5 June 2024 – Alice Perkins
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(9.44 am)
Mr Beer: Good morning, sir, can you see and hear us?
Sir Wyn Williams: Yes, thank you very much.
Mr Beer: Thank you very much. May I call Alice Perkins, please.
Sir Wyn Williams: Yes.
Alice Perkins
ALICE ELIZABETH PERKINS (affirmed).
Questioned by Mr Beer
Sir Wyn Williams: Ms Perkins, before Mr Beer begins to ask you questions, there’s something I need to tell you about and that is that, under our law, a witness at a public inquiry has the right to decline to answer a question put to her by any lawyer, or by me, if there is a risk that the answer to that question would incriminate the witness. This legal principle is known in shorthand form as the privilege against self-incrimination.
I consider that fairness demands that I remind you of that principle before you give your evidence. However, I need to tell you that it is for you to make clear to me, in respect of any question put to you, that it is your wish to rely upon the privilege.
If, therefore, any questions are put to you by anyone or by me which you do not wish to answer, on the grounds that to answer the question might incriminate you, you must tell me immediately after such question is put and, at that point, I will consider your objection and, thereafter, rule upon whether your objection to answering the question should be upheld. Am I right in thinking, Ms Perkins, that you’re represented by lawyers here today?
The Witness: Yes.
Sir Wyn Williams: Well, then, if the issue relating to self-incrimination arises, they are entitled to assist you, so that, if at any stage during the questioning you wish to consult your lawyers about the privilege, you must tell me and then I can consider whether that is appropriate. Do you understand all that?
Alice Perkins: I do.
Sir Wyn Williams: Thank you very much. Then over to you, Mr Beer.
Mr Beer: Thank you.
Good morning, Ms Perkins, my name is Jason Beer and I ask questions on behalf of the Inquiry. Can you tell us your full name, please.
Alice Perkins: I’m Alice Elizabeth Perkins.
Mr Beer: Thank you. Before we start the questions, I should say that there’s a fire alarm at 10.00 am today, it is a drill and therefore we are all going to remain in the room while the procedure takes place.
Before I ask you questions I understand there is something you wish to say; is that right?
Alice Perkins: Yes, there is.
Mr Beer: Yes, please do.
Alice Perkins: Thank you. I realise that the words I am about to use may not be acceptable to some people and I understand that but they are sincerely meant. I want to apologise to all the subpostmasters and mistresses and their families who have suffered at the hands of the Post Office. I have some understanding of what people have been through and the ways, the different ways, in which their lives were wrecked over so very, very many years.
I am more sorry than I can say that, despite serious efforts on my part to get to the bottom of what was going on, I did not succeed in doing so during my four years at the Post Office and, therefore, the suffering of those affected was prolonged.
Mr Beer: Thank you. Ms Perkins, you’ve kindly made a witness statement which is very detailed. It is 232 pages long. It is dated 26 March 2024. Can we look at the last page of it, please. For the record, the transcript URN is WITN00740100. So the last page is 232.
Alice Perkins: Yeah. Yes.
Mr Beer: Is that your signature?
Alice Perkins: It is.
Mr Beer: Are the contents of the witness statement true to the best of your knowledge and belief?
Alice Perkins: They were when I signed that, yes.
Mr Beer: Are they now?
Alice Perkins: Yes.
Mr Beer: Good. Thank you. That witness statement will be uploaded to the Inquiry’s website for everyone, if they’re interested in it, to read it. I’m not going to ask you detailed questions about every part of it; do you understand?
Alice Perkins: Yes.
Mr Beer: Thank you. Can I start, then, with your background and experience. You were the Chair of the Board of the Post Office between September 2011 and July 2015; is that right?
Alice Perkins: Yes.
Mr Beer: As Chair, you were contracted to work two days per week –
Alice Perkins: Yes.
Mr Beer: – but you explain that you, in fact, worked more than that?
Alice Perkins: Yes.
Mr Beer: In terms of your background, you’re a history graduate. Upon graduation in 1971, you joined the Civil Service and then you worked, is this right, for the DHSS, the DSS, the Treasury, the Department of Health and, finally, the Cabinet Office?
Alice Perkins: Yes.
Mr Beer: You left the Civil Service in 2005, becoming a Non-Executive Director of a company called TNS and then BAA?
Alice Perkins: Yes.
Mr Beer: You tell us in your witness statement – there’s no need to turn it up, it’s page 19 – that you had no direct experience of managing a company operating a large IT system; is that right?
Alice Perkins: It is.
Mr Beer: What impact did the absence of direct experience of managing a large IT system or a company that operated a large IT system have on your work in the Post Office?
Alice Perkins: It had the effect that I wasn’t familiar with the language, the IT language, I think you could say, and, therefore, when we were discussing IT issues, I didn’t have the same instincts which I would have had, had I been dealing with a subject with which I was familiar. So I think that there are two things here: one is that the technical terms were unfamiliar but that, secondly, I could rely on instincts developed over the years in respect of very many of the things that I was dealing with at the Post Office but I did not have those instincts in relation to IT.
Mr Beer: Would you agree, however, and here I’m quoting Lord Arbuthnot, that the issues raised by the scandal relate to more than an IT system: they relate to the behaviour of people within the Post Office; the behaviour of people within Fujitsu and the Government; and the legal system?
Alice Perkins: Yes.
Mr Beer: You tell us in your witness statement – it’s paragraph 441, no need to turn it up – that you did not seek out Board members with specialist expertise in criminal prosecutions or technical knowledge of large IT solutions.
Alice Perkins: Yes.
Mr Beer: Why?
Alice Perkins: Because when I was first at the Post Office, which was in July 2011, the mandate that I was given was set out very clearly by the Chairman of the Royal Mail Group, Donald Brydon, and, subsequently, set out at great length by the then Secretary of State in January 2015 in a six-page letter, where he covered, if you like, the Government’s vision for the Post Office, the need to turn it round from a loss-making organisation into one that was breaking even, the requirement to modernise, and so on. I won’t go on at length but it is all set out there.
And what I was looking for was a Board of Non-Executive Directors who would be equipped to deal with that agenda and, at that time, I did not understand – at the very beginning, when I was selected and appointed, I didn’t know anything about this issue at all. It emerged as I joined the Post Office in my induction but, in those early months when I was looking for Non-Executive Directors, I had no idea that this was going to turn out to be the issue that it has turned out to be.
Mr Beer: It emerged quite quickly though, didn’t it?
Alice Perkins: It emerged in the sense that a couple of people – well, two or three people, raised it in the first few months, two of them in, I think, September 2011 and then Lord Arbuthnot approached me in early 2012. So I became aware that there was an issue but I didn’t understand the scale of this issue or the complexity of it.
Mr Beer: By the time the Second Sight investigation was set up in mid-2012, it must have been clear, mustn’t it, that this was a very significant issue for the company?
Alice Perkins: Yes.
Mr Beer: At that point, never mind at the beginning, did you consider whether the Board had adequate expertise on it in relation to matters concerning either the criminal prosecution of staff or IT knowledge?
Alice Perkins: There was one member, non-executive member of the Board, who was the Chair of the Audit and Risk Committee who did have experience of transformational programmes dependent on IT, and that was one of the reasons why I was keen to appoint him. But to answer your question, technical, detailed IT expertise, no, and I’m afraid that that question was not one that came into my mind at that point.
Mr Beer: You tell us in your witness statement, it’s also paragraph 441:
“Had such expertise been available to inform our Board discussions, we might have been better equipped to test the information being presented to us regarding the integrity of the Horizon software and the safety of the prosecutions of subpostmasters.”
Are you saying that there is a possibility that the scandal may have been averted, had the composition of the Board been different?
Alice Perkins: I don’t know the answer to that question.
Mr Beer: You raise this as a reflection –
Alice Perkins: Yes, it’s possible.
Mr Beer: – “Had the expertise been different” –
Alice Perkins: Yes.
Mr Beer: – “then we may have been better able to test the information” –
Alice Perkins: Yes.
Mr Beer: – “being given to us” –
Alice Perkins: Yes.
Mr Beer: – “by executives.”
Alice Perkins: Yes, I think we would have been better able to test that information. I think that is undoubtedly true. Whether that would then have led to the outcome everybody would now have wanted, I can’t say.
Mr Beer: Can we turn – you’ve mentioned it already – to your induction.
Alice Perkins: Yeah.
Mr Beer: One of the things that happened in the very first month of you attending a Board meeting, September 2011, is you had a meeting with Angus Grant?
Alice Perkins: Yes.
Mr Beer: He was the partner at Ernst & Young handling the Post Office Account; is that right?
Alice Perkins: Yes.
Mr Beer: Was this a one-to-one meeting –
Alice Perkins: Yes.
Mr Beer: – ie it was a meeting without any Post Office Executives present?
Alice Perkins: Yes.
Mr Beer: I think this would have been one of your very first meetings on appointment as Chair of Post Office, ie very early in your tenure?
Alice Perkins: Yes.
Mr Beer: In what circumstances was the meeting arranged; why was it arranged?
Alice Perkins: It was part of my induction. I asked for advice when I first arrived about who I should meet. A lot of the meetings were internal meetings with Post Office Executives but a lot of them were with people outside the company and it seemed to be, you know, the obvious thing to do to talk to one of the auditors, or to talk to the audit partner.
Mr Beer: Who advised you to talk to the audit partner?
Alice Perkins: I’d have asked – I can’t remember exactly but I think I would have asked for that.
Mr Beer: Right. You would wish to pay, I suspect, very careful attention to what Mr Grant told you?
Alice Perkins: Yes.
Mr Beer: He was independent of the Post Office?
Alice Perkins: Yes.
Mr Beer: He was a professional person?
Alice Perkins: Yes.
Mr Beer: He was part of a regulated profession?
Alice Perkins: Yes.
Mr Beer: He, would you agree, would be exactly the type of person who would give you or may give you information which company executives might not?
Alice Perkins: Absolutely.
Mr Beer: Indeed, that’s the very purpose or one of the very purposes of independent auditors –
Alice Perkins: Yes.
Mr Beer: – is that right?
Alice Perkins: Yes.
Mr Beer: Can we look, please, at WITN00740122. It’ll come up on the screen for you.
Alice Perkins: Yeah.
Mr Beer: This is a handwritten note, is this right, that you took of the meeting?
Alice Perkins: I don’t know whether I wrote these notes as he was talking or whether I wrote them afterwards.
Mr Beer: So they are either contemporaneous notes, ie you jotted things down as he spoke –
Alice Perkins: Yeah.
Mr Beer: – or the meeting ended and then you wrote the note up at some point afterwards?
Alice Perkins: Yes.
Mr Beer: Is this in a Post Office notebook?
Alice Perkins: Yes.
(Pause for fire alarm test)
Mr Beer: Thank you. I think we can see that this a Post Office notebook if we just pan out a little bit. The logo in the bottom left, a symbol in the bottom right and then one of those messages in the top right-hand corner?
Alice Perkins: Yeah.
Mr Beer: “We do not see things as they are, we see them as we are!”
Can we look halfway down the note, please. It’s about two-thirds of the way down the page there and it starts with the words “With Fujitsu”, can you see that?
Alice Perkins: Yeah.
Mr Beer: I wonder if that can be highlighted. It’s the seventh clip. That’s it. Does that read:
“With Fujitsu, [Post Office] drove a very hard bargain on price but they took back on quality/assurance.”
Alice Perkins: Yes.
Mr Beer: I want to ask you about all of the note that follows that sentence –
Alice Perkins: Okay.
Mr Beer: – and, in particular, three things, starting with that very sentence:
“With Fujitsu, [Post Office] drove a very hard bargain on price but they took back on quality/assurance.”
Firstly, is that Mr Grant, the partner at Ernst & Young, speaking?
Alice Perkins: Yes.
Mr Beer: That’s something that he said to you?
Alice Perkins: Or words to that effect, yes.
Mr Beer: Yes. Do you understand that what you were being told was that the Post Office had driven a hard bargain with Fujitsu on the price of Horizon?
Alice Perkins: Yeah, that’s what he was telling me, yes.
Mr Beer: But that Fujitsu, for its part, had compromised on the quality of Horizon –
Alice Perkins: Yes.
Mr Beer: – ie they, Fujitsu, had taken back on quality?
Alice Perkins: That’s what I would have understood him to be saying at the time, yes.
Mr Beer: And that they, Fujitsu, had taken back on assurance: they had compromised on the assurance that they could give as to Horizon?
Alice Perkins: Yes.
Mr Beer: That’s a very significant message to have received –
Alice Perkins: Yes.
Mr Beer: – wasn’t it?
Alice Perkins: It was.
Mr Beer: Would you agree that’s the first significant message you received in this meeting?
Alice Perkins: Yeah – I mean, I haven’t looked at what goes before –
Mr Beer: The top bit?
Alice Perkins: But yeah, I think, yes.
Mr Beer: Then the next part we should read it as well:
“Chris …”
I think that’s:
“Chris’s role in relation to procurement.”
Is that a reference to Mr Day –
Alice Perkins: I think so. It must be.
Mr Beer: – ie the newly appointed Financial Director for the Post Office?
Alice Perkins: Yes.
Mr Beer: “Chris’s role in relation to procurement.
“Very close relationship with Mike Young.”
Alice Perkins: Yes.
Mr Beer: On that – and this isn’t central but I just want to get your evidence on it – is that Mr Grant saying that Chris Day had a very close relationship to Mike Young or Ernst & Young had a very close relationship to Mike Young?
Alice Perkins: I can’t remember. I think it’s probably – I think it’s probably a reference to Chris Day but I don’t – I can’t be sure.
Mr Beer: Then:
“RMG [Royal Mail Group], good procurement – Cath Harmiston.”
Is that right?
Alice Perkins: Yes.
Mr Beer: “IT – have made progress.
“Getting documentation [and] process better.”
Then this the second thing I want to ask you about. You’ve written:
“Horizon – is a real risk for us.”
Then, as subpoints:
“Does it capture data accurately.
“Cases of fraud – suspects suggest it’s a systems problem.”
Alice Perkins: Yeah.
Mr Beer: Can I look firstly then at what that means. As to the sentence which says “Horizon is a real risk for us”, does the “us”, to your understanding, refer to Ernst & Young or the Post Office?
Alice Perkins: Ernst & Young.
Mr Beer: So Ernst & Young were saying to you directly that Horizon, to them, was a real risk?
Alice Perkins: To them, yes.
Mr Beer: That’s a very significant piece of information to receive, isn’t it?
Alice Perkins: Yes.
Mr Beer: You would agree that, if the computer system, which 11,900 Post Office branches use at this time, as we often hear on a daily basis, to process millions of transactions worth billions of pounds a year, is a real risk to the independent professional auditors, then it’s also a real risk to the Post Office too, isn’t it?
Alice Perkins: I think that when I was listening to this, one of my very first meetings, I interpreted this point as a point from the perspective of the auditors and their ability to audit the accounts. I don’t think – wrongly – that I would have made the connection to the operation of Horizon at the branch level. I’m not sure I would have made that connection. But I think you’re coming on to the next point.
Mr Beer: Yes. Doesn’t one follow the other?
Alice Perkins: I realise now, yes. But I don’t think – I mean I remember something about this meeting and I don’t remember that that was the connection that I made at the time.
Mr Beer: But why not? Isn’t it rather straightforward and obvious, if the auditors are saying that the computer system is a real risk for them, ie it may affect their ability to sign off the audit, there may be something wrong with the computer system and, if there’s something wrong with the computer system, that’s important for the Post Office itself in its day-to-day business?
Alice Perkins: Yes, I see that absolutely clearly. But I think what I’m trying to say to you is that, at the time, I’d been in the role for a few weeks, I’m absorbing a great deal of information and I don’t recall making the link, the weight of that link, in that way, if I can put it like that.
Mr Beer: The two lines that are underneath, “is a real risk for us”, are they essentially bullet points explaining some of the reasons why Horizon was seen as a real risk for Ernst & Young?
Alice Perkins: The two bullet points?
Mr Beer: Yes.
Alice Perkins: You mean –
Mr Beer: So one starting “does it capture” and the next starting “Cases of fraud”?
Alice Perkins: Okay. So the first of those, “does it capture data accurately”, I am clear that that was said from the Ernst & Young auditing perspective. The second one was a different point. What Angus Grant was saying to me was that there had been cases of fraud and that some of the suspects thought that this was a systems problem.
Mr Beer: So they’re not subparticulars of “is a real risk for us”: only the first of them is?
Alice Perkins: For Ernst & Young, yes.
Mr Beer: The first bullet point, as I’ve called it, then, the way you’ve written it suggests that this is a concern being raised by Ernst & Young, rather than something that the suspects suggest, which is the next bullet point, yes?
Alice Perkins: Yes.
Mr Beer: Again, on its own, that is rather significant information to receive, isn’t it?
Alice Perkins: Yes.
Mr Beer: The auditor questioning whether the Horizon system captures data accurately?
Alice Perkins: Yes.
Mr Beer: You say in your witness statement, in relation to this – I’m not going to turn it up at the same time:
“… Angus Grant had identified Horizon as ‘a real risk’ for his audit team and they had to provide assurance that the system was capturing data [accurately].”
Alice Perkins: Yes.
Mr Beer: Maybe we should look at it at the same time. It’s witness statement, page 48, please.
Can we just look at the foot of page 47, first. The very last sentence on page 47 is:
“My note of the meeting would suggest that Angus Grant had identified Horizon as ‘a real risk’ for his audit team”, which is what you’ve told us today.
Alice Perkins: Yes.
Mr Beer: Then:
“… and that they had to provide assurance that the system was capturing data [accurately].”
That’s not recorded in the minute, is it, or note?
Alice Perkins: No.
Mr Beer: Instead, what’s recorded in the note is a different point, which is an issue being raised by Ernst & Young as to whether Horizon captures data accurately, not saying, “and we had to provide assurance that it was”?
Alice Perkins: I think what I’m saying in the witness statement is kind of a follow on. I’m not – so he had identified Horizon as a real risk for his audit team. Whether he then went on to say they had to provide assurance that the system was capturing data accurately, I think is a thought that comes from later papers about the management – about the annual report and accounts.
Mr Beer: Yes, well, if we can put to side thoughts that came later as a result of management papers and reports –
Alice Perkins: Yes.
Mr Beer: – you’ve suggested in your witness statement that Angus Grant had said that Ernst & Young had to provide assurance that the system was capturing data accurately. Are you rewriting history a little bit here?
Alice Perkins: No, I don’t think so. I mean, I can see why – exactly why you’re asking this question but the “does it capture data accurately”, you know, is there on the record. This wasn’t a – you know, I wasn’t writing a verbatim note of everything he was saying and I think the inference of this is he’s questioning whether Horizon captured the data accurately and, if it didn’t, then, if they were going to audit the accounts, they would need to find a way around that.
Mr Beer: That’s not recorded at all. It doesn’t – the note does not read as if he was saying “and we have had work to do” or “and we will have work to do”?
Alice Perkins: It doesn’t say that. I completely agree with you. I think what I’m trying to say is that this wasn’t a formal note of a meeting; it was a kind of me jotting down the key points that struck me.
Mr Beer: But the point that you’ve remembered for your witness statement is not something that you jotted down, is it?
Alice Perkins: No, no.
Mr Beer: Is it the case that you know that this note is deeply problematic for you because you did nothing with the information given to you?
Alice Perkins: I – as soon as I saw this, I realised that this was – looked very, very different to me today, compared with how it looked to me at the time. I haven’t sought in any way in my witness statement to try and play games with the truth. I’m on oath and I signed this in good faith as something that I believed to be true.
Mr Beer: In fact, you didn’t do anything with the information that he gave you?
Alice Perkins: I don’t accept that.
Mr Beer: Your witness statement does not address in any way how this information affected you or your conduct, does it?
Alice Perkins: Not at this point, no, not directly. But it did affect my conduct.
Mr Beer: You received three pieces of information which you’ve accepted were significant, very early in your tenure, and you don’t say in your witness statement what you did with them, do you?
Alice Perkins: No. Not in terms here, no.
Mr Beer: Does that reflect the fact that you never raised the three pieces of information that I’ve highlighted, given to you by Mr Grant, with anyone after this one-to-one with Mr Grant?
Alice Perkins: I’m not – I can’t – I simply can’t remember who I would have spoken to immediately after this meeting. What I was doing at the time was meeting a huge – well, a great number of people who were giving me a lot of information about the Post Office, which I had never previously worked in before and I was trying to assimilate that and make sense of it.
Because I had never previously heard of Horizon or of the cases of the subpostmasters, this didn’t ring the kind of alarm bells to me that it would obviously ring if I had, or thinking about this now, but it did absolutely inform how I thought about the Post Office’s relationship with Fujitsu, and when, in a couple of other instances, the question of Horizon and the cases of the subpostmasters was raised with me, that – it started to emerge in my mind as a proper – as a real issue.
Mr Beer: You don’t describe anywhere in your witness statement you telling any other person about what Mr Grant said to you. Does that reflect the fact that you didn’t tell any other person?
Alice Perkins: It reflects the fact that I simply don’t remember.
Mr Beer: Did you discuss this with Paula Vennells?
Alice Perkins: I don’t know whether I would have discussed this – I don’t think that I would have discussed with Paula Vennells the content of every single meeting that I was having at that point. I think this would have made me realise how important it was to get – to recruit somebody as the Chairman of the Audit and Risk Committee who was really competent to carry out that role and it would have influenced how I thought about – well, as I’ve already said, I’m repeating myself – how I thought about the relationship with Fujitsu and also thought about the Finance – the running of the Finance Department.
Mr Beer: Did you disclose this information to anyone else at the Post Office?
Alice Perkins: I can’t answer that question because I don’t remember.
Mr Beer: Did you report this information to the Board?
Alice Perkins: At that stage, the Board was in embryo. I don’t – I mean, I don’t think – no, I think the answer is I didn’t come to the next Board meeting and discuss this with the then Board.
Mr Beer: The next Board meeting, as you say in paragraph 95 there, is on 10 November 2021 (sic), POL00021502.
Alice Perkins: Yes.
Mr Beer: No need to display that. There is no record of you having told the Board at that meeting of what Mr Grant had told you.
Alice Perkins: No.
Mr Beer: You tell us in your witness statement that, when you were recruited, nobody told you that there was any problem with Horizon?
Alice Perkins: That’s correct.
Mr Beer: Were you surprised or taken aback when you were told that there were problems with Horizon, in one of your very first meetings?
Alice Perkins: I was absolutely on the alert about it. But I didn’t know how to – the second of the bullet points, I didn’t know how to weigh that at that point.
Mr Beer: Someone, the auditors, could plainly see that the Fujitsu product was problematic in terms of its quality and their ability to give assurance of it, correct –
Alice Perkins: Yes.
Mr Beer: – specifically in relation to data accuracy?
Alice Perkins: Yes.
Mr Beer: Did you enquire why you hadn’t been told this by anyone upon appointment?
Alice Perkins: Not at this point, no.
Mr Beer: At any later point?
Alice Perkins: I think I was trying then to deal with events, rather than having a kind of enquiry about why nobody had told me about this.
Mr Beer: The second point under “Horizon is a real risk for us” is:
“Cases of fraud – suspects suggest it’s a systems problem.”
Is that right?
Alice Perkins: Yes.
Mr Beer: Can you expand on what you were told by Mr Grant?
Alice Perkins: I’m sorry, I can’t.
Mr Beer: Was he drawing a link between the data accuracy issue and criminal prosecutions?
Alice Perkins: I did not see it that way at the time.
Mr Beer: Why did you not see it that way at the time?
Alice Perkins: I’m a human being and I didn’t see it.
Mr Beer: You’re told in one sentence “Horizon is a real risk for us”. You’re told that the auditor has concerns over whether it captures data accurately and then you’re told that suspects are suggesting that it’s a systems problem. Aren’t those things linked together?
