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Filed on behalf of the: Defendant
Witness:
Statement No.: Fifteenth
Date Made: 26 March 2019
Claim Nos: HQ16X01238, HQ17X02637 & HQ17X04248
POST OFFICE GROUP LITIGATION
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
QUEEN’S BENCH DIVISION
BETWEEN:
ALAN BATES AND OTHERS Claimants
AND
POST OFFICE LIMITED Defendant
FIFTEENTH WITNESS STATEMENT OF ANDREW PAUL,
PARSONS.
I, Andrew Paul Parsons of
WILL SAY as follows:
Introduction
1. I am a partner at Womble Bond Dickinson (UK) LLP, solicitors for the Defendant
(Post Office) in the above proceedings. I am duly authorised to make this
statement in support of Post Office’s application for an order that the Honourable
Mr. Justice Fraser be recused as the Managing Judge of the Post Office Group
Litigation, and pursuant to paragraph 3.1 of the Order dated 22 March 2019. The
facts set out in this statement are within my own knowledge.
2. References to the “Judgment” are to the Judgment handed down by the Hon. Mr
Justice Fraser on 15 March 2019. Unless otherwise stated, references to
paragraph numbers are to paragraphs in the Judgment.
Identification of relevant sections of the Judgment
3. Post Office will rely, in its application, on the structure, tenor and subject-matter
of the Judgment as a whole.
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4. The sections upon which Post Office will particularly rely in support of the
contention at paragraphs 23 and 24 of my Fourteenth Witness Statement are as
follows (with passages of especial importance within these sections highlighted in
bold):
20: Some sub-postmasters had their contracts with the Defendant
terminated, sometimes very abruptly. In Mr Bates’ case, this was done
whilst he was expressly challenging the accuracy of Horizon and he
believes this was expressly done because he was so challenging this. In
Mrs Stubbs' case, notwithstanding her 27 years' experience, service and
prior record (both as assistant to her husband, who was originally the sub-
postmaster, and as sub-postmistress herself after he died), she found
herself suspended and locked out of her Post Office.
115: Putting entirely to one side the fact that it had taken the Post Office
a period of 15 months to finalise how it was to resolve this matter, and
Mr Bates was given only 16 days to reply (which attitude appears to
me to be symptomatic of how the Post Office regularly treated at
least some of its SPMs), the following important points arise in respect
of this letter:
1. It suggests that Mr Bates' experience was not an isolated one.
The letter states "It has been necessary to formulate a consistent
approach for all such cases." "All such cases" can really only sensibly
mean that there were other cases, and the Post Office was explaining
that time had been spent in deciding on a "consistent approach" for all
these cases. The time taken was, in the circumstances, considerable.
During that time Mr Bates wrote letters addressed to specific individuals
who he had been told were dealing with the matter, and these did not
even gain a simple acknowledgement. As far as he was concerned, they
were being ignored.
2. The ultimate resolution for the £1,041 in Mr Bates' case was to write
that amount off, in other words he would not be required to make it good
and pay that amount to the Post Office. I am satisfied that if he had
simply paid the amount to the Post Office as demanded in the Post
Office letter of 16 July 2001 which sought "as a matter of some
urgency" that he “advise me of your proposals to now make good
the loss" — in other words how he would pay the Post Office that
money which was at that stage demanded - this would not have
occurred.
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3. No explanation was provided to Mr Bates as to how the shortfall
had occurred. He was therefore none the wiser.
4. The writing off of that shortfall was made without prejudice to the Post
Office's rights in future concerning other shortfalls that may occur "for
which [Mr Bates] may be liable under the contract for services" and it
also did "not affect any future liability [Mr Bates] may have for such
losses."
5. The “consistent policy" — if indeed there was one — seems to
have been that the Post Office would simply claim all such sums
from the SPMs in question.
165: Mrs Stubbs has, since leaving the Post Office, involved her
Member of Parliament, The Right Honourable Sir John Redwood, who is
now a backbench MP but has previously been a cabinet minister in the
Government of Prime Minister John Major. At the very least, the Post
Office maintains — or at least it did, when she was cross-examined — that
it performed "an investigation". Mrs Stubbs says she has never seen the
outcome of any investigation into these matters; and her MP who
intervened on her behalf, whom Mrs Stubbs said was promised "a full
investigation" by the Post Office, has never been provided with any
results either. It might be thought that if there were any proper
investigation which actually reported on this, it could and should
have been put to Mrs Stubbs, but if what was put to Mrs Stubbs in
this trial is said by the Post Office to amount to such an
investigation, then it is telling. The "investigation" appears, on the
material deployed in this Common Issues trial, to have consisted of
nothing more than Fujitsu asserting that there was "nothing wrong with
the kit". That is not, in my judgment, an investigation under any
normal understanding or meaning of that word in society generally.
The Post Office's way of dealing with this wholly ignores the provision in
the SPMC and a SPM's liability for losses in that document (which on the
Post Office's case is what applied). There was simply a blanket assertion
by the Post Office that she had to pay these sums. The suggestion that
there was any investigation is not made out on the documents produced
and put to her during her evidence.
172: In my judgment Mrs Stubbs is a careful and honest witness. She
did her best at the time to try and work out what was happening,
the reasons for it, and also notified the Helpline on numerous
occasions, as well as keeping her own separate paper records in
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an attempt, or more accurately numerous and concerted attempts,
to work out precisely how these shortfalls could have arisen. None
of the Post Office personnel involved at the time with Mrs Stubbs,
who attempted to obtain some input or explanation from Fujitsu
were called as witnesses, so it is not possible to know what their full
involvement was, the extent of their knowledge of the background
matters, how many other SPMs they knew of may have had similar
issues, nor the degree to which they considered Mrs Stubbs' good record
of over two decades (including her involvement when her husband was
alive) to be relevant. I make it quite clear that I do not speculate on any
of that. Nor is it possible to know what the outcome of the trial of the
Horizon Issues will be later this year. Mrs Stubbs ran the branch
perfectly satisfactorily for many years, with the exception of the
periods that coincided with the electricity supply problems in 2000, and
the move into the portacabin in 2009. On the evidence before me in
this trial, and upon my assessment of Mrs Stubbs as a witness, I
consider that she is reliable, thorough and honest. I accept her
account of contract formation and the fact she never received, nor did
she have any knowledge of, the SPMC.
193: Thereafter Mr Sabir accepted the appointment and received
training, although it was not as detailed or comprehensive as he was
expecting and he considered it was insufficient and very general. It was
however useful. Nobody in the classroom at the end of the training
could, as he put it, "balance was OK when we came to do the final
thing". This means that nobody in that session could balance
correctly at the end of the training. Certainly Mr Sabir could not. He
also had training in the branch, but again he did not consider this
enough, and the trainer just stood behind and observed. During the first
week he was in the branch, on balance day the branch stayed open late
until 9.00pm due to the National Lottery, but the trainer left at lunchtime
(self-evidently well before the end of the day) and said to him "just follow
the procedure and do it". Mr Sabir's evidence on this, which I accept,
matches the other evidence from other Lead Claimants about in-
branch training. Whatever the intentions of those who designed such
training, which one supposes was to supplement and build on the
classroom training, in practice for these Lead Claimants it was rather
different. It is characterised by the trainers observing rather than
training, and also by early departures from the branch itself by the
trainers. I do however make those comments without making findings
on anything to do with breach, causation or loss.
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208: There is no doubt that the operation of the incorrect entry for Lottery
scratch cards by his assistant was a mistake, or a number of mistakes.
