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IN THE POST OFFICE HORIZON IT I
IRY
INQUIRY CLOSING SUBMISSIONS (HUDGELL CP GROUP)
9 DECEMBER 2024
Table of Contents
Introduction..........csserssorssrsesccsscsscsssnssrsorssrscssonsosscssonsoesessonssssscsssessssossoscosensnees 2
Investigations and Prosecutions ........:sssccccccccsssssssseseeseeeserseteessesssnsesssnssssssessscsseseees O
A Robust Defence.........sescesseessreereeeeees
Regulated Legal Professionals ..........::ccccccccsccscccsessessssssssesssesesssssescessessesssssesesseres 48
76
Management, Governance and Oversight ..
Redress, Restorative Justice and Rebuilding Trust
Where Are We Now? ......seccesscesereessceesecenscensesenscssaeestscesteserseecssserscessssessesesseersceas 96
1 INTRODUCTION
1.2 These submissions are prepared on behalf of all of the CPs represented by Hudgell Solicitors
throughout the Inquiry. We are grateful for the opportunity to make these submissions in
writing. ' They are intended to be read together as a whole with our existing submissions made
in opening the Inquiry and at the Closing of Phases 2, 3 and 4.
1.3. This Inquiry is about the public interest. It is the latest step in a long, long search for justice. A
search for justice that began as a campaign under the banner Justice for Subpostmasters. A
group of people came together to put right a terrible wrong perpetrated against them by the Post
Office, a wholly State-owned institution. People who were first brought together by someone
who would not give up and who could not move on. The campaign - in the way that campaigns
are wont to do - ran on for years.
1.4 The campaign for justice was hard fought. Some really could not afford the petrol to Fenny
Compton. They endured.
1.5. There was help along the way. For some from family and friends who stood strong, ill-believing
the Post Office branded truth. For those in the JFSA and the 555, there was a close band of
supporters. There were accountants and lawyers and journalists who believed in the SPMs
I These submissions adopt acronyms familiar to the Inquiry unless otherwise designated (¢.g, POL for Post Office
Limited), Throughout “the Department” refers to the sponsoring Department for Post Office, regardless of changing
names throughout the relevant period.
17
1.8
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cause during those years in the wilderness. Some of those have attended at the Inquiry or have
given evidence.
However, at the heart of this Inquiry are the people whose lives have been unbearably altered
by the scandal.
The impact of the events which sit behind this Inquiry — this scandal — were undoubtedly life-
altering. SPMs and their stories must sit at the heart of this Inquiry. Officials and Ministers
who gave evidence deeply regretted they had not appreciated the impact of the scandal. Their
pain cannot be forgotten. Homes and families lost and broken. Savings and prospects
destroyed. Stability and health ruined. Reputation and dignity damaged irreparably.
Some did not live to see their conviction overturned. As one example, Karen Wilson — a Hudgell
Core Participant (CP) represents her husband Julian in this Inquiry (and displayed his
photograph while she gave evidence). Moreover, very sadly, CPs such as Lynette Hutchings
and Robert Boyle — represented by Hudgell Solicitors in this Inquiry - died while evidence was
being heard and are now represented by their families. David Blakey — another of the Hudgell
CP group — recently lost his wife Gillian. Together they ran Riby Post Office. The Inquiry has
announced and mourned name upon name.
As we did in our opening statement, on 13 October 2022, and as we have done at the closing of
each phase, we reiterate the value of this Inquiry’s work for those we represent. Through three
years of work, and many, many hours of evidence, the Core Participants we represent have
followed the Inquiry. Many have attended in person. Others have watched at home. Others
still find it too painful to hear the minutiae of the scandal which stole their lives. Yet, for them
all, its work is crucial.
Many have recalled for the Inquiry their terror facing a trial or sentencing. This process could
easily have been re-traumatising. Each of our clients is grateful for the work of all of the
Inquiry team. Thanks are expressed for the professional but compassionate approach taken
throughout. Everyone involved in the proceedings, from the Chair and his assessors to counsel
and solicitors, from the ushers and the shorthand writer to the staff here at Aldwych House and
at the IDRC have treated the SPMs with dignity and care and this Inquiry with the seriousness
due. We and our clients are grateful.
The remainder of this submission follows a simple structure:
(a) _ First we consider the last of the evidence heard on investigations and prosecutions.
(b) Second, we look at Phases 5-6 and the years, upon years spent by the Post Office,
supported by Fujitsu, in their unblinking defence of Horizon and their prosecution
practices. (In this part, we address two significant questions from the Chair on the duties
owed by Post Office as a prosecutor.)
(c) Third we look to the role of regulated legal professionals in this scandal.
(d) I Fourth, management, governance and oversight.
(e) Fifth, we turn to redress, restorative justice and rebuilding trust.
(f) Sixth, and finally, we ask where are we now as the Inquiry ends.
1.14
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Throughout we seek to identify possible conclusions and recommendations designed to assist
the Inquiry. For ease of review, we identify some recommendations in bold. In this introduction,
there are four initial propositions we invite the Inquiry to consider.
First, on the role of the Inquiry and its limits. The terms of reference for this Inquiry start in
building on the conclusions of Mr Justice Fraser in the GLO and on the conclusions of the Court
of Appeal Criminal Division. It has a critical role in asking what exactly went wrong and who
knew what when, in order that lessons might be learned for the future.” For many we represent,
recovery will only begin with a full understanding of why the Post Office was allowed to
continue as it did for so long.
Our Core Participants are very conscious that this Inquiry may not be the last step in the process
of accountability. The Metropolitan Police Service (MPS) is a Core Participant and continues
its investigation concerning possible criminal offences arising from this scandal. Operation
Olympus is a national operation and is ongoing.’ While not for this Inquiry to determine any
question of civil or criminal liability, this cannot inhibit the Inquiry’s duty to reach conclusions
on the facts and make recommendations within its terms of reference. The Inquiry will be well
conscious of the administration of justice offences which may be under investigation and their
elements.’ It is not for the Inquiry to establish those tests are met. While those we represent
expect to see criminal prosecution pursued where the evidence warrants it: this is not the job for
this Inquiry. The integrity of any possible prosecution ought to be closely guarded. It would be
a devastating result for those we represent and for the public interest should any person liable
to investigation, prosecution and conviction escape (or unnecessarily delay) trial for procedural
reasons, no matter how spurious. Yet, nothing prevents the Inquiry from reaching conclusions
which point to there being an evidential basis for criminal investigation. That such
investigations are already ongoing suggests such evidential basis is well established. Indeed, in
order to understand what went wrong, the Inquiry may be required to reach findings on the facts
on matters which may be central to such further work.°
Terms of Reference “TOR”, A: Understand and acknowledge what went wrong in relation to Horizon, leading to the
civil proceedings in Bates and others v Post Office Limited and the quashing of criminal convictions, by drawing
from the judgments of Mr Justice Fraser in Bates and others, the judgments of the Court of Appeal (Criminal
Division) in R v Hamilton and others, other judgments in which convictions have been quashed, affected postmasters’
experiences and any other relevant evidence in order to identify what key lessons must be learned for the future.
TOR, B: B: Build upon the findings of Mr Justice Fraser and the judgments of the criminal courts specified in A
above by obtaining all available relevant evidence from Post Office Ltd, Fujitsu, BEIS* and UKGT to establish a
clear account of 1) the implementation and failings of Horizon over its lifecycle and 2) Post Office Ltd’s use of
information from Horizon when taking action against persons alleged to be responsible for shortfalls.
See, e.g. RLIT0000551 Sky News, Post Office Horizon Scandal: Four suspects identified by police, 19 November
2024,
RLIT0000558 Inquiries Act 2005, s2
For example only, someone who acts or embarks on a course of conduct which has a tendency to pervert the course
of justice, and is intended to pervert the course of public justice will commit an offence. RLIT0000520 Archbold,
Chapter 28, 28-1, RLIT0000549 Freones [1891] 1, Q.B. 360, CCR; Andrews [1973] Q.B. 422, CA. A positive act,
whether of concealment or distortion, is required. Inaction is insufficient: Headley [1996] R-T.R. 173, CA (failing to
respond to a summons); Clark [2003] EWCA Crim 991; [2003] R. LR. 27; Jabber (§ 28-5). An attempt or incitement
or conspiracy to pervert the course of justice is likewise indictable: Andrews, above; Sharpe and Stringer (1938) 26
Cr. App. R. 122, CCA; Panayiotou and Antoniades (1973) 57 Cr. App. R. 762, CA.
TOR, A, B. Note, by analogy only, the distinction between determining and investigating a matter drawn in the
consideration of s.10 RLIT0000524 Coroners Act 2009 in RLIT0000516 Regina (GS) v Wiltshire and Swindon
Senior Coroner [2020] EWHIC 2007 (Admin), [73] (albeit, Coroners do not benefit from the clear guidance in s.2(2)
Inquiries Act 2005 RLIT0000558. See also, RLIT0000547 Beer, Public Inquiries, OUP (2011), 2.144-2.145.
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1.15 Second, on knowledge. A key question has always been who knew what and when. This must
include evidence individuals were purposefully shutting their eyes when faced with evidence
that ought obviously to have been explored.’ This included failing to confront risks inherent
and failing to tell people about those risks. The evidence supports that throughout this scandal
— structural problems at both Post Office and Fujitsu aside — there were people within the
business who knew, was reckless to the truth or was wilfully blind when confronted with the
possibility of failures in the integrity of Horizon and that Post Office prosecution practices were
deeply flawed.* Horizon was seen to be too important to fail.
1.16 Thirdly, while explanations may be properly offered, we urge the Inquiry to carefully scrutinise
any conduct which may have contributed to this scandal. Excuse can be distinguished from
explanation. For example:
(a) _ First, on individual memory. The events in this scandal span decades. The Inquiry is
familiar with how the law approaches evidence and memory. Calls for caution inevitably
and reasonably echo in earlier submissions. The Inquiry has substantial contemporary
documentation against which it may test recall and faulty memory. Those we represent
have found it difficult to hear — and surprising — some witnesses vague in their
recollection then surprisingly sharp in their recall of exculpatory conversations or
meetings.” While recognising the frailties of memory over time, the Inquiry and the Chair
ought not be inhibited in testing the credibility of witnesses’ evidence where such is
plainly due.
(b) _ Failures in institutional memory may help provide an explanation why Horizon — broken
from the start and forced into being from the wreckage of a different project with a
different purpose — was thought to provide a solid foundation for the investigation and
prosecution of SPMs. Such failures are no excuse for later individual failures to grapple
with the evidence Horizon lacked integrity.
(c) “I was poorly advised” — afier decades — is no excuse when the questions asked were
skewed or advice ignored or obvious matters left unpursued. We consider the role of the
role of regulated legal profes
oversight in Section 5.
(d) “I wasnt told” — which may provide an explanation for some - is no excuse when the
culture of the business was set from the top to deny any pos: ity that Horizon was
flawed or that the prosecution practices of the Post Office had operated egregiously for
yea ply told enough to know the Post Office and
Fujitsu were running a risk in the conduct of investigations and prosecutions based on
Horizon data. The Inquiry might conclude there were questions screaming to be asked.
It might conclude that even when problems were known to the Post Office or to Fujitsu,
that these were met with unjustifiable ignorance or wilful blindness.
ionals in Section 4 and management, governance and
s Who were
There were witne:
’ ‘Tasked expressly with considering “cover up”, the Infected Blood Inquiry said: “A better expression to convey what
happened is “hiding the truth”. Hiding the truth includes not only deliberate concealment but also a lack of candour:
the telling of half-truths such as the “no conclusive proof line”. RLIT0000538 Infected Blood Inquiry Report, Vol
1, HC 569-1, [7.9].
Knowledge in criminal proceedings extends to constructive knowledge “wilfully shutting one’s eyes to the truth”:
Lord Reid in RLIT0000S17 Harner _v Metropolitan Police Commr_[1969] 2 A.C. 256at 279,
HL;RLIT0000521 Anval v Massey (1972) 56 Cr. App. R. 6, DC; and RLIT0000525 Flintshire CC v Reynolds [2006]
EWHC 195 (Admin): 170 J.P. 73, DC. See the dictum of Lord Bridge in RLIT0000518 Westminster City Council
v Croyalgrange Ltd (1986) 83 Cr. App. R. 155 at 164, HL (“... it is always open to the tribunal of fact ... to base a
finding of knowledge on evidence that the defendant had deliberately shut their eyes to the obvious or refrained from
inquiry because they suspected the truth but did not wish to have their suspicion confirmed”).
s For example, INQ00001151 (Paula Vennells questioned by Mr Beer KC), 73:1 — 75:1.
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1.17 Fourthly, and finally, any suggestion that the Inquiry must identify the villain of this piece as
either Fujitsu or the Post Office draws a false premise. From the outset this Inquiry was not
only about faulty IT but about people. We highlight (again), the powerful statement from Tim
Brentnall in opening:
“Horizon merely provided the data that showed a shortfall but it was people who chose to
believe that data over myself or hundreds of other subpostmasters. It wasn't Horizon that
prosecuted us. It was the Post Office. It wasn't Horizon that encouraged us to pay back money
oo10
under threat of theft charges. That was people at the Post Office
1.18 We have heard apology upon apology and we anticipate further contrition to come at the
conclusion of the Inquiry. Those we represent acknowledge that admissions have been made
by the Post Office and Fujitsu, in their submissions, and by witnesses in their evidence. Such
frank acknowledgments are welcome. However, after decades of dogged resistance these are
difficult to hear. They are difficult to hear alongside mismanagement of disclosure in this
Inquiry and evidence which suggests that for five years since the judgments in the GLO, both
Post Office and Fujitsu has remained slow to recognise the scale and significance of this scandal.
They are difficult to hear alongside witness upon witness slow to accept there was a problem.
It is perhaps telling that Fujitsu accepted a moral responsibility to the victims of this scandal in
late January 2024 (a few short weeks after the showing of Mr Bates). Contrition now feels self-
serving for many CPs: another in a long line of manoeuvres in brand management, defence and
damage limitation.
1.19 At the end of Phase 4 we said it is only when the tide goes out we see who was swimming
without a costume. The serious failings of both Post Office and Fujitsu have been humiliatingly
exposed.
1.20 These last Phases have seen increasing tension exposed in the relationship between the two
businesses as they try to minimise their culpability. The Post Office may invite us all to look at
the failures of Post Office and Fujitsu to grapple with an IT problem. [That is what it always
did.'"] Fujitsu may again emphasise just how poor Post Office practice was. [The Inquiry will
recall the recent evidence of correspondence between Fujitsu and the Post Office as Fujitsu
attempts to distance itself from ongoing police investigations. ]
1.21 This scandal would not or could not have happened if either Fujitsu or the Post Office systems
had acted on the appreciation that Horizon was not infallible and had listened when SPM after
SPM told them there was a problem. If individuals at Fujitsu had considered the possibility
that the problems arising were not by default “User Error” or if Post Office had paused to
consider what losses were real before a SPM was forced to “make good”, we may not be here
today.
10 1NQ00001034, 1 March 2022 48:24 — 49:
11 Second Sight was to look only for systemic problems, of which Post Office were sure there were none See for
example, INQ00001152, 23 May, 108:6 — 11:22, INQ00002021 (22 May 2013) (Recording of Susan Crichton “So
Paula agrees that the original scope of the investigation did not go so far as looking at whether — it was the
miscarriage of justice point, Ron and Ian. So that — that’s not what she’s looking for. She's just looking for the
systematic or systemic, rather, not systematic — systemic weaknesses in the Horizon system”).
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1.22 Without errors by both; and clear failures in the oversight exercised by Government this scandal
would never have happened. This story is also about poor decisions in Government. The
Inquiry might conclude that in dodging — or fumbling - important strategic decisions about the
future of the Post Office network in a digital age, Government kicked the wrong can along the
road. They left the wrong people in charge at a time of existential crisis for a much loved
national institution and sowed the seeds of this disaster. When things had plainly gone horribly
wrong, they were slow to step in, for reasons of political expediency.
1.23 In this, the biggest miscarriage of justice in modern legal history: transparency and
accountability really matter. After years of obfuscation and denial, this Inquiry has served to
bring some clarity as to how and why the Post Office came to wrongfully prosecute hundreds
of its people.
1.24 There is blame enough to go round. However, it is time now to “make good”.
2 INVESTIGATIONS AND PROSECUTIONS
2.2 Before moving to Phases 5, 6 and 7 we consider two broad matters:
(a) Post Office Investigations and Prosecutions: We address the evidence of Phase 4
witnesses called in this stage, including Mr Jenkins, Mr Dunks and Mr Ward.
(b) Investigation and Prosecution: Are things any different now?
2.3. We do not revisit our lengthy and detailed submissions made at the close of Phase 4. We repeat
and adopt them. However, by way of context, a summary may assist.
(a) _ First, the approach of the Post Office, supported by Fujitsu, to investigation and recovery
of losses as well as prosecution of alleged offences was deeply and fundamentally flawed.
(b) Second, the management and oversight of investigations and prosecutions by the Post
Office, as supported by Fujitsu, was wilfully blind to, or disregarding of, the proper,
lawful administration of justice. Briefly, the challenges to the integrity of Horizon
brought by SPMs were brought to the attention of management in the Post Office in
individual prosecutions, in civil claims and, eventually, in the press. Still the Post Office
did not hear those warnings and/or refused to hear them. We return to this in our
submissions on the defence of Horizon, management and governance, in Sections 3 and
5.
(c) Thirdly and finally, an overarching focus on the commercial interests of both the Post
Office and Fujitsu - including in protecting the brand reputation of both companies —
contributed significantly and detrimentally to the prosecution of individuals, in the face
of faults in Horizon, of which the Post Office were or ought to have been aware.
(a) Post Office Investigations and Prosecutions
2.4 The failures in the investigative practices of Post Office, of course extended beyond
prosecutions. We believe there is little more to say after the conclusion of Phase 4 as to the
investigative practices of the Post Office (supported by Fujitsu) in connection with civil or
criminal proceedings. The evidence of that Phase was damning. The further evidence heard
in Phase 5 only serves to underline that it is entirely right that this scandal is already with the
police for investigation (as above).
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The evidence heard over the Summer and Autumn confirms that the approach of Post Office to
prosecution was fundamentally flawed. It was built on a toxic premise. It was run by those who
were incompetent, ill-trained, under-supervised and overly aggressive, and, ultimately,
motivated by commercial and/or personal interest. It is clear from the many documents
disclosed in Phase 4 that there were many actions taken by the Post Office and Fujitsu in
investigations and prosecutions which have been outside the proportionate reach of this
Inquiry.'* In previous submissions, the Post Office has cautioned against an impression led only
by the scandalous cases covered in the Inquiry’s case studies (“it is important for the Inquiry
not to lose sight of the fact that the selected sample of case studies is not representative”. This
perhaps means, in lay terms “we werent all bad”). However, the Inquiry has masses of
documents relevant to many matters beyond the Case Studies — including for CPs participating
in this Inquiry and others not participating — where the Inquiry may conclude that similar
patterns arise. In the evidence from the Fujitsu Prosecutions Support Team and their POL
counterparts in Phase 4, the Inquiry heard of work done on the initial template statements of
Fujitsu and statements produced by others including Bill Mitchell and Neneh Lowther and
others. The sickening picture painted by the Case Studies — over and over again — ought not to
be diminished. Regrettably, the submissions of the Post Office we referred to above echo an
earlier Post Office refrain — it was fine most of the time — let’s ignore when it wasn’t.
2.6 There should be no thought that, in our focusing on the evidence in this last part of the Inquiry,
that the learning of Phases 3 and 4 can be forgotten.
(a) There were structural and individual failures in investigations and prosecution at the Post
Office from the start, which contributed to this scandal and for which there must be
accountability.
(b) As ought to be clear from previous submissions, the evidence in Phase 4 is such that those
we represent are satisfied that there is an evidential basis for further criminal investigation
of a number of those involved in prosecutions at the Post Office.
(c) While focus may principally have been on Mr Bradshaw and on Mr Singh, there remains
considerable concern that the actions of others (including those who did not give
evidence) ought not to be overlooked whether for criticism by the Inquiry or other
outcome.
(d) Examples of poor conduct pepper the Phase 4 evidence and closing submissions by all
parties. One stark example is found in the interview of David Blakey, covered in the
evidence of Paul Whitaker: unfounded insinuations of an affair aside, the implicit threat
that continuing to resist the allegations of the Post Office would result in the interview
and investigation of his ill wife was egregious and oppressive conduct which ss76 and 78
of PACE ought to prevented.'? Another example is the questioning of Lynette Hutchings
by Gary Thomas (accompanied by Graham Brander) as to why they had retained Issy
Hogg as their solicitor instead of a local solicitor.'* Ms. Hogg had first defended Jo
Hamilton and went on to represent a number of other SPMs who raised concerns about
Horizon when they were prosecuted. She believed in the SPMs’ cause at a time when it
was not a cause celebre. She was plainly a thorn in the side of Post Office and that
question should never have been asked. Ms. Hogg died on 26 November this year after a
2 SUBS0000028, [35].
8 POL00044830. INQ00001095, 16 November 2023, 88-92.
4 POL00056417 (at around 19.34)
2.7
2.8
1s
”
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long fight against cancer, whilst living every moment of what life was left to her to the
full. We pay tribute to her courage and integrity.
(c) We anticipate that such prosecution files that remain available and subject to complaint
by individual SPMs have been passed not only to the Inquiry but to the MPS.
However, the evidence of each of the witnesses heard in this Phase was starkly illustrative of
the flaws in processes at both POL and Fujitsu. In turn we consider now briefly: Graham Ward,
Andy Dunks and Gareth Jenkins. (Like many other witnesses in this Inquiry, all three were,
quite properly, given the warning against self-incrimination.)
(@) Graham Ward
First, Mr Ward was recalled to address a single issue. Mr Ward had testified that he absolutely
did not delete sections from the statement of by Mr Jenkins in the case of Noel Thomas
(represented by Hudgell Solicitors) which were considered unhelpful to the Post Office.'* On
return, confronted with his own tracked changes, he admitted he must have done.
(a) I We return to this matter in the context of Mr Jenkins’ evidence, but this episode in the
handling of Mr Thomas’s case shows the slipshod and self-serving approach of Post
Office to the prosecution of its people was set at an early stage.
(b) Mr Ward’s recall to the Inquiry underlines our opening caution on memory. Of course,
memory may fail as the years pass. However, this Inquiry has seen considerable certainty
on the part of witnesses as to a recall of past practice or past conduct which is exculpatory.
This episode illustrates the danger of approaching such assertions uncritically.
(c) We anticipate the Metropolitan Police Service (Mr Ward’s current employer) may wish
to further explore the whole iterative saga of Mr Jenkins’ evidence in Noel Thomas
prosecution and the evidence of Mr Ward. Mr Ward was aware this statement was being
prepared for the purposes of criminal proceedings and the evidence before the Inquiry
goes directly to Mr Ward’s intent in applying the amendments which he did.
(d) Regardless, Mr Ward’s actions were indicative of the attitude of staff within the Post
Office who were directly tasked at working hand in hand with Fujitsu on prosecutions.
It shows their concerns about the risk to the business were known and were being
escalated up the line, here to the late Mr Baines. We return to this in our section on
Governance failures, but for now we suggest that the documents put to Mr Ward do
indicate that, within the business, dots were being joined between the growing Horizon
challenges. Moreover, knowledge of the risk in civil and criminal proceedings was being
managed across teams and responsibilities within the POL business and at RMG (by
2005, including Mandy Talbot, Rod Ismay, Keith Baines, Dave Smith (IT) and others).'°
(ec) Broadly, the Post Office were commissioning statements from Fujitsu with a closed mind.
“we'd likely need a statement which outlines how you can confirm that there were no
operating errors within this offices system.” Checks then requested for no serious errors
on the system, by Mr Ward. “[c//early in this case I didnt have an open mind, no.”'7
(f) They were willing to lean on Fujitsu when answers came that did not serve those
purposes; when they ought instead to have been asking for a closer examination of the
system.
INQ00001124, 1 February 2024, 173:1 — 174:7.
POL00119895 (6 December 2005)
INQ00001124, I February, 152:21 — 154:20
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(g) Mr Ward proved this extended to amending expert evidence in the understanding that
providing the original to the Defence would not help POL.
(h) — This was not a frolic limited to Mr Ward. He wrote to Brian Pinder, Keith Baines and
others to describe Mr Jenkins’s evidence — and the reference to system failure — as
“potentially very damaging”.'®
(i) _ Everyone involved in this process knew that the material was being generated for the
purposes of prosecution, with the associated implications for the accused. (The Inquiry
will, of course, recall a similar group involved in discussion of human error in other
statements produced by Fujitsu in mid-2004)."”
(j) Mr Jenkins was lined up to go to Court in late 2006." Noel Thomas pleaded guilty and
there was no trial. The Inquiry heard moving testimony from Noel Thomas about his
spending his 60" birthday in prison, losing his status as a local councillor, and all the
other humiliations that came with his conviction.
(k) The Inquiry has the later correspondence of Mr Ward, including that notorious “Wolfie
Smith” exchange with Gary Thomas, many years later.”' The Inquiry is invited to treat
Mr Ward’s distancing of himself from that message as incredible. His uncritical, self-
interested reply speaks volumes.
(1) The Inquiry might conclude that far from his attitude in Noel Thomas’s case being
isolated: instead it reflected an ingrained approach taken by the POL team which
prioritised the needs of the business over the risk to individual SPMs and the truth.
(ii) Andy Dunks
Second, Mr Dunks. At the start of his evidence, Mr Dunks confirmed that he remained
employed by Fujitsu as an IT Analyst in the Security Team.
scandal, and the criticism levelled at him, this may be surprising.
After his participation in this
Mr Dunks continued to maintain that while providing an opinion as to the state of the computer
in any number of witness statements he produced, he would not have the technical capacity to
express such an opinion. Instead, this was an opinion he would have garnered from talking to
others (not generally mentioned in the statements). The absurdity of that situation is patent in
the responses to questions put by Mr Beer KC on both occasions Mr Dunks came to give
evidence.
While the Inquiry might conclude that Mr Dunks position reflects lack of care on the part of
both POL and Fujistu for the evidence placed before the Court in these proceedings; it also
shows some lack of care on the part of Fujitsu for Mr Dunks training and capabilities and a lack
of care on the part of Mr Dunks beyond doing precisely what his employer asked of him.
(a) I There are numerous examples of requests from POL which the Inquiry might conclude
are pointed in their seeking a statement to serve their ends; not an analysis to prove the
truth of any lo:
1NQ00001124, I February, 168:15 ~ 171:20. FUJ00122210.
INQ00001124, I February, 100:3 — 102:14.
FUJ00153934. Ina report prepared in 2013, Mr Jenkins confirms, “/ was due to go to court in September 2006, but
was advised that a deal had been done at the last minute and so didn t need to appear.” (POLO0165933 shows Mr
Jenkins on the list of witnesses whose availability was checked for trial).
POL00329521, INQOOGOII24, ! February, 141:18 -146:8.
INQ00001175, 16 July,
See, e.g. FUJ00123329 (November 2010),
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(b) POL had no qualms about asking for exactly what they wanted;”* (There was evidence
that POL had been congratulating Fujitsu for their work on successful prosecutions since
at least 2002.’ Mr Dunks thought they had always used a template statement.)
(c) I For Fujitsu, Mr Dunks seemed to have no problem providing it. His description of the
process is perhaps telling:
“[T]he statements weren t fixed because I could add things, or Post Office would request
things to be taken out and put under discussion, so most of the time it would have been a
compromise — I say a compromise under discussion of what was put in and taken out. I
cant recall what the proc
out.””®
was or what discussions were or reasons why that was left
(d) Mr Dunks accepted when called for the second time that he would be expressing an
opinion on the calls he reviewed; not only producing a statement of fact;?”
(e) He accepted that he was relying on others and would not have the skill to be able to check
whether what he was being told was right or wrong;”*
(f) He accepted that, his evidence as to the routine nature of calls could be based on a wholly
untested assumption that if the SPM complained about a system error, and the call was
diverted back to the NBSC, then automatically, the SPM was wrong. It must have been a
commercial error or a user error. While entirely in keeping with the default to User Error
attitude identified in Phase 4, the Inquiry might conclude that this was a wholly
unsatisfactory basis on which to sign off a statement that there was nothing in any
helpdesk calls which would indicate Horizon was not operating as it should.”
(g) The Inquiry might take a view that Mr Dunks was, in parroting these boilerplate
statements giving opinions he had no expertise to give and backing them with
consequently meaningles
(h) _ The approach taken in the case of Jerry Hosi is perhaps illustrative. Phil Budd writes to
Mr Dunks:
“You remember I analysed a couple of counters back in July 07 then you got me to sign a
new witness statement in June 08 well, they came back again and wanted me to sign
statements of truth.
another one — just a single paragraph to say the counters were in ‘full working order and
would not cause a discrepancy’. I was not happy with the implications of ‘full working
order’ since I did not perform test transactions...”
(i) Peter Sewell then replies to them both:
"Your statement is fine and is all you can actually say. If they stump up the cash the
counter equipment can won't be of much use as the 42 days retainer of the message store
is long gone, and will be endorsed by Gareth."*°
(j) It appears there were a number of individuals at Fujitsu who were not willing to provide
witness evidence (e.g. Mrs Chambers post Castleton, Ms Bains, and here Mr Budd) and
others who were more willing (including Mr Dunks and Mr Jenkins).
See, e.g. FUJ00083702 (Porters Avenue) "Can you please provide another full statement for the above office
including in the outcome of the faults reported that it would have had ‘no effect on any counter discrepancy’.
FUJ00083703.
FUJO01S5555. Mr Dunks couldn’t recall if he was working on the account then. However, it was his view they’d
always used standard form statements throughout his time. INQ00001175, 16 July, 88-89.
INQ00001175, 16 July 2 110-111.
INQ00001175, 16 July, 27:9 — 15. See POL00003219 for an example of the scale on which statements were being
produced by POL even in the years 2004-2005.
INQ00001175, 16 July, 55:2
INQ00001175, 16 July, 61:3 — 64:22.
FUJ00225644.
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(k) The Inquiry might exercise a sceptical view over Mr Dunks current evidence on how he
understood the boilerplate in the statements routinely produced. As the Inquiry noted,
his evidence differs substantively from that given in the GLO, when he was cross
examined and unsure of its meaning.*!
(l) Mr Dunks provided statements in numerous of the Case Studies, and others, including
for many in the Hudgell CP group. For example:
i The Inquiry considered his evidence in Mrs Hamilton’s case. His statement is
produced without addressing a query from Graham Ward about the inclusion of a
call suggestive of a fault. He said he’d have done his usual investigation - looked
at things and spoken to people. There were KELs involved which referred to faults
and to message store corruption. KELs which Mr Dunks would have been unable
to understand without help from the SSC. He confirmed he would not have looked
at any data himself to see whether there were any data integrity issues,”
ii, His approach to evidence on the Hosi case was similarly misleading, built on
assumption and opinion expressed that could not possibly have been his own.**
The Inquiry will recall his responsiveness to Lisa Allen’s request that h
be amended to include the crucial opinion: “in my opinion, the calls would have
had no affect on any counter discrepancies" His response coming within only an
hour. Seemingly little time to review the obviously relevant KELs and to obtain a
second hand expert view from the SSC and then to magically convert that into an
opinion of his own.* The Inquiry will ass
working on the issue before the formal request arrived is credible.
