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IN THE MATTER OF THE POST OFFICE HORIZON IT INQUIRY
‘PHASE END’ CLOSING SUBMISSIONS:
PHASE 4
On behalf of POST OFFICE LIMITED
INTRODUCTION
1. These submissions are made on behalf of Post Office Limited (‘POL’)! in accordance
with the Chair’s directions of 20 December 2023. They are necessarily brief, in
accordance with those directions, and (as with POL’s ‘phase end’ submissions for
Phases 2 and 3) are primarily made for the purpose of highlighting a number of key
issues and themes arising from the evidence heard to date in Phase 4,7 rather than
seeking to address each of the issues in the Completed List of Issues considered in Phase
4in turn?
2. In particular, these submissions identify a number of points where it is clear that POL
got it wrong, and critical findings should follow, for which POL apologises, as set out
more fully below. No-one who has read and watched the evidence in Phase 4 could be
in any doubt that the Horizon IT scandal is indeed the most widespread miscarriage of
justice in British legal history, and that its roots lay in fundamental structural failings.
Since the endings of Mr Justice Fraser, POL has taken real steps to try to put right that
which it had so seriously got wrong previously. POL instructed external lawyers and
counsel to undertake a huge post-conviction disclosure exercise to facilitate and
expedite the bringing and concession of appeals in cases where convictions were
potentially tainted by Horizon issues. More recently, as the Inquiry is aware, POL
instructed its external lawyers to undertake a pro-active review of odes in all remaining
cases where no appeal or application to the CCRC has been bought in order to try to
identify cases where there appears to have been a miscarriage of justice, and to pro-
actively encourage appeals in such cases. POL recognises that there is much still to be
done, but is committed to remedying the injustices.
3. These submissions also seek to clarify some aspects of the legal framework governing
prosecutions, and related evidence. In this respect POL relies upon the expert reports
of Jonathan Laidlaw KC (‘JLKC’), including Part 2 in which he has considered and
responded to Part 2 of the expert report of Duncan Atkinson KC (‘DAKC’).4
} POL uses the same abbreviations (”POL” and "Fujitsu”) as in its Phase 2 closing submissions (see footnote 2).
2 References to transcripts in this document are given in the form T day/month/year [page:line — page:line].
3 Given that Gareth Jenkins is yet to give his Phase 4 evidence, Jarnail Singh will be returning in Phase 5/6 to finish
his Phase 4 evidence and when the Inquiry will also be hearing from a number of relevant Cartwright King
witnesses these submissions are necessarily incomplete in any event.
+ Unfortunately, it was not possible for JLKC to finalise Part 2 of his report in advance of DAKC giving evidence
on 18 & 19 December 2023 in circumstances where DAKC’s Part 2 was not available until 29 November 2023 (with
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4. These submissions are structured as follows:
(1) Criminal policies and procedures:
a. Scope of the duty of reasonable investigation (§8-§15);
Timing of administration of a caution (§16-§17);
Duty to advise Postmasters of their rights in interview (§18);
Scope of the duty to provide disclosure prior to interview (§19);
Scope of the duty to provide disclosure prior to plea (§20-§21);
Circumstances of plea (§22-§24);
Rv Eden (§25-§27);
Relevance of the confiscation regime (§28);
Instruction of expert witnesses (§29);
j. Distinction between Offender Reports and Discipline Reports (§30); and
k. Further specific matters (§31-§34).
(2) Criminal Case Studies: case specific points (§35-§44).
(3) Policies and procedures: suspension, termination and civil recovery:
a. Recorded policies and procedures (§45-§49); and
b. Applicable standard for disclosure and conduct of proceedings (§50-§54).
(4) Civil Case Studies:
a. Cleveleys (Wolstenholme) (§55-§70);
b. Marine Drive (Castleton) (§71-§82); and
c. Broader governance issues (§83-§85).
(5) ARQ data (§86-§96).
(6) Remote access (§97-§105).
roa me aos
5. Before addressing those themes, POL notes, with profound regret, that as with Phase 3,
there has been evidence that, in respect of a number of POL employees:
5.1. There was a mindset that presumed that where issues arose in relation to
Postmasters the most likely explanation was dishonesty;
5.2. There was a mindset, even setting aside any issue of dishonesty, that such issues
as did arise with the Horizon system were always due to user rather than system
error; and
5.3. There was strong resistance to countenancing the existence of any flaws in the
Horizon system.
6. The effect of these mindsets was, similarly, compounded by the fact that:
6.1. The organisation and hierarchy of POL was such that junior employees did not
feel able to escalate issues upwards which resulted in insufficient overview being
taken at appropriately senior levels;> and
6.2. Some important roles in both the security and criminal law teams were occupied
by individuals who did not have sufficient understanding of the obligations
attaching to their roles.
an addendum provided on 12 December 2023). It was disclosed to the Inquiry at the earliest opportunity as soon
as it was completed.
5 See for example the evidence of Andrew Hayward (T10/10/23 [119:12 - 120:13]) and David Posnett (16/12/23
[17:1 -178:10)).
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7. Again, POL fully recognises that the Inquiry is likely to be critical of these aspects of
past behaviour and procedures.®
(1) CRIMINAL POLICIES AND PROCEDURES
(a) Scope of the duty of reasonable investigation
8. POL recognises that a fundamental investigatory and prosecutorial duty is to pursue all
reasonable lines of investigation whether pointing towards or away from guilt. Whilst
the consistent picture painted by evidence from POL investigators and lawyers is that
they were aware of this obligation upon them and had received training on it, it is also
clear that, in a number of cases, there was a failure properly to meet those obligations.
This is a matter of the most profound regret.
9. The question of whether a particular line of investigation was reasonable in a particular
case will necessarily be a case and fact-specific exercise. The Part 2 report of JUKC
acknowledges a number of case studies where POL investigators failed to pursue
reasonable lines of investigation and where POL lawyers failed to identify this and
advise that they be pursued. However, there are also a number of case studies where
JLKC disagrees with DAKC’s view that certain lines of investigation were reasonable or
required on the individual facts of the case study. To the extent that there is
disagreement as to whether a particular line of investigation was reasonable (and
therefore necessary) in any given case study, POL respectfully invites the Inquiry to
prefer the evidence of JLKC, as being a better reflection of the reality of the generally
accepted and generally practised approaches by other investigative and prosecutorial
bodies at the relevant time, rather than the ‘counsel of perfection’ advanced by DAKC.
10. In assessing the scope of the reasonableness of investigations into the reliability of
Horizon data, it may assist the Inquiry to consider the range of independent and
external experienced prosecutors who did not consider it to be reasonable or necessary
to require POL investigators to conduct a wholesale investigation into the reliability of
Horizon data beyond obtaining the standard evidence and assurances from Fujitsu:
10.1. The evidence from devolved jurisdictions, where prosecutorial decisions were
taken by independent public prosecutors who were able to direct/require further
investigations if such were considered to be necessary or reasonable.”
10.2. In a number of POL prosecutions, including the case study of Seema Misra,
applications by the Defence to the Court for directions for disclosure and further
investigation were rejected by the trial Judge.*
10.3. All POL cases prosecuted in the Crown Court were prosecuted by independent
counsel who owed a professional duty to advise if a case required further
6 See too paragraphs 7-8 and 27-32 of POL’s written ‘phase end’ submissions for Phase 3 on the issue of POL’s
contemporaneous understanding, of Postmasters' contractual obligations.
7 See, for example, the evidence of Shiels (T31/1/24 [23:7-16]), Teale (T26/1/24 [32:25-33:18]) & Winter (26/1/24
[32:25-33:18]).
® See, for example, the Judge's ruling in Misra as set out at §121 of Section 11 of Part 2 of JLKC’s report on p.244
[the transcript of the hearing is UKG100014994].
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investigation.’ It is noted that these counsel would also have prosecuted for the
CPS and could be expected to apply the same generally accepted standards to POL
prosecutions as they would in CPS cases."
10.4. Prosecutions after 2012 were advised upon and conducted by Cartwright King as
an independent firm of experienced criminal solicitors.
In assessing the mindset of POL investigators and prosecutors, particularly in relation
to the scope and reasonableness of further inquiries, the Inquiry ought fairly to assess
that mindset in light of the guidance that they were receiving from external sources who
appeared to validate their approach.
11. The Inquiry will also wish to have careful regard to the repeated assurances that reached
POL lawyers and investigators from Fujitsu that Horizon was reliable." Individuals
within POL, who themselves had no or very limited technical understanding, could
reasonably be expected to place considerable reliance on those assurances.
Furthermore, the approach by POL prosecutors and investigators in assuming the
reliability of Horizon data must be seen in light of Parliament's decision to legislate to
remove s.69 PACE, leaving a presumption of the reliability of data.
12. As such, for the reasons set out by JLKC, unless and until a POL investigator or lawyer
had actual or constructive knowledge of problems with Horizon capable of causing
discrepancies in branch accounts (or a suspect had explicitly raised this as an issue in
their case), the Inquiry might consider it unfair and unrealistic to criticise them for not
having considered an investigation into the reliability of Horizon data to be a reasonable
line of investigation.'* Moreover, even in cases where the reliability of Horizon data had
been explicitly raised by the defence or the existence of issues with Horizon was known
(actually or constructively), the Inquiry will wish to consider whether, on the facts of
that case, it would have been considered reasonable to expect more than the obtaining
of evidence from Fujitsu to address the reliability of the data in that instant case.1?
13. Additionally, the extent to which investigating the reliability of Horizon data was a
reasonable line of investigation in any given case would necessarily depend on what the
nature of the case was and what other evidence was available to corroborate the Horizon
° See DAKC's evidence at T5/10/23 [12:21 to 123:15].
© See, for example, JLKC’s observations at §46 to §48 of Section 8 of Part 2 of his report (at p.170).
4 The Inquiry has seen many such assurances provided by Fujitsu in e-mails and witness statements (including
expert evidence) to the effect that Horizon was reliable, and many POL witnesses gave evidence that such
assurances reassured them that Horizon was reliable (e.g. Winter at 26/1/24 [47:10-23] and Harbinson T22/11/23
[21:15-22:7))..
» Although POL accepts that, as a corporation aggregate, it had knowledge of the existence of bugs, errors or
defects in Horizon on the basis that such knowledge existed somewhere within the organisation (e.g. solely within
the IT function), this is not the same as a concession or specific finding (either by Fraser J or the Court of Appeal)
as to who knew what and when. The Inquiry may ultimately find itself wishing to make general criticisms of
POL's failure to ensure that this information was funnelled to those who needed to know it. However, before
making any criticism of the actions (or inactions) of individuals or specific teams in respect of any specific case
study within Phase 4, the Inquiry must consider whether that individual or team had actual (or constructive)
knowledge of those bugs, errors or defects at the time of the case under consideration.
8 DAKC acknowledged that it was not necessarily inappropriate for POL to seek expert evidence from Fujitsu as
to the reliability of Horizon (see fn 58 below).
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evidence. As the Court of Appeal made clear in Hamilton & Others [2021] EWCA Crim
577 and the various appeals that have followed it, a failure to investigate and disclose
Horizon issues would not have been unfair or unreasonable such as to render a
conviction unsafe if Horizon reliability was not "essential". Where the Horizon data was
corroborated by admissions in interview," or by other evidence (including
circumstantial evidence) independent of Horizon reliability,’ the Court of Appeal do
not consider POL's failure to investigate or disclose Horizon reliability issues to be
unfair or unreasonable.
14. This is particularly relevant in respect of Pensions & Allowances ('P&A') frauds, which
represented a significant proportion of POL prosecutions up until 2006. In P&A fraud
cases, the investigation did not relate to an audit shortfall.!° Rather, the allegations were
often based on physical evidence (including forged or stolen foils). In overclaim or re-
introduction P&A fraud cases, where the investigation was based on the discrepancy
between vouchers entered onto Horizon by the Postmaster and the vouchers sent to the
DWP processing centre at Lisahally, the reliability of the Horizon record was usually
corroborated by non-Horizon evidence." '*
15. It is, however, acknowledged by and on behalf of POL that once a point was reached
where investigators or lawyers had actual or constructive knowledge of Horizon issues,
then it would have been incumbent on them properly to investigate Horizon reliability
before relying upon Horizon evidence within a prosecution.
ing of the Administration of a Caution
16. Although the evidence demonstrates that Postmasters were always cautioned prior to
questioning by POL investigators in interview (see below), it has been suggested during
¥ See the Court's discussion of the case of Stanley Fell at §388 to §415 of Hamilton.
°5 See the cases of Cousins (§361 to §387) and Hussain (§416 to §446) within the Hamilton judgment, as well as the
cases of Allen and Robinson at §62 et seq in Allen & Others [2021] EWCA Crim 1874, Cameron at §24 et seq in White
& Another [2022] EWCA Crim 435, and the case of O'Donnell [2023] EWCA Crim 979.
1 The nature of P& A frauds was that the offender would either over-claim for a legitimate P&A voucher or make
a claim on a stolen/forged voucher or re-introduce a genuine voucher (i.e. claiming, twice for the same voucher).
The effect of all of these frauds would be to generate a surplus in the branch which could be stolen. The fraud
would often be detected following reconciliation of the physical vouchers at the DWP processing centre at
Lisahally who would identify stolen/forged vouchers or identify the lack of a voucher to support an overclaim/re-
introduction. As such, the fraud did not generally involve any audit shortfall. On the contrary, the absence of a
surplus in the accounts was part of the circumstantial picture which demonstrated that the transaction was not an
error (by the Postmaster or Horizon), since an erroneous transaction would necessarily produce a surplus in the
branch accounts (see §386 of Hamilton and also, for example, the evidence of Kevin Shiels T31/1/24 [20:9] and Les
Thorpe 130/1/24 [21:11-24)).
Y See the cases of Cousins (§361 to §387 of Hamilton) and the case of O'Donnell for examples considered by the
Court of Appeal.
