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Note: Legally Privileged & Confidential
Horizon Questions for Parliamentary Debate 17 December 2014
Scope and Operation of the Scheme
Q. How has POL defined “the system” — this was supposed to be wider than just Horizon?
¢ Scheme’s overall objective is to try to achieve the mutual and final resolution of individual
Applicants’ specific concerns about Horizon and related issues
@ The scheme is wider than just the software involved. This encompasses, as recorded in
Second Sight’s interim report, the following:
“..Horizon relates to the entire application. This encompasses the software, both bespoke
and software packages, the computer hardware and communications equipment installed in
Branch and the central data centres. It includes the software used to control and monitor the
systems. In addition, ....... testing and training systems are also referred to as Horizon”
Q, If it’s not a Horizon issue that is causing the problem, what is, 140 Subpostmasters can’t be
wrong?
* 140 subpostmasters is less than 0.1% of the total users of Horizon — there are thousands of
other subpostmasters who have not made a complaint
That said, this question is precisely what the Scheme is designed to find out
@ No two cases are identical, so inherent danger lies in trying to look for a “one size fits all”
explanation
© However, investigations so far show that a large number of the problems were caused by
how the Subpostmasters themselves were using Horizon.
@ The Scheme was set up in good faith and Post Office is prepared to respond constructively to
what it finds, good and bad
Of course subpostmasters in the Scheme have faced difficulties, but it does not necessarily
follow that Post Office is responsible
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Q. Paula Vennells talks about investigating “Horizon and directly associated issues”. “Directly” is
not what was agreed when the scheme was established.
Scheme was set up with a specific and defined purpose which it is seeking to address.
¢ It is not in the interests of applicants or the thousands of other subpostmasters delivering
vital services to communities and our constituents to keep expanding the scope of the
Scheme in the hope that something somewhere might be found when no issues have been
found (thus far) with Horizon
¢ I would remind everyone that nothing prevents subpostmasters from raising a complaint
with Post Office at any time and Post Office will look into it.
Q. Why did Post Office agree to incorporate convicted cases in to the scheme if it knew it wasn’t
going to mediate?
e Each case is looked at on its individual facts and merits. That meant not pre-supposing the
outcome of some cases by blocking their entry to the scheme.
e However, investigations so far have not revealed any suggestion that a subpostmasters
conviction is unsafe
© Let me be clear: Post Office does not have the power to overturn any conviction and nor
does the Mediation Scheme — Only a Court does.
Post Office is, however, under an absolute duty to immediately disclose any information
which is capable of casting doubt over the safety of a conviction — Post Office has made no
such disclosures arising out of the Scheme
e There is no doubt in my mind that it is being particularly vigilant in this regard as it carries
out its investigations
© The fact remains, uncomfortable as it may be for some, that nothing has to date surfaced
which suggests that any of the convictions are unsafe. If it does it will be dealt with in
accordance with POL’s obligations. It will have to be.
Q. Why aren’t POL mediating criminal cases?
As {have made plain, I understand that each and every case is looked at individually
© You have suggested you have lost faith in the Scheme, and indeed a number of cases have
already been resolved. So it cannot be said to have failed.
e However I am not going to say anything which could be taken by applicants which could
suggest that Post Office or anyone else might decide whether to proceed in a particular way.
e If all cases are being considered on a case by case basis and I have not seen all the cases and
l assume my honourable members have not either.
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Q. JA states that the “outcome envisaged” at the start of the scheme was that not mediating
would be the exception. Why is this not now the case?
It was never envisaged that all cases would be mediated
* Post Office looks at every case on it merits and will mediate in cases where in its view
mediation offers the genuine prospect of fair resolution
¢ No party could predict at the start of the Scheme what the investigations might discover
with any certainty, nor could they given that the Applicants had not yet set out their
individual complaints.