(m) The Inquiry might conclude that Mr Dunks had absolutely no business making these
statements. He seemingly signed multiple statements of truth without valid foundation.
The Inquiry might further conclude that his employers knew he did not have sufficient
expertise to make the statements he was making and yet, he was left, for years, to give
opinions that were (on their face) entirely without basis. He did this when many others
in the business were not — it would seem — willing to stand up the integrity of Horizon in
Court.
statement
s whether his claim to have been
(iii) Gareth Jenkins
Finally, Mr Jenkins. Mr Jenkins also demonstrated no reticence to sign statements and go to
Court. In the interests of proportionality, we take this evidence relatively briefly.
(a) We do not address the Clarke advice of July 2013 at length here. It appears that Mr
Jenkins was not accurately informed by POL of the substance of that advice and nor was
Fujitsu.** Instead Fujitsu was informed that advice on “rules of evidence” meant that an
independent witness was required. This was passed to Mr Jenkins. (Fujitsu noted in that
context they were successful in moving discussion away from a full ‘system’ review,
making it clear that access to any Fujitsu witnesses would be in a “controlled way” and
they would reserve the right to challenge the findings of any external expert. This work
would be charged to POL. The Inquiry might consider in what “controlled way” Fujitsu
envisaged Mr Jenkins providing support to that kind of process.)
1NQ00001175, 16 July, 94-99, FUJ00201401.
1NQ00001175, 16 July, 99:20-108:4
1NQ00001175, 16 July, 109- ne 4,
INQ00001175, 16 July, 12
INQ00001168, 27 June 2024, ri 22 — 186:12. FUJ00156923,
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(b) We do not deal further with the obvious flaws in Mr Jenkins’ engagement in the trial of
Seema Misra (nor the role of Warwick Tatford) already addressed in Phase 4. We
anticipate these matters will be addressed at length by those representing Mrs Misra (as
they have been during the hearings and in their written and oral submissions). We repeat
our Phase 4 submissions and see parallels in the evidence of the work done in Mrs Misra’s
trial in the preparation of Mr Jenkins statement for Noel Thomas’s trial in 2006, years
earlier.
(c) The evolution of Mr Jenkins’ role in prosecutions can be — perhaps — traced back to that
contact: Just do the statement, give POL what they need, they usually plead guilty
anyway, bill it to the Post Office Account and move on. (The Inquiry will recall that POL
paid extra for this work. There was evidence of John Scott railing against the absurdity
of Post Office paying Fujitsu to stand up that their system worked and Rob Wilson
accepted in evidence to the Inquiry that it was wrong.” Yet, the work of the Prosecution
Support Unit was governed by arrangements agreed by POL and Fujitsu as long ago as
2002.)
(d) Mr Jenkins agreed that in all the time he had worked with Fujitsu, he was unaware of any
internal work being done to guarantee that the system was up to the task of supporting
prosecutions and civil actions conducted by POL.*” He had been involved in the earliest
development of Horizon and in the problems thrown up by Riposte during the early days
of Horizon’s development and live operation. He recalled chat at Fujitsu around the
black box situation created by PFI. He had worked on IMPACT, which the Inquiry heard
threw up its own problems. He described a disconnect between his work and that of the
SSC, first claiming it would be happenstance as to who was working on any particular
bug, error or defect, as to whether he knew. Then he said he was aware that “bugs that
actually impacted the accounts were rare”. He could not reconcile how he could have
the confidence to comment on the rarity of such occurrences without first-hand
knowledge, beyond, he conceded, a confidence in Fujitsu’s systems. ** He had been
involved in support — on the Fourth Line — and accepted that while he could have
examined the PEAKs, PinICLs and KELs for existence of problems of a similar kind,
when giving evidence, he accepted that he did not.*” He accepted that — albeit in hindsight
— by 2018/19, the Riposte lock issue did not just impact Callendar Square. Even then,
the Inquiry might conclude he was unreasonably reluctant to accept that there may have
been other impacts that could have been better understood but for a lack of contemporary
investigation and support.” The Inquiry will take a view on whether in the face of
repeated allegations of Horizon going wrong, this history was one that was easy to forget
(even if, as Mr Jenkins asserts, it was believed problems had been fixed as they arose).*!
(ec) In his experience, he was always brought in after the decision to prosecute was taken.*”
While the gathering of evidence post-charge might be said to be standard prosecution
POL00133297 “Why should we pay for Fujitsu to defend their own IT system? (John Scott described being over a
barrell),_INQ00001106, 12 December 2023, 16:7 ~ 17:5
1NQ00001169, 28 June, 42:17-25.(Probably fair)
1NQ00001166, 25 June, 18 ~ 34:2
INQ00001166, 25 June, 223:1 ~ 17
1NQ00001166, 25 June, 193:20 ~ 194:16.
@.8. INQO0001166, 25 June, 51:12 ~ 52:2: “Y didn't think it was a problem as far as that was concerned because, at
the times I was giving evidence for, I believed that the EPOS system was stable and was operating correctly: So the
fact that there were problems during the pilot and the rollout don't necessarily mean that the problems carry on into
the system. I was confident in the way that problems were being picked up and fixed and knew things were being put
into the system to actually manage the issues that are being found early on.”
1NQ00001169, 28 June, 54:9-19.
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practice,*® this hinges on there being a sufficiency of evidence for charge. In cases
involving Horizon integrity, where the case sits on Horizon data, the existence of a loss
arguably could not be proved until after the integrity of the data i
(f) It will be for the Inquiry to reach a view on whether Mr Jenkins was or was not instructed
as to his expert duties effectively. The 2005 Bond Dickinson correspondence addressed
in questions by Mr Beer KC and addressing the CPR expert duties is telling." Addressed
to Fujitsu, Mr Jenkins was, of course, forced to concede he would have received it (having
previously confirmed that if he’d received it, he would have read it).** However, the
s assured.
Inquiry might consider that, in engagement upon engagement, referral back to that single
correspondence alone as fit and proper instruction might be thought wishful thinking.
Whatever instruction was provided; it plainly was not monitored effectively by Bond
Dickinson (nor counsel, where instructed). No statement provided by Mr Jenkins
appeared to comply with the standards set out in that 2005 instruction. (We return to the
role of lawyers in Section 4).
(g) I Mr Jenkins claims he did not appreciate he was being instructed as an expert are further
significantly undermined by his repeated engagement with expert reports produced by
the defence and accompanied by the usual undertakings. Time and again, he was
described as an expert.” He would have seen and read, time and time, and time again,
those undertakings. Time and again, he participated in discussions with experts. He
agreed joint statements or reports. Time and time again, he would have known he could
not bring himself to sign any CPR compliant undertaking. He was an expert and he knew
he was an expert. He was not independent and nor could he separate himself and his
approach to evidence from the interests of Fujitsu, the company where he had made his
(distinguished) career.*”
(h) In 2006, Mr Jenkins agreed to his witness statement in the Thomas case being
substantively amended by Mr Ward (who had no technical expertise to speak of). Having
pushed back against the inclusion of the boilerplate, he is, somehow persuaded to leave
it in. These changes are secured in the knowledge of the significance of these cases for
POL. This shifi, from push back, to resignation, might be seen to shape the continuation
of Mr Jenkins engagement on prosecution work.
(i) In 2005, following the Bond Dickinson instruction, Mr Jenkins conceded that despite his
willingness to speculate at length, that “without doing a detailed analysis of everything
that has gone on in the branch it is difficult to speculate as to what has happened.
Certainly the most likely explanation is misoperation or fraud. However I appreciate
that that is not sufficient for a prosecution.’ The Inquiry saw that, even with such a
useless caveat applied to obvious speculation, the message eventually to be passed to
POL (and sent to Mr Jenkins for approval) had the detail removed by Mr Pinder. It was
* $UBS0000028, p&, fn 34, (POL Phase 4 Closing Submissions) “Suggestions have been made at various points (e.g.
'9/12/23 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.”
4 FUIO01S2573 (Page 13), INQOO001166, 25 June, 64:25 - 73 :16.
45 INQ00001166, 25 June, 64 :25 -73 :5-16.
4 Including by himself, e.g. FUJ00152866 (December 2009). See also, POL00097123: “"Thanks for the clai
If am required to go to court ... I need some more background on the specific case and exactly what's being
alleged. I appreciate that is not covered by my statement, but if I need to be an expert witness, I need to understand
what is happening." FUS00083741
#7 INQ00001169, 28 June, 90:1 — 11
48 INQ00001166, 25 June, 77 :17 - 78:9.
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said that Mr Jenkins could not comment.” The reason for removal appears obvious: to
remove any ambiguity or nuance from Fujitsu’s message that the problem was not theirs
but the SPMs or to avoid a close examination of the data. (The Inquiry has seen the extent
to which the data was considered in Castleton, by Mr Jenkins and Mrs Chambers and
covered in Phase 4. Again, we do not address the detail, which we anticipate being
addressed by his recognised legal representatives.°)
Gj) Years later, Mr Jenkins was persuaded to agree and sign a generic statement in repeated
cases, without receiving any data to analyse or consider before agreeing his evidence. He
says that he believed they were not for use in specific cases. He then observes and
acknowledges that they are being so used; he says he doesn’t have data but proceeds
anyway.*! He says he was “confused”. However, Mr Jenkins expresses not concern about
the ultimate use of the statement (“Can t you use the report I have already sent to you?”)
but about the need for “commercial cover” to be in place for his services. These events,
the Inquiry might consider, reflect a pattern set early, even before Thomas, in the 2005
discussion of the Castleton case. It might be asked whether Mr Jenkins default was
always to start with a set view of the likely position, before considering the evidence?
Was that default to User Error the same that infected the operations of SCC and NBSC?
Was it indicative of the reluctance seen throughout Phases 3 and 4 on the part of anyone
at POL or Fujitsu to countenance that Horizon could be the problem? The Inquiry might
consider that for Mr Jenkins to adopt this approach in expressing an expert view to
support a prosecution is particularly unacceptable.
(k) The Inquiry might consider whether he and Mr Dunks demonstrated an altogether
disastrously flippant approach to their roles. On Mr Hosi’s case, Mr Jenkins wrote: “J’ve
got to do another ‘expert report’ and this time I want to actually read your logs properly!".
That is indicative of the toxic attitude driving this work.** By this time, he had produced
statements for use in Thomas and Misra.
(1) The implications of that approach are plain in evidence concerning the preparation for
trial of Khayyam Ishaq, one of the last SPMs to be prosecuted and convicted (while the
work of Second Sight was ongoing). The Inquiry might think it astonishing that Mr
Jenkins’ approach had not moved on. He still had no qualms over stepping into the shoes
of the prosecution to speculate beyond his expertise in agreeing a joint statement with the
expert accountant instructed.**
(m) By this time, of course, Mr Jenkins had been involved in the email exchanges covered in
the Rose Report on Lepton, discussing their implications with Angela Van Den Bogerd
directly at the end of January 2013 (some time before the Second Sight Interim Report).**
1NQ00001166, 25 June, 81 :6~ 89 :15. FUJ001S2573, Page 1-3.
1NQ00001166, 25 June, 105:12 ~ 106:10. Anne Chambers experience and her reluctance to give evidence again, as
reflected in her Afterthoughts document appears to have been common knowledge. The Inquiry has seen Ms
Chambers and will take a view on whether anyone would have been likely to consider her reluctance was solely due
toa lack of courage to be pushed beyond a comfort zone.
POL00097137, INQ00001168, 150:23-156:17; (He indicated he would have taken guidance from within Fujitsu,
including a Fujitsu lawyer (156:7, 162:16-20, 23- 163:2, 164: 16-21)) Mr Jenkins evidence is that he would have
seen that the words “/ understand that my role is to assist the court” had been added to the draft statement, he believed
by Cartwright King but he was not 100 % sure. (167:6-168:2) See also 176:9 ~ 18:24).
FUS00083741
Questioned by Mr Moloney: INQ00001169, 28 June, 90:1 ~ 112:5. Sce also, questions put on the approach to the
Grant Allen case and Mr Jenkins expressing a direct concer for the precedent that might be set in that case for POL
and Fujitsu. INQ00001169, 28 June, 82:6 — 87:2. He accepted that he must have had in mind considerations of
reputational risk for Fujitsu and the interests of the business who had been his effective employers for the whole of
his career.
1NQ00001166, 25 June, 117:21 on,
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As would become plain in the Helen Rose report, it was clear that POL did not have a
grasp of the difference between the standard ARQ data and the additional raw audit data
held by Fujitsu (albeit it had been plain in the successive Prosecution Support Policies
which followed since first agreed in 2002). POL was on notice — if it wasn’t before — that
Fujitsu had data which could tell POL more about what was going on in branch accounts
than could be viewed in a standard ARQ. [As an aside, the Inquiry might consider
whether, this was information that ought to have been acted upon, in the light of the
prosecution duty of POL, quite aside from the input of Second Sight later in July 2013].
(n) The incredulity of Mr Jenkins’ evidence on his understanding of the boilerplate
statements that he was being asked to repeatedly sign is patent. As Mr Beer clarified: “So
you're saying, by that, that the Word Proces
was being typed, or typed for you, was working properly?. And the response: “And
whatever was being used for doing the analysis, and so, on, yes.”** The Inquiry has the
evidence and will reach their own view. However, his assertion that he did not understand
that these were designed to be an assurance of Horizon or a statement to back the system’s
integrity in any individual case is
‘or or other computer on which the statement
imply unbelievable when seen in context. He was an
intelligent, seemingly considered man. The Inquiry might consider his transparent
attempts to explain this material away wholly destructive of his credibility.*°
(0) In January 2013, Mr Jenkins was asked to produce, a reflection for Fujitsu management
on the cases in which he had provided evidence in at that stage. This was to be produced
for Fujitsu at “Executive Level” and an apparent draft document provides a summary of
the Second Sight investigation and Mr Jenkins contact with Second Sight.*”
(p) Fujitsu Legal were not isolated from this process. In 2010, for example, the Inquiry saw
that Mr Jenkins directly approached Fujitsu Legal (JP Prenovost) for guidance on
engagement with Charles McLachlan in the matter of Misra.** There were other
examples.
(q) Fujitsu was well aware of the arrangements in place for prosecution support from 2002
on. The policy documents were not left stagnant, but revisited and revised throughout
the relevant period. (It is not enough for Mr Patterson to recognise now that the Fujitsu
approach to giving statements was wrong; without recognition that Fujitsu ought to have
known then that it was shameful.)
(ct) _ Fujitsu was clearly conscious of its role in this continuing scandal long, long before the
GLO. It was a commercial partner in supporting the prosecutions pursued by POL by
design. When sought (and we know POL did not always seek data or statements to stand
up its case), it charged, over and over again, for evidence designed to give a cloak of
integrity to Horizon generated figures. And it was deployed to persuade SPMs, defence
solicitors and barristers and Courts alike that resistance to any prosecution was futile.
(s) Mr Jenkins described the approach to this work undertaken by POL as chaotic, but he
remained ever willing to help. He conceded, at the last, that he would have been (at
1NQ00001167, 26 June 2024, 145:6-17.
1NQ00001167, 26 June 2024, 141:15 -150:14; INQ00001169, 28 June, 71:19-23 ; He said (in response to questions
from Mr Stein KC ) as to whether he would be happy to include such statements, given the reading attributed to them
by the Inquiry. He “was happy that the Horizon system was working correctly. I wasn't -- 1 wouldn't have said that it
was working correctly everywhere in all particular circumstances but I didn't think that's what I was being asked to
say.
FUJ00153934.
FUI001S6248. INQ00001166, 25 June, 141 — 147.
INQ00001117, 19 January, 33:17 — 34:8.
1NQ00001166, 25 June, 123:2-11.
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least by 2013) conscious of the reputational impacts for Fujitsu and the commercial
interests of the business which had employed him for the whole of his career.°! What is
underlined by this Phase is that this work could not and should not have been assuring to
POL. POL had an undisturbed and settled view which the Inquiry may consider wholly
unwarranted by what was being communicated to the business by Fujitsu, by SPMs, by
Emst & Young and, ultimately, by the press and Parliamentarians. It was a view which
time and again, POL sought evidence to affirm.
(b) Investigation and Prosecution: Where are we now?
2.13 In order to consider whether the Post Office has learned the lessons of the past, the Inquiry must
consider how its approach to investigation and prosecution has changed. While the Post Office
has stopped prosecuting, the Inquiry may consider concerns remain.
2.14 First, we underline that while much store was placed in the decision to stop prosecutions in
2014, this was not a swift full stop. That decision appears to be one taken with much reluctance;
and with resolution of the issue of an independent assurance of Horizon pending. We note there
appeared to be at least some evidence of a discussion of a return to prosecution as late as 2019.
The fact that at least some of these conversations involved Rodric Williams and Martin Smith
may be of particular concern. (These appear to have preceded the judgments in the GLO). It
should go without saying, that the Post Office should never be permitted to pursue private
prosecutions in their own right ever again.
2.15 Second, the considerable evidence heard in Phase 7 as to the process of self-reflection
underlying the very recent work on Project Phoenix and Past Roles is deeply disappointing. It
appears that this work was prompted only by the work of this Inquiry and the evidence of SPM
CPs on human impact. That there was no process of internal reflection as to the conduct of
prosecutions at POL, whether as a result of the outcome of the Second Sight Interim Report or
as part of the Mediation Schemes, might appear shortsighted but it is wholly in keeping with
the Post Office’s blinkered impression of its own infallibility. Of course, in our Phase 4 Closing
we referenced Jackie McDonald’s application to the mediation scheme. She told Second Sight
the Post Office investigators had acted like bullies: like the Mafia.** The Post Office did not
listen or did not want to hear.
2.16 Even though it has begun, this work is illustrative of a lack of understanding or appreciation of
the substantial failings which confront the Post Office and which were starkly depicted in Phase
4. We note that much of the contemporary documentation on which the Inquiry may reach its
findings (and the information drawn from questioning auditors, individual investigators and
financial investigators, lawyers and others) might have been available to Post Office, long, long
ago. Yet, we note that the thematic Phoenix report was concluded only in August 2024.
Moreover, Post Office employees were supported to come before this Inquiry to give evidence
on their involvement in the scandal while continuing to be employed in roles with direct
consequence for SPMs; not least in the Remediation Unit (e.g. Rodric Williams, Caroline
Richards to name a few), where they were involved in the consideration of redress for those
6! INQ00001169, 28 June, 82:6 ~ 8
POL00126175: “I see the main purpose of this current activity is to work out...what it is we need to do and have in
place if we are to start prosecuting again.” (Rodtic Williams, 2 January 2019). See also POL00126180.
© POL00099689.
“ — POL00458007.
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directly harmed by the actions of the Post Office. Mr Bartlett was shown POL00447931 the
“Service Support Overview of Teams and Responsibilities”, the meta data of which suggested it
was created in May 2021 and it listed individuals including Christopher Knight, Stephen
Bradshaw and Robert Daily within the Security Team at Post Office. He confirmed that these
individuals (or at least some of them) remained involved in the Network Crime and Risk
Support Team and this involved interacting with SPMs. He agreed this was a problem.®
2.17 Learning that these individuals remained within the employment — and confidence of — the Post
Office was distressing for some of those we represent. For others, it felt like business as usual.
The time which it has taken the Post Office to progress this work (and despite challenge by the
SPM NEDs progress had seemingly been glacial until post-January 2024) adds insult to injury.
While there may be complex employment obligations in play; the Post Office has considerable
access to legal advice. This process of self-reflection simply didn’t matter to the business, until
it had the potential to embarrass senior management during the coverage of this Inquiry.
2.18 Third, there must be no question or ambiguity as to how and when investigations are passed to
the police when there is suspicion of criminality and when the Post Office might conduct
interviews under caution.® The Inquiry might conclude from the evidence it heard that there
was a degree of uncertainty as to how that process should be managed. The contract provided
to SPMs was heavy-handed and misaligned. Mr Read agreed that in his view it was not
appropriate that SPMs were told that the Investigation Division retained the power to interview
under caution. The Inquiry is invited to recommend that POL revisit the contract and its
latest policy to afford clear guidance on when a PACE-compliant interview will or not
be appropriate; and when the police ought to be contacted to take over any individual
investigation. The Inquiry might consider a more robust line appropriate, such that there
should be no provision for interview under caution. However, this approach ought to be
guided by the need to ensure fairness to any SPM who may be interviewed by POL and
subsequently subject to investigation.
2.19 Fourth, there is a need for clarity over how the continuing lack of confidence in Horizon impacts
both the investigative work of POL and the engagement of Fujitsu and POL with the police.
This is important not only for those who may be subject to investigation for breach of contract
or potential criminality but also for the public interest in preserving the integrity of the Post
Office. The Inquiry has the evidence of Mr Cameron on the stress he experienced challenging
the Post Office on the evidential basis for shortfalls before he left his role.® It is clear, at least
from the ongoing disagreements between POL and Fujitsu as to reliance upon Horizon data for
the purposes of prosecutions, that until something changes or Horizon is replaced, then the
business may struggle to maintain integrity going forward. Genuine losses due to theft, fraud
or incompetence might be legitimately recovered. Indeed, they ought to be given the lo:
to the public purse. However, it appears that until both Fujitsu and POL can express confidence
in Horizon figures, any such action remains stalled.
s are
© INQ00001198, 17 October 2024, 10:5 ~ 13
& — POL00000254. INQ00001194, 10 October 2024, 22:7 — 27:12.
INQ00001189, 1 October 2024, 191:21 ~ 192:8: “J couldn't get sensible data out of it so I had to put an EY team in
there to get sensible data out of it. And it was perfectly clear that they were hardly investigating any of them, and it
just wasn't a basis to be asking people for money at all. And that — there was a lot of resentment that I was asking
those questions out of the Operations Directorate. So all of that was very stressful.””
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2.20 The Inquiry heard evidence on the approach to interaction with the Police from both Mr Read
for POL and Pau! Patterson of Fujitsu. The implications that either would refuse to comply with
an ongoing police investigation appear to have been ill-understood. The bluster of the
correspondence from Fujitsu appeared almost near-staged for the benefit of this Inquiry. First:
“The approach of Fujitsu is to cooperate with the police and any other third party, exercising
independent investigative, prosecutorial, regulatory or judicial powers. However, we are
concerned by the behaviour of the Post Office Investigation Team on this matter." This went on
seemingly to rule out reliance on Horizon for either criminal or civil enforcement: “"Jt seems
that the Post Office may be continuing to pursue postmasters for shortfalls in their accounts.
We would have expected that the Post Office has changed its behaviour, It should not essentially
be relying on Horizon data as the basis for that enforcement." Similarly: “"A witness statement
from [Fujitsu] attesting to the reliability of the Horizon system, and of data from it in criminal
proceedings would amount to expert opinion evidence. [Fujitsu] is incapable of providing
expert opinion evidence, as it is neither independent nor has it sufficient information to provide
such an opinion."® Mr Patterson said they were actively supporting police in their inquiries.
However, Mr Patterson appeared committed in his reluctance: “A witness statement from us on
what comes out of the Horizon application is still a problem to us, for exactly the reasons I said
earlier, because the Horizon system is one lens on the entire supply chain in the Post Office,
and we can't attest to everything that goes on in that, from left to right.” Yet, when asked
whether Fujitsu had themselves had any independent company report on the reliability of the
system, Mr Patterson could not answer. He said, he did not know. This would appear to be an
astonishing lack of insight, if credible.
2.21. There was a figure of 33 prosecutions ongoing referenced in the Inquiry. Mr Read was taken to
the decision of the POL Senior Executive Group to decline to delegate to the Director of A &
Cl the ability to disclose evidence to the police without Board approval.” As above, he agreed
there was a misalignment between the SPM contract (described as heavy-handed) and the way
that Post Office investigations are now intended to operate. He said it was not con:
how POL “support postmasters when they have issues”. The Inquiry may consider this
misalignment indicative of the care with which Post Office treats matters of critical significance
ent with
for SPMs post-GLO. As to cooperation with the police and investigations, Mr Read appeared
to agree with a description of POL as “paralysed”.”” Mr Patterson confirmed there were four
cases on which Fujitsu were in correspondence with police. He confirmed to the Chair that if
asked, Fujitsu would at least try to find someone to give an appropriate witness statement. The
worst of all possible worlds might be one where SPMs under investigation find themselves
again faced with evidence which appears impossible to challenge but which lacks integrity.
However, behind any delay in the engagement of POL and Fujitsu in these proceedings are
people who may or may not be subject to investigation and later trial. The uncertainty and fear
in such delay are feelings familiar to many of those we represent and ought not to be
underestimated. This is plainly an issue which must be resolved and which cannot wait for the
roll out of NBIT, whenever that may be.
id 1NQ00001205, 11 November 2024, 189 - on
i 1INQ00001194, 10 October 2024, 5 - on
7” Ibid, 16-17.
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2.22 Fifthly, while a renewed commitment to whistleblowing appears positive on paper, in practice,
the Inquiry might be concerned that the commitment is hollow. The Inquiry heard of numerous
investigations, begun and farmed out to independent processes, which then seemingly stall for
months at a time, if not longer. Considering the evidence on the NBIT complaints alone, the
seriousness with which the commitment to learning from whistleblowing is taken appears
wholly undermined by what the Inquiry was told happened in practice. Progress seemingly
stalled for so long until those involved appear to have moved on from the organisation.
Investigation after investigation, indicative of an organisation in crisis.
2.23 Sixthly, a true change in approach is unlikely to occur until the toxic attitude of disbelief and
distrust in SPMs is made a thing of the past. We return to SPM NEDs on the Board in Section
5. However, the lessons learned in the evidence of Saf Ismail and Eliot Jacobs suggest that
there is a wide gulf between the public commitment of the Post Office to a change which puts
SPMs at the heart of the business and the attitudes of some to staff. A change in culture will
only occur when led positively from the top down and at all levels of the business. As Mr
Cameron acknowledged, there was believed to be a fundamental conflict of interest in the
interests of the Post Office and its SPMs: “if Post Office wants to meet a financial target, the
easiest way it can do that is not pay as much money to postmasters. And what we have seen was
—I mean, a deliberate and you know, I can explain it — attempt to reduce the overall postmaster
remuneration between 2012 and 2018, which is all disclosed, and that was done through largely
Network Transformation”.”' He said that Mr Read was very clear that SPMs should be put first
as a “rallying cry” in 2021. Since then Mr Cameron said it was “uncomfortable” using that
phrase as “if you looked at the way we were divvying the money up, we put hitting our financial
targets first and postmaster remuneration second, and he said he hadnt been using that phrase
for some months at that time.” Evidence on the actions taken over the past 5 years suggests
to those we represent that the work of the Post Office has regrettably been, as ever, focused first
on self-preservation. For an organisation in crisis, recovery, rehabilitation and a change of
culture will go hand in hand. The replacement of the Chair and the CEO as we come to the
close of this Inquiry ought to be an opportunity for a clean slate. The Inquiry has the new
strategic review and coverage of public commitments of the new Chair (to which we return,
below). Whether these come to pass and are accompanied by a change in attitude across the
business remains to be seen. A first step on the road to change would be an open commitment
by the Post Office (and the Department) to the implementation of any and all recommendations
of this Inquiry without undue delay.
2.24 Seventhly, the limited evidence available to the Inquiry concerning the conduct of investigations
by POL principally relates to NED members of the POL Board. This material suggests that the
approach being taken within the A & CI team to investigations may yet require serious attention.
If the experience of Eliot Jacobs at Director level can be so unsatisfactory, the Inquiry may wish
to ask what might happen in another serious investigation elevated to the A & Cl team. The
evidence of Mr Jacobs suggests that while the Post Office is saying the right things, their
approach to investigations may remain aggressive, unprofessional and intrinsically anti-SPM.”
It is particularly concerning that his experience was with the A & CI team (the team which is
now to be responsible for the assurance of investigations throughout POL). We note that,
71 INQ00001189, 1 October 2024, 183: 21 — 184:10.
7 Toid 184:24 — 125:8
73 WITN11180100, [19] ~ [28].
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despite the recommendations of KPMG’s review of investigations, it took two and a half years
to progress to a meeting with the College of Policing to discuss a training package for POL.
The speed of this work suggests nothing short of extreme reluctance or lack of care. However,
in the light of the approach to Phoenix and Past Roles, this may be unsurprising. We are
conscious the Inquiry has few other examples of work on live investigations now, whether
within the Retail Team (Mel Park) or the A & CI (John Bartlett), but would encourage
scepticism. The case for continuing, independent external scrutiny of non-police investigation
activity by the Post Office appears strong.
Finally, there is scope for learning beyond the Post Office in this Inquiry. While the Post Office
may have stopped pursuing private prosecutions there are a number of bodies which have
pursued (and continue to) pursue non-police investigations with a view to prosecution in both
the private and public sectors. Local authorities,” DWP’ and other bodies conduct
investigations pursuant to PACE, with a view to investigation. (Other non-police bodies
conducting investigations which may lead to prosecution of offences include the TV Licensing
authority” and the RSPCA”).” In our closing submi
no equivalent of the IOPC for the Post Office Police. The IOPC does consider some non-police
investigations in the public sector, including HMRC. However, as was clear in the course of
ions in Phase 4 we raised that there was
this Inquiry, even where a body is not using compulsory powers or the use of force, misconduct
in the course of investigatory work can be devastating. We invite the Inquiry to recommend
Government conduct a review of the operation of private criminal investigations and
prosecutions within the UK, focusing on both public and private bodies who pursue these
activities outside of the ordinary activities of the police and CPS. This ought to include
consideration of the creation of a body responsible for independent complaints handling
for any non-police investigation of criminal offences. In addition (or in the alternative),
the Inquiry may wish to recommend standard guidance for all public and private bodies
conducting non-police investigations (including those which purport to conduct PACE
compliant interviews with a view to prosecution). This could draw on the lessons learned
in this Inquiry about the recruitment, training, deployment and conduct of investigators.
INQ00001198, 17 October 2024, 25:1 — 29:22. The proposal was not yet finalised
RLIT0000573 See, only for example, South Hams District Council Enforeement Policy, which commits all
investigations to compliance with PACE and other relevant legal standards.
General complaints about handling of some complaints by the DWP can be pursued with an Independent Case
Examiner after the exhaustion of a local complaints process. However, they cannot deal with complaints that have
been subject to legal proceedings, for example. Complaints may be made to the Parliamentary and Health Services
Ombudman. This does not focus on investigatory powers.
TV Licensing Officers are required to comply with a Prosecution Code of Conduct, but they do conduct interviews
under caution, deploying bodyworn cameras for this purpose: “Our Officer will tell you why they're visiting. They'll
be polite, considerate and fair: And they will follow our code of conduct”. There has been recent extensive criticism
of the use of the single judge procedure for the processing of TV license offences in the magistrates courts. While
beyond the scope of this Inquiry, it may be noted that these prosecutions are not rare and although they involve lower
level offending, they have had a reportedly devastating impact on some. RLIT0000560 Telegraph, Secret court for
speeding and TV licence fee offences must end, magistrates urge, 25 March 2024.