% POL notes that in Scottish cases where appeals have been allowed, COPFS have not provided reasoned
explanations for its concessions and the Scottish Courts do not provide reasoned judgments identifying the basis
for the successful appeal, and so the basis upon which the conviction has been quashed is not always clear. It may
also be relevant to note that the majority of such cases relate to P&A frauds in which the prosecution was based on
physical evidence rather than primarily on Horizon records (even if the defence had sought to raise concerns about
Horizon within the case), or cases in which the suspect made seemingly reliable admissions in a PACE compliant
interview, and the Court of Appeal of England & Wales has upheld convictions in such cases.
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questions asked by (or on behalf of) Core Participants that Postmasters should have
been cautioned and afforded a right to legal advice prior to being asked any questions
about shortfalls either by auditors or investigators.'? Any such suggestion is
misconceived and wrong in law.
17. The obligation to caution a person arises only at the point where there are objective
grounds to suspect that a criminal offence has been committed by the person being
questioned.” It therefore follows that auditors and POL investigators are permitted to
ask questions of Postmasters without administering a caution in circumstances where it
is not yet clear that a crime has been committed.” As such, unless there were already
objective grounds to suspect a crime (which would rarely be the case at an audit) an
auditor (or investigator) would be entitled to ask a Postmaster if they had an explanation
for an apparent audit shortfall without first administering a caution, and any answers
provided would be prima facie admissible in evidence in subsequent proceedings. *
Moreover, DAKC's evidence confirmed that it was good practice for auditors or
investigators to take a contemporaneous note of any significant statement made by a
Postmaster during such questioning and to ask the Postmaster to sign the note to
confirm its accuracy.
(c)___ Duty to advise Postmasters of their rights in interview
18. The Inquiry has now had the benefit of transcripts of the interviews in case studies, and
has also seen copies of the standard forms that were used by POL investigators in every
interview and signed by the interviewees during the interviews to confirm that they
understood the rights referred to therein. Moreover, the Inquiry has seen that
interviewees were reminded of their rights after breaks in the interview. The Inquiry
has also seen that, in addition to the rights to which an interviewee was entitled as a
matter of law, POL also voluntarily provided interviewees with an additional right to a
Post Office "friend" to assist them. The Inquiry has not only seen from the transcripts
and signed forms that the interviewee's rights forms were invariably used in interviews,
but it has also heard evidence from every investigator who has been asked during Phase
4 confirming that POL investigators were trained and required to use the forms in every
interview. The evidence demonstrates that POL investigators assiduously complied
with the duty to advise Postmasters of their rights in interviews, and any suggestion
© See, for example, the questioning of Paul Whitaker at T16/11/23 [71:13 to 72:10].
2 Nelson & Rose [1998] 2 Cr App R399, CA
2 James [1996] Crim LR 650, CA
» Given that an investigator's remit included both criminal and contractual matters, the mere fact of the attendance
of an investigator does not mean that there exist reasonable grounds to suspect that a criminal offence has been
committed by the person being questioned.
2 See §284(a) of DAKC's second report. The evidence from the case studies and by POL investigators confirms
that this is something that was done as a matter of course.
2 Examples of the CS001 and CS003 forms setting out the rights can be found a nd POL00045345
respectively. An example of an interviewing officer cautioning an interviewee and taking them through the rights
form can be found in the transcripts of Ms Adedayo's interview at pages 3 to 10 in POL00066742 and then she was
reminded of those rights at pages 1 and 2 of POL00066745 when the interview resumed after a break to change the
tapes.
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(whether within Human Impact evidence or otherwise) to the contrary is factually
incorrect. 5 76
(d) Scope of the duty to provide disclosure prior to interview
19. The Inquiry has heard evidence from a number of investigators that pre-interview
disclosure was provided to the legal representatives for an interviewee in advance of
the interviews in order to assist them to take instructions and advise their clients.
Although there had been a suggestion that POL investigators had acted unfairly or
improperly in not providing unrepresented interviewees with such pre-interview
disclosure, DAKC's evidence confirmed that POL's approach was wholly in compliance
with the approach adopted by the police in accordance with Home Office guidance.”
(e) Scope of the duty to provide disclosure prior to plea
20. The Court of Appeal have emphasised in Hamilton & Others and the cases which
followed it that a prosecutorial duty to investigate and disclose issues with Horizon did
not arise in every case. The obligation to investigate and disclose issues relating to
Horizon arises only in cases where the reliability of Horizon data was "essential" to the
prosecution either because proof of an essential element of the offence was wholly
reliant on evidence from Horizon (with no evidential corroboration independent of
Horizon) or because the Defence had placed Horizon reliability into issue such as to
generate a CPIA duty to investigate and make disclosure. It therefore follows that in
cases where Horizon reliability was not "essential",* there was no duty to disclose
Horizon issues prior to the taking of a guilty plea (or at all).
21. In cases where there was an obligation to investigate and disclose Horizon issues, the
point at which the obligation crystalised depends upon the facts and circumstances of
the case:”
2 See POL’s ‘phase end’ closing submissions for Phase 3 at §68 on the suggestion that evidence in Phase 1 stands
as being “unchallenged”.
> It will be noted that the rights forms were different in devolved jurisdictions to reflect the different rights existing
in those jurisdictions. In particular, in Scotland, prior to Cadder v HM Advocate in 2010, an interviewee had no
entitlement to legal representation in interview (and Mr Quarm’s suggestion that the lack of representation
rendered his interview unfair was rejected by the Court, T30/1/24 [64:13-22)).
27 [18/12/23 [48:18 to 50:12].
* For example, in a case where the reliability of the Horizon data was corroborated by contemporaneous
admissions or by other non-Horizon physical or circumstantial evidence (e.g. in P&A frauds).
» It has been suggested to a number of witnesses that POL was under an obligation to disclose to defendants that
there had been a number of complaints about Horizon from other postmasters (and to disclose details of those
complaints). Although there may be circumstances in which this might be appropriate, such as where the defence
may be assisted by notice of further lines of inquiry (per Tatford T15/11/23 [86:1-24]), the fact of unproven or
unverified complaints would not ordinarily be disclosable, even in cases where Horizon reliability was in issue. As
Warwick Tatford advised at §4 and §5 of his advice of 5/1/10 [POL00044557], the test to be applied when
considering the disclosability of complaints about Horizon from other postmasters was whether the material was
"capable of casting an objective doubt on the reliability of Horizon” and that “the mere assertion by a sub-postmaster that a
loss should be attributed to computer error is not capable of amounting to the sort of objective material that ought to be
disclosed.” This approach was agreed by Mrs Misra’s defence counsel and, more importantly, DAKC agreed that
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21.1. The CPIA obligation to pursue reasonable lines of inquiry is one which arises at
the point at which the line of inquiry becomes a reasonable one to pursue. In a
case where there is no evidence of a shortfall save from Horizon, investigating the
reliability of the Horizon data is likely to be a reasonable line of inquiry from the
outset.” In other cases, such a line of inquiry might only become reasonable to
pursue at a later stage following, for example, the defence raising concerns as to
Horizon reliability in a defence statement during prosecution proceedings."
21.2. The CPIA duty to disclose Horizon issues does not arise until after charge, when
Court proceedings are underway. A prosecutor’s statutory duty to disclose
unused material to the accused is triggered by a not guilty plea being entered in
the Magistrates’ Court, or a case being sent for trial at the Crown Court.** The
duty to keep disclosure under review thereafter is a continuing one, and there is
a particular duty to review any defence statement served by a defendant and to
disclose further material depending upon the matters raised in that defence
statement.>
21.3. Given the statutory trigger points for disclosure, the CPIA does not provide an
accused with an entitlement to see the prosecution's evidence or disclosure prior
to entering their plea.4
this approach was “consistent with the CPIA” (§369 & §370 of Vol 2 of his Report). Similarly, the CPIA disclosure
duty did not require POL to disclose a running commentary on enquiries being made in respect of Horizon
reliability, since the CPIA duty is to follow the reasonable line of investigation and then disclose the results if they
meet the disclosure test. POL acknowledges that the position would be different once the “tipping point” (per
section 2.1 of JLKC’s Part 2 Report) had been reached, because at that point there would have been a need for a
fundamental investigation into Horizon reliability.
8° Of course, the question of what sort of inquiries are reasonable may well depend on the circumstances and the
state of belief of the investigator at the time as to Horizon reliability. For the reasons given by JLKC in his report,
if an investigation were taking place at a time prior to the investigator gaining actual or constructive knowledge
of Horizon issues, a reliance on the assumption or regularity and/or a mere assurance from Fujitsu might be
reasonably sufficient. An investigation taking place after the investigator has actual or constructive knowledge of
Horizon issues would require a greater level of scrutiny and evidence of reliability.
3 Such as, for example, in the case of Misra when she raised Horizon for the first time at her initial trial date on 2
June 2009 (having previously advanced a defence that the money had been stolen by an employee).
3 See s.1 CPIA 1996.
88 See s.7 CPIA 1996.
© Suggestions have been made at various points (e.g. T5/12/23 at p.87) that POL should have obtained and
disclosed all of its evidence (e.g. the Fujitsu witness statements producing ARQ data) prior to the commencement
of a prosecution and the entering of the pleas (so that the accused had the evidence prior to deciding whether to
plead guilty). Such a view is not consistent with the statutory scheme or general criminal practice. Moreover, the
Sentencing Council Definitive Guideline on reductions in sentence for guilty pleas emphasise that part of the
reason for the discount on sentence for an early admission and guilty plea is because it saves "time and money on
investigations" and §F1 emphasises that full credit should not be afforded to defendants who delay pleading guilty
in order to assess the evidence against them _(https://www.sentencingcouncil.org.uk/wp-
content/uploads/Reduction-in-Sentence-for-Guilty-Plea-definitive-guideline-SC-Web.pdf).
% Although there are some surviving common law disclosure obligations which might require pre-committal
disclosure, (including where disclosure might assist an accused: to make an early application to stay the
proceedings as an abuse of process; to make representations about the trial venue or a lesser charge; or to prepare
for trial effectively), the effect of the CPIA means that such common law disclosure is not appropriate for matters
which would properly be for argument before a trial Judge or as part of the trial process (see ex parte Lee at 318E).
As such, disclosure of issues relating to Horizon reliability should generally have been a matter for CPIA
disclosure.
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f) Circumstances of plea
22. In four of the case studies,** acceptance of the defendants' pleas was made conditional
upon their agreeing not to criticise Horizon and/or to make full repayment of the alleged
Horizon shortfall. POL acknowledged within Hamilton & Others that such an approach
was wholly inappropriate in the circumstances of those cases,” and profoundly regrets
that it happened.
23. It is, however, important for the Inquiry to distinguish between the circumstances, such
as in the above four case studies, where it was improper to make acceptance of the pleas
conditional in such a way, and other cases where POL refused to accept a basis of plea
criticising Horizon or where acceptance of a plea or a decision not to prosecute was
conditional upon repayment of loss:*
23.1. The Code for Crown Prosecutors states that “It must be made clear to the court on
what basis any plea is advanced and accepted. In cases where a defendant pleads guilty to
the charges but on the basis of facts that are different from the prosecution case, and where
this may significantly affect sentence, the court should be invited to hear evidence to
determine what happened, and then sentence on that basis.” As DAKC implicitly
acknowledged,*? it would not be appropriate for a prosecutor to accept or agree a
basis of plea which did not accord with the position shown by the prosecution
evidence.
23.2. It therefore follows that, if a prosecutor believed that there was evidence which
showed that Horizon was not responsible for a loss, it would not be appropriate
for them, simply in the interests of expedience, to accept or agree a basis of plea
which asserted that Horizon was responsible for that loss. To that extent, if a
prosecutor reasonably believed that the evidence in the case demonstrated that
Horizon was not the cause of the loss, that prosecutor would be entitled, and
arguably obliged, to refuse to accept a basis of plea blaming Horizon for the loss
if it was believed that it may make a difference to sentence.”
23.3. DAKC acknowledged that the question of whether a suspect had "made reparation"
was a relevant factor to be considered in relation to the prosecutorial assessment
of the public interest limb of the test when considering charging." Given that the
8 Jo Hamilton, Hughie Thomas, Allison Henderson and Alison Hall.
+ See §113 to §117 of Hamilton & Others.
% This issue is addressed in more detail by JLKC at section 2.11 of Part 2 of his Report (§73 to §78 and also within
his analysis of the case studies).
% See §171 to §177 of Vol 1 of his Report.
4° Whether a prosecutor did reasonably believe that the evidence showed that Horizon was not to blame will be a
fact and case specific question depending on the extent of their actual or constructive knowledge of Horizon issues
and the extent to which there had been an investigation and evidence obtained in relation to Horizon reliability in
the case in question.
+! See §639 of Part 2 of DAKC's report. §4.17(i) of the Code for Crown Prosecutors states that the factors which
might mean that the public interest was less likely to require prosecution also include the extent to which the
suspect had put right the loss or harm (albeit a suspect should not avoid prosecution solely because they had
repaid the loss). Similarly, DAKC agreed that where there was sufficient evidence to prosecute, the question of
whether the Postmaster had repaid the loss would be a factor that a prosecutor should legitimately consider when
assessing the public interest test and whether a caution might be a sufficient and proportionate disposal (see
T18/12/23 [78:6-15]).
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Code for Crown Prosecutors requires consideration of the public interest when
considering the acceptance of pleas, it would not necessarily be improper for a
prosecutor to conclude that acceptance of a plea would only be appropriate if the
defendant repaid the loss.
23.4. Whilst a willingness to accept a plea to false accounting in place of a theft charge
would not necessarily imply a lack of confidence in the evidential merits of the
theft charge (it may, for example, simply reflect a legitimate consideration of
whether a plea to false accounting was in the public interest allowing for the
factors set out in the Full Code Test),? it would, however, be inappropriate for a
prosecutor to require reparation from a defendant as a condition of accepting a
plea to false accounting in a case where there was no evidence either of an actual
loss or that the loss was due to theft by the defendant.
