat with Paula earlier on and we had a couple of chats this morning, Ron and Ian, and then separately I’ve had chats with Alwen so I just thought we should probably come back together and try and see if we can move this forward. So Paula agrees that the original scope of the investigation did not go as far as looking at whether – it was the miscarriage of justice point, Ron and Ian. So that’s – that’s not what she’s looking for. She’s just – she’s looking for the systematic – or systemic, rather, not systematic – systemic weakness in the Horizon system, but not – as I said, didn’t go on to that next point around whether or not it’s caused a miscarriage of justice or a suspension of a subpostmaster, because I think that’s – once you have found it, then it’s up [to] us to look for and see what impact it might be if that happens.”

I appreciate you weren’t a party to this conversation.

Paula Vennells: Mmm.

Mr Beer: But it’s expressing a view about your approach to what should be and what shouldn’t be in the Second Sight report.

Firstly, was it your view that the focus of the Second Sight Report should be on whether there are systemic weaknesses in the Horizon system?

Paula Vennells: I can’t remember, first of all, the conversation that Susan and I had. So I don’t know whether I had raised the issue with her or her with me. I don’t remember, personally, ever sort of feeling that I had instigated the use of the word “systemic” in some way. That was – the work I understood Second Sight to be doing was part of the terms of reference which had originally been established.

I imagine the miscarriage of justice point was a conversation with Susan because I wouldn’t have expected forensic accountants to be working on issues of justice and law but I can’t remember the conversation with Susan to – and I’m not sure that this necessarily points in a particular direction that reminds me.

Mr Beer: We saw the Second Sight proposal earlier this morning.

Paula Vennells: Yes.

Mr Beer: Wasn’t the purpose of their work to seek to establish whether there had been miscarriages of justice?

Paula Vennells: You’re right. I think that was – I don’t know if those words were mentioned in the terms of reference but, if you’re telling me they were, I’m happy to accept that, but they were to look at individual cases to see whether there was anything, as a result of Horizon issues, that could have caused that. I don’t imagine Susan would ever have – and myself even less so – would ever have thought that Second Sight would then go on to look into whether there was a miscarriage of justice because, clearly, that’s a legal issue not an issue for a forensic accountant or the detail of the work they were doing it.

Mr Beer: But when Second Sight reported, you raised the issue, which is essentially referred to here, “It’s up to us to look at the impact that their conclusions had”, and we saw in your exchange with Lesley Sewell and Mark Davies this morning, you raising “Have we got to go back 12 to 18 months, have we got to 500 convictions for false accounting, have we got to go back a decade?” That was never done, was it?

Paula Vennells: No, what you saw me raising was questions about – whereas I said earlier today, naive questions, in a sense, but important questions – about what this work could do, and what – and why the Post Office wasn’t considering going back further. It wasn’t that I was saying we shouldn’t; I was simply asking the questions to understand better.

Mr Beer: The way this is explained to Second Sight here is, “You, Second Sight, on Paula’s instructions, should look at whether there are systemic weaknesses in the Horizon system. It’s for us to work out whether there have been miscarriages of justice; we will see what the impact of your report is on our convictions”?

Paula Vennells: And I think that’s what I understood because Susan was the General Counsel and that would be a decision for a lawyer to take forwards –

Mr Beer: So why wasn’t that done? Why was a mediation scheme set up instead?

Paula Vennells: I don’t know. It was Susan who called me to talk about the Mediation Scheme. We’ve seen the background of information that I wasn’t party to, in terms of the original advice from Richard Morgan or the discussion that took place. As I sit here today, we would have been better doing two different things: we could have had a mediation scheme that worked for non-criminal cases; and we could have – but in a sense, it sort of migrated to this – we could then have done a separate investigation, which Second Sight were involved in, which may have thrown up information for disclosure which subpostmasters could have taken through to appeal through the courts.

As far as I understood it, Post Office itself couldn’t instigate that process. That process – what Post Office could do was to instigate a review that potentially could lead to that.

Mr Beer: Here it records that you are not looking for them to look at miscarriages of justice and, in the event, you didn’t look for the Post Office to look for miscarriages of justice either, did you; you set up a mediation scheme instead?

Paula Vennells: We set up a – I don’t think I understood at this stage – and I don’t think others – I don’t think I understood, when we set up the Mediation Scheme, that it was going to finish in the way it did for the criminal cases. The Post Office – the very original legal advice that Susan took from Richard Morgan was then almost repleted two years later by Brian Altman, I think – I think it was Brian Altman – to say that you can’t resolve criminal cases through a mediation scheme and the advice was very strong that the Post Office shouldn’t put criminal cases through the Mediation Scheme, and what it should do is to continue to do the detailed investigation, which itself might then provide subpostmasters with information to take through the Court of Appeal, and some had already gone into CCRC.

Mr Beer: You knew that James Arbuthnot’s main concern was miscarriages of justice, didn’t you?

Paula Vennells: I did yes.

Mr Beer: Can we turn, please, to SSL0000128. This is a transcript of a covert recording with the Post Office team and you of 2 July 2013. Can we look, please –

Paula Vennells: This is with Second Sight and the Post Office team, yes?

Mr Beer: Yes. Sorry, Ian Henderson and Ron Warmington are both on the call. We will see in due course that, on the Post Office side, there is included Lesley Sewell, Simon Baker – I think that’s it. If we look at the foot of the page, please. Simon Baker says:

“Just to let you know, Paula has now joined us.”

Then top of the next page, you say:

“Hi, Ian”, and Mr Henderson reciprocates.

Then if we go to page 3, please, under “Ron Warmington”, he says to you and the call:

“His [that’s Mr Arbuthnot] main theme continues to be the possibility, whether there exists the possibility of wrongful prosecution or, for that matter, wrongful civil action, but he’s less concerned about that.”

Mr Henderson: “He’s certainly referring to miscarriages of justice. We’ve obviously briefed him on the defect issue, and I don’t know to what extent he has been previous sort of briefed on that, but he seemed very concerned about that. He didn’t, you know, suggest that it was a cover-up but he said ‘I find it quite astonishing that it is only now that information is coming to light, bearing in mind that these were, you know, events and so on that occurred you know up to three years ago’.”

Simon Baker: “just for the record, before the room can be clear … written to the subpostmasters about that and how many court cases we had mentioned … if we … for information only.”

Lesley Sewell: “… in terms of responding to that, can we make it clear that that is all in the public domain?”

At this point, did you understand that to mean the information that Second Sight had uncovered about the existence of bugs, Simon Baker and Lesley Sewell were saying was already in the public domain?

Paula Vennells: I think Lesley here is saying something that I remember her being irritated over, which was that she had said – and I think she said in her evidence last week – that she had told Second Sight, and I think it was being said that Gareth Jenkins had told Second Sight, and I think what she’s referring to here is that it was Post Office who told Second Sight, there was no cover-up about that, and this was about the two bugs. I don’t know what happened about Callendar Square/Falkirk.

Mr Beer: Was she saying there that all of the bugs were in the public domain?

Paula Vennells: She is saying that there but whether she was – my recollection was that her emotion, as it were, was around the fact that it had been said somewhere that it was Gareth Jenkins who had told Second Sight when Lesley – I understood it was clear that it was Post Office that had told them.

Mr Beer: So “certainly no cover-up” but it’s absolutely “in the public domain”. Was the existence of the receipts and payments mismatch bug absolutely in the public domain as at July 2013?

Paula Vennells: I think she’s referring here to what was in the Second Sight Interim Report or the –

Mr Beer: This is before the Second Sight Interim Report?

Paula Vennells: What date is this, please?

Mr Beer: 2 July.

Paula Vennells: Well, it wouldn’t have been in the public domain by then, no.

Mr Beer: But she’s saying it is. She’s saying it is absolutely in the public domain?

Paula Vennells: I think – well, I can’t comment exactly on what Lesley is saying here but I’m trying to help by saying that my recollection was that her response – it was the word “cover-up” because I think she was responding to the fact that somebody had said that Post Office hadn’t disclosed these bugs and her view was that the Post Office had disclosed the bugs to Second Sight – oh, and of course, in terms of them being in the public domain, the postmasters had been written to. So you’d have to go back to Lesley to get –

Mr Beer: That was putting it in the public domain, was it?

Paula Vennells: Sorry?

Mr Beer: That’s what you understood “putting it in the public domain” to be?

Paula Vennells: That was my understanding of what Lesley was meaning by this comment, at this distance from the conversation.

Mr Beer: Yeah, that they’ve been through court cases. Was she saying that these bugs have been disclosed in court cases, to your understanding?

Paula Vennells: I mean, that would be –

Mr Beer: Was that something she said to you, “Look, we’ve disclosed these bugs before, receipts and payments mismatch bug and local suspense account bug, in court cases, no cover-up here”.

Paula Vennells: No, I don’t think so, Mr Beer. My only recollection on this is what I’ve just said, which is she wanted to reassurance me that it was Post Office that had told Second Sight, not Mr Jenkins, and I can’t comment on the line about other court cases but there is a possibility that that’s the link through, because the reason Gareth Jenkins was stood down is that he hadn’t mentioned – I’m not entirely clear, I’m sorry.

Mr Beer: Okay. Mr Henderson:

“… I think his point was, you know, until the last sort of few days, he was certainly unaware of that, and I think there was a feeling, you know, bearing in mind that this investigation was set up 12 months ago, there was a lengthy and protracted build-up to that, you know, why is it only now that he is hearing about this? Now, you know that may be a valid point.”

Mr Warmington: “Yes, he said something like, ‘They haven’t told me about it’, or, ‘They hadn’t told me about it’.”

Simon Baker: “I think we ought to register that point. I think us discussing it is probably not going to – okay, can we just keep going then. What else transpired at the meeting?”

There’s then some discussion about what transpired at the meeting between Second Sight and Mr Arbuthnot. Then, at the foot of the page, Lesley Sewell, four lines from the end:

“… the other point around the system itself in terms of the cases, there’s nothing material been found in terms of Horizon. Was that made clear to James?

Ian Henderson: “Well, no, because like us he is using this broader definition of Horizon, and I think like us – I know, Simon, you said yesterday we’ve just got to agree to differ. I think, if you look at that wider definition of Horizon, if you look at the totality of the user experience, you know, what you, I think collectively sort of identified as sort of, you know, process changes, opportunities, and so on, he is putting more into the category of … using that definition, sort defects in Horizon …”

Lesley: “Sorry to jump in but that’s not what we talked about yesterday. We were absolutely clear yesterday in terms of how we carve up each element of the process so … the system so that we are absolutely clear where we’ve got the issues which we do need to address.”

Ron Warmington: “Lesley, we are crystal clear on that. However, I don’t think you’ll find that he cares. From his viewpoint, it doesn’t matter whether it’s software code or the procedures.”

Then there’s an example of a spot review involving scratchcards.

If we go over the page, please, four paragraphs in, Ian Henderson:

“Simon, the message is: don’t rely on this narrow definition of Horizon. I think, frankly, any references to software and so on are not going to help your case. James is operating well beyond that. He … like us, is looking at the totality of the user experience when he’s talking about Horizon.”

Over the page, please, to page 7, four paragraphs in:

“Simon, I don’t think we can be categoric like that. Trying to compartmentalise frankly is going to backfire on you. That’s the message we’re picking up from James’ office. He has got no time whatsoever for these semantic definitions and distinctions … he wants all of us to stand back and actually, you know, think about the bigger picture and the totality of the user experience.”

Then foot of the page, you say:

“I think we need – I mean, I understand the message you’re giving us. I’ve [something] semantics. I think there are very different things here between – you know, a systemic problem with Horizon system that brings into question all of the transactions, and the fact that it’s not a user-friendly experience for user subpostmasters and we need to … you know, and I said this yesterday, the number of transactions we do, the number of branches that run and the number of complaints that we’ve had, even though we’ve been out and advertised and been very open about them.”

As a result of this conversation that you were a party to, what did you understand Second Sight to be saying as to their approach to the phrase or definition of “systemic issues”?

Paula Vennells: They were – and there was a line in here that we’ve looked at – they could understand the difference that – what was, I think, going on here, and then there is further documentation about it, is that as the Interim Report was published, it was important to the Post Office to make the distinction between the findings of the report about the system so – which were, at that stage, they had so far found nothing – no systemic issues to the Horizon system, and the wider system issues around training and support –

Mr Beer: Stopping there –

Paula Vennells: – and –

Mr Beer: What do you understand “no systemic issues with the Horizon system” to mean?