While widely reported that the RSPCA announced its intention in 2021 to end its practice of private prosecutions,
following recommendations by the HC DEFRA Committee in 2016, transitioning to work with the CPS on cases of
animal cruelty, we understand that it continues to investigate and may remain involved in prosecutions. See,
e.g. RLIT0000566 Countryside Alliance, Tim Bonner, Post Office scandal puts spotlight on RSPCA, 11 January,
www.rspea.org.uk/whatwedo/endcruelty/investigatingcruelty/ process
POL00006802 The Inquiry will recall the review of this anachronistic practice in Brian Altman QC’s advice to Post
Office in 2013.
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2.26 The House of Commons Justice Select Committee has previously recommended that an
inspectorate for private prosecutions be created (together with a power for Government to strip
a body of the ability to pursue private prosecutions and the introduction of other safeguards).
This would have included the introduction of a binding code of standards.*° These proposals
were rejected by Government (“we are not persuaded that introducing a binding and
enforceable code of standards (or the inspection regime proposed ...) would be a proportionate
response”).’' This response came before the evidence of Phase 4. We invite the Inquiry to
revisit these recommendations and associated safeguards and to urge the Government to
establish an inspectorate of private prosecutions without delay in order to ensure that no
repetition of this scandal can ever occur.
3 A ROBUST DEFENCE
3.2 While the history of Horizon raised a number of legitimate questions, when concerns were
raised, the response by Post Office (and its leaders) was studiously, if not culpably, incurious.
3.3 The response to any question over the integrity of Horizon was defensive: defensive of Horizon,
defensive of Fujitsu and defensive of the Post Office. Phases 5 and 6, taken together, provided
months of shocking evidence on the actions taken year on year that would keep the truth about
Horizon and the Post Office’s mistreatment of SPMs out of the public domain.
3.4 In this section, we invite the Inquiry to consider ten propositions on the Post Office response to
concerns about Horizon and unsafe convictions.
1. The Robust Defence of Horizon did not start in 2013.
3.5 The seemingly unblinking defence of Horizon didn’t start in 2013, when, as Mr Cameron
described it, POL “doubled down”. We refer the Inquiry to our earlier submissions on this
point. The business knew from roll-out that if the Post Office were to survive, its ethos had to
be Horizon-centric.** There wasn’t a Plan B.™ From the apparent ignorance or ignoring of the
warnings in Jeremy Folkes’ parting red-flags to the business (commissioned by David Miller)
‘5, to the critical failure to engage with the joint expert report in Cleveleys, everything in the
80 RLIT0000530 HC 487, Ninth Report of Session 2019-21, Private prosecutions: safeguards (29 September 2020).
RLIT0000567 In January 2024, the Committee invited the Government to revisit its decision to reject the safeguards
recommended by the Committee: “The Government response to the Committee's Report rejected the Committee's
recommendation on the need for all bodies that conduct prosecutions to be subject to inspection. The Committee
further called for the creation of a power to strip an organisation of its power to conduct private prosecutions, which
the Government also rejected. The Government also rejected the Committee's recommendation for a binding code of
standards for all private prosecutors and investigators. Given the information that has come to light on the Post
Office's approach to prosecutions, and the limited power of the justice system to provide safeguards to those targeted,
we would ask that the Government look again at these recommendations.”
al RLIT0000531 HC 1238, Tenth Special Report of Session 2019-21, Private prosecutions: safeguards: Government
Response to the Committees Ninth Report (2 March 2021).
% — INQ00001189 , 1 October 2024, 173:3 — 18: “And what I meant by doubling down is Post Office retreated into
"Well, we'll do the Mediation Scheme, but ..." you know, and to become much more defensive again, and that is what
I meant, and that seemed to be around 2013.”
8 POL00031230 (January 1999).
8+ INQ00001016 (Stuart Sweetman), 2 Nov 2022, 11:24 — 17:20.
85 INQ00001005, 3 Nov 2022, 14:3 — 20:25. WITN05970123 (February 2000 updated 2022). “/W]e had gone through
a tough five years and there were a number of things that L felt that I wanted to be able to write down to -- should
anybody try to do this thing again, to avoid some of the problems.” “I was concerned that not enough appeared to
21
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first days of Horizon pointed to the prospect of it going wrong being too big a reality to face.
Consequently, it was not faced.
The Inquiry has good grounds to be sceptical as to whether the history was forgotten or, instead,
a blind-eye was wilfully turned in the face of growing evidence. What we do know suggests the
approach to risk-management for Horizon was deeply flawed. The evidence of Phases 3 and 4
demonstrates the continued refusal to countenance any message that the operation of Horizon
(and the approach of Post Office to the investigation and prosecution of its own people) was
worthy of concern. The evidence of Mr Ismay, who had been Head of Control and Risk and
author of the notorious Ismay report is telling.*° In reality, the seeds for the approach to the
defence of Horizon and the Post Office’s prosecution practices by the business (acting together
with its legal teams) were sown and nurtured early.
We return to the issue of risk management and good governance in Section 5 below.
2. Independent Technical Interrogation of Hori was dodged time and again.
One obvious step that might have averted this scandal would have been a full technical audit of
Horizon; including as it operated on the counter. Opportunity upon opportunity to consider and
conduct a full independent investigation was passed over before the engagement of Second
Sight. There had been legal advice from Rob Wilson and a conversation in conference with
Richard Morgan (now KC) about the risk associated with such an investigation, first in 2010,
and then in 2012.*7 It was a lose-lose prospect for Post Office.
Recommendations for independent investigation of Horizon as a system went ignored or were
allowed to drift. Phase 5 confirmed these went beyond mere coal face speculation.
Phase 4 revealed Horizon challenges drawn to the attention of management, including Rod
Ismay and David Smith at the Post Office, as early as 2005. Mandy Talbot’s suggested responses
to these challenges included a clear recommendation of the involvement of independent
expertise beyond Fujitsu, and a more consistent joined-up approach by the Post Office.** Her
recommendations were seemingly discussed and then largely stalled.
Proposals for an independent external review in March 2010 were shut down following contact
between the relevant Senior Managers, including Rob Wilson (the Head of Criminal Law), John
Scott (the Head of Security) and Rod Ismay (the Head of Product and Branch Accounting).*°
The Ismay whitewash followed.
In Phase 5 we also learned that the parent RMG had asked about independent review. In
September 2011, Mr Brydon, Chair of RMG had written to Ms Vennells expressing his surprise
over reporting of the class action in Private Eye. He questioned whether there had ever been an
independent audit of Horizon.”
have been done or we had not had enough visibility of it, as to how the system would behave in cases of failure”. The
evidence is that nothing happened with Mr Folkes concerns including his proposals including for hostile testing.
1NQ00001063, INQ00001064, INQ00001145.
POL00106867 (Rob Wilson, 3 March 2010), POL00006484 (Richard Morgan QC, 12 June 2012 (Conference
Attendance Note).
POL00107426, POL00071202.
POL0010742
WITN00740126. INQ00001151, 22 May, 151:5 ~ 153:2.
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3.13 The Inquiry heard of Ms Vennells chasing Mr Young in frustration, with the BBC asking more
questions. She wrote a message to Ms Sewell headed “Horizon independent assessment”. She
said this was in response to the Brydon queries. Ms Sewell had said Fujitsu intended to use Pen
Test Partners but would instead now go to KPMG. Ms Vennells asked “how can it be
independent if Fujitsu are choosing and swapping suppliers? Is that sustainable evidence in
court — independently verified by a company they choose?” This might be the closest we see —
before Second Sight — to an interest in pursuing any independent interrogation of Horizon. It
coincided with the first Shoosmiths ‘letters before claim’ being live. Ms Vennells wrote of her
concern about how a class action could be “hugely negative reputationally” and “it could cost
us a lot of money and this verification, which presumably could be of enormous help is not even
off the blocks.” She was on holiday, cross and frustrated. She explains her frustration: “/ know
everyone is working very hard but I’m a bit disappointed that I found out only by asking as a
result of potential BBC coverage.” But it might legitimately be asked whether Ms Vennells was
more worried about the need to see off the BBC than she was of the risk the Post Office had
acted unlawfully? Ms Sewell had rolled the lawyers into her reply (to which we will return). Ms
Vennells sent her ill-tempered reply to Mr Young alone (seemingly albeit in error).
3.14 It appears little more was said as focus turned to Second Sight in 2012: a technical, interrogation
akin to an audit by Deloitte being passed over in favour of Mr Henderson and Mr Warmington.
For reasons which remain unclear, the business did not want to instruct the Big Four.
3. Any Independent View was to be Ignored, Dismissed, Avoided or Diminished.
Y
a
Any critical (or potentially critical) external view on Horizon delivered to the Post Office was
forgotten, ignored, dismissed, avoided or diminished. Alternatively, its circulation was limited
with the very real prospect that it was hidden.
3.16 First, the Inquiry has evidence of the role played by Fujitsu in the evidence of Paul Patterson.
The Inquiry has the evidence of Phases 2-4. Fujitsu undoubtedly did not pass on everything it
should to POL in the way it should (the handling of the EPOSS Task Force a case in point).
Where bugs were passed on, they appear to have been consistently dismissed, diminished or
explained away as “fixed” or “not relevant” with limited questioning. This was precisely how it
appeared each of the bugs considered in the Second Sight Interim Report had been handled long
before 2013. We have addressed the approach to Mr Jenkins’ evidence above.”!
3.17 However, despite apparent resistance to an external view, there were red flags in those which
did get through to POL (or ought to have done): the Phase 4 evidence on the handling of the
expert evidence in Cleveleys and Castleton is starkly illustrative.
3.18 Ernst & Young raised the flag on remote access in 2011 and continued their work into 2012.
Alice Perkins was full of apology that she didn’t get to the bottom of what was going on. Yet,
at the start of her tenure, in September 2011, Angus Grant at Ernst & Young appears to have
given her an idea. Jotted down in a Post Office notebook, with a prescient logo: “We do not see
things as they are, we see them as we are!” — she recorded: “With Fujitsu, [Post Office] drove a
very hard bargain on price but they took back on quality/assurance." “Horizon -- is a real risk
ot POL00134295, POL00144533 (GJ work on the Lepton Spot Review). The Inquiry has seen some evidence of his
drafting on Spot Reviews for Second Sight also amended, by Bond Dickinson.
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for us."
Days later, as Ms Perkins recognised, Donald Brydon, Chair at the parent RMG, was
questioning what he’d read in Private Eye about Horizon.”* Even if—as suggested by Ms Perkins
— Ernst & Young’s concerns were for the past (which was patently not the case) — this was a
glaring warning that perhaps there might just be something in the SPMs claims that Horizon
lacked integrity.
The appointment of Second Sight was apparently a sea change in attitude at the Post Office; and
it ought to have been. Yet, despite denials, the business plainly saw the appointment not as an
opportunity for rigorous interrogation of the technical capacities of Horizon and honest
reflection on Post Office’s own past practices but, instead, as a means of shutting down press
and Parliamentary pressure. Ms Perkins said it herself when she told the Board she had met
James Arbuthnot and “hoped that she could find a way to convince him and the other MPs that
the system was not at fault."°*
(a) _ It was never a technical audit. One had been offered, considered and eschewed. The Post
Office never wanted a Big Four firm.”*
(b) The Inquiry heard evidence on how Post Office sought to constrain and shape the
investigation. There was disagreement upon disagreement over the scope of the
investigation and its purpose. There was a critical distinction to be made between
systemic and systematic. What was systemic? Post Office wanted focus strictly on the
system despite determining at the outset a full technical audit of Horizon was not on the
cards, Susan Crichton told Second Sight: “Paula agrees that the original scope of the
investigation did not go as far as looking at whether — it was the miscarriage of justice
point...So thats not what she looking for. Shes just — she’s looking for the systematic —
tem”.°® The
business wanted to have its cake and eat it. An investigation that focused on Fujitsu
in the Horizon s)
temic, rather, not
systems but which was not a full technical audit. An investigation independent enough to
¢ off the MPs, but not so independent it would cause more trouble.
(c) Disclosure from Post Office and Fujitsu to Second Sight was mismanaged and
incomplete. At the start, they were provided with very little coherent information at all.
When they asked for the general file, they were told there wasn’t one.”
(d) _ The visceral response within Post Office to the Interim Report is telling. Susan Crichton
had failed to “man mark” Second Sight.”* It was thought by her leaders that she had lost
sight of the interests of the business. Leadership appears to have concluded her
professional obligations as a lawyer got in the way. Ms Vennells described this as clumsy
language but it is more likely that it was a note never meant to see the light of day.”
(e) I When the result was not what the Post Office intended it rewrote the narrative. The results
were spun, miscast and publicly misrepresented. Second Sight were dismissed,
diminished and ultimately removed.
WITN00740122. INQ00001156, 5 June, 11:10 ~ 29:15.
INQ00001156,
INQ00001156, 5 June, 53:23 — 56:25. POL00021505,
INQ00001156, 6 May 2024, 74-75: Ms Perkins suggested this was to meet concerns of Lord Arbuthnot.
INQ00001152, 23 May 2024, 4 (Paula Vennells); INQ00001134 (Susan Crichton), 23 April 2024,53. INQ00001136,
25 April 2024, 179 (Angela Van Den Bogerd: "My take would be that that would have been less costly than getting
one of the big four in.”
1NQ00001152, 23 May, 108:6~ 11:5.
INQ00001162, 18 June, 14:22 - 145:4.
POL00381455, INQ00001156, 5 June, 154— 159.
INQ00001152, 23 May, 178:8 — 180:8.
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(f) There were opportunities seemingly missed throughout the engagement of Second Sight.
To take just one: Second Sight’s heavily caveated critique of Post Office investigations
and investigators seems prescient in light of the evidence in Phase 4. There is evidence
this went to Susan Crichton and Chris Aujard and the Inquiry might think it ought to have
triggered some self-reflection and inquiry.'° Yet, staggeringly, as we learned in Phase 7
that it took the Human Impact Hearings of this Inquiry to trigger Project Phoenix and
Past Roles. And that work of critical — and long overdue - self-reflection still continues.
3.20. The handling of expert, external input afier the Second Sight Interim Report is a sorry tale.
Witnesses invite the Inquiry to conclude that conspicuous red flags were missed, misunderstood
or held back by a few individuals. After Second Sight, the whole business ought to have been
on alert. But it was not because, instead, it was on the defensive. It will be for the Inquiry to
conclude whether to accept incompetence truly did ensure ignorance. We urge scepticism. The
actions taken in the post-2013 period invite close scrutiny and suggest an organisation desperate
to defend itself; supported by an aggressive legal team driven above all to protect a narrow view
of their client’s best interests to the detriment of all else. Unblinking in its defensiveness, at best,
it appears individuals shut their eyes to information which didn’t suit the narrative. At worst
they may have buried it. The greater the opportunity for dots to be joined, the defences to be
broken, the more the credibility of claims of incompetence or ignorance might diminish.
3.21 The handling of the Clarke advice of July 2013 was shameful. We deal with this relatively
briefly, as the Inquiry has substantial evidence on this issue
3.22. The Clarke advice was plainly seen by many lawyers for the Post Office; both internal and
external.'°! It went to General Counsel and to Bond Dickinson. Its significance is plainly
understood from the outset, with Gavin Matthews (Bond Dickinson) and Susan Crichton, as
early as 16 July, discussing potential liabilities for Post Office, Fujitsu and Cartwright King as
a result of Mr Jenkins failures to comply with his obligations as an expert witness.'”
3.23 This is consistent with an appreciation of the common law duty that would have been known to
any reasonable practitioner. In R (Nunn) v Chief Constable of Suffolk Constabulary [2015] AC
225, Lord Hughes explained:
“There can be no doubt that if the police or prosecution come into possession, after the
appellate process is exhausted of something new which might afford arguable grounds for
contending that the conviction was unsafe, it is their duty to disclose it to the convicted
defendant.”
3.24 That was always the common law duty. It was always the duty, before 2014 and before 2000. It
was the duty for the whole of the relevant period of this Inquiry. Every reasonable criminal
lawyer would and should have known that.
(a) _ As to the continuing duty of disclosure owed by POL to those it had prosecuted in the
Horizon era, the premise of the Cartwright King sift review is that the existence of such
a duty was understood by POL and those advising them extended to the disclosure of
potentially exculpatory material which may render the convictions in question unsafe. It
100 1NQ00001162, 18 June, 146:16 — 154:11. POL00344051.
tol 1INQ00001160, 13 June, 29:21 — 37:23. INQ00001135, 24 April, 78:2-21. INQ00001132, 18 April, 141:10 — 147:22.
102 1NQ00001160, 13 June, 29:21 — ; and the documents therein, in particular WBON0000133.
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was in the understanding and application of the duty that things went wrong. There
appears to be no contention that POL was bound, and the organisation and its advisors
knew they were bound, by such a duty. The consideration given to disclosure was wholly
inadequate. To fail to even consider disclosure of the substance of the Clarke advice, both
in terms of the information it disclosed about Mr Jenkins and his state of knowledge and
the substance of the advice that he was unsafe, was plainly wrong.
(b) Both the substance of the advice and the information about Mr Jenkins which it
incorporated ought to have been disclosed in appropriate cases. That is, cases where it
might afford arguable grounds for contending the conviction was unsafe. It follows:
i. It should definitely have been disclosed to all those who had been convicted on
the basis of the evidence of Gareth Jenkins;
ii. It should also have been disclosed to all those who raised the unreliability of
Horizon at any stage of the proceedings (including in unexplained
discrepancies); whether they were subsequently convicted after trial or convicted
by their own plea. That is because the reliability of Horizon was essential to their
convictions.
(c) I What should have been disclosed is the substance of the advice;
(d) _ The disclosure should have been given as soon as practicable after receipt of the Clarke
advice (POL having had this information since early July and in writing from 16 July).
(When there appears to be a real prospect that further inquiry will uncover something
which may affect the safety of the conviction, then police or prosecutors ought to co-
operate in making such inquiries (Nunn, [41]). However, when it is plain that material
goes to the safety of the conviction; the duty of disclosure bites (Nunn, [35] (above)). The
only reasonable delay ought to have been in identifying that there were cases which relied
on Horizon integrity. As explained above, it should also have been disclosed to affected
SPMs.
3.25 The information in the Clarke advice ought to have gone to the Board and directly to the CCRC
in July 2013 (if necessary, after a short investigation to confirm the premise of Mr Clarke’s
advice). There were plainly cases within POL’s knowledge where Horizon integrity had been in
issue (including cases considered by Second Sight). That Bond Dickinson’s initial concern over
disclosing the tainted witness issue to the CCRC as reflected in the draft response was not
immediately contradicted (not by Cartwright King nor by Brian Altman KC") was a patent and
terrible error.
3.26 Had a proper inquiry been conducted, consistent with the duties of the Post Office, then a range
of other exculpatory matters may have been discovered. This may have included that Mr Jenkins
(and indeed, other Fujitsu witnesses) had not been properly instructed before each case by the
Post Office, their legal team or Fujitsu. They would have, arguably, discovered Mr Jenkins’ far
03 1NQ00001143, 8 May, 57:20 — 58:5. “Mr Altman KC admitted to an error in his consideration of the “tainted witness”
issue: “ don't think privilege would have ~- if I had applied my mind to the fact that Gareth Jenkins’ credibility was
in issue and his assessment as an expert was in issue, I think I would ultimately have advised that that ought to be
disclosed in appropriate cases. I clearly didn't. I can't think now why I didn't, I'd like to say it was a misjudgement
but I'm not even sure there was a judgement. I don't know why, I think we were — if I have to think back and speculate,
I think the focus was so geared towards these two new bugs that that just slipped thorough, as it were.” When pressed
as to disclosure to the CCRC, Mr Altman intimated his general review went to the CCRC (We understand this was
some time later, in February 2015). He agreed again that the failure to advise that the Clarke Advice and his own
opinion as to the tainted witness issue ought to have been considered for disclosure. INQ00001143, 8 May, 66:9 —
21.
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wider knowledge of BEDs relevant to Horizon (including in its development) and knowledge
of KELs etc. Further, on examination of his earlier witness statements, it would be, we say,
inevitable that the trail of edits relating to Mr Jenkins’ statement in the Thomas case would have
been discovered. As above, the advice should have been disclosed without delay (together with
any other disclosable material discovered in any subsequent inquiry). Instead, the narrow focus
of Cartwright King (and in turn, the Post Office) fell horribly short. The Inquiry has numerous
examples. To take one, the Inquiry has the advice of Andrew Parsons on the approach to the
Helen Rose report as disclosed: “/nstead, our preferred approach is to downplay the importance
of the [Helen Rose] report in any [Post Office] investigation reports. We recommend minimising
or ignoring entirely the [Helen Rose] Report when responding”. Again, limiting disclosure and
downplaying the significance of a document which if disclosed without redaction could have
exposed the position of Mr Jenkins! (We return to this in Section 4 on regulated legal
professionals).
3.27 The conflict of interest in Cartwright King’s position was plain. In any event, it was raised in
the initial review of BAKC but seemingly not pursued further.'°> Advice aside, it ought to have
been a matter of common sense that Cartwright King had skin in the game and their role in the
sift review and other matters going forward was wholly inappropriate.
3.28 Sufficient information was passed to Paula Vennells and to Alice Perkins that they were (or
ought to have been) aware of the substance of the advice of July 2013. Ms Crichton’s
recollection of dates was unclear, but she testified that she would have briefed Ms Vennells on
the Cartwright King advice sometime after they advised at the London office on 3 July. Ms
Vennells conceded that she would have known about the problem with the Fujitsu witness at
least a month before 27 September 2013 and definitely in July.'®° She insisted that she never
saw the advice and never had its full implications explained to her. On her own explanation as
to what she knew, it is simply incredible that she did not ask to be fully briefed. The Inquiry
might regard the evidence of Ms Vennells as both vague and yet strangely precise at the same
time, in the manner it appears exculpatory. However, the Inquiry might consider that, in her
evidence, she accepted she did know sufficient of the essence of the issue to beg the question
why she would possibly have let it lie. On her own explanation as to what she knew, it is simply
incredible that she did not ask to be more fully briefed at any time after 16 July. Similarly, that
Ms Crichton and Mr Aujard (and then Ms McLeod) all proceeded in the tasks that they did
without ensuring the full understanding of the CEO as to the serious implications of this
revelation for the business appears simply incredible. (Again, the Inquiry will determine
whether the suggestion that no request was ever made for a fuller briefing or a copy of the advice
(nor one offered or discussed) is either credible or merely convenient.)
3.29 Ms Perkins asserts that she was unaware of the Clarke advice until much later; that is, during
the appeals. She said it ought to have been provided to her by Ms Crichton: “J see this as one of
a number of failed turning points in this very sorry story. And I do really believe that, in that
summer of 2013, things could have been very different, and they weren't.” Yet, it is Ms
104 POL00129392, INQ00001161, 14 June 2024, 37 — 44 (Mr Parsons evidence was that this would have been on the
advice of Cartwright King).
105 POL00006583 at [16].
106 INQ00001153, 24 May, 34:24 — 35:7.
107 INQ00001156, 5 June, 161: 1- 20.
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Vennells’ evidence that she told her Chair what she knew. We observe that this appears
supported by the “wnsafe witness” email of 21 October 2013.'°*
3.30 If all the evidence is taken at face value; this has to be (at best) one of the most egregious
examples of reckless incompetence on the part of each of the players. However, on the basis of
what it appears Ms Vennells (and Ms Perkins) knew of the ie, if not the advice, then if not
escalated to the Board in all the circumstances of mid-2013 this was simply extraordinary.
3.31 The Board was updated at the disastrous meeting of 16 July. General Counsel was held outside.
The Board had her paper, including Appendix 1. It didn’t deal with the tainted witness. Whatever
the Board was told, it causes sufficient concern for wrongful prosecutions and the liability of
POL and its Directors asking for a briefing on the insurance position and tasking the team to
update the insurers.'°? Did no one in that meeting (or any later meeting) ask to talk to the
lawyers directly about what exactly triggered the real risk to the business? And were there no
repercussions for the Board members who failed to ask such questions? (The Inquiry has the
Governance Experts Case Study 2.)
(a) Whilst the plight of SPMs was conspicuously ignored, we know this concern triggered a
series of inquiries about insurance for Directors and Officers liabilities and notification
to the Board’s insurers.'!°
(b) Members of the Board were told that there was a need for a new witness.''! They knew
this conversation was going on against the background of years of challenge to POL’s
historic prosecutions. Did no one really ask — why now? What’s wrong with the one we
used to use? Again, is this incompetence or might the absence of any question suggest
that the reason had already been explained, even — or especially — if not recorded?
(c) I The Inquiry heard that the Board continued to be involved in conversations on changing
policy on prosecutions and on prosecutions being paused. The suggestion that during that
time there was no discussion of the true reason why the pause had become necessary,
again, appears either incredible, or by egregious design.
(d) The Inquiry might conclude that there was altogether too great a focus on the possible
civil liabilities of the Post Office (and its directors) and scandalously little regard had for
the impact of the serious miscarriages of justice which had occurred on SPMs. The nadir
of this might be in the discussion of the options for continuing or ending prosecution by
POL, in November 2013, with the benefit of advice from Brian Altman KC, and the
shameful reluctance of Executive and Board members in the ARC to step away from the
108 POL00382001.
10% POL00099218 (Update Paper) and POL00021516 (Minute). We note that the Annex I summary of the issues, while
seriously deficient, does focus upon both the prospects for appeal and the overturning of convictions; but also on
potential civil liability for POL (albeit alongside a focus on communications).
The Inquiry will recall how that notification was ultimately handled, with input from Bond Dickinson and a
suggestion that verbal notification might be used (avoiding a paper trail) (POL00145716) and input from Cartwright
King diminishing the seriousness and the significance of the information conveyed about the “tainted witness” issue.
Later amendments to a March 2014 notification were passed through Rodrie Williams and Andy Parsons)
1NQ00001160, 13 June, 71:11 — 80:22.
11 See, for one example, the significant litigation report circulated in November 2014: POL00149638 (at p168):, “There
are number of cases which could have been prosecuted (e.g. those with full and frank admissions to theft fraud), but
prosecutions were not commenced to avoid adverse judicial comment. Several cases have also been terminated while
POL obtains an independent expert report on the Horizon branch accounting system (see below). There are currently
14 cases which are being kept under review as to whether a prosecution (supported by an expert report) can be
commenced." This then goes on to refer to Imperial College as the “New Experts”. By March 2015, the significant
litigation report included: “Steps continue to be taken to determine the basis on which Imperial College London may
be able to provide expert evidence to support prosecutions which involve data obtained from the Horizon system.”
POL00353031 (25 March 2015) at p95.
Lo
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anachronistic practice of POL acting as prosecutor, with a now all too familiar focus not
only on deterrent but recoveries.''* We note Ms Vennells sought to stress the impact a
change of policy might have on the ongoing position in relation to the integrity of past
prosecutions: “any change of policy is likely to be closely scrutinised and over-interpreted
~ with the likely inference that this is an admission that we were wrong to pursue
prosecutions in the past.” Again, the perceived commercial interest of the business was
to prevail over what was obviously good sense
In October 2013, Detica concluded: “Post Office systems are not fit for purpose in a modern
retail and financial environment.” The work of Detica ought to have reinforced the conclusions
of Second Sight, seen by those at the heart of work on what came next and who had reporting
lines direct to the CEO (namely, Angela Van Den Bogerd, Lesley Sewell and Chris Aujard) but
seemingly it had little impact.'>
This was, of course, concurrent with Cartwright King being tasked to check (albeit only some
of) their own work on some of their past prosecutions. In the light of the evidence of Brian
Altman KC, Martin Smith, Simon Clarke and Harry Bowyer, and that of Jarnail Singh, the
Inquiry might consider that the question of conflict of which the Post Office ought to have been
aware was obvious. It was plain that at least some in the Post Office had considered the position
of Cartwright King and their liability for malicious prosecution: Mr Singh had asked Cartwright
King to comment on Bond Dickinson’s advice and responses being given on civil liability,
asking about not only the position of POL vis Cartwright King but his own position (See also
the evidence of Ms Cortes-Martin).''*
The approach to the Cartwright King Sift Review was shaped first by PR input (to which we
return below) and the input of both Bond Dickinson (the Post Office’s civil solicitors) and the
Post Office into the overlaid work of Brian Altman KC."'°
The Post Office team were also drawing on the expertise of Sir Anthony Hooper, after his
appointment. It was his evidence that he warned Ms Vennells and Ms Perkins that the Post
Office position didn’t make sense. He suggests that although he didn’t see the Bond Dickinson
advice, he thought the Post Office believed the process would see them paying out small
amounts. He told them otherwise: substantial payments ought to be anticipated. He accepts he
1NQ00001135, 24 April, 98:4 - 99:13. POL00021424. POL00030900. Noting that the Board were advised of the
commercial impact of ending prosecutions thus: “it would be open to us to use the civil courts to recover losses,
though this is a more time consuming process, and there is greater scope for assets to be hidden from view. " See also
the engagement of Ms Vennells, Ms Perkins and other Board Members. Ms Vennells being firmly in favour of
retaining prosecutions but with a higher bar: POL00027688, See also POL00100223 and the first witness statement
of Ms Vennells, WITN01020100 at [743].
INQ00001151, 22 May, 101:21 — 107:22.
POL00164253, POL00100003, POL00198765, POL00327114 (16 December 2013): “Am I right in interpreting
this as meaning that as Post Office does not conduct its prosecutions in house — that is, it uses Cartwright King rather
than directly employed lawyers ~ any claim for malicious prosecution would properly stand against Cartwright King
and not POL, provided we follow our normal processes as described in the advice.” Advice is available which appears
to be a Cartwright King view on the Bond Dickinson advice, confirming that where POL instructs outside lawyers,
the claim for malicious prosecution will lie against those outside lawyers (Cartwright King): POL00198766. See
also POL00327117, POL00327118. Mr Singh’s concem for his own position appears clear: “What about cases I
advise on and have done as part of Royal mail in house prosecution team.” This message is marked urgent and not
copied to anyone else but Cartwright King (17 December 2013).
See, e.g. POL00021980: Gavin Matthews advising as to Brian Altman’s terms of reference and his query as to
whether his review should consider the efficacy or safety of past prosecutions. It was the view of Bond Dickinson
that Mr Altman should leave the question of safety to Cartwright King.
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ought to have asked to speak to the Board to impress upon them “the fundamental implausibility
of the Post Office case”.''° We return to consider regulated legal professionals in Section 4
below.
4. Public Relations governed the Public Interest
Any concern about Horizon or the safety of prosecutions was met first with concern for the
business and its public perception. At the end of Phase 4, we addressed the toxic culture at Post
Office: it was not a superficial problem but how far it went remained to be seen in Phase 5.
While those in corporate control of an organisation must have concern for its brand, reputation
and public relations, evidence before the Inquiry was of a Post Office wholly driven by a desire
to protect the brand, its message and commercial interests to the exclusion of all else. Steps
responsive to substantive concerns raised about Horizon or about prosecutions were never about
asking the right questions — Is this thing working? Are we the bad guys? Instead they asked —
how do we defend ourselves from this attack?