Alice Perkins: Well, clearly, now, they are absolutely linked together.
Mr Beer: Clearly, on the face of the page, they’re linked together: one follows the next.
Alice Perkins: They were not – they weren’t linked in that way in my mind, at that time. Bear in mind that this was the very first time – although, actually, I’m not sure whether the day before I hadn’t had – hadn’t seen an email from Donald Brydon about Horizon and the Private Eye allegations. Those two things came very, very closely together. But this is the first time I’d ever heard of – I’d absolutely no –
Mr Beer: The Private Eye email comes two days later.
Alice Perkins: Okay.
Mr Beer: But we’ll come to the Private Eye email in a moment.
Alice Perkins: Okay, but here, if I can just try to explain how this would have felt at the time: I’m newly appointed; I have not worked in the Post Office before; the Post Office covers an absolutely huge range of very different and very complex issues and I’m trying to get up the learning curve as quickly as possible and absorb a whole lot of information, some of which is on subjects which are completely new to me.
I’m not trying to make excuses for myself here but I’m just trying to explain what it felt like. I didn’t read Private Eye and I didn’t read Computer Weekly. I just did not know – I mean, this the first time that anybody had made the suggestion to me and I simply did not weigh this in the way that, of course, everybody now, with the benefit of hindsight, looking back at this, would weigh it.
Mr Beer: Doesn’t the fact that you weren’t imbued in the issues, by reading Computer Weekly, reading Private Eye, make this more of a stand-out moment for you? This isn’t part of a piece or a narrative that you already know about. This is the auditor saying – and it takes up half of your note – that Horizon is a real problem?
Alice Perkins: Yes, but I think what I’m trying to say here is that he was absolutely telling me that he thought Horizon had real problems and he was explaining the background to that. But what was not jumping out at me, in the way that it now would, was the reference to the cases of fraud, and the suspects suggesting it’s a systems problem.
Mr Beer: The next line is:
“Post Office POL v Fujitsu – naive/too nice.”
Is that right?
Alice Perkins: Yes.
Mr Beer: Was the sense of what was being conveyed to you that the relationship between the Post Office and Fujitsu was too nice?
Alice Perkins: That the Post Office were being too nice in relation to Fujitsu, yes, yes.
Mr Beer: Okay, and it was the Post Office that were being naive?
Alice Perkins: Yes.
Mr Beer: What did you think about what you were being told?
Alice Perkins: I thought – I wasn’t entirely surprised because I think it is not uncommon for organisations contracting with IT companies to be at a disadvantage in relation to those IT companies and I would, therefore, have been very concerned to know what Angus Grant’s opinion was of the key individuals who would be dealing with this.
Mr Beer: You tell us in your witness statement – it’s paragraph 90, no need to turn it up:
“I recall from my earliest days with the Post Office, I had concerns about [Fujitsu’s] relationship with Fujitsu and whether or not it was an equal relationship.”
Alice Perkins: Yes.
Mr Beer: Why did you have such concerns?
Alice Perkins: Partly because I think that’s something that I – you know, at a general sense, I would – might have been looking for but, at least in part, because of what Angus Grant was saying to me here.
Mr Beer: In what way or ways did you consider the relationship to be unequal?
Alice Perkins: I think that it would have been to do with the scale of the people who would have been working in Fujitsu on this contract. It would have been to do with the level of – so numbers of people, experience of people, the fact that in departments and companies and organisations buying IT services, they have often hollowed out their own capability, and I knew that the procurement of IT systems relating to the Post Office, up until that point, had been handled in the Royal Mail Group, and that the Post Office was going to have to build its capability to stand on its own feet. But those would have been things that I would have been concerned about.
Mr Beer: You continue:
“Lesley Sewell ‘knows what good looks like’.”
Alice Perkins: Yes.
Mr Beer: Then:
“Over dependence on Fujitsu?”
Alice Perkins: Yes.
Mr Beer: What did you mean by “over dependence on Fujitsu”?
Alice Perkins: I think I –
Mr Beer: What did Mr Grant mean by “over dependence on Fujitsu”?
Alice Perkins: Well, I same it’s the gist of what I’ve just been saying; it’s about the balance of – I suppose you could say the balance of power and expertise. Information, as well.
Mr Beer: Overall, would you accept that you were provided with three very significant pieces of information in the course of this meeting?
Alice Perkins: Yes.
Mr Beer: Would you accept that they ought to have conditioned your conduct thereafter?
Alice Perkins: Yes, and I think they did.
Mr Beer: Can we turn, please, to – both documents can come down – WITN00740126. If we look at the bottom of the page, please. So the meeting with Mr Grant was on 27 September –
Alice Perkins: Yes.
Mr Beer: – and, as I mentioned a moment ago, it was two days later that the Private Eye email arrived from Mr Brydon –
Alice Perkins: Yes.
Mr Beer: – 29 September?
Alice Perkins: Yes.
Mr Beer: So it’s an email from Mr Brydon. So he was the Chairman of the Royal Mail Group at this time?
Alice Perkins: He was.
Mr Beer: It’s to Paula Vennells and others, including you. The subject is “Class Action”, and he says:
“Paula,
“I was a bit surprised to see the article in Private Eye this week about a class action by subpostmasters. It may be a bit after the horse has bolted but it may be appropriate to have an explicit litigation/legal report in the [Post Office] Board papers for the future – obviously Alice’s call.
“The article raises some questions about Horizon. I suspect the [Audit and Risk Committee] ought to take an interest. Have we ever had an independent audit of Horizon?”
Yes?
Alice Perkins: Yes.
Mr Beer: Now, this is the very thing that you had been briefed about by Mr Grant two days earlier, isn’t it?
Alice Perkins: Yes.
Mr Beer: It must have been quite concerning to have received this?
Alice Perkins: It was.
Mr Beer: The last question that the Chairman asks is:
“Have we ever had an independent audit of Horizon?”
Alice Perkins: Yes.
Mr Beer: You knew at this time – it must have been fresh in your mind – that the independent auditors had concerns over the integrity of the data produced by Horizon?
Alice Perkins: Yes.
Mr Beer: So why did you not pipe up and say in response to this “I’ve got some significant information that’s relevant here”?
Alice Perkins: I don’t know why I didn’t do that. I mean, I – the fact is, I didn’t do that. I waited for Paula to respond to this. I think – I mean, I think at this point, I would have thought the question was addressed to her and I wanted to hear what the Post Office Executives’ answer to that question was. I also remember thinking that the idea that we should have an explicit litigation report in the Board papers was right and we should do it.
Mr Beer: If we scroll up to Paula Vennells’s reply, she says:
“… you may remember this has reared its head before. I’ll get a brief circulated for the new Board members.
“In summary, each time any cases have gone to court, [the Post Office’s] position has been upheld. And from memory, in at least 2 cases fraud was proven with subsequent imprisonment.
“However, to avoid future doubt, [the Post Office] took a decision several months ago to have Horizon and the newer [Horizon Online] independently verified by an external systems auditor. This is currently in process and we should have the results at the end of next month.”
So this is an entirely reassuring message, isn’t it?
Alice Perkins: Entirely reassuring.
Mr Beer: Yes, it’s one of a series of entirely reassuring messages that you received from senior executives in Post Office over the years, isn’t it?
Alice Perkins: From the beginning to the end, yes.
Mr Beer: You say had your role as Chair of the Board was, amongst other things, to challenge what you were being told by senior executives?
Alice Perkins: Yes.
Mr Beer: Here, you had the information, the ammunition, with which to challenge, didn’t you?
Alice Perkins: I had some information on which to challenge, yes, I did.
Mr Beer: You had good information on which to challenge, didn’t you?
Alice Perkins: Yes. Yes, I did.
Mr Beer: So again, why did you not say, “Hold on, Paula, what about Ernst & Young? Don’t you know about them?”
Alice Perkins: I simply can’t remember.
Mr Beer: Did you just instead accept the reassurance that the Chief Executive gave in this email?
Alice Perkins: Yes, I did accept that.
Mr Beer: Is that what happened consistently in your time: if somebody from the company gave you reassurance, you gladly accepted their reassurance?
Alice Perkins: Absolutely not.
Mr Beer: On a related issue, you may have heard Ms Vennells give evidence that she was unaware that the Post Office prosecuted its own subpostmasters until mid-2012. Were you ever under the impression that, before mid-2012, Ms Vennells didn’t appreciate that the Post Office was bringing its own prosecutions?
Alice Perkins: Sorry, could you say that again?
Mr Beer: Yes. Were you ever under the impression that before mid-2012 Ms Vennells didn’t know that the Post Office prosecuted its own subpostmasters?
Alice Perkins: No, I didn’t know that.
Mr Beer: Or there came a moment in mid-2012 when this new news was revealed to her: that, in fact, the Post Office did prosecute its own subpostmasters?
Alice Perkins: I don’t – you know, I have nothing to say to help with that, I’m afraid.
Mr Beer: The Private Eye issue didn’t entirely go away, did it?
Alice Perkins: No.
Mr Beer: It was raised again by Les Owen, one of the Non-Executive Directors, at a Board meeting, wasn’t it, in early January 2012?
Alice Perkins: It was, yes.
Mr Beer: Can we look at the minutes of the Board meeting of 12 January 2012, POL00021503. If we just quickly look, so minute of Board, 12 January 2012. See who is present: amongst other people, you.
Alice Perkins: Yeah.
Mr Beer: Les Owen, a NED; Paula Vennells, Managing Director; Chris Day, Chief Financial Officer; Neil McCausland, Senior Independent Director; and then those who aren’t members of the Board but who were in attendance are listed. Then if we go to page 6, please, and look at the foot of the page, please, under the heading “Significant Litigation Report”:
“Les Owen [so he’s a director] asked for assurance that there was no substance to the claims brought by subpostmasters which had featured in Private Eye.
“Susan Crichton explained that the subpostmasters were challenging the integrity of the Horizon system. However, the system had been audited by [Royal Mail Group] Internal Audit with the reports reviewed by Deloittes. The audit report was very positive.
“The Business has also won every criminal prosecution in which it has used evidence based on the Horizon system’s integrity.”
So, at this meeting, you were told, according to the minute, that the system had been audited, yes –
Alice Perkins: Yes.
Mr Beer: – and you had been told that the system had been audited by Royal Mail Group Internal Audit, and that the reports, plural, had been reviewed by Deloitte. Yes?
Alice Perkins: Yes.
Mr Beer: I think you weren’t shown a copy of the internal Royal Mail Group audit or audit reports at that meeting?
Alice Perkins: No, we weren’t. I think because Les Owen, you know, he brought it up probably – I’m sure he wouldn’t have, as it were, pre-notified that he was going to bring that up.
Mr Beer: So the internal audit or audits were not shown to you nor the review or reviews of them by Deloittes?
Alice Perkins: No.
Mr Beer: You tell us in your witness statement – no need to turn it up, it’s paragraph 107 – that you would have taken comfort from the fact that Deloitte, an extremely well regarded firm of professionals, were said to have reviewed the internal audit reports?
Alice Perkins: Yes.
Mr Beer: If we look at the entry at the foot of the page:
“Susan Crichton suggested that she clear the audit report [we’re back to singular now] with the external lawyers and if it is possible to give the report privileged status it would be [circulated] to the Board.”
Yes?
Alice Perkins: Yes.
Mr Beer: Is that how it worked in Post Office at this time, to your understanding, that if an existing document, a document that had already been typed up and there was a printed copy of it, it was in somebody’s desk or in their drawer or on their computer, it was okay to give it to the Board, if that document could be given privileged status?
Alice Perkins: I simply don’t know why she said that. You know, what the reason was that she said that and, coming back to this afresh, in preparation for my evidence to the Inquiry, I’m afraid I’m mystified by it.
Mr Beer: Surely, you as the Board were entitled to see relevant documents?
Alice Perkins: Yes.
Mr Beer: They didn’t have to be privileged –
Alice Perkins: Yes.
Mr Beer: – or given privileged status for them to be passed to the Board?
Alice Perkins: I don’t know. I mean, I wouldn’t have thought so.
Mr Beer: Now, you did subsequently receive a copy of the Royal Mail Group Internal Audit?
Alice Perkins: I did, later, yes.
Mr Beer: It was a single report. There was not more than one. Can we look at it, please. POL00107127. I think this is your personal copy, isn’t it?
Alice Perkins: Yeah, it’s my writing.
Mr Beer: Yes. So this the one that’s marked up by you?
Alice Perkins: Yes.
Mr Beer: It’s got your handwriting, as we can see at the top of it, on the right-hand side, and there’s some more handwriting further on in the document.
Now, it’s nine pages long, this audit report or assurance review. That nine pages includes the cover page. You’ll see that it has been badged up as being legally privileged; can you see that?
Alice Perkins: Yes.
Mr Beer: Under the big black box –
Alice Perkins: Yes.
Mr Beer: – “Legally Privileged and Strictly Confidential”; down in the bottom left, “Legally privileged and strictly confidential”, on each page.
Do you know why an internal audit would be badged up in this way?
Alice Perkins: No.
Sir Wyn Williams: I’m sorry to interrupt, Mr Beer, but what about the date: March 2012? The minutes were January, were they not?
Mr Beer: Yes.
Sir Wyn Williams: I’m just wondering if it’s the same document as the minute refers to, that’s all.
Mr Beer: It is, sir. There is in existence at the January meeting a copy of this document in draft. A date then gets put on it of February 2012 and then, when it’s provided to Ms Perkins, the date of March 2012 is added.
Sir Wyn Williams: All right. Thank you.
Mr Beer: We’ve seen discussion in the Board meeting about giving the document privileged status. You’ve looked at this document recently, I think?
Alice Perkins: Yes. Along with a great many others.
Mr Beer: Yes. There isn’t any mention in the document, from start to finish, about it being prepared for the purpose of litigation or being prepared for the purposes of receiving legal advice; would you agree?
Alice Perkins: I take your word for it. I can’t be certain without re-reading it.
Mr Beer: Anyway, you’d been told at the Board meeting that Deloittes had reviewed this report, yes?
Alice Perkins: Yes.
Mr Beer: I don’t think there’s any mention in the document of them having reviewed it, is there?
Alice Perkins: No, and that was a great mystery to me when I came back to look at this. But I think I now understand.
Mr Beer: What’s your understanding?
Alice Perkins: I think – I may be wrong about this but I think I understand, from a previous witness, that this report was not independently reviewed by Deloitte as such but that there had been somebody from Deloitte who had been seconded who had been part of the team.
Mr Beer: So that’s very different from what you had been told at the Board meeting?
Alice Perkins: Yes.
Mr Beer: I think it’s right that you saw no document at the time to say that Deloitte had reviewed this report and, if so, what the outcome of the review was?
Alice Perkins: No, there was no document and, when I came back to look at this recently, that was – one of my questions was: well, where is this Deloitte report?
Mr Beer: You’ve written “Deloitte” in the top right-hand corner at the time –
Alice Perkins: Yes.
Mr Beer: – and put a circle round it?
Alice Perkins: Yeah.
Mr Beer: Was that a note to check about the so-called Deloitte review or so-called Deloitte assurance?
Alice Perkins: It’s – obviously in my mind is that we had been told that Deloitte had, whatever it was I said, reviewed this, and I guess I was trying, in my mind, to think “Well, is this the Deloitte report or is there a separate Deloitte report?” But I’m afraid I can’t remember – you know, I simply don’t remember my thought process at the time.
Mr Beer: You know now that there was no Deloitte –
Alice Perkins: I do know that now but only very –
Mr Beer: – review, no Deloitte report?
Alice Perkins: I’ve only known that in the very recent past.
Mr Beer: You’ve told us that, given their status and professional independence, the fact that Deloitte had reviewed the report would have been an important factor for you?
Alice Perkins: Yes.
Mr Beer: Wasn’t it important to nail down that review at the time, then?
Alice Perkins: Well, with the benefit of hindsight, absolutely. It would have been a very good thing to have nailed that down at the time. But I’m afraid that I didn’t nail it down at the time.
Mr Beer: Can we go to page 9 of the document, please. There is here a table in which the authors set out the extent to which progress had or had not been made against ten issues raised by Ernst & Young in their 2010 to 2011 management audit, yes?
Alice Perkins: Yes.
Mr Beer: They were reported in a letter and accompanying report of August 2021 (sic), and you tell us in your witness statement that you’re not sure whether you saw that at the time?
Alice Perkins: I don’t think I could have seen that at the time.
Mr Beer: In any event, this is a record of the progress that had or had not been made against the issues identified by Ernst & Young in their August 2011 management letter and report. You’ll see that, in relation to all ten issues, none of them had been completed –
Alice Perkins: Yes.
Mr Beer: – and that, in relation to four of them, including one which enjoyed an Ernst & Young risk rating of high, further work is required?
Alice Perkins: Yes.
Mr Beer: This was presented at the January 2012 Board meeting, as we’ve seen, as being very positive?
Alice Perkins: That – I don’t think we saw the report, no, but –
Mr Beer: We’ve established that already.
Alice Perkins: – the way it was described, yes.
Mr Beer: Yes.
Alice Perkins: Yeah.
Mr Beer: Is that how you read it, looking at it now?
Alice Perkins: Well, no, it’s not how I would see it now. No.
Mr Beer: It had been presented to the Board at the meeting of January 2012 as being a review of the entire system?
Alice Perkins: Yeah.
Mr Beer: You know now that that’s incorrect; it wasn’t a review of the entire Horizon system, was it?
Alice Perkins: No.
Mr Beer: If we go back to page 1, please. You wrote along the top, the very top of the document:
“Which parts of this are relevant to the subpostmasters’ issues?”
Alice Perkins: Yes.
Mr Beer: Who was that question addressed to?
Alice Perkins: I don’t know. I can’t remember. It’s a question that obviously occurred to me and I would have followed it up with somebody but I can’t tell you who that was.
Mr Beer: Did you ever ask that question of anyone?
Alice Perkins: I’m sure I would have done but –
Mr Beer: Did you get an answer?
Alice Perkins: I can’t remember. I just can’t remember who I would have spoken to and I can’t remember, therefore, what they would have said.
Mr Beer: I mean, it seems to have occurred to you –
Alice Perkins: Yes.
Mr Beer: – that an issue is the subpostmaster claims –
Alice Perkins: Yes.
Mr Beer: – and that you’ve got a report that doesn’t really, on its face, match the claims?
Alice Perkins: Yes.
Mr Beer: It doesn’t address them.
Alice Perkins: Not – it didn’t jump out to me that it addressed them, no.
Mr Beer: But you can’t recall whether you raised that with anyone and, if so, what the answer was?
Alice Perkins: It’s – it would have been unusual for me to write something like that and not to raise it and I think I’m right in saying that this was – this document was part of the briefing that I had for a subsequent meeting with Lord Arbuthnot. So I think on the – you know, thinking back as to how I worked and how I went about things, I think I would have raised this but I am sorry that I can’t add more.
Mr Beer: Is the position we’ve reached, Ms Perkins, that we’ve ended up with this nine-page document that, on its face, has not been approved by Deloitte or reviewed by Deloitte, when you’ve been told that it had; it’s protected by privilege; it was presented at the Board as being very positive, when it isn’t?
Alice Perkins: I think that I would have thought, wrongly, that somewhere there was a separate document from Deloitte. That’s what I would have thought.
Mr Beer: Again, wouldn’t you want to nail that down at the time?
Alice Perkins: Now I would absolutely want to nail it down, yeah. I think – if you look at these issues now, we all know what actually happened. At the time, we didn’t know and I am dealing with not just this issue. This – at this time, this issue was absolutely there on the table but it was there on the table with a great many other issues that I was attending to and I had to give attention to those other issues as well as this.
So when we are talking about this now, I absolutely accept that there were questions that I could have followed up but that I don’t think I did. I think there were other questions which I think I probably would have followed up but I can’t swear to the fact that I did. But I do think it’s important to understand that this was not the only issue on the table, and –
Mr Beer: Ms Perkins –
Alice Perkins: Sorry.
Mr Beer: So sorry. Ms Perkins, even with that context, I’m suggesting to you that you should have followed up, in circumstances where you say that you took reliance from the fact that a well-known firm of City auditors had reviewed a report that was said to be very positive, you get a report that, on its face, has not got Deloitte’s fingerprints on it at all and isn’t very positive. You should say, “Hold on, why are the Board being given this information when it’s palpably wrong?”
Alice Perkins: I should have asked. I should have followed it up.
Mr Beer: Can we turn, then, to the meeting with James Arbuthnot and the events that led ultimately to the appointment of Second Sight.
I think the first of this was you receiving an email from James Arbuthnot on 23 February 2012?
Alice Perkins: Yeah.
Mr Beer: Can we look at that, please, POL00095973, and go to page 2, please, and look at the bottom. This is the originating email in the chain from James Arbuthnot to you, heading “Subpostmasters and the Post Office”:
“Dear Alice,
“You may remember that when … we met at, I think, Ditchley Park I mentioned the issues of the Horizon computer system in use in sub post offices throughout the country, and I said I had a real concern about the way some of the subpostmasters in and outside my constituency had been treated.”
Then second paragraph:
“May I please come and see you about it? I know it is the position of Post Office (supported by the [Federation], though not by the [CWU]) that there is nothing wrong with Horizon. I am deeply sceptical about this, and hope I can persuade you to look afresh at the matter, rather than accepting that there should be a closing of ranks round the computer.”
Then if we go up the page, please. Thank you. On the same day, you send this on to Paula Vennells and Susan Crichton. You say:
“Hi there,
“James Arbuthnot is a Conservative MP who is, I think, Chairman of the Defence Select Committee. I knew him when I was in the Treasury and he was a Minister at the MoD. He is a thoroughly decent and sensible person.
“I will reply later today saying of course I will meet him. I think I should probably see him on my own, to look open and receptive but equally, if you think I should take someone with me, I would be open to that. I will need briefing of course. Is there anything else I should know at this stage?”
We’ve got a reply of yours to James Arbuthnot saying:
“Yes, of course I will meet you.”
Can we go to the briefing for the meeting with James Arbuthnot that you received. POL00179470. If we look, please, at the bottom email, 12 March 2012, from Susan Crichton to you:
“Here is a briefing paper for your meeting with James Arbuthnot …”
Yes?
Alice Perkins: Yes.
Mr Beer: Can we look, please, at the attachment to the briefing, POL00107701. This is at the briefing. I just want to ask you one thing about it. If we look at the middle of page 1, I think that’s it, the third – sorry, scroll up again. Yes. It’s sort of the third paragraph under “Overview”:
“[Post Office] has rigorously tested the Horizon system, using independently assured processes and it has been found to be robust. Horizon has been in successful operation for in excess of 10 years”, et cetera.
So the line “[The Post Office] has rigorously tested the Horizon system using independently assured processes and it has been found to be robust”, at the time that you received this, you knew that Ernst & Young had conducted an audit, yes?
Alice Perkins: Yes.
Mr Beer: You knew that they thought that Horizon was a real risk?
Alice Perkins: To their auditing, yes.
Mr Beer: You knew that they had concerns over the accuracy of the data that it produced?
Alice Perkins: In that context, yes. Yes.
Mr Beer: When you read this, did you think, “Hold on, this is in conflict with what I’ve been told by the partner who conducted the audit”?
Alice Perkins: I think, at this point, the thing that would most recently have been in my mind was the assurance that we’d been given about the internal audit report and the assurance of that by Deloitte, and that, I think –
Mr Beer: I’m sorry to speak over you but, by this time, you’d got the report –
Alice Perkins: Yes.
Mr Beer: – and you could see that it wasn’t very positive?
Alice Perkins: If you go back to the table that you showed, there are certainly are things in there which are not very positive but there was – if you look at the overall column showing progress, there was quite a lot of progress that had been made against most of the items there.
Mr Beer: Did you regard it at the time as very positive?