24. During Phase 4, criticism was levelled at POL lawyers (and prosecuting counsel) for
seeking the views of the investigators prior to accepting pleas. Such criticisms were
misconceived as it would be normal (indeed, required) for a CPS prosecutor to seek the
views of an investigating police officer in a publicly prosecuted case in such
circumstances.**
(g)__R v Eden
25. The Court of Appeal decision in R v Eden [1971] 55 Cr App R 193 does not state that it
was improper to charge both theft and false accounting. Rather, it states that it is
improper to charge them both to cover the same criminality (inviting the jury to treat
them as standing or falling together). It is perfectly proper to charge both offences
where they are put either as alternative counts or where they are intended to reflect
different criminality. It would, however, be improper to charge both offences simply as
a means to exert pressure on a defendant to plead guilty to false accounting.*°
26. In many cases prosecuted by POL, it would have been entirely appropriate on the
prosecution case,*° to charge both theft and false accounting. The alleged offending
would often encompass both the theft of POL funds and then the covering up of the
© 719/12/23 [15:25].
* Per Hamilton & Others at §113 to §117
# See §67 at p.350 of Part 2 of JLKC’s Report. This is because the investigator is likely to be the most familiar with
the facts and details of the investigation which might be helpful in assessing whether any plea (or basis of plea) is
evidentially justified, and the circumstances of the investigation and offender which might be relevant to the
lawyer's assessment of the public interest in accepting the pleas or not. Moreover, §9 of the Code for Crown
Prosecutors (§10.3 of the 2010 edition), makes clear that the views of the victim are a proper consideration to take
into account in deciding whether to accept guilty pleas offered by the defence.
4“ See $62 and §211 to §217 of Part 1 of JLKC’s report. Although DAKC's first report adopted a different
interpretation of Eden, when DAKC gave evidence, his explanation largely accorded with JLKC’s (see T5/10/23
[56:18 to 57:8] and T6/10/23 [27:14 to 32:10).
46 Subject to there being sufficient evidence to make good the prosecution case.
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theft by falsifying branch accounts over a period of time. This represented two distinct
offences which would commonly have both been charged in such cases by the CPS.”
27. Inhis evidence, Rob Wilson suggested that he had given instructions to POL's criminal
lawyers not to charge both theft and false accounting because "it was wrong because R v
Eden effectively said you should pin your colours to the mast."** Mr Wilson's evidence on this
point may not be reliable and Mr Wilson may simply be confused and/or
misremembering details long after the event. Not only is his understanding of Eden
mistaken, but the fact that POL lawyers (including Mr Wilson himself) regularly
charged both offences suggests that no such instruction was ever given.
)_ Relevance of the confiscation regime
28. Suggestions have been raised with a number of witnesses either that consideration of
confiscation inappropriately affected decisions relating to charging or acceptance of
pleas, and also that the conduct of confiscation proceedings was unfair because POL
recovered more than its actual loss. In response to such suggestions, the Inquiry might
wish to bear the following in mind:
28.1. Section 80(2) of Proceeds of Crime Act 2002 ("POCA") requires the Court, in
assessing the benefit figure in a loss case, to uplift the value of the loss to account
for RPI inflation between the date of the offence and the date of the confiscation
order. As such, in any case where the confiscation order is made a significant
period after the offending, the benefit figure will necessarily exceed the actual loss
to POL.” It is this statutory requirement, and not any impropriety by POL, which
led to recovery of more than POL's actual loss in all affected cases.®
28.2. In fact, because indictments faced by Postmasters often ranged over a period of
more than six months or included three or more charges from which the defendant
had benefitted, POL would have been entitled to apply the statutory assumptions
under s.10 POCA which could easily have resulted in a confiscation order
significantly in excess of the actual loss figure.>! The fact that POL did not seek to
apply these assumptions and therefore recover larger sums is a matter that the
¥ It was clear, for example, from Warwick Tatford’s advice in the case of Seema Misra [POL00051586] that the two
counts were not intended to be seen as alternatives, and neither did an acceptance of guilt of false accounting
properly or adequately reflect the entirety of the alleged criminality in Mrs Misra's case. Clearly, Mr Tatford (an
experienced prosecutor for the CPS as well as POL) perceived the charging of both offences here to be proper
within the meaning of Eden and not merely a device to exert pressure on Mrs Misra to plead guilty to false
accounting.
48 712/10/23 [130:15 to 132:1].
* See also §66 of DAKC's addendum report in which DAKC observed whilst dealing with the case of Mr Wilson,
that the confiscation order included an RPI uplift which meant that there was "a 102% recovery."
®° This is, of course, subject to the more fundamental question of whether there ever was an actual loss on the facts
of the specific case in question. However, in a case where the fact and amount of the loss was corroborated and
reliable (and not a Horizon error), recovery by POL through confiscation of a sum which was inflated to account
for RPI was not only appropriate but required by statute.
51 Per s.75(2)(b) and (¢) of POCA.
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Inquiry might wish to consider when assessing whether POL was wholly and
improperly motivated by maximising recoveries.
28.3. Consideration of the implications for recovery of losses via compensation is a
proper factor for a prosecutor to bear in mind when making charging decisions
and decisions as to the acceptability of pleas.“ The Court of Appeal has made
clear that, although it is not appropriate for a prosecution to be motivated solely
by the prospect of financial gain for the prosecutor, it is perfectly proper, and in
many cases obligatory, for prosecutors to consider the possibility of confiscation
proceedings at the time of charging.®
(i) Instruction of Expert witnesses
29. POL accepts and acknowledges that it failed properly to instruct expert witnesses in
cases that it prosecuted:**
29.1. It is clear from the case studies that POL investigators and lawyers failed properly
to appreciate the difference between evidence of matters of fact from a witness
with expertise in the subject (e.g. an explanation of how Horizon worked), with
matters of opinion evidence which would be admissible only from a properly
instructed expert witness (e.g. an opinion on whether Horizon was working
properly in the branch in question and whether shortfalls could have been caused
by Horizon error). A number of POL witnesses gave evidence that they
considered witnesses from Fujitsu giving evidence as to Horizon reliability to be
giving evidence of fact and not expert opinion evidence.” This error appears to
have been responsible for much of the subsequent failure properly to instruct
Fujitsu witnesses as to their duties and responsibilities as expert witnesses.
29.2. It is acknowledged that POL failed to ensure that Gareth Jenkins was properly
instructed as an expert witness in any of the cases where he provided expert
5 In relation to the suggestion that has been raised on numerous occasions during Phase 4 that improper charges
were pursued because it made confiscation easier due to the problem with proving actual loss by theft, the Inquiry
will note that had POL not declined to apply the statutory assumptions, the burden of demonstrating that the
defendant had not stolen the money would properly have been on the defendant by virtue of s.10. As such, POL's
evidential challenges in proving the fact of loss stemmed from its decision not to take advantage of the statutory
scheme provided by Parliament.
5} See too the unequivocal evidence that the conduct of investigations were not influenced by performance
objectives including bonuses for financial recoveries: e.g. Daily (T/23/1/24 [51:13 - 62:6]), Posnett [T/5/12/23 [54:15-
25]), Ward (T/1/2/24 [36;4-17]).
4 See §23.3 and footnote 39 above.
5° For example, see R (Kombou) v Wood Green Crown Court (2020) 2 Cr App R 28, as set out in §111 of Hamilton &
Others.
5° This topic is addressed in more detail in Part 2 of JLUKC’s report at section 2.12 (§79 et seq) and in his analysis of
the case studies, particularly that of Seema Misra.
°7 See, for example, Rob Wilson's evidence at T12/12/23 [35:11 - 36:25]. This error related to Gareth Jenkins’ status
as a witness up until mid-way through the preparations for the prosecution of Seema Misra (see Singh at T1/12/23
[26:22 - 27:6] and Tatford T15/11/23 [54:2-20]). It also affected the evidence of Penny Thomas and Andy Dunks
whose evidence was a mixture of fact and opinion (the opinion related to their assessments, insofar as they were
provided, on whether Horizon was working reliably in the branch, whether Horizon errors might be responsible
for shortfalls, and whether the matters raised in calls to helplines might have been related to Horizon issues causing
discrepancies).
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evidence by way of a statement.* Although the evidence shows that both
Warwick Tatford and Jarnail Singh did impress upon Gareth Jenkins the
obligation to disclose any known issues with Horizon which might undermine his
analysis,” it is acknowledged that POL did not provide sufficiently clear and
explicit written instructions on this point, nor to ensure that Mr Jenkins’
statements/reports complied with the requirements of the Criminal Procedure
Rules, including the provision of appropriate disclosure schedules.”
29.3. The failure properly to advise Mr Jenkins as to his duties of disclosure is
particularly regrettable in circumstances where, by the time of the Misra trial, a
number of POL lawyers had been copied into emails attaching reports of a known
bug in Horizon Online.*' Given that those lawyers were aware from that time of
the existence of at least that bug in Horizon Online, their failure to ensure that the
bug was disclosed in Mr Jenkins' reports in subsequent Horizon Online cases (and
more generally) is difficult to understand.
29.4. It is acknowledged that POL's approach of instructing Mr Jenkins to provide a
"standard" witness statement attesting to Horizon reliability was an inappropriate
one, particularly in circumstances where it was already known (or should have
been) that concerns were being raised as to Horizon reliability. Any such report
ought properly to have been case-specific and involved Mr Jenkins examining the
ARQ data and the Message Store data in the case to form a view as to whether the
Horizon data was reliable or not.
29.5. Although it is not inherently improper for prosecutors to suggest amendments
and clarifications to expert reports that they have instructed, it is incumbent on
the prosecutors to ensure that previous drafts of reports are listed on the schedule
of unused material and where a previous draft contains something that
undermines the prosecution case or assists the defence that draft should be
disclosed in accordance with the prosecution's CPIA obligations. POL's lawyers
failed to ensure that this happened.
88 There was some suggestion during Phase 4 that it was inappropriate for POL to instruct Gareth Jenkins as an
expert due to his lack of independence from the subject matter. Such suggestions were misconceived. The Court
of Appeal has repeatedly made clear that the mere fact that a witness is a member of the team that investigated the
offence (or closely associated to that team) would not necessarily disqualify him from acting as an expert witness
[see, for example, R. v. Gokal [1999] 6 Archbold News 2, CA and Stubbs [2006] EWCA Crim 2312]. As
acknowledged by DAKC, an expert witness need not be functionally independent from a party in a case provided
the expert is aware of his or her duty of independence (16/10/23 [51:21 -53:20}). Mr Jenkins’ statements all included
the necessary statement confirming that he was aware that his duty as an expert lay to the Court and not to his
employer or the party instructing him (see, for example, the opening paragraph of POL00059474).
8° See §11 and 90 of Warwick Tatford’s statement (WITN09610100) and the third paragraph of Jarnail Singh's e-
mail of 5/2/10 (p.5 of POLO0114272).
© See T6/10/23 44:21 - 54:5.
& See POL00055410, POL00028838 and POL00001733, and T12/12/23 [91:15 - 110:1}.
© The failure was not only of POL's internal lawyers within the Criminal Law Team, but was also shared by POL's
external lawyers, Cartwright King. Although Warwick Tatford accepted in his evidence that he failed to ensure
that Mr Jenkins’ report contained all of the required elements for an expert report (T15/11/23 [53:22-65:17]) and that
he failed to ensure that the amended drafts of the report were scheduled and disclosed (T15/11/23 [159:7-167:1]),
Mr Tatford's failures can be significantly mitigated by the fact that he did believe that he had advised both POL
and Mr Jenkins as to Mr Jenkins’ expert disclosure duty (15/11/23 [63:15-18 & 72:1-73:15]) and §88-90 of
WITN09610100] and also that Mr Tatford had no knowledge of the existence of any bug other than the Callender
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29.6. In any event, the partisan way that Mr Jenkins was instructed to attack or discredit
a defendant's case, as opposed to reviewing the evidence and forming an
independent expert opinion, represented a regrettable and improper
understanding of the role of an expert on the part of POL's criminal law team.
i Distinction between Offender Reports and Discipline Reports
30. A number of witnesses were asked about §2.15 of the POL internal guide to the
preparation of case files dealing with Offender reports and Discipline Reports. That
paragraph, dealing with Discipline Reports, refers to the need to exercise care when
including such failures in security, supervision, procedures and product integrity
within the report because the report will be disclosed to the suspect. It has been
suggested that this paragraph suggests that POL investigators were advised to omit
references to Horizon failures to prevent disclosure of those failures to suspects facing
criminal investigation and prosecution. Such a suggestion is misconceived:
30.1. That paragraph deals only with the preparation of Discipline Reports and not
Offender Reports. The former is concerned with potential internal disciplinary
proceedings (where no CPIA duty of disclosure applies).
30.2. In relation to Offender Reports, which are the type of report considered by
lawyers and other decision makers concerned with potential criminal
prosecutions, §1.24 of the same guidance emphasises that any such failures in
security, supervision, procedures and product integrity must be included in the
Offender report and highlighted. Any affected suspect who might be subject to a
criminal investigation would be covered by §1.24 and so the relevant lawyer and
decision maker would have their attention drawn to the failure.
30.3. Moreover, POL's Casework management policy notes at §3.1 that whilst security
or operational procedure failures should not be disclosed in interview, they must
be included in the offender report and considered for disclosure under CPIA
1996.4 As such, the policies specifically emphasise that any such failures should
not only be drawn to the attention of any decision maker in relation to a
prosecution, but also that they should be considered for disclosure under the
CPIA.®
Square bug which was disclosed. Some further mitigation for the lawyers concerned can be derived from the fact
that in all of the cases where expert evidence was served from Mr Jenkins, the failures to comply with the Criminal
Procedure Rules requirements for expert reports (including the provision of disclosure schedules) was never
identified by the Judge or by defence counsel or solicitors.
® POL00038452.