Ofen, the first thought of management was to stonewall any doubters and protect the brand.
This extended to interactions with Parliament: do only enough to protect the position of the
business, to hammer home our message. Stay in your boxes. Go no further than pushed. No
more. This was keenly illustrated in the briefing of Ms Vennells for her February 2015
appearance before the House of Commons Business, Innovation and Skills (BIS) Select
Committee.'!? Whatever you do, never accept the premise that something might just be wrong
at the Post Office. It ruled the Executive response to crisis. We cite a couple of examples from
many:
(a) When confronted with immediate news of the death of Martin Griffiths, with his family
and Mr Bates laying blame at the door of the business, Ms Vennells (and her team)
thought first of how to protect the Post Office: "J had heard but have yet to see a formal
report, that there were previous mental health issues and potential family issues".!'* The
Inquiry heard that a number of the Executive and management team were involved in the
immediate response within Post Office, including Mr Davies asking Ms Crichton to line
up a specialist media lawyer.'!° The first thought was to protect the brand. Ms Van Den
Bogerd said: “in all my time with Post Office, from very early on, I was very conscious
that, you know, PR was very important”.”® This was correspondence never intended for
exposure beyond the Post Office inner circle. It is a most shocking and telling insight into
the toxic culture that had been allowed to fester in the business. The public face masked
a very different attitude behind closed doors.
(b) In early July, with the face of the incoming Second Sight Interim Report and with the
knowledge of the tainted witness issue already in the business; Ms Vennells took the PR
man’s steer away from a full historic review of past prosecutions (the historic review
proceeds but is curtailed to January 2010): “There are two objectives, the most urgent
being to manage the media.” (The second, was, of course, manage James Arbuthnot and
Alan Bates without dealing with the reopening of past cases).'°! Ms Vennells’ continued
1NQ00001127, 10 Apri, 134 — 139.
INQ00001151, 22 May 178: 7 — 192:13. See POL00117096 and POL00117097. (Addendum to the briefing for
Select Committee o(2 Feb 2015), with reference back to POL0002981
INQ00001151, 22 May, 60:1 — 72:13. POL00301440. POL0002775
Bogerd, INQ00001137, 26 April }, at 10:17 — on.
POL00162068.
1INQ00001137, 26 April 2024, 15:22 -25.
INQ00001152, 23 May, 49:15 — 68-1 (see 64:18 — 66:7). POL00099056. POL00099055.
- POL00393535. See also Angela Van Den
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assertions that she didn’t favour the advice of PR is fundamentally undermined in light
of the evidence heard of repeated occasions where it appears that is precisely what
occurred. This was plainly a moment where, had the right thing been done, the true picture
may have emerged without need for years of hurt and legal costs.
3.38 The Post Office “lines” on Horizon evolved, but at the core of the business remained a toxic
combination of disdain and contempt for SPMs and an unwarranted, untested and unquestioned
assertion as to Horizon’s integrity.
Subpostmasters were incompetent or on the take:
3.39 We have addressed in our Phase 3 and 4 closing submissions, the dangerous default that where
there was an error, or a discrepancy, the SPM was to blame.
3.40 User error was a go-to explanation in the absence of any root cause. Some SPMs were always
going to be considered incompetent (regardless of any evidence they were or not). SPMs were
always considered responsible for losses (regardless of whether or not that was actually what
the contract said or not).
3.41 Whether in Mr Cook’s casual reference to “subbies with their hands in the till”? or Ms Vennells
telling James Arbuthnot of the “semptation” some SPMs gave into,'”*
narrative led from the top that SPMs were not only incompetent (or muddle-headed) but
dishonest.
there was a consistent
Horizon was robust:
3.42 The Inquiry is now well familiar with the stock line which had been settled in POL by at least
February 2010. In response to yet another press query, it was said: “J am providing our stock
line which states the system is robust”.'** We have had three years of evidence, and we still have
no clear picture as to who signed off that “stock line”.
3.43. We do know from the evidence of Phases 2, 3, 4 and now, Phases 5-6, that it was a view reached
despite there being knowledge within the business of BEDs, remote access, and that there had
been errors in the handling of audit data.
3.44 We do know that it was a line that persisted. As late as February 2019, Tom Cooper and Paula
Vennells exchanged views on press strategy on the GLO. Ms Vennells recommended business
as usual: “As before, we hold the ground: the system is robust...So, ‘aggressive’ no, robust
9125
absolutely no question. We do know that it was a line parroted with enthusiasm by the
NFSP. (The Inquiry will recall the message from Mr Bates to Mr Thomson concerning the
Second Sight investigation and the response forwarded to Post Office: “I have just received this
rubbish from JSA, obviously I will tell him Horizon is secure and robust and to go away.”'*
ad
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We do know, and the Post Office knew or ought to have known well before 2010, that it was a
stock line wholly without foundation. The Inquiry has heard since Phase 3 that POL was notified
122 POLO0158368 (15 October 2009).
123, FARBO000OOT (18 June 2012). See also INQO0001151, 22 May, 45:20 ~ 52:12.
128 POL00002268 (1 February 2010) (Michelle Graves to Hayley Fowell).
125 POLOOII1694.
126 POL00184390, INQ00001165, 21 June, 97:4 ~ 102:18.
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of BEDs (including Callendar Square) since early in the life of Horizon. After 2012 and the
POL shift in position from “there are no bugs” to “there are bugs, but...”; and afier 2013 and
the revelations of the Second Sight Interim Report, this “/ine” became a shocking
misrepresentation of information available to the business, including the CEO, the Chair and
the Board.
3.46 We propose to say little about George Thomson and the NFSP. They supported the Post Office.
The Common Issues judgment says all that needs to be said. The individuals involved over the
relevant period — and the continuing work of the organisation — continue to generate
considerable anger for many of those we represent. Where they ought to have been a source of
support and assistance for SPMs, they provided nothing but further pain, trauma and isolation
while echoing the Post Office stock lines. They were perhaps persuaded by the next mantra:
Horizon worked for most people. It must be your fault.
Horizon worked across the network and across many. many transactions:
3.47 We addr
submissions
d the evolution of that message and its repetition in our Phase 4 closing
. It was a message — as our submissions on “Our Story” identified — that made its
way from PR into statements prepared for Court, with terrifying, unchecked ease.
3.48 In Phases 5 and 6 we saw how that narrative was adopted by the leadership. It was a go-to in
the misleading and positive spin placed on the publication of the Second Sight Interim Report.!”
It continued to permeate. In August 2015 — in the appreciation of there being bugs in Horizon,
with the benefit of the Second Sight Report and in the understanding of the tainted witness issue
— Ms Vennells continued to ass ss and the thousands
rt: “our priority is to protect the busin
who operated under the same rules and didn't get into difficulties.”'"*
disingenuous, and logically flawed. Obviously so.
As a line, it was
It didn’t matter if what was said was wrong if the myth stood.
3.49 The myth that the Post Office had never lost a case where Horizon was challenged was repeated
time and again; and used to support the integrity of Horizon. Paula Vennells had used it to deflect
queries which came after the Chair at RMG read the SPMs allegations in Private Eye with some
horror.'”° She rolled it out in one of her first meetings with James Arbuthnot. The Inquiry heard
this was only months after Nichola Arch had been acquitted in April 2012.'*° Efforts to explore
the root of this myth may prove fruitless. Susan Crichton gave this message to the Board in
January 2012, she told us, relying on information from Mike Young.'*! This was a matter which
was patently wrong and easily checked. Yet, it seems, no one thought ever to ask, “is that right?”
“is that still right?”
(a) The myth that Deloitte had checked Ernst & Young’s critical work on IT controls at
Fujitsu was peddled first to the Board and then again to James Arbuthnot (in seeming
error) and never corrected despite investigation showing this to be wholly incorrect.'*?
(b) The Inquiry heard that, repeatedly, Post Office staff claimed that data showed
“keystrokes”. This was plainly with the implication that Post Office knew all, had checked
al POL00113770 (8 July 2013) Press Release on Post Office statement on findings of interim report into Horizon
computer system.
128 INQ00001151, 22 May, 35:6 — 40:11. POL00102438
129 WITNO0740126. INQ00001151, 22 May, 151:5 — 153:2.
130 JARBO000001. INQ00001151, 22 May, 45:14 — 51:2
‘81 [NQ00001134, 23 April, 27:1 — 38: 1.
132 INQ00001156, 5 June, 50:14 ~ 55:7.
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all, and there was nothing in the SPMs complaints. Yet, this was entirely wrongheaded.
The Inquiry has all the evidence it needs on the data POL could (and could not) access
both at the counter and through Fujitsu. Even before considering bugs, errors and defects
in the audit data, POL neglected to obtain what it could, and it did not acknowledge that
data did not follow every keystroke. Yet, even after Ms Van Den Bogerd was well aware
of the Helen Rose Report on Lepton — which made plain what POL couldn’t see (i.e. raw
data held by Fujitsu) - she met with Panorama in 2015 and repeated again the myth of
every keystroke being recorded.'*?
(c) Ms Van Den Bogerd was asked why in briefing James Arbuthnot on Mrs Hamilton’s case
she neglected to consider Graham Brander’s comment on the lack of evidence of theft in
the Investigation Report he prepared.'** She suggested that she would not have seen the
Investigation Report but only the audit: “/ just wanted to present the picture as I saw it
from the information available.” There are documents disclosed to the Inquiry which
suggest Ms Van Den Bogerd was provided with a copy of the Investigation Report, such
that she read it and asked for the Appendices to be provided to her (which they were). We
invite the Inquiry to address this with Ms Van Den Bogerd. It appears her recollection is
incorrect: she had access to this information but did not share it.'** Was it information
which distracted from an otherwise very clear narrative that the Post Office wished to
paint for the MPs, so it was not addressed?
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Even when those at the top were told the earlier message had been wrong, this did not prompt
any serious or proper reflection. First, Ms Vennells was told that there were bugs in Horizon
and the Post Office line needed to change before the conclusion of the Second Sight report. It
became that it isn’t that there are no bugs, there are some, but they’re fixed and not relevant
anyway.'*° Second, the issue of remote access (we return to this below). In response to the GLO
letter before claim; Ms Vennells is told the company’s previous line on remote access isn’t quite
right either. The position on super-user rights has to be amended.'*” Wrong, and wrong again.
This was in the midst of a years’ long defence of the indefensible, and the Post Office (and those
at its helm) didn’t skip a beat.
It didn’t matter if what was said was offensive. There were moments when the mask truly
slipped.
3.51 Mark Davies’ appeared on the Today show in December 2014, at a time when the business had
the Second Sight Interim Report (and more). SPMs who were convicted, broken and in poverty
were experiencing “lifestyle difficulties”. Shameful.
83 POL00140211.INQ00001137, 26 April 2024, 135 - 140.
154 POL00044389. INQ00001137, 26 April 2024, 123:13 ~ 130:11.
'85 POL00124944. This sees Chris Darvill in Legal Services write to Ms Van Den Bogerd on 14 May 2012. He writes
that he has been unsuccessful in locating the prosecution files which would have been prepared for the pur
the criminal proceedings. He then attaches both the audit report and the investigation report prepared by the security
team. Ms Van Den Bogerd replies asking for each of the three appendices to the investigation report as a matter of
urgency (with the implication she had read the investigation report). He sends on the appendices on 15 May, and Ms
Van Den Bogerd forwards these on herself to Tracey J Cutts.
POL00105632. “Paula the only things that is not for the brief for James is our move away from ‘there are no bugs
in Horizon’ to ‘there are known bugs in every computer system this size but they are found and put right and no
subpostmaster is disadvantaged by them' it would be good to be able to go on and say ‘or has been wrongly
suspended or prosecuted’. INQ00001150, 21 May 2024, 87-89 (Alwen Lyons).
87 POL00041258. POL00110482._ WITN10010100 (Jane McLeod), [219] on.
138 WITN09860100, [86]. See POL00150393 (23 December 2014) Email thread subject matter “Comment on Mark’s
blog”. “See below a couple of comments that have come in response to Mark’s internal blog on the intranet.” Melanie
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3.52 Ms Vennells asked the Inquiry to believe that she rolled her eyes and said, “Oh Mark.” Yet days
later, we see her unguarded, late evening post-One show congratulations. She was more bored
than outraged by the plight of the SPMs. Mrs Hamilton lacked passion. Ms Vennells was so
apologetic when shown this whilst sitting in the room with Mrs Hamilton.'* Yet, in 2014, she
was so proud of her team she copied this to the Chair, Ms Perkins, twice. Once in the original,
and again, recirculating her missive the next morning in the cold light of day.'*° Shameful.
3.53
The Inquiry saw example upon example (from Kipling references to Roosevelt) of Post Office
staff — including Mr Davies (the PR man) — casting themselves as heroes in a worthy battle
against their SPMs.'*! Any effort at distance from the crowing, Singh “bandwagon” email
circulated by Mr Ismay to those at the top appears ill-served. There was no contemporaneous
distancing.
Toxicity within the investigation team towards SPMs and those challenging the integrity of
Horizon ran through Phase 4 (on the part of both Post Office and Fujitsu). The Inquiry might
conclude that this message came from the top and trickled through the business at POL. Or it
was a self-perpetuating narrative allowed to fester. Regardless, the poison infected all.
3.55 The Inquiry may be invited to treat these as gratuitous, moments of unguarded “chat” between
colleagues under pressure. Instead, they paint a telling picture of the true story. For every day
of this scandal, the Post Office leadership acted up in a fiction of a fight against its own people
to protect Horizon, to protect the commercial interest of Post Office and Fujitsu and, for some,
to protect their own self-interest. In the face of SPMs battling for justice, struggling with
broken lives, this was not only offensive it was grotesque.
5. The message from the top was — I need to know all is well. So, tell me what I need to
know. Tell me what I want to hear.
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This was a message the Inquiry saw echoed throughout Phase 5.
(a) David Smith, CEO, confirmed the evidence of Mr Ismay that his whitewash had been
commissioned with a particular purpose in mind.'*? Despite the use of the term
“objective” in its text, it was meant to be nothing more than a collected summary of POL’s
claimed justifications for its preconceived view of Horizon.
(b) Paula Vennells, of course, wrote to her team in similar terms in preparation for her
February 2015 appearance before the House of Commons Departmental Select
Committee"? “is it possible to access the system remotely? We are told it is.” “What is
the true answer? I hope it is that we know this is not possible and that we are able
to explain why that is. I need to say no it is not possible and that we are sure of this
because of XX and that we know this because we have had the system assured.”
Corfield was checking whether “these people have any connection to the scheme”. David Heslop wrote: “You will
also forgive me if the words of Mark “lifestyle issues (Yes going to jail/been made bankrupt is a lifestyle issue) Davies
do little to assure me.”
138 POL00109806. INQ00001153, 24 May, 133:13 — 143:16.
140 POL001503: INQ00001157, 6 June 2024, 167:18 — 173:23.
ial POL00101860, INQ00001157, 6 June 2024, 82-88.
M2 INQ00001128, 11 April, 74 . Mr Smith agreed that Mr Ismay’s evidence on what he was instructed to do
“Broadly, that sounds right, yes.
Ms POL00029812. INQ00001151, 22 May, 178 — 200. : 7— 192:13 See POL00117096 and POL00117097. (Addendum
to the briefing for Select Committee (2 Feb 2015), with reference back to POL00029812.
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(Emphasis added). (The Inquiry heard how that was ultimately handled and how the
message was misleading and incomplete — driven again by the PR team.) Her explanation
was that Ms Perkins had taught her this was the kind of direction she needed to give her
team. '* “Alice Perkins but— not related to this particularly but I can remember Alice
Perkins saying to me at some stage, "Paula, if you want to get the truth and a really clear
answer from somebody you should tell them what it is you want to say very clearly and
then ask for the information that backs that up".'* (While denied, Ms Perkins has
considerable experience in coaching and the Inquiry might accept that Ms Perkins did
believe Ms Vennells required coaching in some matters of management.) This may be
entirely consistent with a view of Ms Vennells the Inquiry saw had been expressed behind
closed doors by UKGI."*° It is consistent with the general approach taken by POL when
considering any question of Horizon integrity: starting with a settled view and closed to
any objective evidence which would support a change of mind.
itigation privilege
3.57 The Inquiry has heard a lot about concerns for privilege within the Post Office. What the Inquiry
has heard, again, and again, about privilege (and, more widely, secrecy) underlines the criticism
made of POL by Mr Justice Fraser.
ad
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First, RMG Legal circulated the Springford warning in the face of the Shoosmiths letters before
claim. The Inquiry will recall the warning around document retention and the detailed advice
on both document retention and document creation, and on maximising privilege.'*? On
document creation:
“It is very important that we control the creation of documents which relate to any of the above
issues and which might be potentially damaging to POL's defence to the claims, as these may
have to be disclosed if these claims proceed to litigation. Your staff should therefore think very
carefully before committing to writing anything relating to the above issues which is critical of
our own processes or tems, including emails, reports or briefing notes. We appreciate
that this will not always be practicable, however.
Where it is necessary to create a document containing critical comment on these issues, it will
in certain circumstances be possible to claim privilege over the document, so that POL will not
have to disclose it in any proceedings. As litigation is now a distinct possibility, the document
will be privileged if its dominant purpose is to give/receive legal advice about the litigation or
to gather evidence for use in the litigation. This also applies to communications with third
parties - i.e. with other organisations - provided they are confidential and their
dominant purpose is as set out above. All of the following steps should be taken in order to
maximise the chances of privilege attaching to the document:
* If the dominant purpose of the communication is not to obtain legal advice, try to
structure the document in such a way that its dominant purpose can be said to be evidence
gathering for use in the litigation;
a INQ00001151, 22 May, at 181:19-182:1: “Alice Perkins — not related to this particularly but I can remember Alice
Perkins saying to me at some stage, "Paula, if you want to get the truth and a really clear answer from somebody
you should tell them what it is you want to say very clearly and then ask for the information that backs that up". That
was why I phrased this that way.”
las INQ00001151, 22 May, 181:18 ~ 183:16.
M6 See e.g. UKG100002440; UKG100042677
147 POL00176467 (including an example of its cascade through the business).
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* Mark every such communication "legally privileged and confidential";
* If you are sending the document to someone, state in the covering email/memo/letter
that you are not waiving privilege by doing so;
* Request that the recipient of a communication confirm that the document will be kept
confidential and that he/she will not forward it to anyone else;
* Think very carefully before "replying to all" on an email - do all the recipients need to
see the communication?
* Where possible and appropriate, copy a member of Legal Services into the
communication, and make clear that you are doing so to enable them to advise on the content.
Please note that copying a member of Legal Services into the communication alone will not
necessarily suffice.
If in doubt, call Legal Services before committing anything to writing which relates to these
issues and contains critical wording.”
3.59 The Inquiry might consider similar warnings over paper trail communicated by Bond Dickinson
and Mr Parsons in summer 2013, following the Second Sight Interim Report and throughout his
engagement with the business.'**
3.60 Second, other repeated warnings were circulated once the GLO was live. This was done on a
regular basis and cascaded through the business. These dealt with document retention and
document creation in robust terms. '”
3.61 The Inquiry might wish to consider the implications of this approach:
(a) The Inquiry heard evidence on the notorious shredding advice in Phase 4 and again in
Phase 5/6.
(b) The Inquiry will recall the extreme caution with which it appeared communications
with the Board, the Department and others were being treated as a result of concern
over litigation privilege. The Inquiry might conclude that concern for litigation privilege
was arguably operating to limit the capacity of the Board (and the business more
generally) to access advice and understand the advice it was paying for — and the
capacity of the Department — and to appropriately manage risk.
(c) The Inquiry will recall that the notification to Post Office’s insurers and the role
privilege played in the note prepared by Bond Dickinson stamped Common Interest
Privilege.'*° The Inquiry might ask whether the bounds of any privilege was being
inappropriately asserted wherever possible (or even impossible) in an attempt to
maximise secrecy (in that instance, around the tainted witness issue and the role of Mr
Jenkins).
(d) The Inquiry might consider the proximity of Mr Parsons’ advice on disclosure risks,
document creation and privilege in the context of the Clarke shredding advice.'*' The
448 POL00083932, INQ00001160, 13 June 2024, 37 ~ 50.
149 INQ00001199, 18 October, 98:1 — 10:1.
150 TINQ00001160, 13 June, 66:9 ~ 70
151 [NQ00001160, 13 June, 37:24 — 50:8. And other documents which see Mr Parsons advising against disclosure,
softening or tempering messages from Post Office which might concede of a problem, including: POL00006799,
POL00145716.
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mantra of secrecy — don’t write anything down, don’t create anything potentially
damaging — created an inevitability that things were shielded. Transparency and
accountability sacrificed to the litigation and the defence of the Post Office.
3.62. While Bond Dickinson appear to have taken the lead in advising Post Office on privilege and
they were not specialist criminal solicitors, they did appreciate the interaction between litigation
privilege and the prosecutorial duty. Not least, as early as 13 August 2013, they asked Cartwright
King for their view and (albeit Mr Bowyer focused singularly on the duty owed in an ongoing
prosecution) were told by Mr Bowyer: Di trumps privilege." The Inquiry
might consider whether Cartwright King had good reason to focus on a forward looking
approach to the Post Office’s duties or whether, in this context, this was an oversight. The
understanding of the continuing duty of disclosure sat behind the justification for the sift review
and consideration of disclosure of the Second Sight Interim Report and the Helen Rose report
(albeit the approach to those materials was ultimately, horribly flawed).
losure alway
3.63 Lawyers for Post Office were very quick to assert that this was standard commercial litigation
practice. Yet, this scandal was simply not a matter of standard commercial practice.
(a) The Inquiry is asked to believe that at no time does it appear that anyone paused to
consider the relationship between privilege and the ongoing prosecutorial duty of
disclosure. It appears no-one at the Post Office (or in its highly paid, highly qualified
legal teams) grasped this fundamental.
(b) — The Inquiry has seen no evidence of any consideration whether this kind of direction —
whether those given by Mr Williams or the more extreme form produced by Ms
Springford — was appropriate where an organisation might wish to assert legal
professional privilege but also was subject to continuing duties of disclosure as a
prosecuting authority.
(c) At no time did it appear that a business wide alert was cascaded to underline the duties
of disclosure owed by the business to those it had historically prosecuted. '**
(d) Finally, this was not a commercial organisation in the traditional sense at all. It was a
corporation wholly owned by central government which served an important social
function it was required to discharge.'**
3.64 The Inquiry may wish to consider whether the Nolan principles of honesty, openness and
accountability fit entirely with aggressive resort to litigation privilege by any public body, not
least where a publicly funded body is fighting its own people over the integrity of convictions
it imposed on them.
‘52 WBON0000806. See also POL00325695. By December 2013, Mr Parsons was invited to advise again on specific
governance work, privilege and disclosure. Again he deferred to Cartwright King to check his advice. He wrote: “a
privileged document may still have to be disclosed in criminal proceedings in accordance with POLS prosecution
duties.”
158 INQ00001199, 18 Oct 2024, 97:23 — 101:23.
Ist The Post Office raises an issue as to whether or not the Post Office would be considered a public authority for the
purposes of administrative law in its closing submissions (“it is far from clear that POL is in fact a “public
0000028, at [52]-[54], citing R(Sidpura) v POL [2021] EWHC 866, where Holgate J, it is accepted,
authority” $I
accepted a “for sake of argument” point he did not have to determine). We do not address this argument in detail
here, as it is not a matter which the Inquiry need decide conclusively. However, the Inquiry does have evidence that
the business believed itself subject to a risk of judicial review, including in relation to the proposed removal of Second
Sight. POL00006571 minutes the Sparrow Board sub-committee discussion of advice being on the risk of judicial
review (albeit risk of a successful application was considered to be low. (Disclosure on Relativity refers to the
instruction of Tom Weisselberg KC).
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Y
a
a
The Inquiry may consider the approach to privilege and its impact good reason to underline the
Government’s commitment to a new public duty of candour. We return to this issue below.
7. The Post Office did not respect obligations as a prosecutor / duties to the court
3.66 We address this point above, in the context of the failure to disclose the Clarke advice. By way
of contrast to the approach taken to privilege, it appears that there was little understanding or
little respect for the duties of POL as a prosecutor and the continuing duty of disclosure. It is
plain that POL were advised, in the Clarke advice, and in the advice of Brian Altman KC, both
of which were predicated on the duty. However, the Inquiry may wish to consider whether the
business ever understood, respected or took true ownership of that duty.
3.67 It appears that if the business — including General Counsel, the Executive, CEO and Chair - did
not understand the scope or significance of this duty, then there was no corporate or individual
effort to expand understanding. Unlike the legal professional privilege enjoyed by POL, where
the message was cascaded through the business to help protect its position; it appears the
business took as guarded an approach to the appreciation of its prosecutorial duty as it did to
the duty itself. There was no evidence this messaging was ever cascaded through the business.
3.68 When this duty was spelled out for the business it was seemingly restricted in its circulation
(Clarke advice/Brian Altman KC advices and later the information in the Project Zebra Report,
Board Summary and Action Summary). Annex I to the Crichton update paper produced for the
meeting on 16 July, as deficient as it may be, did indicate that the sift review was necessitated
by the continuing duties of the Post Office (“We have an continuing legal duty as the prosecutors
to do this.”).'5
3.69 Those who ought to understand (and had a responsibility to do so) ought to have done better. It
appears that successive lawyers, failed to appreciate the scope and implications of the
continuing common law duty of disclosure or approached it in an unduly narrow way in its
application. The Inquiry may take a view on why that may have occurred. Cartwright King and
Brian Altman KC, as legal specialists had a critical responsibility but others, including General
Counsel,such as, Susan Crichton, Chris Aujard and Jane McLeod and Bond Dickinson, all ought
to have understood the duty by virtue of information provided to them by Cartwright King or
Brian Altman KC.
3.70 We return to consider the position of regulated legal professionals in Section 4.
8. When problems were escalated through the business there was a wholly inadequate
response
3.71 What all this boils down to is that when issues were escalated, no one acted as they should.
When information which could have changed the path of this scandal crossed the desk of anyone
at the Post Office, the response fell short. We cite just a few examples:
(a) I We have covered the July 2013 Clarke advice.
(b) Project Zebra and its erstwhile Zebra Action Summary.
Iss POL00145428, p4. The Inquiry will recall the exchanges with Mr Blake on the drafting of this document, at
1NQ00001134, 23 April 2024, 99 — 110.
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3.72 We urge the Inquiry to consider the handling of Deloitte to be a paradigm example of Post
Office’s approach to external, expert input. The Zebra project was, of course, so closely guarded
that when disclosure was eventually given, the name remained redacted for privilege (hence the
comments on the absurdity of the approach to privilege from Mr Justice Fraser (Common Issues:
(38] - (42).
3.73 Project Zebra resulted from advice to the Board from Linklaters designed to satisfy the Board
that all was well. It was in its essence — work for the Board. The work was to expressly consider
data integrity. The Zebra Action Summary eventually disclosed into the GLO (albeit in a
redacted form) shows that the business was plainly aware of the significance of the Deloitte
work for the integrity of Horizon.
3.74 The Report, the Board Summary and the Action Summary contain information about remote
access and the integrity of data which was out of step with the position of the business (including
that provided to Second Sight). (The work was done under contemplation of litigation and
treated as privileged from the outset (see Appendix 4, engagement letter signed by Chris
Aujard). There were two critical pieces of information in the 72-page report from May 2014:
one related to Balancing Transactions and the other to superuser access to the audit trail allowing
for deletion of a basket and its replacement, seemingly without a trace. For example (see, e.g.
item 4(g) on page 31):
“g. Branch Database: We observed the following in relation to the Branch Database being: A
method for posting ‘Balancing Transactions’ was observed from technical documentation which
allows for posting of additional transactions centrally without the requirement for these
transactions to be accepted by Sub-postmasters (as 'Transaction Acknowledgements’ and
"Transaction Corrections’ require). Whilst an audit trail is asserted to be in place over these
functions, evidence of testing of these features is not available;
LJ]
For ‘Balancing Transactions’, 'Transaction Acknowledgments’, and 'Transaction Corrections’
we did not identify controls to routinely monitor all centrally initiated transactions to verify that
they are all initiated and actioned through known and governed processes, or controls to
reconcile and check data sources which underpin current period transactional reporting for
Subpostmasters to the Audit Store record of such activity;
Security of the Branch Database around the 'Messaging Journal table’ is a key area of risk due
to the branch transactional data being held on this table for up to a day before being written to
the Audit Store. It was unclear from the documentation reviewed whether specific assurance
work had been carried out in this area; and Controls that would detect when a person with
authorised privileged access used such access to send a ‘fake' basket into the digital signing
process could not be evidenced to exist”.!°6
And Item (f) on Page 31, immediately above this section:
186 POL00028062. (23 May 2014)
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“would potentially allow privileged users at Fujitsu to delete a legitimate sealed file, and
9 157
replacement [sic] with a ‘fake’ file in an undetectable manner”.
3.75 The Board Summary (a ten page document), dated 4 June 2014, said:
“We have not identified any documented controls designed to:.... Prevent a person with
authorised privileged ace
digital signing process”.
‘o the digital signing process from sending a ‘fake’ basket into that
“All proc
subpostmaster disclosure and acceptance.
with the exception of Balancing Transactions, operate on the principle of full
1158
3.76 In a cover email — prepared by Chris Aujard or Lesley Sewell — the Board is sent the full
summary (of ten pages) but the key findings were said to include: “Deloitte has "not become
aware of anything to suggest that the system as designed would not deliver the objectives of
processing of baskets of transactions and keeping copies of them in the Audit Store with
integrity" and “POL has in place key controls over the day to day IT management of Horizon.
These have been independently tested and assured by Ernst & Young since 2012”.'° Mr Aujard
accepted this was far too abridged a summary.'°°
3.77 Not least, as reflected in the Action Summary (a seven page document):
“One point raised in the report was that it was possible for someone with privileged access to
delete data from specific areas of Horizon. This is always a risk with individuals using admin
or power user accounts and is a persistent risk, one that needs to be catered for in almost any
organisation. Due to the sensitive nature of the information contained in the databases,
monitoring of those databases should be put in place using technology to detect and record
deletions and administrative changes to the databases. If possible, alerts should also be
generated for mass deletions and high level risk changes to database schemas. ”'°!
3.78 The action to be taken was to include logging and logs being reviewed on a “daily basis”.
Ownership of the Report and the Board Summary and the follow up Zebra Action Summary
appears to have been shared by Chris Aujard and Lesley Sewell.'®* The Inquiry may conclude
that the covering message sent to the Board was wholly inadequate. The Inquiry may wish to
consider whether it was deliberately inadequate. Mr Aujard was involved in discussions on the
Action Summary which also engaged Mr Ismay.'®
The Inquiry has evidence of this risk detail being discussed in email correspondence between Rodric Williams and
Chris Aujard with Deloitte on 20 May 2014, See POL00029728, 20 May 2014, and as put to Mr Aujard in his
evidence, INQ00001135, 126 — 130.
‘58 POL00028069.
189 POL00029733
160 INQ00001135, 24 April 2024, 145:2 - 147:3. Mr Aujard went on to address a number of reports on Zebra,
including POL00031410.