Mr Sabir himself discovered this mistake. However, Mr Sabir notified the
Post Office of this as soon as he discovered what had happened. Mr
Sabir corrected the situation in physical terms by making sure the money
was put in the safe and plainly knew himself there was a discrepancy on
scratch cards. He had reported this himself to the Post Office and had a
reference number for this, and also expressly asked for and was awaiting
help. That help simply never came.
217. The principal points that arise out of this are that:
1. Mr Sabir reported the problem caused by what he described to be his
assistant's mistake. He knew the number of scratch cards shown on the
Horizon system would not be the number physically present in his
branch, because for each one that assistant had activated, she had
pressed the wrong button. In simple arithmetic terms, if the total number
she had activated was x, the stock would be incorrect by 2x. Instead of
each one activated and sold reducing the total stock by 1, it would
increase the total by 1, a difference or discrepancy of 2 for each time
she did it. The difference between the two figures would depend upon
how many times she had done this, over a period of time.
2. Mr Sabir had no separate record, and no access on Horizon, to the
number of scratch cards he shouldhave had. He requested this
information from the Post Office, who did have it. It was not
provided. He used the Helpline to notify the Post Office of the problem.
This is the way the Post Office maintain disputes should be notified.
3. Mr Sabir also had no way of identifying or recording this on the Branch
Trading Statement.
4. Unless the Branch Trading Statement was completed, the system
would not permit trading to commence the next day. The branch would
have to close.
5. The same mistake(s) led to a surplus of cash, namely the money paid
by customers for their scratch card. Mr Sabir separately kept this in the
safe.
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6. When the audit was performed, the auditors obtained the figure for the
correct amount of scratch cards he should have had in his branch. This
took a 5 minute telephone call.
7. Due to this discrepancy, Mr Sabir was suspended.
8. The Post Office's case is that Mr Sabir falsified his accounts and
misstated his stock by completing the Branch Trading Statements
from the period he discovered the mistake.
218: Mr Sabir's account is substantiated by the audit report itself,
prepared by the auditors two days after the audit. The report is dated
12 August 2009 and the audit took place on 10 August 2009. It states in
part:
"I then telephoned yourself at 09.30am to report a preliminary
suspected shortage of approximately £5000.00 and that I would
ting you back with the final figure once I had completed the
audit. At this point you advised me to contact Andrew Carpenter
as you would be unavailable. However I was unsuccessful
contacting Andrew Carpenter but was able to speak with Paul X
Williams. This I did at 11.45am to report an overall shortage in
the branch of £4878.36.
I also notified Lisa Allen Fraud Team Manager at 13.00pm to
relay these findings.
A decision was taken by Paul X Williams to precautionary
suspend Mr Sabir at 12.00pm and that the branch would be
transferred to a relief Postmaster the (Newrose group), the
assets were secured in safe and the keys taken by myself Mark
Buller along with the alarm code that had been changed.
The audit and subsequent transfer of the branch was concluded
at 15.00pm the following day 11/08/2009.The branch was rolled
into TP 05, BP 03 and a Final Account produced.
Cash was presented to the value of £4780.00 and a cheque for
£98.36 to make good the discrepancy on the day of the audit
10/08/2009, and this was put through Horizon and despatched
the same day."
219: That cash was the very cash that Mr Sabir had been keeping in the
safe. I accept Mr Sabir's evidence and I found him to be a reliable
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witness. When he could not remember something, he would say so.
When he did not understand a question, he would make this clear. Any
findings as to specific breach or breaches must await a later trial. I do
however take this evidence into account in reaching my
conclusions on the Category 2 facts that are disputed by the Post
Office. I deal with that at the end of my review of all the evidence, both
for the Lead Claimants and the Post Office.
222: There can be no excuse, in my judgment, for an entity such as
the Post Office, to mis-state, in such clearly express terms, in
letters that threaten legal action, the extent of the contractual
obligation upon a SPM for losses. The only reason for doing so, in
my judgment, must have been to lead the recipients to believe that
they had absolutely no option but to pay the sums demanded. It is
oppressive behaviour.
223: In my judgment, the attack on Mr Sabir's credit which I have
identified above fundamentally ignores the reality of the situation, the
fact that he had contacted the Helpline and sought assistance, and
the fact that the vital piece of information he needed (the number of
scratch cards the system was showing that he should have) was so
readily accessible to the Post Office auditors, but never provided to
him.
248: Turning to Mr Abdulla's operation of the branch, I have already
identified his account of how even disputed Transaction Corrections had
to be dealt with, at some stage prior to the next Branch Trading Period,
by clicking a button "Accept Now". He would contact the Helpline about 6
or 7 times a month, and was shocked at the inadequate support. He
would often experience apparent shortfalls on the days when he would
perform balances, but could rarely get through to the Helpline on
these occasions. He thought the advisers were ill informed and
would often give the impression of reading off a script. Even his
area manager could not help, and he was told by his area manager that
he should just pay the shortfalls and wait to see if a Transaction
Correction was issued in his favour.
249: Apparent shortfalls began appearing in his accounts soon after the
branch transfer and continued regularly. He could not resolve these
through the Helpline.
263: On 29 June 2009 in a letter signed by him, Mr Mylchreest wrote to
Mr Abdulla and dismissed his appeal, saying:
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"I have now completed my investigation into the circumstances
leading up to the summary termination of your contract for
services at Post Office® Charlton branch on the grounds that
you misused Post Office® funds and falsified your branch
trading statement.
I have carefully considered all of the information in the case
papers and the evidence you put forward at your appeal
interview. I have concluded that both charges against you have
been proven."
264: It is not clear if "my investigation" included any further information
from or investigation of the situation regarding Camelot, either by Ms
Ridge or even Mr Mylchreest. Given the time scale, this appears
unlikely. Certainly no documents were produced in this trial that
suggested it was. It was made clear by Mr Myichreest that he did not
accept Mr Abdulla's explanation regarding the undated cheque.
However, the losses that were held against Mr Abdulla following the
audit undoubtedly included the various items shown subject to some of
the TCs that I have described. So, the issue of the cheque was not the
only point being held against him and relied upon to reach the decision
both summarily to terminate his appointment (by Ms Ridge) and to
dismiss his appeal (by Mr Mylchreest).
297: Mrs Stockdale was accepted as a SPM and had some training. She
attended the classroom training with her son. She did not have all the
training she was told she would receive because the premises were
subject to building works necessary to transform it into a Local branch,
and also because one of the trainers who attended in the first week after
her branch had opened, a lady called Lina, attended for only one day
and had to leave unexpectedly; another person called Daniel, did not
really know what he was doing (according to Mrs Stockdale) "and stayed
in the back mostly".
302: Mrs Stockdale's experience of running the branch was not a happy
one. Unexplained shortfalls would appear on Horizon when she was
completing a weekly balance or submitting a trading statement. There
were no explanations for these, and there was no way available for
her to get to the bottom of them either.
303: These shortfalls continued. On 15 October 2014 there were
unexplained shortfalls of over £3,500. When she [Mrs Stockdale]
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phoned the Helpline she was told that this was “only £3,000, that's
a drop in the ocean compared to some people's problems". This
contradicted an earlier statement from the Helpline when she had
been told she was the only SPM experiencing these problems,
which just made her feel inadequate. I will track this particular
shortfall through in terms of her evidence. She phoned the Helpline
again on 21 October 2014 and again asked for assistance, as well as
further training in relation to the balancing problems. She felt that a sum
of over £3,000 was a lot of money, notwithstanding the views of the
Helpline operator when she first called. Mr Longbottom came to her
branch on 29 October 2014 to try to work out what was going on, and
she let him have access to her records. He printed out various
documents but he could not get to the bottom of it either. He said the
problem would be referred to the Horizon Technical Desk. I accept this
evidence by Mrs Stockdale. There can be no doubt that this
shortfall was clearly in dispute, even on the Post Office's
understanding of how disputes were to be raised.