¢ Mediation is a voluntary and consensual process and, accordingly, neither Applicants nor
Post Office are bound to proceed to mediation even where it is the Working Group’s view
that mediation is appropriate
¢ But it is worth remembering that Post Office placed no bar on the acceptance of cases to the
Scheme even where there appeared to suggest little of substance to investigate
Q. Why is POL excluding professional advisers from the final consideration of whether a case
should go to mediation?
¢ Post Office makes a substantial contribution to Applicants to obtain professional advice in
preparing their claims against it
¢ And, in cases which do proceed to mediation, there is a further contribution for professional
advisers to attend
© Inany event, JFSA fulfil the role of representing the views of Subpostmasters on the Working
Group
If pressed:
In any event, Applicants and advisers are free to approach Post Office about mediation or a
discussion on their case at any time
Q. How can we rely on Second Sight if paid for by POL?
Inresponse to the honourable member for Batley and Spen (Mike Wood MP) last year, I
gave a specific commitment that the working group would include representation from
Second Sight, recognising their independent understanding of the issues
* Second Sight continue to play a central role in all aspects of the Scheme
The honourable member for North East Hampshire (James Arbuthnot MP) acknowledges
their independence in his letter to the POL CEO and in a BBC blog where he wrote:
o “..someone had to pay for it. I wasn't going to, the Government wouldn't have
forked out money from somewhere else to do so, and the Post Office offered to do
so despite the risk involved to their reputation. That does contrast ...... with the
cover ups we've seen elsewhere in the public sector”.
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Q. Who is Sir Anthony Hooper? Who Chairs the Working Group?
e The Working Group is independently chaired by Sir Anthony Hooper, whose appointment
was announced on 29 October 2013.
e I understand he was suggested by JFSA themselves.
¢ He is a former member of the Court of Appeal of England and Wales.
Q. When were subpostmasters able to complain? Hundreds have been frozen out of the process.
e Subpostmasters were offered an opportunity to come forward when Second Sight were first
appointed back in 2012.
* Those who wanted to apply for the Scheme had three months between August and
November 2013 to submit their applications
The Post Office advertised the Scheme, as did the Justice for Subpostmasters Alliance, and
I'm sure interested honourable members would have done so also
There is nothing to stop any SPM from raising a concern with PO at any time through any
other channel and it will be investigated.
Progress / Results of the Scheme
Q. What were the main accusations of the interim report?
Though Second Sight identified a number of areas of concern that needed further
investigation, it must be noted that their primary finding was one of no evidence of system
wide problems with the Horizon software
* However, there was recognition both within the report, and from Post Office Ltd, that more
could be done to support and train subpostmasters who use the Horizon system.
Q. What were the main accusations of the leaked thematic report?
@ The Report is confidential to those involved in the Scheme and Members will understand
that I can’t comment on document I haven’t seen
e I do, however, know that it remains the case that no evidence of system wide problems with
the Horizon software has been identified
How many cases have been resolved?
© Sir Anthony Hooper has written to me with regard to progress of the scheme.
e There were 150 applicants originally, of which 4 were ineligible
¢ Of the 146 remaining, 12 were resolved early
e Since that point, 24 cases have been proposed for mediation by the working group:
© 2of those were resolved before the mediation meeting
o 7have been mediated
© 9 are waiting for mediation (3 scheduled for this week)
o 2 where Post Office declined to mediate
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How much has this cost the Post Office to date? [IS THIS OK FOR PUBLIC CONSUMPTION OR NOT —
at a push?]
© To date, Post office has invested over £5 million in the scheme and matters associated with
it. This includes, but is not limited to:
© Approaching £1m on Second Sight, the independent forensic accountants
o More than £400k for Applicants to obtain professional advice in preparing their
claims against Post Office, including £31k for JFSA’s advisor
o £2 million on investigating cases and supporting the Scheme
Q. Can the minister summarise the findings of the scheme to date, in her view?
e Iam unable to say because I neither know nor am entitled to know the detail of cases.
e Inany event I am not prepared to say anything which might, in some way affect the process
or individual mediations.