161 POL00031409, 12 June 2014. See also discussion at POL00346958 of meetings to discuss the Action Summary. It
refers to discussion with Chris Day, Chris Aujard and Lesley Sewel
12 POL00138463 (2 July 2014). In discussion of feedback on later actions, including in respect of a “detailed review
of balancing transaction use” and “verification work over key Horizon features” and “analytic testing of Audit Store
Data” including with Gareth James of Deloitte, ownership overall is discussed and Malcolm Zack (at this stage)
asserts “This resides with Chris A and Lesley who initiated the review.” Chris Aujard replies: “But just to be clear:
a review is a review. That said, the actions that arise out of a review need to be allocated properly”.
‘63 POL00346958 of meetings to discuss the Action Summary. It refers to discussion with Chris Day, Chris Aujard
and Lesley Sewell.
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3.84
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The Board did receive a later Board Summary that ought to have been a red flag. Richard
Callard, at that time the Government NED, agreed he had read the original report. He said he
couldn’t recall reading the later Board Summary but said that he should have read it, and he
should have understood its significance. This was a source of regret for him.'*
The close guarding of the Swift review by POL staff and Tim Parker is again, telling. While Sir
Jonathan Swift covered a lot more than Zebra, Zebra was central to his recommendations for
follow-up work.'°*
Tim Parker said he was told four people were to be within the “tightly knit” circle of distribution
for the Swift Review.' Whether the motivation was secrecy in the interests of once more
shutting down further inquiry, or an interest in preserving privilege in the GLO, its handling
entirely neglected the history of POL as a prosecutor. Badged as privileged, the focus firmly
remained on the GLO and disclosure in the claim. It ought to have gone to the Minister, the
Board and the CCRC. But it did not. Yet another opportunity missed.
The suggestion that the business failed to grasp the significance of Zebra until Jonathan Swift
highlighted it in his report in 2016 is not tenable. The Zebra Action Summary puts paid to that.
Work continued for Deloitte: on Bramble. Bramble continued on through 2016 to, it appears,
2018'*’ and seemingly informed the work of the Post Office on the defence of the GLO.
On Zebra, Mr Aujard may point to Ms Sewell and Ms Sewell to Mr Aujard.'®* Mr Ismay, again,
who wrote the whitewash, which, of course, covered integrity issues, was again, in the mix. The
Inquiry may conclude that questions of accountability must be considered for all.
The timing of the original Zebra report was significant. In mid-May 2014, a Post Office response
to a request from Second Sight for a formal certification that remote access was not possible
was produced, on agreement of Angela Van Den Bogerd, Rodric Williams and Andrew Parsons
(Mr Williams had been closely involved in the work of Deloitte). The position adopted was that
there could be no deletion without it being apparent to the subpostmaster.'® It appears Second
Sight were never shown the Deloitte report.
This was yet another seemingly missed (or dodged) opportunity for things to have gone so very
differently. It ought to have been disclosed, in 2014, or in 2016 when the question was raised
by Jonathan Swift. It was considered by Cartwright King on 25 March 2015, but it appears was
not disclosed.'” This was information which could, the Inquiry might consider, call into
question the credibility of any conviction based upon Horizon data (including in the face of
1NQ00001173, 12 July, 157:5~ 159:6.
POL00006355, including [147]. (See also WITN11750100
INQ00001170, 3 July 2024, 18:15 ~ 24.
See e.g. POL00174563, POL00029097.
INQO0001140, 2 Maj TNQ00001148, 16 May 2024, 141 ~ 143
POL00304478. See also INQ00001140, 2 May (Chris Aujard), 20:13
POL00029843 (27 March 2015). Advice from Simon Clarke identifies the information as potentially disclosable,
with reference to a conference with both Rodrie Williams and Andy Parsons, While this advice purports to focus
solely on the issue of balancing transactions, it does refer to “fake” transactions in the report, which might suggest
the second issue had also been picked up. Further information was requested to allow for a final advice.
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unexplained discrepancies) and which ought to have been disclosed.'’! Instead, the Post Office
continued, for years, to resist arguments on remote access.'””
9. This hardened, ‘heat-alV defence — of Horizon, of POL, of the indis
untability and infected the approach to both the mediation
iduals involved ~
wevented any notion of true a
scheme and the GLO.
3.87 The defend at all costs attitude calcified and hardened the approach of the Post Office to every
step in this scandal. This included the mediation and the conduct of the GLO. Again, the
evidence heard by the Inquiry fully justified the criticisms laid at the door of the business by Mr
Justice Fraser.
3.88 First there was the mediation scheme. The Inquiry might reasonably conclude this was another
device designed to put this all to bed; designed with the hands of the PR man firmly on the tiller
from the outset. Get the SPMs in a room, keep Second Sight on side only so long as to keep Mr
Bates and Lord Arbuthnot happy, offer them a conversation, offer to explain why their
complaints were ill-founded.'”> Compensation, where necessary, was anticipated to be small,
token sums.'”* Post Office was simply being seen to do something. Again, when this didn’t go
as the Post Office anticipated, the scheme was remade under in-house administration. When
Second Sight was sacked, the only way forward for the JFSA was group litigation and its
associated costs risk.
3.89 Mr Justice Fraser’s analysis of the Post Office’s conduct cannot be impeached. If anything, what
the Inquiry has heard is even greater cause for concern.
(a) _ First, the approach Disclosure. The Inquiry will recall the exchange on the disclosure
of policy in the PO Investigation Guidelines requested by Freeths, and the discu
of the relatively benign 2013 edition which included “Should the recent Second
review be brought up by a subject or his representative during a PACE interview
the Security Manager should state: 'T will listen to any personal concerns or issues that
you may have had with the Horizon system during the course of this interview.” Ms
Prime wrote to Mr Williams, using language settled by Mr Parsons: “For now, we'll
do what we can to avoid disclosure of these guidelines and try to do so in a way that
looks legitimate. However, we are ultimately withholding a key document and this may
‘you disagree with this approach do let me know.
attract some criticism from Freeths.
Otherwise, we'll adopt this approach until such time as we sense the criticism is
becoming serious.’"”* Involving those with primary responsibility for the process, the
Inquiry might consider this language (not seemingly contradicted by Mr Williams) was
a clear insight into the strategic thinking of POL on approach to the GLO and its duties
11 Asked if the May 2014 Zebra Report was considered for disclosure, Mr Aujard said: “I’m not sure that they did.”
“So the answer is Ljust don t know but I don't believe so”. He agreed that someone should have looked through.
and asked those questions. He thought that if it hadn’t been sent to Cartwright King for that purpose it would have
been a “matter of absolute deep regret.” INQUO001135, 24 April 2024, 130-132.
2 Returning to the matter of privilege briefly, the Inquiry will recall discussion around this matter when it came to
disclosure of the Action Summary into the GLO [POL00255949.] and Mr Justice Fraser’s concern over the assertions
of privilege retained in that document (as above). INQ00001133, 19 April 2024, 164 — 170.
173 1NQ00001152, 23 May 2024,59-79. POL00099055.
14 "POL00116218, INQ00001152, 23 May 2024, 161, 166.
175 WBON0000467, INQ00001160, 13 June 2024, 116 — 132.
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of disclosure. The Inquiry may recall a very similar approach taken by Mr Parsons to
the Known Error Log.'”°
(b) I Second, the approach to witness evidence. The evidence of Mr Parker, Ms Van Den
Bogerd and Mr Dunks in the Inquiry might stand as examples of how the Post Office
approached evidence in the High Court.'”” The Inquiry, again, has the criticisms of Mr
Justice Fraser. (Ms Van Den Bogerd confirmed, of course, that despite such criticisms,
she did receive an annual bonus from Post Office in 2019).'7
(c) Third, strategy. The participants in the GLO believed the criticised strategy adopted by
POL had behind it a purpose: to increase pressure to settle as funds ran out to continue.
Despite what may appear as hollow denials from Mr Parsons, his strategy memo of 11
February 2018 appeared to put this beyond doubt. This was more than a said-to-be
“crazy” view — a straw man — it was indicative of the mindset of those running this
litigation, their instinct: “That said, my instinct is the [claimants'] funding is under
pressure and they do not want to be burning money on a 3rd trial.” “Drawing the
attached together, I think we need a plan that can be [flexed] to accommodate the
possibility of an appeal. Also tactically the best option for [the Post Office] are (i) to
force the [claimants] to burn money and (ii) to target limitation.”'”
(d) The Inquiry has evidence which may suggest a chaotic approach to advice on merits
and quantum;'*’ (There may have been questions for Ms McLeod on this had she
appeared, of course).
(©) That alone might be sufficient to beg the question whether this litigation was being
embarked upon seriously or as an unthinking continuation of the win-at-all-costs and
unblinking defence of Horizon. By this stage, in the face of increasing cost, risk and
publicity, the Inquiry might question where the shareholder was in all this? The Inquiry
has heard time and time again of the impact of value for money in public decision
making; it might ask whether (in the seeming absence of a clear picture on merits and
costs) any true assessment of value and risk were conducted whether at POL, UKGI or
in the Department. As was addressed in the evidence of Ms Gratton and Mr Donald,
changes were made to provide for greater visibility over litigation following the GLO.'*!
The Inquiry might wish to consider why, given the obvious risk, Government did not
step in sooner. The evidence appeared to point to this being considered the Post Office’s
fight; with the Government reluctant to step into the fray. The Inquiry might consider
the Government was waiting to see which way the wind blew on a matter of some
substantial risk to the public interest and the public purse. (We return to the role of the
shareholder in Section 5, below).
3.90 We note that UKGI guidance on litigation risk for shareholder teams has been updated since the
GLO (updated in August 2023).'** This spells out that Boards, Shareholders and UKGI should
be sighted on the detailed legal advice the business receives on both merits and strategy. Earlier
POL00245938: “I've not made any express reference to the [Known Error Log]. Even the phrase ‘known error’
could set hares racing so I've avoided it entirely. I hope however the key message (‘cart before horse’) still comes
across.” INQOO001160, 13 June 2024, 116 ~ 132.
177 See, e.g. INQ00001062 (Mr Parker), INQ00001136 (Ms Van Den Bogerd) (including 81-90).
"8 INQO0001137, 26 April 2024, 163.
"9 POL00111290
189 See, for example, POL00276474, INQ00001199, 18 October 2024 (Ben Foat), from 61 ~ 65 —“I hope this helps
explain why there hasn't been an overall opinion on the merits of the litigation in general.” POLO0276883.
'8I_ WITN11310100 (Lorna Gratton) [56] ~ [57]. See also INQ00001204, 8 November 2024, .
is UKGT00044278.
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guidance (2018) had been informed by the lessons learned in the Magnox litigation. The Inquiry
might consider that some of this guidance was common sense or obvious risk management
which ought to have been available before the GLO in any event (including how litigation risk
ought to be reported to Boards, and then on to the shareholder). The Inquiry may wish to
encourage UKGI to revisit its guidance on litigation to consider approaches to risk
management in litigation involving risk to public funds and/or to the public investment.
At a minimum, lessons learned in previous strategy ought to be revisited in the light of the
evidence before the Inquiry.
3.91 The Post Office was, of course, entitled to take advice on appeal (and to pursue an appeal if so
warranted). Again, full legal argument now on the merits of the advice and how it was presented
are outside the scope of these submissions. The reasons of Lord Justice Coulson stand. The
Board heard directly from Lords Grabiner and Neuberger before deciding on the nuclear course
of recusal That they did decide to proceed, despite doubts, and without intervention by
Government, is indicative of the extent of the unbreakable entrenched view in the unblinking
defence. It was an opportunity for intervention by Government, lost. For the Post Office, the
battle against their own people simply could not be lost. We offer a few limited propositions on
this last stage of the scandal:
3.92 The Inquiry will, we anticipate consider how the explanation came to be given by counsel to
the High Court with regard to Mr Jenkins. The Inquiry has the evidence of Mr De Garr
Robinson KC (“the upshot was that I was told in emphatic terms that Mr Jenkins was not a
reliable witness. The solicitors said that Mr Jenkins had given misleading evidence.").'** This
being the case, how could the explanation given to the High Court and described at [512] of the
Horizon Issues judgment have come to pass? Mr De Garr Robinson KC said “Certainly Andy
Parsons would have approved.” This explanation, having been given, how could Bond
Dickinson and the Post Office — both with knowledge of the true reason for Mr Jenkins being
kept at arms-length — not have caused it to be corrected? Again, the Inquiry might conclude
that this was an entirely improper attempt to conceal what was known to all about the nature of
Post Office’s concerns over Mr Jenkins’ role in the prosecution of SPMs. Mr Jenkins’ role was
open to challenge and ought to have been disclosed in 2013: here was perhaps an example of
the most extreme actions to prevent that information coming to light even in the closing of the
GLO. In conference, with HSF, the Inquiry will recall the note of counsel’s debrief on 4 October
2019 (after submissions, but pre-judgment): “They say the fact that we didn't call Gareth
Jenkins is suppression”. "And you know what, that might be right."'** Well, quite.
3.93 On the settlement of these proceedings, we address the indicators of attitude towards strategy
above. Even if not set in stone; the Post Office’s appreciation of the costs risks facing the 555
was highly significant. The Inquiry heard that the Government was actively involved in the
consideration of the approach to settlement (and the figures which would require active approval
by the Department would plainly have informed the Post Office’s approach to negotiation). The
Post Office and the Government knew all along that the funds in settlement would be
substantially eaten up in costs. These were costs which were critical; without the funding to
proceed, there would have been no GLO and no judgments of Mr Justice Fraser. This scandal
would have doggedly remained on the pages of Private Eye and the domain of committed
83 1INQ00001158, and in particular, 73 — 112.
1st Ibid, 11:15 —112:4.
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bloggers rather than in prime time. However, they and the settlement ultimately created a
situation of incredible unfairness, where those who had perhaps committed most to change were
left without any route to full and fair compensation without action the part of Government. That
the Government took so long to rectify the position of the 555 underlines the painfully
incremental movement by Ministers and officials away from business as usual and towards fair.
We address the Board and legal advice in Sections 4 and 5; and refer the Inquiry to the views of
its Governance Experts on access to legal advice and reliance upon legal advice. Advice
remains just that: decisions to continue to litigate are not taken by lawyers but their clients. The
Inquiry heard from Alisdair Cameron on his views towards settlement: “We should have settled
the claims, apologised and moved on years ago. We have defended ourselves inappropriately to
avoid the consequences of our actions. This has been a waste of public money and a
postponement of justice.".'** The Inquiry might agree. It appears — the Post Office, its Executive
and legal advisers were locked in a battle to the end — and could not countenance the dismantling
of the artifice of their robust defence (until the humiliation of the unsuccessful recusal
application and the failure of its appeal).
Government remained wholly responsible for the Post Office. Officials must have known by
this time any liabilities incurred would ultimately be met by central Government. Yet on both
the decision making and what came next, they abrogated that responsibility for reasons of
political expediency. The Inquiry might conclude that Ministers and Officials wished to have
clean hands when they were already steeped in Post Office wrongdoing.
The evidence of Carl Creswell is perhaps telling as to the impact of the hands-off approach
taken by Government.'** There appeared to be a visceral reaction to the loss which appeared to
drive the response within POL. Yet, the Inquiry might conclude the Government designed to
leave POL to stew in their own mess, until far too late. Seemingly entirely neglectful of the fact
that POL’s mess was the Government’s mess and one that would ultimately be owned by the
taxpayer.
The Post Office took its advice on the most nuclear of options (recusal) from a former President
of the Supreme Court. Regardless of the merits of that approach, it is perhaps unedifying that
the name of the very senior figure who had advised then had to be so shrouded in secrecy: the
weight of his or her gravitas being seemingly communicated by implication and speculation for
so long. The Inquiry might ask, no matter how strong the Board, nor how clear the guidance:
what courage would it take for any Executive or NED to gainsay the advice of someone who
had been the one of the most senior legal figures in our constitutional settlement? This begs a
question for Government: ought those in the most senior judicial roles in our constitution expect
to return to a paid commercial practice and provide advice? And does such practice risk that
they are trading (or perceived to be trading) on the status of that former function such that their
ability to advise effectively (and in circumstances where necessary for that advice to be
effectively challenged) is undermined? In the face of such risks — whether for this Inquiry or
not — the current practice ought to be reviewed and reformed.
1NQ00001149, 17 May 2024, 39:11-19.
See, e.g. INQ00001202 , 6 November 2024, 132: “I think people were -- were dubious that the appeal would
succeed, but felt that it was a judgement for the Post Office Board about whether to request that appeal.”
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10. Fujitsu supported POL till the end.
3.98 We addressed the role of Fujitsu in support of the actions of the Post Office in Phases 2, 3 and
ions here but re-iterate that while the decision making of Post
4. We do not repeat those submi
Office was front and centre in the final stages of this Inquiry, Fujitsu’s role remains critical.
3.99 The lowlights from the previous Phases remain. Taking only a few:
(a) Fujitsu actively agreed arrangements with POL for prosecution support which were
seemingly designed to take the least work for Fujitsu and which both parties knew or
ought to have known did not provide a full picture of all the data held by Fujitsu beyond
the agreed ARQ. This was plain from the negotiation of the first Network Banking
Prosecution Support arrangements in 2002, covered in the evidence of Graham Ward,
at the end of Phase 4.
(b) The Inquiry might conclude that the product was just bad.'*” The ICL decision not to
rewrite after the conclusions of the EPOSS Task Force jointly authored by Jan Holmes
may be one which remains with Fujitsu — and perhaps code writers globally — forever.
(c) Jan Holmes appears again in Cleveleys, of course. The dismissal of Mr Coyne as a
“git” entirely unwarranted and perhaps the least worrying of the criticism of the
approach taken by Fujitsu in that matter. Brian Pinder appears in that case too. He’s
relevant later, of course, in the decision that Mrs Chambers is stood up in Castleton and
thereafter in quietly shelving her critical wash up document.
(d) The distasteful Castleton gloating — he was just a “nasty chap” - from the leadership at
the Prosecution Support Team.'** “We all protect our own companies” confirmed Peter
Sewell.'® In this blind loyalty, to the detriment of SPMs, we saw Fujitsu staff share the
commitment of the POL team to their brand.
(ec) I We deal with the position of Mr Jenkins, Mr Dunks and others signing statements and
providing evidence in the course of prosecutions and other proceedings, above. The
Inquiry might conclude that Fujitsu left its own people with entirely inadequate training
and oversight. It may also consider that some Fujitsu staff remained too willing to act
outside their competence to please their employer and a major contractor.
(f) I When pressed — in the face of known problems — to commit to stand up their system in
Court, at every turn, the Inquiry might conclude, that they did.
3.100 Phase 5 and 6 confirmed that Fujitsu remained committed to the Post Office account, providing
support in both the progress of the work of Second Sight and in the mediations. However, we
note, as they Inquiry may, that even in those exercises, it appears that it was not beyond the
purview of Bond Dickinson to edit the input from specialists when it did not precisely appear
to meet the needs of Post Office’s narrative.
3.101 The significance of Fujitsu to the GLO was clear from the outset. Even as POL fashioned its
response to the letter before claim; it was suggesting to the Board that new information from
Fujitsu on remote access necessitated a late amendment. Late disclosure was occurring till the
bitter end in the Horizon Issues trial (an occurrence familiar in this Inquiry). Yet, the Inquiry
might consider that this was information which was or which ought to have already been well
187 FUJ00080690, consistent with the view of the EPOSS Task Force that the process of development and fixes, had
resulted in poor workmanship and bad code. INQ00001018, 153:21-154:25. INQ00001017, 68:7-69-19;
1NQ00001018, 71:21-72:20.
188 FUJ00154750
189 INQ00001116, 18 January 2024, 112.
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known to POL. The time which Mr Jenkins spent working at the time of the GLO paints a
picture of Fujitsu’s involvement. He was retired and working on consultancy: “one to two days
a week, for a period of about five or six months”. He estimated he would have spent half that
time on the litigation in 2018-19.'" Until closings, Mr Justice Fraser may have been baffled
over how Mr Jenkins came to be supporting the evidence to the High Court, without being called
himself to give evidence.'”! The eventual disclosures of the Clarke advices were enlightening.
In this Inquiry, it appears, we learn that Mr Jenkins may have been, himself, baffled given
(apparently) no one had told him there had been anything wrong with his earlier evidence. The
Inquiry heard about seemingly growing frustration within POL about changes in the information
provided by Fujitsu to them, including on remote access. It heard about extremely late
disclosure of KELs in the Horizon Issues trial, again laid at the door of Fujitsu. Yet, repeatedly,
for years, POL had maintained the mantra that Horizon had integrity. Some witnesses, the
Inquiry might find, still found that mantra difficult to abandon.
3.102 We know there is a standstill agreement between Fujitsu and POL. We have no understanding
as to when the standstill agreement reached. There is no explanation beyond Tom Cooper’s
evidence on advice to the Board as to contemplation of position on Fujitsu at Board level,
deterred by advice from General Counsel. Fujitsu were they never joined to the GLO, but they
played their part. Without Fujitsu as a party, this remained all about the Post Office and the myth
of the “swbbies with hands in the till”.
3.103 Fujitsu remained, behind the scenes, and in the witness box, as ever, in support of the Post Office
and its own poor performing product, that should have been consigned to history in 1999.
4 REGULATED LEGAL PROFESSIONALS.
4.2 Whether working in-house at Post Office, or acting for Post Office when based externally in
firms and chambers, regulated legal professionals might be expected to provide the requisite
independence to rein in a blinkered corporate resistance to criticism. Indeed, the prof
codes which bind both solicitors and barristers are designed to ensure a degree of professional
independence and detachment. Lawyers, whether solicitors or barristers owe an overriding duty
to the administration of justice beyond any duty to their client.'°? Put most simply, and perhaps
as a matter of common sense, professional regulated lawyers should be independent and act
only within their areas of competence.'"? These are, of course, reflected in the professional
ional
190 INQ00001166, 25 June 2024, 13:1-8, 15:4019.
191 We address the position of counsel, in the evidence of Mr De Garr Robinson KC, above.
192 e.g. RLIT0000554 SRA Principles 1: You act in a way that upholds the constitutional principle of the rule of law,
and the proper administration of justice. RLXT0000569 BSB Handbook, Core Duties: CD1 You must observe your
duty to the court in the administration of justice [CDI].
193 RLIT0000568 e.g.SRA Principles 3: You act with independence. SRA Code of Conduct 3: Service and
Competence: 3.2: You ensure that the service you provide to clients is competent and delivered in a timely manner.
RLIT0000569 BSB Handbook, Core Duties: CD4 You must maintain your independence [CD4]. CDS You must
not behave in a way which is likely to diminish the trust and confidence which the public places in you or in the
profession [CDS]; CD7 You must provide a competent standard of work and service to each client [CD7].
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44
>
4.6
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principles adopted by Parliament in the Legal Services Act 2007.'* The risk that lawyers who
work in-house will lose their independence when embedded in a team is well-acknowledged.'*°
Yet, in this scandal, all too often both internal and external lawyers formed an integral part of
the robust defence of Horizon and the civil and criminal proceedings which were founded on
its corrupt data. All too often, lawyers were seen to fight a rearguard action for Post Office
whether they were involved in civil proceedings, criminal prosecutions, reviews of convictions
or the group litigation. We have touched on examples of this where necessary in other parts of
this submission but rehearse just a few more with direct relevance to the actions of lawyers.
As recognised by the governance experts instructed by the Inquiry, and as we set out above,
none of this can excuse individual and structural failures of individuals within the Post Office.
For example, failing to ask the right questions or to act on legal advice when given (e.g. the
handling of the Simon Clarke (Gareth Jenkins advice) and the report of Jonathan Swift QC (as
he was then) or shaping questions asked in instructions so that advice was constrained (for
example, Brian Altman QC, (as he was then), asking whether POL wanted to explore the safety
of convictions or not) or asking a specialist then deferring to the non-specialist firm whose
advice best fit the interests of the business (e.g. asking Bond Dickinson to instruct Brian Altman
QC and to advise Post Office on its approach to his contribution). It may be shutting one’s eyes
to obvious, common sense, conflicts of interest while the advice being given appeared to cover
off risks to the business (e.g. Cartwright King and the continuing sift-review). However, the
role played in this scandal by legal professionals who failed to meet their own regulatory
standards, time and time and time again is stark.
It may be said by some that the whole of the justice system failed the SPMs, with defence
lawyers and judges also implicated in the Horizon debacle by failing to challenge. While
tempting, given the evidence heard by the Inquiry as to the approach taken to prosecution by
the Post Office, and, in particular, to disclosure, it may be thought that the cards were stacked
against fairness from the start.
As addressed in our Phase 4 closing submissions, for some, referral to their Regulator (or
consideration as part of the ongoing criminal inquiries) could reasonably be contemplated.
While SRA referral was raised by Peters & Peters in the evidence considered by the Inquiry;'"°
it might be asked whether the Post Office lawyers themselves (where the Post Office is now
willing to recognise where things had gone wrong) ought to have made those referrals
independently long ago.
RLIT0000570 Section 1(3). The “professional principles” are
(a)that authorised persons should act with independence and integrity,
(b)that authorised persons should maintain proper standards of work,
(c)that authorised persons should act in the best interests of their clients,
(d)that persons who exercise before any court a right of audience, or conduct litigation in relation to proceedings in
any court, by virtue of being authorised persons should comply with their duty to the court to act with
independence in the interests of justice, and
(e)that the affairs of clients should be kept confidential.
e.g RLIT0000835 SRA, /in-/iouse solicitors, Thematic Review, March 2023.
POL00128970 (And the questions put on 11 December 2023, from p4). Conceming advice from counsel on
Jamail Singh, Rob Wilson and Juliet McFarlane.
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(i) Civil Proceedings
4.7 The early proceedings which led to the bankruptcy of Lee Castleton are informative of the
approach which was to be taken by Post office throughout this scandal. Post Office had nothing
other than a vindication of Horizon to gain from fighting to a conclusion against a man who was
experiencing health problems.'” They should have settled but they didn’t and forced a
conclusion in their favour.
4.8 But, as explained earlier, it was the response to the letters before claim from Shoosmiths which
laid the foundations for the inexorable outcome that POL’s legal strategy was to become as
much a part of the robust defence of Horizon as the actions of its PR driven Executive and its
mafiosi investigators. As outlined above, an email from Emily Springford, circulated to heads
of department within Post Office at 15.51 on 21 October 2011 was pivotal to that approach.'°*
We do not copy the crucial parts set out above at XX:
4.9 — That email had at its core that if any critical comment about Horizon reliability was to be made,
it preferably should not be reduced to writing and then it need not be disclosed. It also provides
strategy for avoiding disclosure in circumstances where committing critical comment about the
reliability of Horizon to writing is unavoidable. While some evidence appeared to suggest this
was an example of standard litigation practice, the Inquiry might conclude it went beyond what
is proper and acceptable. Rodric Williams'” thought the instructions in respect of critical
comment were more “focused and targeted” than he had seen in other litigation hold
communications. Paula Vennells did not think it was a fair approach.”°°
4.10 Echoes of this guidance can be found in the advice offered by Bond Dickinson in the aftermath
of the Second Sight Interim Report and beyond.
4.11 But the advice from Emily Springford immediately became the orthodoxy within Post Office.
This is seen through an exchange between Paula Vennells and Lesley Sewell (highlighted
above). Paula Vennells sent an email to Lesley Sewell at 15.48 on 21 October 2011; just three
minutes before the Springford edict. The email’s subject header was “Horizon Independent
Assessment’. It was copied to Mike Young and Kevin Gilliland. When Lesley Sewell replied to
that mail at 17.39 — just one hour and 48 minutes after Emily Springford’s email — the ‘Horizon
Independent Assessment’ subject header had been replaced with “Legally Privileged and
Confidential”. And whilst Mike Young and Kevin Gilliland remained copied in, Hugh
Flemington and Emily Springford were also copied. All completely consistent with the edict
issued at 15.48 on that day.
4.12 For any organisation, that approach to document creation appears designed to stretch privilege
beyond its bounds. For an organisation that conducted its own prosecutions it was
fundamentally wrong. It was entirely at odds with the requirements for disclosure in criminal
cases (as considered above). It could not fail to lead to significant injustice for those who
challenged the reliability of Horizon as part of their defence to criminal charges. In the
As recorded in the telephone attendance of Mr Dilley “the Post Office driver had been getting a judgment against
Mr Castleton to show that the computer system wasn t wrong and deter other subpostmasters from bringing a
claim. I therefore thought the most important thing for them was getting judgment for the full amount, and that we
want as much costs recovery as possible”. POL00069794.
198 POL00176467 (including an example of its cascade through the busin
99 INQ00001133 , 19 April.24 159:23
200 INQ00001153 , 24 May 2024. 113:04
).
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circumstances, the Inquiry might conclude that it both fitted the narrative within the business
(any questions about Horizon going unasked and, where problems arose, information kept to a
close circle) and operated to further increase the tendency towards defensiveness on Horizon.
While this ought not to have gone unnoticed by the Executive team at Post Office, the Inquiry
might conclude that the fact that the relationship between legal privilege and the continuing
duty of disclosure was seemingly fumbled by both Cartwright King and by Bond Dickinson
was wholly unacceptable.
4.13 And until the Clarke advice of 15 July 2013 shattered forever the smug triumphalism of Post
Office prosecutors, epitomised by the email from Jarnail Singh at the conclusion of the trial of
2°! no lawyer had ever turned their mind to whether such an approach created
issues for the prosecutions conducted by RMG and Post Office. John Scott may only have been
acting in accordance with long standing practice which followed the Springford edict; echoed
in the repeated language emanating from Bond Dickinson in the aftermath of the Second Sight
Interim Report (and the July 2013 Clarke advice)” when he shredded the notes of the review
meeting and ordered that no notes be taken other than by his department.
Seema Misra
4.14 While Post Office may point to their taking the right steps in response to the advice — and there
being ultimately no loss of information — this neglects what ought to have been learned from
the episode.” If the Head of Security truly thought that instruction was proper, what did that
say about the approach of the business to work under his purview or the attitudes within the
business to transparency, fairness and accountability? What had been happening in the years
prior? It ought to have been cause for Post Office and its legal teams — both at Cartwright King
and Bond Dickinson — to reflect on the culture within the business.
Gi) Criminal Prosecutions
4.15 But there was much, much more to be concerned about with the behaviour of internal and
external Post Office lawyers than merely the attitude to disclosure in the business. There is no
time to do justice to the wealth of material available to the Inquiry. We address some themes in
the Case Studies in our Phase 4 closing.
(a) The treatment of the evidence of Gareth Jenkins as an expert witness is almost
inconceivably poor. That none of the lawyers involved in deploying his evidence realised
at the time that Gareth Jenkins was acting as an expert witness and therefore should be
guided as to his duties as an expert and properly deployed by them as such is difficult to
believe.
(b) — Jarnail Singh’s evidence that he did not consider Gareth Jenkins to be an expert witness
was exposed as utterly untenable”,
(c) I Warwick Tatford admitted to clear failings in his duty when dealing with experts when
Mr. Jenkins was a witness in the Seema Misra trial’’ . The various iterations of Mr.