& POL00104777 at p.2 of 6
Lest it be thought that the instruction at §3.1 not to disclose such matters in interview is an inappropriate lack of
disclosure, it must be remembered that pre-interview disclosure is intended solely to enable the interviewee's legal
representative to understand the nature of the suspected offence. There is no obligation under the CPIA or PACE
Codes of Practice to disclose material capable of undermining or assisting prior to interview. Such obligations can
only arise subsequent to charge. On the contrary, §11.1A of the PACE Code C specifies that "Before a person is
interviewed, they and, if they are represented, their solicitor must be given sufficient information to enable them to understand
the nature of any such offence, and why they are suspected of committing it (see paragraphs 3.4(a) and 10.3), in order to allow
for the effective exercise of the rights of the defence. However, whilst the information must always be sufficient for the person
to understand the nature of any offence (see Note 11ZA), this does not require the disclosure of details at a time which might
prejudice the criminal investigation.”
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Further speci matters
The conduct of interviews
31. As is clearly acknowledged in JLKC's report,® there were some interviews by POL
investigators in which their conduct of the interview was unfair and inappropriate, and
POL deeply regrets this. However, it should be remembered that such impropriety was
the exception rather than the rule, and the overwhelming majority of interviews were
conducted in a fully PACE-compliant way. Similarly, an interview conducted
properly with an appropriate degree of firmness may be perceived as oppressive by the
interviewee. If an interview had been conducted in an inappropriately confrontational
way, the trial process can properly deal with that conduct.® It will also be remembered
that interview transcripts would ordinarily be edited, by agreement between the
prosecution and defence counsel, to remove improper questioning or inadmissible
comment by the interviewing officer.”
John Scott's instruction in relation to the shredding of minutes
32. The Inquiry has heard the evidence of John Scott in relation to his instruction that
minutes of the weekly ‘hub’ meetings which had been established to discuss Horizon
issues should be “scrapped” or shredded,” and will form its own views on the
credibility of Mr Scott's answers. However, it is important to recognise how POL
reacted to the issue. Upon discovering the instruction, Jarnail Singh phoned Martin
Smith of Cartwright King on 31 July 2013 and, on 1 August 2013, sent an e-mail to Martin
Smith seeking formal advice to confirm his view that even if there was any truth to the
“common myth” that there need not be disclosure in civil proceedings if no written
record existed, that was certainly not the case in relation to criminal cases.7” An advice
from Cartwright King was provided on 2 August 2013, and sent to Hugh Flemington
(POL Head of Legal) and Susan Crichton (POL General Counsel).”* POL Legal explicitly
supported Jarnail Singh and unequivocally directed that no documents should be
destroyed, and that minutes of the weekly Horizon issues meetings should be taken,
centrally retained and disclosed where appropriate, and a formal protocol was put in
place to this effect. Despite John Scott’s instruction, copies of the minutes were
retained and the very minutes of the meetings to which the instruction related have been
66 See Section 2.5 of Part 2 of JLKC's Report at §33 et seq.
© See Part 2 of JLKC Report. The failures in isolated cases by individual investigators does not mean that that POL
investigators were not properly trained and instructed in the proper conduct of interviews. It should be
remembered that a proportion of police interviews would include similarly inappropriate aggressive and
confrontational questioning.
* A defendant who had experienced inappropriate questioning may wish to place the improper questions before
the jury to demonstrate the prosecutorial unfairness. Alternatively, any admissions obtained through an unfair or
improper interview could be excluded under s.76 or s.78 PACE.
& See DAKC's evidence at T18/12/23 [51:2 to 53:11].
70 T11/10/23 [23:2 to 64:4].
7 POL00139746.
72 See POL00006799 and POL00298236.
78 See POL00141574, POL00006797, POL00128997 & POL00139696.
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disclosed to the Inquiry.” Accordingly, if the Inquiry considers that criticism is due for
the instruction in relation to the minutes, it should be remembered that the instruction
was John Scott's alone and did not reflect POL's views more generally.
The drafting of Mr Bradshaw's statement in the case of Wylie
33. Whilst being questioned about POL00120723 (a witness statement in the case of Wylie),
Stephen Bradshaw stated that the witness statement (at p.5 of that document) dealing
with POL's confidence in the Horizon system had been drafted for him by Cartwright
King.”> However, in order properly to assess this evidence, it is necessary for the Inquiry
to understand the context. This witness statement was not an evidential statement to
be relied on as evidence before the jury at trial attesting to Horizon reliability but rather
simply an accurate statement of POL's corporate position as used in a number of similar
cases.” As such, there was nothing improper about the statement being drafted by
Cartwright King in the terms that it was.
Horizon issues capable of affecting branch accounts
34. A number of Horizon issues have been examined during Phase 4. The Inquiry is invited
to have careful regard to the difference between those Horizon issues which might have
affected branch accounts and those which could not. This is particularly significant
when assessing the state of mind of POL investigators and lawyers. Knowledge of a
bug which could not affect branch accounts could not reasonably lead an investigator
or lawyer to consider that such an issue could be responsible for shortfalls.”
(2) I CRIMINAL CASE STUDIES: CASE SPECIFIC POINTS
35. The majority of the case studies relate to cases where POL had already conceded in the
criminal appeals that the convictions were unsafe. Whilst this provides the Inquiry with
a helpful insight into how things went wrong in those cases, it is important for the
POL00089719.
75 T11/1/24 [17:12 to 23:2].
7 Ms Wylie’s defence solicitors had written to POL (POL00141393) noting that POL had instructed Second Sight
and therefore appeared not to have confidence in Horizon. As such, the solicitors requested a statement of position
from POL so they could consider an application to stay the prosecution (or adjourn it until after Second Sight
reported). Mr Bradshaw's statement (at p.5 of POL00120723) was simply a response to this request and was no
more than a true and accurate description of POL's corporate position. It was not an attestation to Horizon
reliability from his own knowledge/opinion, and could not have been used in evidence at trial as such (he not
being an expert), but was served as evidence to answer the defence query and to be used in any application to stay
the prosecution. Mr Bradshaw's statement was a "cut & paste" from an equivalent statement provided by Sharron
Jennings in another case where the same defence request had been made (POL00133643). To that extent, Mr
Bradshaw is right that it was a standard statement provided by other investigators too.
7 An example of the latter category would be the ARQ Record Duplication Issue, which involved an issue with
the ARQ data spreadsheets extracted from the audit vault (the process of extraction meant that some transactions
appeared twice on the spreadsheet). POL lawyers and investigators were alerted to the issue and the need to check
affected spreadsheets using the "workaround" provided by Fujitsu, but were also aware that the issue related to
the extraction and not to the underlying ARQ data. As such, provided the POL investigator or lawyer was using
either the workaround or the re-extracted data (which did not contain the duplications), they would have no reason
to doubt the integrity of the underlying data simply because of this issue.
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Inquiry not to lose sight of the fact that the selected sample of case studies is not
necessarily representative. The Court of Appeal and CCRC have identified that the
convictions were safe in a significant proportion of cases where appeals have been
brought, and the Pro Active Case Review undertaken by members of the Independent
Bar (2 KCs and 3 juniors) has identified that in the majority of those cases where no
appeal has been brought and there are sufficient papers to enable a view to be reached,
there is no evidence to suggest that Horizon issues rendered the convictions unsafe.”
The Inquiry may also be assisted in this regard by reference to the Overarching
Narrative, provided to the Inquiry on 2 October 2023, in respect of the 88 representative
sample cases reviewed by POL's current criminal lawyers (Peters & Peters and their
instructed counsel).
36. The fact that the case studies considered by the Inquiry may not be representative of the
generality of cases considered by POL's investigators and lawyers is significant. In
particular, it is impossible for the Inquiry fairly to assess the credibility and/or
reasonableness of the evidence given by witnesses to the Inquiry that they believed that
Horizon evidence was reliable and that shortfalls were likely to have been caused by
criminality on the part of Postmasters without remembering that in the vast majority of
cases investigated and prosecuted by POL, the Postmasters admitted to criminality in
interview and subsequently pleaded guilty to the matters charged.”
37. Part 2 of JLKC's report addresses the case studies and, subject to the matters set out
above arising out of evidence to the Inquiry not considered by either expert, POL adopts
JLKC's analysis.
38. The one case study upon which POL would wish to add specific comments is that of
Oyeteju Adedayo. The Inquiry will be aware that this is the sole case study where POL
does not accept that the conviction was unsafe,*” and where her appeal was conceded
solely on public interest grounds.*!
78 This is based solely on papers in POL's possession. The review may reach a different conclusion in light of any
fresh evidence served by an appellant if an appeal were advanced.
™ And also that even in cases where the Postmaster did not make contemporaneous admissions at audit or in
interview, but instead asserted that the losses were unexplained (or due to Horizon), in very many cases the
Postmaster subsequently pleaded guilty, thereby lending credence to the investigators’ belief that they were guilty
and Horizon was reliable. For the purposes of the Inquiry assessing the reasonableness or genuineness of the
investigators’ belief in Horizon reliability, what matters is whether the investigator(s) believed the
admissions/guilty pleas to be reliable at the time and not whether in fact it was. This remains the case even if fresh
evidence subsequently emerged during appeal proceedings or this Inquiry to cast doubt on the reliability of the
admission or guilty plea on the facts of a particular case. Moreover, even with what is now known of Horizon and
the conduct of investigations, the CCRC and the CACD (and the Pro-Active Case Review conducted by
independent counsel on behalf of POL based on the evidence available) have identified nothing on the facts of
many convictions that would render the admissions and/or guilty pleas unreliable or unsafe.
®° This view has been reached by two independent criminal KCs instructed to review all of the evidence (including
her evidence to the Inquiry) and is also shared by JLKC and, to an extent, DAKC at §181/2 of Vol 2 of his report
(although, when questioned on behalf of Ms Adedayo, DAKC accepted that deficiencies in Natasha Bernard's
questioning and investigation left a "potential" that her confession was unreliable (T19/12/23 [202:14]).
®! The Inquiry will note that the CCRC having referred the case for appeal, POL was obliged not only to consider
whether there was sufficient evidence for a realistic prospect of conviction on a retrial but also whether a re-trial
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38.1. Because of the page limit on closing submissions, it is not possible to set out POL's
position fully in respect of Ms Adedayo's case within these submissions and so
the observations within JLKC's Part 2 Report (at section 6) are adopted.
38.2. It is important to remember that the CCRC's conclusion that there was a "real
possibility" that a court might believe Ms Adedayo should not be taken as a
finding that the CCRC thought her account to be credible nor that a Court would
be likely to do so.*
38.3. Ms Adedayo has given numerous inconsistent and contradictory accounts to the
CCRC and the Inquiry to explain her contemporaneous confessions,*> none of
which have been tested by cross-examination.*! Similarly, the Inquiry has not had
the benefit of hearing evidence from Mr Valani which contradicts Ms Adedayo's
most recent accounts.
38.4. Although, when questioned on behalf of Ms Adedayo, Natasha Bernard accepted
that Ms Adedayo's confession in her contemporaneous interviews was
contradictory, the questions asked involved presenting decontextualised
answers from only parts of Ms Adedayo's interviews. Read together and in
context, it is clear that Ms Adedayo was speaking about different tranches of
monies and was not inconsistent about the amounts. Whilst it is acknowledged
that Ms Bernard's interview failed sufficiently to clarify certain answers from Ms
Adedayo, the interviews do contain clear and unambiguous admissions
(particularly in light of the signed confession previously provided to the auditor
which contained details about which the auditor could not have previously been
aware).
38.5. Given the possibility that Ms Adedayo's case may be subject to litigation, the
Inquiry should exercise caution before making findings in circumstances where,
unlike a future court, it has not heard evidence tested by cross-examination.
39. None of the observations set out above are intended in any way to detract or resile from
the apologies that POL has already made. At the outset of Phase 2 of the hearings POL
apologised unreservedly for the suffering and damage caused to every person who has
been affected by the Horizon IT scandal. That included not only Postmasters directly
affected by POL’s failures, but to all others, including in particular their families, whose
lives have been impacted by those failures. Having heard the evidence in relation to the
criminal case studies POL emphatically reiterates that apology.
40. Whilst the particular facts of every case are unique, it is clear from JLKC’s expert report
that the nature of POL’s failures were all too regrettably consistent. In short, his view
is that the evidence has broadly demonstrated that POL failed in a large number of cases
was in the public interest, and it was solely on the public interest limb of the test that POL conceded the appeal
(see §31 of JLKC's report at p.125/6).
© The test applied by the CCRC in deciding whether to refer is the "real possibility” test under s.13 CCA 1995 (see
JLKC's Part 2 Report at §30 on p.125 and DAKC's evidence (T19/12/23 [64:1-24)).
® See JLKC's Part 2 Report at section 6 dealing with Ms Adedayo's case.
“ See POL’s ‘phase end’ closing submissions for Phase 3 at §68 on the suggestion that evidence in Phase 1 stands
as being “unchallenged”.
85 TIO/11/23 [55:21 to 66:15]
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by way of: (i) inappropriate questioning or approach in interview; (ii) failure to pursue
reasonable lines of inquiry based on what was known at the time; (iii) inappropriate
charging decisions based on what was known at the time; (iv) inadequate consideration
/ conduct of disclosure; (v) the way in which expert evidence was obtained; and (vi)
improperly making the acceptance of a plea conditional on not criticising Horizon
and/or making repayment.
41. For some Postmasters* only one of these types of failure occurred; for others there were
two,*” three, §§ four,*” or even five” such types of failures. Whilst there is obviously not
a direct correlation between the number of different types of failure on the part of POL
and the impact on each of the Postmasters (and their families) — indeed, just one failure
is obviously one too many — cases where there are multiples or even many multiples of
failures are obviously particularly egregious in terms of POL’s governance and
accountability. So, whilst POL recognises the differences between the cases, and
recognises its particular culpability where there were multiple such failures, its apology
to every one of these individuals is the same: it is profoundly sorry.