Alice Perkins: No, I don’t think I would have regarded it as very positive but I think I would have regarded it as real progress.
Mr Beer: What about what the auditor themselves, the independent auditor, had said; was that cast to one side?
Alice Perkins: No. But I think I would have put the two things together, that the auditors were concerned about the reliability of the data for auditing purposes, and had flagged those up, and that improvements were being made, that there was – it was not the end of the story but it wasn’t a totally – it wasn’t a negative picture.
It wasn’t – I absolutely see that it wasn’t a very positive picture but I think it’s more nuanced, perhaps, is what I’m trying to say.
Mr Beer: You knew that the internal audit function in Royal Mail Group had conducted a review or an assurance exercise of sorts, which, it was said, had been reviewed by Deloittes. You’d seen nothing to support that. You’d been told by the audit partner at Ernst & Young that they had real – they thought that Horizon was a real risk and had concerns over the integrity of its data. When you read this, did you not think, “Hold on, that’s a bit strong; it’s not really supported by what I’ve been shown and read with my own eyes”?
Alice Perkins: I can’t remember what my reaction to this was. But it is clear that I didn’t take any action at that point in relation to these issues that you have been raising. I think that I was more reassured than I should have been and I can see now, looking back at this, that I should have asked more questions about this.
Mr Beer: Thank you.
Sir, that’s an appropriate moment to take the morning break. Can we break until 11.10, please.
Sir Wyn Williams: Yes, certainly.
Mr Beer: Thank you very much, sir.
(11.00 am)
(A short break)
(11.11 am)
Mr Beer: Good morning, sir, can you see and hear us?
Sir Wyn Williams: Yes, thank you.
Mr Beer: Ms Perkins, before the break, you told us that you had recently established or found out that the extent of Deloitte’s involvement in the internal audit was that there had been a person seconded to the RMG Internal Audit Team rather than Deloitte having reviewed the report.
Alice Perkins: That is my understanding now.
Mr Beer: Can we look, please, at POL00338794. This is an email of 23 March 2012 from Alwen Lyons to you, and the first line says:
“We have found the two reports by RM Internal Audit (with assistance from Deloittes) and Gartner Consulting.”
Then if you skip over a couple of paragraphs:
“I have a comment from Internal Audit regarding Deloittes’ involvement which may be of interest.
“‘The preparatory fieldwork relating to the report was carried out by the Royal Mail Internal Audit and Risk Management team, which involved an IT expert seconded from Deloitte UK under an Outsourcing Agreement to assist in the review’.”
So I think you knew at the time that the extent of the Deloitte involvement was an IT expert being seconded to the RMG Audit Team.
Alice Perkins: That email certainly says that, yes.
Mr Beer: Does that put any different complexion on what you had been told at the January 2012 Board meeting that RMG Internal Audit had conducted an audit and it had been reviewed by Deloitte?
Alice Perkins: Yes, I should have seen that those were – they were different things.
Mr Beer: In any event, can we turn to the meeting with Lord Arbuthnot, as he now is, on 13 March 2012. POL00105481. Can you see at the top that this is a note of the meeting?
Alice Perkins: Yes.
Mr Beer: Can we look at paragraph 5, please, and just read it:
“AP [that’s you, Alice Perkins] explained that the system had been independently reviewed by several people including [Royal Mail] Internal Audit and Deloittes (who had no relationship with the business or Fujitsu) [Lord Arbuthnot] was not convinced this had been done by IT experts.”
Firstly, just to be clear what you said, what it means: were you saying there that there had been more than one independent review of the system and that those independent reviews had been conducted by (1) Royal Mail Group Internal Audit and (2) Deloitte?
Alice Perkins: I can’t remember what was in my mind. Sorry, can I just be clear, the email from Alwen to me that you showed me a minute ago –
Mr Beer: 23 March, so a fortnight after 12 March.
Alice Perkins: – and this meeting – so the meeting preceded Alwen’s –
Mr Beer: Exactly.
Alice Perkins: – email?
Mr Beer: Exactly.
Alice Perkins: Okay.
Mr Beer: So, just looking at what you said, do you accept that a plain reading of it is that there had been two independent reviews, one conducted by Royal Mail Internal Audit and the second by Deloitte?
Alice Perkins: That is the plain reading of it, yes.
Mr Beer: I think you’ll accept, certainly now, that such a statement is not accurate. There had been no independent review –
Alice Perkins: Yeah.
Mr Beer: – of the system by Deloitte?
Alice Perkins: Yeah.
Mr Beer: When you said this, were you working from what you had been told at the 12 January Board meeting?
Alice Perkins: Yes, and – I think there was also a brief that included this.
Mr Beer: No, the brief doesn’t touch on the extent of the Deloitte involvement?
Alice Perkins: Okay, right.
Mr Beer: You had yet to receive the email –
Alice Perkins: Okay, thank you.
Mr Beer: – that I’d drawn your attention to –
Alice Perkins: Okay, yeah.
Mr Beer: – that pointed out the extent of the involvement of Deloittes being much more minimal.
Alice Perkins: Thank you, I’m having difficulty sometimes remembering how these things relate to one another in sequence.
Mr Beer: Paragraph 6 records you offering to:
“… consider a further review of the system by an IT expert specifically looking at the integrity of the data and discrepancy errors thrown up in subpostmasters’ balances.”
Was that offer made on the basis of what you had been told by Mr Grant?
Alice Perkins: I think it would have been a mixture of things. So, by now, obviously, I had had the meeting with Mr Grant. I was aware that Private Eye had been covering this. It was clear to me that Lord Arbuthnot was, you know, very concerned about this issue. I took him seriously. And I think at this point I had come to the view that the Post Office was about to become a separate organisation in its own right, it was about to have a new Board and that I certainly thought, and I thought that any Board would think, that we should take a fresh look at this to see for ourselves.
Mr Beer: You knew at this time that the internal audit did not address the concerns of the subpostmasters –
Alice Perkins: Yeah.
Mr Beer: – hence your handwritten note at the top of it?
Alice Perkins: Mm-hm.
Mr Beer: You knew, at this time, what you’d been told by Mr Grant. Did you reveal any of those pieces of information to Mr Arbuthnot?
Alice Perkins: No, I didn’t but I think what I was trying to do here was to move things on by taking a fresh look at everything. I don’t think that I would – I don’t think I really knew what to make of it all. I could just see that there was an issue here that was a serious issue, and I thought here’s – you know, “I’m new, the Board is new, we need to look at this”, and my hope was that we would take a serious look at it and then we would all be clear about what the position really was.
Mr Beer: Wasn’t this offer made instead, to try to convince him and other MPs that the system wasn’t at fault?
Alice Perkins: Absolutely not.
Mr Beer: Can we look, please, at POL00021505. This is the Board minute of 15 March 2012, so three days after your meeting with – sorry, two days after your meeting with Lord Arbuthnot on the 13th. We’ll see that you’re present. Can we go to page 9, please, and the foot of the page. Under “Any other business”, (c):
“The Chairman [that’s you] explained that she and the Company Secretary had met [Lord Arbuthnot] at his request to discuss the subpostmaster cases questioning the integrity of the Horizon system. The Chairman hoped that she could find a way to convince him and the other MPs that the system was not at fault.”
Alice Perkins: Yes.
Mr Beer: That’s exactly what you said was absolutely not your intention?
Alice Perkins: It was not my intention. I mean –
Mr Beer: Why did you tell the Board that it was?
Alice Perkins: I don’t know what was in my mind when I said that but it was always – I’m absolutely clear that it was always my intention that we should take a proper look at this – and I think you’re – I’m sure you’ll come on to this – that there is a lot of contemporaneous documentation which shows that that was my attitude.
Mr Beer: That sentence there, recording what you said, reveals a closed mind, doesn’t it?
Alice Perkins: No, I don’t think it reveals a closed mind. I would have been able to see that this was a very serious issue for the business. I would have hoped that the system was not at fault but that doesn’t mean to say that I was not looking at an independent study of the issues as exactly that.
Mr Beer: Can you help us – I’ll just ask you one more time – why did you tell the Board that you were hoping to find a way to convince James Arbuthnot and other MPs that the system was not at fault, if that wasn’t your intention?
Alice Perkins: Well, I’m not sure that I can help you with that. At the time, I believed that the system, from what – on the basis of what I’d been told, that the system was not at fault but I was always open to the possibility that it might be.
Mr Beer: How could you really have believed, at this time, that the system was not at fault, at least in some cases, given what Mr Grant had told you and given what you knew about the limited nature of the RMG audit and the limited assurance that the RMG audit had given?
Alice Perkins: Sorry, I’m sorry Mr Beer. I got lost again.
Mr Beer: Yes. How could you, as you’ve just said, believe at this time, mid-March 2012, that the system was not at fault, as you put it, when you had been told what we have discussed you were told by Mr Grant and when the only document that you had was the RMG audit?
Alice Perkins: Yes, okay. Thank you. I think that I just had not – I hadn’t weighed the Angus Grant comment, which was made in September, in that – in my mind, in the way in which it is now being – that you are – obviously, I can see why you’re asking these questions but it is as though we’re describing something that was happening in a short space of time and it was the only issue on the table. And I think what I am wanting to try and explain is that I was, over that period, receiving the most enormous quantity of new information about all kinds of very complex and fraught issues to do with the separation from Royal Mail and the future strategy for the Post Office and I just didn’t hold these strands, that do all come together, of course they do, and of course I see that now, but I was not holding those strands at the same time in my mind and bringing them all together in the way that I obviously now wish that I had. I think that’s the case, is that –
Mr Beer: Thank you.
Alice Perkins: Is that enough?
Mr Beer: Thank you.
Alice Perkins: Sounds like it.
Mr Beer: You have told us that you were engaging with Lord Arbuthnot. That document can come down. Did you similarly seek to engage with any MPs or similar in Scotland or Northern Ireland at this time?
Alice Perkins: No, I didn’t.
Mr Beer: Did you take any steps to investigate or cause to be investigated whether the issues that were being raised in England and Wales were similarly being alleged by subpostmasters in those jurisdictions?
Alice Perkins: No, I didn’t.
Mr Beer: Can we move forwards please. We’ve looked at your meeting with James Arbuthnot on the 13th, the Board meeting on 15 March.
Alice Perkins: Yes.
Mr Beer: Can we turn to a supper you had with Paula Vennells on 19 March 2012, please, by looking at POL00413669. This is, I think, some sort of meeting organiser entry. Was Glenda Hansen your Executive Assistant or similar?
Alice Perkins: Yes, she was at that point, yes.
Mr Beer: You’ll see that the computer diary records a “Supper with Paula” in the top line?
Alice Perkins: Yeah.
Mr Beer: Booked table for 6.00 pm in your name at The Zetter in Clerkenwell on 19 March between 6.00 and 8.30?
Alice Perkins: Yes.
Mr Beer: The topic seems to be just one:
“Discuss James Arbuthnot Update – (meeting scheduled for 28 March Paula not in attendance).”
So this is a second meeting planned for 28 March with Lord Arbuthnot?
Alice Perkins: Mm-hm.
Mr Beer: Now, it’s right, isn’t it, that not all discussions between you and Ms Vennells would be formally noted and minuted?
Alice Perkins: I think almost none – I don’t think any of them were.
Mr Beer: Does that reflect the fact that a range of formal and informal exchanges made up your working relationship?
Alice Perkins: Yes.
Mr Beer: Not all information would come to you, as Chair, by way of written briefings?
Alice Perkins: Yes, that’s right.
Mr Beer: Much information would be communicated verbally rather than in writing?
Alice Perkins: Yes.
Mr Beer: Now, disclosed alongside this front page of the document are a series of other pages and, if we just skip through them to the next page, please, but one, so page 3, there’s the note of the meeting with James Arbuthnot. Yes?
Alice Perkins: Yeah.
Mr Beer: Then, if we go over two pages to page 5, there’s a note that James Arbuthnot gave you at the meeting on the 13th, yes?
Alice Perkins: Mm-hm, mm-hm.
Mr Beer: If we go over to page 9, thank you. There’s a handwritten note. Are these documents that came disclosed with the meeting invitation, essentially, your preparation for and the product of your meeting with Paula Vennells?
Alice Perkins: I don’t know in which order they came, I’m afraid.
Mr Beer: They’re all together.
Alice Perkins: Okay.
Mr Beer: They’re in a group of documents that are all together. The answer is you don’t know?
Alice Perkins: I don’t know.
Mr Beer: Would you get prepared by Glenda Hansen a little pack, if you were going for supper with Paula Vennells, of the relevant materials, so that you could have an informed discussion with Ms Vennells; would that be usual?
Alice Perkins: I would either have done it myself or asked her to do it, yes.
Mr Beer: In any event, there is quite a long, handwritten note here. That’s your writing, yes?
Alice Perkins: Yes, it is.
Mr Beer: It says, under (1):
“We do not like prosecuting subpostmasters.”
Alice Perkins: Yes, it does say that.
Mr Beer: “We are one of the [very] few public bodies who are allowed to bring our own prosecutions. Not something we take lightly – our lawyers want a [very] high standard of proof.”
Can you see that?
Alice Perkins: Yes, I do see that.
Mr Beer: Then in brackets:
“(+ no one would take lightly the decision to plead guilty to a criminal charge).
“We have taken a number of cases to the criminal court and we have never lost.”
Yes?
Alice Perkins: Yes.
Mr Beer: Is that your note of what Ms Vennells told you?
Alice Perkins: I can’t tell you that, I’m afraid. I mean, I don’t know where that came from.
Mr Beer: I mean, it will be unusual to take a note at a supper meeting at The Zetter?
Alice Perkins: I might have written it afterwards.
Mr Beer: Okay.
Alice Perkins: I mean, that is something that I – you know, memory not always being very reliable, I did sometimes take notes, you know, pretty quickly afterwards.
Mr Beer: In any event, the “we” referred to here, is that likely to reflect what Ms Vennells was telling you rather than your own self-reflection of what the Post Office did or did not do in prosecuting subpostmasters?
Alice Perkins: I don’t think I would have had used the word “we”.
Mr Beer: If this was you self-reflecting?
Alice Perkins: Yes.
Mr Beer: So you think it likely that this is a note, maybe not taken at the time, but written after the event of what Ms Vennells told you at the supper at The Zetter?
Alice Perkins: I think so but I’m not sure.
Mr Beer: If this was what Ms Vennells was telling you, at this time on 19 March, do you know why she was telling you?
Alice Perkins: Well, presumably we were discussing my meeting with Lord Arbuthnot and she would have been telling me what she – she would have been telling me her perspective on this, I think. I mean, if you look at the third point, the –
Mr Beer: “Horizon records transactions”, yes.
Alice Perkins: Yes, that’s not –
Mr Beer: Let’s just read it together, so we can get your –
Alice Perkins: Okay, fine.
Mr Beer: Go on, if you translate it, “Horizon records”?
Alice Perkins: “Horizon records transactions in great detail and with total transparency – all the keystrokes are recorded so we can reconstruct precisely what a subpostmaster has done.”
That’s not me thinking that up from nowhere. I mean, that’s – somebody has said that to me and I’ve written it down, and if it’s – it’s a bit hard to tell without seeing how this – without knowing how this bundle of things were put together but –
Mr Beer: There’s simply a series of pages, pieces of paper –
Alice Perkins: Right.
Mr Beer: – one after the other, given to us by the Post Office –
Alice Perkins: Yes.
Mr Beer: – after the meeting invite?
Alice Perkins: After – so they’re all together with the meeting invite?
Mr Beer: Yes.
Alice Perkins: That’s how they were kept?
Mr Beer: Yes.
Alice Perkins: Well, then it does – yes, that’s not me briefing myself, if you see what I mean.
Mr Beer: Yes, and so this is also likely, the point at 3, to have been something that Ms Vennells was impressing upon you: all the keystrokes are recorded so the Post Office can reconstruct precisely what a subpostmaster has done?
Alice Perkins: It – on the face of it, it must have been, unless somebody else said that to me but that doesn’t – from what you’re telling me, that doesn’t seem to be likely.
Mr Beer: Did anyone ever explain to you, at this time or later, what ARQ data was?
Alice Perkins: No, I don’t think so.
Mr Beer: Any difference between ARQ data and enhanced ARQ data?
Alice Perkins: No.
Mr Beer: Okay. At the foot of the page, we can still see it, it’s recorded:
“Vast [majority] of subpostmasters cope well – Horizon supports them, training [and] free service call centre, help at …”
Alice Perkins: Dearne?
Mr Beer: Darlington, maybe: at somewhere.
Alice Perkins: A place.
Mr Beer: This series of points – we don’t like prosecuting subpostmasters; there’s a very high standard of proof; no one pleads guilty lightly; Horizon transactions are all recorded on the system by way of keystrokes, so that the Post Office can reconstruct what has happened; Horizon supports the vast majority of subpostmasters who cope well” – that, essentially, became the party line that was deployed for the following years, didn’t it?
Alice Perkins: Yes, it did.
Mr Beer: On what you know, would you say this is Ms Vennells giving it to you at a supper meeting at The Zetter?
Alice Perkins: It looks like that but I don’t – you know, I can’t swear that that is what is the case but it does look like that.
Mr Beer: If we just go back up to (2), which we skipped over.
Alice Perkins: Yeah.
Mr Beer: “We have commissioned a number of studies of the Horizon system – from internal audit through to Deloitte …”
“Didn’t”, or “don’t”, is that?
Alice Perkins: I think what that means is that they don’t audit the Royal Mail, us or Fujitsu. I think that’s what that’s saying.
Mr Beer: Ie that’s emphasising their independence?
Alice Perkins: Yeah.
Mr Beer: “… they have looked at the integrity of the system from a managing accounting perspective and have upheld it.”
Alice Perkins: Yes.
Mr Beer: On the basis of the internal audit report, did you form a view whether what you were being told there was accurate or not?
Alice Perkins: I can’t remember. But I – if – you know, I think we have already established that I hadn’t properly checked out what the Deloitte position was. I’d had that email from Alwen. It could have been that there were other studies from Deloitte but I didn’t – I mean, I didn’t definitively know that.
Mr Beer: Thank you. That can come down. Thank you.
You’ve told us already that the record in the 15 March Board meeting, that you hoped that you could find a way to convince James Arbuthnot and other MPs that the system was not at fault, didn’t reflect your view –
Alice Perkins: Yes.
Mr Beer: – at the time.
Alice Perkins: Yeah.
Mr Beer: Can we look, please, at POL00085836, and look at the bottom, please, of page 1. This is an email chain in which you are not involved.
Alice Perkins: Yes.
Mr Beer: It’s between Angela van den Bogerd and Craig Tuthill. Ms van den Bogerd says:
“I met with Simon Baker today – he’s been asked by Alice Perkins to find a way of demonstrating that the Horizon system is robust and not subject to ‘glitches’ as claimed by the JFSA former [subpostmasters].”
Does that again reflect your mind at the time that the purpose of any review contemplated at this time was to find a way of demonstrating that the system is robust?
Alice Perkins: Absolutely not. Those are not my words and I’m absolutely sure that that was not what was in my mind. What was in my mind was that we were going to – I think that we – we were trying to think of ways in which to demonstrate to Lord Arbuthnot – and I think later Mr Letwin came – joined that meeting, there was a kind of model office in the Head Office of the Post Office at the time, where you could – I’m looking – trying to find the word here – you could model what was happening in – what could be happening in a post office.
I thought that it would be very useful to demonstrate the system to them but I was absolutely not asking anybody to spin a message here.
Mr Beer: This is the second record that we’ve got – the first being a direct record in the minutes and this being a conversation between people not including you – which does attribute to you a desire to spin, don’t it?
Alice Perkins: It attributes it to me, but that doesn’t mean that it’s correct.
Mr Beer: So there’s been a misunderstanding, has there?
Alice Perkins: I think there has been a misunderstanding here and I think – I’m sorry to make this point again and to jump ahead but I think, if you look at documentation, what I said in my witness statement about how determined I was to get an independent investigation going and what I did about the terms of that investigation, and some of the things that I said later, there is a consistent record of me wanting to set up something that was going to look at this in an independent way, in a – I was prepared, if you like, to lift the rock and see what was underneath it.
Mr Beer: Can we move forwards then, please, to 17 May 2012, a further meeting with James Arbuthnot and, as you’ve said, Oliver Letwin MP. POL00105479. This is a briefing for that meeting, it’s about 20 pages long and I think this is your version of the briefing because it’s got your handwriting on it?
Alice Perkins: It has.
Mr Beer: Can we look, please, to page 23, please. We can see here, under “External Scrutiny”, at the foot of the page, the briefing says:
“Horizon and Post Office systems environment have always been subject to external scrutiny both for assurance and accreditation purposes. Ernst & Young carry out an annual financial systems audit; an independent auditor also carries out a yearly audit to maintain the system’s Payment Card Industry (PCI) accreditation.”
The reference there to Ernst & Young’s yearly audit, yes –
Alice Perkins: Yes.
Mr Beer: – annual financial systems audit, would you agree the way that this is being referred to here suggests that Ernst & Young could be relied on because they had given Horizon a clean bill of health?
Alice Perkins: That – just those highlighted words?
Mr Beer: Well, the whole context of external scrutiny and the first bullet point.
Alice Perkins: Yes. But then I asked a question about that in the –
Mr Beer: Well, I’m going to come to that in a moment?
Alice Perkins: Sorry.
Mr Beer: It’s just what you were being briefed –
Alice Perkins: Okay yes, okay.
Mr Beer: – was, essentially, again, a reassuring message.
Alice Perkins: Yes.
Mr Beer: You can take faith in Horizon because of external scrutiny, in particular Ernst & Young carry out an annual financial systems audit.
Alice Perkins: Yeah.
Mr Beer: But, again, by this time, you knew that Angus Grant of Ernst & Young was concerned about the situation and had specifically raised his concerns with you, in an introductory meeting.
Alice Perkins: Yes.
Mr Beer: By this time, did you know the results of the 2012 Ernst & Young audit? This is 17 May 2012.
Alice Perkins: I think that might have – I can’t remember the sequence. That might have come later. There was an Audit and Risk Committee to which that came, which was – was that in May, I think?
Mr Beer: Yes, and I’m asking whether you knew, at that time, the audit of Ernst & Young, for the year 2011/2012 had said that, in high level summary, the IT systems couldn’t be relied on for audit control purposes and they had had to take some mitigating measures in order to sign off?
Alice Perkins: I remember that. I can’t remember whether I knew that at this juncture because I can’t remember the exact sequence of when I would have seen that.
Mr Beer: You write, next to “External [audit]”:
“How relevant are these to this subject?”
Alice Perkins: Yeah.
Mr Beer: You were concerned, were you not, in the light of what you knew, that deploying points that there had been external scrutiny of Horizon in support of its integrity might be misleading?
Alice Perkins: I was certainly questioning, yes. I had a questioning frame of mind, here.
Mr Beer: The briefing does not say directly that the Ernst & Young audit had given Horizon a clean bill of health –
Alice Perkins: No.
Mr Beer: – but that’s the implication, isn’t it, if this kind of briefing was regurgitated to the MPs?
Alice Perkins: Mm, yeah, it’s intended to be reassuring.
Mr Beer: When you started to engage with MPs in early to mid-2012, over their concerns with Horizon, were any steps taken at Board level to query the propriety of continuing to prosecute?
Alice Perkins: At that stage, not at Board level, no. Not at that stage.
Mr Beer: Were you aware that criminal prosecutions were continuing, and were continuing to rely on Horizon evidence, whilst you were discussing the setting up of an independent review?
Alice Perkins: I would have been, yes.
Mr Beer: Do you know why that issue was not discussed at Board level, “We’re thinking of commissioning an independent review because of these concerns about Horizon data. We’re continuing to rely on Horizon data for criminal prosecutions”?
Alice Perkins: That wasn’t – I – that was not raised by me at that time and it wasn’t raised, as far as I’m aware, by anybody else.
