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MEDIATION SCHEME —
BIS SELECT COMMITTEE
DIFFICULT QUESTIONS (BOXES)
1
2
3.
4.
5.
6
7
8
9
. COMPENSATION
. CRIMINAL CASES
. CULPABILITY
. REMOTE TAMPERING
COST
. PERSONAL/APOLOGY
» TREATMENT OF MPS
» SECOND SIGHT
. HORIZON
10. SCHEME
11. TRAINING AND SUPPORT
12.CRIMINAL INVESTIGATIONS AND PROSECUTIONS
13.CONTRACTS
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1. COMPENSATION
How much will you pay out in compensation?
e This is not a compensation scheme. Important to make that clear.
e And there is no evidence of system wide problems with Horizon.
And no evidence has been offered thus far to suggest any
miscarriages of justice.
e@ Inasmall number of cases where we have investigated we could
have done better as a business in terms of things like the training
and support we provided to postmasters.
e Insome of those cases we have reached an agreement with an
applicant.
e This can mean many things: we have written off some debts in
some cases, for instance.
¢ This is a tiny number of cases — particularly when one considers the
size of this business.
e But this is not a compensation scheme.
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How much have you paid out?
e IIcan’t give you exact figures because each case is confidential. And
the Scheme is ongoing. But the amount which will go on financial
settlements is in the thousands, not the millions.
e Overall, this process, over two and half years, has cost around
£5m. That breaks down into areas such as set up costs,
investigation costs etc.
e There is some provision within that for those cases where we may
make small payments where we could have done better in certain
areas.
e Itis worth stressing again, though, that there is no evidence of
Horizon not working as it should
Are you deciding not to mediate some cases because, as has been reported
you told the Chair of the Working Group, the compensation claims are simply
too high?
e This is not a Compensation Scheme - and there is no evidence
Horizon has not worked as it should
e Every case is different and is treated on its merits
e When cases passed to CEDR from the WG, then Post Office - asa
party to mediation — has to assess prospect of resolution. Applicant
can do the same. That is how the scheme was established.
e If an Applicant has very high expectation of large financial pay out
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when there is no evidence of any fault on PO’s part, mediation is
unlikely to offer resolution
e But Post Office has only declined to mediate five cases of the 41
recommended for mediation by the Working Group - ready and willing
to take part in mediation in cases where justifiable
There has been nothing in your financial Report and Accounts about any of
this. Does that not demonstrate that you have clearly made no provision for
compensation because you decided you simply were not going to pay any?
e We report our Report and Accounts appropriately.
e This is not a compensation scheme. Where we reach a financial
settlement that can be for a range of reasons.
e But mediation is not set up as a compensation scheme. I am satisfied
with the provisions we have made in this area.
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2. CRIMINAL CASES
Why won’t you mediate criminal cases?
e This is a very difficult area.
e The first thing to say is that we take every case on a case by case
basis.
© So it is self-evident that I don’t rule out mediation in a case where
there is a criminal conviction.
¢ But mediation cannot overturn a criminal conviction. No-one
should be given that expectation.
e tis also the case that in criminal cases, legal avenues for appeal
remain open. None of the criminal cases in the Scheme have gone
down this route.
e@ But where MPs have approached us about cases in the Scheme
where there are criminal convictions we have offered — should the
applicant give their consent — to meet to go through the case and
our investigation into it.
© The offer remains open to do that.
But you said you would?
e With respect, we didn’t. Perhaps we didn’t make it clear enough.
But we were clear that mediation was not guaranteed.
@ Mediation is by its nature a process of compromise. Each side must
be willing to enter into it in that spirit.
e That is why each case must be judged on an individual basis.
But there could be miscarriages of justice here?