42. The case studies in the devolved jurisdictions were not considered by DAKC or JLKC
and therefore not addressed separately in this context, but POL’s apology to all those
affected by the Horizon IT scandal should be understood to encompass all those whose
cases were considered, even if not by way of a case study, during the Phase 4 hearings.
43. As the Inquiry is aware, senior executives at POL (including Nick Read, CEO, and
Simon Recaldin, Head of the Remediation Unit, as well as other senior individuals) have
been engaging in a significant number of restorative meetings with Postmasters, and
there are a large number of further such meetings already scheduled. POL would like
to take this opportunity to reiterate their willingness to meet and listen to any
Postmaster, including of course those who were case studies in the Phase 4 hearings
who they have not yet met. Their voices deserve to be heard directly by POL,
particularly having now heard directly from those who failed them, and whose failures
are ultimately POL’s failures.
44. Quite apart from the particular views expressed in JLKC’s report, having heard all the
evidence in Phase 4 it is clear that, irrespective of the state of knowledge of individual
lawyers and investigators at any particular time during the relevant period, during that
time POL as an organisation held within it knowledge that there were issues with
Horizon, and it is equally culpable for its failure as an organisation to ensure that this
knowledge reached the investigators and lawyers. POL has accepted that position in
the CACD, which has informed its approach to conceding appeals as appropriate, but
*¢ Lisa Brennan, Carl Page and Janet Skinner.
*” Jo Hamilton, Peter Holmes, Joan Bailey and Lynette Hutchings.
“* Tahir Mahmood, Seema Misra, Julian Wilson and Khayyam Ishaq.
*° Grant Allen, Anne Sefton, Angela Nield, David Blakey and Alison Hall.
°° Hughie Thomas and Allison Henderson.
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it is something that it is only right that POL also apologises for in the context of this
Inquiry.
(3) I POLICIES AND PROCEDURES: SUSPENSION, TERMINATION AND CIVIL RECOVERY
(a) Recorded policies and procedures
45. POL’s civil policies, procedures and practices have not been subject to the same degree
of scrutiny in Phase 4 as its criminal policies, procedures and practices. Accordingly,
POL’s submissions are relatively brief, but address the policies and practices of auditors,
contract advisers and appeal managers who made the decision to suspend and
terminate contracts as well as debt collectors.”
46. With regard to auditors, the Inquiry will be aware that the Audit Process Manuals were
the principal documents for the relevant period. These show that:
46.1. The primary purpose of POL branch audits was to (i) verify assets (cash, stock,
vouchers, foreign currency etc); and (ii) verify compliance with certain POL
procedures. That (relatively narrow) purpose remained entirely consistent
throughout the relevant period. As both a consequence and a cause, auditors were
not required to hold any formal qualifications or undertake external training.
There was no broader investigative function to be performed by auditors (e.g. for
the purpose of detecting where any money had actually gone). POL submits that
the narrow focus of auditors’ work was not inherently objectionable, but was
deeply problematic in the absence of an adequate further investigatory function
to get to the bottom of discrepancies.
46.2. For the majority of the relevant period, there was an expectation that Postmasters
(when invited and/or requested to do so by auditors) would submit proposals for
making good and/or actually make good discrepancies identified during audit by
way of various mechanisms. This was plainly incompatible with their
independent role as an auditor.”
47. With regards to contract advisors and appeal managers there is more detailed
documentation of the guidance available to them regarding suspensions, appeals and
termination, from which it appears that:
47.1. Throughout the relevant period, the approach to suspension and termination was
relatively consistent: following a referral from an auditor, a contract adviser
would initially decide whether to suspend or not. They would then turn their
mind to whether the Postmaster should have their contract terminated. £1,000 was
repeatedly cited as the size of a discrepancy that would warrant suspension.
™ There is no central repository of policies and guidance at POL for the entirety of the relevant period, such that
the documentation which has been produced cannot offer a complete or definitive picture of what guidance was
available when. Specifically, documentation prior to the split between Royal Mail Group and POL is particularly
limited.
*= Where an audit was conducted following a robbery or burglary, the Postmaster was also required to make good
the loss by way of recording it in their suspension account and/or seeking to recover the loss by way of an insurance
claim.
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Where the Postmaster was summarily terminated, they had a right to appeal that
decision until the right to an appeal was removed in the Network Transformation
Contracts from 2011 onwards.
47.2. POL’s attitude to suspension and termination evolved. POL acknowledges that its
policies and procedures were initially weighted against Postmasters in significant
respects: there was an expectation that responses to discrepancies were ‘robust’,
there was no right to legal representation, and a ‘no-fault’ termination with three
months’ notice without any appeal process. There was no right to remuneration
during a suspension and backdated compensation was at POL’s discretion.
Finally, POL’s guidance identified a failure to accept responsibility as an
aggravating factor in deciding whether to terminate a contract. This would place
a Postmaster into the invidious situation of accepting potentially inaccurate data
or losing their post office.
47.3. However, following the intervention of Second Sight and the instigation of the
branch support programme, POL did seek to act in good faith and partially
rebalance their policies and procedures so they were more equitable. POL
introduced a presumption that Postmasters would not be suspended during an
investigation; and a new sanction of a ‘suspended termination’ was introduced
which operated as a final written warning.
47.4, Whilst criticisms can be made of POL’s process, the documentary evidence does
show that appeals were taken seriously and heard in good faith. Appeal managers
were senior staff who received additional training—they were reminded of the
need to ensure that the principles of natural justice were applied and that their
role was to undertake a full rehearing. POL, however, accepts that there was no
recorded mechanism of disclosure within the appeal process.* This is a significant
oversight given that Postmasters may not have had access to their former property
and the underlying Horizon data that led to their termination. It is also a matter
of deep regret that appeals were removed in the Network Transformation
Contracts.
48. The most critical task undertaken by contract advisers and auditors was whether a
reference should be made to the Security Team. A legitimate criticism can be made that
the factors that informed this decision were not comprehensively recorded during the
relevant period. However, it does appear that the following were the key considerations:
48.1. The Security Team would only consider Postmasters where there had been a
suspension.
48.2. In practice, the Security Team would only consider discrepancies which were
greater than £1,000 and the discrepancy could not be explained away by
outstanding transaction corrections.
48.3. Debts above £5,000 would typically engage the Security Team.
48.4. Nevertheless, the limited guidance is clear that these amounts were only guides
and that the full merits and circumstances (including any admissions) were to be
considered by contract advisers and auditors. POL submits that at a broad level,
there is nothing inherently objectionable about these criteria, but when applied
*% As demonstrated in Mr Castleton’s case.
“ The right to a review (with remuneration) has been reinstated (POL00027984)
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with limited information or presumptions against Postmasters they had the
potential to operate unfairly and did operate unfairly.
49. With regard to debt collectors, POL submits that the policies and procedures adopted
by POL were typical and proportionate. Equitable set-off was used to recover debts for
existing Postmasters but this was nearly always under a negotiated programme. For
former Postmasters, lower value debts were written off through internal processes
(typically three ‘Dunning’ letters). Higher value debts were passed up for a letter before
action from a solicitor. If that did not yield a recovery, a view was taken on whether
recovery was proportionate taking into account the viability and cost of recovery. If a
debt was less than £3,000 it was not pursued and if the debt was less than £10,000,
recovery was only attempted after ascertaining the financial position of the Postmaster.
(b) Applicable standard for disclosure and conduct of proceedings
50. Counsel to the Inquiry's ("CTI") questioning of Mr Dilley in relation to the Marine Drive
(Castleton) case study” proceeded on the basis that the approach to be adopted by POL
in civil proceedings differed from claimants generally because it was a “publicly owned
company”. As such, it was suggested that it was inappropriate for POL to have adopted
a strategy of brinksmanship,® or to have advised that a step should not be taken
(disclosure of an expert report commissioned by POL) because it might increase the
number of claims brought against it. CTI’s questioning of Richard Morgan KC went
further and suggested that different considerations in principle would and should have
applied to civil litigation involving a “public authority or a public corporation” as distinct
from a private corporation.
51. POLhas carefully considered this proposition, and sought to understand what the legal
underpinning for it might be, as it would obviously have far-reaching implications
including in particular the nature and scope of the criticisms that could fairly be directed
at POL’s conduct of the GLO.
52. By way of starting point, POL notes that it is far from clear that POL is in fact a “public
authority” for the purposes of administrative law, such that public law principles would
have applied to any civil litigation conducted by it. In R (Sidhpura) v POL [2021] EWHC
866, a challenge to the HSS, Holgate J accepted for the sake of argument, but did not
determine, that POL was, at least for some purposes, a public authority, for the purposes
of analysing whether a “a public law element has been injected into the dispute” (§30).
However, he went on to find that there was no possible basis for argument that the HSS
had any public law character or engaged any principle of public law (§43). Notably, in
reaching this conclusion he found that any dispute that was not resolved under the HSS
°° This point was not raised in the Cleveleys (Wolstenholme) case study, but logically were CTI’s approach to be
right then it would apply equally to any civil recovery proceedings.
% This involved pressing for an early trial date in circumstances where the result would either be that Mr Castleton
would submit a late expert report, in which case POL could ask for the trial date to be vacated (and by implication
POL could then submit its own in response), or he would not submit any expert report, which was regarded by
Counsel as being beneficial to POL.
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would be resolved by the county court or arbitration “applying private law principles to
what remains throughout a private law dispute” (§42).
53. As for POL’s status as a “public corporation”,”’ not only is that a sectoral classification
operated by the Office of National Statistics* rather than a determinative indicator that
administrative law principles would have applied to civil litigation conducted by it, but
as set out above it is difficult to see why the conduct of civil litigation would have had
any public law character or engaged any principle of public law such that those
principles would have been engaged in any event.
54. POL notes that whilst Fraser J (as he then was) criticised very many aspects of POL’s
conduct of the GLO, and found in the CIJ that there were a number of implied terms in
the Postmasters’ contracts with POL which might arguably mean in some circumstances
that there ought to have been greater sharing of information by POL with the
Postmasters, at no time did he suggest that POL’s conduct in civil litigation fell to be
judged by any higher standard than that applicable to any other limited company,
irrespective of the identity and nature of its shareholder. Any conclusion by the Inquiry
that POL does fall to be judged by a higher standard would therefore not only be
inconsistent with the view of Holgate J and (impliedly) with the view of Fraser J, but
would have far wider ramifications than just for POL. It would affect the approach to
civil litigation required to be taken by every other “public corporation” or company
owned by the state. Indeed, taken to is logical conclusion it would also lead to a higher
standard applying every time a public body or authority is engaged in private law
litigation. This is because there is no reason of principle why a different approach
should be confined to cases where the public authority's participation in the litigation is
through owning or controlling an incorporated entity. There is no suggestion in
legislation, the Civil Procedure Rules or case law that a different standard should apply
to the public sector when engaging in private law litigation.
(4) CIVIL CASE STUDIES
a) __Cleveleys (Wolstenholme)
55. The Cleveleys case is an early example of allegations being made by a Postmaster that
defects in Horizon were causing loss. As such it is, understandably, of particular
interest to the Inquiry. POL accepts that it failed in a number of respects in the Cleveleys
case, which are considered below, and sincerely apologises to Mrs Kay (née
Wolstenholme) for these. In particular, it recognises and deeply regrets the impact its
handling of her suspension and ultimate termination of her contract had on her and her
family, both financially and, of course, psychologically.
*” As reflected on the Government website https://www.gov.uk/government/organisations/post-office
°8 See §6 of the Cabinet Office Guidance at
https://assets. publishing. service.gov.uk/media/5a74d700e5274a59fa7 15592/Classification-of-Public_Bodies-
Guidance-for-Departments.pdf
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56. Mrs Kay became Postmaster in the Cleveleys branch a few months before Horizon was
introduced.” She encountered early problems with Horizon and after several months
decided that she was no longer prepared to use Horizon at all until the problems were
sorted out. This situation led in due course to the suspension of her contract on 30
November 2000 and eventually to its termination.!” POL accepts that in suspending
and then terminating Mrs Kay’s appointment, POL failed to give full and proper
consideration to all matters that it should have; and also failed properly to investigate
the allegations relating to Horizon which were being made at that time. As well as its
actions being unfair to Mrs Kay, an early, and potentially valuable, opportunity to
identify issues with Horizon was thereby missed.
57. POL issued proceedings against Mrs Kay on 23 April 2001,'"' initially seeking only
delivery up of various pieces of equipment (or their value). Mrs Kay defended the claim
on various bases including that there was an implied term that the computer system
provided by POL would be fit for purpose which she said was not the case. No
particulars were pleaded either in the original or amended versions of the Defence.
58. Ina witness statement disclosed to Core Participants on 2 February 2024" Mrs Kay has
set out her recollection as to how her complaints about Horizon were dealt with at the
time, although that statement is necessarily untested.'° The most detailed evidence in
relation to such matters is set out in the call logs, which were provided to Mr Jason
Coyne, although some further detail appears in the draft letter that Mrs Kay has
estimated that her father wrote, but did not send, in January 2004.'"* It is submitted that
in all the circumstances the Inquiry cannot make any further findings in relation to that
evidence than Mr Coyne himself did at the time. This is considered further below.
59. The Inquiry is reminded of POL’s acceptance — as set out in its Closing Submissions for
Phase 3 and summarised above — that at the relevant time it had a mindset which
included firm beliefs that: issues which did arise with Horizon were always due to user
rather than system error; and there were no flaws in Horizon." Faced with a vague
and unparticularised case, of relatively low value, POL appears to have felt that there
was little incentive to look into matters particularly deeply. That is not either to criticise
Mrs Kay for the way she presented her case; and nor is it to excuse POL for the approach
which it took. But it is a relevant piece of context.
60. In Mrs Cottam’s witness statement, prepared for the purposes of the proceedings
against Mrs Kay,°° Mrs Cottam sought to give the impression that Mrs Kay’s complaints
® See para 5 of Julie Wolstenholme’s witness statement dated 10/11/03 in POL v Wolstenholme: POLOO118219 @
internal p.249
100 See Particulars of Claim in POL v Wolstenholme [POL00118218 @ p.5]
29! POL00118218 @ p.3
©2 WITN09020100, paras 9-15.