309: Mrs Stockdale was obviously in an extremely difficult position. She
did not know what product had caused her loss. This was part of the
problem. She had sought assistance for this problem and even a Post
Office auditor could not help. She wrote back and said that Mr
Longbottom was looking into it. Her e mail stated:
"I had Dave in to investigate the problem and he said the
transactions were all ok at this end but was referring the problem
to the Horizon Technical Desk to see if they could find any cause
for the discrepancy.
Not had a response as yet but if there is a problem I am willing
to pay as per your email but hopefully someone will get to the
bottom of it."
310: She felt she had no choice but to agree. I find that on the
options presented to her at the time, she indeed had no choice but
to agree. She also considered that this instalment agreement meant that
she could not settle any further unexplained losses for the period
specified. Mr Longbottom revisited the branch on 18 November 2014
and a subsequent e mail from him shows that he discussed with Mrs
Stockdale "a large loss that the branch had reported." A further Post
Office employee also visited her branch, he could not get to the bottom
of it either, and recommended to her that she sack all her staff.
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311: Mrs Stockdale then took very sensible and extremely thorough
measures. She introduced a robust paper recording system for all cash
movement in the branch. She required all staff to complete manual till
and safe logs, what had been paid in or paid out, and even the
denomination of notes. She could therefore do a complete cash
reconciliation in and out. She installed CCTV so she could monitor her
staff at all times. She trusted them but she wanted to be able to have
tight control of all cash, in and out, and to be able completely to rule out
theft by her staff. She explained that she spent hours with the
records, including her own paper records, trying to investigate.
These shortfalls simply kept occurring and she could not work out
why. Even thoroughly interrogating her records and viewing the CCTV
footage, she could not explain how this was occurring.
327: It can be seen that these are very wide ranging and extremely
serious allegations against the Post Office, which include ones that the
Post Office had treated them unlawfully, including prosecuting them,
leading to bankruptcy and community and custodial sentences (which
means imprisonment). Even if the precise terms of the first claim form
were not known in early May 2016 (which depends upon when it was
served), the Post Office would probably have learned of them at some
point during the summer and before 16 September 2016. During this
period the Post Office chose to act as it did with Mrs Stockdale, shutting
her branch and stating she was considered to have committed a criminal
offence. It also expressly stated to her that it was taking into account that
she had not contacted the NSBC or asked the Post Office for assistance.
The documents available in this litigation show that this was
simply not true, and she had expressly done both of these things. I
will return to this subject when summarising the evidence of Mr
Carpenter, who was the Post Office witness predominantly involved.
328: I found Mrs Stockdale to be a careful and accurate witness,
and I consider she was telling me the truth. The single question that
she declined to answer was that she had been misstating the accounts to
hide discrepancies. Whether she was right to act as she did at the time
regarding her accounts is a matter for another trial. As with the other
Lead Claimants, I am making no findings in respect of breach, causation
or loss.
346: No such workbooks were sent and Mr Dar had to chase for these,
which he did. The training was 3 days long. Mrs Dar raised a specific
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query with the trainer about balancing and Horizon, and was told if there
were problems or she was in doubt, she should call the Helpline. Mrs
Dar considered the training inadequate. This was followed by branch
set up and induction training at the branch. The Post Office auditor
present for this was Mrs Margaret Guthrie. She did not give evidence
before me. She was also responsible for induction training. She had
problems with Horizon, logging on took some time and even before the
branch opened Mrs Dar said there was a shortfall of £977, which she
believes was due to mistakes by Mrs Guthrie in inputting the stock into
Horizon. Mrs Guthrie spent some of her time trying to fix problems
with Horizon rather than doing the induction training that Mrs Dar
was expecting.
352: Mrs Guthrie stayed on site after opening for 6 or 7 days. She was
supposed to be providing further training during that period, at least this
was how it had been characterised in the previous communications to
Mrs Dar. Mrs Dar described this as shadowing, interventionist and not
helpful. Mrs Dar had taken on an experienced Post Office assistant, and
had been encouraged to do this by the Post Office. Mrs Guthrie did not
attend on Mrs Dar's first balance day, as she was supposed to. Mrs
Guthrie also said that she would come back to give further training
and support. In fact she did not, at least not until some months
later on 15 July 2015 when she came back to carry out an audit.
357: Her experience with the Helpline was not a positive one. She
contacted them 2 to 3 times per month, often in relation to apparent
shortfalls or balancing. Most of the time she was told to recount and
if there was still a shortfall she had to make this good (which
means pay it herself). Once, she was told how to "get around" the
problem by altering the stock figures to balance, which shocked
her. She considered there was some kind of fault within the system.
402: It is not clear to me under the regime for appealing termination
without notice that did exist under the SPMC, what the test was to be
applied upon such an appeal, or whether the Appeal Manager who heard
the appeal was conducting a review, or a rehearing. Mr Breeden's
evidence suggested to Mr Green at least (because he later put the point
to Mrs Ridge) that it was a rehearing. That evidence in his statement
was:
"The Appeals Manager would have had no prior involvement in
the case. He would undertake a full review of the case papers
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and might meet with the Subpostmaster. The Appeals Manager
would decide whether _it_was appropriate _to terminate _the
Subpostmaster's Contact __without__notice__based__on__his
assessment of the risks to Post Office's assets and reputation
and _the materiality of the contract breaches. His decision was
final. The contractual appeal process was not replicated in the
NT Contracts."
(my emphasis)
Mrs Ridge, who had decided to terminate Mr Abdulla's appointment, said
to Mr Green when he asked her, that her understanding of an appeal was
not a rehearing and that "I thought — not a full hearing, but listening to
the points that I have gone through and to see if I have done everything
correctly." That suggests more of a review than a rehearing. This is more
than an academic nicety. Terminating someone without notice is a
severe step. A right of appeal was supposed to be present under
the SPMC, but the Post Office's own witnesses do not know what
that appeal consisted of and what the test was. This is deeply
unsatisfactory.
403: On either approach, I do not know why risks to the Post Office's
reputation should be a relevant factor in such an appeal (which is
what I find Mr Breeden's evidence to consist of) or why a SPM's
entitlement to be heard on appeal would differ from case to case.
Also, the Post Office's reputation might be significantly affected if it were
found to have suspended a SPM on grounds that were wholly unjustified.
Unjustified suspension ought to be a factor in favour of an appeal
succeeding, on any sensible view. The Appeal Managers are senior
Post Office managers who are said to have had training to hear appeals.
The reputation of the Post Office would best be served by appeals
that were justified succeeding, and those that were not failing. It
should not have formed any part of the criteria.
437: Of course, this case concerns more than just a shortage of a few
stamps. But the point is a useful one because nowhere in the training
(or the interview, or anywhere else) is there any recognition of how
to deal with a shortage, discrepancy or disputed TC of any order of
magnitude, still less those of these six Lead Claimants, and if the
steps instructed on these laminated instructions were followed, there
would be shortages in the cash accounts of branches where these
occurred.