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e We take our duty of disclosure very seriously
@ No evidence so far that any conviction is unsafe
e Scheme does not affect anyone’s legal rights
But are you ruling out mediation for criminal cases?
e Every case is different — treated individually
e Unless new evidence, prospect of resolution is unlikely in cases
that have been decided by the Courts, but we have kept an open
mind and considered cases individually
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3. CULPABILITY
So something went wrong?
e Weare not perfect. Show me a business or organisation which is.
e On the whole, we get it right. And if there are potential issues we
approach with thoroughness and rigour.
e@ What this process has shown is that in a very small number of
cases we could have done better.
e We could have provided better training and support, for instance.
e Inthe context of a business of our size, that is hardly surprising
that sometimes things don’t go as I would hope.
e But we listen and we learn. We have taken action. More, I think,
than any other business would do.
e Whilst every case is important, we need to recognise these are a
very small number of cases — 150 [applicants, with 136 admitted
into the Scheme] over the last decade out of half a million people
who have served in our branches in the last decade.
e And there is no evidence of a system wide problem with our
software. If there was, we would know about it by now, from our
customers and our clients.
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4. REMOTE TAMPERING
Can Horizon be accessed remotely?
e Transaction data in branch accounts can’t be changed remotely and
there is no evidence of malicious tampering
e There is no functionality in Horizon for either a branch, PO or Fujitsu
to edit, manipulate or remove transaction data once it has been
recorded in a branch’s accounts
e There is also no evidence at all of any malicious remote tampering
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5. COST
How much has all this cost and how can it be justified?
e The Post Office is an incredibly important business to millions of
people.
e Ifthere is a doubt about our systems and processes, I have a duty
to look into that.
e I have to have confidence in our systems on behalf of our people
and our customers.
e This is a business on the up.
e So the money we have spent on this process is money well spent.
e In total it has cost around £6m so far. It is a lot of money, of
course.
e But in the context of this billion pound business, a network of
offices up and down the country, in each of your constituencies, I
think that is a price worth paying.
How much public money has been spent on this Scheme so far and how much
is the whole inquiry and Scheme likely to cost by the time it ends?
e We took responsible actions to get to bottom of very serious
allegations
e@ PO has spent £5m in the last 2.5 years on this
e Allegations are so serious, the integrity of our computer system so
fundamental
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e We would have been, rightly, heavily criticised if we had not taken the
allegations seriously
e James Arbuthnot (in 2012) gave PO credit for funding the Scheme,
acknowledging government would not have done so
What’s the breakdown of the £6 million spent — how much has gone on
lawyers’ fees?
e We have spent money to ensure independence and impartiality
e We have supported scheme applicants with funding
¢ Cannot provide details without breaching commercial confidentiality
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6. PERSONAL/APOLOGY
Will you apologise?
e@ lam very sorry where people who have worked in Post Offices
have, for whatever reason, faced challenges in their lives.
¢ I know that these are emotional stories. We have had cases of
bankruptcy, families falling apart, homes lost and others.
Of course I am sorry about those events. But it does not follow that
the Post Office is responsible for those issues.
Your communications director said these were ‘lifestyle issues’ — not taking it
seriously?
[Note: This was on Today programme. I said ‘we are sorry when people have
faced lifestyle issues...” Some MPs have suggested I said “Lifestyle choice”. I
didn’t.]
@ What he said was that we are very sorry when people have faced
difficult issues in their lives — of course we are.
e But it doesn’t follow that the Post Office is responsible for those
issues and challenge.
Will you turn down any bonus this year?
e The question presupposes fault. I am very proud of all we have
done to address this issue.
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Is it true that not only have Post Office actions led to people losing their jobs,
being bankrupted and some going to prison, they have also been the cause of
tragic suicides?
e No-one could be without sympathy — this is an emotive subject,
and people have experienced very difficult times
@ From my own experience, suicide often points to wider mental
health issues.
e It does not follow that personal events are consequence of
Horizon
What is your answer about at least 150 [136 in Scheme] people, many of
whom had worked for you for many years and had led unblemished lives,
suddenly deciding to turn to crime?
e Minority of cases involve criminal convictions
e PO prosecutions are brought where the circumstances warrant
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7. TREATMENT OF MPS
You have treated MPs appallingly — you are arrogant and have shown no
respect.
e This process came about thanks to an MP. I am incredibly grateful
that he brought the issue to my attention.