43 As CTI noted in his oral submissions on 2 February 2024. Nor was the content of that statement put to Ms
Oglesby or Elaine Cottam (née Tagg) when they gave evidence.
2° WITN09020114
185 POL’s Phase 3 Closing para 4
16 POL00118219 @ internal p.5
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evidenced operational misuse rather than faults with Horizon. Even if that was a
sincerely held view at the time, it was a serious omission not to have drawn the attention
of the Court to the entirety of the relevant call logs including, crucially, those which
showed Mrs Cottam herself conveying to the Helpdesk, on Mrs Kay’s behalf, allegations
which appeared on their face to allege defects in Horizon.
61. It was appropriate that expert evidence be sought and the Court sensibly directed that
the parties appoint a joint expert, Mr Coyne. Mr Coyne’s report"” is an important
document. It is, as he states in the covering letter, really just a “brief note’! based on
the information which he had been provided with, which he lists. Mr Coyne explains
in his witness statement for the Inquiry’ that he created an Excel spreadsheet,
“Analysis of the PO logs” which he exhibits to his statement for the Inquiry." The
various calls which Mrs Cottam was taken to by the Inquiry were included in that
document so that it appears that Mr Coyne was provided with the full suite of relevant
call logs, despite Mrs Cottam not drawing them to the attention of the Court herself.!"
62. Mr Coyne provided a brief summary of some of the evidence he had reviewed. He was
critical of aspects of Horizon’s performance and preferred Mrs Kay’s version of events
to POL’s. On the evidence before him he was obviously entitled to reach those
conclusions. However, he was not able to, and did not, conclude that any Horizon
malfunction had actually caused loss to Mrs Kay. He raised the possibility that that had
occurred but, rightly on the evidence before him, went no further. Again, no criticism
of Mr Coyne is intended. He acted properly. His views were carefully expressed and
he made it clear that he had reached provisional conclusions based on the limited
information made available to him and that further investigation and data would be
required if he was to arrive at a firmer view.
63. POL emphasises that in making these points it is not trying to distance itself from the
errors that were made or to suggest that Mr Coyne was mistaken. However, that
evidence was, as he acknowledged, limited, and while the Inquiry may well conclude
that POL should bear some share of responsibility for the fact that evidence was lacking,
it is submitted that the Inquiry should not proceed on the basis that it was proved at the
time, or has since been proved, that Mrs Kay’s losses were caused by bugs, errors or
107 WITN00210100 }@ p.20
109 F WitNooz10100 I @ para 44
10 W) 02
1 Reference to the call on 24 February 2000 which Mrs Cottam was taken to at T 7/11/23 [47:17 - 50:2] as
I WITN00210102 @ row 19: note that there are 2 entries on the spreadsheet for 24/2/00 but row 19 has
the same call ref (224009) as the document which Mrs Cottam was taken to by CTI;
Reference to the call on 31 March 2000 at 5.35 pm which Mrs Cottam was taken to at T 7/11/23 [50:3 — 54:2] as
i WITN00210102 @ row 39: again there are 2 entries but row 39 has the same call ref (3311342) as the
document which Mrs Cottam was taken to by CTI]; and
Reference to the call on 2 November 2000 which Mrs Cottam was taken to at T 7/11/23 [54:3 — 64:24] as FUJ00055145:
WITN00210102 @ row 83: note call ref (11021413) is the same as appears on the document to which Mrs Cottam
was taken by CTI under “ORIGREF” in “References” box. However, note that Mr Coyne gives the date of this as
7/11/00 and not 2/11/00 as appears on FUJ00055145, although there is another entry of 2/11/00 in Mr Coyne’s
spreadsheet — see row 85 in particular Column G “Blue screen reported by Elaine”
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defects in Horizon. POL was reliant on what it was told by Fujitsu and they made no
suggestion that the Cleveleys branch had been affected by bugs — in fact the evidence
suggests that Fujitsu was convinced that there were no such problems, albeit that that
conviction appears not to have been based, as it should have been, on a proper and
detailed analysis of the allegations made by Mrs Kay and underlying data.
64. The reaction to Mr Coyne’s report needs to be carefully considered — and it is important
not to confuse internal reactions (i.e. within POL and Fujitsu where it was reasonably
assumed that observations, although as we now know, inappropriate, were being
privately made) and external reactions (i.e. what was communicated to Mr Coyne and
Mrs Kay):
64.1. POL was concerned at Mr Coyne’s conclusions: Susanne Helliwell, POL’s
solicitor, recalled that both she and Mr Cruise of POL, then her primary contact at
POL, were shocked and surprised;!"
64.2. Mr Baines of POL wrote to Mr Lenton-Smith of Fujitsu on 5 February 2004"° and
asked Fujitsu to consider the report and, if Fujitsu did not agree, to suggest what
could be provided to Mr Coyne that might lead him to change his findings.
65. Fujitsu's response was set out in a Note which was appended to a letter from Mr Lenton-
Smith of Fujitsu to Mr Baines.'* The Note does not wrestle with the fundamental points
which Mrs Kay was alleging (albeit without being particularised in her pleaded case)
but instead focuses on explaining the function and objectives of the Helpdesk and on
setting out a comparison of Cleveleys with other branches. This approach was plainly
flawed.
66. Fujitsu’s Note was provided to Mr Coyne and he provided his response to it in an email
to Ms Helliwell dated 27 February 2004."° Mr Coyne was, understandably, not
persuaded to change any of his views.
67. Fujitsu’s internal view of matters is set out in a report dated 29 March 2004."'* Paragraph
3.0 sets out criticisms of Mr Coyne. A number of points arise from this report:
67.1. First, the criticism of Mr Coyne was unfair and inaccurate. Mr Coyne was
provided with limited information and reached valid views based on that
information. He made it clear that he required further information to arrive at
definitive views but none was provided. He should not have been the subject of
criticism, even internally;
67.2. It is unclear whether all of the detailed data really was unavailable. The Inquiry
has heard more general evidence which suggests that further data would or
should have been available and it may be that more strenuous and co-ordinated
efforts would have resulted in detailed data being uncovered (in addition to the
call logs) with the result that a more definitive account as to what had happened
12 T 26/7/23 [140:1-140:4]
14 PUJO0121512
115 FUJO0121535
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would have been revealed. That said, there is no evidence that those dealing with
the dispute at POL (or Fujitsu) either knew or suspected that additional data was
available.
68. POL recognised in light of these events that its position in the case was weak and
appears to have made a payment in of £25,000 which was not accepted by Mrs Kay.""”
POL then sought advice from counsel and Mr Brochwicz-Lewinski provided an Advice
dated 26 July 2004."* The Advice analyses why, on the evidence before him, he thought
POL’s case would fail.’ He also concluded that as a result of the computer evidence,
POL would be found not to have grounds for summary termination so that Mrs Kay
was entitled to three months’ notice of termination. He considered various other heads
of loss claimed by Mrs Kay and concluded that they probably would not succeed.
Following receipt of that Advice, the case settled, shortly before the trial was due to
commence. '” The terms of that settlement have not been located.!71
69. Insummary, it is submitted that the following points can fairly be made:
69.1. When Mrs Kay first raised her concerns and complaints about Horizon i.e. when
she was still in post, POL and Fujitsu missed an early opportunity properly and
fully to investigate the allegations that she made, and failed to take all relevant
matters into account when deciding to suspend her;
69.2. Fujitsu, for its part, failed to consider all that Mrs Kay had said or to consider what
it knew generally about various issues with Horizon which might have been
highly relevant to her situation;!
4” Note that in May 2004, an internal POL IT Risk Register assessed the risk of "Damage to reputation of Post Office
and potential future financial losses if PO loses court case relating to reliability of Horizon accounting data at Cleveleys
Branch Office" at £1 million. [POL00120833). This risk assessment was escalated to David J Mills, POL's CEO, who
attended a meeting of the "IT Commercial Team" where this risk was raised, and requested further information,
including on who at POL was instructing lawyers in this case (POL00158493).
1@ para 17
120 To the extent the Inquiry is interested in the source of instructions in this case, we note from the documents
identified and produced by POL that:
- The liaison between POL Legal (Jim Cruise and Mandy Talbot) and Agents Debt team appears to have mostly
been conducted by Carol King (Branch Control and Conformance Manager) £
- The approval for the settlement was sought and obtained from Jennifer Robson (Debt Recovery Section Manager)
and Victoria Noble (Head of Transaction Processing) + POL00142492, POLO0158488]
- The case appears to have been flagged to David J Mills, POL's Chief Executive [POL0158493] and to Rod Ismay,
Tony Marsh and Tony Utting [POL0142483, POL00158510, fp POL00158511, POL00158512]
121 It is noted that in a presentation given by Dave Smith of years later [the presentation is undated but
it states - POL00090575 @ p4 - that it was being delivered shortly before Mr Smith left POL and that was in March
2010 - see WITN05290100 @ para 9], he reported that the case had settled for “£187.5k (cost included)” [POL00090575
@ p.5]. It is possible that that is the correct amount (and it is accepted that this currently appears to be the only
evidence available of the actual level of settlement) but equally this is very much higher than the sort of sums being
referred to by Mr Brochwicz-Lewinski, and it is striking that this is the amount which Mrs Kay apparently said she
wanted in April 2004: [FUJ00121602 - email dated 6 April 2004 from Mr Cruise to Mr Holmes] it is of course
possible that she held out for that full sum but it is submitted that it is more likely that settlement was arrived at
somewhere between that figure and POL’s payment in amount of £25,000, and that Mr Smith’s figure was incorrect.
Mrs Kay does not include this information in her witness statement of June 2023.
122 T 28/7/23 [8:15 - 8:24]
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69.3. Had these matters been investigated at that stage, it is possible that a more
definitive answer would have been obtained about what was happening at the
Cleveleys branch — and whether there really was a problem with Horizon;
69.4. Similarly during the course of the proceedings and in particular when POL and
Fujitsu received Mr Coyne’s report, there was another opportunity for some
thorough investigation to take place. A further opportunity was missed;
69.5. All of that said, it is submitted that, save in two respects, POL’s conduct of the
litigation itself was conventional and proper. Mrs Kay advanced a case which was
essentially unparticularised and which POL genuinely believed was
misconceived. POL was reliant on Fujitsu telling it if there really were problems
with Horizon and Fujitsu said quite the reverse.
69.6. The two respects in which the litigation was not conducted appropriately are that:
(a) Mrs Cottam’s witness statement plainly should have exhibited and considered
all relevant calls including those made by Mrs Cottam herself; and (b) the heavy-
handed attempt to persuade Mr Coyne to change his views, particularly on a
flawed basis.
69.7. Once it became clear that Mr Coyne was (quite reasonably) not going to change
his views, it was obvious that POL was going to lose the case, so that it became
sensible to settle it on the best available terms. However, that did not mean that
POL realised that Mrs Kay’s allegations were true, only that there was insufficient
evidence to contradict them. The distinction is important.
70. Within POL there was a level of anxiety about this case and a concern that an adverse
judgment would or might set a precedent which would be detrimental to POL’s
commercial interests. In itself, such a concern was not improper but importantly it
should not have prevented a proper investigation from being carried out.
b) Marine Drive (Castleton
71. Before turning to the details of its submissions, POL also wishes to apologise to Mr
Castleton. POL is profoundly sorry for the impact its conduct had (and continues to
have) on Mr Castleton and his family. The injustice Mr Castleton endured was both the
result of systematic failures but also the decisions of individuals employed by POL. POL
does not need the benefit of hindsight to make these admissions: POL should have dealt
with his case differently at the time.
72. The Inquiry has heard from many witnesses who had a part to play in the overall story.
Many were doing their job conscientiously and should not be criticised. Others could or
should have ensured that POL paused from time to time and reflected on what was
being done and why. The Inquiry is invited to distinguish between these two groups.
73. Many aspects of POL’s treatment of Mr Castleton prior to his termination were deeply
regrettable:
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73.1. Mr Castleton reached out and made many calls, 2° he requested an audit to try to
uncover the root cause,!4 and it was obvious from the start (which POL has always
recognised) that he was honest. Mr Castleton’s experience with the Horizon
Systems Helpdesk (‘HSH’) was woeful: no Postmaster should have to have been
as persistent as he was. That alone should have marked Mr Castleton out as
someone who deserved thorough and considered assistance;
73.2. An analysis of the call logs'® reveals that the HSH team were keen to close calls
and pass matters back to NBSC: the logs suggest a refusal to countenance the
possibility that there had been a software or hardware failure;
73.3. Catherine Oglesby made significant attempts to assist (and in POL’s submission
the Inquiry should be slow to criticise her) but it is accepted that these were not
sufficient to bottom out an explanation of the events in Mr Castleton’s branch;!?°
73.4. The audit Mr Castleton requested did not (and nor was it intended to) consider
the adequacy of Horizon either in the branch or generally. Worse, the standard
checklist — which contained standard potential criticisms such as leaving the safe
open — was, in the subsequent proceedings, wrongly treated, at least initially, as
applying to the Marine Drive branch;!””
73.5. The decisions to suspend, and then terminate, Mr Castleton’s appointment were
consistent with POL’s mindset and policies at the time.8 The more fundamental
issue is whether POL should have allowed the underlying situation to arise;
73.6. Anne Chambers commented in her “Afterthoughts” on the Castleton case!” that
there was a failure to carry out a full technical review of all the evidence before
proceedings were commenced. That is a fair criticism;
73.7. POL accepts with hindsight that it should have gone much further in trying to
determine what was actually going on before taking any decision about
suspension or termination.
74. POL’s conduct during civil proceedings contained many regrettable elements:
74.1. It remains unclear as to which individual actually took the decision to issue
proceedings against Mr Castleton.'° The case ought to have been looked at by
"23 In his witness statement he states that he made 91 calls over 12 weeks: WITN03730100, page 2, paragraph 17.