Paula Vennells: At that time, my understanding – because we were trying to make the clarification, so there could be no misunderstanding – was that they had found no systemic issues with the technology but they had –

Mr Beer: What does “systemic issue” mean?

Paula Vennells: – found – so something that was wide-ranging across the system – they make the point in there the scratchcard issue – which, by this stage, had been fixed – had generated, I think – was it 700,000 transaction corrections? It was a systemic issue. It was something that could have affected a single post office and affected a number of them, but what they were also saying was that they had come across other issues around processes and support and training.

And what Post Office was trying to do at this stage was to accept both, accept what they were saying, in a sense – although on the training and support issues I think there were some challenges – to make sure that when any reporting on this happened in the media, there wasn’t a headline that said, “bug’s been found in” – or – in the Post Office system. So I think that was the nature of this conversation at this stage.

And I think Second Sight understood that, as did Mr Arbuthnot, because we had that conversation later, and there is a minute on that somewhere.

Mr Beer: Did you understand “systemic issues” to mean an issue which affects the entirety of, ie all, of the system?

Paula Vennells: Do you mean including the training and support and process issues?

Mr Beer: No, just on the technology front.

Paula Vennells: I think at this stage we had understood it to mean the technology front.

Mr Beer: Yes –

Paula Vennells: Yes.

Mr Beer: – ie a systemic issue relating to the technology –

Paula Vennells: Yes.

Mr Beer: – in order to be a systemic issue, had to affect the entirety of the estate on that issue?

Paula Vennells: Yes, or a scale of branches, yes.

Mr Beer: Or a scale of branches?

Paula Vennells: Yes, so –

Mr Beer: What was the scale of branches that it had to affect to be a systemic issue?

Paula Vennells: The – I’m simply thinking about the – I think it was the scratchcard issue that was given as an example. That affected numbers of branches but I don’t think all of the branches. So it wasn’t – it was a system issue in terms of interfaces and some branches – actually, that was probably –

Mr Beer: What about an issue that affected the balancing of 500 branches; was that a systemic issue?

Paula Vennells: I think I had taken – I had accepted the definition of “systemic” that Second Sight themselves had said.

Mr Beer: Which was?

Paula Vennells: I wouldn’t have said – I can’t remember. It wasn’t the point we were talking about here, it was earlier. They had talked about an issue that would – I think it was – they talked about system-wide, or something like that.

Mr Beer: Can I understand your evidence correctly: you, at the time, understood Second Sight’s reference to “systemic issues” as meaning an issue that affected, on the technology front, all of the estate in relation to that issue or a very large part of the estate on that issue?

Paula Vennells: Yes, I think so.

Mr Beer: Would it cover an issue which affected the balancing of 500 branches?

Paula Vennells: That would be a serious issue. I don’t know that I went into any numbers of branches. I didn’t think about numbers of branches. I simply accepted the definition that they, as experts, had given, and I think their wording was – it wasn’t every branch but it gave you an indication that it covered a large number or it may have been system wide, I can’t remember.

Mr Beer: You know that the Post Office went on to use this phrase –

Paula Vennells: Yes.

Mr Beer: – year in, year out afterwards –

Paula Vennells: (The witness nodded)

Mr Beer: – in order to defend its system?

Paula Vennells: Yes.

Mr Beer: Did not occur to you that there was a category of case involving a large number of branches, which may have experienced a problem with Horizon’s systems but which didn’t affect every branch?

Paula Vennells: I don’t imagine that I ruled that out at all because the ambition behind the scheme that was put in place was to look at all of the branches that came forward, and all of the issues that came forwards.

Mr Beer: Can we turn, please, to the Board meeting of 16 July, by looking at POL00099218. This is a report prepared by Susan Crichton for that Board meeting, entitled “Post Office Board, update following the publication of the Interim Report on Horizon”. It’s dated 12 July 2013. So I’m going to call it the 12 July Board report.

You tell us in your witness statement, it’s paragraph 519, that this was made available to you at the time, before the 16 July Board meeting, correct?

Paula Vennells: Yes, yes.

Mr Beer: The purpose of the paper is recorded to be to:

“Update the Board on the latest events; and

“Seek input as to how the business moves forward with the three new initiatives outlined in the … press release of 8 July and explored further in this paper.”

If we scroll down – and there’s some background. Then if we look at “Current activity under way”, and then go over the page, 3.7 records one of the pieces of activity under way is:

“On the advice of our external criminal lawyers we have immediately begun a review of our criminal cases conducted since Separation on 1 April 2012. More detail [on] this is set out in Annex 1.”

That date there, the separation date of 1 April 2012, as being the date of the review, I think, must be an error. That was the date of separation but it wasn’t the date that the review went back to –

Paula Vennells: No.

Mr Beer: – as we’ll see when we look at annex 1 itself. They went back to January 2010.

Paula Vennells: Yeah.

Mr Beer: If we scroll down, “Proposed Way Forward”:

“4.1. The Working Party …

“Overview: We will establish a working party (to include the JFSA) to complete the review process and look at the thematic issues which have emerged …

“Continued involvement of [Second Sight]: Following the meeting with [James Arbuthnot] and the MPs and the comments made in the House it is clear that [Second Sight] will have to continue to be involved in this matter. We are currently considering how best to manage this and to use the work already completed by them, mindful of the need for their report to remain independent, [and] a need for a cap on their costs. In addition followed the statement in the House we will need an independent chair for this group.”

Can you help us, was it the original plan, as per your email to Lesley Sewell and Mark Davies, to part company from Second Sight?

Paula Vennells: My email didn’t say that as an action. My email didn’t refer to Second Sight and, as I’ve said this morning, we were considering whether or not we could bring in additional resource to support Second Sight, whether their involvement should end. There was, I remember – or there were, I remember, questions from the Board about whether Second Sight should continue and it became very clear that they should, because they had the ear and the confidence of the MPs and the Minister and that was important, and so they did.

And so what the – and, again, this isn’t my paper, this is Susan’s paper, but I think, from memory, what the Board then asked us to do was to think about how we could support Second Sight so that the work could be progressed at more pace and closer to the budgets which they had originally agreed, or they were about to sign off.

Mr Beer: You make the point this is Susan’s paper and not your own. You went on to present this paper and –

Paula Vennells: I can explain why, if that’s helpful.

Mr Beer: We’ll get to that but the short point is she was made to sit outside on a chair?

Paula Vennells: Yes, yes.

Mr Beer: If we go to page 3, please. Under the heading “Next steps” if we go down, 4.6:

“A proactive approach – there are a number of areas where the Post Office wishes to take a proactive approach, for instance looking at processes for managing our relationship with our subpostmasters. Further details will be shared …

“A reactive approach – in respect of the criminal cases the Post Office should wait for those to be overturned via the Court of Appeal and for claims for compensation to be made. We [will] then decide whether to settle or fight …”

Why was a proactive approach being taken to the management of relations with subpostmasters, but a sitting back, a reactive approach, being taken to miscarriages of justice?

Paula Vennells: I can’t really comment on the criminal legal side of things. I am not a lawyer and I know you discussed this – or Mr Blake, I think, discussed this – when Mrs Crichton came in last week, and I can’t remember what she said in her evidence but this was her recommend, and my recollection at the time was that, as I said earlier today, that criminal cases had to go through the Court of Appeal for any resolution to be reached.

Mr Beer: That’s a truism, but it doesn’t tell you anything about what the organisation responsible for the prosecutions in the first place should itself do, to uncover material, to review material, to be an honest broker, to allow the Court of Appeal to fulfil that function, does it?

Paula Vennells: Yes, I agree and I said this morning, it would have been better if we had done a separate – completely separate investigation into this. At the time, I and the Board took the advice from the Legal team and the lawyers that they were working with that this was the way to do it. It was clearly completely wrong to put criminal cases into a mediation scheme that couldn’t have resolved it but, in the Mediation Scheme documentation, it allows for that, and there were questions –

Mr Beer: Was that a deliberate strategy to do that?

Paula Vennells: No.

Mr Beer: To lump these things into –

Paula Vennells: I’m sorry, I –

Mr Beer: – into a process that you well knew had no facility to deal with them?

Paula Vennells: No, not a deliberate strategy on my part – at all.

Mr Beer: Can we go over to page 4, please. This is the annex that was referred to and is Ms Crichton’s note on the “Details of the Criminal Cases Review”. It records:

“Post Office have been advised by our external criminal lawyers to undertake a review of all cases going back to the time of the migration from old Horizon to Horizon Online … – [ie] 1 January 2010 – and this has already begun.”

Paula Vennells: Yes.

Mr Beer: That’s the correction to the main paper –

Paula Vennells: Yes.

Mr Beer: – that I mentioned earlier.

“They are essentially looking at whether or not anything in the [Second Sight] Interim Report should be drawn to the attention of any defendants (current or past) and if so they will be writing to the relevant defendants providing them with a copy of the … report. We have a continuing legal duty as prosecutors to do this.

“It is important to note that we believe … that we have undertaken [about] 55 prosecutions a year for the last 10 years. [The lawyers] advised us that they believe there will be around 5% where they need to disclose additional evidence and it will be up to the defence lawyers to consider the evidence and apply to the Court of Appeal.

“Each individual has to seek leave”, et cetera.

“We may also face civil suits for wrongful conviction. The consequences of this …”

I think “the courses of action are”:

“Malicious Falsehood …

“Defamation …

“Wrongful termination of their contracts …

“Harassment …

“1.4. If we abandon prosecutions we may also face claims for, eg malicious prosecution.”

Over the page – oh, that’s the end. Thank you very much.

Paula Vennells: Excuse me, if you remember this morning I mentioned that I had a recollection about the external lawyers thinking there were a small number of cases, I think 1.1 may be a reference to that.

Mr Beer: Ie the 5 per cent?

Paula Vennells: The 5 per cent, yes.

Mr Beer: Can we look, please, at the agenda for the meeting. POL00371898. We can see at item – this the agenda for the meeting on 16 July 2013. If we scroll down to item 9 we can see that Susan Crichton was, after lunch, to speak to the issue of group structure, yes?

Paula Vennells: Yes.

Mr Beer: Then earlier, before lunch, “Horizon Update”, item 4, Susan Crichton and Mark Davies were to speak to that issue, yes?

Paula Vennells: Yes.

Mr Beer: And was that the plan so far as you were concerned as you walked into the meeting?

Paula Vennells: It was the plan as far as I was concerned until very shortly, either before the beginning of the meeting, or the break. Now I’ve seen the agenda it might have been before the break. I was told by Alice Perkins that she – and this was a complete surprise to me – that she was planning to stand Susan Crichton down and, I assume, Mark Davies, because she wanted a full and frank discussion in the Board meeting, and I think I said two things, I can’t recall exactly. But, first of all, that seemed unfair because Susan had written the paper – and this was a very important matter – and so the second thing was how were the Board going to be properly briefed on this, and her response to me was “Well, you can table the paper”.

Mr Beer: Sorry, stopping there, presumably you said, as you’ve said to us a number of time frames, “But I’m not a lawyer, I don’t know anything about this”?

Paula Vennells: I did, exactly that. I said, “I can’t possibly table that paper” and her reply to that was “Well, you can talk to” – you know, I was familiar with some of it clearly, I could talk to what I could talk to and the questions that I couldn’t answer could be picked up later, and so that happened, and I felt uncomfortable about it.

Mr Beer: Can we look at what you said in the board meeting, POL00021516. These are the minutes of the meeting on 16 July. We see that you are recorded as being present. If we go forward to page 6, please. It’s recorded that you provided a Horizon update, and that’s correct, you provided –

Paula Vennells: Yes.

Mr Beer: – the Horizon update; is that right?

Paula Vennells: Yes, that’s right.

Mr Beer: You presented the Susan Crichton 12 July Board report to the board?

Paula Vennells: Yes, I’m not sure entirely how that happen but, yes.

Mr Beer: It records that you explained that:

“… although the Second Sight Report had been challenging it had highlighted some positive things as well as improvement opportunities.”

Is that really how you read the Second Sight Report?

Paula Vennells: Well, that is what is recorded, so I imagine that that was what I said in the meeting, or that was what was taken out of the discussion in the meeting from the paper.