Mr Beer: Thank you. Can we move forwards, please, to the selection of Second Sight over, in fact, Deloitte, to carry out the independent review –
Alice Perkins: Yes.
Mr Beer: – and we’re among forward a month now to June 2012.
Alice Perkins: Okay, yes.
Mr Beer: Can we look, please, at POL00096576. This, we can see, on its face, is a document prepared by Second Sight, and its purpose is described under the subtitle:
“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.”
If we go forwards then, please, to page 5:
“This Case Review approach will include the following tasks:
“[1] Select 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 new and old versions of Horizon if possible)
“which have been taken up by MPs.”
So did you know that the proposal made by Second Sight to conduct an independent review involved, essentially, those elements set out there?
Alice Perkins: Yes, because I’m sure – I saw those terms of reference in draft and commented on them.
Mr Beer: So that involves, firstly, the selection of a representative sample of cases; secondly, to include both new and old Horizon, yes –
Alice Perkins: Yes.
Mr Beer: – and include cases specifically raised by MPs and where the defendants claim they didn’t take any cash, yes?
Alice Perkins: Yes.
Mr Beer: Can we look, please, at POL00180209, and the bottom of page 1, please. If we stop there. There’s an internal email chain involving Mr Baker and Ms Crichton and Ms Sewell. You’re not copied in. They’re discussing Second Sight’s proposal that we’ve just looked at:
“Attached is Ron’s proposal.”
Then Simon Baker says:
“My view is we make it clear to Alice/Paula the distinction between the work [that] Ron [ie Second Sight] is proposing ([which is] an independent review of past cases) and the Horizon Forensic Audit (the Deloitte’s proposal) and put it on the agenda to discuss tomorrow.”
Was the distinction between those two types of investigation ever made clear to you?
Alice Perkins: I didn’t remember having this – until I saw some of these documents, when I first started putting my witness statement together, I didn’t – I was mystified by these papers because my recollection was – and it’s a clear recollection – that when the discussion with Lord Arbuthnot had got to the point of what kind of review, we did talk about whether we should use a big organisation such as Deloitte and Lord Arbuthnot was very clear that he didn’t want to use that kind of organisation. He wanted to use a different kind of approach and that was very instrumental – well, instrumental, it was very influential in my thinking.
Mr Beer: That’s the way you describe things in your witness statement –
Alice Perkins: Yes.
Mr Beer: – that it was the species of organisation –
Alice Perkins: Yes.
Mr Beer: – which was the relevant consideration?
Alice Perkins: Yes.
Mr Beer: The Big Four –
Alice Perkins: Exactly.
Mr Beer: – or more boutique, off the beaten track –
Alice Perkins: Yes.
Mr Beer: – investigators –
Alice Perkins: Yes.
Mr Beer: – rather than a distinction between the type of work that they would be undertaking?
Alice Perkins: I think so and, as I said later in my witness statement, one of my regrets is that at this juncture, I didn’t stop and think through more clearly with my colleagues on the Board what exactly it was we were trying to do here and what would have been the best way of doing it. I think that – do you mind me giving you a bit of a context here?
Mr Beer: Please do.
Alice Perkins: I think it’s really, really important to understand here that, when I came back from my first meeting with Lord Arbuthnot, when I had proposed that we should take a fresh look at this, I had a meeting with Mike Young and Susan Crichton and they told me that they thought that this was not a good idea, that the system had been investigated numerous times, nothing had ever been found that was wrong, and that the organisation had basically too much on at the time to devote time to setting up such a review.
And it was perfectly true, the organisation did have a huge amount on at that time. I didn’t think that either of those reasons were good reasons for not looking at this afresh and there then elapsed a period – and I can’t remember how long it was, but it must have been several weeks – and absolutely nobody came back to me on this.
Mr Beer: A period of silence, you describe it as in your witness statement.
Alice Perkins: Exactly, and then I then, well, obviously knew that I would need to follow up this discussion with Lord Arbuthnot, couldn’t understand why I hadn’t heard anything, raised it again, and was told that nothing had been done about it because it was thought to be a bad idea.
Mr Beer: You subsequently refer to this, I think, as pushback from the business?
Alice Perkins: Well, Alwen described it as me saying that this and other things were pushback from the business.
Mr Beer: In any event, this document on 6 June, records an intention to make it clear to you as to the distinction between the type of work, rather than the nature of the organisation, that is proposed?
Alice Perkins: Yes. That is perfectly true. Yeah.
Mr Beer: Can we turn, then, to a meeting that you held the next day at 7 June, POL00233736, and go – sorry, this is a document created by, I think, the Post Office, subsequently –
Alice Perkins: Oh, yes, okay.
Mr Beer: – setting out a timeline –
Alice Perkins: Yes.
Mr Beer: – of the Mediation Scheme –
Alice Perkins: Yeah.
Mr Beer: – and, in fact, the events that preceded it.
Alice Perkins: Yes.
Mr Beer: Can we go to page 3, please. If we just look there, it’s at the bottom of the page we’re looking at, its now towards the top 7th June so that’s the next day, can you see that?
Alice Perkins: Yes.
Mr Beer: Third box down.
Alice Perkins: Yes.
Mr Beer: “A meeting is held [with] Paula Vennells, Alice Perkins, Susan Crichton, Alwen Lyons and Simon Baker …”
Alice Perkins: Yeah.
Mr Beer: So we’ve seen the discussion the previous day between Mr Baker and Ms Crichton:
“… where the Deloitte and Second Sight proposals are discussed.
“Second Sight is chosen as the preferred supplier.”
We haven’t got a record of this meeting of the 7th. This is the only reference to it that I think we can find.
Alice Perkins: Yeah.
Mr Beer: Was the matter that was discussed in the email chain the day before, 6 June, ie an intention to draw to your attention the distinction between the nature of the work being undertaken –
Alice Perkins: Yeah.
Mr Beer: – in fact, drawn to your attention?
Alice Perkins: I don’t remember it being drawn to my attention. That doesn’t mean that it wasn’t.
Mr Beer: Was one reason for preferring Second Sight over Deloitte that Second Sight were to conduct a review which was much narrower in scope, ie reviewing the system in the context only of sample cases rather than forensic IT audit of the whole system?
Alice Perkins: Not in my mind no, absolutely not.
Mr Beer: Why was the decision made at this meeting, before you go and see James Arbuthnot again, to prefer Second Sight over Deloittes?
Alice Perkins: I think for the reason that I – as far as I can recall, I think the main reason for this was because of this discussion I’d had with Lord Arbuthnot earlier about what kind of organisation should be used to do this review. I think it – I don’t think I can add anything more.
Mr Beer: So, in your mind, the reason for deciding on Second Sight, rather than Deloitte, was nothing to do with the nature or extent of the audit that would be conducted?
Alice Perkins: Absolutely not. No.
Mr Beer: Can I turn, then, to the scope of the investigation, in terms of whether convicted subpostmasters would be included within it –
Alice Perkins: Yeah.
Mr Beer: – and look at POL00096606. If we look at the bottom of the page, please, we see an email from you and, if we just scroll up a little bit, it would have been to, I think, Paula Vennells, Susan Crichton, Alwen Lyons.
Alice Perkins: Okay, yeah.
Mr Beer: Your email:
“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 tins 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 [be] 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 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 believer) 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.”
So that was your view, your clear view, on 9 June?
Alice Perkins: It was, and it’s absolutely reflective of my view throughout.
Mr Beer: Can we look, please, at paragraph 161 of your witness statement, please, which is on page 80. The bottom part of the page, paragraph 161, fourth line, you say:
“On the 7 June email Susan refers to comments that Paula and I had given her that morning (I assume in person). She also said in that email that she had given thought to the cases in which subpostmasters had been criminally prosecute – she thought that we did not want to be seen to reopen those cases, but should position this as a more limited review of the existing evidence, while for those who had not been prosecuted [the Post Office] should offer a full and independent investigation.”
That I think you’re attributing to Susan Crichton –
Alice Perkins: I am.
Mr Beer: – that view. Was that a view that she held strongly?
Alice Perkins: I think, yes, I think she did hold that view strongly.
Mr Beer: If what you say here is accurate, she’s not saying that those that have been criminally prosecuted should be left out of account. She’s saying that a separate process should be set up for them in which there is a full and independent investigation, correct?
Alice Perkins: That is what she’s saying at this point, yes.
Mr Beer: Why wasn’t that done?
Alice Perkins: How do you mean, why wasn’t that done? I’m sorry.
Mr Beer: Why was the Second Sight sample case approach to test the integrity of Horizon taken, on the one hand, with a full and independent investigation looking at those that had been criminally prosecuted, on the other – ie two investigations, rather than one?
Alice Perkins: Should there have been two investigations, you’re asking?
Mr Beer: Yes. Well, I’m not asking should there; I’m asking why there wasn’t?
Alice Perkins: Why there wasn’t. I don’t think – I mean, I can’t give you a detailed answer to that question. I think that – I can’t answer that question. I’m really sorry. I don’t know.
Sir Wyn Williams: I’m sorry to interrupt again but am I understanding paragraph 161 correctly? My reading of that initially was that Ms Crichton was making the suggestion that there should be a more limited review of the convicted people, with a full and independent investigation only for those who had not been prosecuted. Am I missing something here?
Alice Perkins: No, I think that’s –
Mr Beer: Quite right, sir.
Alice Perkins: I’ve got very confused, I’m afraid, but I think what you’ve just said, Chair, is right. Yes.
Sir Wyn Williams: Well, I think all I’m doing is reading what you’ve written, Ms Perkins.
Alice Perkins: Yeah.
Sir Wyn Williams: But there’s no nuance that I’m missing; is that correct?
Alice Perkins: Just let me re-read it, please.
Sir Wyn Williams: Yes.
Alice Perkins: Yes, I think that’s exactly right. So this is about a single investigation with two different ways of treating different categories of cases.
Mr Beer: So you understand that’s what Ms Crichton proposed: a single investigation with two different approaches, depending on whether or not the subpostmaster had been prosecuted or not?
Alice Perkins: Yes.
Mr Beer: Why wasn’t that done?
Alice Perkins: I don’t know.
Mr Beer: Can we go back to the email chain that we were just looking at. POL00096606. Remember, at the foot of the page here, there’s your email – if we just scroll down to see it – the one saying you’re clear that we should include all cases, irrespective of whether they’ve been decided in court, yes?
Alice Perkins: Yes.
Mr Beer: If we scroll to the top of the page, please, we can see Alwen Lyons’s reply, second email down, just to Ms Vennells:
“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 [sic] case 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 it external advice on the effect this would have on cases which have been through the courts.”
So, you remained of the view that all cases raised by MPs should be included in the independent review?
Alice Perkins: Yes.
Mr Beer: Your view was seemingly not shared by, at least, Ms Crichton?
Alice Perkins: Yes.
Mr Beer: Was it also not shared by Ms Vennells?
Alice Perkins: I don’t know.
Mr Beer: Did anyone else on the Post Office Board oppose your view?
Alice Perkins: So, as I said to you a minute or so ago, I very much regret that I didn’t bring in other members of the Board on this process. So I am not sure that other members – I certainly – I am sure that I did talk to Neil McCausland about this at some point, I can’t tell you when that was, and I know he had some questions about it, but I should – with the benefit of hindsight, what I absolutely should have done is I should have ensured that this issue, this whole question of setting up the review, what the review should have done and who should do it, should have come to the Board and there should have been a proper Board discussion about it and I really regret that I didn’t do that.
Mr Beer: It’s suggested in the second paragraph of that email that you felt that the business was pushing back unnecessarily. Did you feel that the business was pushing back unnecessarily?
Alice Perkins: Yes, I did feel that, partly because – I mean – excuse me. I did feel that because of the reaction that I had to the original proposal, because I got that negative reaction and then nothing happened and then I had to re-raise the issue in order to get something done, and then I thought, which is what we’re discussing here, that the scope should be inclusive and I was being – it was being argued that it shouldn’t be.
Mr Beer: Who in the business was pushing back unnecessarily?
Alice Perkins: I thought that Susan Crichton was definitely pushing back unnecessarily. I thought Mike Young was pushing back unnecessarily. I – and they were – those were the two people who I had in the front of my mind.
Mr Beer: Was the substance of their objection that Horizon had been tested independently in the past and had been found to be robust and not at fault?
Alice Perkins: That was one of them, yes.
Mr Beer: What were the other elements of the objection to an independent review?
Alice Perkins: As expressed to me, that, given everything else that the business was trying to do at the time, there wasn’t the – there wasn’t the capacity to do this as well.
Mr Beer: Did you seek to understand any reasoning that was explained to you that, if Seema Misra’s case was included, this might be red rag to a bull?
Alice Perkins: I thought that – I think that what I was wanting to do – maybe I was being simplistic about this. I just wanted these cases to be independently investigated by people who had credibility – that would have credibility obviously inside the Post Office but also outside. I don’t think I really – I just wanted to get at the facts.
Mr Beer: Thank you.
Sir, that might be an appropriate moment for the second morning break. Can we break until 12.20, please?
Sir Wyn Williams: Yes, of course.
Mr Beer: Thank you, sir.
(12.10 pm)
(A short break)
(12.21 pm)
Mr Beer: Good afternoon, sir, can you see and hear us?
Sir Wyn Williams: Yes, thank you.
Mr Beer: Ms Perkins, can we turn to your third meeting with Lord Arbuthnot. This one is on 18 June 2012. This time it was with other MPs.
Alice Perkins: Mm-hm.
Mr Beer: Can we look at a record of that meeting, which I don’t think you had when you wrote your witness statement. It’s JARB0000001. Thank you. These are the minutes of the meeting. Do you recall attending the meeting with James Arbuthnot, other MPs?
Alice Perkins: Yeah.
Mr Beer: If we look at the foot of the page, please, the minute records you giving background information –
Alice Perkins: Yes.
Mr Beer: – and the Post Office’s perspective. You introduce your colleagues and said:
“Post Office is now a completely separate entity from the Royal Mail. She [that’s you] arrived at the organisation in August 2011 and became aware of the issue soon after starting.”
Alice Perkins: Yeah.
Mr Beer: “She [that’s you] emphasised that the matter was a very serious matter for the Post Office, whose business rests on its reputation as being trustworthy. She said that the Post Office also recognised full well that the matter was also very serious for the subpostmasters and mistresses involved as it was invariably life changing.”
Then over the page, please.
“[You] said that now was a time of enormous change at the Post Office, and that it was important to give MPs confidence in the business and its reputation.
“[You] stated that the matter involved treading a tightrope regarding questions of money. The Post Office and its staff are stewards of large quantities of cash – the cash does not belong to the Post Office; it is in transit as it comes through the Post Office. There is the issue of trying not to put temptation in people’s way, but in any retail business this is not possible.”
That statement there, “putting temptation in people’s way”, was that you seeking to imply that the causes of loss was down to subpostmasters taking the money, without actually coming out and saying it?
Alice Perkins: No. Well, can I try and explain what I think it was I was trying to say here?
Mr Beer: Yes, please do.
Alice Perkins: It’s been suggested that I thought, or was inclined to think, that subpostmasters were more likely to be tempted by the fact that there was a great deal of cash lying around than any other group of people, and that is absolutely not my position – was not my position then, it certainly is not my position now – but it was not my position then. What I was aware of, because, by then, I had done a number of visits to different post offices, I had been really taken aback, if you like, by the fact that there was so much cash in the business of – for different reasons, and I was aware of the fact that, in any retail business, there was and is some level of fraud, for want of another word, and this could be something that would be in the minds of some people in the organisation.
But it was absolutely not – I was absolutely not thinking or intending to say that I thought subpostmasters were inherently dishonest or more likely to be dishonest. In fact, my impression from those visits was that subpostmasters were doing a very complex job and I was – I had a lot of respect for them in what they were trying to do.
Mr Beer: Why did you hold that belief, as you claimed, when you’d been told that every case that the Post Office had ever taken to prosecution involving the Horizon system had found in favour of the Post Office?
Alice Perkins: Because I thought – I believed what I was being told, that those cases had all been won by the Post Office. I believed that was true and I believed that – so I did believe that some people – I did genuinely believe that some people were guilty but I wasn’t approaching this issue with a mindset that said they were – you know, that they were more likely to be tempted than any other group of people might be. I’m not sure if I’m explaining myself very –
Mr Beer: Yes, it’s clear what you’re saying. If we move further down – thank you – we can see what to Paula Vennells then said:
“She said that temptation is an issue …”
Next paragraph:
“Of the 11,800 subpostmasters currently employed, only a tiny number are presenting [problems].”
“The Horizon system is very secure. Every keystroke used by anyone … is recorded and auditable …
“It appears that some subpostmasters [next paragraph] have been borrowing money from the [account] in the same way as they might do in a retail business …”
Then:
“Every case taken to prosecution that involves the Horizon system has thus far has found in favour of the Post Office.”
That rather reflects the note that we think was a record of the Zetter supper, doesn’t it –
Alice Perkins: Yes.
Mr Beer: – which you’ve, I think, said did reflect the Post Office corporate position for a number of years?
Alice Perkins: Yes.
Mr Beer: As the Chairman of the Board, what steps would you expect your CEO to take before telling a group of MPs that every case taken to prosecution has thus far found in favour of the Post Office?
Alice Perkins: I would have expected that to be an accurate statement.
Mr Beer: Reasonable to rely on what she had been told orally?
Alice Perkins: No, not really.
Mr Beer: We know that, by this time, a lady called Nichola Arch had been acquitted in 2004 –
Alice Perkins: Yes.
Mr Beer: – having blamed the Horizon system for the losses?
Alice Perkins: Yes.
Mr Beer: A lady called Maureen McKelvey had also been acquitted in 2004 by a jury in Northern Ireland, having blamed Horizon for the losses?
Alice Perkins: Yes.
Mr Beer: And Suzanne Palmer had been acquitted by a jury in 2007 and the jury had, in fact, sent a note saying, “What is Mrs Palmer to do if she didn’t agree the figures that Horizon had produced?”, and the Post Office was unable in court to answer that question and had been on the wrong end of a cost order for £78,000, the Post Office had.
What steps would you expect, reasonably, a CEO to take to seek to uncover the true position?
Alice Perkins: Well, I would – you know, it’s difficult to generalise, isn’t it, but I think that, if you are going to say something as the Chief Executive on behalf of the organisation of which you are the Chief Executive, you should have tested those propositions by asking to see the evidence, by asking the key people what the facts were.
Mr Beer: Lord Arbuthnot has told us that he didn’t believe what he was being told for a minute. He thought that he was being misled here –
Alice Perkins: Okay.
Mr Beer: – and so it didn’t appear to be operative on his mind –
Alice Perkins: Okay.
Mr Beer: – because he trusted what the subpostmaster that he’d actually met –
Alice Perkins: Yes.
Mr Beer: – had been telling him?
Alice Perkins: Yeah.
Mr Beer: Did you accept, at face value, the accuracy and truth of what Ms Vennells was saying?
Alice Perkins: Yes, I did. Yes, I did.
Mr Beer: Thank you. That can come down.
Can we move forwards a year, please. I’m not going to ask you questions about the conduct of the Second Sight investigation. You address that in some detail in your witness statement.
Alice Perkins: Okay, thank you.
Mr Beer: Can we turn to the days and weeks before the production of Second Sight’s Report on 8 July 2013 –
Alice Perkins: Yeah.
Mr Beer: – and the Board’s preparation for that publication and the Board’s response to the publication.
Alice Perkins: Yes.
Mr Beer: Can we start, please, by looking at an email of 27 June 2013. POL00098782. If we scroll down, please, and look at an email from Martin Edwards to Paula Vennells. Can you see that, of 27 June?
Alice Perkins: Yes.
Mr Beer: Then if we just scroll to the top of the page. We can see the next day, that’s sent on to you.
Alice Perkins: Yes.
Mr Beer: Okay. So let’s go back down to Martin Edwards’ email. A heading “Re: [James Arbuthnot]?” In the second paragraph, second line, he says to Ms Vennells:
“As discussed we need to think about a Plan B given the likelihood that James won’t agree to delay the meeting/report. We need to be very careful not to overplay our hand with [Second Sight] – they could turn out to be quite obvious if we threaten them with legal action or attempt to replace them with another firm. Easy for this to be portrayed in the media as heavy-handed tactics because we don’t like their findings (it plays directly into the existing perceptions we’re trying to counteract).”
At this time, so 27 June 2013, what was your understanding of the concern amongst senior Post Office Executives about the Second Sight review?
Alice Perkins: My understanding was that the executives thought that there were likely to be things in the Interim Report, statements made by Second Sight, which were not properly substantiated by the evidence.
Mr Beer: What steps, if any, did you take to ensure that you were fully aware of what those issues were and the evidence that Second Sight were leaving out of account?
Alice Perkins: I think – I mean, I was bearing it in mind. I obviously, at this stage, didn’t know what was going to be in the Second Sight Report but I would have been concerned that there might be things in that report which were critical without being properly substantiated.
Mr Beer: Were you given any evidence of that, as opposed to what people were saying?
Alice Perkins: I simply can’t remember how much detail I was given about it at that point. I think that it’s worth bearing in mind that this thought, that Second Sight were advancing propositions about the Horizon system and other aspects of the Post Office’s operations that were not fully substantiated or that the Post Office had not had time to – there hadn’t been time for them to consider properly the Post Office’s evidence, those were – those had been around for some weeks before this. So this wasn’t – there wasn’t a new thought at this stage, that this might be happening.
Mr Beer: Was it the view of senior executives of the Post Office that it, the Post Office, could exert a degree of influence over Second Sight at this time?
Alice Perkins: I think – I am absolutely clear that it was never my intention or the intention of anybody on the Board to influence Second Sight’s evidenced findings –
Mr Beer: I was asking, sorry, Ms Perkins, about executives?
Alice Perkins: Sorry, I know you are. I don’t believe that that was something which the executives were trying to do either.
Mr Beer: To your understanding, was it important for the Post Office to seek to control a narrative in the media regarding its handling of the Second Sight Report?
Alice Perkins: For me, what was important was that – there was a lot riding on the Second Sight Reports – on the Second Sight’s Interim Report – and, if they were going to find – if they were going to say that they had found things that were wrong, that were supported by the evidence, that would obviously be uncomfortable and there would be all kinds of implications and consequences of that but that was something I was absolutely prepared to face up to. What I didn’t want was for there to be any allegations or innuendo that there was more that was wrong than could be properly substantiated.
Mr Beer: Can we move forwards, please, to the next day, POL00144909, middle of the page, an email from you to Paula Vennells:
“[Thank you] for the updates. I am glad we have the best people on this.
“Three thoughts – first is probably a red herring but I’ll mention it because it came into my mind. Are the lawyers also thinking about implications for [the Post Office] and the people in it, if there is any suggestion by [Second Sight] that things have been awry – may be [over the top]/worst-case scenario but just need to be aware of Maxwellisation/Salmon letters angle.
“Second, I agree with Martin about the risks of getting heavy with [Second Sight] – deeply unattractive. But I haven’t heard anything yet which gives me hope that we can get this properly back on track. Which is worse? (I don’t know the answer). (Keep aiming high here! That is, for the goal of no interim/no meeting. But I recognise that this is not within our control.)
“Third, a constructive suggestion! Shall we ask Oliver Letwin to help us turn this round?”
Before writing this email, had you taken any steps to get fully to the bottom of the apparent tension between the Post Office and Second Sight over the terms of Second Sight’s proposed findings?
Alice Perkins: I don’t think at that stage anybody had seen – well, I certainly was not given the impression that anybody had actually seen what it was they were going to say. I think it was, as far as I was concerned, it was – there’d just been a series of discussions or meetings.
Mr Beer: How was it known, then, that they were going to say things that were unevidenced?
Alice Perkins: Because of the things that had been said in those conversations.
