POL00145089
POL00145089
From: Susan Crichton[IMCEAEX-
_O=MMS_OU=EXCHANGE+20ADMINISTRATIVE+20GROUP+20+28FY DIBOHF23SPDLT+29
_CN=RECIPIENTS_CN=SUSAN+20CRICHTONC5FA6431-DC28-49AB-8FOF-
BE4237A4AD4F @C72A47.ingest.local]
Sent: Wed 03/07/2013 7:13:31 AM (UTC)
To: Martin Edwards:
Ce: Hugh Flemingto!
Subject: Re: JA meeting brief
Hi there - so I have not read the re-worked document, are you happy that there are no hostages to fortune? We
shouldn't send Rod's note as there is updating required.
Susan
From: Martin Edwards
Sent: Wednesday, July 03, 2013 07:00 AM
To: Paula Vennells
Cc: Mark R Davies; Alwen Lyons; Alice Perkins CB
Subject: Re: JA meeting brief
Lesley J Sewell; Susan Crichton
Thanks.
I think sharing with BIS would be helpful - I know they would certainly appreciate it. I'll just re-read to check for
any issues which could be misinterpreted or unhelpful to our position, but otherwise I'll forward around 8.30
unless anyone objects before then.
I'll defer to Susan and Alwen on SS, but presumably a bespoke letter drawing on some of the points in the brief
would be the safest approach if we need something in writing.
And I'll send to ExCo on your behalf Paula (presumably you mean now rather than holding off until after the
meeting?).
Martin
Martin Edwards
Chief of Staff to the Chief Executive
Post Office
On 3 Jul 2013, at 07:21, "Paula Vennells
A thought, four actually. You may already be ahead of me :
1) this could be shared with BIS as background briefing to my call with JS later today.
2) it puts the whole issue into context, which as we discussed yesterday, needs to be brought out
in the SS report. Is there merit in sharing with SS, so they understand how seriously we take the
issue of proportionality and related reporting? Also with our lawyers who will be reviewing their
report over the weekend.
3) Share with the Board but after the JA meeting - Alwen, Alice and I will discuss, post. JA.
POL00145089
POL00145089
4) it should be sent to the ExCo please with a covering note from Martin on my behalf, explaining
briefly what is happening and to be kept P&C.
Thanks Paula
Sent from my iPad
On 3 Jul 2013, at 02:04, "Martin Edwards"
Alice, Paula
With many thanks to Susan, Alwen, Mark and everyone else involved, here's the briefing
note for the meeting with JA (attached as both a Word doc and PDF, and also pasted in the
email below in case easier to read on blackberry. I think Alwen will try to bring printed
copies if she has time).
Also attaching a more detailed factual background brief in case needed, which is what
we're developing as our main fact base for reference throughout this process. It includes
details of the 4 cases under review by SS in the interim report and also a summary of the
cases pertaining to JA and OL's constituencies.
I mentioned a website earlier which provides guidance on the proper process for
independent enquiries, including in relation to ‘Salmon letters' - have referenced the key
read-across in the brief, but here's the link if anyone wants to read up on this in more
detail:
http://publicinquiries.org/holding a hearing/fairness to witnesses
Best wishes for the meeting,
Martin
Briefing for meeting with James Arbuthnot, 3 July 2013
<image002.png>
SPEAKING NOTES
Introductory points:
Thank you for agreeing to meet us.
SS provided us with an update following your call with them on Tuesday morning.
Following that, would like to discuss with you:
a) Communications around the report and media/parliamentary handling
b) The approach to the report itself and Monday's meeting
c) The approach beyond next Monday to close down other MPs' cases and
learn lessons
But first point to reiterate is that we take this whole process extremely seriously
indeed. That is why we set up the independent investigation in the first place. It is
important we get to the truth and learn lessons where appropriate.
i) Communications around the report and media/parliamentary handling
Would be useful to understand your plans for communicating the report to the media
and Parliament. (Second Sight's read-out of your conversation gave us some areas for
concern.)
The single most important principle from our point of view is that the report and the
associated communications must be rigorous and completed grounded in the facts.
The Post Office is too important a business to thousands of sub-postmasters and
millions of customers (and taxpayers) across the country for confidence to be
undermined unfairly.
From the SS update we have been made aware of the potential for different
interpretations on the definition of Horizon. Whilst we both agree that the wider
system is part of the review (as defined in the ToR) we consider that the report and
communications should clearly distinguish between the ‘computer system’ and the
wider support processes.
POL00145089
POL00145089
From what we have been told by SS so far, there is no evidence in the interim report
to support any suggestion of systemic failures with the Horizon system (and this is
based on the four "best" cases from all those under review).
If this is the case, important that point is communicated clearly given some of the
original allegations against the system - otherwise customer and agent confidence in
the integrity of the system could be fundamentally undermined.
This is not to belittle the importance of the overall user experience for spmrs. It is
essential that we continue to improve our wider systems of support and training for
agents, and we are grateful for some of the additional insights generated by this
investigation to date. Many of these process issues are historical and have already
been rectified through improved guidance to staff and training for spmrs - but where
further changes need to be made we will absolutely act on them. Will come back to
how we propose to engage JFSA and spmrs and identifying further process
improvements.
We're concerned to hear that you may have lined up an interview with the BBC in
advance of the report being shared. Keen to understand your thinking here.
We will let you know our handling plan in relation to the media, and share statements.
We would be grateful if you were able to do the same. You will appreciate the danger
of the media exaggerating the report and our need firmly to defend our reputation.
ii) The approach to the report itself and Monday's meeting
SS propose to share with us the draft report on Friday. We will work urgently over the
weekend to check for factual accuracy.
Clearly this issue has significant bearing on our main supplier for Horizon, Fujitsu. They
will therefore also be asked for their views on the facts contained in the report before
publication.