« We have met several times over the course of the last two years,
along with some of his [and your] colleagues
e We have written to all MPs who had a case in the Scheme to offer
a meeting
e MPs helped to design the Scheme and welcomed its introduction
e@ We have written to all MPs who spoke in the Westminster Hall
debate offering to meet to discuss the cases they raised
e Sol do not agree that we have not treated MPs in the right way,
though of course I am sorry they feel that way.
Is it not true that MPs, who were instrumental in establishing the Scheme,
have simply been kept in the dark whilst you have broken all the
commitments you made to them?
e The Scheme is working as agreed with MPs
e@ We have done what we said we would and discussed our decisions
with MPs. We are sorry they do not agree with our approach.
e We can discuss with MPs the individual cases of their constituents, if
their constituents consent
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Proposition in Nov last year to mediate all cases was carefully
considered by Chief Executive and Board — but would deprive WG of
its independent role and restrict our decisions regarding a voluntary
process (mediation)
RE suggestion to broaden scope of Scheme — important to us to
maintain focus on Horizon given SS’s initial report (took 1 year, no
problems with Horizon, some with training and support)
PO established Scheme in good faith
JFSA were principal drivers of its design, establishment of WG and
recommendation for Independent Chair
PO has now completed investigation of all cases in the Scheme and no
fault identified with Horizon
No need to seek to change scope — it’s designed to cover every issue
raised by Applicants
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8. SECOND SIGHT
Have you fallen out with Second Sight?
¢ Not at all.
e lam very grateful to Second Sight for all they have done and
continue to do as part of this important process.
e Of course they have challenged us. They wouldn’t be doing their
job if they didn’t.
e They are independent. That they are sitting alongside us today
should not be taken to read that they are in our pocket — indeed
their challenge has been forensic and proper.
Why won’t you give them all they need?
e@ We have provided thousands of pages of information to Second
Sight.
e They have pushed us, rightly, in the areas where they think
appropriate.
e And where it is appropriate and relevant to the focus of the
Scheme, we have been as open as possible.
© What we can’t do is prove a negative. In the absence of evidence
of a system problem in our systems — and there is no evidence —
there is a danger of this becoming a never-ending inquiry.
e And that is no-one’s interests.
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Your own independent consultants claim that you are being obstructive and
preventing them from gaining the information they need ?
Horizon is a computer system used by 78,000 people and processes 6
million transactions daily: there is no evidence of a system wide problem.
We all need confidence in that system — if a problem was found we would
be transparent about putting it right
We have provided Second Sight with hundreds of thousands of pages of
information (often at their request)
What was your response to their ‘part 2’ report?
August 2014 Part 2 report was sent as confidential document to some
Applicants, their advisers and the PO
PO was unable to endorse the report due to inaccuracies and omissions
Within Second Sight report, several issues were said to need further
investigation
From 109 questions we’ve been asked as a result (some about very
complex issues) we are not providing answers to 4:
o For three questions, we don’t have the info
o One question is not understood
© Questions which are relevant to the Scheme are all being answered
We understand that you are saying to Second Sight that subpostmaster
contracts are “out of scope” but how can this be when there are so many
complaints about them?
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e Scheme is to investigate individual complaints
e Ifan Applicant has raised an issue with their contract, we have addressed
it
e But the inquiry is about Horizon — principles of contracts are outside the
remit of SS as accountants
Second Sight say that you have changed their terms of engagement to narrow
the scope of their investigations — is this true?
e No
e Scheme is to investigate individual complaints
e Scheme is operating as agreed between PO, JFSA, SS and with MPs
¢ No organisation can allow open-ended inquiries without limitation on
time and scope
e PO subject to legal regulatory, commercial and compliance requirements
scrutiny, employing other organisations e.g. auditors
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You have clearly been trying to fetter the independence of Second Sight — you
refused to endorse a much leaked confidential report designed to help people
in the Scheme and are you not trying to prevent or at least heavily influence
the final report they plan to publish in March?