Mr Beer: So it was just oral conversations?
Alice Perkins: Over a long period of time. I mean, this isn’t just something that’s come at this point. As I have set out in my witness statement, the – a series of events, if you like, or things that happened that made the executives and me somewhat concerned about what Second Sight were basing their – or would be basing their findings on.
Mr Beer: Were you not concerned at this stage of your previous experience of the business unnecessarily pushing back, that this was happening again and this was a case of executives not wanting to face uncomfortable facts and findings?
Alice Perkins: I think that, at this point, I was becoming very sceptical about whether Second Sight were the right people to do this job.
Mr Beer: I’m asking you about whether you were sceptical of your executives, given that you said that you had been rather unimpressed about their conduct in the very setting up of this enterprise. Had that concern evaporated?
Alice Perkins: No, I don’t think it had evaporated but what I was worried about was that we were suddenly coming very, very close to there being a public document, which was obviously going to get a great deal of attention and I thought that – I was concerned about unnecessary damage to the Post Office, as opposed to unavoidable and properly referenced damage.
Mr Beer: Was this all based on whispers?
Alice Perkins: No, I don’t think it was based – no, I wouldn’t accept that. No.
Mr Beer: You say here “Keep aiming high” and you tell us in your witness statement that you don’t know what you meant by “Keep aiming high”?
Alice Perkins: Yes.
Mr Beer: Isn’t it explained by the next sentence, that is “Keep aiming high” means achieving the goal of having no Interim Report and no meeting with James Arbuthnot?
Alice Perkins: So what I had in mind there was not what some people might read into this, that I was thinking could he possibly have been thinking that there would be no report at all from Second Sight and, therefore, no meeting to discuss it? I think that what I was expressing there was the thought that the Interim Report was premature. That this was – that more time needed to be spent on the work leading up to a document that was going to be public.
That’s what I think I was saying there because the – as I remember it, the timetable – first of all, the timetable had slipped very, very, very greatly. Originally, when Second Sight started their work, we believed – they believed and we believed that the work would be completed in a matter of weeks, a small number of months, and here we were a year later and the MPs were perfectly understandably becoming frustrated by that.
We were coming up to the summer recess and they were very, very keen, and I completely understand why, to be given an update on where things were and that’s what drove the idea of having an Interim Report but, in terms of the substance of what had been done, the timing was artificial.
Mr Beer: Was this you giving the green light to your executives for taking a robust position with Second Sight to get them, Second Sight, to alter the contents of their report?
Alice Perkins: It was never my intention nor did I seek to influence the executives to do anything that would stop the properly evidenced findings by Second Sight being reported. My concern was that there would be, in somebody else’s words, “loose language”, which would be interpreted negatively, for which there wasn’t a proper substantive base. That was my concern and had been my concern for some time, by the end of June.
Mr Beer: Can we turn to POL00296944. This is a few days later, 1 July, an email from Paula Vennells to you, heading “Latest on [Second Sight]”:
“Hi Alice, I’m looking forward to catching up properly [today]. I thought the board were generous in their patience tonight over the [Second Sight] discussion. It is helpful to know that they are supportive of the need to be robust.”
Then carrying on, second paragraph:
“I caught up with Susan this evening after we finished. She had finished her meeting with [Second Sight] and [was] of the view that they do now understand the risk of being caught up in something bigger and more sensitive. She is hoping that their report should be more balanced, should say that they found no evidence of systemic Horizon (computer) issues but will confirm shortcomings in support [of] processes and systems, and that the Post Office has already identified and corrected a number of these.”
Isn’t that a reflection of Second Sight being influenced by the Post Office as to the conclusions in its report?
Alice Perkins: I think that’s evidence of what it was I said a minute ago, which is that it was really, really important that anything that Second Sight said in the Interim Report was based on firm, provable evidence, rather than speculating, if you like.
Mr Beer: In what way did you understand Second Sight’s Interim Report needed to be “more balanced”?
Alice Perkins: My understanding was that there were – there was a risk that there were – I don’t think anyone had seen a draft of it –
Mr Beer: No, it doesn’t come out until the 5th.
Alice Perkins: No.
Mr Beer: So, we’re, at the moment, talking just about what people are saying.
Alice Perkins: Yes, that is absolutely right and that’s why the Board didn’t see that report in draft because there wasn’t time. So what I and I believe the Board were being told on that telephone meeting that we had had was that there was a real risk that Second Sight would be saying things, critical things, about the Post Office’s operations, which either there had not been – there had either not been time for them to consider properly the Post Office’s evidence, or – and/or, they were floating, if you like, things that had been said to them that they thought might be true.
And that what the Board was saying was that they were encouraging, they were supportive of the executives making a clear distinction between those things which were properly evidenced and properly considered and those which were not yet, and bear in mind that this was – everybody knew this was an Interim Report and there was further work to be done.
Mr Beer: Was it your understanding that it was at Post Office’s suggestion or insistence that a line was included that Second Sight had found no evidence of systemic computer issues?
Alice Perkins: I have never understood that that was a phrase that had come from Post Office executives. My understanding always was that when the Post Office executives heard that this was going to be said, obviously that was a relief, if you like, not knowing what might have been said. But I have never ever understood that anybody suggested that Second Sight should say that.
Mr Beer: Can we move on, please, to 3 July, POL00027852. This is an email from Martin Edwards of 3 July to you and others or to you and Paula Vennells, and others, copied in. He says he’s attaching a briefing note, first line:
“… here’s the briefing note for the meeting with [James Arbuthnot].”
Can you see that?
Alice Perkins: I don’t think I’ve seen this before but I can see that that’s what he’s saying, yes.
Mr Beer: I think this was amongst the documents that you have been shown, yes?
Alice Perkins: Was it? Okay. Right.
Mr Beer: So it’s 3 July, I’ll take it slowly, if you think you may not have –
Alice Perkins: Yes, thank you, I appreciate that.
Mr Beer: – read it all.
Alice Perkins: Thank you.
Mr Beer: If we go to the briefing note, which is the second page, “Key Objectives and Points to Cover at the Meeting”, and then if we go down, please, to the foot of the page.
Alice Perkins: Mm-hm.
Mr Beer: That’s it, “On the two ‘exceptions’”, at the foot of the page.
Alice Perkins: Oh, yes.
Mr Beer: It’s ringing a bell now, is it?
Alice Perkins: Yes, thank you. I think it was the cover email I was unsighted on, okay.
Mr Beer: “… we proactively disclosed to [Second Sight] two exceptions (or ‘anomalies’) where [subpostmasters’] accounts have been affected. Our internal and system processes identified these cases, appropriate action has been taken and they did not lead to any disciplinary action against [subpostmasters]. No reason to believe this means that there are other undiscovered issues. (We are sorry this information was not passed on to you at an earlier stage – if we had considered it to materially to change the investigation we would have flagged it directly, but it doesn’t).”
Did it cause you concern that the two exceptions or anomalies, to use the preferred language, regarding Horizon were not passed on to you at an earlier stage?
Alice Perkins: I can’t remember, there was so much going on at that time. I can’t – I simply can’t remember whether I was irritated by that. I mean, the whole thing felt so badly handled that –
Mr Beer: By?
Alice Perkins: Well, by everybody, really. I mean, you know, we’d commissioned Second Sight over a year before to do a piece of work. It had taken – it was taking a very, very long time. I’d been told all kind of things about, you know, the length of time it was taking, the way Second Sight were losing objectivity, worried about how the cost was ratcheting up and feeling that there was a real risk that we weren’t going to get the kind of report that I had wanted us to get and, at the same time – and this one of my digressions, I’m sorry, but I do need to give you a bit of context here – we were negotiating the next five years’ of money for the Post Office from 2015 onwards.
This was about, you know, obviously the future survival, in whatever shape, of the Post Office and we had the critical meeting with Vince Cable and Jo Swinson coming up two or three days after this Interim Report was going to be published. So –
Mr Beer: That’s very helpful. In fact, I know that tomorrow you’ll be asked a number of questions –
Alice Perkins: Okay.
Mr Beer: – about the extent to which that motivated Post Office Board’s conduct and the conduct of its executives.
Alice Perkins: I think what – the point that I’m trying to make here is that we were in a – we were very anxious about all kinds of things at that point.
Mr Beer: Sensitive to criticism?
Alice Perkins: Just, there was just a huge amount going on to try – and lots of other things going on as well, and I think what I’m really trying to say and perhaps taking too long to say it, is that I can’t – I haven’t held all of this in my head.
Mr Beer: So you can’t recall your reaction to being told that there are two problems with the system that you hadn’t been informed about previously?
Alice Perkins: I think I would have been irritated by that, yes. I said that a minute ago.
Mr Beer: And that there was an apology to be delivered to the MPs –
Alice Perkins: Yes.
Mr Beer: – “We’re sorry it hadn’t been passed”?
Alice Perkins: Yes, I mean, clearly that was not – that was bad.
Mr Beer: It says in this note that there is “No reason to believe this means there are other undiscovered issues”, which, in the context of what we know now, is quite a claim.
Alice Perkins: Yeah.
Mr Beer: What steps, to your knowledge, were taken, to establish whether or not the fact that there were two bugs, I’m going to call them, was not indicative that there were other undiscovered bugs at that stage?
Alice Perkins: I can’t help you with that, I’m afraid. I mean, I certainly – I don’t think I would have concluded from this – from what is being said here that it followed that there would not be other bugs or anomalies, or what they were being called at the time.
Mr Beer: Do you agree it’s a logical question, if there has been revealed two bugs, which were previously undiscovered, what steps should we take to establish whether there were other undiscovered bugs?
Alice Perkins: I think the impression that we were being given by the executives was that they had, in fact – that their processes had – well, it says this here – their processes had identified these cases, in other words, these were things that had been found within the Post Office system and, therefore, that was of – it was of comfort that those had been found – that we were being told that those had been found by the Post Office.
Mr Beer: It was never suggested to you that, far from the Post Office revealing the bugs to Second Sight, it was Gareth Jenkins from Fujitsu who had done so?
Alice Perkins: Absolutely not, no. No.
Mr Beer: So in fact this was being presented to you as essentially a good news story –
Alice Perkins: Yes.
Mr Beer: – “our systems worked”?
Alice Perkins: Exactly.
Mr Beer: Can we move forward to Second Sight’s Interim Report of the 8 July. POL00004406. This is a copy of the Interim Report and it reveals on page 6, if we turn to it, please, at the top of the page, at paragraph 6.5, the receipts and payments mismatch bug affecting 62 branches and then, in 6.6, the local suspense account bug affecting 14 branches. Then, if we go forwards to page 8, please. 8.2:
“We have so far found no evidence of system wide (systemic) problems with [Horizon].”
Alice Perkins: Yeah.
Mr Beer: “We are aware of 2 incidents where defects or ‘bugs’ [arose] which took some time to identify and correct …”
Then at (c):
“Occasionally an unusual combination of events, such as power or communications failure during the processing of a transaction, can give rise [to] a situation where timely, accurate and complete information about the status of a transaction is not immediately available to a [subpostmaster].
“d) When [subpostmasters] experience or report problems, [the Post Office’s] response can appear to be unhelpful, unsympathetic or simply fail to [resolve] the problem. The lack of a ‘user forum’ … means that [subpostmasters] have little opportunity to raise issues of concern …”
Alice Perkins: Yeah.
Mr Beer: Et cetera. When you read this – and you say in your witness statement that you’d got a copy of the Interim Report and read it – did you focus on each of the individual concerns raised by Second Sight here, including those which weren’t related to Horizon itself, for example lack of training and support –
Alice Perkins: Yeah.
Mr Beer: – helpdesk facilities, investigations that had, as their aim, asset recovery, and the contract, which placed risk on subpostmasters, or did you focus on the conclusion that there was no system-wide (systemic) problems with the software?
Alice Perkins: I certainly focused more broadly than that and I certainly remember focusing on the training and support issues. I think those had been raised by Lord Arbuthnot very early on, if not his first meeting. So, you know, those were in my mind and I think that, by the time this report came out – but I may be wrong about this – that people within the Post Office were aware of or had talked about the need to improve training and support, the Helpdesk, and so on. So I was absolutely aware of that.
We’ve just talked about the two incidents where I felt, you know, it was reassuring that the Post Office itself had identified these and taken action and that nobody had been any – out of pocket or any the worse for that.
On these other issues, it seemed to me that these were up in the air and that they would need to be considered – you know, they were going to be considered further, as part of – because this was an Interim Report.
Mr Beer: Can we turn up – in fact, before we do: what was your understanding of the phrase, “no evidence of system-wide (systemic) problems”?
Alice Perkins: My understanding of that was that it was a reassuring message that the Horizon system was basically sound.
Mr Beer: Did you understand it meant that there were no software problems with Horizon?
Alice Perkins: No, because of the point (b).
Mr Beer: Did you understand that point (b) was the only software problems with Horizon?
Alice Perkins: At that point, that would have been my belief.
Mr Beer: Did you know the extent to which Second Sight had investigated the extent of software problems in Horizon, going back to Legacy Horizon, back to 2000 and with Horizon Online?
Alice Perkins: I wasn’t aware of all the detail of what they’d been doing, no.
Mr Beer: Can we turn up paragraph 198 of your witness statement, please, which is on page 100. It’ll come up on the screens for you.
Alice Perkins: Okay, thank you.
Mr Beer: So page 100. It’s just something you say in your witness statement at paragraph 198. You say:
“I am asked whether there was any change in approach by the Post Office to the existence of [bugs, errors and defects] since the instruction of Second Sight. As previously explained, I did not understand that Horizon was subject to [bugs, errors and defects] nor had I heard that acronym until many years after I had left the Post Office.”
Alice Perkins: Mm.
Mr Beer: Just some clarification, if I may.
Alice Perkins: Mm.
Mr Beer: Are you saying that you did not understand that any bugs had affected Horizon at any point during your period as Chair?
Alice Perkins: That is what I’m saying here.
Mr Beer: That can be right though, can it? Because we’ve just read the Second Sight Report, which said that at least two bugs had affected –
Alice Perkins: Yes, well – oh, I see what you’re saying. Okay. That the two – I suppose when I was writing this, I was thinking of this acronym, BEDs: bugs, errors and defects.
Mr Beer: Yes, so is the correct position –
Alice Perkins: So the correct position is that, obviously, when I read the – when I first read the Interim Report, I could see clearly that there were – there had been these two things called anomalies in this report, so yes, absolutely, I was aware of them. I’m afraid when I was – I think when I wrote this I wasn’t clear about this acronym or these –
Mr Beer: Yes, so this is all about the acronym –
Alice Perkins: Yes.
Mr Beer: – rather than the bugs?
Alice Perkins: Precisely.
Mr Beer: Is that a fair way to describe it?
Alice Perkins: I think so, yes because I use that – I say that at the end, “nor had I heard of that acronym”. So that’s what I think I was responding to.
Mr Beer: Then lastly on this topic, if we can go forward to paragraph 211 of your witness statement, which is on page 105, you say:
“The Horizon system was critically important to the Post Office. The subpostmasters and people in Crown Offices and members of the public around the country relied on it daily for transactions. If there was any suggestion that it couldn’t be relied on, it could make the public think their money was not safe with us and worry the people under the system. I was not at any point trying to bury information that might reveal that there was something wrong with Horizon. If something was wrong, we needed to know, to be open about it and act on it. If the findings were not evidence-based however, it was going to cause serious damage for no reason – and it did not appear that all of Second Sight’s criticisms were going to be properly evidenced.”
Alice Perkins: Yes.
Mr Beer: The last sentence first, “it did not appear that … Second Sight’s criticisms were going to be properly evidenced”; that’s what you were told –
Alice Perkins: Yes.
Mr Beer: – orally –
Alice Perkins: Yes.
Mr Beer: – and that was based on what somebody else had said to the person that was telling you?
Alice Perkins: It was based on, I think, what several had said to me over a long-ish period of time.
Mr Beer: When you say here that the Horizon system was important for the public because it relied on it daily for transactions, did you consider that a similar or greater concern at the time ought to have been whether such suggestions about Horizon’s integrity were relevant to a substantial number of convictions that may have been unsafe?
Alice Perkins: I don’t think that, at that point – I don’t think – that I was aware and the Board was aware of the scale of the issue. But we – I mean, clearly we were aware that people had been prosecuted and so there had to be a possibility that some of those – you know, if anybody is successfully prosecuted, there has to be a possibility that that prosecution might not have been safe.
Mr Beer: That’s a very abstract statement. I’m asking in the context of what you say here about the critical importance of Horizon to the Post Office and the public that it served. I’m asking whether that overshadowed, in your mind and the Board’s mind, the possibility that Horizon had been relied on to produce data that had led to convictions that may be unsafe?
Alice Perkins: No, I don’t think it did overshadow that. But I think what I was trying to deal with here in my witness statement was the suggestion that the Board or I were improperly concerned about the Post Office’s reputation, and what I was trying to say here – and it’s borne out by other evidence, is that I was absolutely prepared to face up to findings by – evidence findings by Second Sight that things were wrong.
But what I was – really, really did not want to happen, was that things would be said that weren’t – I mean, I’ve said it already – that things would be said in that report that were critical of the Post Office’s operations, which were not actually justified. That was the concern.
Mr Beer: At this point in time, had what Mr Grant said to you been lost in the midsts of time?
Alice Perkins: I think I – to be quite honest, I’m not sure that I would have remembered that conversation at that point. I mean, that conversation took place in September 2011, in the middle of a huge inflow of information onto – not a blank mine but, you know, a very unfilled mind, and here – we’re now in July 2013, it’s nearly two years later.
Mr Beer: Thank you.
Sir, that’s an appropriate moment; we’re changing topics. Could we reconvene at 2.00 pm, please?
Sir Wyn Williams: Certainly, yes.
Mr Beer: Thank you very much.
(1.10 pm)
(The Short Adjournment)
(2.00 pm)
Mr Beer: Good afternoon, sir, can you see and hear us?
Sir Wyn Williams: Yes, thank you.
Mr Beer: Good afternoon, Ms Perkins. We were dealing with the publication of the Second Sight Interim Report on 8 July 2013 and the events that immediately preceded it, and now turning to the events that followed it.
Alice Perkins: Yes.
Mr Beer: Can we look, please, at POL00407582, please. If we look at the top part of the page, thank you, it’s a Bond Dickinson attendance note and you know that Bond Dickinson were one of the firms of solicitors instructed by the Post Office at this time?
Alice Perkins: Yes.
Mr Beer: It’s an attendance note of Simon Richardson, who is one of the solicitors there, and it’s an attendance upon Susan Crichton and Hugh Flemington.
Alice Perkins: Right.
Mr Beer: It’s on 10 July. You’re not party to this but it says things about you and about the Board, of which you were a member?
Alice Perkins: Yes.
Mr Beer: So I want to ask you some questions about it.
Alice Perkins: Okay.
Mr Beer: Sorry, if we just scroll up a little bit. The “Matter”, second from the top, is “Horizon Challenges General”?
Alice Perkins: Yeah.
Mr Beer: Then, if we scroll down, please, and look at numbered paragraph 3, the introduction to this says there was:
“… general discussion about how [we] were going to manage the additional complaints and resourcing. Essentially, where we got to … was quite a lengthy brainstorming session …”
Then 3:
“The Board want to sack [Second Sight] and of course are … not coping well with the fact they are independent. [Susan Crichton] is going to arrange to meet [Second Sight] and asked if she could use our offices next Tuesday.”
Then paragraph 7:
“There was generally an overall defensive air and the Board are also feeling bruised. There are tensions between people and that includes Alice Perkins (the Chair), Paula Vennells (CEO) and [Susan Crichton]. I said I thought the Minister had dealt with the questions extremely well and looked in control of the brief. Evidently she had [Post Office] in to tear them off a strip for not thing someone up earlier in the day for interviews on radio and [television]”, et cetera.
So, just scrolling back up to paragraph 3, at this time, 10 July 2013, did the Board want to sack Second Sight?
Alice Perkins: No.
Mr Beer: Do you know where either Susan Crichton or Hugh Flemington may have got the idea from that the Board wanted to sack Second Sight?
Alice Perkins: Well, Susan Crichton, I think, would have been aware of the fact that the Board was concerned about Second Sight for the reasons I gave this morning. I think that the telephone board meeting that we had had, I think it was on 1st July, we talked about this morning?
Mr Beer: That’s right.
Alice Perkins: Yeah. That meeting had been in people’s diaries for a completely different reason and the discussion about the coming of the Interim Report was sort of shoe-horned into that. People on the Board weren’t expecting that to be happening at that point and, obviously, there was no – there were no papers or anything like that, they were just, you know, having to react on the hoof. And, as I said this morning, we were at a critical point in our negotiation with Government about the next five years’ funding and I think people were more sensitive, if you like, than they would normally have been.
Mr Beer: But they didn’t want to sack Second Sight?
Alice Perkins: No, I think there were questions being asked about the competence of Second Sight – the capability, the scale of the enterprise, if you like, and their competence to deal with these issues in the context in which we all found ourselves but I think that really is an exaggeration of the situation.
Mr Beer: Was, to your knowledge, the Board not coping well with the fact that Second Sight were independent?
Alice Perkins: No, I don’t think so. I don’t think that was it at all. I think the Board – I mean, I wouldn’t say the Board weren’t coping well. I’ve had quite a lot of experience of looking at how Boards operate. One of the things that I think almost all Boards take badly is being taken – being bounced, is being taken by surprise. They don’t –
Mr Beer: That’s not what this is talking about; this is talking about the independence of the investigators?
Alice Perkins: No, absolutely. I understand that. But I think what I’m trying to say is this was something that everybody was finding very uncomfortable. You can’t – you shouldn’t – they were finding it uncomfortable and, you know, were perhaps reacting in ways that they didn’t normally react, but that was absolutely not the same thing as saying that they weren’t coping well with an independent review or report.
Mr Beer: Is what we read here, in fact, the truth of the position, not reflected at all in the Board minutes, but piercing the veil, peeling back the veil –
Alice Perkins: No.
Mr Beer: – with Susan Crichton speaking on a legally privileged occasion and revealing the truth?
Alice Perkins: Sorry, can you take me to what you’re looking at here?
Mr Beer: Yes, “The Board want to sack Second Sight and are not coping well with the fact that Second Sight is independent”.
Alice Perkins: You’re talking about piercing the veil?
Mr Beer: Yes. We don’t see in either of the Board minutes of 1 July 2013 or 9 July, which was, in fact, about a different issue that Board was convened, any mention of the Board’s concern over Second Sight being independent or any concern that they, the Board, wished to sack Second Sight. What I’m asking you is are the minutes are sanitised?
Alice Perkins: No, no, no, they’re certainly – the minutes were never sanitised. Absolutely not.
Mr Beer: Can you explain how it is that either Hugh Flemington or Susan Crichton are telling the Post Office lawyer that the Post Office wants to sack Second Sight and your board is not coping well with the fact that they’re independent?
Alice Perkins: No, I have absolutely no idea what they base that on but I can absolutely assure you that that was not the case.
Mr Beer: Paragraph 7:
“There was generally an overall defensive air and the Board are … feeling bruised.”
Was the Board feeling bruised?
Alice Perkins: No, I don’t think the Board was feeling bruised, the board was feeling, if I can be colloquial about this, “Oh my goodness, you know, there is an awful lot to cope with here and it’s difficult”, but they weren’t feeling bruised.
Mr Beer: It records that either Hugh Flemington or Susan Crichton said there were tensions between people, including you, Paula Vennells and Susan Crichton; is that accurate?
Alice Perkins: Well, I think that I felt – and I think I say this, don’t I, in my witness statement – that the Post Office had not handled the run-up to this well and I was cross that we had been taken by surprise in this way. I didn’t – it was not right that a telephone Board meeting called for something else was the forum for discussing something as serious as this. There were no papers for it. Nobody had had any time to prepare for it, and that’s not the way I would ever have wanted to conduct a Board discussion about something as important as this.