Jenkins’ statements following conferences with him were never disclosed to the defence.
20 POL00093686, page 5.
202 INQ00001160, 13 June, 37 :24 ~ 50:8, And other documents which see Mr Parsons advising against disclosure,
softening or tempering messages from Post Office which might concede of a problem, including: POL00006799,
POL00145716.
203 SUBS0000028, [32].
208 INQ00001102, I December 2023, 23: 15 to 65
25 "TNQ00001094, 15 November 23: 53 to 74
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Jarnail Singh conceded that particular disclosure failing amounted to a “serious
dereliction of a prosecutors’ duties”®°.
(d) The responsibility of others at POL, must not be overlooked, including Rob Wilson, who
might have the Inquiry believe that he entirely abrogated responsibility for supervision
of individual matters. That position appears entirely unsustainable, not least in the light
of Mr Wilson’s 3 March 2010 intervention in the consideration of an independent look at
Horizon.
(e) Nobody at Cartwright King sought to ensure that Mr. Jenkins’ evidence complied with
the requirements for an expert witness. They were all experience lawyers and it did not
occur to any of them. Mr. Andrzej Bole thought that Mr. Singh must have taken care of
educating Mr. Jenkins as to his duties; whilst at the same time saying that he had such a
low opinion of Mr. Singh that he didn’t understand how he was in the job he had.
4.16 The approach to disclosure was very ofien flawed. Post Office, whether through its internal or
external lawyers, and whether in respect of third party disclosure concerning Fujitsu or
responses to defence requests, failed to fulfil its
sclosure duties. The approach to disclosure
by Mrs
Misra’s legal team as “unreasonably and unnecessarily raised”. The examples of disclosure
revealed a defensive mindset. In January 2010, Mr Singh described disclosure reque:
failures were too numerous for all of them to be cited here. Some notable examples included:
(a) Post Office failed to disclose that SPMs who took over from the defendant SPM
continued to suffer losses in branch in the same way their predecessor defendant SPM
had done.
(b) Post Office failed to disclose that it had concluded that there was no evidence of theft
when pressing ahead with thefi charges.
(c) On 1 July 2013, the day before the Second Sight Interim report was due to be published,
prosecutors made an ex parte application at Birmingham Crown Court to withhold
disclosure of the findings of the report on the basis of public interest immunity and asked
for an adjournment of the trial of Mr. Samra that was due to commence that day. The
public interest to be protected was ostensibly parliamentary privilege. Counsel who
conducted that hearing, Simon Clarke, said that he was instructed to make the application
on that basis by Rodric Williams and Jarnail Singh*”
Post Office*”’. It was entirely consistent with the robust defence of Horizon prevalent
before the dam burst with Mr. Clarke’s later advice. It read in material part:
. He wrote an attendance note for
. it's worth commenting on the reasoning behind my advice that we seek a PIT
certificate in this case. Post Office were, rightly in my opinion, very concerned at the
potential adverse publicity which would inevitably have been generated by the revelation
of the existence of a (draft) Second Sight Report...... Such speculation would have
seriously damaged the reputation of POL and would have greatly undermined public
confidence in both POL and POL systems. Our objective was to avoid such consequences:
that objective was achieved.”
In the light of Mr. Clarke saying in that attendance note that it was his “advice that we
seek a PII certificate in this case”, it may be that Mr. Clarke’s memory of where his
instructions came from is faulty. In any event, the reasoning “behind my advice” is at one
206 INQ00001102, 1 December 2023, 121-122
207 INQ00001144 9 May 2024: 169
208 POL00172804
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with the robust defence of Horizon permeating the business. The objective which was
achieved was to protect the reputation of POL and maintain public confidence in POL
and POL systems.
4.17 Disclosure in criminal cases - whether privately or publicly prosecuted — should not be the
minimum that can be legitimately justified. It should never be guided by the desire to protect
the prosecuting body. It should never result from a feat of mental gymnastics which effectively
satisfies the prosecutor that they have fulfilled their disclosure duties without revealing all that
ist the defence.
would reasonably a
4.18 Prosecutors failed to conduct adequate scrutiny and supervision of investigations, including in
their failure to identify reasonable lines of inquiry. We addressed this issue in our Phase 4
closing submissions and do not repeat it here.
(iii) Reviews of Convictions
4.19 Following Second Sight’s revelations, POL announced that it had
instructed an independent firm of criminal specialist solicitors to identify every criminal
case prosecuted by the Post Office and Royal Mail Group prior to their separation’?
4.20 As Simon Clarke accepted”'°, that was not accurate. In fact, it was positively misleading.
Cartwright King were not independent. The Inquiry might regard the explanation of Mr Smith
that they were “independent of Post Office” both as plainly wrong and wholly incredible as a
view that he could have held at the time.”!' Only weeks before they were appointed as an
“independent firm of criminal specialist solicitors” they had secured a PII certificate with the
stated objective being to protect the reputation of POL. They had been prosecuting the very
cases they were looking into. They were marking their own homework. As Harry Bowyer
conceded, there were cases where disclosure should have been made and it was not. For
example, Mr. Bowyer conceded that his advice on whether disclosure should have been made
to Gillian Howard was “badly wrong’”'*. In interview, Mrs. Howard had raised problems with
balancing along with suspicions about the sons of a member of staff. Disclosure should have
been made to her of very relevant material prior to her later entering a guilty plea. That relevant
material was that the son of the member of staff had been stealing from the branch after Mrs.
Howard was dismissed. It wasn’t disclosed. In his advice, Mr. Bowyer had concluded that?!*:
"This is an extremely worrying case. It is only through good fortune, sensible prosecution
counsel and a sympathetic judge that we are not going to have to disclose material which would
cause [Post Office Limited] a great deal of embarrassment."
4.21 Once again, the interests of the prosecuting body were at the forefront of the thoughts of the
prosecutor. Mr. Bowyer decided at that stage that disclosure was not necessary because: "It is
my view that there could not possibly be an appeal against conviction .......bearing in mind the
admissions in interview and the basis of plea"
209 1NQ00001139, I May 2024, 165:21 — 169:12.
210 1NQ00001144, 9 May 2024: 84
ar 1NQ00001139, 1 May 2024, 169-169
22 INQ00001140 , 2 May 2024:47
218 INQ00001140 , 2 May 2024: 43
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4.22 Mr. Bowyer thus prejudged the prospects of success of the appeal in deciding that no disclosure
was necessary. That was not his job. As he candidly accepted, that was a decision for Mrs.
Howard, not him. It was arguably a feat of mental gymnastics by him justifying non-disclosure
of material which would cause “a great deal of embarrassment”
4.23. Ifa truly independent firm had been commissioned to carry out the review, it may be that the
full substance of the Clarke advice would have been disclosed as it should have been.
4.24 It was simply not good enough to rely on the input of Brian Altman KC to cover off any possible
criticism of the Post Office’s approach. The Inquiry has the evidence of Mr Parsons and Mr
Altman as to how the initial instruction of Mr Altman was pursued and how the scope of those
instructions were constrained following questions counsel raised in his Interim Review,
including as to conflict and Cartwright King and as to the review of the safety or efficacy of
prosecutions. The Inquiry might consider that the desire for material from Mr Altman QC to be
privileged legal advice (and so, not published) and yet, relied upon to assuage others that the
Post Office’s house was in order, was inherently contradictory. It could be seen as entirely
consistent with the defensive, secretive and adversarial approach being taken by Post Office in
its defence. Yet, as Warwick Tatford did, counsel conceded mistakes were made. Brian Altman
KC conceded at the Inquiry that he should have considered the disclosure of the substance of
the Clarke advice and disclosed in appropriate cases.”'* Prospective appellants were entitled to
know that Gareth Jenkins was considered a tainted witness and had wrongly withheld his own
knowledge of bugs in the Horizon system. This was an error which endured. Although Mr
Altman’s advice had been provided to the CCRC in 2015, and would have included information
about the tainted witness, the Inquiry might conclude that there were repeated later opportunities
to question whether this information had been disclosed appropriately in the relevant cases.
4.25 Jarnail Singh, Rodric Williams, Susan Crichton and Chris Aujard all have more to explain about
why the full import of the Clarke advice on Gareth Jenkins was seemingly not conveyed to the
Board. While Mr Aujard appeared to suggest that he didn’t raise the issue because it had been
grappled with before his time and were being dealt with by Cartwright King as part of the review
process, the Inquiry may take a view as to the credibility of this rationalisation.*!* This was
such a significant issue of POL’s position as a prosecutor that the absence of any reference to it
in any subsequent papers prepared (including those dealing with appointment of an independent
witness or the policy on prosecutions) may beg more questions than it answers. The Inquiry
might conclude that similar questions arise in relation to the Project Zebra report and its Action
Summary, including for Mr Aujard. He was aware of the substance of the report and its
recommendations and ought to have been aware of its implications for the Post Office position
on remote access. Moreover, he was aware or ought to have been aware that this engaged the
continuing duty of the business as a prosecutor.
(iv) The Group Litigation
4.26 The GLO saw the continued aggressive defence of the position of Post Office by internal and
external lawyers. That Mr. Justice Fraser considered it necessary to refer to the litigation strategy
adopted by POL in such terms is a measure of how apparent that approach was (as highlighted
a INQ00001143, 8 May 2
21s INQ00001135 24 April 2024, 93:11 - 18
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in some detail in Section 3, above). The application to recuse the trial judge and the subsequent
appeal against the refusal of that application were, in reality, not inconsistent with that strategy.
4.27 As said earlier, while the client must take responsibility for the direction of strategy in any
litigation, the lawyers advising must bear appropriate responsibility where the advice given
lacked due objectivity or competence.
4.28 As another brief example, the Inquiry heard about the approach which may have been taken by
Ms McLeod to guarding privilege in the context of the GLO.”!° Did her failure to recognise the
relationship between the criminal duties of POL and its interests in the civil litigation (like those
before her) mean that costs and time were unnecessarily wasted on pursuit of the GLO? These
were, of course, questions the Inquiry was unable to ask Ms McLeod. She remains out of the
jurisdiction and refused to cooperate by attending to give evidence.
4.29 Issues of independence, conflict and competence arise throughout the evidence of the legal
professionals paid (ultimately from the public purse) to support POL through this o As to
independence and competence; the Inquiry might conclude that the continuing heavyweight role
played by Bond Dickinson (and, in particular, by Mr Parsons) in matters where the criminal law
duties of POL were inappropriately put second to POL’s interests in civil litigation, raises
questions over actions outside of competence and deserves particular attention. The firm was
involved in representing the Post Office on a long retainer and played a role at each stage. They
were involved in advising on the early civil Case Studies; they were involved in the Second
Sight process; and in the shaping of the mediation scheme and in the GLO.
(v) Conclusion
4.30 The Inquiry might conclude that this evidence taken together makes a strong case for the more
effective regulation of both professions. It may wish to call for a substantial change in the
guidance which the SRA and the BSB provides to solicitors and barristers on the dangers of
losing independence and the significance of maintaining an objective distance from the interests
of one’s clients, including when acting in house and on long retainers. However, shortly before
the conclusion of the Inquiry, the SRA has, in fact, issued new guidance for in-house lawyers
on the ethical challenges they face. The Inquiry might conclude that it contains little which is
new and most of it ought to have been common sense to everyone involved in advising the Post
Office (whether internal or external). Rather, the Inquiry might consider the evidence heard
painted a picture of a wholly bigger problem for the ethics of the legal profession (which ought
to be entirely without reproach).”!”_ The catastrophic failure of existing standards in this scandal
calls for radical rethinking.
216 WITN10010100, [151]. “From April 2016 when we were informed that Freeths, the Claimants’ solicitors, had filed
a claim in the High Court, I was more sensitive about confidentiality and privilege issues given the risk that litigation
was imminent, and therefore some updates were verbal only.”
The Inquiry may wish to consider the recommendations of Professor Richard Moorhead, in his third Hamlyn lecture.
He suggests the scandal evidences three problems: (a) excessive aggression in legal work; (b) mutually irresponsible
management of legal decisions shared between lawyers and clients and (¢) the abuse of confidentiality and legal
professional privilege. He recommends that an independent commission is established to consider the provision of
legal services (akin to the Clementi Commission which led to the Legal Services Act 2007,), and in particular to
consider how to improve honesty, integrity and effectiveness in the ethical position of the professions. Its goal ought
to be to ensure the effectiveness of ethical standards in the rule of law upheld by individual lawyers, clients, the
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The Inquiry is invited to recommend the establishment of holistic review of ethical
standards in the legal profession, to incorporate a full independent review of the law on
privilege and its scope for abuse. This ought to be supported by Government but
independent, including of each of the professions.
MANAGEMENT, GOVERNANCE AND OVERSIGHT
The considered evidence of Dame Sandra Dawson and Dr Katy Steward provides ample basis
for the Inquiry to conclude that devastating failures of governance, by the Executive, the Board
and the Shareholder Department, at each stage, contributed to this scandal. We do not repeat
wholesale the picture of failed governance in their combined expert reports (collectively,
referred to as the Experts/Reports, herein), but raise several observations.
Although there were four separate periods in the evolution of the Post Office’s governance, at
each stage, the Executive, CEO, Chair, Board and Shareholder shared responsibility for the
management of risk in the organisation alongside their other duties:
(a) Phase 1 (1999-2001): For these early years of Horizon, POC and POL were subsidiary
to the Post Office Authority or Consignia (wholly owned by Government). The parent
had powers of direction by virtue of the POC Articles of Association (including to do or
refrain from doing things asked by the parent Board). The POC Executive were
responsible for the operation of the business (including reporting on key risks and other
matters it considered the parent should know).!*
(b) Phase 2 (2001 — 2012): The Executive was directly accountable to the Royal Mail Group
parent (RMG). POL Articles of Association gave the parent and Shareholder department
powers over POL. In 2003, the Government created the Shareholder Executive (ShEx).
ShEx retained various formal and informal routes for oversight of RMG/POL, including
meetings, reports, signing off on strategy, recruiting the Chair, CEO and NEDs. The
officers of ShEx were senior civil servants.”!”
(c) Phase 3 (2013 - 2019): During this period, POL became a public corporation with its
own Articles, Board, independent Chair, NEDs and two Executive Directors (CEO and
CFO). POL created its own Board Committees, including the Audit, Risk and Compliance
Committee (“ARC”). The CEO managed its General Executive (“GE”), comprising
regulators and also by the judicial system. It would incorporate a full independent review of the law of privilege and
its abuse. Specific considerations for lawyers include revised education and training; for the courts, to integrate legal
risk management into corporate governance rules and guidance; and, to revisit professional regulation and guidance
and the codes of conduct. A single ethical code of conduct across the professions might be considered. Richard
Moorhead, RLIT0000539 La: Ed I for Action, 14 November 2024. The Full Third Hamlyn Lecture,
Frail Professionalism, Routes back to proper professionalism, Professor Richard Moorhead, can be viewed online
EXPG0000006 R, p16-17. The leaders at POA/Consignia at this time were Neville Bain (Chair) and John Roberts
(Chief Executive), with Mr Roberts also acting as Chair at POCL and Stuart Sweetman as Managing Director.
Jonathan Evans was Company Secretary.
EXPG0000006 R, pl7-18 Successive leaders at RMG during this time were Neville Bain (Chair, 2001), Alan
ighton (Chair, 2002 ~ 2009), Donald Brydon (Chair, 2009-2013), John Roberts (Chief Executive, 2001-2002),
Adam Crozier (Chief Executive, 2003-2010), and Moya Greene (Chief Exec/Director, 2010-2012). At POL, Alan
Leighton (Chair, 2002-2003), Michael Hodgkinson (Chair, 2003-2007), Donald Brydon (Chair, 2009-2011), David
Mills (MD, 2002-2005), Alan Cook (MD, 2006-2010) David Smith (MD, 2010); Paula Vennells (MD, 2010-2012).
Jonathan Evans remained Company Secretary at both RMG and POL until 2010 having commenced in the role in
2001.
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direct reports and supported by Executive Committees including the Risk and
Compliance Committee (“RCC”). In 2016, ShEx was replaced by UKGI.””°
(d) Beyond 2019: Changes were made to the GE (renaming this the Strategic Executive
Group (“SEG”) and reducing attendance) governance arrangements remain largely
unchanged.””!
5.4 The principles of accountability were plainly shared by the leaders, Executives, Directors and
the Shareholder in POL regardless of whether it was a private company or a public
corporation.222
5.5 We do not repeat the specific duties of each entity rehearsed by the Expert evidence but refer
below to specific accountabilities and duties where necessary or illustrative.””>
5.6 The Experts identify themes from three case studies which paint a picture of failures by each of
those responsible for the business, in both 2004 and 2013 (and beyond) which the inquiry might
conclude were infected by wrongdoing, wilful blindness, incompetence or inertia. There were
individual, collective and structural failures in the governance of Post Office which were
directly relevant to the scandal throughout the period of this Inquiry.’ In addition to the case
studies of the Experts, we raise a few further examples by way of illustration.
5.7 Despite extensive disclosure and gathering of oral evidence, the Inquiry may never have an
entirely full picture of what precisely successive Boards were and were not told and when. The
passage of time means that correspondence and Board papers are not necessarily complete in
the material provided to the Inquiry. The Inquiry heard evidence that minutes were not necessary
a complete reflection of events (for example, the record of the 16 July 2013 discussion following
Susan Crichton’s exclusion from the Boardroom) and that, at least historically, oral briefings
and conversations out of Board were not necessarily always reduced to paper.”** The material
that is available, and the recollection of witness is sufficient confirmation that those in charge
at the Post Office either did not understand their true functions or did not function in them as
they should.
S,
5.8 We highlight important issues of governance for the consideration of the Inquiry beyond the
case studies identified by the Experts, as follows:
(a) _ First, Pre-2013. Failures in Governance were not limited to the period post-separation.
(b) Second, Post-2013. The Case Studies are not a full picture of the failings post-2013.
(c) I Third, we consider three themes in the evidence:
i. Wrongdoing, wilful blindness, incompetence or inertia.
ii. Board Effectiveness.
iii. The Role of the Shareholder.
5.9 Additionally, we address a number of further issues for the Inquiry to consider:
20 EXPG0000006 R, p18-19. Paula Vennells remained as CEO until she was replaced by Alisdair Cameron as Interim
and then Nick Read. Alice Perkins stepped down in 2015 and was replaced by Tim Parker.
21 WITN11360100 (Karen McEwan), [69].
22 Tbid, p21, [2.2]. See also EXPG0000010_R, pl, at [21] ~ [22]
23 EXPG0000006 R
228 EXPG0000010 R
xs For example only, Jane McLeod, WITN10010100, at [150] ~ [151].
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(a) Specialist Board Members;
(b) The Role of General Counsel;
(c) Legal advice, Litigation and LPP;
(d) — Whistleblowing;
(e) A Duty of Candour
a) Pre-2013
5.10 Failures in Governance were plainly not limited to the period post Second Sight. The Cleveleys
Case Study (Case Study 1) reaches significant conclusions about the weakness
at POL and RMG in the period around 2004. There were plainly other failures — whether in
communication, failures to exercise curiosity or to act on obvious indications of risk — which
directly contributed to the making of this scandal or which were obvious missed opportunities
to avert it. Putting the Cleveleys Case Study (Case Study 1) in context is critical. A few examples
follow.
(a) The same David Miller, the Executive Board Member who signed off the Cleveleys
settlement, had been Programme Manager for Horizon. The same Mr Miller now accepts
that he ought not to have told the POC Board, before acceptance, that Horizon was robust
and fit for service.”** Whatever he did or did not say, it is minuted that continuing
problems were reported and those were left hanging, unchallenged and seemingly not
followed up at Board level (“members were concerned that a number of technical issues
remained unresolved”).2” The Inquiry has considered the letter from Ernst & Young, and
whether used as a negotiating tool or not, it appears that ought to have been escalated to
Board level.”* The January 2000 Third Supplementary Agreement which allowed
Horizon to go live across the whole network had been signed by Mr Miller and witnessed
by the late Keith Baines.” Mr Miller confirmed he had commissioned and seen the wash
up document produced by Mr Folkes in February 2000 which highlighted technical areas
to pay attention to and concerns as to the need for ongoing assurance during live operation
of the system. Mr Baines role in Case Study I (and the approach to his second statement)
is dissected in the evidence of Susanne Helliwell. This was, of course, an exercise in
which Fujitsu, through Jan Holmes, was embroiled (Jan Holmes co-authored the EPOSS
Task Force report and was involved in settling the arrangements for litigation support at
Fujitsu).?°° Mr Baines had been central to the troubled birth of Horizon, being Head of
Horizon Commercial.”*! That both he and Mr Miller may have treated the troubled path
of Horizon in 1999-2000 as irrelevant by the time of their engagement on Cleveleys in
2004 deserves considerable scepticism. Afier 2000, there was a shocking absence of
management regarding the known risk that technical problems could undermine
in Governance
accounting integrity. That risk was seemingly ignored while focus turned to more
commercial matters.
INQ00001130. Transcript, 16 April 2024, 16@13 - 17:4 (The Chair pressed him to clarify if e accepted the minutes
were correct, despite his lack of memory: “I’m afraid so, sir, yes”.)_The Inquiry has followed the Minutes of
POL00000354, POL00000336 (11 January 2000) and POL00021476 (12 June 2001) (Consignia),
27 1NQ00001007, Transcript, 28 October 2022, 62 :15 — on, He previously confirming in questions that he did not tell
the Board it was “robust and fit for service” at 107:2-4. POL00000352 (Board Meeting, 20 July 1999). Noting
POL 00078362 (August 1999) which refers to the steer from the Board being not to accept a sub-standard system.
is was, after Mr Miller was said to have provided his July update.
228 POLevooDES (August 1999)
29 FUJOO118186, INQ00001130. Transcript, 16 April 2024, 21:1- 11._The Inquiry has followed the Minutes of
POL00000354, POL00000336 (11 January 2000) and POL00021476 (12 June 2001) (Consignia).
280 FUJO0152501 2).
231 POL00028540
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(b) The failure to act in response to the growing recognition of problems in the context of
proceedings ongoing at the same time as the Castleton proceedings evidences continuing
failure. We note that management and strategic discussion in this context included the
cases of Bajaj and Thomas and was again indicative not only of serious individual failures
but structural and collective failures of governance around management of risk.” The
findings of the draft expert report produced by BDO for POL ought to have been escalated
(particularly in light of the Cleveleys position). It would be astonishing if the fact and
implications of the outcome were not escalated. Yet, the Inquiry heard that the case was
being treated by POL as a test for Horizon, and the value of a precedent hunted.”°? Mandy
Talbot’s recommendations on a more coherent approach — copied to Rod Ismay —
prompted the Horizon strategy meeting in December 2005 (as above).2* That was
attended by Ms Talbot, Graham Ward (his involvement in Noel Thomas’s conviction is
addressed above) and Keith Baines. As a result, Mr Baines was to discuss an independent
expert with Fujitsu. Matters were to be directly escalated to Mr Corbett to consider
independent interrogation of Horizon and the involvement of auditors. It is plain it was
intended this issue was to be escalated up. Instead evidence from Fujitsu is pursued.
Whether there was a failure to join the dots on these cases by design or, instead, negligent
omission by management, Executive or the Board, this all evidences a serious failure of
risk management, a failure of good governance and a significant missed opportunity.
(c) By March 2006, Keith Baines was being copied in on important correspondence
regarding expert evidence on prosecutions (Graham Ward was editing the draft Jenkins
statement on system failure for Noel Thomas’ prosecution which was thought to be
“potentially very damaging”).”* (At almost the same time, he was coordinating with
Mandy Talbot and highlighting the
Castleton)."*° Whether aware of the Cleveleys and/or Castleton reports, or not, this
discovery, both of the position of Mr Jenkins and that POL was actively seeking to doctor
supposed expert evidence ought to have been escalated up the Executive line and beyond.
Against the background of the Cleveleys and Castleton experiences, it ought to have been
a clear indicator of a problem for both POL and Fujitsu in their approach to Horizon
integrity and the support of proceedings against SPMs, whether in the criminal or civil
courts.
(d) As above, by February 2010, the ‘stock line”?>” had been developed and was being used
by the Executive correspondence team. This begs the question, if the leaders of the
5, Who signed off the stock line?
issues raised in the Thomas case and others for
business were blind to the significance of these i
POL00107426, Email thread beginning 23 November 2005, from Mandy Talbot to David X Smith, Tony Utting,
Rod Ismay and others, copied to Clare Wardle in RMG Legal. See also, POL00071202, Email thread 3 March 2006
(“Keith and Dave Hulbert have brought the case of Hughie Noel Thomas to our attention as yet another discipline
case where HORIZON is being blamed. Also that of Hogsworth Post Office Skegness"). In this correspondence
there is coordination with a view to Fujitsu providing evidence to support the functioning of Horizon. Bill Mitchell’s
witness statement in the Shobnall Road case (a case concerning phantom transactions) is circulated.
e.g. POL00069794.
POL00119895 (6 December 2005)
FUJ00122210 (24 March 2006)
See also, POL00071202, Email thread 3 March 2006 (“Keith and Dave Hulbert have brought the case of Hughie
Noel Thomas to our attention as yet another discipline case where HORIZON is being blamed. Also that of
Hogsworth Post Office Skegness").
POL00002268 (1 February 2010) (Michelle Graves to Hayley Fowell) (“/ am providing our stock line which states
the system is robust.) 1NQ00001129, 12 April 2024, 178: 18-24. It was Mr Crozier’s evidence that he was unaware
of any stock line but he agreed that if Horizon integrity were in question and a stock line was being used that would
be a serious matter for the Post Office and RMG. He added “it would also be entirely wrong.”
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(e) I The shutdown of proposals for an independent investigation in March 2010 is familiar to
the Inquiry. Again, we see both Ms Talbot (RMG), Mr Ismay and Mr Scott playing a role
in this conversation alongside Mr Wilson (also, RMG).”** By 2010, there can be no
question of any disconnect between the legal team in RMG (of which Ms Talbot and Mr
Wilson formed part) and those working on Horizon integrity problems at POL (and,
notably, it appears there was coordination touching on Thomas and other cases as early
as 2006). The commissioning of the Ismay report — a report which directly builds on the
advice of Mr Wilson — belies a significant understanding at Executive and CEO level of
a significant risk to the business.
(f) The Ismay Report was sufficiently significant that it was treated as essential reading for
Alice Perkins from the outset.”*” Mr Ismay had, of course, been Head of Risk and Control.
The internal contradictions in this whitewash of a document are patent. (The failure to
take this further after POL — including Mr Ismay — are on notice of the Receipts and
Payments bug is catastrophic). The lack of any constructive action to further interrogate
Horizon or to consider the safety of prosecutions pursued on Horizon data signals either
corporate neglect by Mr Smith (and others) or a positive effort to avoid addressing a
known risk to the business on the part of those who read it. Having commissioned this
document in the face of growing criticism and questioning of Horizon™® — later provided
internally (with some enthusiasm) to the incoming Chair — it is not credible that prior to
separation it was escalated no further than David Smith, the POL Managing Director in
2010. It was, of course, the evidence of Mr Smith that although timed with further
inquiries by Channel 4, the report resulted from engagement with ShEx, who set the
“exam question”.**' There is no question the Report ought to have been interrogated
further, escalated and discussed in keeping with the rationale of the Cleveleys Case Study
(Case Study 1). That its inadequacies were missed — and that it was subsequently relied
upon by new leaders — is indicative of at least a considerable lack of care and, at worst,
confirmation that the document was intended to be used solely to present the proud
illusion of Horizon as robust without any rational consideration of the contrary
possibility.
(g) In 2011, the first SPM letters before claim arrived. These were being run under the RMG
legal team (with advice on privilege, for example, circulated throughout POL by Emily
Springford in October 2011 (addressed above in Sections 3 and 4).2#? That this messaging
was reaching the POL Executive was plain from Ms Vennells correspondence with Lesley
Sewell and Mike Young where again, she chased further information on yet another
potential independent look at Horizon (to vindicate the position of POL) which seemingly
never came to pass.“* RMG legal services may have been providing briefings.** We
note that, in this messaging at least, there appears to be an intention that these issues could
238 POL00106867 (3 March 2010), Email Rob Wilson to Dave Posnett and others.
239 WITN00740100, [133].
240 A reply to Ed Davey having been written in May 2010, for example. This being in the midst of frustration in the
relationship between Fujitsu and POL over integrity in the development of Horizon Online, with Mike Young asking
for independent review and “open book” exercises. See INQ00001128 (David Smith).
24 INQ00001128, 72: 2 - 72:14, POL00417098, POL00417100.
242 POL00176467 (20 October 2011) (Although this appears in various iterations). It appears that the RMG Legal team
engagement by Ms Springford on Horizon integrity preceded this time. See POL00106869 which appears to Ms
Springford forwarding to Ms Talbot a Fujitsu document on Horizon integrity and a 2009 copy of the standard Fujitsu
WS originally sent from Mr Smith (IT) to “Hayley, Emily and Michele” (Ms Graves, Ms Springford and Ms Fowell)..
243 POL00294928 (21 October 2011)
24 POL00413669 at p15 (included as part of papers behind the “supper with Paula” diary entry). This is a Briefing Note
on Current Status of Claims Involving Horizon, prepared by Legal Services (12 March 2012).
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be escalated up to the Board or Board queries on the issue of Horizon integrity were
anticipated.“
(h) In September 2011, Mr Brydon, Chair of RMG had written to Ms Vennells expressing
his surprise over reporting of the class action in Private Eye. He asks if it was appropriate
for the Board papers to have a litigation/legal report but that would be “Alice’s call”. Ms
Perkins is copied in. He goes on to indicate the Audit and Risk Committee (which was a
committee of RMG) ought to take an interest, and (as above) he questioned whether there
had ever been an independent audit of Horizon.) In reply, Ms Vennells provides assurance
on an entirely false basis: that every time Horizon integrity had been challenged in Court,
the Post Office position had prevailed. This information was demonstrably false. (She
claimed it must have been provided by the legal team).2*
(i) I The Ernst & Young work done on integrity — and inappropriate system privileges
including APPSUP - from 2011 through 2012 did engage Moya Greene. She said this had
been raised, she thought at the initiative of Donald Brydon.™” By 2011, the issue of the
Shoosmiths claims had been reported up to RMG, through the ARC, in the context of an
update on the Horizon relationship and the work of Ernst & Young on IT control is:
(“A small number of these have defended the claims on the basis that they were not guil
of the charges made but that Horizon was faulty.” “Prosecutions and civil debt recovery
actions by POL where the defence claim Horizon is flawed — these have consistently been
won on the facts of the Horizon transaction logs. Judges have spoken supportively of
Horizon”). This was a paper presented by Chris Day with Lesley Sewell and Rod
Ismay.’ Ms Greene said the Board and the ARC had ultimately been assured. Yet, in
2012, it appears that while progress had been made in the auditors control work, there
was work yet to do. An update was circulated, including to Dame Moya Greene.” No
one appears to have asked — if Fujitsu is fixing this — and there was a problem — what did
that mean for past integrity? For those cases? Instead, the Board remained assured. In
2012, when Les Owen actively pursued the issue of Horizon integrity, the information he
(and the rest of the POL Board) received appears to have been misleading and — while
the significance of the assurance was recognised by Ms Perkins - seemingly never
corrected. She regretted having not nailed it down at the time.”*° She admitted she should
have done more.”*!