e Independence and impartiality of Scheme
e We have worked on facts and substance — good and bad
e We would not have taken the approach and actions we have if we did not
intend independence
e PO did not endorse the confidential document because it was inaccurate
and it omitted information that is important for Applicants
e To correct inaccuracies and provide information SS omitted, we produced
a document setting out our detailed position and this is also sent to
Applicants
There is significant doubt that Post Office is truly revealing all the documents
and evidence needed for these cases to be properly investigated and
reviewed — is it true that documents have been and are still being destroyed?
e PO has taken great care not to destroy documents relevant to the
Scheme
e Some cases date back many years
o Retention policy is, generally, seven years
o Some records going back further have been retrieved
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What safeguards are in place to ensure that Second Sight can be confident
that they are receiving all available material for each case to allow them to
properly review? Post Office will be biased in their investigations.
e Independence/ impartiality of Scheme
e Scheme working as agreed
e Investigation process was agreed with JFSA and SS as part of the Scheme
e For every case there is a checklist of docs so that it can clearly be seen by
SS, Applicants and their professional advisors exactly which docs have
been searched for and retrieved
It seems that in many of the cases the conclusion being reached is that it is not
actually possible to know where the money has gone — so how can you
possibly keep asserting that there is no problem with Horizon? The truth is
that the investigations are not revealing the cause of these losses at all.
e 2.5 years of investigation — no evidence in any of the cases that
Horizon has not worked as it should
e Each case is different but there is clear evidence in many cases
about the most likely cause of loss
In almost every case you are challenging Second Sight’s findings and
conclusions in some way — do you have no confidence in the consultants you
appointed?
e Independence/ impartiality of Scheme
e@ POand Applicant can comment on SS draft report
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9. HORIZON
Has Horizon had bugs?
e This is a massive IT system.
e It deals with six million transactions a day. Xx billion a year.
e Like all systems it experiences issues from time to time.
e Where there have been issues we have been absolutely up front
about them.
e And they have not impacted to the detriment of subpostmasters.
e From 2011 FOI. Post Office Ltd as a responsible business has
undertaken regular and robust external audits of its IT systems
which includes Horizon. During the past five years there have been
16 external audits and accreditations. Post Office Ltd undertakes
monthly vulnerability scans and penetration tests are conducted
annually, therefore there have been 65 scans and tests which we
consider audits.
Where has the money gone?
e There are only two ways to explain how losses take place.
© One is criminal behaviour.
e The other is operational error.
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e Losses cannot be hidden from Horizon. Subpostmasters have a
choice when reconciling their accounts.
e [Bring in Angela]
10.THE SCHEME
Are you saying you will pull the plug?
e We have investigated all the cases. Second Sight are looking at our
investigations. Some mediations have taken place, and some cases
have been settled.
e Weare committed to seeing the process through for the
applicants.
e But at the same time, MPs who helped set up the scheme and
welcomed it, have now withdrawn their support. The JFSA has said
it is unhappy and has a legal firm working with it.
e Ican’t ignore that and must reflect on it.
e Clearly I have to make a judgement as chief executive, with my
Board, as to whether the aims of the Scheme have been achieved.
e@ What! am clear about is that we have fully implemented the
scheme as established with all necessary thoroughness and rigour.
Should there be a public inquiry?
e [see no reason to do so. But it is not a question for me.
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This is taking too long?
e These are complex cases. Each is different
A third of cases have been are now closed / passed through the
scheme
Important to allow sufficient time for people to come forward
Each stage of process taken longer than anticipated (Applicants, PO
& SS)
We have conducted rigorous investigations & reviews
136 reports on individual cases — each typically 20 pages with 80
pieces of evidence
Scheme does not affect anyone’s legal rights
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But the Scheme is satisfying no-one?
o Athird of cases are now closed / passed through the scheme —
no predetermined outcomes
o We agreed with SS, JFSA and MPs exactly what we would do
and that is what we are doing
o We did not know what inquiry & investigation would find.