Mr Beer: Was the Board operating with a defensive air about it?
Alice Perkins: I don’t think that’s a correct interpretation and I don’t think – I may be wrong about this – I don’t think Hugh Flemington was present at either of these discussions.
Mr Beer: So, if this was said, it would be Susan Crichton saying it?
Alice Perkins: Well, I mean, he may have chosen to say it but, if I’m –
Mr Beer: Not knowing the truth?
Alice Perkins: If I am right, that he wasn’t on the call, I mean, I don’t know whether I am right. I don’t think he would have –
Mr Beer: Hugh Flemington wasn’t.
Alice Perkins: No, so I don’t know on what basis he would have been saying that.
Mr Beer: It must be Susan Crichton?
Alice Perkins: Well, either he’s heard something that he’s overinterpreting, or it’s Susan or it’s both of them. I don’t know. I was pretty shocked when I first saw this, I must say, and –
Mr Beer: I’m sure. The headline that the Post Office took from the Second Sight Interim Report was that there were no systemic faults in Horizon and that the Post Office could continue saying that it was a robust system.
Alice Perkins: Yes, and that was also the view of Lord Arbuthnot at the time, and he put that – he said that in his press statement about it. So we were not alone in concluding that.
Mr Beer: Therefore, there would be no reason to sack Second Sight. There would be no reason for the Board wishing that Second Sight were not so independent, no reason for the Board feeling bruised, if that was genuinely the message that Post Office took from the Second Sight Report?
Alice Perkins: Well, we accepted the support and training findings and were – people were very determined to do something about that. I mean, you know, I’m not trying to say that there weren’t reservations about Second Sight. I have already just said that. But – I mean, this is not a description that I recognise.
Mr Beer: Can we turn to the 16 July 2013 Board meeting. I think you realise that this is a significant event, don’t you?
Alice Perkins: Yes, I do.
Mr Beer: Can we turn to the papers that were prepared for the Board meeting first, by looking at POL00099218. This is a paper prepared, if we look at page 3, 12 July 2013, by Susan Crichton.
Alice Perkins: Yeah.
Mr Beer: Back to page 1, please. It’s an “Update following publication of the Interim Report” –
Alice Perkins: Yeah.
Mr Beer: – whose purpose was to (1) update the Board on latest events and (2) seek input on how the business moves forward with the three new initiatives outlined in the Post Office’s press release.
Alice Perkins: Yeah.
Mr Beer: Let’s look at the foot of the page. It sets out the “Current Activities … underway”. I’m not going, to read all of those. If we go over the page and just read 3.6, “Ongoing/new prosecutions”:
“we are reviewing these on a case-by-case basis as to whether or not they need to be adjourned or other action taken in the light of the publication of the … Interim Report.”
3.7:
“Criminal case review: 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 is set out in Annex 1.”
Also, I think you know the date actual given is 1 January 2010 in Annex 1.
Alice Perkins: Yes.
Mr Beer: Can we go to Annex 1, please, which is page 4. This is Susan Crichton’s Annex 1:
“Post Office have been advised by our external criminal [solicitors] to undertake a review of all cases going back to the time of the migration from old Horizon to Horizon Online – 1 January 2010 – and this has already begun. 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 … Interim Report. We have a continuing legal duty as prosecutors to do this.”
Then 1.1:
“… we believe … that we will have undertaken [around] 55 prosecutions a year for the last 10 years. Our external lawyers have advised us that they believe there will be around 5% where they need to disclose the additional evidence and then it will be up to the defence lawyers to consider the evidence and apply to the Court of Appeal.”
Then keeping to 1.3:
“We may also face civil suits for wrongful conviction. The consequences of this are:
“Malicious Falsehood …
“Defamation …
“Wrongful termination of their contracts …
“Harassment …”
“1.4 If we abandon prosecutions we may also face claims for eg for malicious prosecution.”
If, as the Post Office was presenting matters publicly, there were no systemic defects in Horizon, that the two anomalies or exceptions, as they were rebranded courtesy of Ms Vennells’ husband, didn’t affect any prosecution or civil cases, and that the two exceptions had been spotted and dealt with entirely appropriately at the time, how could convictions be overturned and the Post Office face claims for wrongful conviction?
Alice Perkins: I think that we thought that – I mean, you know, we were in receipt of advice here. As we’ve already established, there was nobody – there were no Non-Executive Directors who had legal knowledge. I think that we were just accepting what we were being told by the General Counsel and thought that this sounded like the right kind of precautionary action to be taken.
Mr Beer: I’m asking how it added up. If Second Sight said there are no systemic problems, if the bugs had not affected any prosecutions and had been dealt with entirely appropriately in accordance with Post Office’s usual procedures, why might the Post Office face claims for wrongful conviction?
Alice Perkins: I don’t know how – I’m not sure whether I really thought that through at that point.
Mr Beer: Can you see the point?
Alice Perkins: Yes, I understand the point you’re making.
Mr Beer: It doesn’t really add up, does it? If the Post Office genuinely believed in the conclusions which it chose to highlight in the Second Sight Report, none of this makes sense; there must be something else, mustn’t there?
Alice Perkins: I don’t know whether we would have thought that it could have been something to do with the lack of support that the subpostmasters were being given, that they were – I mean, you know, one of the things that Lord Arbuthnot said to me, right at the outset and repeated, was that he thought that some of the subpostmasters had – because they hadn’t been, in his view, properly trained and/or properly supported, they just got into a position where they felt unable to withstand the situation they found themselves in. So perhaps –
Mr Beer: That could be it. So it could be the training and helpline support issue –
Alice Perkins: It could be.
Mr Beer: – that may mean conviction –
Alice Perkins: Could be –
Mr Beer: – a conviction falls to be overturned –
Alice Perkins: Yes.
Mr Beer: – and a claim for wrongful conviction sought?
Alice Perkins: Because the treatment had been so inappropriate. I don’t know. I mean –
Mr Beer: Was anything else –
Alice Perkins: – I’m not a lawyer.
Mr Beer: – ever mentioned, anything else dropped in at this stage about a witness giving false evidence?
Alice Perkins: I think not at this stage. There was a very – later – and I think it’s in my witness statement, I can’t remember offhand – but later, there was a Board paper which had a one-sentence reference to finding a new independent expert without any explanation as to why that was, and the sort of – the inference that people could perfectly reasonably have drawn from that was there was some prosaic reason for that.
After I had signed this witness statement, very recently I was shown an email from Paula Vennells to me, which listed a whole series of things that she wanted to tell me about, and there is a reference to the independent expert in that, which I think she described as not material.
Mr Beer: Yes, and we’ll come to that later today or probably tomorrow.
Alice Perkins: Okay.
Mr Beer: But, at this point, we’re not to draw from this Susan Crichton paper –
Alice Perkins: Yeah.
Mr Beer: – the fact that you thought there was anything odd or unusual with, on the one hand, the Second Sight Report being presented to the public as vindicating Horizon –
Alice Perkins: Mm.
Mr Beer: – and yet privately, in the Board, it was being told that convictions may, on application, be overturned and the Post Office may face claims of wrongful conviction?
Alice Perkins: I think we always knew that there was a possibility that there could be claims for wrongful conviction. I think we would have just thought that this was a precautionary, proper process.
Mr Beer: Thank you. Can we move on, then, to the Board meeting itself.
Alice Perkins: Yeah.
Mr Beer: POL00021516. We can see a list of those present –
Alice Perkins: Yes.
Mr Beer: – including you –
Alice Perkins: Yeah.
Mr Beer: – and then in attendance those present, if we scroll down a little bit.
Alice Perkins: Yes.
Mr Beer: Then, if we go to page 6, which is the relevant part, please, under “Horizon Update”:
“The CEO [Paula Vennells] explained that although the Second Sight Report had been challenging it had highlighted some positive things as well as improvement opportunities. The business had been praised in Parliament for setting up the independent 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 were cultural issues which had to be addressed to improve the support we gave to subpostmasters. The CEO stressed that this was now a catalyst to make changes in the Business.
“The Board was concerned that the review opened the Business up to claims of wrongful prosecution. The Board asked if Susan Crichton, as General Counsel, was in any way implicated in the prosecutions. The CEO reported that, up until eighteen months ago, Royal Mail Group had run the Criminal Law Team and many of the cases in the review had arisen before separation. The CEO explained that the Business was a prosecuting authority and as such bought 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.
“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 controls going forward.
“(d) The board accepted that this was an independent review and therefore things could happen that were beyond the control of the business.
“However the things that could be managed by the business needed to be well managed with strong leadership and the Board asked the CEO if she had considered changing the person leading for the Business.”
Just to stop there, that’s a reference to Susan Crichton.
Alice Perkins: It is, yes.
Mr Beer: “(f) The CEO had considered this and recognised that the Business did not have good governance in place around Second Sight, but that the independence of the review, and the input from MPs and [JFSA] had made this complicated.
“The Chairman asked for a review, a post-mortem, to report to the Audit and Risk Committee explaining how we awarded and managed the contract. This should be put in hand, swiftly.
“Action: Susan Crichton.”
Then over the page:
“The Board asked the CEO to decide the way forward in terms of the leadership of this work based on the option which had least risk to the Business.”
Then, lastly:
“The CFO [that’s Mr Day] was asked what the insurance position was. He promised the Board a note on this. He was also asked to ensure that both Royal Mail Group regime and the Business’s insurers were given notice of the review findings.”
Now, we’ve seen that there was a 12 July 2013 paper, four-page paper written by Susan Crichton.
Alice Perkins: Mm, yeah.
Mr Beer: It was intended, according to the agenda, that she presented that?
Alice Perkins: Yes.
Mr Beer: Who presented the Susan Crichton, 12 July Board report?
Alice Perkins: Paula Vennells did.
Mr Beer: Who presented Susan Crichton’s Annex A to it?
Alice Perkins: Presumably – I don’t think anybody else presented, other than Paula.
Mr Beer: So Paula Vennells, as well?
Alice Perkins: Yes.
Mr Beer: There was also a Significant Litigation Report before the Board as well, wasn’t there?
Alice Perkins: There was, yes.
Mr Beer: Can we look at that, please. POL00099210, and look at page 105, please. Thank you. This is the Significant Litigation Report that was placed before the board –
Alice Perkins: Yes.
Mr Beer: – and it’s divided into essentially two parts. Part A, a report on Horizon claims. You can see under the “Description”:
“[Post Office] has received various claims from subpostmasters alleging wrongful termination of contract and/or damages based on alleged defects in the Horizon system and [the Post Office’s] internal processes.”
They were made in five claims brought by Shoosmiths, which is not currently progressing the claims through the courts. Similar allegations have been made through subpostmasters’ MPs, through the JFSA and in defences to cost proceedings bought by Post Office to recover debts from subpostmasters:
“An independent investigator Second Sight has been reviewing these allegations in consultation with James Arbuthnot …”
Then under “Status”, in the last paragraph of status:
“Second Sight is continuing to investigate the [subpostmasters’] concerns. [Post Office] is cooperating with Second Sight’s investigation and conducting a review of the criminal and civil proceedings it has issued against [subpostmasters] where issues with the Horizon system have been raised to establish which cases may be vulnerable to challenge.”
Who presented this paper to the Board?
Alice Perkins: Was this a noting paper?
Mr Beer: It’s difficult to tell.
Alice Perkins: Okay. I mean, if it were a noting paper, then it wouldn’t necessarily – it wouldn’t normally have been presented unless, you know, if somebody wanted to raise a question on it, on a noting paper, then if we knew in advance, then we would arrange for that person to be there and, if not, it would be picked up and followed up later.
Mr Beer: In fact, if we just go back to page 1 of the whole document, and scroll down, and again –
Alice Perkins: Yes.
Mr Beer: – if you look at 11 –
Alice Perkins: Yes.
Mr Beer: – the SLR is for noting?
Alice Perkins: Yes.
Mr Beer: So it wouldn’t necessarily be presented by anyone?
Alice Perkins: No.
Mr Beer: Thank you. So the 12 July paper and the annex to it, it was intended that they be presented to the Board by Susan Crichton?
Alice Perkins: That had been the intention, yes.
Mr Beer: Did, in fact, as you say, Ms Vennells present it in place of Susan Crichton, who was not invited into the meeting, at your direction?
Alice Perkins: That’s correct. Would it be all right if I explained?
Mr Beer: Well, just, if you answer the following questions it may be –
Alice Perkins: Sure, of course.
Mr Beer: – that explanation will emerge.
Alice Perkins: Yeah.
Mr Beer: Firstly, was that a unilateral decision?
Alice Perkins: I’m not sure whether it was or wasn’t a unilateral decision and I can explain why.
Mr Beer: Okay, go ahead.
Alice Perkins: You’ll see at the top of the agenda that –
Mr Beer: If we scroll up, yeah.
Alice Perkins: So, before the Board, there was a meeting of Non-Executive Directors, on their own.
Mr Beer: At Bistrot Bruno Loubet?
Alice Perkins: Exactly, which is just down the road. We used to have these approximately every six months, it’s considered to be good practice for Non-Executive Directors to meet on their own, from time to time. This would have been arranged months in advance, so it would have had absolutely nothing to do with the fact that it happened shortly after the Interim Report had been published.
But there – it was an opportunity for Non-Executive Directors to share amongst themselves things they were concerned about and there was a good deal of concern expressed at that meeting about the events leading up to the Interim Report, how things had happened in the way they did and it would have been, on the back of that and also possibly, but I can’t remember this, conversations I may have had with individual Non-Executive Directors that I felt that we would not be able to have a discussion that we needed to have in the Board if Susan was present throughout.
I knew that there were going to be critical questions raised about the way she had handled things, and I thought for two reasons that it was right to have that discussion initially without her. I’ll come back to why initially. One was that I thought the Non-Executive Directors needed the opportunity to say what they wanted to say in the full Board, and I knew that it was going to be very critical of Susan and I didn’t think that it was appropriate for her to have to sit there and take it. But it was my intention to let that happen, and then to bring her in and have her present the paper. But I think what happened was it was one of those discussions which just developed and developed, and took more time than I had expected possibly or wanted, and we had other things on the agenda that were really pressing. And I’m – I don’t remember for certain but I may well have felt “I can’t ask her to come in – having heard all of this, I can’t just ask her to walk into this room without knowing something of what had been happening”.
So that’s the background to why she ended up not coming into the room and, obviously, I understand that that would have been very disconcerting for her and, as I said to her later, I am really sorry that that happened. I’ve been kept outside Boardrooms in my life and it’s not a comfortable experience and I knew that, but there were really good reasons for doing what I did.
Mr Beer: Why is none of that reflected in the Board minutes?
Alice Perkins: Because I don’t think that we would – I don’t know why it wasn’t reflected in the – I don’t know the answer to that question.
Mr Beer: Why is what you’ve just said not reflected in your 232-page witness statement?
Alice Perkins: That’s because it was only after I had signed my witness statement that I saw that the – I saw – I did two things. One was that I saw some documents that I hadn’t seen up to that point, and they were my note of my meeting with Susan later in that month, and a note of Paula’s, of, I think, two meetings that she had with Susan, and they were really – the one I’ve written myself did jog my memory, and then I went back to this agenda and I went back to think about what was happening at this time and what else was on the agenda, and it came back to me.
Mr Beer: How could Ms Vennells possibly speak to the legal issues mentioned in Susan Crichton’s Board paper of 12 July?
Alice Perkins: Well, she couldn’t, really, have spoken to –
Mr Beer: She told us that she didn’t know the facts and had no legal knowledge and, therefore, couldn’t speak to the paper at all?
Alice Perkins: No, I think –
Mr Beer: You’d know that, wouldn’t you?
Alice Perkins: I would have known that and I can see that what I should have done, in retrospective, is that I should have paused and I should have thought “We’re not having the kind of discussion about this paper that’s before us that we ought to be having and, therefore, we’ll have to have a separate discussion about it”. That’s what I should have done but I didn’t.
Mr Beer: I mean, there were really two issues, weren’t there –
Alice Perkins: There were.
Mr Beer: – one was the legal claims –
Alice Perkins: Yes.
Mr Beer: – that Post Office may face and the management of those –
Alice Perkins: Yeah.
Mr Beer: – which Susan Crichton’s paper had spoken to?
Alice Perkins: Yeah.
Mr Beer: The second was that management by her, amongst others, of the Second Sight process?
Alice Perkins: Yes.
Mr Beer: In making her sit outside because you wanted to discuss the latter, there was no discussion of the former?
Alice Perkins: I think that’s absolutely right. Yes, and that one of the – so I have a lot of regrets about this particular period because I think now, looking back on all of this, that what we – the way in which we followed up the interim review, combined with the fact that – as I’m sure we’ll come on to – we didn’t see absolutely revelatory legal advice meant that we failed to take a really important opportunity to go in a different direction on this.
Mr Beer: You tell us – I’m going to give the references without going to the witness statement.
Alice Perkins: Okay.
Mr Beer: That document can come down, thank you. You tell us in your witness statement, it’s paragraph 81.7.3 on page 39, that you were astonished that the Board received no notification of the Simon Clarke Advice on expert evidence of 15 July 2013?
Alice Perkins: Yes.
Mr Beer: The day before this Board meeting?
Alice Perkins: Exactly.
Mr Beer: You say:
“This advice came at a crucial time, when we were considering Second Sight’s Report and the review of Horizon based prosecutions but this was never shown to the Board.”
You say you were never shown Gareth Jenkins’ note entitled “Local suspense problems”; you were never shown the Helen Rose Report of 12 July 2013; you say that a subsequent advice by Simon Clarke of 2 August 2013, about the duty to record and retain material, was never brought to your attention, and that you are “astonished that this document was never provided to the Board.”
You say in paragraph 82 on page 41 that you find it:
“… extraordinary and highly regrettable that these pieces of information were not provided to the Board.”
You look back at these omissions and you feel very badly let down by them:
“This meant the board did not ask questions which might have got to the truth of the matter, which was that Horizon was unsafe and should not have been relied on for prosecutions.”
In other parts of your witness statement, you essentially identify Susan Crichton as being principally responsible.
Alice Perkins: Yes.
Mr Beer: You sat her outside on a chair and then criticised her failure to reveal information to you as shocking or astonishing. How do those two things sit with each other?
Alice Perkins: I wouldn’t describe it as “made her sit outside on a chair” but I understand that she was not in the meeting. She – well, I don’t know to whom the Simon Clarke Advice was originally sent but what I do know is that both pieces of advice from Simon Clarke came into the Post Office when Susan was the General Counsel. It’s perfectly true that she didn’t have the opportunity to mention that to the Board at the meeting on 16 July. We have no way of knowing – I don’t know whether she had even read it by then.
Mr Beer: She hadn’t, in fact. She hadn’t been provided it. It sat in a drawer for 12 days, we are told.
Alice Perkins: Okay, well, she couldn’t have done it, even if she had been there, but two pieces of advice of that nature shouldn’t just be reported orally. They should have been the subject of some kind of written note – not a note, I mean a proper paper, saying, “We’ve had this advice”.
Perhaps the original advice might not have been provided in the first instance but the findings of the advice and its implications should have been brought to the Board –
Mr Beer: Can we go – I’m sorry.
Alice Perkins: – and there was – I’m terribly sorry to cut across you but there was time, after even the 12 days were up, when that could have been done, and it wasn’t.
Mr Beer: Can we look at what you were provided with, and go back to the report for the Board of 12 July 2013, POL00099218. We looked at this a moment ago. If we look, please, at page 3, please, under “Next steps” – thank you – “Next steps”:
“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 at the meeting.”
Alice Perkins: Mm.
Mr Beer: “A reactive approach – in respect of the criminal cases … should wait for those to be overturned via the Court of Appeal and for claims for compensation to be made. We then decide whether to settle or fight these on a case-by-case basis.”
Even on what you were told, there were issues for the Board –
Alice Perkins: Yeah.
Mr Beer: – to consider and decide upon, weren’t there?
Alice Perkins: Yes.
Mr Beer: But it didn’t, did it?
Alice Perkins: No, it didn’t.
Mr Beer: One of the reasons was the extent to which excluding cases predating January 2010 from the review was a reasonable approach to take. Was that identified by the board?
Alice Perkins: I’m afraid – I mean, I don’t think it’s in the minutes. I can’t remember whether it was raised or not.
Mr Beer: The annex to this paper says that we’re going back to 1 January 2010?
Alice Perkins: ‘10, yeah. I think we knew that there were practical difficulties about going back pre that date.
Mr Beer: Where did you learn of those practical difficulties from?
Alice Perkins: I can’t tell you for certain but I think there had been references over time to that.
Mr Beer: Do you accept that the type of questions that the Board ought to have been asking when presented with this paper and its annex is “These bugs that we’ve been told about, do they pre-date the introduction of Horizon Online or do they post-date it? If some of them pre-date it, why are we only going back to the introduction of Horizon Online? Why is that a reasonable cut-off?”
Alice Perkins: Sorry, is that a question?
Mr Beer: Yes.
Alice Perkins: Yes.
Mr Beer: It started with “Do you accept that”.
Alice Perkins: Sorry. Look, I have said and I do accept, that, in the event, the Board didn’t give this paper – it didn’t give the substance of this paper the attention that it should have done and I take responsibility for the fact that I didn’t stop and think about having – the conversation – discussion having turned out the way it did, I should have thought about what we ought then to do about aspects of this paper which had not been discussed, and I didn’t do that and I’m very sorry that I didn’t do that.
Mr Beer: What was yours and the Board’s reaction to being informed that the Post Office may face civil claims for wrongful prosecution?
Alice Perkins: I think we were concerned about that.
Mr Beer: What was your reaction and the Board’s reaction to being told that, if the Post Office stopped prosecuting, it may face claims for malicious prosecution?
Alice Perkins: I think if – I think I would have thought, if there were reasons, good reasons, for stopping prosecution, we should stop prosecution.
Mr Beer: Were you and the Board concerned that the review, the Second Sight review, had opened up the Post Office to claims of wrongful prosecution?
Alice Perkins: I think we realised that the interim review put us in a different position from the position we’d been in before. I wouldn’t want anybody to interpret that as us thinking that that meant that it was a bad thing to have done the independent review.
Mr Beer: Were you the person on the Board who expressed the strong views, according to the minutes, that the Post Office had not managed the Second Sight review well?
Alice Perkins: I think that was a view that was very widely shared. It was my view but I was by no means alone in that view, and it wasn’t my style to impose my view on the board, I was always really, really careful not to lead the board on – I would encourage other people to come in and express their views before I expressed my own view.
Mr Beer: Why were you concerned that the Second Sight review had opened the Post Office up to claims for wrongful prosecution?
Alice Perkins: I think we were being told that it –
Mr Beer: Yes, but what’s the concern?
Alice Perkins: I suppose we thought that there might be something to do with – I mean, you know, I think we were thinking that there could be other bugs. I think we’ve talked about this already, haven’t we, that the absence of adequate training and support could have been part of this?
Mr Beer: I was thinking more about many organisations have claims brought against them –
Alice Perkins: Yes.
Mr Beer: – and they can be concerned about them because they may have a financial impact upon them?
Alice Perkins: Yes.
Mr Beer: They may affect the balance sheet?
Alice Perkins: Yes, yeah.
Mr Beer: They may have staff morale impacts?
Alice Perkins: Yeah.
Mr Beer: They may have an abstraction of resources to deal with the concern. There might be a media or reputational harm caused by claims for wrongful prosecution?
Alice Perkins: Yeah, yeah.
Mr Beer: There might actually be a concern that some people have been wrongfully prosecuted?
Alice Perkins: Yes.
Mr Beer: Which of those things was the concern of the Board?
Alice Perkins: I can’t remember the detail of these concerns but I think it could have been all of them.