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462: In any event, her evidence does demonstrate the Post Office's
default position regarding their SPMs. This is that shortfalls and
discrepancies are not caused by the Horizon system, therefore those that
do occur can only be the responsibility of SPMs. This conclusion
means that the Post Office fraud prevention and debt recovery
procedures will be used against SPMs in this position, unless an
SPM can show that the shortfall or discrepancy was not their fault.
Whether this is justified will only be resolved after further trials, and this
judgment does not contain findings on breach, loss or causation
Evidence saying in general terms how fraud occurs and that the
perpetrators are not necessarily "bad" people does not advance matters
a great deal.
479: Mrs Ridge also dealt with the suspension of Mr Abdulla. She was
cross-examined about this. He was invited to a meeting as has been
seen, and Mrs Ridge had some documents that showed, in particular,
Lottery TCs. The documents she had in the interview were lacking in
much (or any) detail about what different items were, or to what they
related. Some were simply numbers listed. She accepted that the much
greater detail on another document, which she did not have at the time
(an Excel spreadsheet in the trial bundle) would have been helpful, and
would have helped her more fully to investigate, and she also accepted
that given what she had in the interview, she "could not investigate in
any depth". Given the odd combination of various items all for
£1,092 - which she accepted “was a bit odd" - this information
would evidently have been very useful. She also accepted that this
would be "pretty important" anyway, and would have helped her decide
whether to believe Mr Abdulla at the time. I find that he was giving her
an account concerning £1,092 which she would have been more
willing to consider was truthful had she had the Excel spreadsheet
at the interview. She treated his account with scepticism because
she did not have the relevant internal Post Office documents that
showed a number of TCs for the Lottery, all for £1,092.
480: The hearing process in respect of Mr Abdulla's suspension
(and eventual termination) therefore proceeded with incomplete
information being provided to the person tasked with conducting
the hearing and making this important decision, and still less
information being given to Mr Abdulla by the Post Office. More and
better information was available, and I have already expressed my view
on it dealing with Mr Abdulla's evidence above. Mrs Ridge said
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requesting further information from Fujitsu — something called an ARQ -
is not something that she would have done, which I took to mean in any
case, not simply Mr Abdulla's alone. She also said that the Post Office
rule that a SPM could not be accompanied by a legal adviser to such a
meeting was something that the Post Office lawyers had told them, and
that was the origin of the rule. I make no findings on any matters
connected with breach, causation or loss. Mrs Ridge seemed to me to
have a greater awareness of the need to be fully accurate and helpful to
the court than some of the other Post Office witnesses.
514: Mr Carpenter was also responsible for the decision to suspend Mrs
Stockdale. Because this happened after the litigation had
commenced, I was most interested in the exact sequence. Therefore
in questions from me at the end of his evidence I wanted to ensure that I
had a complete understanding of the sequence in respect of this.
"MR JUSTICE FRASER: Just focusing on the Mrs Stockdale
suspension decision, just so I have the sequence right. I think
you say you requested the audit.
A. Yes.
Q. You were looking at the whole figure [ie the shortfall in her
accounts]
A. Yes.
Q. By "whole figure", do you mean including the amount that she
was repaying over a period of time?
A. Yes, I was aware of the outstanding debt, my Lord, and of
course the £18,000 that she had settled.
Q. What was your understanding of her choices in terms of
settling sums centrally during that period when she was repaying
the amount?
A. My understanding is there was never a block on her settling
centrally a shortage. The options are both the same.
Q. Sorry, when you say "the options", which options?
A. Making good to cash or cheque or settling centrally.
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Q. You say they are both the same. Both the same in terms of
what? Because as I understand it, if you make good to cash you
put the cash in.
A. Sorry, I didn't explain myself clearly. She would have had the
options she would always have had in that she could settle cash,
settle cheque or settle centrally. What I understand was the
situation, she wouldn't have then been able to request a
repayment plan because she was already on a repayment plan
to pay back previous losses.
Q. So what was your understanding of — let's just take an
example figure. If she settled £5,000 centrally —
A. Yes.
Q. -she can't request a repayment plan, is that right?
A. (Witness nods)
A. The process would be she would settle it centrally. She would
then have been invoiced for that amount.
Q. For the £5,000?
A. Yes. At which stage she would have had the opportunity to
say "I can't make it good, I have a problem", and we could have
then investigated further as to what was happening at the
branch.
Q. Were you individually responsible for the decision taken to
suspend her in May 2016?
A. At that stage I would have put a recommendation forward to
make the suspension.
Q. To whom would that recommendation go?
A. To my line manager, Mr Breeden.
A. When you made that recommendation did you know she was
claimant in the litigation?
A. I don't believe I did. I knew very quickly because of the email
I received the same day. I don't believe I was aware at the time
but I'm not 100 per cent certain on that, my Lord."
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515: The following pertinent points arise from this evidence, which I
found of considerable interest. I do not consider the re-examination
(which was both lengthy and leading) changes its substance in any
appreciable respect.
(1) Sums that were disputed by SPMs were treated by the Post
Office, and those responsible within the Post Office for decisions
to suspend SPMs, as though they were "outstanding debts".
(2) There was in effect no difference, so far as the Post Office
was concerned, in terms of amounts "made good to cash" or
"settled centrally". The latter were treated as debts owed to the
Post Office, and were invoiced to the SPM on that basis.
(3) Having been on one repayment plan (which in reality simply
means the Post Office had given an SPM time to pay, rather
than having to pay the full amount immediately) an SPM such as
Mrs Stockdale would not be granted another plan at the same
time. Other documents show this period lasted for 12 months
after the repayment plan had ended.
(4) An investigation would only be started - even on Mr
Carpenter's evidence — if after an invoice had been sent (which
did not refer to contractual obligations for losses, and asserted
sums due to the Post Office in blanket terms) an SPM did not
pay it and said "I can't make it good, I have a problem". I have
seen no correspondence to any SPM that explains this, and this
ability does not seem to have been notified to any SPM. It is
also directly contrary to the correspondence sent to the SPM
telling them to pay the sum due. No such option is explained in
that correspondence.
(5) Mr Carpenter was not 100% sure that he did not know
Mrs Stockdale was a claimant when he recommended her
suspension. Even though — on his evidence - he found out
on the day, that does not seem to have had any effect on
his recommendation to suspend at all.
517: It must be understood with crystal clarity that I am not making
findings on these substantive and serious issues in this judgment.
Whether the Post Office was guilty of acting in the ways complained of
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by the Claimants can only be resolved later in these proceedings after
other trials. However, even putting it at its best for the Post Office,
such conduct towards Mrs Stockdale during this early stage of the
litigation could potentially be construed as_ threatening,
oppressive, and potentially discouraging to other potential
Claimants to become involved in the litigation, whether by accident
or design. I can think of no reason why such an approach was
taken unilaterally by the Post Office in such a way, without the Post
Office's solicitors giving advance notice to her solicitors, so that a
less confrontational and aggressive path was adopted, given her
role as a claimant in the litigation. However, even once it was done
and she was suspended, the Post Office continued to act in a
highly regrettable fashion.
541: Secondly, a number of contemporaneous documents internal to the
Post Office show that there has been, at least to some degree, an
awareness of Horizon problems within the Post Office itself over a
number of years. A number of these documents were put to the
different Post Office witnesses. These documents were referred to in the
transcript of proceedings, but not all of the documents were put. I did
however tell counsel for both parties that I would read all of the
documents in preparing this judgment and neither party objected to my
doing that.