Established Scheme with open mind & have done great deal to
ensure impartiality (WG, Independent Chair)
o Listening to our critics and, in circumstances, we are considering
how we move on
Why are you so secretive about it?
o Weare not being secretive, we are upholding the necessary
confidentialities of the scheme as it was established
o Even facing unsubstantiated allegations, we have not & will not
breach applicant confidentiality, which protects personal sensitive
info of Applicants, e.g. re ill-health
o Mediation (always, not just this Scheme) is a confidential process,
and it is required by CEDR
= When Sir Anthony Hooper wrote to the Minister for Postal
Affairs (Dec 2014) he attached letter from CEDR re
confidentiality (this is also in the House Library)
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How does mediation work?
® Mediation is a two-stage process
1. Investigation and independent review, shared with Applicant;
SS recommend whether to mediate or not
2. WG face-to-face discussion and vote
e It was never agreed all cases would be mediated (per original
documentation)
© Out of 41 cases recommended for mediation by WG, we have
declined to mediate 5
Why won’t you do what MPs have been asking for?
o To agree all cases should be mediated would deprive the WG of
its important, independent vote
o We fund administration of entire Scheme and support
Applicants to engage professional advisors to build their cases
But you take a legalistic approach and refuse to agree where Second Sight
recommend mediation?
o Scheme working as agreed
o Impartiality of Scheme
e PO funds the Scheme because so keen to get to the bottom of
complaints and difficult to see how else it could have been funded —
but very careful to have impartiality built in
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It is surely pointless having a mediation Scheme when Post Office refuses to
mediate some of the most worrying cases, even when this is recommended by
everyone else in the scheme working group?
e Third of cases now closed / passed through the scheme
e Declined mediation in 5 cases (out of 41 recommended by WG for
mediation)
e We provide support funding for Applicants to engage professional
advisors and build their cases
But James Arbuthnot MP says that you are objecting to mediation in 90 per
cent of cases in the Working Group — even if they are proceeding to CEDR
because you are out-voted. The Scheme documentation says mediation is
“likely” in most cases — but haven’t you in fact been trying to prevent it
behind closed doors?
e This is not correct
e Third of cases already closed/ passed through the scheme
e Declined mediation in only 5 cases (out of 41)
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On what basis are you refusing to mediate cases that are recommended for
it?
e For mediation to be successful there must be a reasonable prospect of
resolution
e Where there is no evidence that Post Office is responsible for allegations
in a complaint there is no reasonable prospect of resolution
Isn’t it true that even in cases you are mediating you are continuing to bully
postmasters, refusing compensation and even claiming that some of them
still owe you money?
e Impartiality/ independence of Scheme — including independent
mediator
e Reputable mediation experts ensure mediations are in line with
best practice
e We cannot discuss cases without breaching confidentiality of
Applicants and of the confidentiality agreement with CEDR
(fundamental part of their Codes of Conduct)
But are you, in any cases, still chasing or going to chase alleged debts?
o Scheme is about resolving complaints
oO Icannot provide details of outcomes of mediation for
reasons of confidentiality
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Why is there so much secrecy?
o Nosecrecy — confidentiality to protect people as agreed
by all parties
o Confidentiality of mediation is not particular to this
Scheme but is inherent in all mediations
o Confidentiality in line with CEDR’s Code of Conduct and
European Code of Conduct which UK providers must
observe to maintain accreditation
o Independent, well-established and reputable mediation
experts appointed to ensure mediations follow best
practice
There might have been miscarriages of justice so how can anything that could
reveal that be out of scope in this inquiry?
e Scheme is to investigate individual complaints
e Provided huge amount of information to SS about Horizon and
business processes
e POhas taken steps through the Scheme with duty of disclosure firmly
in mind
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There are apparently hundreds more potential cases but you closed the
Scheme last November so these postmasters have no opportunity to raise
their complaint and get an independent review — surely that is wrong and
unfair?