@ What I can say is that in none of the cases which have been re-investigated to date has any
evidence been found of a system wide issue with Horizon or any suggestion that a criminal
conviction is unsafe.
What I observe, however, is a genuine and good faith effort being made by Post Office to try
to resolve the issues raised by Applicants to the Scheme
Q. Why has POL rejected 90% of cases going to mediation?
e I have heard this figure being quoted and it is extremely unclear how it has been arrived at
¢ Information shared with me by the Working Group tells a different story
e Of the 24 cases recommended for mediation by the Working Group, Post Office have only
declined to mediate 2 cases
Q. Why are POL ignoring Second Sight’s advice if they are independent and are recommending
mediation?
¢ Post Office is not ignoring Second Sight’s advice — on the contrary it takes all information
into account when deciding whether to mediate
e However, Post Office cannot be expected necessarily to agree with Second Sight’s
recommendation
e If Second Sight’s recommendation alone was the determinant factor in whether the case
was recommended for mediation then that decision would be made without the benefit of
the views of the Working Group
e This is why recommending cases as suitable for mediation is one of its role as jointly
designed by JFSA, POL and Second Sight
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Q. How much has POL spent on this to date:
© To date, Post office has invested over £5 million in the scheme and matters associated with
it.
This includes, but is not limited to:
Approaching £1m on Second Sight, the independent forensic accountants
More than £400k for Applicants to obtain professional advice in preparing their
claims against Post Office, including £31k for JFSA’s advisor
© £2 million on investigating cases and supporting the Scheme
Q. Given POL has spent so much, why is POL not going the final mile to mediation?
* Mediation is a voluntary and consensual process, designed to get agreement through
compromise
¢ But there must be something to suggest that responsibility for what went wrong is really in
doubt, and that resolution is a realistic outcome — mediation may not be able to deliver
what an Applicant wants.
Q. JA admits that some Subpostmasters might be trying it on — have there been any cases where
the working group / JFSA / SS agree?
e Again, Post Office is unable to provide any detail relating to specific cases in order to protect
Applicants’ privacy
* Members will understand that, perhaps particularly in cases where there may be
suggestions of this nature, subpostmasters are unlikely to want this information disclosed
Q. Post Office has taken six months to investigate some cases, SS have only taken 2-3 months?
e Each case is being considered individually, no two cases are the same, and it is important
that each case is rigorously investigated
e Some of the cases are complex and some date back many years, involving exhaustive
searches of Post Office records
© Post Office investigations are obviously therefore the longest part of the process for many
cases
¢ Post Office prepares a case report and provides this, together with the all material retrieved
and appropriately ordered, to Second Sight for their analysis
* Some investigation reports run to over 30 pages and 80 pieces of information/evidence
© Amuch shorter period is required for this because it does not involve searches and retrieval.
Q. Why is the scheme taking so long to complete?
In circumstances where the integrity of the system which millions of people up and down
the country rely on every day is being questioned, that requires an appropriate response
© It is imperative therefore that all investigations are thorough and complete
Each case is investigated afresh and on its own merits
* This takes time
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James Arbutnot “asks” of POL (in his letter to Paula Vennells)
Q. Will the delay in investigating the scheme mean that Post Office can rely on the statute of
limitations so that applicants cannot bring action against them?
The progress of the Scheme does not affect any Subpostmaster’s legal rights.
© Ifa Subpostmaster is facing a limitation deadline, there is nothing stopping them from
starting Court proceedings against Post Office if they believe their case has merit.
Q. Will Post Office agree to waive the time bar to statute of limitations in this matter?
¢ I absolutely cannot commit POL to anything such as this — this is for Post Office to decide.
¢ However, the Limitation Act protects defendants against very old claims that may not be
able to be properly investigated.