POL does not dispute that figure.
124 John Jones had never before come across a situation where it was the Postmaster who was asking for an audit
to be carried out T 29/9/23 [15:2 — 15:8]
5 POL00082560, electronic pages 3 to 11 (printed pages 2406 to 2414). POL00074476.
126 POL submits that neither Ms Oglesby nor Mr Jones should be singled out for criticism for their decision to
suspend and ultimately terminate Mr Castleton’s contract once it is placed in its full context. They were confronted
with growing losses with no known cause and Mr Castleton had declined to fully follow Ms Oglesby’s suggestions
as to how to eliminate possible causes: POL, however, accepts that Ms Oglesby erred when she removed
documents without creating a ledger of those documents removed. However, that was as much a fault of POL for
failing to have a policy to deal with evidence during investigations as it was Ms Oglesby’s error.
12” This failure was never fully explained at the Inquiry either by Helen Rose (whose evidence it was) or Stephen
Dilley (who ought to have picked the point up at least by the time of Helen Rose’s second witness statement).
"28 Which is to explain the actions of the individuals concerned but not to excuse the relevant policies at a corporate
level
29 FUJO0152299
80 Mandy Talbot's suggestion seemed to be that proceedings were issued on a “business as usual” basis and there
is no evidence of any careful consideration being given before this important decision was taken. T 28/9/23 [35:3 —
36:10]
29
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someone with proper knowledge and understanding of the history of the branch
and of Mr Castleton’s attempts to get matters resolved; and the possibility of
arriving at a collaborative solution before launching formal proceedings ought to
have been explored. This not only reveals a failure of governance on POL’s part
but a failure fully to document and assess the merits and impacts of civil recovery;
74.2. POL should also at least have considered the impact on Mr Castleton and his
family and continued to do so on an ongoing basis. Mandy Talbot's evidence
suggests that no consideration was given to this at all, either in this case or in
general.!! This was a serious failure and POL would emphasise that this is not
part of its culture now;
74.3. Itis unclear whether the clear view of Mr Morgan KC and Mr Dilley — namely that
in light of the approach being taken, the case against Mr Castleton would not set
any precedent about the reliability of the Horizon system as a whole — was
communicated or understood by those in POL who were following the progress
of the case. However, given the way that the case was explained to the court,
POL/’s in-house lawyers ought to have had no difficulty in understanding that this
was in truth not a trial about the robustness of the overall Horizon system;
74.4. The proposal that Mr Castleton declare his confidence in Horizon as part of any
settlement was unenforceable and high handed given that POL were not seeking
such a declaration from the courts;
74.5. Despite this, there can be no doubt that the case was seen as acquiring a greater
importance in POL than was merited in the circumstances. It seems likely that
executives at POL were not carrying out a close analysis of the issues but were
taking a broader brush approach which focused more on the message that could
be worked up and communicated to the wider community of Postmasters;
74.6. These substantial errors of judgement betray a lack of experience, compassion and
insight on the part of those undertaking the litigation on behalf of POL. There was
a clear governance failure.
75. Notwithstanding these substantial criticisms, POL submits that there are some
contextual points for the Inquiry to consider when drawing the most accurate lessons:
75.1. Mr Castleton was legally represented for the majority of the proceedings — it was
only on or about 20 November 2006 that he started acting in person,’” by which
stage the trial was only a few weeks away. The Inquiry has not heard from Mr
Castleton’s own lawyers or seen what advice they gave him. It has to be assumed
that he received robust and frank advice about the merits of his ambitious
counterclaim, initially put at £250,000. It was this counterclaim which raised the
stakes that elevated the status of the claim out of the auspices of a simple debt
claim before the County Court;
75.2. Although POL could and should have paused before issuing proceedings, there
is nothing inherently objectionable about pursuing a debt in the circumstances
that POL, a custodian of public money, believed to exist. Mr Castleton’s
successors had run the branch without issue. Mr Jones concluded that there was
131 T 28/9/23 [90:24 — 91:7]
‘2 Stephen Dilley’s ws WITN04660100 @ para 288
30
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no more that he could investigate and that Mr Castleton had not implemented
some of the recommendations made to him by Catherine Oglesby;'*
75.3. Similarly, there is nothing inherently objectionable in principle about fighting an
appropriate case as a test case robustly to deter meritless cases later on;!**
75.4. At the outset, the claim amounted to litigation for a 5-figure sum intended for the
County Court which was commenced many years before the Justice for
Postmasters Alliance was formed or the GLO instigated —this started as a ‘bread
and butter’ claim;
75.5. It is also clear that POL made real efforts to arrive at a settlement with Mr
Castleton — at one point it even seemed that the parties had reached an agreement
although Mr Castleton ultimately declined to sign off on that.'%>
76. Anumber of potential criticisms were advanced against the representatives of POL:
76.1. It was suggested to Mr Dilley that POL ought to have provided more extensive
disclosure. The Inquiry is invited to be careful not to judge matters by reference
to what is now known about the problems in Horizon. POL faced an
unparticularised case — even after Mr Castleton had provided some Further and
Better Particulars — and was under an obligation to keep costs proportionate.
Further, Mr Castleton was legally represented when disclosure was carried out: if
Mr Castleton’s lawyers had had concerns about the scope of disclosure then they
could and should have issued an application for specific disclosure. It has also to
be borne in mind that Mr Castleton’s pleaded case stated that he was able to prove
that Horizon was not working properly from the material already available to
him, by “a manual reconciliation of the figures contained within [the balance snapshot
documents created by the Defendant during the course of his tenure] that the apparent
shortfalls are nothing more than accounting errors arising from the operation of the
Horizon system”;
76.2. A suggestion was made to Mr Morgan that he should have understood that Mr
Castleton disavowed the accounts he signed and that he only signed them so that
he could proceed with the next day’s trading. But that was not how Mr Morgan
understood how Mr Castleton’s case was pleaded and nor, it is clear, did the
Judge;
76.3. Potential criticisms were advanced regarding procedural claims run by POL;
specifically, the decision to retain the December 2006 trial date if possible so that
the pressure was kept up on Mr Castleton. These were legitimate and
commonplace decisions in the context of civil litigation; and
76.4. Mr Morgan rightly identified at the time that it would be a considerable challenge
for POL to prove that there was nothing wrong with Horizon: as well as the
conceptual difficulty of proving a negative, the scale of Horizon meant that that
was not a realistic aim for a modest debt-recovery action. He saw, however, that
it was not necessary to run such a case since Mr Castleton expressly avowed the
288 T 29/9/23 [32:1 — 32:17]
‘31 Where such a strategy becomes problematic is where, as here, sight is lost on the personal impact of the
defendant (in this case Mr Castleton), where the importance of being seen to “win” trumps all other considerations
or where, also as in this case, it becomes clear that the case is not actually going to be a test case at all.
85 Stephen Dilley’s witness statement WITN04660100 @ para 255
31
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accounts he had signed and that was sufficient for POL’s purposes. The case was
fought and won on that basis.
77. Against that background, it is submitted that the Inquiry should be slow to criticise any
of the external lawyers involved in the Castleton litigation. Both Stephen Dilley and
Richard Morgan KC provided long and detailed witness statements and provided full
accounts of the decisions which they took. They had a job to do and they did it in
accordance with their instructions and the relevant rules. Both of them robustly advised
POL of prospects of recovery, the scope of the case and the risks involved. Any decision
to continue litigation rests with POL alone.
78. Anne Chambers’ evidence was important. Although the case did not hinge on whether
Horizon was reliable, Mr Castleton criticised its reliability.
78.1. Mrs Chambers gave careful and thorough evidence before the Inquiry. She made
some serious criticisms of POL and Fujitsu and was clearly not taking any party
line, either in her evidence at the trial or the Inquiry. She explained how she had
investigated matters: carefully in 2004; again more thoroughly in preparation for
the trial in 2006; and yet again in preparation for giving evidence to the Inquiry.
Despite all this effort over a period of almost 20 years, she was unable to identify
any specific problem with Horizon at Mr Castleton’s branch:'* and said that if
there was an error in Horizon it is one that “left no evidence and that nobody has ever
found...if there could even be such an error” !37;
78.2. Mrs Chambers wrote an internal Fujitsu memo dated 29 January 2007 which set
out her “Afterthoughts on the Castleton Case”.!* She made important and
justified observations and criticisms of the process she had experienced. Those
criticisms were principally directed at Fujitsu but it seems that the only response
from Mrs Chambers’ superiors in Fujitsu was that Mrs Chambers was given a “pat
on the head”'5* by Fujitsu’s Security Manager, Brian Pinder:" there is no evidence
that the recommendations were widely discussed internally at Fujitsu - still less
actioned — or shared with POL. Had they been, there is a chance that changes
would have been made.
79. Following the judgment, POL should not have treated the Castleton decision as though
it proved that Horizon was problem-free. There was no expert evidence in the case and
it was not the basis on which the case was pleaded or fought.
80. However, once judgment had been obtained against Mr Castleton, POL took the
ordinary steps that any successful litigant is likely to take in order to obtain the amounts
which had been ordered to be paid. These actions, in principle, should not be the subject
of criticism since any successful litigant is entitled to seek recovery of the amounts
136 T 27/9/23 [148:7 — 150:17]
187 T 27/9/23 [150:15 — 150:17]
138 FUJ00152299
18° T 27/9/23 [90:8 — 90:10] - the phrase was CTI’s but Mrs Chambers agreed with it
40 FUJO0152300
32
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ordered to be paid. That said, it is accepted that in the circumstances of this case POL
could and should again have reflected on whether it was appropriate to seek a full
recovery.
Conclusion
81. Overall, there are significant lessons to be learned from the Castleton case but the
Inquiry must be astute to the limits of the findings which can be made and of the nature
of those lessons.
82. POL accepts that:
82.1. POL should have made a greater effort at the outset to determine the underlying
cause of the discrepancies in the branch and been supportive and transparent
about potential issues, including the possibility of errors in Horizon;
82.2. Instead of resolving the matter fully and certainly, POL limited its efforts to
proving the narrow point that there was no specific evidence that the Horizon
operations in Mr Castleton’s branch were not at fault. POL failed to take an
appropriate and similar interest in finding out what was actually going wrong at
the branch;
82.3. POL pursued the litigation (including after judgment had been obtained) with a
level of aggression which was disproportionate to the sums at stake and which
disregarded the effect of the litigation on Mr Castleton and his family. However,
the Inquiry cannot conclude that there was a bug, error or defect in the Marine
Drive branch. There is no evidence to that effect — indeed Mrs Chambers suggests
that that was not the case. Similarly, the Inquiry cannot conclude that the case
was wrongly decided by the Judge at the time. A perfectly understandable and
proper legal approach to proving POL’s loss was taken and was not challenged
by Mr Castleton;
82.4. Having taken the case to trial and judgment, neither Fujitsu nor POL learned the
lessons which they should have from the overall experience. Mrs Chambers’
careful “Afterthoughts” document should have been discussed and actioned
within Fujitsu, who in turn should have shared those lessons with POL.
(c) Broader governance issues
83. The Cleveleys and Marine Drive case studies also provide some insight into broader
governance issues at POL in relation to civil litigation and its emerging understanding
of Horizon issues.
84. The cases are directly linked by Mandy Talbot whose job title during the relevant period
was “Litigation Team Leader” or “Principal Lawyer”, although she sought to
characterise her role as being “just a case worker”. She was not involved in the decision
to bring proceedings in either case, but once involved she appears to have been central
to the instructions being given. In particular,
84.1. In the Cleveleys case:
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84.1.1. Ms Talbot was recorded in 2004 as having wanted to ‘throw money’ at Mrs
Kay, to keep Mr Coyne’s expert report out of the public domain if possible,
and to "keep [Mrs Kay’s] mouth shut";
84.1.2. When seeking advice on evidence and quantum POL’s instructions had
asked counsel to take into account the fact that POL was anxious for Mr
Coyne’s report “to be given as little publicity as possible”. In her evidence to
the Inquiry Ms Talbot sought to suggest that neither she nor POL had
anything to hide from public view, and that she may have wanted the
report to be given little publicity to avoid affecting the relationship
between POL and Fujitsu. POL recognises that the Inquiry may find this
suggestion unconvincing.
84.2. In the Marine Drive case:
84.2.1. Ms Talbot became involved from October 2005 as a recipient of a summary
of the case from Mr Dilley. Soon afterwards she spoke to Mr Dilley and
asked why Bond Pearce had issued the claim when reliability was
unclear.'*!
84.2.2. Around the same time she emailed her line manager (Clare Wardle), Head
of Commercial (and possibly acting Head of Legal) (Nicky Sherrott) and
other employees noting that “if the Horizon evidence is not up to the job this
will have serious ramifications for the business”.
84.2.3. In her evidence to the Inquiry she denied that her concern was the
adequacy / reliability of Horizon, and denied that her concern was based
on her experience in the Wolstenholme case. She refused to accept any
connection between the Wolstenholme and Castleton cases, and never
mentioned Wolstenholme to the external solicitors acting for POL in
Castleton or to the counsel instructed by them, despite ‘the integrity of the
Fujitsu product generally’ being raised as an issue. Moreover, she denied
that her approach to the Castleton case was influenced by the
Wolstenholme case despite having queried why external solicitors had
issued the claim “when reliability was unclear”. Again, POL recognises that
the Inquiry may find these suggestions unconvincing.
84.2.4. In any event, Mr Dilley’s summary of the case, and Ms Talbot's response,
were subsequently escalated to Dave Hulbert and Keith Baines." There
is currently no evidence as to what, if anything, they did as a result.