e Inquiry started in 2012 - there has been 2.5 years for people to come
forward
e We encouraged people to come forward in 2012 and when the Scheme
was established, as did JFSA
e Very few people have come forward outside of the Scheme
Many postmasters say they struggle to check discrepancies because there is
no proper audit trail — why can you not give them a proper explanation when
they query losses?
e Thousands of postmasters use Horizon successfully
e If branch shows discrepancies then branch has access to range of reports
including line-by-line transactions of the day
If Horizon is working so well, why are you replacing it?
e Thousands of postmasters are using Horizon successfully
e Six million transactions a day
¢ Growing business with banks and other clients
e Would be unusual for any large organisation not to make continual
upgrades and improvements
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e We doso in the context of a digital revolution which is transforming
people’s lives — not surprising then that we would want to get the best
system for our people and our customers
Some postmasters appear to have panicked and just agreed with Horizon’s
figures to ensure they could trade the next day — isn’t it the case that the
system itself was pressuring some people to falsely account?
e Thousands of postmasters use Horizon successfully
e SPMRs can accept discrepancy if they are responsible for it or can dispute
it for investigation
e@ SPMRs do not have to accept Horizon balance in order to continue
trading
Horizon was introduced over a decade ago — even with upgrading it is surely
no longer fit for purpose — but what incentive do you have for improving the
situation when your postmasters take all the risk?
e Postmasters are not responsible for all losses
e Balance of risk and reward, similar to franchisee
e Postmasters are independent business people
e Postmasters are not liable for losses beyond their control (e.g. external
fraud) if they follow correct procedure
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Some of your more rural Post Offices have problems with telephone lines and
power and find themselves having to try to run Horizon on mobile technology
— how can this possibly be secure and is not the case that system crashes and
interruptions could cause losses for postmasters?
e Horizon is working as it should and is secure
e System is capable of handling power and telecom problems, a risk faced
by all IT systems
e SS specifically looked into recovery process and found it worked
How old is some of the hardware? If postmasters need replacement
hardware is it second hand?
e Horizon is working as it should
e Industry standard practice on replacement
e No evidence that suggests Horizon did not accurately record transactions
processed by applicants
Is it not the case that there are still regular issues with Horizon, but many
postmasters are understandably afraid to raise it?
e@ Open communications — with forums and channels that provide feedback
e Nothing to suggest postmasters are afraid to raise issues
e Horizon processes 6 million transactions a day
e Horizon used successfully in all our outlets (e.g. WH Smith, Tesco, Asda)
We have had information that there is a current issue involving mailing labels
and that there is CCTV evidence about it. Do you know anything about that?
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Investigate issues raised with us
Safeguard built into Horizon but we are looking into improving the
process
If pressed re allegation that postmasters are fraudulently ‘reclaiming’
money they are losing from the issue: we have repeatedly requested
evidence but it has not yet been provided
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11. TRAINING AND SUPPORT
Your training and support for postmasters has obviously been pretty woeful
e Thousands of postmasters operating successfully
e Provide comprehensive training and follow up support
e Inasmall number of cases, the standard expected was not provided —
this is being addressed in the Scheme
e Continually improving training and support, with involvement of our
people
e Created branch support scheme as a direct result of this issue
Your own helpline was providing instructions and advice that simply made
things worse for people — in some cases doubling their losses. It is not
surprising that some of them gave up on it is it?
e Helpline used by thousands of postmasters
e Call logs are retained — no evidence that wrong advice was provided
Postmasters were continually told that things would be put right by the
system and it would correct itself, but this never happened - how could you
then possibly justify the actions you took to punish these people?
e This is likely a reference to the processes within the system that are in
place to enable review when, for example, someone has input the wrong
figures — if any issues cannot be resolved they can be escalated to higher
level of support (Field Support Advisors or other managerial)
e Thousands of postmasters operating Horizon successfully
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You now appear to be running the risk of making things even worse for
postmasters — have you not cut back severely on training and support and
outsourced your helpline abroad?