Mr Beer: Did you consider that the Second Sight investigation needed better management?
Alice Perkins: This is something I know there’s been much discussion about. I thought that the Post Office had not properly liaised with Second Sight over their work and that the whole basis of the relationship between Second Sight and the Post Office had not been put on a proper footing.
Mr Beer: Why was the Post Office’s governance around Second Sight unsatisfactory to you?
Alice Perkins: I don’t know whether I was aware of this at the time but I certainly became aware of the fact that there’d been absolutely – there’d been no letter of engagement for Second Sight, which seems very strange, that, as I said to you earlier, there had been an understanding on my part and I think on the part of everybody concerned, that Second Sight expected to complete their work within a matter of weeks or short months. There was a kind of budget set up for it and, in practice, it took – I’ve already said this, so I’m sorry I’m repeating myself – it went on much, much, much longer than anyone –
Mr Beer: Sorry to speak across you.
Alice Perkins: Yes.
Mr Beer: Did you establish who bore responsibility for that?
Alice Perkins: So part of what I was thinking here was why was the board and why was I so unaware that these – that this Interim Report was coming when it was? And the whole thing, after Second Sight had been set up, went very, very quiet from my perspective and the Board’s perspective for a very, very long time and then it kind of emerged as a sort of – as something that was happening in this most enormous hurry, and I just – I didn’t think that that was professional.
Mr Beer: Did the Board approve the reactive strategy, namely not itself review the safety or propriety of the convictions that it had obtained but, instead, give disclosure of the Second Sight Report to some subpostmasters, and let them pursue their cases through the Court of Appeal?
Alice Perkins: As I understand it, that was the advice we were given and we took it.
Mr Beer: Why did the Board take the reactive approach rather than say, “We ourselves should commission a review of the safety of the convictions that we’ve obtained”?
Alice Perkins: Because I think that – that was the legal advice that we were given but I agree that we could – you know, of course we could have had a discussion about that and we could have asked, you know, we could have asked for another view.
Mr Beer: If we go back, please, to POL00099218, and page 3, please, and “Next steps”. You’ll see the reactive approach set out there. There’s no note in the Board minutes that this was discussed or approved.
Alice Perkins: No. I mean, the Board is asked to note the update and the actions set out above and decide whether the Audit and Risk Committee should consider the position of the Post Office as a prosecuting authority, which, of course, it wasn’t, alongside its risk work in September. So I think –
Mr Beer: So you’re saying that it wasn’t actually asked to make a decision?
Alice Perkins: It wasn’t asked to make a decision but that doesn’t mean to say that you can’t, you know, you can’t – I’m not saying for one moment that if the board was asked to note something and it decided that it, actually, wanted to have a discussion, of course it would have had a discussion. But, you know, I think what I’ve tried to explain is that this item, it went off the rails, I think you could say, at short notice, and we didn’t have the kind of discussion which we should have had about it.
Mr Beer: You put a fair and full discussion of these issues beyond the reach of the Board by sitting outside the author of this document, didn’t you?
Alice Perkins: No, I don’t think that’s fair. I think that, in the circumstances in which I found myself on that day, I think I took a perfectly understandable decision that it wasn’t in anybody’s interests for Susan to come into that discussion at that time. And I think, had she – events – sometimes the most rational processes get hijacked by events. This was an occasion when that happened, and I really don’t think that, had Susan been brought back into the room, in that context, that we would have had a fruitful discussion.
What I do think, and I’ve said this already, is that I should – well, either I – and I take responsibility for this because I was the Chair of the Board – or somebody else on the Board could have said to me – and they were well capable of doing this – “Alice, I think we haven’t done justice to this and we’d better have a separate discussion”.
We were always having separate discussions. We were constantly having unscheduled telephone meetings about this and that and the next thing, and that could have been done. But we didn’t do it.
Mr Beer: Even at its lowest, this Board paper asks the Board to note the update and the actions set out above, including the reactive approach –
Alice Perkins: Yeah.
Mr Beer: – to past possible miscarriages of justice, yes?
Alice Perkins: Yes.
Mr Beer: Can we go back to the Board minutes, please, at POL00021516, and page 6, please. This is the Horizon update that we read through in full earlier. If you just scroll through it, and down, and down, and down, and down and then stop. The paper isn’t even noted?
Alice Perkins: Well, that’s just – I mean, that’s just stupid. Sorry, but I mean it should have been – you know, we – you know, I can’t understand whether that was just an omission from the minutes or what it was. I really don’t know.
Mr Beer: Do you think the paper got entirely overlooked?
Alice Perkins: No, I don’t think it did get entirely overlooked. I don’t think it did. I think probably what happened was that Paula spoke to the bits that she felt able to speak to. I think that’s probably what happened.
Mr Beer: So what’s the status of the recommendation in the Board paper that the Post Office should adopt a reactive approach rather than a proactive one to possible past miscarriages of justice?
Alice Perkins: I think –
Mr Beer: Where does that sit?
Alice Perkins: Well, there wasn’t a discussion about it. I mean, I think all you could say was, in the absence of a discussion, and nobody saying, “I want to talk about this” or “I don’t agree with this”, that you could say it had been noted because people would have read it and nobody would – and nobody had said, you know, either of those two things. But I agree. I mean, the fact that it has not even recorded what the status of the paper was at the end of that item, is – it’s not right.
Mr Beer: Would you agree that, overall, the handling of the issue of the impact of the Second Sight Report on past criminal convictions by the Board on 16 July was very considerably suboptimal?
Alice Perkins: I think I’ve accepted that.
Mr Beer: In particular, the suggestion of a reactive approach appears not to have been the subject of discussion, decision, or even noting?
Alice Perkins: I think that is right. Yes. I think that is right.
Mr Beer: Can I explore some of your criticisms of Susan Crichton, please. That document can come down.
I should have said that Susan Crichton has told us in evidence that, before the Board meeting of 16 July, she met with Paula Vennells and told her that, in her view, Susan Crichton’s view, there would be many successful claims against the Post Office arising from past prosecutions. Was that information passed on to you by Paula Vennells?
Alice Perkins: No.
Mr Beer: Did you know from any other source that that was Susan Crichton’s view, that there would be many successful claims against the Post Office arising from past prosecutions?
Alice Perkins: No.
Mr Beer: Do you agree that that is important information to have received or would have been important information to have received from your General Counsel?
Alice Perkins: I do.
Mr Beer: Do you accept that this critical information may have been passed to you if she had been allowed into the room?
Alice Perkins: I have no way of knowing that but the way that – if you look at Annex 1 of that paper that, we were looking at, it talked – there’s a sentence in there about disclosure being required in about 5 per cent of cases so that was a sentence that was in there, which was a very, very partial account of what Susan understood the position to be.
Mr Beer: Can I then explore some of your criticisms of Susan Crichton by moving forwards to POL00381455. This is a note of your meeting with Ms Crichton on 31 July –
Alice Perkins: Yeah.
Mr Beer: – at Post Office’s premises at 148 Old Street.
Alice Perkins: Yeah.
Mr Beer: If you just forgive me a moment, I need a reorg.
If we look, please, at the second page, at the third paragraph, starting “I understood”, you record:
“I understood that [Second Sight’s] investigation had to be independent but in the Civil Service there would have been someone marking it who was close to all of the key people, (Second Sight, [James Arbuthnot], JFSA) and knew what was going on between them.”
Then the 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.”
Alice Perkins: Yeah.
Mr Beer: You record that:
“[You] commented that if she had felt unable to play that role, she should have flagged that up and 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).”
Would you agree that marking someone means to stay close to them, usually an opponent, in order to hamper his or her play?
Alice Perkins: If you’re a footballer, that’s certainly what it means. I realise that that verb, and the one about influencing, give a very particular impression of what I was trying to do.
What I was actually talking about – and I wrote this note and so, you know, I take responsibility for the words in it – what I was talking about was liaison. So I’m talking about somebody in an organisation keeping the channels of communication open with people who are doing an independent review, knowing how their time frame is working out, knowing how their costs are building up, knowing what they’re planning to do in terms of the way they go about their work, and when it’s going to be presented, and finding out whether there are things that they are encountering which are causing them difficulty, or anything else that the organisation can reasonably be expected to want to understand.
It was absolutely not my intention that Susan or anybody else in the Post Office should be trying to influence the substance of Second Sight’s Report, and that, in fact, is corroborated by other emails that I was sending at that time.
Mr Beer: You meant “mark” in exactly that sense: influence, hamper their conduct, stay close to them. You wanted the key people – Second Sight, James Arbuthnot and JFSA – influenced in their conduct, didn’t you?
Alice Perkins: No.
Mr Beer: If you didn’t mean that or you were not to be understood to mean that, then can you explain why Susan Crichton replied in the second paragraph there that it was inappropriate for her to influence the key stakeholders?
Alice Perkins: So I think what happened here was that there was a complete failure of communication between what it was that I had in mind and what she interpreted that I had in mind. So I was – I’ve already said this – I am on oath and I’m a truthful person: I am absolutely categorical that I – it was never my intention for anybody in the Post Office to try to influence Second Sight’s evidence-based findings.
Mr Beer: The – I’m so sorry.
Alice Perkins: And I can see that if that is what Susan thought I meant, why she didn’t think that that was a proper thing for her to do because it wouldn’t have been a proper thing for her or anybody to do. But what I was saying was that there had been this total vacuum, as it seemed to me, where we had appointed Second Sight, we had some expectations about how that work would progress, it had progressed in an entirely different way and we didn’t know anything about it, or very little about it.
Mr Beer: Can I explore what you said on three basis: first, I’ll suggest to you that the reply she gives, “inappropriate for her to influence key stakeholders”, gives the lie to what you meant, doesn’t it; it reveals what you meant?
Alice Perkins: It reveals her interpretation of what I meant. It absolutely does not reveal my intention.
Mr Beer: The second point, then, is when she says, “But hold on that’s inappropriate, it would be inappropriate for me to influence key stakeholders, I’d be criticised because of my professional duties, for doing that”, why did you not say, “Well, hold on Susan, I’m not even suggesting that at all. You’ve got the wrong end of the stick” –
Alice Perkins: I’ve got the wrong end of the …
Mr Beer: – “there’s a miscommunication between us” –
Alice Perkins: There’s a miscommunication.
Mr Beer: – “I’m talking about marking somebody in the benevolent sense of being a liaison point” –
Alice Perkins: Yeah.
Mr Beer: – “your understanding of it is completely wrong”. That didn’t happen, did it?
Alice Perkins: My understanding of it is completely right from my point of view. What I am saying is that I completely failed to communicate what I was tying to say.
Mr Beer: When she gave her evidence to the Inquiry on 23 April 2024, it’s page 142 of the transcript, Susan Crichton said that this is exactly what you were doing: you were suggesting to her that she should have exerted influence over the people responsible for the commissioning and conduct of the independent report and that’s why she said what she did about her professional duties.
Alice Perkins: She – I mean, she did say that, you know, if – I – but that doesn’t mean that it’s right.
Mr Beer: So why wasn’t it corrected at the time?
Alice Perkins: Well, I obviously wish that I had paid more attention to making sure that the record of this meeting was a correct description of what I intended.
Mr Beer: Isn’t the truth of the matter that, through the use of the language which you have recorded as coming from you, “marking the key people involved”, the natural meaning of that, and Susan Crichton’s reply, you were suggesting that she should have exercised actively influence over them on matters of substance?
Alice Perkins: No, I don’t accept that. I absolutely don’t accept that.
Mr Beer: Were you unfamiliar with the professional duties imposed on lawyers and the Solicitors Code of Conduct?
Alice Perkins: I’ve no – I would never have studied the Solicitors Code of Conduct.
Mr Beer: Is the reality that you were annoyed that Susan Crichton, who had led on the Second Sight project, had not influenced Second Sight in a way that was sufficiently favourable to the Post Office?
Alice Perkins: No.
Mr Beer: You accept, I think, that on Susan Crichton’s understanding of what you were chiding her for, you were asking her to undermine her professional obligations and integrity?
Alice Perkins: Sorry, somebody was talking whilst you were asking me the question, would you mind repeating it?
Mr Beer: Yes, on Susan Crichton’s understanding of what you were chiding her for in this meeting, you were, in fact, asking her to undermine her professional obligations and integrity?
Alice Perkins: Had her interpretation been correct, then that might well be so but her interpretation was not correct and I misunderstood – I misunderstood her interpretation. And I don’t know what – I don’t know what more I can really say about this.
Mr Beer: If, as you say, executive members of the Post Office team were engaged in a process of not revealing serious matters to you, preventing the Board from finding out about them –
Alice Perkins: Yes.
Mr Beer: – the first Clarke Advice, the second Clarke Advice –
Alice Perkins: Yes.
Mr Beer: – the Helen Rose Report, the Gareth Jenkins report about suspense accounts –
Alice Perkins: Yes.
Mr Beer: – why do you think they did it?
Alice Perkins: I don’t know. I really don’t know. I mean, I am a believer, if I can use this phrase, in the cock-up rather than the conspiracy theory of life. I tend not toy think that people in large, complex organisations, are conspirators. I really do not know why that didn’t happen but it should have happened. I mean, it is extraordinary that it didn’t happen and I think the thing that – you know, when I saw the Simon Clarke Advice, many, many years later, one of the things that struck me about it was that it was written in such clear language, whereas many of the documents that you’ve been talking about, ones we saw and ones that we didn’t see, were quite technical in nature and wouldn’t necessarily be obvious to somebody who didn’t have a background in those subjects.
But if you read the Simon Clarke Advice, there is no mistaking what it is that he’s saying.
Mr Beer: Looking back on matters now, knowing everything that you do now and having, I think, listened and watched to a substantial body of evidence –
Alice Perkins: Yes.
Mr Beer: – in the Inquiry and read a substantial number of documents –
Alice Perkins: Yeah.
Mr Beer: – was this done to prevent an emerging scandal from surfacing?
Alice Perkins: I wish I knew. I just don’t understand it. So, for a General Counsel to receive advice like that, to put it at its lowest, it would be in your own best interests to share it. Wouldn’t it? I mean, you know, it wasn’t in your best interests not to show it to anybody. So I just – I can’t – I’m sorry but I don’t know – and we can all speculate but I don’t know the answer to that. But I just, I see this as one of a number of failed turning points in this very sorry story. And I do really believe that, in that summer of 2013, things could have been very different, and they weren’t.
Mr Beer: Just on a point of detail, I think I suggested earlier that the Jenkins advice of 15 July stayed in a drawer for 12 days. It was, in fact, the shredding advice of 2 October that stayed in a drawer for 12 days?
Alice Perkins: Oh, okay, okay.
Mr Beer: Knowing what you know now and knowing very closely at the time the personalities involved, do you believe that the senior executives were trying to deal with the problems themselves in the hope that they could make them go away, without revealing them to the Board?
Alice Perkins: It’s possible.
Mr Beer: Were they concerned, do you think, that the Board members might break things out into the public domain by telling MPs, or even subpostmasters directly, about the matters revealed in the Clarke Advices, for example?
Alice Perkins: I can’t think that anybody would have thought that we would leap from – you know, supposing the Clarke Advice had been shown to me before it was shown to the Board, I would have said, “This needs to go to the Board and we need a proper discussion of this”. If it had gone to me and the Board simultaneously I’m absolutely sure that people would have wanted a proper discussion of it. But that – they wouldn’t have gone – there wouldn’t have been a leap to tell people outside the Post Office as the first reaction; do you see what I mean? I mean, we would have wanted to talk about it amongst ourselves, and get advice on it, and decide – I mean, the first thing we would have had to have done would have been to talk to the shareholder about this.
Mr Beer: Sir, that’s an appropriate moment for a break.
Can we take the afternoon break of 15 minutes, please, until 3.25.
Sir Wyn Williams: Certainly.
Mr Beer: Thank you.
(3.11 pm)
(A short break)
(3.25 pm)
Mr Beer: Sir, good afternoon. Can you continue to see and hear us?
Sir Wyn Williams: Yes, I can, thank you.
Mr Beer: Thank you.
Ms Perkins can we just finish off, please, the note that you wrote of your conversation with Susan Crichton, by just going back to the last part of it, POL00381455, and page 3 which is the last page. At the bottom of the last page, it’s the “PS”:
“PS At one point Susan Crichton referred to a recent conversation with the BIS team [that’s Business, Innovation and Skills team] at which one of them commented that they had always felt uncomfortable about the Horizon cases. When she had asked why they hadn’t pursued that, the person had said it was because the [Post Office] had always been so forceful in its defence of the issue and its handling.”
Did Susan Crichton name the person at that Government department who that felt uncomfortable about the Horizon cases?
Alice Perkins: If she did, I don’t remember who it was.
Mr Beer: If she had named them, would you have recorded it?
Alice Perkins: Yes, I think so. I can’t see why I wouldn’t have done.
Mr Beer: The person said, according to Ms Crichton, that they hadn’t pursued the issue of being uncomfortable about the Horizon cases because the Post Office had always been so forceful in its defence of the issue. Is that an accurate characterisation of how you, at this time, would have viewed Post Office’s response to criticism of its prosecutions and the Horizon system, ie forceful?
Alice Perkins: I think we’ve talked, haven’t we, about the concern about unevidenced allegations. So I think the Post Office was forceful about unevidenced allegations. I mean, certainly I had conversations with people in the Shareholder Executive at various times about this and I – you know, I don’t think I would describe – I don’t think I would describe those conversations as forceful.
What other people said when I wasn’t there, I can’t say.
Mr Beer: Did anyone from the BIS team say anything to equivalent effect as is recorded there to you –
Alice Perkins: No.
Mr Beer: – that they’d felt uncomfortable –
Alice Perkins: No.
Mr Beer: – about the Horizon cases?
Alice Perkins: No. I did – I mean, I do remember some, you know – I can’t remember the detail of them but I do remember that, you know, this did come up from time to time. But I don’t – I absolutely don’t remember that and I would have been – I would have been alert to that.
Mr Beer: Did you pursue this in any way with anyone in the BIS team?
Alice Perkins: I don’t think so.
Mr Beer: Why wouldn’t you have done?
Alice Perkins: I don’t know. I think that this conversation happened – I think I must have been about to go away for three weeks because it was the summer and perhaps I didn’t come back to it. I just don’t remember that I ever did raise it with anybody from BIS.
Mr Beer: I mean, it’s quite significant, isn’t it, that somebody in the – would this be the shareholder team that’s being referred to there?
Alice Perkins: Not necessarily because, at that point, there were these two different parts of the business department. There was the Shareholder Executive, which sat within it, and there was the Post Office team, that sat within it, and they were separate.
Mr Beer: So it could either be the Shareholder Executive or somebody in Government itself?
Alice Perkins: It could.
Mr Beer: Thank you. That can come down.
You say throughout your witness statement, as we’ve addressed in part already, that you were shocked or astonished at the fact that the Post Office Board was not provided with the Clarke Advice of 15 July 2013 concerning Gareth Jenkins –
Alice Perkins: Yeah.
Mr Beer: – the Clarke Advice, known as the shedding advice, of 2 August 2013 –
Alice Perkins: Yeah.
Mr Beer: – about document retention or destruction, nor any of the advices written by Mr Altman that revealed the existence of those previous two advices.
Alice Perkins: Yes.
Mr Beer: Does that suggest to you that successive General Counsel within the Post Office were responsible for the same failing or the same approach, at least Ms Crichton and Mr Aujard, in not giving disclosure to you?
Alice Perkins: Well, neither of them did give disclosure but –
Mr Beer: And, incidentally, nor did Jane MacLeod, when she became General Counsel, did she?
Alice Perkins: No, she – not to me, certainly, she didn’t. No.
Mr Beer: She was handling the ongoing interest in the Post Office from the CCRC, wasn’t she?
Alice Perkins: She was, yes.
Mr Beer: None of those documents were, therefore, shown to you by three successive General Counsel?
Alice Perkins: That’s true.
Mr Beer: Do you know why three successive General Counsel were not showing to you, so far as we can tell, and not the non-executive director Board members?
Alice Perkins: No, I don’t. I mean, we had a bit of a discussion about this before the last break and I was saying to you that, you know, I can’t understand why, if somebody knew advice like that – I mean, had seen advice like that come into them, why they wouldn’t have wanted to share it. I mean, if something like that had – I mean, you know, I – obviously, it’s evident I’m not a lawyer, but as a civil servant, over very many years, I dealt with lots and lots of really difficult things, some of which were really hard to handle and, if I got a piece of really bad news, if you like, the first thing I would have wanted to do was to share it because – I mean, why wouldn’t you want to share it? You’d want somebody else’s view on it, you want to be open about it. It’s beyond me. I don’t understand it.
Mr Beer: One reason that has been given is that it was not the practice of General Counsel to provide to the Board the originating advices of counsel or solicitors. Can we look, please, at POL00027688, and if we scroll down, please, thank you.
Alice Perkins: Okay, yeah.
Mr Beer: Your email of 8 February 2014.
Alice Perkins: Yes.
Mr Beer: This is unconnected with the topic that we were addressing, ie Second Sight in the middle of 2013 –
Alice Perkins: Yes, yes.
Mr Beer: – but I’m looking at the issue of the practice of sending on originating documents, legal documents, to the Board or to you.
Alice Perkins: Mm.
Mr Beer: You say:
“Alisdair,
“It is not yet clear whether it will be possible for me to participate in this telephone conference. I will if I can. My reaction to this paper which is helpful and clear in many respects … is that it does not spell out clearly enough for me, why we think it is right in principle for us to maintain a different policy from other organisations …”
Alice Perkins: Yes.
Mr Beer: “… (the Brian Altman point) ie option C is dismissed too summarily.”
Alice Perkins: Yes.
Mr Beer: “I do, of course, understand that we couldn’t just throw our cases at the CPS and walk away at a moment’s notice.”
Then you continue. The detail isn’t actually relevant for the moment. Then if we scroll up, please, Ms Vennells then forwards that on to the then Interim General Counsel, Chris Aujard, saying:
“Alice has sent a good set of challenges. You will … be able to answer most and in fact, I think the cost question is a case of adding up what you have in already.”
Then the second paragraph:
“The difference from my experience and perhaps not immediately obvious to our leading Counsel, is scale. None of the businesses Brian Altman compared us to has a network the size of ours … and although some may operate agencies, none will have the unique relationship that we do with [subpostmasters], nor the cash handling through individuals”, et cetera.
This appears to suggest that you had seen either Brian Altman’s advice about the continuation of the Post Office prosecution role or a detailed summary of it.
Alice Perkins: I certainly had not seen the original advice and my recollection is that Chris Aujard had written a paper on this question of the future of prosecutions where he gave some selective quotes from that advice attributed to Brian Altman.
Mr Beer: That could equally have been done in relation to the other advices, the Clarke Advice of 15 July –
Alice Perkins: It could.
Mr Beer: – 2 August –
Alice Perkins: Yeah.
Mr Beer: – or Mr Altman’s reviews, there are two advices in 2013, that he conducted.
Alice Perkins: Yeah.
Mr Beer: That wasn’t done even to that extent, was it, ie a summary with quotes?
Alice Perkins: No.
Mr Beer: Was it the practice that you were not generally supplied with original documents emanating from legal folk?
Alice Perkins: Well – yes, clearly it was. But I didn’t understand until very recently that that was, as it were, conscious policy, if you see what I mean, rather than something that just hadn’t happened. I didn’t realise that and, of course, I have seen other things, other consultations between, for example, Susan Crichton and Richard Morgan, very early on, about the unwisdom of going down the independent review route, which I was totally unaware of. I mean, I had no idea why that conversation had taken place, why it had taken place at that point when we had decided to go down that route, or, you know, I mean, I was –
Mr Beer: Just on that point, it looks rather as if she was going off to get some advice to support her position, doesn’t it?
Alice Perkins: Well, you said it. I didn’t.