543: These internal Post Office entries make it clear that,
notwithstanding the tenor of the Post Office evidence before me, behind
the scenes there were at least a number of people within the Post
Office who realised that there were difficulties with the Horizon
system. Some of these entries relate specifically to some of the Lead
Claimants, for example Mrs Stubbs. Whether the internally expressed
reservations then, or the different position expressed now by the Post
Office, is the correct one is something that will only be resolved after the
Horizon Issues trial.
556: However, the Helpline does not seem to have operated in that way,
and on the evidence before me for the issues in this trial, the
matters in dispute reported to the Helpline were not treated
differently even when they were reported. The Lead Claimants’
evidence made it clear that just getting through to the Helpline was
an achievement in itself, and when this was finally accomplished,
the experience would be variable at best, and does not seem to
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have come close to resolving any of the disputes. Some operators
would assist with getting Horizon to permit rollover into the next trading
period by suggesting "work arounds". These "work arounds" did not
resolve disputed items. No particular investigation appears, in the case
of any of the six Lead Claimants, to have been initiated by reporting a
dispute to the Helpline. An item "settled centrally" would be subject to
debt recovery processes by the Post Office regardless of what the
particular Lead Claimant did regarding the Helpline. Mr Carpenter said
he thought the Helpline's role was to direct a query to a particular
department within the Post Office, but that was not simply made out
on the evidence before me.
557: Mrs Stockdale telephoned the Helpline. She then assumed the debt
recovery letter she received meant an investigation had been done and
resolved against her. That assumption was not correct. Mrs Stubbs
has been pressing for many years to find out the outcome of whatever
"investigation" was in fact performed in her case. In both cases, the
Helpline had been notified by each of these Lead Claimants. In neither
case could the Post Office produce and put to each of these Lead
Claimants, or show the court, the end product of any such
investigation
558: It is therefore the case that, on the evidence before me, the
Helpline did not operate for the Lead Claimants in the manner that
the Post Office contended for. What was presented to the court by the
Post Office in respect of disputes notified to the Helpline show that, for
the most part, initially the SPM in these individual cases was told they
would have to pay the shortfall. Even when persistent, all that would
happen is the sum would be "settled centrally" and after a period of a few
weeks the SPM would be chased for the Post Office for that sum as
though it were a debt. Detailed findings of fact as to this must however
wait for a later trial.
569 (Factual Matrix Points 34, 35, 40, 42, 43, 50-51, 54-57, 70):
34. Claimants were themselves unable to carry out effective
investigations into disputed amounts because of the limitations on their
ability to obtain the necessary information from Horizon.
35: The process for disputing discrepancies or apparent or alleged
shortfalls is agreed by the parties in Appendices 3 and 4 to the judgment
as being by phoning the Helpline. However, even amounts that were
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disputed in this way were treated by the Post Office as debts owed
by the SPM.
40: The Defendant in fact sought recovery from the Claimants for
apparent shortfalls. I would also add that on the evidence the Post
Office did this regardless of whether disputes had been reported to
the Helpline or not. This was accepted by all the Post Office witnesses,
and occurred whether the SPM in question was appointed under the
SPMC or the NTC, even though the terms of those contracts were
different. It was also done regardless of any analysis of any causative
fault on the part of SPMs. It was also done when the SPM in question
had been told that no action would be taken in respect of a disputed
shortfall.
42: The Post Office required Claimants to accept changes to
records of branch transactions, ("Transaction Corrections" or
"TCs" issued by the Post Office), unless the Claimant was
effectively able to prove that the Transaction Correction was not
correct.
43: The Post Office did sometimes issue Transaction Corrections
after the end of the branch trading period in which the transaction
had taken place. There was only limited evidence before me about
whether this was also done after the 42/60 day period during which
Claimants could generate (limited) reports using Horizon. However, for
some of the examples used in evidence, this time limit was not observed
by the Post Office.
50. The introduction of Horizon limited the Claimants’ ability to access,
identify, obtain and reconcile transaction records.
51. The introduction of Horizon limited the Claimants’ ability to
investigate apparent shortfalls, particularly as to the underlying cause
thereof. Both this, and 50 immediately preceding it, are obvious on the
evidence, and could readily have been agreed. It cannot sensibly be
argued to the contrary, in my judgment.
54 to 57. I cannot make detailed findings about Fujitsu's role on the basis
of the evidence before me. However, it is clear that Fujitsu were able
to obtain greater information about a particular branch's
transactions than either the Post Office or the SPM. How this was
done, and whether it included providing a data transfer service between
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the central data centres and clients of the Post Office, must await the
Horizon Issues trial (if relevant).
70: On the evidence of the six Lead Claimants, even when further
training was specifically requested it was not provided, and in some
cases the SPM was told there was no entitlement to it, even though it
was specifically requested.
723(1): Even though the Post Office's own case on the relevant
provision in the SPMC dealing with liability for losses requires
negligence or fault on the part of a SPMC, this was routinely and
comprehensively ignored by the Post Office, who sent letters of
demand for disputed sums in express terms as though the SPM
had strict liability for losses. These letters entirely misstated the
legal basis of a SPM's liability, even where they had been
appointed under the SPMC.
723(2): Legal representation is not permitted by the Post Office at
interviews which deal with whether a suspended SPM is to have their
engagement terminated - which effectively ends that part of their
livelihood. Regardless of whether this is justified or not, the specific
grounds and proper particulars of why they face potential
termination are not even clearly identified in advance to the SPM in
question. Additionally, information directly relevant to the grounds
(or at least what the Post Office is concerned about, in the absence
of properly identified grounds) is not provided to the SPM either, or
at least not in the case of the Lead Claimants who faced such
procedures. Mr Abdulla tried at his interview to explain the situation
regarding TCs and the Lottery. He was disbelieved. The documents
available in the trial show that, whatever else he had done, he was
telling the truth about the existence of these TCs. Neither he nor the
interviewer had this information available to them at the time.
723(4): The approach of the Post Office is to brook no dissent, and it
will adopt whatever measures are necessary to achieve this. An
example of this is in the Modified SPMC, which in Section 15 clause 19
deals with something called an Investigation Division Interview. This
Division includes investigation of potential criminal offences against the
Post Office. One part deals with the presence at such an interview of a
friend of the SPM. The relevant clause states:
Modified SPMC Section 15 clause 19:
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"A friend may only attend and listen to the questions and
answers. He must not interrupt in any way, either by word or
signal; if he does interrupt he will be required to leave at once
and the interview will proceed without him. Whatever is said at
the interview is to be treated as in strictest confidence. The
friend may take notes of the interview but he must keep the
notes in the strictest confidence. The only communication the
friend is entitled to make on behalf of the person who has been
questioned will be in the form of a written "in strictest
confidence" statement which may be submitted by the latter, in
support of any official appeal which the person questioned may
desire to make in connection with the methods followed at the
enquiry. No other communication about the interview is allowed
(unless _made by permission of the Post Office) as_it might
constitute a breach of the Official Secrets Acts."
(emphasis added)
Other parts of Section 15 deals with the requirement for a
caution and so on, but I find it somewhat unusual, and
potentially oppressive, that the Post Office could seek to
use the Official Secrets Acts in this way. I do not see how,
in a routine case, these Acts could possibly apply in the
way suggested by the Post Office in this contract.