¢ Continually improving training
¢ Have put in place branch forum as we said we would
e Forum reviewing training and support
e Using digital channels to expand and improve training further
© Our approach is to have efficient support processes for our customer
facing colleagues and we'll continue to develop these — as every good
customner facing business should
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12.CRIMINAL INVESTIGATIONS AND PROSECUTIONS
Postmasters claim that you act as judge and jury — if there are any losses
found at audit you have no interest in finding the cause because they have to
pay them, isn’t that true?
e This is not the case. It is always in Post Office interest to find cause of
losses and to support postmasters to protect this money
e Iflosses are not made good, PO bears that loss
e Postmasters not responsible for all losses
e Only postmasters and their employees know what happens day-to-day in
a branch
You send in your own investigations team if losses are found, with their
powers to interview people under caution — how can this possibly be fair and
without bias?
e Post Office has no special powers of investigation
e Interviews are compliant with PACE
e Cases must meet CPS Code
Why do your investigators not allow people legal representatives to be
present when people are questioned?
e Post Office carries out investigations fairly
e Legal representation always allowed in interviews under caution
e All potentially criminal cases are thoroughly investigated
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e Decisions about appropriate courses of action are taken on the basis of
the available facts and evidence and their application to the relevant legal
principles following review by specialist legal advisors
e This includes being satisfied that the case meets the Full Code Test in the
CPS’s Code for Crown Prosecutors (i.e. that there is both sufficient
evidence to provide a realistic prospect of conviction, and that
prosecution is required in the public interest)
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You seem to rarely be able to prove theft so instead pressure people to admit
to false accounting, which is much easier to do — do you not accept that some
of your postmasters are simply not in a position to be able to refute that even
though they have done nothing wrong?
e Thousands of postmasters operate Horizon successfully
¢ No reason for anyone to commit a criminal offence
e Prosecution subject to scrutiny of defence lawyers and ultimately the
courts
e Falsifying accounts cannot be justified and destroys the audit trail making
investigation difficult / impossible
There seems to be a ‘one size fits all’ attitude to prosecuting people with no
account taken of the circumstances in which they have had to try to operate -
is it not therefore highly likely that some postmasters will have found
themselves victims of miscarriages of justice, either wrongfully prosecuted,
wrongly convicted or put in a position where they plead guilty simply through
fear?
e Prosecutions are very rare
e Every case is considered individually and subject to checks and balances
e Decisions on how to plead to a charge are not a matter for Post Office
e After 2.5 years of investigation we and SS have found no evidence of
unsafe convictions
e In deciding whether to prosecute, PO and legal advisors consider whether
the case meets the high standards of the CPS codes
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e Defendant is entitled to legal advice
e PO takes duty of disclosure extremely seriously
Why did you start dropping prosecutions when the scandal about Horizon
started to surface?
e Cases always continuously reviewed
© PO will not comment on specific individual cases
e PO keeps cases under continuous review all the way up to and during any
trial to ensure it meets CPS Code for Crown Prosecutors
Is it not true that, because you go for false accounting and people are
pressured to plead guilty because a lesser sentence is likely, that evidence
about Horizon is actually therefore not tested much, if at all, in Court?
e Prosecutions are rare
e How an individual pleads to a charge is not a matter for Post Office
e All evidence is disclosed to defence and could be tested
e Evidence about Horizon has been tested in court
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Some of the postmasters felt they were the only ones with problems with
Horizon. Now it is clear that they are not — and there might in fact be
hundreds more cases than we know about — should not every single criminal
case be allowed an appeal? It is surely powerful new evidence that there are
so many cases and that there have been serious glitches in the system, even if
those glitches did not directly apply to these cases.
e There is no evidence in these cases — none at all - that Horizon has not
worked as it should and Post Office cannot be asked to ignore this
e Every case is different and must be assessed on all of its facts and
substance
e We need to recognise the context, whilst recognising every case is
important — 150 cases with 136 still in the Scheme — spanning the last
decade where we have run a network of over 11500 branches each year
— each accounting weekly or monthly.