Our hope and expectation is that this fact checking and consultation can be completed
in time to allow the report to be shared with MPs on Monday afternoon - but
obviously an extremely tight turnaround, so we will need to review the situation on
Monday. If there remain fundamental concerns around factual points, it would be
better for the report to be delayed rather than misleading statements to be issued.
[If needed: none of this undermines the independence of the SS investigation - on
the contrary, our aim is to protect its credibility and rigour. Also has parallels with
the statutory process for public enquiries - Inquiries Act 2005 recognises the need for
‘Salmon letters' to give appropriate warning to any person or organisation about whom
criticism could be inferred from an enquiry.]
In terms of the meeting itself, we understand that the JFSA and their lawyers will be in
attendance alongside the invited MPs. As both the commissioner and subject of the
report, we would appreciate it if you could also give us the option of sending
observer representatives. Most likely to involve one employee and one external
lawyer. Will help us to ensure we have a clear and accurate read-out of the meeting
and that we can follow-up on any queries or action points as appropriate.
iii) The approach beyond next Monday to close down other MPs' cases and learn lessons
Clearly we recognise that the interim report does not cover all the cases put to Second
Sight. We agreed on this approach and we also recognise the need to complete the
POL00145089
POL00145089
review of the other cases put to Second Sight by the JFSA and MPs.
We'd like to work with JFSA to continue this work but we do have concerns about
the process. It has taken too long, and we have to have regard for the appropriate
use of public money.
Need to stress as well that, in Second Sight's view, in around half of the cases from
MPs there is insufficient evidence on which to investigate, despite requests for further
information to be submitted.
So we suggest a refined approach for the remainder of the cases. We want to set up a
user group (chaired by ClO) which would meet regularly to learn from experiences of
spmrs and to provide a forum for continual improvement.
We suggest that this would include JFSA and for the immediate period the forum could
(potentially) also include Second Sight and have as its priority the completion of the
reviews of the cases put to it. This approach might be more effective than the process
we have gone through, which you will accept has not been perfect.
Once the cases put to us have been reviewed by the group and a conclusion or
conclusions reached, the forum would continue as a structure through which we can
continue to refine and improve our processes.
We would hope that the JFSA would continue to be a part of this, along with other
interested parties such as the NFSP.
Additional point if needed
Depending on the tone of the meeting, it may be appropriate to address head on JA's
apparent annoyance at the issues around prosecutions and the systems ‘exceptions’.
Current prosecutions
Since the start of the SS investigation we have not pursued a criminal conviction which
relies solely on Horizon computer system evidence. We have also put on hold civil
recovery proceedings in certain cases whilst we await final report.
As you now, we also prepared an ‘immunity agreement’ with the JFSA to provide
reassurance to spmrs thinking of submitting evidence to the process.
But in cases where it is clear that Horizon system isn't the issue, we have a duty to take
appropriate action to safeguard public money. For criminal prosecutions we treat each
matter on a case by case basis, with a detailed investigation and legal review (generally
involving external lawyers).
Historical convictions
Nothing has emerged from the interim findings given to us by SS which would point to
specific convictions being unsafe. Cases have been through the judicial process and the
Court considers all relevant evidence not just that relating to the Horizon computer
system.
In the event that any person considers that there has been a miscarriage of justice
they have the right to apply to the Court of Appeal to have their conviction reviewed.
POL00145089
POL00145089
POL00145089
POL00145089
System exceptions
« We know of two systems exceptions (anomalies) under the current Horizon system
where spmrs' accounts have been affected, and both were voluntary communicated to
SS (although not directly related to the cases under review).
. Key point to note is that in both cases our processes picked up these issues,
appropriate remedial action has been taken and they did not lead to any disciplinary
action against the affected spmrs.
e Absolutely no reason to believe this means there are other undiscovered issues.
e = Weare sorry this information was not passed onto you at an earlier stage - if we had
considered these cases to materially change the investigation we would have flagged
them directly to you, but in our firm view they don't.
Further detail on the two cases if required:
«© The "62 branches exception" - 3 years old at the time of migrating branches from old
Horizon the HNG:
o Affected 62 branches (13 Crowns; 12 Multiples; 37 Sub postmasters)
© Sub-postmaster branch losses ranged from £115.60 down to 8p
o° Identified by Horizon's built-in checks and balances which are designed to flag
up these types of discrepancies. Appropriate action taken to rectify issue.
© 17 sub-postmasters were adversely affected, i.e. had a loss attribute to their
branch.
© Sub-postmasters notified in March 2011 and (where appropriate) reimbursed.
°
Sub-postmasters who made a gain through the anomaly were not asked to
refund this.
* The "14 branches exception"
© Financially impacted 14 branches (4 Crowns; 5 Multiples; 5 Sub-postmasters)
o Concerns an error where historic accounting entries in the 2010/11 financial
year were replicated in accounts for 2011/12 and 2012/13, only showing up a
year later.
© Raised by 2 sub postmasters affected by the exception.
© 1 sub postmasters and 4 multiple partners were adversely affected, i.e. had a
loss attribute to their branch.
o We suspended attempts to recover known losses from affected sub-
postmasters
o Letters to notified sub-postmasters will be sent out imminently
© The worst loss to a branch would have been £9,799.88. This was one of the first
cases notified, so no recovery action was progressed. Other losses ranged
from £113.14 down to a penny.
POL00145089
POL00145089
© Action underway to modify the system to prevent any repeat of this exception
Martin Edwards I Chief of Staff to the Chief Executive
<image003.png>
@postofficenews
<image004.png>
<20130702 JA meeting brief.doc>
<20130702 JA meeting brief.pdf>
<20130703 Briefing Note re Second Sight Interim Report - 02 07 13 (2).pdf>