824: This point was, perhaps presciently, identified by Mr Bates himself
as long ago as 2000. With his background knowledge in IT systems, and
his high degree of attention to detail, he attempted to get to the root
cause of the first unexplained shortfall in his case, and he realised that
the information for him to do so was simply not available to him, or
any SPM in a branch. The Horizon system did not allow him to do
this.
955: One feature which seemed to me to be wholly absent from the
training courses run by the Post Office for the Lead Claimants was
any sort of assessment or test of competence at the end of the
training. Every case will of course be wholly different, but whereas one
individual might, after four days, be wholly competent to use the Horizon
system unsupervised, another might need longer than that. If they are all
given four days of training regardless, and there is no assessment at the
end of that four days, then some incoming SPMs might not be
conversant with all the features of the system. This situation is in no-
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one's interests, and in my judgment I would go further and say it is
contrary to business logic. Although there was some in-branch
training, the approach to that did not appear to be uniform either.
Add to this that the auditors have the dual role of in-branch training after
branch transfer day, and subsequent auditing of that particular branch, it
can be seen that inadequate training is not likely to be readily
discernible to the Post Office. Certainly the subjective experiences
of the Lead Claimants so far as training was concerned was far
from ideal. I do not consider that it would be difficult for any
training to include at the end of it some sort of assessment or test,
and if a SPM were to fail that assessment or test, then they would
not have been satisfactorily trained. They would therefore require
further training.
5. The sections upon which Post Office will particularly rely in support of the
contention in the first sentence of paragraph 25 of my Fourteenth Witness
Statement are as follows (with passages of especial importance within these
sections highlighted in bold):
AC_154900148_1
21: Nothing in this judgment should be taken as my expressing any
concluded view on the functionality of the Horizon system, as the issues
relating to that will be tried by me between March and May 2019. Nor
should this judgment be taken to be making any findings in fact
concerning any particular allegations of breach by the Post Office. This
judgment is concerned with the Common Issues. However, this cannot
be done in complete hermetic isolation from any facts at all. The Post
Office adopted a curious position so far as the Lead Claimants’ evidence
of fact is concerned. Having failed to have that evidence struck out, and
not having sought to appeal that order, Mr Cavender QC cross-examined
on a great many aspects of it. The Post Office made submissions that
some of the Lead Claimants were positively lying to the court (for
instance Mr Abdulla), and were mistaken in fact as to contract
documents provided prior to contract formation (for instance Mr Bates).
However, at the same time, the Post Office urged me not to make
findings as to credit. This appeared, on close examination during oral
submissions, to amount to adopting a hybrid approach to witnesses, and
an approach with which I am not familiar (nor can I find any authority).
The Post Office was entitled to challenge the credit of the Lead
Claimants, if it so chose, and it did. However, the Post Office seemed
to want findings on that only if they were in the Post Office's
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favour. This is a peculiarly one-way approach by any litigant. I deal
with the credit of the Lead Claimants in Part C.
28: Another point with which I have to deal is what Mr Cavender QC for
the Post Office described in Opening as a "challenge to the court". He
submitted that "one of the challenges to the court might be how it
approaches that situation where its sympathies on one side might be in a
certain sub-postmaster group in one direction and with a more
commercial group in another". It ought not to be necessary to state that
no judge makes decisions based on personal sympathy. It also ought not
to be necessary to recite that every party, and every witness, comes to
the court at a substantive trial with a clean slate, regardless of the
procedural history of the proceedings. This litigation is being tried by a
judge and not a jury, but even juries are told (and are assumed) to make
their decisions objectively and to put no personal emotion into the
decision-making process. The Post Office may have made these
submissions because, on an objective analysis, it fears objective
scrutiny of its behaviour, or it may have made them for other reasons.
30: I found the approach by both parties in some respects unhelpful. The
rule of law means that all individuals and legal entities are subject to the
same laws as everyone else. There is no special exemption available for
the Post Office because it has a lot of branches, or for sub-postmasters
either. The balance of bargaining power can be a relevant feature in the
law of contract, and this is well known, and commercial common sense
is also relevant. However, a party (here the Post Office) threatening dire
consequences to national business should their case not be preferred is
not helpful, and this seemed to me to be an attempt to put the
court in terrorem.
34: Each side called evidence of fact. I heard from each of the six Lead
Claimants. The Post Office called fourteen witnesses. All of the
witnesses were cross-examined. I deal with my conclusions as to these
witnesses in Parts C and D of this judgment. The Post Office objected to
vast tracts of the Lead Claimants’ evidence of fact and sought to strike it
out in advance of the trial; I dismissed this application in Bates v Post
Office Ltd (No.2) at [2018] EWHC 2698 (QB). In closing submissions,
the Post Office sought to persuade me that none of the evidence that I
had refused to strike out was relevant to any of the Common Issues. The
Post Office seemed to adopt an extraordinarily narrow approach to
relevance, generally along the lines that any evidence that is
unfavourable to the Post Office is not relevant.
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117: The full subsequent trial of Mr Bates’ claim will show what, if any,
consideration was given at the Post Office internally not only to this
shortfall, but others (if there were others) in the period December 2000 to
March 2002. If the Post Office did in reality do what Mr Bates
suggests they did — namely bury their heads in the sand, press on
regardless, and chase numerous SPMs for shortfalls and
discrepancies caused by the Horizon system — then that would be
behaviour of an extraordinary kind, and given the criminal
implications for some SPMs, may be extraordinarily serious. On the
other hand, Mr Bates' shortfall in December 2000 may, upon
investigation by the Post Office, have been put down to early difficulties
by SPMs in operating or understanding the new system and writing off
the amount may have been decided upon as a pragmatic solution in the
circumstances. I make no findings either way at this stage of the
proceedings in this judgment.
123: I reject the criticisms made by the Post Office of Mr Bates and his
evidence. I find that his evidence was careful, and he was an honest,
thorough and reliable witness. Where he could not remember he would
say so, and he would accept sensible points put to him if they were
factually correct. Many of them were not, for example the number of
SPMs in the Second Sight scheme who had problems with their contract.
He is undoubtedly committed to resolving this dispute, and given the
length of time he has been involved, he must have a degree of stamina
and endurance that most people would not possess. The Post Office
subjectively might view him as unreasonable or stubborn, as he simply
refuses to let this matter drop, and has obviously over the years involved
himself in the campaign to resolve these issues. Mr Bates has, from
about December 2000 onwards, proved himself to be a considerable
irritant to the Post Office so far as the Horizon affair is concerned. He
was an irritant to them in 2001 when he simply refused, point blank, to
pay the £1,000 odd demanded of him (that sum ultimately being written
off by the Post Office the following year). He had undoubtedly continued
to be an irritant to the Post Office from then on, both from the
establishment of the JFSA onwards. He is persistent and no doubt
possesses what might be termed staying power. There was nothing
unreasonable or stubborn in his evidence before me, and none of the
pejorative terms deployed by the Post Office to describe his evidence
are justified, in my judgment. The Post Office must have decided to
attack him because the whole case of the Post Office requires an
assumption or acceptance that the predominant, or only, cause of
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shortfalls is fault (or worse) on the part of SPMs. The case by the Post
Office is that careful and/or diligent and/or honest SPMs and/or their
assistants do not experience shortfalls. Therefore, so far as the Post
Office is concerned, in each branch where such shortfalls occurred,
either the Claimants and/or their assistants must have at least some, and
potentially all, of those characteristics. If it were otherwise, the Post
Office edifice would run the risk of collapse.