Mr Beer: Isn’t that to put some – to put it mildly – spin on the Second Sight Report? It highlighted positive things as well as improvement opportunities?

Paula Vennells: I don’t believe I was doing that. The Board had the paper and they had the – so they had this Board paper and, by this stage, I think the Second Sight Report had been circulated to the Board, and –

Mr Beer: So they could read for themselves –

Paula Vennells: – it was an interim –

Mr Beer: They could read for themselves whether the thing to take from it was that there were positive things as well as improvement opportunities?

Paula Vennells: I say, first of all, that it had been challenging, and then I say – and maybe there’s a comma missing, “It had highlighted some positive things as well as investment – improvement opportunities”.

Mr Beer: You say –

Paula Vennells: And it had been challenging. There were numbers of challenges in the report, particularly around the training and support issues, and those were the improvement opportunities that needed to be dealt with.

Mr Beer: You –

Paula Vennells: I can’t remember what the positive things were.

Mr Beer: – carry on to say:

“The business had been praised in Parliament for setting up the interpreter review; the proportionality of the tiny number of cases had been emphasised; and no systemic issues had been found with the Horizon computer system. However, there are cultural issues which had to be addressed to improve the support we gave to subpostmasters. This was now a catalyst to make changes in the business.”

Paula Vennells: Yes.

Mr Beer: Then the Board is recorded as being concerned that the Second Sight review opened the business up to claims for wrongful prosecution. What did it say, the Board members –

Paula Vennells: I don’t recall this because, when I read this minute more recently, the main recollection I have of the discussion – I mean, clearly this is discussed, but I don’t recall this. My main recollection was around all of the criticisms that had been made that the business had yet been able to respond to, and I don’t – I mean, this is a minute of a Board conversation. This isn’t a minute of what I presented. So I’ve no reason to doubt the minutes at all but I don’t recollect the board asking if Susan was implicated in any way.

Mr Beer: I haven’t come on to that yet.

Paula Vennells: Okay, I beg your pardon.

Mr Beer: I’m just asking about whether the Board said to you that they were concerned, it was concerned, that the Second Sight review opened the business up to claims for wrongful prosecution?

Paula Vennells: As I say, I can’t recall that.

Mr Beer: Do you know how the Second Sight Report might open the company up to claims for wrongful prosecution; I thought it had found no systemic issues?

Paula Vennells: Which is what it said. I don’t know whether at the time I understood how the Board – whoever in the Board had arrived at that particular conclusion. Um –

Mr Beer: Anyway:

“The Board asked if Susan Crichton … was in any way implicated in the prosecutions.”

You said that:

“… up until they eighteen months ago, Royal Mail Group had run the Criminal Law Team and many of the cases in the review had arisen before separation. [You] explained that the Business was a prosecuting authority and as such brought its own prosecutions. However since separation the General Counsel had proposed moving to the more normal position of using the CPS for prosecutions; this was being explored.”

Is that right, as at 16 July 2013, using the CPS to prosecute was being explored?

Paula Vennells: I don’t know how much it was explored. The only recollection I have – and it’s a fairly constant recollection about discussions on the CPS – was that whilst that would have been – I think, for those of us who were lay people in the sense of legal expertise, that would have been an option that should have been considered. The constant feedback we had about the CPS was that they were stretched, that there were budget issues, that there were resource issues. There was a further point – and a lot more detail in an advice that Brian Altman –

Mr Beer: Ms Vennells, I’m just asking at the moment, did you tell the Board on 16 July 2013, that –

Paula Vennells: If the minute captures this, then yes.

Mr Beer: – the use of the CPS was being explored?

Paula Vennells: Yes.

Mr Beer: Where did you get that from?

Paula Vennells: I can only imagine the General Counsel.

Mr Beer: Susan?

Paula Vennells: Yes.

Mr Beer: “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.

“The board accepted it was an independent review and therefore things could happen that were beyond the control of the Business.

“… the things that could be managed by the business needed to be well managed with strong leadership. The Board asked [you] if [you] had considered changing the person leading for the business.”

That’s a reference to Susan Crichton?

Paula Vennells: It is, yes.

Mr Beer: Did they ask you had you considered relieving her of her duties?

Paula Vennells: I don’t recall today but I’m sure they did, if that’s captured in the minutes.

Mr Beer: What did you say?

Paula Vennells: I think my response was, which is documented, further on –

Mr Beer: Yes –

Paula Vennells: – is that I thought that Susan was the right person to lead it going forwards and that what we needed to do was to support and put better project management in place to help her do that.

Mr Beer: You are recorded at (f) as saying:

“[You] had considered this and recognised that the business did not have good governance in place around Second Sight …”

Why did you say the business did not have good governance in place – I’m going to say “concerning Second Sight” rather than “around”.

Paula Vennells: Yes, I don’t know whether those are the words or not, but I – what the business didn’t have in place, which it then put in place, when we went into the Mediation Scheme, was proper project and programme management around making sure, as much as it could, although that continued to be a challenge, that the work was progressed in a reasonably efficient and in a manner that was within budgets that had been approved, because the Board issues were particularly timing and budget, at this stage.

Mr Beer: You’re recorded as saying that the independence of the review, amongst other things, had made this complicated? Why had the independence of the review made good governance complicated?

Paula Vennells: The way an organisation like – well, any large organisation like Post Office would work, with independent and external consultants, is that you would normally agree a work plan and you would have workstreams and you would have timescales related to those workstreams.

This was – for me, I think as well as everybody else, this was a very unusual situation where Second Sight came in, and they were taking – they were independent, and that was the case all of the way through. They had an idea of how they would approach things. They had been asked to keep the JFSA on board or happy. They had MPs who were speaking to them as well, and so this was a very complicated context in which to manage a piece of work, and the Board hadn’t I think really understood the complexity of that.

The directors around the Board table, the NEDs, other than the Chair, had no experience of the complexities of work involving these sorts of bodies and MPs, and their view was this ought to have been very straightforward and why hadn’t it been so?

Mr Beer: You’re asked to conduct a post-mortem, a review –

Paula Vennells: Yes.

Mr Beer: – is that right?

Paula Vennells: Yes. In fact, I think I had suggested that to the Chairman before this meeting.

Mr Beer: So you presented Susan Crichton’s Board paper in her place?

Paula Vennells: Yes, I –

Mr Beer: She was made to wait outside on a chair –

Paula Vennells: Yes, and I felt bad about that.

Mr Beer: – sitting there like a naughty schoolgirl.

Paula Vennells: It must – she must have felt terrible.

Mr Beer: You presented her paper, you took over the issues, didn’t you?

Paula Vennells: I imagine what I did was certainly not present her paper, because I was not Susan, I was not a lawyer. I suspect what happened is that I asked the Board if they had questions on this paper and, where I might be – where I answered them – where I could answer them, I would and, where I couldn’t, there was an opportunity where the Chairman had said that people could speak to Susan but, from memory, there was not a formal presentation of this paper because what happened is the Board had a pretty free ranging conversation about how the Post Office had not managed this piece of work better.

Mr Beer: Susan Crichton has told us in the Inquiry that she spoke to you before the meeting to say that, in her view, there would be many successful claims against the Post Office arising from past wrongful prosecutions; did she tell you that?

Paula Vennells: I have no recollection of that whatsoever.

Mr Beer: That would be very significant information, wouldn’t it?

Paula Vennells: It would. Could you remind me? I heard Susan’s evidence. I don’t –

Mr Beer: Yes. She said that she spoke to you before this meeting to say that, in her view, there would be many successful claims against the Post Office arising from past prosecutions?

Paula Vennells: I don’t recall that at all. My recollection is what is in her paper, which is that the lawyers had found – thought it would be about 5 per cent of the cases they’d looked at.

Mr Beer: If she had told you that, that would be about the last thing you wanted to hear, wouldn’t it?

Paula Vennells: No, not at all. I approached this in – Mr Beer, I would not cover anything up in this process. That would not have been –

Mr Beer: That – I’m sorry.

Paula Vennells: I’m sorry, because this is an important point, if –

Mr Beer: That’s why I’m asking you about it.

Paula Vennells: Yes, I’m sure it is. If Susan had explained that to me very clearly, why, in her paper, did it say 5 per cent? And, if she had said that to me, I never once withheld information from the Board and I have to go in and brief her paper. I’m very sorry but my recollection on that is I don’t recall it.

Mr Beer: Did you take over her paper and present it, or the issues in it, to prevent the Board from hearing her opinion?

Paula Vennells: No. I’ve told you exactly what happened, which is I was expecting her to come in and, minutes before that should have happened, the Chairman told me she had decided to stand Susan down.

Mr Beer: Did you tell the Board about what you had been told, concerning evidence that the Fujitsu expert had given to courts which had led to prosecutions, in which he had not disclosed his knowledge of bugs in Horizon?

Paula Vennells: That I can’t remember because the way it was presented to me was not in the way that I now understand it to have been so important, and I didn’t see the Simon Clarke advice of 15 July. It was presented to me as I’ve explained, as a frustration, and something that seemed – that was a logic that I couldn’t follow – that Lesley Sewell had explained and I couldn’t follow either.

I can’t imagine that I would have withheld that level of information but what you’re asking me about is much more serious, and I didn’t brief the Board on that aspect of it because I didn’t know.

Mr Beer: Let’s try and break that down. You hadn’t got a copy of the Clarke Advice?

Paula Vennells: No.

Mr Beer: You had been told by two people, Lesley Sewell and Susan Crichton –

Paula Vennells: Yes.

Mr Beer: – that there was a concern that the Fujitsu expert had given evidence to courts in which he had failed to reveal his knowledge of bugs, errors and defects in Horizon?

Paula Vennells: Yes.

Mr Beer: There’s no record of you telling the Board about that?

Paula Vennells: No, there isn’t, and I don’t know at what stage the Board became aware of it.

Mr Beer: Susan Crichton –

Paula Vennells: But if I may, the brief that was going to the Board was in Susan’s paper.

Mr Beer: Susan Crichton did know about the Clarke Advice, didn’t she?

Paula Vennells: I understand – yes, obviously she knew about the Clarke Advice.

Mr Beer: Ought this to have been the occasion on which the Board was briefed about the Clarke Advice?

Paula Vennells: Yes, it should have been in her paper because she was going to get the written evidence three days late – well, the day – she received the written evidence the day before the Board.

Mr Beer: The Post Office was in possession of expert legal advice to say “The expert we’ve relied on in criminal proceedings to secure the conviction of subpostmasters is an unreliable witness and breached his duties to the court”. The person in possession of that information is sitting outside on a chair. You’re not telling the Board about it. You have a summary of it on your account. How has this state of affairs come about?

Paula Vennells: I have been put in a position in the Board meeting with no notice to present the paper by Susan. As I say, I don’t think there was a formal presentation of it because what took place was a wide-ranging conversation that the Board is dissatisfied and this wasn’t in Susan’s paper. So I had no prompt – first of all, I had no understanding about the degree of the seriousness of it, and we had, by that stage, stopped most of the prosecutions. So, in terms of it being an meet need of no longer having an expert that wasn’t – which might have been my reflection, that wasn’t front of mind.

Mr Beer: So this is a series of unfortunate events?

Paula Vennells: No, I was asked – I was asked to take this paper in that Susan had prepared, that was not in the paper, and I don’t suppose it would have crossed my mind to have raised that because I was not aware at the time just how serious an issue it was.

Mr Beer: What would you say to the suggestion that this is the Executive Team shielding the board from the Executive Team’s dirty laundry?

Paula Vennells: I’d say it was completely wrong.

Mr Beer: That “We can manage the problem away. If the Board know, they will ask the proper questions. They may ensure that we disclose all of this stuff to subpostmasters, to the CCRC, to the public and to Parliament”?

Paula Vennells: I feel very strongly about that because one of the elements that was so important to me was to have the Board challenged, because I was very aware that I was not a legal expert – or an IT expert, for that matter, but in this case a legal expert – I relied on my Board, and I think there is evidence in the Board Effectiveness Review that I took feedback and challenge, and I valued it.

Mr Beer: The minutes note a list of items for noting, which include a Significant Litigation Report, which itself refers to a separate standalone report for the Board. Can we look at the separate standalone report to the Board. POL00099218, and can we look at page 4, please. If we scroll down, it’s 1.1:

“… 55 prosecutions a year for the last 10 years.”