Would you agree that there should be no time bar for these cases?
e Legal rights of applicants are not affected by the Scheme
e Post Office also has legal rights
e Limitation periods firmly established in law
Would you welcome the Criminal Cases Review Commission examining these
cases?
e The Scheme does not change anyone’s legal rights
¢ No evidence by PO, SS or Applicant suggesting convictions are unsafe
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e¢ PO writes to everyone who has suggested they have evidence a
conviction is unsafe asking them to disclose it — no such evidence has
been brought forward
What is your reaction to the challenge that you should no longer have
prosecution powers and investigations and prosecutions should be carried out
by police and CPS?
e Statutory right to bring a private prosecution open under the Prosecution
of Offences Act 1985
« Statutory right applying to every person and organisation in England and
Wales
« Post Office is not unique in bringing its own prosecutions. In 2012 for
instance, one in ten criminal prosecutions were brought by TV Licensing.
155,00 people were convicted. The RSPCA and local authorities bring
criminal prosecutions.
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13.CONTRACTS
Aren’t the contract terms completely unfair?
e Thousands of postmasters operate successfully and have done for years
e Similar position to franchisees in other organisations
e Contract terms negotiated with National Federation of SPMRs which
represents 80% of postmasters
e Balance of risk and reward — not responsible for all losses
But the contract goes back decades and was in place before Horizon was
introduced — how can your contracts still be fit for purpose?
e Agreed and regularly reviewed with NFSP (represent 80% of independent
postmasters — 6,100)
e Core principles remain and overwhelming majority of postmasters
operate effectively within these terms as they have done for many years
e Broadly similar to franchise arrangements across UK
e Postmasters have responsibility for protecting PO money within the
branch they control by following proper procedure, many of which
required by law and compliance regulation
e Transactions and accounts are now computerised but this does not
impact on the contract
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Postmasters might well be independent business people but a lot of them are
running village shops, not large companies but you don’t even provide them
with legal advice before they sign up to the contract — or even advise them to
get some. How do you make sure they really know what they are signing up
to?
e Postmasters are usually already running their own businesses
e Open to any postmaster to take legal advice
e In-depth appointment process
e Postmasters are free to take independent advice, as they are free to
choose to enter into a contract with PO, or not
The British Franchise Association recommends that independent legal advice
should always be taken before signing a franchise agreement — why does Post
Office not comply with this best-practice recommendation?
e BFA recommendation is to franchisees (akin to SPMRs) not francisors
(akin to PO)
e Reasonable for PO to assume an independent business person entering
into a contract will take legal advice if they think they need it
Is it true you don’t even show the contract to postmasters before they have
started working for you and they are only asked to sign an acknowledgement
document agreeing to its terms?
¢ No this is not true
e Contract is available to postmasters throughout negotiation
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e Itis issued with the offer of appointment
e Common practice for new subpostmasters to sign an “Acknowledgement
of Appointment” document, rather than the full contract — but this is
done after the contract has been provided and people have had the
opportunity to go through it and seek any advice they wish
e A postmaster is also always able to ask for a copy of the contract if s/he
so wishes
But was this always the case? Aren’t there cases where postmasters have
never seen the contract?
e It has been our practice since 2001 to send out the contract with the
offer of appointment following successful interview
e tis always open to a postmaster to ask for a copy of the contract
How can it be fair for postmasters to be responsible under the contract for
losses caused by their staff including when these have been caused by
genuine and innocent mistakes?
e Postmaster is responsible for running his/her branch and that includes
the employment of staff
e Responsible for hiring assistants and for their training. Postmasters’
assistants are not employees of Post Office
e Postmasters assure themselves that assistants they employ are suitable
for the role — they interview them, seek references and do necessary
checks
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