(j) We note that the engagement of the RMG Chair does not appear to have ended entirely
in 2011 or 2012, whatever assurances afforded. During the fractious conversation with
Ms Crichton in Costa on 30 August 2013, and as recorded by Ms Vennells herself, Ms
Vennells commits to engaging with Ms Perkins, including on her believing Donald
[Brydon] “and BIS comments about a ... cover up.” This suggests at least that there were
conversations between the two chairs about the implications of the Second Sight Interim
Report during that summer. It appears the Department were also engaged and that — at
least in the impression of Ms Crichton — there were concerns even at that stage for a risk
POL00294928 “/ could easily have sent a note in respons
verification underway and the results are due any day soo
WITNO00740126. INQOOO01151, 22 May, 151:5 — 153:2.
1NQ00001178, 19 July 2024, 148:16 ~ 162:16.
RMG00000083
POL00029114
1NQ00001134, 23 April 2024, 36: 14 — 39:25, INQ00001156 (Alice Perkins) 39 :17- 45 :8
INQ00001156 (Alice Perkins) 50:1-3 “think that I was more reassured than I should have
been and I can see now, looking back at this, that I should have asked more questions about this."
fo a Board query, saying not to worry because there’ a
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of cover up. (Ms Vennells hangs a lot on the addition of a question mark to indicate this
was all news to her.)**?
5.11 The Inquiry is invited to treat with some scepticism any assertions of those in leadership
(whether at POL or RMG) of ignorance of the prosecuting function of the Post Office or the
continuing questioning of Horizon integrity. Mr Miller was, for example, clear that he
understood that function and the role of RMG Legal when part of the Executive team before he
retired in 2006. There may, of course, have been a difference in understanding as between
those working in hands on positions and those above Executive level; but Mr Miller was a Board
member. Sir Michael Hodgkinson conceded that he would have been aware that POL was
prosecuting its own people during the end of his tenure (he left in 2007). He said that the
processes for investigation and prosecution had been discussed in the RCC at a general level
and knew that Horizon data was used to support prosecution.*** Mr Evans, the Company
Secretary until January 2010, was clear that, from his prior roles, he understood the business
prosecuted its own people.”** The visibility of this is apparent from:
(a) The investigation and prosecution activities of RMG were discussed by POL Board,
RMG Board Committees and POL Committees.”*°
(b) IThe RCC was engaged in the work of Tony Utting and his team, and in particular, engaged
with the proposed use of the Proceeds of Crime Act 2002 as a tool for Post Office
recoveries. On 5 January 2005 there is a discussion of “/nternal Crime”. Mr Ismay was
Head of Risk and Control but sent his apologies. At that time, the RCC was told that there
were over 600 cases over 39 investigators. Financial investigations — proceeds of crime
— were discussed with prospects for. It recorded there had been £1.2M recovered. A new
risk model for profiling SPMs was discussed. Sir Mike Hodgkinson was in the Chair and
seemingly offered to assist in securing Home Office training.”*”
(c) The often contradictory evidence of witnesses who had worked closely together. To
examine one example, that of Mr. Cook:
i. It was the evidence of Mike Young that he was aware of the process of
prosecution at POL precisely because it had been described to him by his boss,
at POL, Alan Cook. Yet, it was Alan Cook’s evidence that he was entirely
unaware that POL was acting as a prosecutor until 2009 (albeit he was aware
there were court cases) (“J didnt realise that Post Office...had initiated the
prosecution”).>*
282 INQ00001152, 23 May, 168:25 ~ 171:25_POL00381629
283 INQ00001130, 33:3-20.
284 INQ00001128, Transcript 11 April 2024, 176:7-23.
258 INQ00001003, Transcript 4 November 2022, 4: 7 ~ 6 :6 (Albeit he claimed to be unaware that the Horizon data
would provide the basis for prosecutions, 96: 21 ~ 98:7. It was Mr Evans evidence that he did initiate a report to the
Board on litigation. It seems that he was aware that maiters of litigation ought to be visible and/or escalated to the
Board.
26 For example, POL00021485 (POL Board Minutes, 13 October 2004). "The board agreed that in situations where
fraud had been perpetrated against the company, the appropriate civil orders would be used immediately and in
advance of any criminal proceedings. This would help recovery efforts by ensuring that the assets of those involved
in criminal activity were quickly secured, David Miller would verify the current procedures and report back to the
board." Mr Evans queried whether this being approved by the Board raised more questions that it answered
(NQ00001003). We note that the POCA 2002 came into force in March 2003. The recovery of losses and perceived
debt to the company had been a particular focus of IMPACT. See, e.g. POL00038878 (Also March 2004).
POL00021503,
287 POL00021416. Sce also 6 April 2005 : POL00021417.
258 1NQ00001129, 12 April 2024,
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ii, Alan Cook had close, regular contact with Tony Utting (although it appears as
yet unclear whether he retained line management responsibility for the Security
and Investigations team, or this vested with the Company Secretary).
(d) To take another, Ms Vennells maintained she was unaware of the role of POL as a
prosecuting authority until 2012. She had by that time, been in the business since 2007.
In the familiar “subbies with their hands in the till” message, on 15 October 2009, copied
to Ms Vennells, Mr Cook writes, “Bizarrely the author of the email below was a very
senior postmaster in the Fed...whose wife was found to be defrauding us and we have
prosecuted”. The Inquiry will recall questions put to Ms Vennells on the absurdity of her
having been Network Director, then Managing Director then Chief Executive, and a
member of the RCC, without apparent appreciation of the role of the POID or the Security
and Investigations Team thereafter.”
(e) The Inquiry heard of correspondence relevant to investigations and prosecutions and
complaints about Horizon being handled in Executive (and Board level). That included
flagged cases from members of Parliament.” This correspondence remains difficult to
see for many of our clients. It peppered the evidence of Phase 5 and 6. In one example of
the management of such correspondence, Mike Young told the Inquiry he instructed John
Scott to escalate to him anything that “was likely to escalate to the Board — POL Board
and the Royal Mail Group Board — and certainly anything coming from the
shareholder”2°' This suggests, at least, that correspondence of this nature was being
escalated (or there was an awareness that it ought to have been). Mr Cook confirmed
himself that in 2008, he would have read a detailed reply to Sami Sabet defending his
prosecution by the Post Office before he signed it. David Smith acknowledged that while
there would be discretion within the team as to what came across his desk, he would have
some oversight of that team.
(f) At the end of the day, Mr Crozier reiterated that Mr Leighton (Chair of RMG) sat on the
POL Board and the Company Secretary (Jonathan Evans) was on both Boards and
attended throughout the relevant period, until 2010.”* It was suggested the purpose of
this was to act as a safeguard against issues being unnoticed by RMG.
262
5.12 If the parent did remain in the dark, this raises questions of both structural and individual
responsibility. It was the responsibility of the Company Secretary (acting with the Chair) to
ensure that persons were appropriately inducted and understood the scope of the business’s legal
obligations and their implications for the business. It was the evidence of Mr Crozier that Mr
Evans had line management responsibility for the RMG legal team, for General Counsel and
for the Head of Security within the Post Office.” It is the evidence of Catherine Churchard that
as Director of Legal Services till 2006, she was managed by the Company Secretary but the
Criminal Law Team moved from her report and became part of Security Services (there appears
no question it remained as part of RMG at this time).°* Douglas Evans, General Counsel from
29 INQ00001151, 22 May 2024: 81:4 — 95:4
26 POL00062444, POL00107713, POL00143535
21 POL00019281. INQ00001196. Transcript, 15 October 2024, 7:11 ~ 10:1. Sce specifically, 9:18-10:1.
262 INQ00001128, 56:6 — 58:13.
263 INQ00001129, Transcript, 12 April 2024, 120 :4-24.
264 INQ00001129, Transcript, 12 April 2024, 138:16 — 142:9 (albeit he believed there were separate POL and RMG
egal teams, both under the supervision of the Company Secretary). ‘This appears consistent with the evidence of
Catherine Churchard from 2002 (before which, she recalls that the reporting line was through the Managing Director
(Stuart Sweetman) (WITN11230100 at [19] ~ [20]).
265 WITN11230100, [16], [20], [21]. (A separate team for POL being discussed but rejected as not cost effective).
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2006 till 2010 confirmed there was no separate legal function for POL. He confirmed that the
Criminal Law Team remained under his supervision. He described 1:1s with Mr Wilson.?° Mr
Evans remained as Company Secretary for both RMG and POL until January 2010 (when
succeeded by Susan Crichton; and then Alwen Lyons). The Inquiry might conclude that if Mr
Evans’ role was intended to provide an additional safeguard, this proved ineffective.
we
&
Finally, in respect of the situation pre-2013, we note the conclusion of the Experts that the risks
in POL prosecutions were “u/timately the responsibility of the Parent RMG, not simply because
RMG was the parent holding company, but also because prosecutions reported to the legal
function which in 2004 was still a central function managed by RMG.”°°' This remained the
position until separation. (The Inquiry hi ions over the settling
of an MOU to follow separation on investigation and prosecution.”**) This seems an unassailable
reflection of the corporate position, even if not as understood by those in charge. It may place
the efforts of Ms Vennells to remove references to Second Sight and Horizon integrity
challenges from the prospectus for floatation in a different light (although the Inquiry has heard
no evidence on the disposition of existing liabilities between RMG and POL post-separation).
een a record of fractious discu:
5.14 At the closing of Phase 2, we regretted that there had been apparently little attempt to retain
institutional memory as key players (including Mr Miller) were moved on. Yet, there was
sufficient continuity of personnel engaged in these problems in 2004 and beyond — until the
Ismay report in 2010 — that any suggestion that the connection between the genesis of Horizon
and its tumultuous evolution was forgotten or lost rings hollow. Horizon had been Mr Miller’s
domain. It had been he and Keith Baines who got it over the line. Mr Ismay had been at the
heart of the Cleveleys debacle, and it was he who escalated the matter to David Miller. Keith
Baines signed a statement giving a wholly incomplete picture of the problems arising in the
development of Horizon. Mr Miller sat on the Board of POL. Efforts to take the issue further in
December 2005 were destined for the Executive through Mr Corbett. They seemingly went
nowhere. Mr Ismay, in his role at P & BA was well aware of the technical flaws arising in
connection with IMPACT*® and, following the Cleveleys settlement, had been involved by
Mandy Talbot in discussions over how to address case upon case raising Horizon integrity. The
saga of his whitewash is truly shameful.
we
a
At each of these stages, there were commercial incentives and imperatives to look the other
way. In 2005-2006, IMPACT was being rolled out.” By 2006, plans were beginning for
Horizon Next Generation. The Board wanted it to be cheaper and the planning was discussed
by the Board both at POL and RMG.”” These provided the foundation for cheaper operations
and for the growth of Network Banking. No one appears to have considered the operational
experience for the SPM.”” By 2006, POCA was looking attractive for recoveries against SPMs.
In 2010, acceptance of Horizon Online was squarely in issue. Throughout, there were financial
206 WITN11240100
267 EXPG0000010_R, at [205].
268 POL00179491 Email thread beginning with exchange between John Scott and Mike Young, 6 March 2012.
269 POL00021420 (22 March 2006, RCC Minutes):_ "IMPACT and the POLFS accounting system have moved on
significantly since the last report ..."The -m is not yet processing all transactions correctly and so the end state
of POLFS ledgers which automatically interface to the main business account has not yet achieved.
While Mr Ismay appeared to deny any connection between IMPACT and the pursuit of SPMs for recoveries. This
position is simply incredible. See INQ00001063, Transcript, 11 May 2023, 49:9 — 50:23.
am RMG00000033. In this context, at RMG level, a concern was raised by Richard Handover, a NED, and CEO of WH
‘Smith, that cost reductions being offered by Fujitsu could be accompanied by service degradation.
nm POL00329630 (6 February 2006), INQ00001128, Transcript, 11 April 2024, 163: 18 — 166:10.
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challenges with risk of insolvency, personal risks for Directors and threats to the survival of the
business.” We return to this below.
5.16 The time before 2013 and Second Sight remains fundamentally important. Prosecutions
continued apace after the failures at Cleveleys. The name Noel Thomas bears repeating. Noel
was of course convicted in 2006 but he is only one of many. Between 2005 and 2010, those
convicted included Jo Hamilton, David Blakey, Carl Page, Alan McLaughlin, Tahir Mahmood,
Harjinder Butoy, Durandra Clarke, Pauline Stonehouse, Abiodun Omotoso, Julian Wilson, Sami
Sabet and Susan Rudkin.
5.17. Even in the three years between the Ismay report in 2010 and 2013, many more people had their
lives ruined. They included — again, to name only a few - Wendy Buffrey, Timothy Brentnall,
Allison Henderson, Jackie McDonald, Jerry Hosi, David Hedges, Gurdeep Singh Dhale, Lynette
Hutchings and Della Robinson.
5.18 None of this might have happened had those at the top done their job and exercised even the
minimum of professional curiosity. These were no small failures. Every missed opportunity to
act; every time the problem was studiously avoided and every time someone refused to act on
the repeated challenges to integrity were to be devastating for someone else who was prosecuted
after that opportunity was missed.
b) —_ Post-2013
5.19 There are serious failures of governance illustrated in the two Case Studies in 2013: (Case Study
Two) the Second Sight Interim Report and (Case Study Three) the handling of the Simon Clarke
advice of July 2013. We do not add significantly to what we say on these matters above. Briefly:
(a) The failures identified must be viewed in context of a history of years of defensive
retrenchment on the part of the leadership at POL;
(b) A toxic culture of anti-SPM feeling, disbelief and retrenchment saw staff, leadership and
the Board unmovable from the mantra that Horizon was robust;
(c) _ That stock line had become an unassailable orthodoxy: an unquestioned belief of which
no challenge could be countenanced or tolerated;
(d) That carried into every aspect of POL’s engagement with the issue of Horizon integrity:
in relationships with the individual sub-postmasters, the press, parliament and the courts;
(c) The evidence, including as analysed in both Case Studies, supports the conclusion that
precisely those who had the opportunity to halt this scandal — the CEO, the Chair and the
Shareholder — singularly failed.
5.20 We note that the Experts do not set out to reach any conclusion on the facts. They express their
views on the facts as they see them. Conclusions on individual actions and who knew what
when will remain for the Inquiry. We highlight concerns throughout these submiss
opportunities missed, at Executive and Board level.
ms as to
(a) As to the response to the Second Sight Report, for example, the D & O assurance sought
illustrates that, from the outset, someone on the Board did appreciate the seriousness of
73 See, for example, Sir Michael Hodgkinson INQ00001128, Transcript, 11 April 2024, 113: 8-11: “Jt was a constant
theme throughout the whole period, where Directors had to be constantly looking at this for fear of becoming
vulnerable themselves for overtrading and being liable for creditors.”
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the advice given on wrongful prosecutions but the first thought was to protect themselves
and the business.
(b) As to the Clarke advice, for example, there were many occasions beyond 2013 where
opportunities to brief the Board and opportunities for the Board to ask questions were
missed. But equally, there were actions taken by some to positively remove reference to
the toxic witness issue from draft documents. This may suggest something more than a
failure to appreciate the problem or an unwillingness to face the truth. Instead, it may
suggest an appreciation within the business that information exposing POL to a terrible
truth should be hidden. From where did that message come? The evidence may support
that those from the top were deliberately asking only to be told what was convenient. At
best, the culture within the business was so degraded that the seeming protection of the
Post Office position was seen to be valued over truth and personal integrity.
(c) On the latter, it will be for the Inquiry to determine the extent to which the Chair and the
CEO, Ms Vennells and Ms Perkins had knowledge of the “tainted witness” and either did
not act on it; or positively averted their attentions to avoid such knowledge.
(d) Ms Perkins described the Board on her arrival as embryonic.””* Both she and Ms Vennells
knew that the governance arrangements in place post-Separation were in their infancy.
This ought to have been a reason for greater care and transparency, not less.
(ce) The Inquiry heard repeatedly about concerns individuals had about Ms Vennells and her
performance in her role. Most significantly, the Inquiry has seen that there was discussion
of her position by UKGI (seemingly without reference to the Chair if Ms Perkins
evidence is accepted). The Inquiry heard from witnesses in this scandal, that they had
been promoted into jobs for which they perhaps had little or no appropriate prior
experience.
(f) The Inquiry might conclude that there were people within POL who were overpromoted
and perhaps rewarded for their loyalty to the business.
(g) It might conclude that Ms Vennells and Ms Perkins sat at the top of a precarious tower of
individuals who were the wrong people, in the wrong jobs at the wrong time.
(h) However, the buck stopped somewhere. If there were issues of competence within the
Post Office, those responsible — in the Board and at the shareholder — failed to act and
must be held accountable.
5.21 By their actions, the Inquiry may conclude that individuals within the business took steps
patently designed to shield Horizon, the Post Office and themselves rather than to discover the
truth. The Inquiry may conclude that collectively the Chair and Directors failed to challenge
and interrogate obvious risks so that, structurally, the governance arrangements in place became
pointless.
5.22 We anticipate the Inquiry will consider the totality of missed opportunities for the Executive
and the Board to have acted on this scandal as it continued to unfold. In the interests of
proportionality, we consider a few further examples of failed governance.
(a) The work of Deloitte on Project Zebra in 2014 had been commissioned following advice
to the Board from Linklaters. The Inquiry might conclude there was a complete failure
on the part of Chris Aujard and Lesley Sewell to escalate this information to the POL
Board in a manner which was appropriate. The email cover letter circulating the
information was incomplete and misleading. The seriousness of the information
4 INQ00001156, 5 June, 23:6-10.
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disclosed by Deloitte was plainly understood within the business as reflected in the Zebra
Action Summary discussed with Chris Aujard, Lesley Sewell and Rod Ismay. In short,
they knew that remote access by Fujitsu was possible. There was a corresponding failure
on the part of the CEO, the Chair and the NEDs (including the Shareholder NED, Richard
Callard), to respond appropriately to the information that was conveyed to them.””* This
work ought to have entirely altered the attitude of the business to the i
access. Not least, this information ought to have been disclosed to Second Sight and to
Sir Anthony Hooper in the course of the mediation scheme. It ought to have been
ue of remote
disclosed to those who had been prosecuted on the basis of Horizon data and it ought to
have been disclosed to the CCRC. This might have led sooner to the further substantive
interrogation of Fujitsu by Deloitte (Bramble limped on until 2018). It may have turned
up what was known inside POL about remote access (the Lynne Hobbs email; the
Lusher/Wynn email exchange; the exchanges on the options to respond to the receipts
and payments bug in March 2011) and it may have revisited some of the history within
Fujitsu.°”° Instead, the business continued to insist — in press, in parliament and in its own
rhetoric — that interference with Post Office accounts was not possible. Whether
singularly, or in the context, it was plainly a failure of governance that this material was
not considered at Board level and acted upon.
(b) The subsequent handling of the Swift Review and its recommendations illustrates that
Board weakness in the management of risk continued under the fresh Chairmanship of
Tim Parker. The decisions taken on that Review and next steps and the decision to close
down further work in the light of the GLO are perhaps illustrative of the entrenchment of
the toxic culture within POL: a culture which refused to countenance the possibility of
miscarriage of justice even in the face of Ministerial challenge and expert review. If
properly understood in the context of the Post Office’s role as a prosecutor (as outlined
above), then that this work might be disclosable (not only in the GLO but to the CCRC)
was reason that it ought to have been conducted rather than shut down. That the actions
for which Tim Parker was eventually, and wholly inadequately, censured by the
Department were permitted by those around him are testament to the continuing failings
in the culture of the business. That this work was permitted to continue as it did without
contemporary follow-up by the Shareholder in 2016 — whether by Ministers or officials -
suggests a corresponding failure of governance on the part of the Department.
5.23 For reasons of proportionality, we only briefly address governance in the period post Common
Issues judgment. In short, Phase 7 exposed the Post Office in the post-Vennells era as a broken,
dysfunctional organisation from the top down. The Chair, the CEO and the Shareholder
(Ministers and Officials) together failed utterly to grasp the scale and constitutional significance
of the judgments in the GLO, while continuing to issue public sympathetic messages of intent
to do the right thing.
5.24 We take just one issue briefly: strategy. The Inquiry has heard evidence that the Chair, Tim
Parker, was asked to focus on vision and mission in 2020. Nigel Railton, upon taking up the
25 As addressed, above, in Section 3.
276 FUJ00088036 - "Secure Support System Outline Design", version 1.0 dated 2 August 2002. Page 15: paragraph
4.3.2: "All support access to the Horizon systems is from physically secure areas. Individuals involved in the support
process undergo more frequent security vetting checks. Other than the above controls are vested in manual
procedures, requiring managerial sign-off controlling access to post office counters where update of data is
required. Otherwise third line support has: "Unrestricted and unaudited privileged access (system admin) to all
systems including post office counter PCs ..."
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position of interim Chair, observed the problem of a prolonged lack of strategy within the
business.” This business in crisis was allowed to continue on without strategy. A business
stands and falls on strategy. Here, there was none. It seems that the CEO, the Chair, the Board
and the Shareholder were all operating in crisis without a roadmap over the course of a number
of years. Worse still, the Inquiry may conclude that where there was call for strategy (NBIT),
the leadership utterly dropped the (very expensive) ball. It took a minimum of two external
consultant reports (Grant Thornton and Teneo) before the Post Office was able to construct and
agree a strategy for the future. Even then, it was not complete in time for witnesses from the
Board to be questioned on it at this Inquiry. Nor, it appears, can the strategy be treated as truly
final. The Inquiry heard strategy of the business is intrinsically linked to the vision of
Government for the Post Office and the network.°”* Governance at the Post Office remains
broken. While the commitments of Mr Railton, Mr Brocklehurst and their new team, both at the
Inquiry and in subsequent press, may have been encouraging, considerable effort, engagement
and resource will be required to effect any positive change. Those requirements remain — at least
in part — in the gift of His Majesty’s Government.
wt
id
a
Regrettably, we and the Inquiry are inhibited in any observation as to the future governance of
the business. In the absence of a clear picture from central Government as to Post Office policy
for the future, any recommendation for change may be an exercise in sculpting wet sand.
5.26 We return to compensation in Section 6 and NBIT and the future of the business in Section 7.
b) Themes
5.27 Below, we identify four themes permeating the Governance failures at Post Office.
i Wrongdoing, wilful blindness, incompetence or inertia
5.28 Individual failures, incompetence or wrongdoing cannot excuse the collective and obvious
failures of governance. We urge the Inquiry to recognise that there were failures which were
individual, collective and structural. An inability of those in charge at the Post Office to do the
right thing infected every aspect of governance at the business. We anticipate fingers will point
~ it wasn’t my fault, it was theirs. There is blame enough to be shared.
5.29 Catastrophic failures (or even wrongdoing if that were the case) by a General Counsel or a
Company Secretary cannot excuse a CEO, a Chair, a Board or a Shareholder from accountability
if they fail entirely in their duties to ask the obvious questions, take the obvious actions and
utterly fail to meet their own duties. So, consistent with the view of the Experts (and our
submission above) — the mishandling of the Clarke advice on Mr Jenkins was not solely the
responsibility of successive General Counsel. Similarly, that the Deloitte Zebra report and all
that followed.
5.30 In the Executive and the Board bearing responsibility for an organisation which acted as victim,
policeman and judge in the prosecution and conviction of its own people, it is astonishing that
each stage of this scandal was, at best, allowed to unfold without intervention from the Board
of Royal Mail Group or Post Office Limited. At worst, it appears there were very serious failings
m WITN11390100 (Nigel Railton), [40].
ve 1NQ00001192, 8 October 2024, 122, 141
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which were actively facilitated by those at the top and action then taken to prevent those failings
coming to light. Where key players were involved for many years in the management of Post
Office and issues of Horizon integrity, it becomes more difficult to accept that any oversight or
failure results from simple error. Those we represent anticipate that the conclusions of this
Inquiry may help them understand why there were failures. To repeat: they understand that it
may not be the last step in the process of accountability. Necessary conclusions as to the
responsibility of individual Directors for the failures identified by the Experts are likely to have
significant reputational impacts for all of those involved in successive iterations of the Board.
Other consequences for Directorial failure have not been directly considered by the Inquiry.
ii) Culture and the role and value of SPMs in POL Governance
The evidence on the challenging experiences of the first shareholder NEDs was some of the
most shocking of Phase 7. Witness upon witness gave testimony as to how important it was that
shareholder NEDs sat on the Board. Yet, suspicion and concern that a lack of independence or
“trade union rep” tendencies might undermine the interests of the business, permeated evidence
of any interaction with other Directors, including ShEx. SPM NEDs are obviously, patently not
independent. They bring with them the experience and expertise of the SPMs on the network
precisely because they are not so. It is difficult to understand how a non-independent
Shareholder NED might pass muster where a non-independent SPM NED might be labelled
“not to be trusted”. Yet, this is what the evidence suggests may have occurred in the engagement
of Saf Ismail and Eliot Jacobs. The changes proposed by Grant Thornton must be implemented
without exception to ensure parity of experience across Directors. With both SPM NEDs due to
stand down, contemplation ought to be given to ensuring staggered replacement to preserve
institutional memory. Given evidence as to the limited training and support offered, a dedicated
programme of training and induction ought to be offered to new SPM NEDS. In addition, they
ought to be reimbursed (including for their time away from their business). NFSP designs on a
Oversight Committee may be duplicative and easy to exclude from real decision making (should
the culture of the business remain unmoved). Those we represent recommend that in order for
true culture change to be effected, the interests of the network and SPMs must be embedded in
the organisation from the top and understood (not tolerated) by the Chair, the CEO, the
Executive and NEDs, including the Shareholder NEDs). This ought not to mean just time spent
in a rural branch close to home (although that may not hurt). It will require a wholesale shift in
attitude which sees SPMs as partners in a network which serves a social purpose, and which
holds both financial and wider community value. A concrete commitment to honesty in
conversations with SPMs about the viability of the network and sustainable remuneration for
the future. If change needs to come to the Post Office, SPMs ought to be treated with the respect
due (on an equal footing to the corporate partners and clients the Inquiry saw treated with kid
gloves in some correspondence).
The Inquiry is invited by POL to place faith in the promises of Mr Railton that the future will
be different. It is a source of real concern that only days after his appearance at the Inquiry, Post
Office strategy was announced with fanfare in the press.” Closures — but so we can pay SPMs
more!
RLIT0000557 The Guardian, Post Office to announce branch closures and job cuts in cost-cutting drive, 12
November 2024.
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For many of our clients, they want nothing more to do with the Post Office. They would struggle
to pass the branch next door to this Inquiry. For others, that this scandal appears to have
destroyed their lives and may yet see the end of a national institution is a source of real sadness.
For all, regrettably, press before substance feels only so much like business as usual.
iii) Board Effectiveness
There were governance failures at POL at every stage of this saga. POL was not an insubstantial
business. In all of its iterations it was a high-profile organisation. It was, for the most part, a
public corporation with an active Government shareholder (albeit one actively engaged in both
seeking to preserve a socially important and politically sensitive network of commercially
challenged outlets while seemingly cutting reliance on public funding). The Chairs and
Directors at POL who were appointed to safeguard the interests of the business were
heavyweight individuals with impressive CVs. They were credible business professionals with
ahistory and a “name”, operating or building portfolio careers towards retirement. Dame Sandra
confirmed that this was not an unusual practice.”*° If a business of this calibre can fail over and
over again to meet good practice, it begs the question whether failings are happening behind
many, many Boardroom doors which will go undetected until crisis hits. We invite the Inquiry
to ask what safeguards there are to ensure that Directors are not simply left to check their own
homework or to reinforce collective incompetence or inertia. We raise three issues:
(a) Overboarding: Thinking on the practice of overboarding has evolved over the period
of this scandal. When asked, every witness, perhaps unsurprisingly denied being
overcommitted. While Dame Sandra appeared reluctant to accept that change may be
necessary, overcommitment breeds risk and self-policing requires an awareness which
may falter in the face of opportunity. The Inquiry may wish to consider whether there
is a case for the FRC to revisit more concrete guidance and rules on
overcommitment amongst Directors and Chairs. In any event, the Inquiry may
consider UKGI ought to introduce more concrete rules for appointment to roles in
public asset governance.
(b) Directors: guidance and training: Dame Sandra was asked if there was any training or
continuing professional development for Directors.”**' The Inquiry may wish to invite
FRC to revisit guidance for Directors and Boards on continuing development and
training for both Chairs and Directors through the life of an appointment. UKGI
ought to consider the training requirements and guidance currently offered for
Directors in pul owned companies, in order both to consider gaps, and to
consider any learning that might be drawn from the conclusions of this inquiry.
(a) Board Effectiveness Reviews: The Experts were asked what measures were in place to
act as a check on Directors’ competence, commitment and honesty — beyond crisis. Were
these closed Boardrooms filled with very experienced people expected to get on with it,
self-regulate, or be relied upon to call each other out before anything went horribly
wrong? We asked about training and other measures. The Experts pointed to regular
Board Effectiveness Reviews, governed by the Code and associated guidance. Dame
Snadra referred to reviews every two to three years sometime involving external
facilitation. The Inquiry has copies of the Board Effectiveness Reviews completed by
1NQ00001207, 13 November 2024, 59 on. (Questioned by Mr Moloney).
1NQ00001207, 13 November 2024, 61 on. (Questioned by Mr Moloney).
69
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POL. However, that these were simply ineffective to prevent the wholesale failure
identified by the Experts and in the evidence before this Inquiry is clear. Ironically, at the
disastrous 16 July 2013 meeting dealing with the Second Sight Interim Report, the Board
discussed its last Board Effectiveness Review. As minuted, the Board wanted fewer
presentations from the Executive Committee (perhaps apt with Susan Crichton waiting
outside) and more time for discussion where NEDs shared their “own thinking”. Papers
were to be clear and not overly optimistic. Questions of fact ought not to be necessary.
This suggests that — at that time — the Board were aware that the papers being provided
were inadequate — and required probing with the authors — again, why was Susan Crichton
left outside? Finally, and perhaps with tragic prescience, the Board discussed the use of
advisors, and the CFO was asked to provide a paper highlighting the processes in place
for monitoring the use of advisors, procuring advisors and negotiating their terms (we
note the focus on cost, not ensuring that the Board is well briefed on the advice it had
paid for).’*? The Inquiry may wish to invite the FRC to revisit its provision for Board
Effectiveness Reviews, in order to consider whether steps might be taken to increase
their effectiveness. UKGI guidance ought to be revisited in the light of this inquiry
to consider whether specific provision for reflection within publicly owned
companies ought to be improved to increase opportuni for regular learning and
reflection in the interests of transparency and accountability.