So about 550 prosecutions in which there may be a need to disclose in 5 per cent of cases the “additional evidence”.

What did you understand the additional evidence to be?

Paula Vennells: I think this was relating to the Interim Report. I now know that it also included the Helen Rose Report but I don’t believe I knew that at the time.

Mr Beer: So the Board knew, from at least mid-July 2013, that there was a material risk that around 5 per cent of prosecutions undertaken in the name of the Post Office needed to have disclosure that might lead to appeals to the criminal courts being made; is that right?

Paula Vennells: Yes.

Sir Wyn Williams: Sorry, what was that date again, Mr –

Mr Beer: Mid-July.

Sir Wyn Williams: Mid-July, yes.

Mr Beer: 16 July, to be precise.

Were you concerned about that number of cases, or did you regard it as small or trifling?

Paula Vennells: No, not at all. This was an extremely serious matter and was something that I was relying very heavily on the Legal team to lead and advise on. I do remember the last line of paragraph 1.2, as well, that there had been – so this was a serious concern but there was a small reassurance that it was no means certain that each appeal would be successful –

Mr Beer: What point are you making there?

Paula Vennells: In that I think the – I think this is covered somewhere else in another document, that Cartwright King had said that – let me make it very clear, first of all – any wrongful prosecution, any at all, one, would have been unacceptable and the Post Office needed to do whatever it needed to do in that instance.

There was a concern about the number of prosecutions that the Post Office had conducted and that its external lawyers were saying that it was unlikely to be 550; it was likely to be potentially 5 per cent of that number, and that, from their view, having reviewed this, there was a view that perhaps even fewer than that would be – would have been unsafe convictions.

And the Board, I think, was – and this is, again, this is Susan’s paper. This isn’t information I’ve presented but the Board would want to have an idea of the scale of what we were going to be dealing with.

Mr Beer: How did it react, the Board, to that information, in your presence, “we may have only wrongfully prosecuted a small number of people”?

Paula Vennells: I don’t recall because I don’t know how much of Susan’s paper we actually got through. As I said, I really don’t think that I presented it page by page, point by point.

Mr Beer: Did you say, “I’m not a legal expert, the person that is is sitting outside on a chair”?

Paula Vennells: I’m sure I did but the Chairman, I think, positioned it very clearly at the beginning that there was a reason – I think she possibly had the thought of bringing Susan in at some stage, I’m not sure how Susan would have felt about that. But the Board ran out of time and Susan didn’t come in.

Mr Beer: Can we move on to later on the same day, 16 July, and look at POL00192088. We’ll see at the top there’s a reply from you on the morning of the Board meeting at 7.05, in response to a Mark Davies email the previous day. Let’s look at the Mark Davies email first. 15 July at 5.51:

“Paula

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

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

That’s Network Transformation?

Paula Vennells: That’s right.

Mr Beer: How would the issue rumbling on damage or hamper Network Transformation?

Paula Vennells: I believe this was Mark referring to – if there was – I’m not entirely sure. If there was either no resolution to the cases that were coming in to the scheme, or – I had a feeling this was around people being worried about the impact of Horizon, and the issue with Network Transformation is that we were closing and relocating about 3,000 to 4,000 post offices, and recruiting new subpostmasters, many with existing retail outlets that the post offices were going to be put into and I think there was a concern that it might impact people’s willingness to consider that.

Mr Beer: It wasn’t to do with Government funding, that, if this Second Sight issue dragged on, it may impact on the extent to which the Post Office was funded for Network Transformation.

Paula Vennells: No, I have seen that and I think the Chairman made a point in relation to that but that was never my understanding.

Mr Beer: Okay, I’m going to let others ask questions about the relationship between the Post Office’s conduct and Government funding. He continues:

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

“We are taking the right steps in looking to the future …”

What did you understand him, Mark Davies, to mean, “We need to take the sting out of the final Second Sight Report in advance of it being published”?

Paula Vennells: I’m not entirely sure, actually.

Mr Beer: “We are taking the right steps in looking to the future …

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

“There is an opportunity here to make a big statement about the kind of business we are and intend to be in the future.

“We can’t though issue a blank apology because we just don’t know the details of each case. At present we also face the risk of an ‘open-ended’ situation where the pipeline of cases is potentially very long.

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

“We create an independent panel to oversee cases where a [subpostmaster] feels lack of training or support contributed to an issue (therefore in addition to the legal review).

“We proactively invite people to submit their cases to the panel (including writing to the likes of those in the telegraph piece).

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

Scrolling down:

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

“Evidence is made public.

“We allocate funding to compensate in cases where training and support is judged to have fallen short (but the fund is limited).

“… this is potentially expensive and needs more thought …”

Then the top of the page. You say:

“… this is very helpful. Susan and I discussed last evening with one of our experienced lawyers, and came up with a similar idea of a discussion and resolution Forum, which could be chaired by a professional mediator.

“We should play into the Board discussion and regroup afterwards.”

Who were the experienced lawyers that you spoke to the previous evening?

Paula Vennells: I don’t recall, I’m sorry. I imagine Bond Dickinson, because I had no contact with Cartwright King. I don’t think I met ever any of the lawyers from Cartwright King.

Mr Beer: Was this where the idea for a mediation scheme was born in this exchange of emails here?

Paula Vennells: No, I think that – my conversation with Susan on the station when I’d – at the end of my journey home, was only me and her. That’s my very clear recollection of the first time that we had a conversation about a mediation scheme and, whether she had spoken to Mark as well – because I didn’t remember Mark making this recommendation until I saw this document in the Inquiry disclosures.

So whether Susan and I had had a discussion and I asked her to set up a call with somebody so that I could understand it better, I’m not sure.

Mr Beer: Let’s move forward to 26 July when you go back to the Board. POL00006590.

This a document dated 26 July. It’s further, in paragraph 1, as it says, to the Board discussion on 16 July, and:

“… provides an update on how we’re taking forward the programme of work in response to the publication of the Second Sight Report.”

Paula Vennells: I’m sorry, could you just give me the date again?

Mr Beer: 26th –

Paula Vennells: Thank you.

Mr Beer: – I think, I’ll just check that. Yes, if we go to page 8.

Paula Vennells: That’s fine, I’m happy to take your –

Mr Beer: At the foot of the page, 26 July.

Paula Vennells: Thank you.

Mr Beer: So it appears that this document was prepared, is this right, for the Board in response to the actions that the Board had asked you to take on the previous occasion –

Paula Vennells: Yes, I think so –

Mr Beer: – not the post-mortem?

Paula Vennells: No, this isn’t the post mortem, no. This is, I think, the next steps in terms of work going forwards.

Mr Beer: Then if we scroll down to paragraph 4. I should have said to start with, did you write this?

Paula Vennells: No, I didn’t write this.

Mr Beer: Who wrote it?

Paula Vennells: I think – I heard Susan question who wrote it. I think Martin Edwards wrote this, and –

Mr Beer: Your Chief of Staff?

Paula Vennells: My Chief of Staff but there is a – I mention that I have – somewhere I mention that I have offered to Susan to be able to use Martin to help her as an additional resource. Martin could only have written this with input from others.

Mr Beer: In paragraph 4, the report to the Board says:

“We have … been focusing on developing an approach to respond to these expectations which balances the requirements to be cost effective, time efficient and credible. We have two specific concerns around Second Sight’s role …

“As a two-man team they do not have the capacity to deal with all these cases within an acceptable timescale; and

“Their approach of seeking to reconcile the conflicting evidence and views of the Post Office and subpostmasters – which stems from a steer from James Arbuthnot that they needed to ‘keep the JFSA onside’ – is pushing them into an almost impossible situation, which both extends the time taken to conclude each case and, more worryingly, creates a tendency for them to place a greater weight on the subpostmaster’s version of events, irrespective of the evidence we [produce].”

Then page 2 – sorry, I should have looked at the bottom of page 1:

“We propose to address these concerns:

“restricting Second Sight’s remit to the specific task of preparing an impartial [evidential] base with no requirement to iron out any inconsistencies between the two sides’ positions. We propose that this process of resolution will instead be pursued by employing an independent professional mediator, who will seek to facilitate a dialogue between the Post Office and the subpostmaster to arrive at a sensible conclusion; and.

“changing the way we work with Second Sight, by allocating additional senior level resource with a deep understanding of the network to work closely alongside them, in order to answer their queries and help them prepare an accurate evidence base as quickly and efficiently as possible.”

Who did that person turn out to be?

Paula Vennells: I think that was Angela van den Bogerd.

Mr Beer: She was the chosen one for that?

Paula Vennells: She was the senior individual who had the expertise and the experience across the business to do the work we believed needed to be done, supported by a team who also had experience.

Mr Beer: Paragraph 6:

“The mediator … is likely to be a senior, independent lawyer with specific experience and expertise in mediation. [Their] role will be to help the subpostmaster and Post Office find common ground and hopefully some form of resolution to the subpostmaster’s complaint. They would not have authority to impose a financial settlement or any other warm of resolution on the parties.”

Then page 3, paragraph 11:

“We also considered the option of supporting Second Sight with additional capacity from another firm … However, this would not address the underlying issues … We therefore concluded that the repudiation process, alongside more collaborative joint working and no arbitrary time limit, would be the best way to balance our various objectives.”

This was the proposed ways forwards, wasn’t it?

Paula Vennells: Yes.

Mr Beer: A way forwards that meant it was impossible to deal with anyone who’d been convicted of a criminal offence?

Paula Vennells: I hadn’t read that into this.

Mr Beer: You thought that this was going to be able to resolve those complaints of those people who had been convicted of criminal offences?

Paula Vennells: We didn’t have any conversation about excluding criminal cases from this and the documentation that was produced to support the mediations – the Complaint Review and Mediation Scheme, clearly envisaged criminal cases going into it, because there were questions and answers related to if “I have a previous conviction, may I submit my case?”

Mr Beer: What was going to happen to those that were convicted of criminal offences? How was the mediator going to deal with their conviction?

Paula Vennells: Mr Beer, I don’t know. I wasn’t involved in that – if that conversation took place at all, I wasn’t involved in it.

Mr Beer: What’s happened to the “We need to review convictions going back 12 to 18 months, we need to review convictions going back up to a decade”? Has that been lost now, that idea?

Paula Vennells: I don’t – I’m not entirely sure but we did have some advice – not seen – from Brian Altman, I think, who reviewed the process that Cartwright King were going through. I believe found that it was when fundamentally sound and there was – he looked at the start point which he decided I think was proportionate at the time but that the Post Office would need to be open to that going back further if that was necessary.

Mr Beer: Were utility all of that at the time or are you repeating what you’ve now read?

Paula Vennells: That’s – that’s good question, because – I’m very clear on that now. I think at the time, that is documented somewhere. I’m fairly sure that, not in any great detail, but I knew at least some of that at the time.

Mr Beer: Thank you.

Sir, that might be an appropriate moment. I wonder whether we can break until 3.20, please.

Sir Wyn Williams: Yes.

(3.07 pm)

(A short break)

(3.20 pm)

Sir Wyn Williams: Mr Beer.

Mr Beer: Ms Vennells, can we move on to late August 2013, please, by looking at POL00116218, and page 2, and scroll down, please. There’s an email from you of 27 August to Alwen Lyons and Susan Crichton about the draft note for the Board. In the third paragraph, you address a different issue. You say:

“Susan, a couple of questions … I have just read the mediation pack tonight …”

Just stopping there, was that a collection of documents that was to be given to putative applicants to the scheme?

Paula Vennells: Yes, I think so.

Mr Beer: “… page 10 clearly states that compensation can be a possible outcome. When we discussed this, the hope of mediation was to avoid or minimise compensation but as far as I can see, the pack doesn’t really suggest any other outcome (difficult to do I know). And so this will be the page that [subpostmasters] will pay attention to. You explained that there were steps in place to advise [subpostmasters] entering the process that this was a chance to be heard and not to expect compensation. How are we planning to manage those expectations? And where compensation may be offered, you mentioned small figures in the £3,000 to £5,000 band: can we give a range of costs?”

Was it your view that mediation was to avoid paying compensation?

Paula Vennells: No, my view was, as I explained earlier from the conversation with Susan, that it would be in those cases where it was possible, a way for resolution to have a conversation between – a mediated conversation – between the Post Office and a subpostmaster, and I’m playing back to her exactly the content of the conversation and the way that she explained it to me. So what I had then seen in documentation was something that was different to what I had expected.

