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Private and Confidential: Subject to Legal Privilege
Meeting with Baroness (Lucy) Neville Rolfe, Parliamentary Under Secretary of State
Tuesday 26" January 2016, 9am to 9.30am
I understand that Jane Hill has written to you separately covering the purpose of this meeting,
together with some contextualisation and briefing notes for the other issues likely to raised, during
the course of the meeting, by BNR.
In relation to ‘Project Sparrow’ and specifically the barristers’ investigations, BIS officials had asked
for ‘pre-brief’ on the progress made to date. This took place on Wednesday and they were told:
* the review is being conducted for you personally;
© Post Office has limited its involvement to the supply of information to your legal team and
providing logistical support;
¢ a first draft of the report was sent to you during the week commencing 11" January and you
are currently digesting its contents;
* you have not had the opportunity to discuss it with your legal team due to work and
personal commitments;
¢ the report makes a limited number of recommendations that are “belt and braces” in
nature;
* you have indicated that you wish all recommendations to be accepted and taken forward
where possible. Precise timescales for completion will depend on how long this work takes;
and
* your meeting with the Minister will be the opportunity for you to provide an update.
Further, during a call this morning, Jonathan Swift QC agreed our proposals for discharging the
recommendations set out in his report. These are set out at Annex A.
Private and Confidential: Subject to Legal Privilege
ANNEX A - POL’s proposals for addressing the Report’s recommendations, as agreed with Jonathan Swift QC
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Number
Recommendation
Status
Proposal
Legal advice be sought from Counsel as to
whether the decision to charge a SPMR with theft
and false accounting could undermine the safety
of any conviction for false accounting where a)
the conviction was on the basis of a guilty plea,
following which and/or in return for which the
theft charge was dropped, and b) there had not
been a sufficient evidential basis to bring the theft
charge.
Partially undertaken — analogous advice was obtained
from Brian Altman QC in February/ March 2015.
POL will instruct Brian Altman QC to provide
legal advice on the specific questions posed, for
the sake of certainty.
If such a conviction could be undermined in those
circumstances, that Counsel review the
prosecution file in such cases to establish
whether, applying the facts and law applicable at
the relevant time, there was a sufficient
evidential basis to conclude that a conviction for
theft was a realistic prospect such that the charge
was properly brought.
No previous work, of a similar nature, has been
undertaken
This is dependent upon the content of the
advice provided by Brian Altman QC to
recommendation 1.
POL consider instructing a suitably qualified party
to carry out an analysis of the relevant transaction
logs for branches within the Scheme to confirm,
insofar as possible, whether any bugs in the
Horizon system are revealed by the dataset which
caused discrepancies in the accounting position of
any of those branches.
Partially undertaken — Post Office considered selected
transaction logs as part of the Complaint Review process.
POL will instruct a Deloitte to determine
whether such an analysis/review is feasible, and
if it is, to provide an indication of the cost, time
and process that would be incurred.
If Deloitte determine that such an
analysis/review is feasible, POL will review the
worth of instructing Deloitte to actually carry
out this piece of work.
POL instruct a suitably qualified party to carry out
a full review of the use of Balancing Transactions
throughout the lifetime of the Horizon system,
insofar as possible, to independently confirm
Partially undertaken — the feasibility of such a review was
considered with Fujitsu in mid-2015.
POL will instruct Deloitte to determine whether
such an analysis/review is feasible, and if it is, to
provide an indication of the cost, time and
process that would be incurred.
Private and Confidential: Subject to Legal Privilege
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from Horizon system records the number and
circumstance of their use.
If Deloitte determine that such an
analysis/review is feasible, POL will review the
worth of instructing Deloitte to actually carry
out this piece of work.
POL instruct a suitably qualified party to carry out
a full review of the controls over the use and
capability of authorised Fujitsu personnel to
create, amend or delete baskets within a sealed
audit store throughout the lifetime of the Horizon
system, insofar as possible.
Partially undertaken — considered by audits undertaken,
principally the ISAE3402 Audit, which is carried out by
E&Y.
POL will instruct Deloitte to undertake this
review, throughout the lifetime of the Horizon
system, insofar as is possible.
POL seek specialist legal advice from external
Counsel as to whether the Deloitte reports, or the
information within them concerning Balancing
Transactions and Fujitsu’s ability to delete and
amend data in the audit store, should be disclosed
to defendants of criminal prosecutions brought by
POL. This advice should also address whether
disclosure should be made, if it has not been, to
the CCRC.
Completed:
1. Advice was obtained from Cartwright King and Brian
Altman QC in mid-2015. Cartwright King identified
the Balancing Transaction information as the only
issue in the Deloitte reports which might require
disclosure in Post Office criminal prosecutions.
Brian Altman then advised that there was no current
need for Post Office to give further general
disclosure to prosecuted postmasters about
Balancing Transactions, general complaints about
“remote access” being insufficient to trigger Post
Office’s disclosure duties
2. The CCRC was notified of the Deloitte reports on 13
January 2016
POL will provide Jonathan with the advice
referenced in the ‘status’ column. If this advice
does not satisfy Jonathan that the
recommendation is discharged, POL will instruct
Brian Altman QC to provide advice on the
specific questions posed.
POL cross reference specific complaints about
misleading advice from NBSC call-handlers with
the possible employees who provided that advice
and consider their personnel files, where
No previous work, of a similar nature, has been
undertaken.
POL will attempt, for the time period covering
complaints made:
1. Identify the particularised complaints
Private and Confidential: Subject to Legal Privilege
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available, for evidence as to the likelihood that
the complaint may be well founded.
2. made by Scheme Applicants, in respect
of ‘misleading advice’ being provided
3. Cross reference these complaints to the
call handler(s) who took the call(s)
4. Review these call handlers personnel
files, where they still exist, for evidence
as to the likelihood that the complaint(s)
may be well founded
POL commission forensic accountants to review
the unmatched balances on POL’s general
suspense account to explain the relationship (or
lack thereof) with branch discrepancies and the
extent to which those balances can be attributed
to and repaid to specific balances.
It is understood that E&Y audit POL’s Suspense Account as
part of its annual auditing of POL.
POL will, in the first instance, make contact with
E&Y to understand what, if any, analysis it
performs on the POL Suspense Account during
its annual auditing of POL. Assuming E&Y do
not already hold answers to the questions
posed, POL will commission Deloitte to review
any unmatched balances on POL’ s Suspense
Account