84.2.5. On 23 November 2005 she emailed a series of senior people, including
David X Smith (POL Head of IT), Jennifer Robson (Debt Recovery Section
Manager), Tony Utting, Rod Ismay and Clare Wardle (Head of Civil
Litigation), with the title “Challenge to Horizon”. In that email she
summarised the facts in the Marine Drive case, and set out Mr Bajaj’s
“1 POL00070574
22 POL0107423
“8 Service Manager, Ops Control
“4 Fujitsu Contracts Manager.
45 This document was not put to Ms Talbot as it was disclosed by POL in October 2023 as part of a disclosure
assurance exercise, shortly after she gave evidence.
34
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challenge to the validity of Horizon data, which had included him writing
an article in The Sub Postmaster November 2005 edition in which he
sought information from other postmasters in a similar situation (and his
solicitors had indicated that a class action was possible). She stated that if
the challenge was not met “the ability of POL to rely on Horizon for data will
be compromised and the future prosperity of the network compromised”, and
suggested that POL/Fujitsu should (among other things) “investigate and
identify whether or not they do hold any data upon the number of complaints made
by postmasters about the Horizon system since inception and whether or not it
can be broken down into statistics about valid problems / resolutions / errors by
postmasters”.
84.2.6. As a result of that email, and discussion at a meeting called by David X
Smith on 25 November 2005, a workshop was organised for 6 December
2005 whose attendees included Keith Baines (Fujitsu Contract Manager),
Ms Talbot, Marie Cockett and Graham Ward, as well as other senior
managers." The actions arising from the workshop included the
recording and co-ordination of the number and nature of challenges to
Horizon, and to consider the appointment of an independent expert to
report on both Horizon’s generic reliability and on individual challenges
that were made, and for David X Smith to be briefed on the meeting’s
recommendations.
84.2.7. In April 2006 Ms Talbot expressed her view to Mr Dilley that if POL were
seen to compromise on Marine Drive “the whole system will come crashing
down”, and noted that Mr Castleton was speaking to Mr Bajaj, such that
POL’s “clear line to industry must be that we are taking a firm line with
Castleton”.47
84.2.8. Ms Talbot denied having been the origin of the strategy and instructions
in the Castleton case, but was unable to identify any other individual who
might have given her those instructions, particularly on the need to send a
message to the industry.
85. The significance of the contemporaneous evidence, and in particular the 2005 workshop,
is that there appears to have been a much more co-ordinated understanding and
approach to cases involving challenges to Horizon than had previously been
understood to be the case. Whilst Ms Talbot was clearly a key part of POL’s approach,
the strategy appears to have been led by more senior employees within POL (including
in particular Mr Smith, Mr Hulbert and Mr Baines). Based on the evidence currently
before the Inquiry it does not appear that these issues were raised at Board (or any
executive group below Board) level, but that will obviously be an issue of considerable
importance in Phase 5/6.
46 POL00119895.
“7 POL00072669
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(5) ARQDATA
86. One of Fraser J’s findings in the HIJ was that POL should use ARQ data instead of POL
management data," and it is implicit in his findings that he considered ARQ data to be
a more reliable data set.” The evidence heard by the Inquiry suggests that ARQ data
was not as reliable as Fraser J (and POL) believed. The Inquiry will be deeply concerned
about the issues which emerged regarding ARQ data. POL shares those concerns.
87. John Simpkins, a Fujitsu Team Leader in the Software Support Centre (“SSC”),
explained that ARQ data was filtered from the full Message Store that was available to
Fujitsu.' Fujitsu had access to the raw Message Store’! and Mr Simpkins’ evidence
was that it was unwise to base conclusions as to the health and integrity of the data that
Horizon had produced based only on filtered ARQ data (i.e. the only data which was
made available to POL), and that he would not have been prepared to draw
conclusions without access to the raw Message Store.'°>
88. POL did not have access to Message Store — nor to the Known Error Log,’ which might
have provided POL with much greater insight into the true state of the Horizon
software. The only way in which Fujitsu communicated some information about bugs,
errors and defects to POL was through the Service Management Portal and any reports
that were provided through that route.’ The Inquiry has not heard any evidence that
POL was told about any of the issues about ARQ data through this route.
89. Despite Fujitsu’s clear understanding of the limitations of the ARQ data, it seems that
no attempt was made to share this information with POL. As far as Mr Simpkins is
concerned, no one in the SSC was asked to provide advice — even within Fujitsu - as to
the range of data available and which therefore ought to be presented for the purposes
of civil or criminal investigations, and to his knowledge no-one in Fujitsu ever
explained the limitations of the data that was being provided to POL.’ From the
evidence which the Inquiry has so far heard, it seems that there was a complete
disconnect between those in Fujitsu who were supplying the ARQ data to POL, and
those in Fujitsu who understood the limitations of that data: if the two groups were
completely separate (which seems, at the very least, unlikely) one would have thought
that the need for communication between them would have been all the more obvious.
M8 HIJ para 286
4 Note that the experts in the case appeared to understand that ARQ data could be filtered (since they
distinguished between “full audit data” and “unfiltered ARQ Data”) - see eg HIJ para 687, 3“ Joint Statement, para
4~although this is not a distinction with Fraser J appears to have considered in detail
150 T 17/1/24 [16:13-17:9]: note that there was a suggestion made to Mr Simpkins that the data had been
“manipulated”: there is no evidence that the date was changed, however, so that it is submitted that “filtered” is
the better term
517 17/1/24 [37:6 — 39:16]
182 T 17/1/24 [39:19 — 40:2]
153 T 17/1/24 [42:23 — 43:6]
184 T 17/1/24 [28:13 — 28:15]
18 T 17/1/24 [29:4 — 30:13]
+56 T 17/1/24 [44:20 — 45:3]
187 T 17/1/24 [48:11 — 48:14]
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90. In fact it seems that the contradictions inherent in Fujitsu’s position (i.e. knowing, at
least on a corporate level, that filtered ARQ data was not a sufficient basis for final
conclusions to be reached; and that Fujitsu was fully aware of that fact but POL were
not) at no stage caused anyone at Fujitsu to pause and look either to improve the
situation or, at the very least, to inform POL of it.!5*
91. In fact, the situation was significantly worse than that since there is evidence that Fujitsu
took positive steps to conceal relevant matters from POL. This emerged most clearly in
the evidence from Peter Sewell who from 2007 to 2009 was the Operations Team
Manager within the Security Team, overseeing Penny Thomas, Andy Dunks and Neneh
Lowther.!?
92. Mr Sewell occupied a senior role within the security team and was involved in many
important communications. In his evidence before the Inquiry, however, he sought,
unconvincingly, to downplay the role that he had played. For example,’ although he
was at pains to claim otherwise,'*' the contemporaneous documents make it clear that
he was involved in considering and advising on the draft witness statements which
were being prepared (both by Penny Thomas and Andy Dunks) in 2005-2006. This
included an important discussion concerning whether it could properly be said in a
template witness statement that none of the calls made by the Postmaster would have
had an effect on the integrity of the information held on the system — obviously a central
element to the evidence to be provided. None of the — understandable — reservations
being expressed by Fujitsu personnel were communicated to POL.
93. Even when Fujitsu did make some relevant communication with POL, there is evidence
that it was not full and frank. Fujitsu identified an issue relating to the unreliability of
the EPOSS code in late 2007 which resulted in a branch trading statement showing a
discrepancy: an issue referred to by Mr Patterson as the Riposte Lock Event.’ The
relevant Peak was PC0152376'® and was dated from 20 December 2007. On 2 January
2008 Gerald Barnes had noted within the Peak that “The fact that EPOSS code is not
resilient to errors is endemic” but in his view there was “little point fixing it in this one
particular case because there will be many others to catch you out”.1*
94, Fujitsu allowed this serious issue to rumble on for many months. A meeting was held
in relation to it in August 2008" and Mik Peach reported on 11 August 2008 that the
issue was occurring 35 times per week and that 1820 events were known to have caused
a discrepancy.’ It would seem that Fujitsu carried out a significant amount of work in
18 T 17/1/25 [75: 12 — 76:19]
+ Peter Sewell’s witness statement: WITN09710100 @ para 11 & para 32
+60 FUJO0122151
tt T 18/1/24 [24 :4— 31:15]
182 WITN06650330 @ paras 75-116: Fujitsu’s (William Patterson’s) third witness statement
463 FUJ00155231 @ p.4
tet FUJ00155231 @ p.7
+65 FUJ00155231 @ p.1
‘66 FUJ00155231 @ p.3
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relation to the issue: nevertheless, Mr Sewell accepted that the fact that it was reported
to him that the issue caused no financial impact “in the vast majority of cases” was not
satisfactory 1°
95. Internally, in a Change Proposal document dated 13 October 2008, ' Fujitsu was clear
that the solution being adopted (of manual checking) was unsatisfactory since, amongst
other things, it was error prone and time consuming. It also invalidated “certain
statements made within the current witness statement”, although there is no evidence that
that was acted upon by Fujitsu. The document was not intended to be seen by POL.”
96. The communication that was eventually sent to POL in January 2009'7! was incomplete
and inaccurate. Instead of being told the true situation, namely that there had been a
widespread and long-standing problem which potentially undermined the reliability
and accuracy of evidence that had been given, POL was told that there had been an
isolated occurrence in December 2007, that the resulting financial imbalance had been
corrected, and a software correction applied across the estate in November 2008. This
was a seriously misleading account of the seriousness and extent of the problem; even
Mr Sewell seemed to accept that,'” as did Mr Patterson.'”°
(6) ‘REMOTE ACCESS’
97. The Inquiry has heard evidence about ‘remote access’ both in Phase 4 and in earlier
Phases. It seems likely that further evidence on the topic will be heard in subsequent
Phases as well. It is therefore all the more important to be clear before the start of Phase
5/6 about what that concept actually means in this context.
98. Access to data using remote means in order to view that data is uncontroversial. It is
the ability to change that data remotely which is key. Further, it is crucial to distinguish
between an ability to change data and balances in a Postmaster’s accounts with and
without the knowledge of the Postmaster. Fujitsu and POL always knew that Fujitsu
could change information in a Postmaster’s accounts with the Postmaster’s
knowledge since that was frequently done e.g. by Transaction Corrections, which the
Postmaster was required to accept.
99. Inthe light of the HIJ it is now clear that, from the outset of the Horizon contract, Fujitsu
had the ability to change data in branch accounts without the Postmaster’s
+67 FUJO0155263
168 T 18/1/24 [60:25 — 63 :2]
46° FUJO0155272
170 T 18/1/24 [72:4 — 72 :8]
17. FUJ00155399
1 T 18/1/24 [108 :23 — 109 :16]
1% T 19/1/24 [81 :17 — 82 :8]
38
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knowledge.’ It is equally clear that POL never had any such ability: Mr Simpkins
accepted that that was the case.!7
100. The way in which it became apparent that Fujitsu had this ability emerged during the
HIT and is set out in some detail in the HJJ, in particular in relation to Steve Parker's
evidence. During Phase 5, the Inquiry may want to gain a better understanding of the
unsatisfactory way in which that evidence emerged and of whether and if so what steps
Fujitsu took properly to explain the true situation to POL.
101. The remaining question is therefore when POL knew that Fujitsu could change
information in Postmasters’ accounts without their knowledge (and, implicitly, without
any such changes always being recorded and auditable).
102. It is apparent from Fujitsu’s document, Customer Service Operational Change
Procedure, dated 18 March 2004,!” which was sent to John Bruce of POL, that at least
some individuals within POL were aware from at least 2004 that Fujitsu would in
principle be able to correct customer data on the live system, and because user data was
involved, if the data to be changed had a financial impact on POL then approval had to
be given by a senior POL manager (and Fujitsu’s policies contained procedures to limit
and record any such). The understanding within POL was that in such circumstances
the Postmaster would be aware of the correction.
103. The earliest contemporaneous document that the Inquiry has considered dates from
November 2010!” in which a POL employee (Lynne Hobbs) emailed Mike Granville
(Head of Regulatory Strategy) and Rod Ismay (subsequently also sent to John Breeden
(National Contract Manager North) in December 2010) in which she said:
“I found out this week that Fujitsu can actually put an entry into a branch account remotely. It
came up when we were exploring solutions around a problem generated by the system following
migration to HNG-X.”
104. It is, of course possible that IT personnel within POL knew of this facility earlier (and
indeed Anne Chambers’ evidence was that some POL personnel may have known of it
as at December 2007).'* For completeness, it should be noted that there is also a
4 HIJ para 534
5 T 17/1/24 [92:9 - 93:7] POL is of course aware of the article in The Times on 15 January 2024 entitled “Post Office
could change accounts remotely, claims whistleblower”. In principle this would concern a different type of remote
access, i.e. the potential for the misuse of a Postmaster’s user ID and password which had been provided to them
previously by the Postmaster for a helpdesk operative to make the changes to live accounts. In this situation then
the helpdesk operative would only have been able to make the same changes as the Postmaster not the same type
of changes which Fujitsu were capable of making. Moreover, POL is not aware of any case in which a Postmaster
was convicted in which a Postmaster raised the fact that they had previously provided their user ID and password
to a helpdesk operative. In the event that more information is provided to POL as to the nature of this allegation it
would, of course, consider it further.
> POL00029282
177 The email chain is POL00088956
8 T 3/5/23 [33:23 - 34:14]
39
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reference in an email dated 23 October 2008!” from Andrew Winn of POL to Alan
Lusher, also of POL, to Fujitsu’s ability to impact branch records “via the message store”
but this is said to have been subject to “extremely rigorous procedures in place to prevent
adjustments being made without prior authorisation — within POL and Fujitsu”.
105. However, as set out in the HIJ, Paula Vennells was told as late as 30 January 2015 by
members of her senior team that neither POL nor Fujitsu was able to edit transaction
data without the knowledge of a Postmaster,’® and this understanding appears to have
remained in place up until pre-action correspondence exchanged for the purposes of the
GLO. It is anticipated that during subsequent Phases, the Inquiry is likely to want to
investigate how this situation came about and who in POL and/or Fujitsu was
responsible for providing this erroneous information.
7° POL00029710
‘8° HIJ para 522
40