Mr Beer: You say here, when the pair of you discussed it, the hope of mediation was to avoid – ie it wouldn’t happen at all – or to minimise the amount of compensation. Was that your hope: that the process of mediation would avoid paying any money to subpostmasters?

Paula Vennells: No, the purpose of mediation was to seek a resolution, and within –

Mr Beer: Why does this say that there then?

Paula Vennells: Because, within that, as I say, it had been Susan’s suggestion – and it had been a conversation about whether this might or might not have been a good idea and, as she explained it, this was one of – I can’t remember exactly but, clearly, we must at this stage have had concerns about potentially paying out major compensation if it wasn’t due – there wouldn’t have been concerns about that if it was due, clearly – but the suggestion of mediation had been a way of dealing with what I expected to be cases that – where the Post Office thought resolution could be sought in that way.

And we had discussed compensation and I mention there the sort of small levels of figures, and, in fact, we did pay more than that in some cases.

Mr Beer: What you’re saying here is “We’ve got a private hope of paying out nothing. The document we’re giving to subpostmasters doesn’t tell them that”.

Paula Vennells: Well, clearly I’m saying that because it didn’t. But I don’t think it was a private hope. I don’t use that word and I’m playing back to her the conversation which had been her suggestion, which I thought sounded a very sensible solution.

Mr Beer: Was it always your intention that token payments should be made?

Paula Vennells: That appropriate payments, that –

Mr Beer: No, I’m asking was it your intention that token payments should be made?

Paula Vennells: No, and that word has been used elsewhere, I’ve seen it –

Mr Beer: And attributed to you?

Paula Vennells: – and gratuitous – yes, and – it wasn’t meant in the negative sense that could be assumed. My understanding of the Mediation Scheme is that it was going to be a conversation around resolution of issues – around understanding and hopefully reaching resolution of issues, and Susan had said to me, and I recall this today very clearly still, that sometimes only an apology is necessary.

So I had gone into this assuming that – and with no prior knowledge or professional knowledge of mediation either, as to what it could lead to and, presumably, the fact that I still have this expectation here when I had that further conversation with Susan and a lawyer, I wasn’t disabused of that view in that conversation either.

Mr Beer: Did you have a discussion, therefore, with Susan Crichton in which you expressed a hope that mediation was a means to avoid or minimise compensation?

Paula Vennells: I don’t remember having the conversation after this. I don’t know what happened after this email.

Mr Beer: No, no, before this?

Paula Vennells: The conversation – no, the conversation with Susan Crichton was that mediation could be a very helpful way of resolving the misunderstandings and issues that the Post Office and subpostmasters were facing and that it would be an independent way of doing that, that there was a process of mediation and adjudication. It wasn’t done to avoid or minimise compensation.

Mr Beer: Why did you write an email –

Paula Vennells: Because that was a factor –

Mr Beer: Why did you write an email which says, “When we discussed this the hope of mediation was to avoid or minimise compensation”?

Paula Vennells: Because that was what we discussed.

Mr Beer: Right, good.

Paula Vennells: But, sorry –

Mr Beer: That was easy then, wasn’t it?

Paula Vennells: But not as – not as the purpose of doing it, that one of –

Mr Beer: The hope –

Paula Vennells: – the aspects –

Mr Beer: The hope?

Paula Vennells: Possibly, yes.

Mr Beer: A desire, a good outcome, we don’t have to pay any money out?

Paula Vennells: I’m sorry, you’re presenting it in a way that I didn’t understand.

Mr Beer: What does the hope of mediation –

Paula Vennells: I didn’t –

Mr Beer: – to avoid compensation mean then?

Paula Vennells: Because my understanding was that the conversation around mediation was that it would – was that mediation would be a conversation and, if it was appropriate, then compensation could be paid but we were not thinking about large scale compensation. That wasn’t the nature of what I understood the issues to be. That’s what I’m trying to say here. And maybe I haven’t chosen the words well enough to represent it but it wasn’t – what I’m challenging is that I didn’t want us to, I guess, set expectations that the Post Office couldn’t meet.

Mr Beer: The subpostmasters who were raising the concerns were those that had lost money, hadn’t they?

Paula Vennells: Yes.

Mr Beer: The Post Office had forced them to make good the losses, hadn’t they?

Paula Vennells: Yes.

Mr Beer: Some of them had been pursued through the courts, yes?

Paula Vennells: Mr Beer, with hindsight, this is completely wrong.

Mr Beer: No, at the time, you knew these facts, didn’t you?

Paula Vennells: Yes.

Mr Beer: Their salaries had been docked or garnished hadn’t they?

Paula Vennells: They had agreed to money being paid back on a monthly basis, yes.

Mr Beer: Agreed?

Paula Vennells: Yes –

Mr Beer: They agreed to –

Paula Vennells: Sorry, they were obliged to, yes.

Mr Beer: Thank you. You never intended to pay out any substantial figures in compensation for those issues at all, did you?

Paula Vennells: Not in – no, that’s right. Not in terms of the Mediation Scheme, because that was not what I had understood it would do.

Mr Beer: Can we look, please, that POL00100336. This is a note in 2014, of 24 February 2014 and, if we look at page 2, we can see it’s Chris Aujard, your Interim General Counsel’s note – back to page 1 – of a meeting between you and him on the one hand, and Messrs Warmington and Henderson on the other.

Paula Vennells: Yeah.

Mr Beer: In paragraph 2, it’s recorded as follows:

“It was noted by [you] that the projected level of claims was currently [around I think that’s £100 million] …”

Paula Vennells: Yes.

Mr Beer: “… in response to which [Second Sight] noted that their back of the envelope calculation was of the order of £25 to £50 million.”

You’re recorded as observing:

“… that this was a long way from the figures that were in mind when the schemes was established, which were much smaller, and more of the nature of a ‘token’ with an apology.”

Paula Vennells: Yes.

Mr Beer: When the scheme was established, it was your intention to make mere token payments, wasn’t it?

Paula Vennells: That was the point in the previous email, is that we were looking at smaller – we could not possibly have paid out token payments for the cases that we now know about, at the time the scheme was put in place and the advice I was given is that this is the way that it would work and, as we got into more and more of the detail, and the claims came through, we were suddenly faced with a potential bill of 100 million.

Sir Wyn Williams: Sorry, Mr Beer, is this 24 February ‘14 or ‘15? I missed it.

Mr Beer: I think it’s ‘14.

Sir Wyn Williams: ‘14. Thank you.

Mr Beer: You wanted to minimise the cost to the business, didn’t you?

Paula Vennells: I had a responsibility to the Board around the budgets that had been agreed and this information was shared with the Board.

Mr Beer: You wanted to give them, at most, a meagre sum and an apology without really understanding or investigating what the cause of their problems was, didn’t you?

Paula Vennells: No, that isn’t the case. All types of cases were welcomed into the scheme but my understanding at the beginning of it was very different to what it turned out to be.

Mr Beer: Everyone was welcomed in, so long as they had a pat on the head and a token payment when they left?

Paula Vennells: I agree that it sounds like that now. This was not the case at all.

Mr Beer: You wanted everyone to get the bare minimum, to forget all of this and move on, didn’t you?

Paula Vennells: No.

Mr Beer: That can come down. Thank you.

Did you blame Susan Crichton for the Second Sight review?

Paula Vennells: I’m sorry, did I blame Susan Crichton for –

Mr Beer: Yes, the Second Sight review. The first one, the one that led to the Interim Report of the 8 July 2013.

Paula Vennells: I had a difficult conversation with Susan about what –

Mr Beer: I’m not asking whether you had difficult conversations at the moment. I’m asking did you blame her?

Paula Vennells: Did I blame her? Susan had two responsibilities on that. She had the legal oversight as a General Counsel, and she was – she herself has said somewhere – responsible for the delivery or the oversight of the project and, if the project hadn’t worked out as had been originally planned, she had some accountability for that part of it.

I didn’t blame Susan, that wasn’t my style and you will see in documents that I tried to help her through this. I challenged back to the Board when they asked whether or not Susan should lead it going forwards and my view was that, yes, she should. I then put in place some additional help and I met with her.

Mr Beer: The Board appeared to have blamed Susan for the Second Sight review. Was that in getting Second Sight in, in the first place, through her previous relationship with them, ie choosing the wrong people, or a failure to manage them once they had started their work, or both?

Paula Vennells: I think it was – and I want to be careful not to use the word “manage” in the wrong way – but I think it was the latter rather than the former. I don’t ever recollect anybody ever saying that it was – Susan had brought Second Sight in and that was the root of what the Board saw the problem to be.

Mr Beer: Okay, so they weren’t blaming her for choosing the wrong team?

Paula Vennells: I don’t think so, no.

Mr Beer: Can we look, please, at POL00381629. This is, I think, a file note of a number of meetings with Susan Crichton –

Paula Vennells: Yes.

Mr Beer: – and then some reflections by you on those meetings.

Paula Vennells: Yes, this was –

Mr Beer: The first is wrongly dated 30 September, that should be 30 August 2013; is that right?

Paula Vennells: That’s right.

Mr Beer: We’re familiar with this, so I’m going to take it at some speed. This is in Costa –

Paula Vennells: Yes.

Mr Beer: – on Goswell Road. First paragraph:

“[She] had asked me earlier in the week how I felt about her continuing in the business and what job I was expecting her to do. I was slightly surprised she had raised the issue again – we had already had a conversation where I said I wanted to help her restore her reputation after the Board discussion.”

Was her reputation such that it needed to be restored?

Paula Vennells: That was what she felt, yes. I – well, I suppose that would have been a fair reflection on her part because the Board had asked me whether she was the right person to lead it going forwards. I think that I had reassured the Board that I thought she was.

Mr Beer: Second paragraph:

“Susan was very, very angry. She yelled at me. She thinks this has damaged her reputation. She was upset that Alice had commissioned the RH [that’s the Richard Hatfield] review.”

Yes.

Paula Vennells: Yes.

Mr Beer: That’s essentially the post mortem?

Paula Vennells: Yeah.

Mr Beer: “She was cross that I hadn’t got her the [terms of reference] before I circulated it to Alice, Alisdair and [Richard Hatfield]. She was convinced there was a breakdown of trust. [Especially] between her and Alice. But with the Board generally. Although she did say that all the Board except Susannah had been in touch.

“[You] explained [you] had not had the time to give her the [terms of reference] …”

Next paragraph –

Paula Vennells: And that if she wanted to make changes to it, I was very open to that.

Mr Beer: Thank you:

“It is clear [next paragraph] that the [Hatfield] review has destabilised her. She shouted that she was looking at other jobs. She threatened that we would have to have her back, implying the importance of references.

“She raised that Alice had made mistakes. [You said] that we probably all had and Alice had accepted that [Hatfield] needed to be even-handed. I reminded [Susan] again that I had raised (with Alice) the ‘issue’ of Alice also needing to be interviewed. And I said that whilst I would be asking Alice about a couple of challenges Susan raised …”

Then:

“… (Alice believing Donald …”

That’s Donald Brydon.

Paula Vennells: Yes.

Mr Beer: “… and BIS comments about a [Post Office] cover-up?) …”

So you say there to Susan that you would be asking Alice about a couple of challenges that she, Susan, had raised, namely Alice believing Donald and BIS comments about a cover-up by the Post Office. So had Susan said to you that Alice believed that Donald and the Department believed there was a Post Office cover-up?

Paula Vennells: I’m sorry, I don’t remember, but if that’s what I’ve said – I think that’s what that implies. I don’t remember, and there’s a question mark at the end of it so it appears that I hadn’t heard that before.

Mr Beer: You say:

“[You] wanted to be loyal to the Chairman as [you] believed that she had imagined the [Hatfield] review would be a way of moving on.”

You note in the next paragraph, in brackets:

“(… Susan is clearly making lawyers notes on everything …)”, as were you, I think.

Paula Vennells: Afterwards, yes.

Mr Beer: Yes.

Paula Vennells: Yes.

Mr Beer: “(… I would like the two of them to repair the relationship. Not sure how doable the latter is, but to have it break down totally at present is not in anyone’s interests.)