295: It therefore remains the case that notwithstanding that Mrs
Stockdale's interview was recorded, that the recording undoubtedly
exists, and that she became a claimant in these proceedings as long ago
as the issue of the first claim form on 11 April 2016, I am told that
because Mr Carpenter's computer has been replaced, the ability to
access the actual recording is said by the Post Office to have been lost.
If that replacement took place after April 2016, and if it is because
of the replacement that this recording is not available, then that
means the Post Office has failed properly to deal with an important
record directly relevant to the litigation during the proceedings
themselves.
368: I provide an analysis of the relationship between the Post Office
and the NFSP in Part F below. Mr Beal was centrally involved in the
relationship between the NFSP and the Post Office. I summarise that
relationship and what was disclosed in this litigation in Part F. It is
obvious, in my judgment, that the NFSP is not remotely independent
of the Post Office, nor does it appear to put its members’ interests
above its own separate commercial interests.
369: Mr Beal was completely unrealistic about this. Mr Green put the
following point to him, having explored the documents in some detail,
about the NFSP linking its own financial remuneration for a significant
number of years going forwards with its role in agreeing the terms of the
NTC:
"Q. And that is not necessarily what you expect, is it, if you were
a subpostmaster from an independent union?
A. I am not a subpostmaster, so I don't have a view on that."
370: I am not a subpostmaster either, but I doubt one needs to be, in
order to have a view on what is a very obvious point. Such matters
plainly should not be linked in the way that the NFSP and the Post
Office linked them in this instance. I do not consider that the NFSP
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can in these circumstances properly be considered to be
independent, or to be acting in the interests of SPMs, given the
way it involved its own commercial interests as a condition in the
way explained in Part F of this judgment.
393: Her written evidence did however more than merely stray into areas
of arguing the case. It embarked upon argument with gusto. One
example will suffice:
"There is a strong and I would say completely reasonable
expectation that applicants for the position of Subpostmaster will
obtain a significant amount of information from the outgoing
Subpostmaster. As I have explained, the outgoing
Subpostmaster will have the responsibility for providing
information and relevant particulars for the marketing of their
branch, whether this is through the AB website (or previously the
purple website) or through an estate agent. In addition, they
would be the first point of contact for potential applicants prior to
NT [Network Transformation]. Following implementation of NT,
they would still have a reasonable level of contact with
applicants. It would seem very strange for the incoming
Subpostmaster not to take full advantage of the opportunity to
obtain information about the branch and its operation from the
current Subpostmaster and indeed they were encouraged to do
so by my team during the application process as this was the
best source of information about the branch and the conditions
that they would be subject to".
394: There is only one part of this lengthy paragraph that is actually
evidence that should be given by a witness of fact, and that is part of the
final sentence dealing with encouragement coming from Mrs Rimmer's
team. The rest is pure argument. It may well not have been drafted by
Mrs Rimmer at all, as some litigants’ solicitors are often
responsible for the content of witness statements. This was not
pursued in cross-examination and so it is neither necessary nor
desirable to make any finding about it. I certainly do not criticise
Mrs Rimmer for it, although if it were not written by her, it should
not have been in her statement. A witness statement is not the place
for this sort of general argument.
476: She would perform 5 to 6 interviews a week on average, and often
several a day. She could not therefore remember specific details of Mr
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Abdulla's interview and cannot be criticised for this. Although she stated
what areas would be covered by reference to two Post Office
documents, these were from Mr Trotter's interview conducted with Mrs
Dar in 2013. There is nothing to suggest that these documents were in
use at the time she interviewed Mr Abdulla 7 years earlier, and this part
of her written evidence sought to give the impression, through
careful wording of her witness statement, that she had covered the
same ground in the interview as contained in these much later
checklists. Her evidence orally was very clear and she made it perfectly
clear that she could not remember the interview at all and had based her
recollection entirely on documents. She immediately accepted paragraph
12 of her witness statement, dealing with everything she "would have"
gone through with Mr Abdulla, was based solely on the 2013 document
and she could not otherwise remember. Her reliance on documents not
then in use cannot have been something that Mrs Ridge herself initiated
for the purposes of her statement. I reject the suggestion that all of the
different items in the 2013 document were gone through in the interview
with Mr Abdulla in 2006. This passage of her evidence appeared to
have been written for her, but again, the point was not put so I
make no findings about it.
483: He had performed a visit to one of the other Claimants — not a Lead
Claimant — and in February 2017 he had requested transaction logs from
the Financial Services Centre to assist in dealing with an investigation
that SPM was trying to perform in terms of an unexplained shortfall. He
had internally requested these going back only to November 2016, and
the Post Office department in question had refused to give them to him.
This left him angry and frustrated, although he tried to play this down by
saying the visit wasn't an audit and he was doing it for the SPM "as a
favour". He was undoubtedly there in his official capacity as an auditor,
and he was undoubtedly asking for these records in that capacity too. I
do not accept that he was performing such a task informally or as "a
favour". I consider that attempting to get to the bottom of the
unexplained shortfall is another example of him being diligent and
careful. I do not know why such records should not be made available to
a Post Office auditor by others in the Post Office, particularly when that
auditor specifically requested them in order to get to the bottom of what
a SPM maintained was an unexplained shortfall. Given by early 2017
this litigation was well underway it may be an example of internal
suppression of material, but I make no specific findings on that, as
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the point was not raised. I can think of no rational explanation for
this, however.
523: For the reasons I have expressed above, I have considerable
misgivings about the Post Office's motivation for the treatment of
Mrs Stockdale during this litigation, and for the treatment itself in
terms of refusal to provide obviously relevant documents. The
evidence by Mr Carpenter, far from satisfying these concerns, actually
increases them. The Post Office appears, at least at times, to
conduct itself as though it is answerable only to itself. The
statement that it is prepared to preserve documents — as though that
were a concession — and the obdurate to accept the relevance of plainly
important documents, and to refuse to produce them, is extremely
worrying. This would be a worrying position were it to be adopted
by any litigant; the Post Office is an organisation responsible for
providing a public service, which in my judgment makes it even
worse.
532: I wholly reject this evidence by Mr Trotter. The transcript shows that
she did express concerns. She [Mrs Dar] expressly stated her concerns
about data protection, what she termed "legislative and contractual
requirements", the Financial Services Authority, wanting “more
assurance", and saying "I don't want too much of a risk". This next
point was not put to him, but it appeared as though his witness
statement had been written by someone else, and not by Mr
Trotter.
560: What is less understandable is the way that this approach seems to
have affected the Post Office's approach to documents. The following
examples can be given:
5. Even the identity of both the sender and recipients of internal
e mails about the termination of Mr Bates' appointment have
been redacted from disclosed correspondence, as I have
explained at [120] above. The Post Office in later submissions
on typographical corrections maintained this was done for Data
Protection reasons. The contents of the e mails are themselves
heavily redacted, and the court will not go behind such an
assertion of privilege. However, given that part of the e mails are
accepted as not being privileged, and have not been redacted, I
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cannot see any sensible basis for maintaining any redaction of
the identity of the sender and recipients.
561: These are examples, in my judgment, of a culture of excessive
secrecy at the Post Office about the whole subject matter of this
litigation. They are directly contrary to how the Post Office should
be conducting itself. I do not consider that they can be a sensible
or rational explanation for any of them.
576: In about 2013 the Post Office commenced discussions with the
NFSP in terms of its Network Transformation Programme which had
started in pilot form in 2011. It wished to have the support of the NFSP
to the revision of some of the terms, and in an e mail dated 2 August
2013 Mr George Thomson, the General Secretary of the NFSP, set out
what he called the framework for a potential agreement. Part of this e
mail — the Post Office being referred to as POL - stated the following:
"POL and NFSP to sign a 15 year contract for the NFSP to
represent all post office operators. This will include:
Financial agreement
£500k payment 2013-14
£1.25m payment 2014-15.