Like everyone else, Post Office has the right not to be sued after a limitation period has
expired.
e However, Post Office has paid for Subpostmasters in the Scheme to receive support from
professional advisors who can help with any limitation issues and they are encouraged to
contact Post Office if a case is facing a limitation deadline.
© In any event, there has never been anything stopping a Subpostmaster from bringing Court
proceedings against Post Office before a limitation deadline passes.
Q. Will Post Office agree to not destroy data ?
¢ Of course Post Office will not destroy available information related to their investigations
e The Scheme anticipated that some cases would be old and information may not be available.
Q. Why is Post Office being so secretive?
e = Itis not being secretive, it is being responsible.
The cases involve sensitive and personal information and that cannot be discussed or made
public
© Post Office must respect Subpostmasters' privacy
© This is what the Chair has said in his letter to me
¢ This is why details of the Scheme are confidential
* However, that confidentiality is balanced by the fact that that Scheme was designed to be
overseen by an independent Working Group chaired by Sir Anthony Hooper
* The Scheme documentation makes it clear to applicants that they and Post Office must
endeavour to keep details of their case confidential and that all matters discussed in the
actual mediation will be strictly confidential
The confidentiality of mediation is common to all mediations, not just cases mediated as
part of this Scheme
e The Centre for Effective Dispute Resolution (CEDR) is providing the mediation for the
Scheme
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e@ The arrangements are in line with CEDR's own Code of Conduct and the European Code of
Conduct for Mediators which the Civil Mediation Council requires all UK providers to
observe in order to maintain accreditation
Q. [JA refers to “the response of 22 September 2014” — what was this and what is the line of his
attack, presumably it is about scope of the scheme?]
Treatment of Subpostmasters
Q, Did Post Office pressure people in to pleading guilty to lesser offences?
© Post Office only brings a prosecution when it meets the tests set out in the Code for Crown
Prosecutors. This means that the prosecution is in the public interest and is supported by
sufficient evidence.
¢ Before pleading to any offence, a subpostmaster has the benefit of seeing Post Office's
evidence and would have the opportunity to take legal advice.
Q. Subpostmasters’ contracts are 100 pages long — what else do/did Post Office do to ensure
Subpostmasters understand their responsibilities?
© The vast majority of the contract deals with everyday matters such as holiday leave and
sickness pay.
e The key issue in the context of the Scheme is the subpostmaster's responsibility for the
safekeeping of the public money held in their branch. This duty is explained to
subpostmasters in their contract and during their training, and is consistent with obligations
under the general law. [WAS THIS ALWAYS THE CASE?]
Q. What has Post office done to settle out of the scheme?
¢ Details of any settlements are confidential between Post Office and the subpostmasters
involved and so I do not have details of this
e@ The Chair’s letter to me says 14 cases have been resolved prior to mediation
Q. Why has POL suspended access to the Horizon mediation schemes data room?
Scheme data can only be used for the purposes of the Scheme in order to protect the
privacy of the Subpostmasters involved
© _JFSA suggested in a press release that it had left the Scheme and so JFSA's access was
temporarily suspended whilst that matter was clarified
e@ JFSA later confirmed that they are still supporting the Scheme and therefore their access has
been re-instated.
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Q. What are the arrangements for ex subpostmasters who did not hear about the scheme but
want their case investigated?
@ The Scheme is closed to new Applicants but a subpostmaster can raise any concerns direct
with Post Office at any time.
Other — possible point to fire back at James Arbuthnot
Q. James Arbuthnot quotes the January minutes of the working group. Should he have had access
to these?
e — I'm disappointed that someone has leaked these to the Rt Hon Member for NE Hampshire as
I think this may cause concern to some Subpostmasters who don't want this type of publicity
of their sensitive cases and just want an opportunity to have their case investigated
privately.
* The chair has provided me with such limited information as he is prepared to disclose and
we should all respect his position as the independent Chair