“I mostly listened and took the anger. Eventually, she calmed down and I said I would (genuinely) like to help her find a way [back through]. She began to be positive again as [you] walked back to [Old Street], Susan suggested I join her and her HR team for her moving on supper. [You] said you would be happy to do that and how sorry [you] were that it had happened so quickly … she had helped make the function much stronger and [you were] grateful to her.”

Then over the page, on 2 August in meeting room, you reflected that:

“… Susan’s request to been in BD …”

Is that Bond Dickinson?

Paula Vennells: It is, yes.

Mr Beer: “… was more about her lack of confidence and decided to reassure her that I was happy to take her opinions …”

What was that about, bringing in Bond Dickinson to do or about what?

Paula Vennells: I don’t recall. I think previously she’d mentioned about – I’m not sure but I think you just have to take this at face value that, actually, I was – I had already said I thought Susan could lead through this. I had given her – we’d had a previous conversation, I’d given her some additional support and a list to things that she could do to sort of address the leadership issues around this and I wanted to show that I was confident in her.

Mr Beer: Next paragraph:

“Susan then told me it didn’t matter because she couldn’t do her job any more. The [Hatfield] review was not the right action for the business. We had ruined her reputation and compromised her. Professionally, she needed to point out that the [Hatfield] review shouldn’t happen as not being legally privileged, it could be detrimental to the business but Alice would not believe her and instead see her view as defensive. She could no longer be effective: a General Counsel cannot operate if they don’t have the confidence of the Chairman/Board/ CEO. I repeated she had my confidence and I cited other business issues in the last several days where I had sought her counsel. I am trying to repair the situation. She pointed to the impossibility of her ever coming before the Board. [You] disagreed – she will have spoken to all of the Board. And I reminded her that Alice wanted an open and even-handed [Hatfield] ‘lessons learnt’ review.

“… if she is right and the [Hatfield] review is not in the best interests of the business, then [you] needed to understand why (she is sending through the legal case). And assuming she is correct then she would need to brief me on how to present the case to Alice, and, we would need to explain at the same time how we were going to demonstrate what lessons had been learned.”

Paula Vennells: Excuse me, that may have been the point about Bond Dickinson.

Mr Beer: I see:

“Hatfield is due to see Susan and Angela on Wednesday [morning]. If I am going to stop or pause the review, I need to stand him down from those two meetings. Seeing [her] in her current frame of mind will not help the business or her. As [Hatfield] is a past colleague of Alice (there are couple of lessons to be learnt here too), then it will be sensible to tell Alice first.

“[You wondered] if Susan [was] overreacting to the [Hatfield] review. But she could be right. She will undoubtedly make the legal case against it. Emotionally, she may just throw in the towel if we decided to press ahead. This may also be her way of saying she can’t cope with much more pressure at present.

“If [she] leaves in the short term, that will be a major setback. She has stabilised the project, she is demonstrating she wants to ‘right the wrong’ (my words – not hers). And importantly, the external stakeholders have responded positively, and she has the confidence of the internal team.

“I need to find a way of calming this down. And buying us some time to think carefully. We can do a ‘lessons learned’ internally. And if we do it ourselves, then there could also be some reconciliation. How we handle this will say a great deal about the values of the business.”

Then “Reflections”:

“… Susan was very emotional.”

Paula Vennells: Excuse me, may I just make a comment. The line you haven’t read is possibly important. “Neil” was Neil McCausland who was the Senior Independent Director and I was obviously going to talk to him about Susan and that could have been for one of three reasons: I may have asked, because if there’s an issue with the Chair, you speak to the SID; he may have suggested it because he will have been aware; or Alice herself, who was generally quite straightforward, may also have suggested that I speak to Neil. So I think –

Mr Beer: We got some emails of you sending these notes on to Neil.

Paula Vennells: Right, okay.

Mr Beer: “Reflections”:

“In both meetings, Susan was very emotional. She is hurt. Her ego and self-esteem have been undermined. She swings between wanting to get away from it with a settlement and leave immediately, to building a case to fight and defend her reputation, to accepting that the most satisfactory outcome would be to restore her reputation by managing the Mediation Scheme through to a satisfactory ongoing process.

“Each time, we have finished the meeting positively.

“Susan has said to me prior to my leave, she would never have put a business she worked for in the situation we found ourselves with the [Second Sight] Interim Report, and she wished she had never allowed Alice to persuade her to do the independent review. She should in her view have resigned over it at the time.”

What does that refer to?

Paula Vennells: That, I think, is what I mentioned much earlier today, which I didn’t – I couldn’t remember or potentially didn’t even understand at the time. She had commissioned the – sorry, she had had the meeting with Richard Morgan and, I think, other lawyers and had come away from that meeting with a view that there shouldn’t have been the review, possibly – I don’t know the detail at all around the cases, and I can only imagine that she spoke to Alice about that and I was out of that loop. I think that is what that is.

Mr Beer: That doesn’t really make sense. She wished she had never allowed Alice to persuade her to do the independent review.

Paula Vennells: Yes, so –

Mr Beer: No female – no woman – is doing an independent review, are they?

Paula Vennells: I think my – my understanding of this, with hindsight, is that Susan had gone to Alice because you will remember that Alice talked about kickback from the business or pushback from the business. I hadn’t been involved in that conversation. She was – she had taken advice from Richard Morgan, who had said very clearly that this is just a no-win situation. She’d had a conversation with Alice, and Alice had persuaded Susan that we needed to continue with the independent – the Second Sight review.

Mr Beer: I see. Then you say this:

“My reflection on what happened with [Second Sight] as I write this today (2/9/13), is that Susan was possibly more loyal to her professional conduct requirements and put her integrity as a lawyer above the interests of the business.”

When had Susan Crichton put her professional conduct requirements and integrity above the interests of the business?

Paula Vennells: I wrote this completely wrongly. What I was trying to say, if I may, is that, as I said earlier, Susan had two responsibilities here. She absolutely – and I respected it 100 per cent – had the professional conduct requirements of a lawyer, as the General Counsel. That was her role as the lead lawyer for the organisation. She also had, in parallel, a major project that she was leading and had accountability for delivering for the business which was this independent review led by Second Sight, and the latter had bumped into all of the issues and problems that we have discovered today, and what I was trying to say here, very badly, is that she had not managed to combine those two responsibilities.

And she hadn’t – and I think this was her point about she wished she – she wouldn’t have let a business get into the situation it was – she hadn’t led the project management side of that as well as she could have done. We had that conversation and I put in additional resource to support her. So I’m genuinely very, very sorry that – I did not mean this in the way that it could be read. It was about that balance –

Mr Beer: It’s not the way that it could be read, it’s the way that it does read.

Paula Vennells: It’s the way it reads, the way it does read, but I’m very clear and I don’t think there is anything else in the notes of conversations that I had with Susan that puts it this badly but that was the point, that she hadn’t balanced those two aspects of her role. But I was sure – and I think this is now the third time – that I had gone back to Susan to help her, in her words, restore her reputation and give her the resource to be able to lead this going forwards.

Mr Beer: Why did you write, why did you type something that didn’t express what you believed or felt?

Paula Vennells: It’s clumsy. It’s clumsy, Mr Beer. But I absolutely did not mean what this reads when you read it in the cold light, and I think there are plenty of other documents around this that show that it was that balance and it was the project management part of her role, because she was a director of the business leading this piece of work, as well as the lead lawyer.

Mr Beer: Did you think there was a choice to be made –

Paula Vennells: No.

Mr Beer: – between, on the one hand, a lawyer’s professional obligations and their integrity –

Paula Vennells: No.

Mr Beer: – and, on the other, the needs of the business, and Susan Crichton had made the wrong choice?

Paula Vennells: No, I didn’t.

Mr Beer: Why did you type it then?

Paula Vennells: I’m sorry, I – it was – I’ve tried to explain, because she had these two areas of responsibility and I think that she neglected the business side but – and focused, as she had to do all of the time in her job, on the legal side, and that’s what I was tying to say. I wasn’t at all trying to say that she either hadn’t done the legal side or that I thought she shouldn’t.

Mr Beer: Can we look, please, at POL00381455. This is a note of a meeting, slightly earlier, 31 July 2013, between Alice Perkins and Susan Crichton. You’re not present –

Paula Vennells: No.

Mr Beer: – but you were sent this note –

Paula Vennells: Yes.

Mr Beer: – see POL00381460. If we look at the bottom of the first page, please, the bottom two paragraphs:

“The Board had been unsighted on the issue. They had naturally been alarmed when they found out what had happened and the fact that the Board paper had been so bland had not helped to build their confidence in the handling of the affair (there had been the possibility of a discussion on a Board call the previous week but because we had needed to discuss issues in relation to the strategy and funding negotiations with the Government which required Board decisions, these had had to come first and we had run out of time for the [Second Sight] issue before people had to leave the call).”

“In the course of what followed, the following points were made:

“[Susan Crichton] said that she now thought it had been right to have the enquiry, as it revealed the imbalance of power between the [postmasters and the Post Office] which needs addressing. This was a huge and complex issue for the business.

“I [Alice Perkins] commented that I thought that although the outcome had in some ways been good for the [Post Office], the way the process had been handled had been deeply flawed. I had backed [Susan Crichton’s] judgement on the appointment of [Second Sight] because we did not want to appoint one of the Big Four, she seemed very confident in them and given her strongly stated opinion to having an enquiry in the first place, I had wanted her to feel some ownership of the process once we had decided to go down that route. We had lost control of the process; I had lost confidence in Simon Baker early on but had been told repeatedly that he was good and capable of handling the role. I said that we should never have got into a position where we did not see the draft of [Second Sight’s] report until days before its publication (the complete version Friday before Monday publication).

“I understood that [Second Sight]’s investigation had to be independent but in the Civil Service there would have had been someone marking it who was close to all the key people ([Second Sight], [James Arbuthnot], and JFSA) and knew what was going on. By the time I found out how [Second Sight] had, in effect, changed the [terms of reference] to which they were working, it was too late to retrieve the situation. The organisation and people in it should have had proper time to consider [Second Sight’s] findings and respond to them. [Susan Crichton] questioned my understanding of the endgame and said [the Post Office] had seen the report days earlier; she had been contacted by the CEO while unwell about this and had come back early from her holiday to handle it which had not been ideal.”

Then next paragraph:

“[Susan Crichton] said that as a lawyer it was inappropriate for her to influence key stakeholders. She would have been criticised had she become close to them. I commented if she had felt unable to play that role, she should have flagged that up and that someone else could have been brought into perform it (privately I am astonished at this view which I simply do not recognise from my experience elsewhere).”

This is what you were referring to, isn’t it, when you said, of Susan Crichton, that she had put her professional conduct requirements and her integrity as a lawyer above the interests of the business?

Paula Vennells: I was – no –

Mr Beer: She had not marked these people properly, had she?

Paula Vennells: I’m sorry. Those are Alice’s words, I’ve never used that. What I was referring to was that she had, as other directors around the Group Executive did, responsibilities for delivering work – and this was a particular project or process, as Alice calls it here – and it hadn’t delivered to time, to budget. The board felt rushed in terms of seeing it. They hadn’t – normally, a report like this from an independent consultancy – as we saw earlier on Deloitte, for instance – would come to the Board, there would be discussions around it, there would be interim discussions, drafts, et cetera.

Although the business had had it days earlier, it was only days earlier before it came to the Board and the business itself hadn’t had that opportunity. So my comment was not about Susan marking anybody; it was simply about how she managed that balance of her legal responsibilities and her responsibilities to deliver a key business project.

Mr Beer: So the Chairman of the business is saying that, in the Civil Service, there should have been somebody marking the key players; the lawyer says it would be inappropriate for me to influence the key stakeholders because of my professional –

Paula Vennells: Yes.

Mr Beer: – obligations.

Paula Vennells: Yes, but also –

Mr Beer: The Chairman is astonished at that view and then you wrote a note which said the lawyer put her professional obligations above the interests of the business but that didn’t refer to this; is that what we’re to believe?

Paula Vennells: Yes, I – I’m very clear what I meant about that and I think I also say somewhere else that, if Susan felt – but this is what Alice says here too – that if she had felt conflicted in that way then she could have mentioned it to me and, when I had the conversation with her, I think at the end of July, we talked about giving her more resource, so that she could have the support to deliver the project.

Mr Beer: You and the Chairman were annoyed that Susan Crichton, who that led on this project, had not influenced or massaged the key stakeholders in a way that was favourable to the Post Office, weren’t you?