Mr Beer: Would that be part of the approach of unnecessarily pushing back that you mentioned earlier?
Alice Perkins: Well, I didn’t know about it when I said that.
Mr Beer: Yes, but you do now?
Alice Perkins: I do now, yes. I think it’s extraordinary. You know, I really – anyway, I keep using that word in this context. So I’m sorry.
Mr Beer: So is the position that you did not generally receive originating legal advice –
Alice Perkins: It is.
Mr Beer: – from the authors but you received papers in which Post Office lawyers summarised –
Alice Perkins: Yeah.
Mr Beer: – it and quoted from it?
Alice Perkins: Yes.
Mr Beer: Thank you. Thank you, that can come down.
Going back to mid-2013, then, it is right that Alasdair Marnoch was deputed to deal with or to oversee the insurance position of the Post Office, wasn’t it?
Alice Perkins: Yes.
Mr Beer: Can we look, please, at POL00099331, and go to bottom of page 3, top of page 4, please. Thank you.
So there’s an email from Alwen Lyons to you and others.
Alice Perkins: Yeah.
Mr Beer: We’ll see in a moment that this is about 19 July 2013. Alwen Lyons says “Dear all”, and then over the page.
Alice Perkins: Okay.
Mr Beer: “On Tuesday the Board asked for information on [the following three things].”
We can skip over 1 and 2. Then, if we scroll down a little further, 3:
“The impact on Horizon/Second Sight on our insurance cover.”
Alice Perkins: Mm.
Mr Beer: Then Ms Lyons says that point is:
“… explained by Chris below.
“Insurance [if we scroll down a bit]
“We discussed what impact the current Horizon issues might have on our insurance on which we are advised by our insurance broker, Miller. Their view is that whilst other insurance policies may be impacted the most likely one is D&O [directors’ and officers’] – this has the added complication that it is the only policy we share with [Royal Mail] and was placed by their broker, JLT. The excess on the policy varies under different criteria but the main one is £25,000 on each and every claim. A meeting is being set up with JLT and Miller to ensure they are fully briefed on the issues before JLT engage with the insurer.”
Then there is a lot of email traffic.
Alice Perkins: Yes.
Mr Beer: Go to page 1, please. You have been removed from the thread now –
Alice Perkins: Okay.
Mr Beer: – and this a conversation by email between Alasdair Marnoch and Paula Vennells?
Alice Perkins: Yeah.
Mr Beer: Alisdair says:
“I’m afraid Chris’s answer …”
I think that’s the answer that we have just read –
Alice Perkins: Okay.
Mr Beer: – as supplemented a little in the email chain but we needn’t address that:
“… does not address the key question as to whether or not we’ve got cover. He dropped me a note which suggested we do but seems to suggest it would be under the [director and officer] cover. Like you, I’m concerned that we believe this policy would cover up for this sort of issue – rather I’m sure we will have a PI policy [professional indemnity or public liability] which will cover us for this and any other like issue.
“The follow on issue is that to avoid the underwriters rejecting our claim we need to keep them abreast of developments and any possible claims (on this and any other issues). Experience tells me that keeping underwriters update on this sort of developing issue can be very tricky getting the balance right in levels of disclosure. Normally I would have expected Chris to be involved in discussions with Susan testing the thinking at each stage of the process.”
Then skipping a paragraph:
“The issues about any disclosure is that it will affect our premiums even if the underwriters don’t pay out. It’s a bit like having to report near misses when you are driving as well as crashes. The result will be higher premiums”, et cetera.
Was this reported back to you?
Alice Perkins: I don’t – I certainly have never – had never seen that email at the time. I mean, I was aware that Alisdair was taking the lead on this.
Mr Beer: As Chair of the Audit and Risk Committee?
Alice Perkins: Of the Audit and Risk Committee, exactly. I think that was perfectly right, actually, both in the capacity that he had, and also because he would have had a much better understanding of these sorts of issues than certainly I would have had.
Mr Beer: Thank you. Can we turn to some related questions, then, arising from questions put by Mr Henry to Chris Day, on Tuesday of this week, by looking at POL00021991. There’s, I’m afraid, quite a long run-up to the wicket here in getting to the questions but I need to give you the context before we look at the issues of substance.
Can we look at the bottom of the page, please. Thank you. Stop there. If we just go up a little bit. We’re in March 2014 and an email exchange between Andrew Parsons – and I think you would know he was a partner at Bond Dickinson?
Alice Perkins: I do now, yeah.
Mr Beer: Did you then?
Alice Perkins: I don’t think so but I can’t be sure. No, I don’t think so, quite honestly.
Mr Beer: Okay, David Oliver?
Alice Perkins: Yes, David Oliver was working in the Post Office.
Mr Beer: Chris Aujard, Interim General Counsel?
Alice Perkins: Yes.
Mr Beer: And Gavin Matthews, that’s Mr Parsons’ colleague –
Alice Perkins: Okay.
Mr Beer: – at Bond Dickinson?
Alice Perkins: I don’t know.
Mr Beer: Then he says, Mr Parsons:
“Please find attached the key pieces of formal advice that have been prepared by [Bond Dickinson]. There are obviously thousands of other emails which provide further ad hoc advice.”
So next, if you look at the subject matter, is that the Post Office is bringing in Linklaters –
Alice Perkins: Right.
Mr Beer: – to give advice. Here, Mr Parsons is providing some of the material, some of the legal advice that the Post Office has previously received, so that Linklaters, presumably, can know about it?
Alice Perkins: Okay.
Mr Beer: Okay?
Alice Perkins: Yes.
Mr Beer: So he attaches a number of documents.
Alice Perkins: Right.
Mr Beer: There’s the note of the meeting with Richard Morgan at number 1, a settlement presentation at number 2 and then something called “Insurances risks note” at 3. Can you see that?
Alice Perkins: Yes.
Mr Beer: He says that that note had:
“… the dual purpose of advising the board (its contents were later reflected in a Board paper) and acting as notification to [the Post Office’s] insurers – hence why this doesn’t look like a traditional piece of legal advice.”
Okay? So this is Mr Parsons saying in 2014 the insurance risk note had two purposes: advising the Board (its contents were later reflected in a Board paper) and a notification to the insurers. Okay?
Alice Perkins: Yes.
Mr Beer: Can we look at the note, please, with that context in mind. POL00021996. If we go to page 4, please. We’ll see that it’s dated 15 August 2013.
Alice Perkins: Right.
Mr Beer: Okay?
Alice Perkins: Yes.
Mr Beer: We go back to page 1. “Horizon risks”, and if we then go to page 2, under the heading “Risks to the Post Office”?
Alice Perkins: Right, yes.
Mr Beer: “Prosecutions & Convictions
“As noted above, where circumstances warrant, Post Office prosecutes subpostmasters who have acted criminally. The basis of these prosecutions is often found in the transaction records recorded in Horizon. As a result of Second Sight’s investigation/Interim Report, Post Office is reviewing all its criminal prosecutions over the last three years to identify any cases where a conviction may be unsafe.”
Alice Perkins: Mm-hm.
Mr Beer: Then this:
“In particular, the expert evidence of one Post Office witness, Dr Gareth Jenkins of Fujitsu, may have failed to disclose certain historic problems in the Horizon system. Under the criminal prosecution guidelines, Post Office has an obligation to disclose (even retrospectively) this previously undisclosed information to subpostmasters’ defence counsel. Post Office is required to make these retrospective disclosures where the additional information (ie Dr Jenkins’ knowledge of historic, but now resolved, problems with Horizon) may have undermined a prosecution case or assisted with an accused’s defence.”
Was that paper presented to the Board?
Alice Perkins: No. I don’t think that the Board ever saw any papers directly from Bond Dickinson because, when I looked at these, at these papers recently, I didn’t – if you look at the top right-hand corner of the top of the document –
Mr Beer: There’s the Bond Dickinson symbol?
Alice Perkins: I honestly don’t think I’ve ever seen that before in my life.
Mr Beer: Were the contents of this paper, as Mr Parsons said in his email that we read, later reflected in a Board paper?
Alice Perkins: No. I mean, there was one sentence, which I’ve already referred to, in a paper from Chris Aujard, which I think the sentence may have been repeated then in significant litigation reports, which made this very bland reference to looking for a new expert evidence.
Mr Beer: Yes, I’m looking for something that is other than bland?
Alice Perkins: Yes, precisely, and I had never heard of Gareth Jenkins until the High Court case.
Mr Beer: So, although Mr Parsons says the contents of this advice were later reflected in a Board paper, your evidence is that, to your recollection, they were not?
Alice Perkins: Absolutely not. No. I mean, I’m absolutely sure that, if I had known about this – I mean, (a) I would not have forgotten and (b) I would have done something about it.
Mr Beer: The document ought to have got to the Board or at least the substance of the information in it –
Alice Perkins: Exactly, of course it should.
Mr Beer: – shouldn’t it?
Alice Perkins: Of course it should, yes.
Mr Beer: So we can add this to the list of documents not passed to or appropriately summarised to Post Office’s Board, can’t we?
Alice Perkins: We can.
Mr Beer: I should say, just for the note – and this is mainly for you, sir, rather than Ms Perkins – that I’ve checked the following, bearing in mind that this document is dated 15 August 2013. There was no Board meeting in August 2013, presumably everyone was in Tuscany.
Alice Perkins: Not everybody.
Mr Beer: 25 September 2013, the Board asked for a noting paper on whether any claims on the business from Horizon work would be covered by indemnity or D&O insurance.
31 August 2013, no mention of these issues.
27 November 2013, no mention of these issues.
4 December 2013, that was a meeting of a subcommittee of directors and the issue wasn’t addressed.
21 January 2014, an agenda for the Board meeting says that a paper called “Insurance Cover for Project Sparrow” is to be presented as a noting paper but no such noting paper is, in fact, within the Board pack and there’s nothing in the minutes of that meeting about a discussion of that issue or even a paper being noted.
So for the Board meetings between August 2013 and March 2014, when Mr Parsons wrote his email, I, at least, can see no record of this paper or a summary of it being presented to the Board.
Sir Wyn Williams: That’s a very helpful, Mr Beer. Can I ask that your team, if it hasn’t already started or doesn’t already know the answer, try and ascertain what Mr Parsons – well, we don’t know that Mr Parsons was the author of this, do we?
Mr Beer: If we go to the top of the page.
Sir Wyn Williams: Yes, it’s Bond Dickinson in the right-hand corner.
Mr Beer: Yes, the very top of the page.
Sir Wyn Williams: Ah, sorry.
Mr Beer: Then if we scroll down to the bottom left-hand side, just right at the bottom, we can see a reference number at the foot of the page.
Sir Wyn Williams: Yes.
Mr Beer: Then if we go to the last page and scroll up a little bit, we can see that it’s signed off corporately.
Sir Wyn Williams: Yes, that was what was in my mind. So, as of the date of the document, we don’t yet know, is this correct, who actually authored it in Bond Dickinson and, just as importantly, what they did with it when it first came into existence?
Mr Beer: Sir, I think that’s right and I think we’ll get helpful assistance from Mr Parsons on these issues when he gives his evidence.
Sir Wyn Williams: Yes, okay. Fine. Thanks very much.
Mr Beer: So what I have been able to establish from the minutes of the Board meetings and the agendas which set out which papers were put up to the Board –
Alice Perkins: Yeah.
Mr Beer: – either for decisions or noting, suggest that’s what you’ve said is right: that this was not placed before the Board, even for noting. Again, can you help us as to what may have been going on at the Executive Team that meant that there was this collection of rather significant advice that never percolated to the Board?
Alice Perkins: I just – I honestly don’t know. I mean, perhaps people weren’t – so there are obviously a whole list of possible reasons for this. One is that people weren’t paying attention, didn’t understand, and another is that this was –
Mr Beer: Sorry, just to stop there, just to speak over you, that would mean that a succession of General Counsel were each not paying attention on each occasion –
Alice Perkins: Yes.
Mr Beer: – to a variety of papers?
Alice Perkins: Yes. That – absolutely. However, these – the documents that we’re talking about, I’ve now lost track of this, but the documents came in at different times, these documents that we’re talking about, under different General Counsels. So I think Chris Aujard said in – when he was here, I think he said that he had either not seen some of this or had assumed that it had already been shared with the Board.
Mr Beer: Yes. I mean, the two Clarke Advices –
Alice Perkins: Yes, and they did come in before him. That is true.
Mr Beer: – are on Susan Crichton’s watch?
Alice Perkins: Yes.
Mr Beer: The Altman advices, at least three of them post-date September 2013 –
Alice Perkins: Okay.
Mr Beer: – and, therefore, they are on his watch –
Alice Perkins: Yes.
Mr Beer: – and, as I’ve said, Jane MacLeod had a continuing interest in these issues –
Alice Perkins: Yes.
Mr Beer: – because she was administering the Post Office’s relationship with the CCRC.
Alice Perkins: Yes. Well, I just – I mean, maybe it was too difficult. But I still don’t really understand that because, if something is very difficult, then you want to share it to make it hopefully less difficult.
Mr Beer: That can come down. Thank you.
Can we look, please, at paragraph 416 of your witness statement, which is page 210. Paragraph 416, you say:
“I welcomed the CCRC’s intervention.”
Alice Perkins: Yes.
Mr Beer: “I believed that the Horizon system was safe but I couldn’t see how the Post Office on its own could bring closure to this issue. So I thought it was helpful that another well respected independent agency was getting involved, and if – despite all the assurances we had been given, both internal and external – there was something wrong, the CCRC would be in a good position to find it.”
Similarly, at page 142, at paragraph 291 – in fact, that’s a separate issue. Dealing with the paragraph that I’ve drawn your attention to already, you welcomed the external scrutiny of the CCRC.
Alice Perkins: Absolutely.
Mr Beer: Did everyone within Post Office senior Executive Team, to your knowledge, welcome the external scrutiny that the CCRC would bring?
Alice Perkins: I don’t remember anyone telling me that they didn’t. I think that I was – I was quite speedy in saying I thought that it was – that we should welcome it and we absolutely should cooperate with it because that was what I felt and, by the time of the paragraph that you were just looking at, I think it’s in the context of 2015, and, by then, you know, it was clear that – I think as I say in there – there was – it just didn’t seem to me that the Post Office was going to be able to find a real resolution to this without another body that was a really authoritative body that had powers of its own independently that could look into this and decide for itself whether things were all right or not.
Mr Beer: Was that consistently your position from when the first communication from the CCRC came in, in July 2013?
Alice Perkins: Yes. I mean, you know, I had never worked with the CCRC but I would have taken an organisation like that – I would have been very respectful of an organisation like that and I would have wanted everything that should be done to be done.
Mr Beer: Can we look, please, at POL00146704. If we just look at the top part, thank you, it’s not an email exchange involving you?
Alice Perkins: Okay.
Mr Beer: But it’s about a briefing to be provided to you. It’s between Andy Holt and Alwen Lyons; do you remember who Mr Holt was?
Alice Perkins: No.
Mr Beer: Okay. He says:
“Hi Alwen – this is based on an update I pulled together with the CEO’s report that is going to the Board. I think this feels like the right sort of level or Alice/[James Arbuthnot].”
Then he cuts into the email the Project Sparrow update; can you see that?
Alice Perkins: The paler writing, is that the cut-in?
Mr Beer: No, the whole thing, I think.
Alice Perkins: Oh, the whole thing.
Mr Beer: Yeah. In the second paragraph of the proposed update to you, he says:
“Brian Altman QC’s first review has now been received. This first review looked into [the Post Office’s] compliance with its prosecution duties in light of Second Sight’s findings – in particular it considered [Post Office’s] legal duty to ensure that Second Sight’s findings were fully disclosed to any person who is currently being or has previously been prosecuted by [the Post Office]. He concluded that [the Post Office] is complying with its duties and that the approach adopted by the prosecution team was ‘fundamentally sound’.”
Then this:
“The report gives [the Post Office] good grounds to resist any formal external review of its historic prosecutions (ie by the [CCRC]).”
Alice Perkins: Mm.
Mr Beer: Was that sentiment communicated to you: that the Post Office had received advice from Brian Altman which gave good grounds to resist external scrutiny by the CCRC?
Alice Perkins: No, I don’t think I’ve ever heard that before.
Mr Beer: Were the sentiments in this proposed update conveyed to you, ie they were taking the opposite view to you about the CCRC?
Alice Perkins: Mm.
Mr Beer: There were pleas that Mr Altman had provided the Post Office with grounds to resist scrutiny. They were using the review to fend off the CCRC?
Alice Perkins: I don’t remember very much about this but I think that I may have picked up some sort of flavour – nothing like these terms here – but some sort of flavour of wanting this to go away, shall we say, and I think that’s why I – there’s – I think some Board minutes, I think quite late on, 2015, I think, where I said – or it’s recorded that the Board had said that we wanted the Post Office to cooperate fully, or words to that effect. I think it may have been me who said that but it’s not attributed to me.
Mr Beer: If we look at the top of the email:
“Hi Alwen – this is based on an update I pulled together for the CEO’s report that is going to the Board.”
Alice Perkins: Yes.
Mr Beer: It seems that those within the Post Office hadn’t got the message from you as to how they should be approaching external scrutiny, ie they were prepared to write a CEO’s report that would be going to the Board and to you saying, “Good news, Brian Altman has given us good grounds to resist review by the CCRC”.
Alice Perkins: I think, at that stage, I was only dimly aware of the – if I was aware at all. There was some correspondence between the CCRC and Paula Vennells and Susan Crichton I think in 2013. I may be wrong about that.
Mr Beer: In July, yes?
Alice Perkins: Yes? Which I don’t think I saw at the time but I think that there was some sort of reference to it, one of those passing references, in a subsequent Board paper.
Mr Beer: My question, essentially, is: you’ve told us in your witness statement that your view throughout is that the Post Office should be welcoming scrutiny –
Alice Perkins: Yes.
Mr Beer: – by the CCRC, the statutory body.
Alice Perkins: Yes.
Mr Beer: Do you know how it’s the case that your message had seemingly not found its way down to those within the organisation, that they were seemingly taking the opposite view?
Alice Perkins: I don’t know, because – I mean, you know, in fairness, to whoever these people were, I don’t think I had expressed that view about the CCRC at that point.
Mr Beer: That’s what I’m going to be driving at. Do you think that you are maybe less welcoming of the scrutiny at this time, 2013 –
Alice Perkins: No, no.
Mr Beer: – as you now like to think, looking back?
Alice Perkins: No, no, no, sorry, that’s not what I was saying at all. I think what I’m trying to say here is that that correspondence with the CCRC that was happening in 2013, I did not see that at the time and it was only referenced in passing in a Board paper in 2013 or whenever that was and I don’t think – I didn’t express a view, I don’t think, about it at the time. I’m not sure. But it absolutely was not my position at any point to be resistant to the CCRC’s involvement. But it was later, in 2015, when we were much more aware of this, that I was explicitly positive about it.
Mr Beer: Thank you. This time, late October 2013, were you aware of a Fujitsu employee who was considered to be an unsafe witness?
Alice Perkins: I didn’t know – there’s reference – no, absolutely not. I didn’t know that there was an unsafe witness – oh, actually, hang on a minute. Sorry, I’m getting a bit tired now. I think that I referred earlier to an email that Paula Vennells had sent me, which had a list of things she was updating me on, and –
Mr Beer: I’m going to come to that.
Alice Perkins: Okay. But I can’t remember when that was.
Mr Beer: It is October 2013.
Alice Perkins: Okay.
Mr Beer: If you’re getting tired now, I’ll make this the last set of questions and we’ll pick it up fresh tomorrow morning.
Alice Perkins: Okay, thank you.
Mr Beer: Can we look, please, at that email.
Alice Perkins: Yeah.
Mr Beer: POL00382001. At the foot of the page, please. Thank you. So it’s about the same time, the email we just looked at on CCRC –
Alice Perkins: Okay, yes.
Mr Beer: – review being maybe unnecessary in the light of the Altman advice. An email of 21 October from Paula Vennells to you.
Alice Perkins: Yeah.
Mr Beer: “Signing out!
“Hi Alice, don’t worry about the lateness of the note [12.47 in the morning] – I am clearing the tray before signing out. I hope your weekend has been good despite the autumn rains …
“A couple of updates.”
Then second update:
“My concern re Sparrow … is our obligations of disclosure re an unsafe witness. (The representative from Fujitsu made statements about no bugs, which later could have been seen to have been undermined by the [Second Sight] report). We do not think it material but it could be high profile. Martin [Edwards] is briefed if you want more detail. This is just in case.”
Then if we scroll up, please. You say:
“Paula,
“Thank you for this. All clear and helpful. I hope you get a real break this week.”
Then you talk about a separate issue. Ms Vennells replies:
“… put it down too late night grump!”
That’s something to do with something else. She has been out for a muddy run, the local abbey and done some gardening. Then you say thank you at the top, okay?
Alice Perkins: Yeah.
Mr Beer: So this email told you that there was an issue of disclosure –
Alice Perkins: Mm.
Mr Beer: – which related to an unsafe witness –
Alice Perkins: Yeah.
Mr Beer: – who was a representative from Fujitsu?
Alice Perkins: Yeah.
Mr Beer: Presumably, you would have been concerned about that?
Alice Perkins: I don’t remember seeing this email until it was shown to me very, very recently indeed.
Mr Beer: Looking back at it now, whether you remember an email that was sent over a decade ago or not – one wouldn’t blame you if you didn’t remember an email sent a decade ago – looking back at it now, reading the words as they appear on the page, you would have been concerned at receiving an email which said that there was an issue of disclosure concerning an unsafe witness who was a representative of Fujitsu?
Alice Perkins: But she goes on to say – can we come –
Mr Beer: Yeah, if we go down to the bottom of the page.
Alice Perkins: Do you mind?
Mr Beer: She says:
“We do not think it material but it could be high profile.”
Alice Perkins: “This is just in case.”
I didn’t – you know, it’s obvious, from the email exchange with her, that I didn’t react to that. I think that – you know, I can’t explain to you now why I didn’t react to that. I wish that I had reacted to that but I think, if your Chief Executive is saying to you that she doesn’t – “We do not think it’s material and this is just in case”, I’m afraid I took that at face value. I shouldn’t that have done.
Mr Beer: We know this was written on the back of the Brian Altman KC general review –
Alice Perkins: Yes.
Mr Beer: – of 15 October 2013 –
Alice Perkins: Yeah.
Mr Beer: – which mentions an unsafe witness –
Alice Perkins: Yeah.
Mr Beer: – and does not say in any way at all that this is not material. He mentions Gareth Jenkins 55 times in his advice, and the word “material” dozens of times and, in particular, highlights the case of Seema Misra on a dozen or so occasions.
Alice Perkins: Yeah.
Mr Beer: Was this because of the balm that was poured on it, in this email by Ms Vennells, an opportunity missed –
Alice Perkins: Yeah.
Mr Beer: – to see, in fact, what Mr Altman was saying about the unsafe witness?
Alice Perkins: It clearly was a missed opportunity. I mean, it doesn’t refer to Brian Altman’s advice here.
Mr Beer: No.
Alice Perkins: But, you know, I don’t know what I can say about this. I don’t remember seeing it but I obviously – it’s quite clear from the record that I didn’t pick up on it, and I’m really sorry. I’m really sorry about that.
Mr Beer: Thank you.
It’s 4.10 now, sir. Can we call a halt to the proceedings now and recommence at 9.45 tomorrow?
Sir Wyn Williams: Yes. Yes, that’s what we’ll do.
Ms Perkins, I’m sure it’s the last thing on your mind that you want to talk about your evidence overnight but, if you do, please resist the temptation, all right?
The Witness: Yes, I am happy to resist the temptation. Thank you.
Sir Wyn Williams: So we’ll resume at 9.45 tomorrow.
Mr Beer: Thank you, sir.
(4.12 pm)
(The hearing adjourned until 9.45 am the following day)