£1.25m payment 2015-16
£2.5m payment 2017 onwards to 2028
This process allows for the drop off of our present membership
fee, and facilitates the change from check off towards POL
charging a fee from all agents which is passed directly to the
NFSP.
Memorandum of Understanding to be worked on with rights and
responsibilities on both sides.
If necessary, NFSP will drop Union badge to sign contract.
Please note - a signed agreement with the blood of both myself
and Paula is necessary on the future of the NFSP before any
agreement is granted on either NT and other points ."
(emphasis added)
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577: "Paula" is Paula Vennells, the Chief Executive of the Post Office.
The sums represent amounts to be paid to the NFSP from the Post
Office. The total amount identified in that e mail represents £30.5
million. Mr Beal explained that the compensation provision for SPMs
under the 2011 NTP was based upon 18 months' remuneration, and the
e mail in question above was in respect of (inter alia) an increase of that
to 26 months. He also accepted that the matters were linked in the
negotiations between the Post Office and the NFSP. Rather curiously
therefore, the e mail above demonstrates that the NFSP was only
prepared to agree what amounted to an increase in its members'
potential compensation, if its own future was assured by the
payment of substantial sums to it. I find that this shows that the
NFSP put its own members' interests well below its own, and I also
find that the NFSP is not fully independent.
589: Also, the NFSP's own website was amended during the trial. At
some point between this matter being raised in cross-examination with
Mr Beal, and the question of documents evidencing dates being re-
visited at the end of the evidence, someone at the NFSP had specifically
altered the NFSP website. I deal with this at [594] below. What they did
not know, when whoever it was did this, was that counsel for the Lead
Claimants had printed the NFSP website page as at the beginning of the
trial. It was therefore clear that the change had been made, and also
clear that it was done during the trial. I was given no evidence by
anyone from the Post Office about why this was done, and done in
terms that suited the Post Office's case on this point. I find this
behaviour highly suspicious. It also undermines, yet further, the claim
by the Post Office that the NFSP is independent.
724: There is no doubt that the Post Office is in an extraordinarily
powerful position compared to each and every one of its SPMs. It
appears to wield that power with a degree of impunity.
1059: I put to one side entirely that the Post Office's case on this shifted
during the trial — at one point it seemed to be argued in opening that the
Post Office's case was that the extent of liability was as Mr Beal (in
evidence I have rejected) explained he understood, namely that it sought
to replicate the extent of liability of a SPM under the SPMC. I also put to
one side entirely that the genesis of this clause emerged about a
decade after SPMs, on their case, started to experience significant
discrepancies and shortfalls due to Horizon; and which on any case, they
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expressly blamed upon the Horizon system. It would be, perhaps, too
cynical for even the most hardened Post Office watcher to suggest
that the problems with Horizon led to changes to, and extension of,
the contractual liability of SPMs for losses that were adopted in the
NTC. However, that option cannot be entirely discounted.
1111: The Post Office describes itself on its own website as "the nation's
most trusted brand" (at http://corporate.postoffice.co.uk/our-heritage ).
So far as these Claimants, and the subject matter of this Group
Litigation, are concerned, this might be thought to be wholly
wishful thinking. Trust is an element of an obligation of good faith, a
concept which I find is to be implied into the contracts between the Post
Office and the SPMs because they are relational contracts. The Post
Office asserts that its brand is trusted by the nation, but the SPMs
who are Claimants do not trust it very far, based on their individual
and collective experience of Horizon.
6. The sections upon which Post Office will particularly rely in support of the
contention in the third sentence of paragraph 25 of my Fourteenth Witness
Statement are as follows (with passages of especial importance within these
sections highlighted in bold):
AC_154900148_1
375: Mr Beal's way of giving evidence was very much the house Post
Office style, certainly for the more senior of its management
personnel who gave evidence. This was to glide away from
pertinent questions, or questions to which the witness realised a
frank answer would not be helpful to the Post Office's cause. Giving
evidence in court and being cross-examined, is an unusual experience
for most people, regardless of the amount and type of preparation that a
person may have undertaken in advance. Mr Beal certainly knew his
subject very well. He sought to give me evidence highly favourable
to the Post Office, which I consider was slanted more towards
public relations consumption rather than factual accuracy. It did not
match the contents of the documents to which I have referred, namely
the GFA, and the change in wording of the terms dealing with liability for
loss by a SPM under the NTC.
425: In a witness statement by her [Mrs Van Den Bogerd] of 145
paragraphs, 44 of those are devoted to the Post Office as a business.
None at all deal with the very great number of detailed points put to her
by Mr Green, based on internal Post Office documents over the years,
which demonstrate an internal view of unsatisfactory performance at
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odds with the Post Office position in the case. This therefore must mean
that Mrs Van Den Bogerd is an extremely poor judge of relevance.
Her judgment also seems to have been uniquely exercised to paint the
Post Office in the most favourable light possible, regardless of the facts.
544: I have no reason to think that any of the Post Office witnesses were
doing anything other than stating their genuine belief as at 2018 (when
the trial occurred) based on their recollection, with two exceptions. The
first is some of Mr Beal's more extreme claims that the drafting of
the NTC was designed to replicate a SPM's responsibility for losses
under the SPMC, and that it was also intended by the Post Office
that the contract with the NFSP would be made public. Neither of
those claims bear analysis when compared with the detailed drafting of
each of those documents, both of which had been carefully drafted no
doubt with the assistance of sophisticated legal advisers. The second is
Mrs Van den Bogerd. She tried to give me the impression that the
detailed cross examination about Mr Abdulla was something she
could not really deal with because she had no detailed knowledge
in the witness box. This was simply not correct; she had signed a
very detailed witness statement just a few days before for the
Horizon Issues trial which dealt with the matters being put to her
about Mr Abdulla in considerable detail. I find that she was simply
trying to mislead me. She also explained a wholesale absence in her
witness statement of highly relevant matters as being due to a restriction
on length of that document, or if not a restriction, a desire to keep her
witness statement short. That answer was simply disingenuous. This
is a very significant and high-profile dispute for the Post Office. There
was no such restriction on length, and I do not believe that, of all the
witnesses, she felt there was any need to keep her statement short. The
non-inclusion of that evidence within her statement is explained, in my
judgment, by the Post Office's approach to the litigation. The Post Office
has appeared determined to make this litigation, and therefore resolution
of this intractable dispute, as difficult and expensive as it can. Mrs Van
den Bogerd did not provide any reference in her witness statement
to matters unfavourable to the Post Office case. That witness
statement was her evidence in chief, and therefore supposed to be the
whole story. I find that she did not do so, because those matters (which
Mr Green put to her in some detail) were highly unfavourable to the Post
Office's case. She was simply not prepared to volunteer such matters in
a witness statement. She was only grudgingly prepared to accept them
in cross-examination, after some time.
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STATEMENT OF TRUTH
I believe that the facts stated in this witness statement are true.
Signed:
Date:
AC_154900148_1 33
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Claim No:
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF
ENGLAND AND WALES
BETWEEN:
POST OFFICE LIMITED
Defendant
AND
ALAN BATES AND OTHERS
Claimant
[X] WITNESS STATEMENT OF [X]
AC_154900148_1 1