Paula Vennells: No, I –

Mr Beer: She hadn’t marked them close enough?

Paula Vennells: That’s what the Chairman said; that was not my view. Susan wouldn’t have been able to influence Second Sight on a number of the areas that they were critical of the Post Office on because a number of those areas were related to operations. Susan was a lawyer, not an operations manager but she was the director who was overseeing the project, and the project was late.

Mr Beer: So it’s coincidence, is it, that on 31 July, the Chairman is writing a note about a conversation that she’s having with Susan Crichton, which involves the lawyer’s duties and whether it was appropriate or inappropriate for her to mark the key stakeholders. A month later, you wrote a note which said that, in your view, she had allowed her professional obligations and integrity to come above the interests of the business but that note didn’t refer to this at all, and was, in effect, a misunderstanding between you and the keyboard?

Paula Vennells: Between me and?

Mr Beer: The keyboard you were typing on.

Paula Vennells: I’ve already explained to you what I was trying to convey in that comment. I would – and I don’t think Alice Perkins would either, have wanted Susan to compromise her professional code, but Alice can speak for herself. My view – but I was being heavily criticised by the Board because the business hadn’t delivered this project to budget and to time, that there were serious complaints within the report that the business said it hadn’t been able to deliver its evidence on, and the individual who was overseeing that work from the business point of view, was Susan.

And that was all I was trying to say: is that she needed to be able to do both and I was happy to support her to do that going forwards.

Mr Beer: Thank you. Can we turn to a fresh topic, please, which is about the Post Office’s attempts to control the narrative.

You tell us in your witness statement, it’s paragraph 765 – there’s no need to turn it up – that:

“The most important outcome for you and the Board was to ensure that the Post Office complied with its legal obligations.”

You tell us that you:

“… genuinely do not believe there was any culture within senior management at the Post Office to prevent the investigation of complaints about Horizon, rather, we had to do everything reasonable to investigate the complaints.”

Correct?

Paula Vennells: Yes.

Mr Beer: Can we turn up, please, POL00294854. Turn to page 2, please. If we look down the page, please, to the foot of the page, we will see an email from David Simpson to a group of people. We will later see, I think, that this email gets sent on to you, about Horizon and Private Eye.

Paula Vennells: Yes, I’m actually copied.

Mr Beer: Oh, yes, you’re in on this copy. Thank you. Tell us who David Simpson was?

Paula Vennells: He was the Communications Director for Royal Mail Group.

Mr Beer: “Mike, Susan, Rebekah, the new edition of Private Eye out today has, as expected, ran an article (attached) about Horizon and the criminals made by some former subpostmasters. The names of the subpostmasters featured are very familiar and the claims made against Horizon are the ones we’ve seen many times before. The article mentions Shoosmiths and a possible legal action …”

Then:

“… not surprisingly – Private Eye has not run in full the very short statement we [gave] them …

“We think we should write a letter to Private Eye for publication making two simple points: the fact that it is the courts and not [the Post Office] that convict people, and (the point we made in our statement) that the courts have upheld [the Post Office’s] position in each court case.

“The draft [should] say:

“Sir, the Post Office takes meticulous care to ensure that the Horizon … system in branches nationwide is fully accurate at all times. We do this because public money is entrusted to the Post Office and our customers and subpostmasters rightly expect the Post Office to fully account for every penny. We have fully confidence in the Horizon system.

“There have been a [small] number of cases involving a small fraction of the Post Office Network where court action has been taken over missing sums of public money. In every case, the courts have consistently upheld the Post Office position that the Horizon records are accurate and reliable. When former subpostmasters have been convicted of theft, it is, of course, the courts that have convicted them, not the Post Office, which has had to provide sufficiently robust evidence of proof otherwise the cases would have failed.”

Then further up the page, please, Susan Crichton says:

“[Thank you] – my own view and experience I would not write … this is old news and we don’t want to prolong the story.”

Then your view, at the top of the page:

“Susan, I understand and it’s a fine line; but I disagree. We need to be front foot and counter anything that has a reputation impact. It is a goal of mine that all press even local press (perhaps especially local press) should be scoured for negative comment and refuted.

“I would only NOT do so only if in Shane or Alana’s view, it is likely to cause more trouble than it’s worth.”

Why was it important for you, at this time, to counter anything that has a reputational impact?

Paula Vennells: This was a general ambition of mine, and the important phrase here is where I say “Perhaps especially local press”. It’s in my statement and I spoke about it at numbers of conferences. The Post Office – the Post Office’s reputation and its brand was built every single day in post offices across the country by the people who worked so hard serving customers, many of whom were particularly vulnerable people, and so it was important to me that, where the Post Office was misrepresented, that that should be corrected, and especially at a local level, because the local post offices were so important to people that – I think I said yesterday, the reputation of Post Office Limited had no weight at all. It was irrelevant. It was the reputation of the Post Office, your local post office, and that’s what I’m trying to say here.

It’s an ambition to make sure – because when – over a number of years, Post Office had been very much a sort of second cousin to Royal Mail, within the group, and what we were trying to do now was to start to build Post Office, its confidence, and to recognise the importance of it in communities, and I think that’s what I mean here about that.

Mr Beer: Was that your general instruction to the business: contest all and any negative comments?

Paula Vennells: I don’t think it’s a general – it was an ambition – well, only if they were inaccurate.

Mr Beer: In the Post Office’s view?

Paula Vennells: In the Post Office’s view, yes.

Mr Beer: So that’s why it was a goal to scour local press for negative comment, leaf through newspapers and online, actively find negative comment and knock it down?

Paula Vennells: It wasn’t – I didn’t commission a piece of work as a result of this. I’m simply stating an ambition for the business here to try to portray the Post Office on – in a positive way, particularly locally.

Mr Beer: What did you mean by that local press should be scoured?

Paula Vennells: Oh, I think it’s a hypothetical statement I’m making, to try to illustrate how important it was that the Post Office was portrayed in the way that people loved it and trusted it. It really was a – is –

Mr Beer: Maybe “was”.

Paula Vennells: – a very important – I’m sorry?

Mr Beer: Maybe “was”.

Paula Vennells: I fully accept that this has damaged hugely the Post Office brand but I imagine, if you go to your local post office, you will still find the same level of service and the same level of value, and people will respect that.

Mr Beer: Can we move forwards, please, to other ways in which the narrative, I suggest, was sought to be controlled. POL00380985. If we scroll down, please, we’ll see an email from you to a group of senior Post Office Executives, amongst which was Susan Crichton, saying:

“My engineer/computer literate husband [has] sent the following reply 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. You can also say conditional exception/anomaly which only manifests itself under unforeseen circumstances’.

“Does that help?”

Mr Davies replied at the top:

“I like exception [very] much.”

Did you consider the terms “computer bug”, “computer glitch” or “computer defect” to be emotive?

Paula Vennells: I shouldn’t have engaged in this at all. We –

Mr Beer: That’s an answer to a different question.

Paula Vennells: No, I realise that but I want to say very clearly we should have said “bugs”.

Mr Beer: Did you consider the word “computer bugs, glitches or defects”, to be emotive?

Paula Vennells: I’m not sure why I used “non-emotive”. I think what I was trying to do here – and the Inquiry has seen that the conversation had been started some days earlier – and I assume that I was asked, so whether I was asked “What’s a non-emotive word”, I don’t know. In my own mind, this seems a – it isn’t now, I fully accept that – but it seemed a reasonable request because the two bugs that we were dealing with – and this is wrong, but I understood at the time to be not – as I’ve mentioned before the word “red herring” was used.

They were two bugs which had been fixed, the business had responded to them appropriately and I didn’t think that – what I was trying to do was to avoid what often happened within the Post Office, and I imagine still does, was misinterpretation of something in relation to the Second Sight work and the Horizon computer system, where it had been dealt with, and my understanding of the way it was explained to me was that that had been done in the way it should.

I should have said “bugs”. I should not have sent the email. I should have said “bugs” and so should the rest of the organisation.

Mr Beer: Did you and your senior Post Office colleagues call these things “bugs”, “glitches” and “defects”, during your internal meetings or did you call them “exceptions” and “anomalies”?

Paula Vennells: I think we’ve seen numbers of different descriptions.

Mr Beer: Before this time, did you call them “bugs”?

Paula Vennells: There was certainly – I think when Alwen Lyons phoned me to tell me about it, I think she said, “We found two bugs”, or – mm, I’m not sure, but …

Mr Beer: Why did you ask your husband for non-emotive words for computer bugs, et cetera?

Paula Vennells: Because we were looking to find a different word than “bugs”.

Mr Beer: Yes, but why?

Paula Vennells: Because, as I’ve just tried to explain – wrongly and stupidly, and we should have said “bugs” – we were trying to keep the proportionality, I thought, around two issues that had arisen that were not anything to do with the systemic impact on the system or the Second Sight Interim Report.

Mr Beer: Did you initiate this discussion or was it one of the recipients to your email?

Paula Vennells: I think it had been initiated beforehand because I think the Inquiry has seen a note from Alwen – but I don’t necessarily want to suggest that it was Alwen who initiated it – but her note where she talked about incidents was a few days before this.

Mr Beer: Did this become part of the Post Office’s communication strategy?

Paula Vennells: The words were picked up, yes. “Anomaly” was picked up and “exception” was picked up. “Strategy” is probably too strong a word but, yes, the words were adopted.

Mr Beer: You were seeking to manipulate language here, weren’t you?

Paula Vennells: Yes, we were seeking to use language that I thought described better the situation and avoided confusion and conflation with something that I viewed as completely separate.

Mr Beer: You thought that using the word “anomaly” or “exception” would help people to understand that a problem with a computer, which was a bug, a glitch or a defect had limited impact?

Paula Vennells: Yes, because that was how I understood it: that these were anomalies or exceptions. They were bugs.

Mr Beer: Why do you think you got this wrong, then, now? You’ve said sorry, you shouldn’t have asked this, you shouldn’t have done this. But, if what you’re saying is true, it was entirely appropriate?

Paula Vennells: It was, and that was why the – that was why I engaged in doing this but, with hindsight –

Mr Beer: So why are you apologising?

Paula Vennells: Because, with hindsight, it was wrong.

Mr Beer: But why, with hindsight; what was wrong? If what you’re saying is true, that what you’d been told that these two bugs had very limited impact, they were red herrings, why are you apologising?

Paula Vennells: Because what I’ve learned since is that there were many other bugs in the system that affected restricted numbers of branches, that, equally, could have been described as anomalies or exceptions and, in fact, what these were manifestations of was an instability in a system that I wasn’t aware of.

Mr Beer: You were involved consistently over the years in the development and agreement to the Post Office’s media strategy in relation to Horizon, weren’t you?

Paula Vennells: Yes, the Communications Director worked to me.

Mr Beer: Sorry, this email can come down. Can we look, please, at POL00111694. We’re quite late in the piece here, February 2019. So a couple of months before you left. If we look at the foot of the page, please, you’ll see an email from Tom Cooper at UKGI to, amongst other people, you; can you see that?

Paula Vennells: Yes.

Mr Beer: He asks, second paragraph:

“To what extent can the court protect [the Post Office] against journalists overstating the evidence re Horizon? If a journalist writes that there is evidence of [systemic] problems with Horizon when in fact no such evidence exists, will the court help us?

“Seems to me extremely important to have a press strategy that seeks to stop misrepresentation by journalists and seeks to protect [the Post Office’s] business today against the implication that the current system doesn’t work properly.”

If we just look at your reply at the top of the page, please, you say:

“Yes we defend robustly but we avoid adding extra coverage.

“As before we hold the ground: the system is robust. And not comment any further during the trial. So ‘aggressive’ no, robust – absolutely no question.

“We are trading well. We will continue to trade well. The system … works and the trial doesn’t change that. A very firm line.”

This was still your approach in February 2019, correct?

Paula Vennells: It was. The system that I was referring to here, though, is the system that was introduced – I put 2010 but actually it was 2017, I think – and Judge Fraser found that that was far more – had far more integrity than the other previous – the Horizon Online and Legacy Horizon.

Mr Beer: Next paragraph-but-one:

“The strategy has worked well so far, which is to minimise coverage in mainstream media.”

Was that the Post Office’s approach, even in 2019: minimise coverage?

Paula Vennells: Yes, I think it was because there was always this concern, as Tom Cooper himself said in his email, about trying to manage misrepresentation in the media, and – so that the chronology wasn’t confused between Legacy Horizon and the current Horizon. And I can’t remember at this stage but I don’t believe the company had yet gone through the Horizon trial.

Mr Beer: Then, penultimate paragraph:

“Your questions re how far we go ‘legally’ are important. We have used injunctions and demanded apologies in the past.”

When had you used injunctions in the past?

Paula Vennells: I’m not sure, actually. I may have got that wrong. There was a – I know Mark Davies –

Mr Beer: Did you threaten injunctions?

Paula Vennells: – Mark Davies had had conversations with some media and lawyers had been – I think he had maybe sought advice from lawyers but I don’t think we had used injunctions, actually.

Mr Beer: Had you threatened the BBC with injunctions?

Paula Vennells: We had certainly considered legal advice at the time, where people thought the coverage was wrong.

Mr Beer: And demanded apologies in the past. Is what you say here reflective that, in your tenure as CEO, you had always defended Horizon robustly? You had taken a very firm line with the media, including threatening injunctions and demanding apologies?

Paula Vennells: You won’t find that I asked about injunctions. That was – I think I was informed about that as the Board were informed about it but, yes, certainly demanded apologies where the business felt that it had been misrepresented, and defended Horizon, yes, because again, I had had confidence in the system. I regret that hugely now.

Mr Beer: Can we turn to POL00184390 and look at the foot of the page, an email from Alan Bates to George Thomson at the NFSP:

“Dear Mr Thompson,

“So close to Christmas and with delays in the mail, I have attached a pdf of a letter to you which is self-explanatory about a forthcoming investigation into the Post Office Horizon system which I believe will benefit your members. If you so wish, it could be published in the SubPostmaster Magazine.

“Once January arrives there will be significant press coverage about this investigation in order to ensure the widest possible audience is reached.”

This is about Second Sight, isn’t it?

Paula Vennells: Yes, yes.

Mr Beer: So Mr Bates writing politely to a leader of the NFSP saying, “There’s an investigation into Horizon that might be of benefit to your members, maybe you could publish it in the SubPostmaster Magazine”. Quite reasonable, really; do you agree?

Paula Vennells: Yes.

Mr Beer: If we scroll up, please. Email to Nick Beal, Kevin Gilliland and you:

“Hi Nick

“I have just received this rubbish from JSA, obviously I will tell him Horizon is secure and robust and to go away. Just keeping [Post Office] in the loop.”

The NFSP weren’t supposed to be the cheerleaders for Horizon, were they?

Paula Vennells: The NFSP, including the Executive Council, were all subpostmasters and they would have fallen into the overused statement about “the majority of people didn’t have problems with Horizon”. So I imagine they reached this conclusion from their own personal experiences.

Mr Beer: Really? Or were you just happy to have a tame and pliant NFSP in your pockets?

Paula Vennells: It was very – it was very helpful to have the General Secretary of the NFSP saying that Horizon was secure. I didn’t use Horizon every day. His wife did, in their post office, and his colleagues were also running post offices. So, for me – I don’t agree with George’s style but this is –

Mr Beer: Rubbish?

Paula Vennells: – very much – yes. Yes, with hindsight it is, isn’t it? But George was quite independent of mind.

Mr Beer: And who paid the NFSP’s bills?

Paula Vennells: At this stage, I’m not entirely sure, but the Post Office certainly made a contribution towards them, I think, a little bit later than this. They lost their status as a union.

Mr Beer: Penultimately, can I quickly address your approach with Government and MPs. You tell us in paragraph 42 that there were no Government representatives on either the Post Office Board or the Royal Mail Group Board when you first joined the Post Office, but that had changed by the time you became MD.

Paula Vennells: No, by the time I became Chief Executive.

Mr Beer: I see. So in 2012?

Paula Vennells: In 2012, post-separation.

Mr Beer: Can you recall who they were, from time to time?

Paula Vennells: The first Government Non-Executive Director was Susannah Hooper, who became Susannah Storey.

Mr Beer: Was that between 2012 and 2014?

Paula Vennells: I think so, yes. Then it was Richard Callard and then it was Tom Cooper.

Mr Beer: Mr Callard, 2014-‘18; Mr Cooper ‘18-‘23?

Paula Vennells: Right. Thank you.

Mr Beer: You tell us in your witness statement that the Post Office Board met with Government officials in ShEx and UKGI and that their Non-Executive Directors were active in their challenge and contribution to board meetings; is that right?

Paula Vennells: Yes.

Mr Beer: In your view, were ShEx, and therefore the Government, aware of the views of Alan Bates and the Justice for Subpostmasters Alliance through the Post Office?

Paula Vennells: Yes, I think so, particularly because the work had been started with – by Alice Perkins and Alice was personally quite involved and would often join briefings with the Board. So I’m sure they would be –

Mr Beer: Aware of –

Paula Vennells: – and also there were, at an executive level, fairly regular contacts with officials in ShEx – what then became UKGI – as well.

Mr Beer: Were they aware of the interests and activity of Lord Arbuthnot in the cases of individual subpostmasters and with the Horizon system generally?

Paula Vennells: I believe so.

Mr Beer: Aware of the involvement of Second Sight and the work carried out by them?

Paula Vennells: Yes.

Mr Beer: Aware of the concerns which the Post Office had at the time about the nature and quality of Second Sight’s work?

Paula Vennells: Yes.

Mr Beer: Aware of the concerns raised about the reliability of some past convictions?

Paula Vennells: Yes.

Mr Beer: Were they made aware that advice had been obtained from Cartwright King and Brian Altman KC?

Paula Vennells: Yes.

Mr Beer: Aware of the involvement of, and a summary of the advice of, Linklaters?

Paula Vennells: Yes.

Mr Beer: Were they aware of the fact of the Group Litigation and the Post Office’s strategy in the Group Litigation, including the decision to apply for the recusal of Mr Justice Fraser, as he was?

Paula Vennells: Yes.

Mr Beer: Were you a party to the decision –

Paula Vennells: Sorry, just on that last point, if I may?

Mr Beer: Yes.

Paula Vennells: Because of a family situation, I had to step back from my role as Chief Executive sort of from January 2019 onwards. I was involved sort of in and out of the business as we were going through hospital visits, and then stepped back much more from March. So I wasn’t always in the meetings where the Board discussed the recusal, but I’m fairly sure there are Board minutes that list – that Richard Callard or Tom Cooper was present at the time.

Mr Beer: That was the last topic I wanted to ask you about. I think you – is this right, although you make the point that you just have – that, through personal circumstances, your involvement in the strategy and direction of the Group Litigation diminished in the course of 2019; is that right?

Paula Vennells: Yes, that’s right.

Mr Beer: You, nonetheless, I think, were on the call in which a decision was made to ask the judge to recuse himself?

Paula Vennells: No, that’s not quite right. I joined a call late and, just for clarification, there is documentation that says that the Tim Parker didn’t know that I was on a particular call. It was because I joined late. He did know later on; I told him about that. And I’d been asked to join the call. I think he and possibly Tom Cooper had to recuse themselves from that decision, which was taken later than the call and I had been asked to join that call by Al Cameron and by Ken McCall, who was the SID.

Mr Beer: You joined silently; is that right?

Paula Vennells: I joined silently, yes.

Mr Beer: Without anyone knowing that you had joined?

Paula Vennells: Ken McCall and Al Cameron, and possibly Jane MacLeod, knew, but I wasn’t sure that I was going to be able to join it at all, and I didn’t take part in – I left the call, and the discussion about the recusal took place either later, or on a different call, or a different meeting.

Mr Beer: Can we look, please, at PVEN00000505. Then next page, please. I think these are a series of communications between you and Jane MacLeod; is that right?

Paula Vennells: Yes, that’s right.

Mr Beer: Are they texts or some other form of communications that you’ve cut into a Word document?

Paula Vennells: I think … I imagine they were texts. Yes, I –

Mr Beer: Anyway, second one down. Whatever medium was used to communicate, you sent a message at 1.04 on 20 March, and you say:

“Jane, I was listening on the earlier call. I get the impression Tim intends to join the main [board] call now. Obviously he doesn’t know I was on the [earlier] call. Can you let me know if you still want me to give a view? [Thanks] Paula.”

Jane MacLeod:

“Sorry Paula – I wasn’t watching my phone and didn’t see your message. The board has approved both appeal and the recusal. Happy to discuss if [it] helps.”

Then you:

“[Thanks] – I’m pleased.”

Then further down:

“Apologies … Been running around getting things going.”

Then later, at 11.33:

“Hi Al, any chance of a quick call …”

This is to Mr Cameron:

“As Tim and Tom are excusing themselves from the recusal decision and Ken is [very] worried about chairing it, she has asked if I might offer a view, by email and caveated of course.

“I’m prepared to do that but as you know, I would normally consult widely on something this serious. We can talk before or after the Lord Grabiner call.”

Paula Vennells: Yeah.

Mr Beer: Then scroll down. If we look at the next page, there, if we just get the date by scrolling up a little bit. I think it’s the 21st, the next day, and then scroll down.

You to Mr Davies:

“… I felt the same about the board, very proud and pleased. Difficult but completely the right decision (the opposite would have been unconscionable after what both Lords Grabiner and Neuberger [had] said).”

Paula Vennells: Yeah.

Mr Beer: Had you listened to what Lords Grabiner and Neuberger had said on the call?

Paula Vennells: I only listened on one call and I think that was presumably the Lord Grabiner call. I had had conversations with – these would have been phone calls, because I wasn’t in the office – with Al Cameron, I think Ken McCall and Jane MacLeod. So I may have heard what Lord Neuberger said through them.

Mr Beer: Not directly but indirectly?

Paula Vennells: I don’t think so, yes. Indirectly.

Mr Beer: Overall, was the board keen to take these decisions to recuse and to appeal?

Paula Vennells: It was really difficult. I mean, I’ve said this here. It was – and the Inquiry has documentation on it – it was a very, very difficult decision. Nobody really quite knew what to do but the views that came through from Lord Grabiner that I heard, and I think what I heard about from Lord Neuberger – and again, you have documentation on this – were very strong that the Post Office had a very good case and the Board took that decision.

Mr Beer: Why were you proud?

Paula Vennells: Because I think it took – so I knew the colleagues around the Board table. This was about the people around the table, not anything more than that. They were being asked, as individuals, to take an extraordinarily difficult decision to ask a judge to recuse himself and I think it was also about appealing the case, and they’re decisions that nobody in their professional life wants to be involved in, frankly. They’re very, very difficult, and I –

Mr Beer: Why were you pleased?

Paula Vennells: Because I think, had I been involved in the conversation, I probably would have arrived at the same conclusion.

Mr Beer: Thank you.

The Witness: Thank you.

Mr Beer: Ms Vennells, they’re the only questions that I ask. You will be asked some questions tomorrow by Core Participants. Thank you.

The Witness: Thank you.

Sir Wyn Williams: Speaking of tomorrow, Mr Beer, I understand that you’ve agreed a timetable with the Core Participants. We needn’t address it now but it’s all in hand.

For personal reasons, I will not be participating in the room but participating remotely, but I fully expect that the excellent behaviour which has prevailed throughout the course of the day will continue, notwithstanding I’m on the screen, as opposed to sitting here. I have an easy means of controlling you all, even on the screen, but Mr Beer will act as my adjutant, or whatever the correct army term is, in ensuring everything goes smoothly.

That’s tomorrow.

Just one or two other announcements, firstly, some people are aware – in fact you may all be aware, that the lady you have heard about, Ms MacLeod, is not willing to come and give oral evidence to the Inquiry. I think I indicated to Core Participants through the Secretariat or my Legal Team that we would provide an explanation for that. If I haven’t done that, I’m now telling you that we will provide an explanation in writing which should be with you tomorrow.

The final announcement I wish to make is that you may have heard there’s going to be a general election shortly. My view currently is that that will not interfere with the timetable of the Inquiry, save for the day of the election and the day after. I have decided that we will not sit on 4 July and 5 July but, subject to that, I propose, so far as humanly possible, to continue as if the election is not occurring.

So those are the announcements that I wish to make, and tomorrow we’ll start again at 9.45. Thank you.

Mr Beer: Thank you, sir.

(4.37 pm)

(The hearing adjourned until 9.45 am the following day)