We note that in October 2024, the IOD published its first voluntary Code of Conduct for
Directors (RLIT0000571) . There are echoes of the Post Office scandal in its foreword:
“We can be rightly proud of UK business organisations much of the time. However, on occasion,
business decision makers fall short of what society expects. Those at the top may lose touch with
what really matters — namely the need to demonstrate exemplary values and integrity in both
their business decisions and their personal behaviours. As a result, we have in recent years
observed scandals and controversies which have exerted a negative effect on the esteem in
which business is held. In the absence of public trust, businesses may find that their freedom to
The publicity surrounding the launch highlighted first and foremost that its principles were
voluntary. They are not backed by regulation, nor are they compulsory. They are simple
principles, and some echo Nolan:
. Leading by example: Demonstrating exemplary standards of behaviour in personal
conduct and decision-making.
. Integrity: Acting with honesty, adhering to strong ethical values, and doing the right thing.
. Transparency: Communicating, acting and making decisions openly, honestly and clearly.
. Accountability: Taking personal responsibility for actions and their consequences.
Fairness:
. Treating people equitably, without discrimination or bias.
. Responsible business: Integrating ethical and sustainable practices into business
decisions, taking into account societal and environmental impacts
When asked by the Chair whether the Nolan principles ought to be familiar in good corporate
practice in any event, the Experts replied positively. During the public consultation exercise on
the Code, most respondents thought the principles were “common sense”. If true, the Inquiry
POL00021516
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might ask why these principles highlighted by the IOD might not be compulsory (and regulated)
for all assuming responsibility for Director roles. If not all, certainly those Directors in public
bodies or companies in public ownership, ought to be bound both by the Code and by Nolan
(and conduct tested to that standard in any review of Board Effectiveness). The Inquiry may
wish to invite the FRC to consider revisiting its guidance on conduct, oversight and
professional development for Directors and Boards. The Board Effectiveness process
might be reviewed and revisited to ensure that it is taken seriously; and more regularly
involves independent oversight. Again, UKGI is invited to consider specific guidance for
its portfolio in any event.
(iv) The Role of the Shareholder
This was a public corporation where civil service oversight of risk through ShEx and then UKGI
saw the public nature of the POL business lost, as successive Shareholder NEDs became co-
opted in the unsustainable, unquestioned POL narrative that Horizon was robust and that no
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miscarriage of justice could ever have occurred. The Nolan principles and any concept of good
governance seemingly forgotten. We do not rehearse the evidence of Richard Callard and Tom
Cooper, with which the Inquiry will be familiar, including the detailed consideration of their
participation in Board discussions and activities and the consideration of risk.
5.39 The Inquiry may recommend that UKGI take ownership of the failings of the successive
NEDs in this process and accountability for the failures of oversight afforded by
Government generally. There ought to be a serious process of reflection within UKGI
and Government more generally as to the effectiveness of the safeguards in place for the
management of risk in government assets, taking on board all of the learning in this
Inquiry and its conclusions.
5.40 We deal with the issue of compensation in Section 6.
d) Further issues for the Inquiry to consider
5.41 We invite the Inquiry to consider recommendations on the following further issues.
i) Specialist Board Members
5.42 The Experts are dismissive in their view of the role of Specialist Board Members, whereas
witness
s who played a role in decision making were asked specifically about the value of both
legally skilled Directors and those with IT experience and responded positively. Witnesses,
particularly in Phase 2, thought greater expertise at the top (particularly in IT) may have helped
scrutiny of the Horizon project. The Inquiry may wish to indicate that Specialist Board Members
ona business of the scale of Post Office (or any other which sits on critical IT or which regularly
takes legal action) may benefit from a Board with specialist expertise. The Experts indicate best
practice may prefer external advice to be brought in to advise on issues requiring experti:
The current 2018 FRC Guidance on Board Effectiveness does not address specialism, for
example.” This view appears to neglect that it may take a specialist view to appreciate when
such external advice is essential or to understand precisely the questions that must be asked of
the expert to protect the interests of the business. The Inquiry may wish to prefer the view
28 EXPG0000010_R., [85] for example.
284 RLIT0000528 FRC Guidance on Board Effectiveness (2018)
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garnered from the experience of the witnesses embroiled in this scandal, who thought greater
expertise at Board level may have provided greater insight.
ii) The Role of General Counsel
The absence of GC in the 16 July 2016 discussion of the Second Sight Interim Report had, in
the view of the Experts, a damaging and iterative effect. The current GC, Ben Foat, has
described what he believes are behaviours which exclude him from meetings and which limit
his capacity to advise the Board effectively. While very serious criticism must be laid at the
door of many of the lawyers who lost sight of their professional duties in this scandal,
structurally, the availability of GC to the Board of any business — whether as a Board member
or as a required attendee at Board meetings — appears an invaluable resource. Clearer guidance
on how Boards access and understand legal advice must be a lesson drawn from the experience
of this Inquiry. There is no formal provision for the role of General Counsel in the Code (it is
perhaps telling that Part 1 of the Inquiry Expert Governance Report includes no reference to
“General Counsel”). “/’m not legal”, “I’m not a lawyer” and similar siloed approaches to legal
guidance within any Executive ought not to operate as a barrier to clear communication by a
Board on matters of legal risk. Clearer guidance on the most visible legal resource available in
a corporate setting appears apt and timely.
The first consideration may be formal attendance on the Board where a company has General
Counsel appointed to protect its interests/play a role. While it might be said that specific GC
attendance could be required for items of specific legal interest, there are specific benefits of
regular attendance which might be missed. First, lay Board members might miss when legal
advice would be essential or helpful to a Board. While a topic may not be within the expertise
of counsel, they may be more alert to situations where a Board ought to take legal advice of a
specialist nature. Secondly, where a GC might be required to advise on a range of issues across
a business, regular attendance at Board will allow for the development of a holistic picture of
the Board’s priorities, concerns and risks which might not otherwise be garnered from a paper
reading of minutes which may not paint a full and nuanced picture of any discussion.
In a consultation response by around 70 GC and academics on the last FRC amendment of the
Code, it was observed that it was “extraordinary” for there to be no specific reference within
the Code or its supporting Guidance to the role of GC. They note that GC “has a particularly
broad influence across the full range of topics that the Code seeks to support, whether pure
governance, ethical and cultural standards, or enterprise risk management.” They
unsuccessfully called for the role to be formalised in the Code.”** Drawing on the comparative
US experience reflected in Sarbanes Oxley and in the Dodd-Frank Act, they wrote: “the General
Counsel intervenes on risk issues without the hindrance of internal business conflicts that other
executives may suffer. They are also strengthened by the professional duties of legal services
regulation that require and enable them as an ‘authorised person’ to hold the business
accountable to its responsibilities, while maintaining professional independence from
the organisation as its legal advisor. In this they hold a primary duty to protect the rule of law
and, in situations of doubt, to do so in ways that protect the public interest, particularly the
public interest in the administration of justice.”
RLIT0000527 GC Response to FRC Corporate Code Consultation, 30 August 2023 (One of the signatories is
Richard Moorhead (member of the HCAB).
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5.46 The Inquiry is invited to recommend that the Government invite the Financial Reporting
Council to revisit the omission of any clear role for GC from the latest iteration of the Corporate
Code (2024). Where a company is required to have a Company Secretary, clear guidance should
be available on the relationship between the two roles. UKGI is free to set parameters and
guidance independently of the Code for companies within public ownership. UKGI should
revisit its own directions and guidance for its portfolio to direct that its companies must
demonstrate how they are operationally managing legal and associated risks. Consideration
should be given to a direction that any General Counsel should be either a member of the Board
or a required attendee at Board Meetings (with alternative attendance permitted by a legally
qualified, regulated Deputy).
iii) Guidance: Legal advice, Litigation and LPP
5.47 Other issues arising in evidence included (i) the ineffective communication of legal advice to
the Executive and the Board; (ii) access to and instruction of specialist external legal expertise;
and, (iii) specific advice on legal risks in litigation. We consider some but not all the examples
from the evidence above in the context of the actions taken by the POL in defence of its position
and in addressing the role of lawyers in this scandal.
5.48 However, in revisiting the position of GC and identifying guiding principles which ought
to govern work in such roles, it might be recommended that the FRC consider principles
in the Code (in the context of risk) which cover access to clear, appropriate and accessible
legal advice for Boards and the appropriate management of legal professional privilege
(including in the context of litigation). Again, independently, UKGI might be
recommended to revisit its own directions and guidance for its portfolio and to direct that
its companies have access to clear guidance on the management of internal and external
legal advice, including as to the appropriate management of legal professional privilege
(especially in the context of litigation).
iv) Whistleblowing
5.49 We repeat what we say in Section 2. While the renewed commitment to whistleblowing in the
business is positive and perhaps to be expected, it is in the practice that the policy will be tested.
On the evidence heard by the Inquiry, as to the state of the ongoing inquiries, including those
arising from NBIT, and the evidence of the mishandling of the “Pineapple” concerns raised by
the SPM NEDs, there is considerable cause for caution.
v) A Duty of Candour
5.50 This i
within it are disrespectful of the extent of their legal obligations to others and to the public
at its heart, an inquiry about what happens when an organisation and the individuals
interest. It is also an inquiry about what happens when an organisation — owned by the public —
fails to come clean when things are going wrong. A failure to reflect honestly on mistakes
they are happening and a closing of eyes to the truth compounded the pain and trauma of many,
many SPMs convicted wrongfully for years. The Government intends to bring into law a duty
of candour for public servants and those acting with public functions, referred to colloquially
as the “Hillsborough Law” following recommendations made by Bishop Jones after his
consideration of the disaster and following a Bill produced under the banner “Hillsborough Law
Now” (and previously pursued as a private members bill). The Kings Speech promises: “My
Government will take steps to help rebuild trust and foster respect. Legislation will be brought
forward to introduce a duty of candour for public servants [Hillsborough Law].”
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5.51 In his speech to his Party conference, the Prime Minister said:
“But Conference, for many people in this city the speech they may remember was the one here
two years ago. Because that’s when I promised, on this stage, that if I ever had the privilege to
serve our country as Prime Minister one of my first acts would be to bring in a Hillsborough
law — a duty of candour.
A law for Liverpool.
A law for the 97.
A law that people should never have needed to fight so hard to get, but that will be delivered by
this [...] Government.
It’ also a law for the sub-postmasters in the Horizon scandal.
The victims of infected blood. Windrush. Grenfell Tower.
And all the countless injustices over the years, suffered by working people at the hands of those
who were supposed to serve them.
Truth and justice concealed behind the closed ranks of the state.
And Conference, this is the meaning of Clause One. Because today I can confirm that the duty
of candour will apply to public authorities and public servants, the Bill will include criminal
sanctions, and that the Hillsborough law will be introduced to Parliament before the next
anniversary in April.
Its work that shows how a government of service must act in everything it does.
Our driving purpose. To show to the working people of this country that politics can be a force
for good. Politics can be on the side of truth and justice. Politics can secure a better life for
your family through the steady but uncompromising work of service.
Because service is the responsibility and opportunity of power.
The pre-condition for hope. The bond of respect that can unite a country, bind us to the politics
of national renewal. Service doesn t mean we'll get everything right.
It doesnt mean everyone will agree. But it does mean we understand that every decision we
11286
take, we take together
5.52 The cost of a lack of candour in this scandal has been devastating. We can do no more than
repeat our Phase 4 Closing. The harm to both SPMs and the public institution of the Post Office
has been deeply damaging to the public consciousne:
5.53 The Inquiry may wish to invite CPs to comment should the Bill be published prior to the
completion of its report. The proposed statutory duty of candour promised by the Prime
ter must extend to the Post Office. Its scope must not exclude application to other
publicly owned assets. The legacy of scandal must be a commitment to truth.
286 RLIT0000429
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e) Conclusions
5.54 Dame Sandra and Dr Steward conclude that, after 2013, successive Boards did not see the
problems in prosecutions, investigations and culture that had been included in the Second Sight
Interim Report and graphically described by SPMs, as well as in the media and at Westminster.
They term this a governance failure. It sits alongside the other detailed failures they identify.
Sitting atop years of seeming failure to grapple with the function of the Post Office as prosecutor
and the relevance of Horizon integrity issues, stretching from the development of Horizon,
through Cleveleys and beyond: the Inquiry might conclude it was a catastrophic failure of
individual and collective accountability.
5.55 By 2013, if not by 2010, a toxic group think culture infected each level of governance at the
Post Office (including the Shareholder):
“So deep were the assumptions embedded in the culture of the organisation, so corrosive was
the company’s ethos that the Board did not call the Executive to account to face up to POL’
role in perpetuating the miscarriages of justice which were increasingly evident to others.
Failure to uncover and correct the dark spots in the culture is a failure of management and
governance. "57
a
&
This continued well beyond 2013. Each and every opportunity to do the right thing was
overlooked; often in favour of a commercially motivated, brand-saving spin which was ill-
grounded in consideration of the facts; and later driven by a committed communications
Director who appears to have led rather than advised the Executive, CEO and Chair. Where
facts were inconvenient or called for further examination, they were seemingly confined to an
inner circle and/or the Inquiry is asked to believe they were missed, overlooked, or
underappreciated (from Cleveleys to the handling of the Swift advice). Corporate accountability
at every level can never, and must never, be suborned to the interests of the “message” or the
“stock line”.
5.57 But this toxic culture did not manifest by itself. From the outset, the attentiveness of all the
players in this scandal to the commercial interests of both POL and Fujitsu, operated to the
detriment of the legal obligations on the Post Office as a prosecutor and their responsibilities to
individual SPMs. It operated against the public interest.
5.58 This scandal always had at its heart, leaders who were acutely aware of the existential challenges
to the Post Office and the critical role that Horizon played in the business’ commercial prospects
for survival. There was an acute focus on profitability and reduction of the public subsidy; ever
striving recovery of seemingly “/os?” profits and on increasing the efficiency and profitability
of the network. This never changed. The observations of the Experts appear to concut
“Throughout the relevant period, commercial aspects of strategy were seen by successive POL
boards to be very important. The Board’: strategic priorities were survival, securing
sustainable funding through commercial activity supplemented by successively agreed
government funding, bolstering brand and improving operational efficiency. The Inquiry has
heard that this demanding strategic agenda dominated the Board’s programme and left little
287 EXPG0000010 R p18, [145].
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room for other things, especially if, like Horizon and prosecutions, they were seen to be
‘operational” °°
5.59 We echo our Phase 4 closing. They could not or would not listen, because their ears were stuffed
with cash.
6 REDRESS, RESTORATIVE JUSTICE AND REBUILDING TRUST
6.2 In this section, we focus on redress.” As observed in Section I (Introduction), above, the
impact on SPMs and their families affected by this scandal has been life-altering. For many,
including those who were wrongfully convicted, and those who were bankrupted by the Post
Office, the Horizon scandal has been truly devastating. This Inquiry — and the wider public —
has seen only a glimpse of the harm which our clients and their families have lived for years.
For them all, engaging with the process of making their case for compensation has been
personal, painful and for many, re-traumatising.
6.3. Those we represent are entitled to redress for the harm done to them. The schemes considered
by the Inquiry are intended to put them, as far as possible, in the position they would have been
had their lives not been ruined by their experiences in the Post Office. Consequential loss,
trauma, distress and personal injury aside; shortfalls made good time and again represent sums
paid to Post Office that must be repaid. SPMs were required to “make good” shortfalls without
delay; yet delay has been an enduring feature in securing compensation for the SPMs we
represent. Given the commitment to compensation being full, fair and prompt, it is shocking
that almost 5 years on from the first judgment in the GLO, wrongly convicted SPMs continue
to die without redress.
6.4 We adopt below the following acronyms for each of the schemes now operating: Horizon
Shortfall Scheme (HSS), Overturned Convictions Scheme (“OCS”), Suspension Remuneration
Review (“SRR”) and POL Process Review (POL Process Review) (all of which processes are
run by the Post Office through its Remediation Unit) and the Group Litigation Scheme (“GLO”)
and Horizon Compensation Redress Scheme (“HCRS”) (which are run by the Department). We
do not repeat the history of each scheme or its evolution, or their purpose and parameters, with
which the Inquiry is now familiar. We consider:
(a) _ First, conclusions that the Inquiry may draw from the general approach to compensation
for SPMs and recommendations to improve delivery of compensation to those harmed
by the wrongful actions of the State (or State-owned bodies) in the future.
(b) Second, specific conclusions and recommendations which the Inquiry is invited to make
in order to ensure that those schemes might operate now to better help secure redress
which truly is full and fair.
(c) _ Third, the position of Fujitsu and its contribution to redress.
a) Compensation: Full, fair and prompt
6.5 Full, fair and prompt compensation has been the touchstone commitment repeatedly given by
Ministers and the Post Office since 2021. From its outset, this Inquiry has consistently asked
288 EXPG0000010 R p12, [24].
289 These paragraphs should be read together with our earlier submissions on compensation (including in February 2022,
April 2022, June 2022 and April 2023) which are not repeated here. See SUBS0000004 and SUBS0000013,
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whether those twin goals of full and fair compensation could be delivered promptly.”
Compensation has not been prompt. For many, it has so far been neither full nor fair.
The path to full, fair and prompt compensation has been beset with problems. For example:
(a) _ HSS was closed prematurely to late applications (until submissions were made to the
Inquiry including from Hudgell Solicitors);
(b) I The Government position on the GLO settlement and its implications remained unsettled
for too long. There had been simply no route to redress for the group of GLO claimants
who had not been convicted and had their convictions quashed until the GLO scheme
was announced in March 2022. Yet, the scheme did not open for applications until April
2023;
(c) Interim payments were initially treated as an afterthought other than for those whose
convictions had been overturned (again, submissions to this Inquiry prompted a change
in approach);
(d) Entirely predictable tax and bankruptcy questions caused apparently insuperable delays
until intervention by the Inquiry;
(ec) Delays in disclosure from the Post Office to SPMs and their legal teams impacted
significantly on progress in individual claims (the Inquiry heard evidence that Ministers
and officials were well aware of the difficulty and cost associated with securing
appropriate disclosure from the Post Office in these claims)””';
(f) The complexity of each of the schemes appeared designed to deter SPMs from claiming
compensation for losses they were entitled to pursue. The Inquiry heard this may have
been in the contemplation of the Post Office staff and management who appear to have
viewed complexity as a more palatable gatekeeping alternative to the charging of fees in
the HSS;?”?
(g) For many the fairness of this process has been fundamentally undermined from the outset
because part of the scheme for redress remained owned by those known to be responsible
for the scandal. Revelations during the course of this Inquiry — including as to the role of
HSF in the latter stages of the GLO and the continued work of staff embroiled in the
scandal (including Rodric Williams, Caroline Richards and Steve Bradshaw) in the
continuing work of the Post Office and its Remediation Unit — have further undermined
the trust and confidence of SPMs. Confidence in the Department, as shareholder, remains
little higher.
(h) We addressed these and many other issue: ions to the Inquiry and do
not propose to further dissect the early failings in the design and operation of the HSS
and the GLO scheme.”** However, the spectre of huge numbers of undersettled claims in
the HSS remains. We consider the Government’s afterthought appeal mechanism briefly
in earlier submi:
Progress Update on Issues relating to Compensation, August 2022. Sce also, INQU0002027, HC1749, First Interim
Report: Compensation, 17 July 2023.
BEIS0000763. Read out of a mecting dated 30 April 2024 involving the Minister and officials discuss
compensation schemes and the fixed term offer with speculation that most people will take the fixed sum “even to a
place where no disclosure at all.” It discusses teams working on disclosure switching between GLO and OC2 (which
was to become the HCRS).
POL00155397. Email from Mark Underwood to Rodric Williams, Ben Foat and others on 10 January 2020. “I think
you can achieve the same desired outcome though having a very tight and clearly communicated set of eligibility
criteria and requirements in terms of the documentation applicants have to provide in order to be accepted into the
scheme”. It was Simon Recaldin’s evidence that he did not recognise this; but if it had been in contemplation It would
be outrageous to have deliberately designed eligibility criteria that would be restrictive: “you just dont go there, you
dont do that”. 1NQU0001200, 4 November, 20:25 — 22:19.
See, for example, letter from Hudgell Solicitors, 22 April 2022; Hudgell Solicitors CP Group Compensation
Submissions, 10 June 2022.
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below. The proposals for appeal must be wide enough to catch those who settled without
legal advice in the first dysfunctional days of that scheme.
6.7 All of these failures contributed to cause delay and to undermine the trust of SPMs in each of
the schemes. The impact of delay is not insubstantial. The fatigue experienced by SPMs and
others considering settlement is real. For many the re-traumatising impact is confirmed in expert
evidence. Put simply, many awaiting compensation continue to live in poverty. Many are aging
and desperate to move on. These vulnerabilities should not be ignored or exploited.
6.8 A large number of problems have been resolved only after questions were asked in this
Inquiry2** Initiatives and improvements very often coincided with developments in the
Inquiry’s programme.””* (This continued until very recently, with significant questions for Mr
Recaldin put by counsel to the Inquiry on the basis of correspondence from Hudgell Solicitors,
on the reasons for continuing delay in the HSS.) This tying of progress to habitual oversight
necessarily raises serious concern over the approach to redress when the Inquiry’s work
concludes. If work towards full and fair compensation only progressed under a watching eye, it
begs the question how seriously the commitment was being taken by those responsible for each
of the schemes.
6.9 There will be a continuing role for the Horizon Compensation Advisory Board (“HCAB”)
and for Parliament in maintaining close oversight of the operation of each of the schemes.
The Ing may wish to ask for an update from all CPs on compensation prior to the
finalising of its report, whether in the form of written evidence from the Post Office and
DBT, together with submissions from others as appropriate. We anticipate the
Department continuing to publish regular updates and statistics on the operation of the
scheme, to facilitate transparency and oversight. However, statistics have been shown to
distort the truth, For example, the Inquiry heard that shining numbers on the numbers of
offers made (and even the number of cases resolved) do not necessarily paint a true
picture, as claims are delayed following derisory low first offers and undersettled by
vulnerable applicants unsupported by effective advice. The Inquiry is invited to consider
whether a more fundamental shift in approach by both Post Office and the Department is
necessary to secure the confidence of SPMs (and the wider public) in the continuing
process.
6.10 The Secretary of State retains ultimate responsibility as to whether redress is full, fair and
prompt whether in the Post Office schemes or those run by DBT.”” He has said: “So, whatever
the level of redress is required, I can guarantee that this Government, that the British State, will
be able to pay for that, and that has already been agreed with the Treasury and has appeared
in the budget.””* (The annual budget provides for “around £1.8billion” which has been “set
2 RLIT0000559 HC1749, First Interim Report: Compensation, 17 July 2023.
285 For example, the Interim Report notes that although the GLO scheme was announced in March 2022, in advance of
oral submissions on behalf of BEIS (now DBT, who administer the scheme) a statement was made in Parliament on
7 December 2022 and a process document for the scheme published the same day) (Interim Report, at [27].
296 HUJ00000007. INQ00001200, 4 November 2024, 161:1_This included examples of offers being substantially
increased including in one case from £4,410.42 to £133, 738.86 and in another case from £363, 095.50 to
£649.414.94. It illustrated that years were being taken to reach these results. This correspondence raised a number
of additional issues, including the propriety of referral back to panel. Mr Recaldin’s response is at HUJ00000006.
(‘I share your concerns on many of the issues you raise.”)
27 INQ00001205, 11 November 2024, 2:5-13.
298 INQ00001205, 11 November 2024, 9:25 — 10:6.
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aside for costs from 2024-25”. He told the Inquiry that while the numbers able to seek
compensation may yet rise, he would envisage further conversations with Treasury to meet that
commitment. Doing what is ry to ensure confidence in full and fair compensation
without further delay or waste is critical. The commitment to that course made by Government
must be adhered to.
nec
6.11 The Interim Report reflected on the temptation to be sceptical as to whether the commitment to
full and fair compensation could be achieved (at [132]). That temptation remains, even in the
wake of continued progress. Scepticism appears justified in the light of the conclusions in the
Inquiry’s survey of applicants for compensation which indicate that higher value claims
correlate with having had legal advice and that those who failed to take legal advice on the
extent of their loss were less satisfied with the approach taken and the outcome.*”! (This reflects
the considerable experience of Hudgell Solicitors that unassisted individuals may not appreciate
their loss/its value and the HSS Panel may fail to identify heads of loss that have not been
advanced by unrepresented applicants).
6.12 The Inquiry should consider why the repeated commitment made by the Post Office and
Ministers has proved so difficult to realise. We suggest that the following reasons have played
a part.
6.13 The initial attitude of both Ministers and officials to the need for redress has failed entirely to
reflect the seriousness of the egregious behaviour at the heart of this scandal and was
shortsighted in failing to learn from the past.
6.14 For much too long, Ministers and officials saw this scandal as a “business as usual” problem
and sought a “business as usual” solution designed to spend as little as possible (except on their
own costs), and do as little as possible, to tidy away a thoroughly inconvenient past. The
realisation of the radical nature of the scandal and its impact was frustratingly incremental, with
Ministers and officials at the Department likened to boiling frogs, trying to meet the biggest
miscarriage of justice in modern legal history, denied for decades, with a business as usual
Clarifying some confusion in the evidence of his junior Minister, the Secretary of State appears to have confirmed
that this sum is not £1.8m in new budgeted money; it is a £0.4m increase on the commitment of the previous
government with a commitment that this money is earmarked and available. He said: “Of course, whilst that's an
increase, it's actually even more significant than that because you will know the compensation previously for this
‘for the four redress schemes was accounted for in the Treasury Reserve, which was heavily overspent, so essentially
not only does the budget put a greater sum towards redress, it confirms that is real money in place” INQ00001205,
11 November 2024, 9:15-21.
300 INQ00001205, 11 November 2024, 12:4-11.
301 EXPGO0000007. The Survey concludes that the lower the claim, the more likely it would be that POL would agree
the value (there being a dramatic drop off in agreement by POL over that value) (see Figure 36). Significantly, only
11% of claims included a claim for personal injury; only 49% included any claim for distress and inconvenience; and
only 37% included any claim for loss of earnings (Figure 37, Page 51). Only one in three (33%) recall having been
informed of their right to obtain legal advice at any time during their application. Only 10% positively remember
being provided with information on how they could contact a legal representative. Only 12% obtained legal advice
during the application process (Page 52). Only 9% of those who had an application outcome had obtained legal
advice on their offer (Page 55). OF the 30 respondents who entered dispute resolution, only half (15 applicants)
secured legal advice (Page 56). See also EXPG0000009: “Those who received legal advice at any stage of the process
were more likely than those who did not to be dissatisfied with: The amount of information provided about how the
outcome was determined (66% vs. 47%), The offer amount (77% vs. 56%), The time it took to reach an outcome (71
% vs, 50%)”.
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solution”
Sarah Munby regretted those briefing her focused on facts and had not brought home
the impact on SPMs. She agreed Ministers briefings were similarly flawed. She said, people
might ask “How can you have taken so long? You should have done something completely
different at the start”. Well, quite.
6.15 Even before the revelations of this Inquiry, the scale and significance of this problem was patent:
as the Court of Appeal (Criminal Division) had made abundantly clear, the Post Office had
wrongly prosecuted and convicted its own people. It had done so for years in some of the most
unfair ways imaginable. Mr Beer KC opened this Inquiry predicting it “may in due course”
conclude this scandal “is the worst miscarriage of justice in recent legal history”.*°* What has
since emerged serves as firm foundation for that conclusion. “Business as usual” was a
fundamentally inapposite response.
6.16 The Inquiry heard about the frustration within the Post Office over the handling of the £600,000
fixed offer in the OCS announced with fanfare by Ministers in September 2023. It was termed
political and seemingly imposed on the business and the Remediation Unit with such speed that
officials continued to query how it was supposed to work in early 2024.°** POL pushback against
the exoneration Bill took on a similarly distasteful flavour.*°*
6.17 Ms Badenoch, the former Secretary of State said: “Being seen to do the right thing, in my view,
iy just as important as doing the right things”. When pressed as to whether doing the right thing
was more important than being seen to do so would not budge: both were important.*° This
may give some insight into the thinking of the Government on the motivation to act.
6.18 It was August 2023 before Ministers in the Department attempted to push things on for the GLO
scheme. This Inquiry had heard witness upon witness over a year and a half. The Interim report
had been published on 17 July. Those attempts to push things on were blocked by the
Chancellor: “in relation to the specific proposal for fixed sum awards on the GLO scheme, while
‘sfuul delivery is paramount, we must also have regard to our responsibility for the public
finances”, “making fixed sum awards on the GLO would incur significant and repercussive risk
and cost, including to the HSS”. They were sent back to the “explore the full breadth of other
options”.**” Officials then proposed a higher scrutiny threshold to speed things up. They floated
again the idea of an upfront payment, reduced to £75,000. The Chief Secretary to the Treasury
again proved a roadblock, citing the impact on other compensation schemes and “the strong
views of the Chancellor”, then Jeremy Hunt.*** Former Minister Hollinrake told the Inquiry that
Treasury officials and the Chancellor did not differ — he recalled the requirement to protect
succ
302 Sarah Munby, [NQ00001201, 5 November 2024, 161:15 ~ 162:9; 19:12 ~ 203:9. Mr
Recaldin maintained that there was no consideration of value for money or the guidance in Managing Public Money:
“in terms of the independent panels, there is no reference to that for a consideration at all”. INQ0001200, 4
November 2024, 31:20 - 25. However, when pressed at to the impact of value for money considerations in releasing
funds from the Department to fund the compensations schemes, this was less clear cut. He explained: “My challenge
around this has always been it's very difficult to articulate a process that nobody has ever done before. This is the
biggest miscarriage of justice ever and my frustration has been around the whole process, and the Government know
this, you've seen all my emails, is that we're trying to squeeze a non-BAU process in -- business as usual process into
a business as usual process and this breaks the mould.” INQ00001200, 4 November 2024, 32:6 - 25.
33 INQ00001044, 14 February 2022, 9:8-14.
304 TNQ00001200, 4 November 2024, 176-192.
305 INQ00001195, 11 October 2024, 21:13 — 23:7. See also, POL00448381 and POL00448701.
306 INQ00001200, 11 November 2004, 102:22 ~ 104:3.
307 BEIS0000705.
308 BETS0000722.
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public money sat alongside fairness to all SPMs.°”” He did not accept that the Treasury failed to
see the scandal with priority. However, Ms Badenoch and Mr Hollinrake could not move the
Treasury. Ministerial directions were seemingly impossible without the Chancellor. Ms
Badenoch, as former Secretary of State, sought to blame the “government machine” for delay
but struggled to explain what that meant beyond the “government” of which she was part.’!° No
one seemingly sought to challenge whether the Treasury interpretation of Managing Public
Money was right. Successive editions have confirmed that in considering compensation in the
face of national scandal, value for money plays only one part. The impact of the scandal on
those harmed, the effectiveness of the compensation and administration cost are also critical
considerations for the public interest.’!' Had the Cabinet believed a swift, radical solution
necessary, one could have been found from the start. This was more “business as usual”.
6.19 January 2024 saw a change to all that. Politicians firmly in the sight of an imminent election
cycle saw the plight of the SPMs take on a reinvigorated political impetus. Schemes little
promoted now saw a peak of new applications. The exoneration bill announced on 10 January,
tabled and passed swiftly. Fixed offers for all — identified as the new hope for swift redress —
eventually rolled out to the GLO in January and to the HSS in March.
6.20 Business as usual had to go. That it did go is to be welcomed. But the necessity for a television
drama watched by millions who sympathised with the plight of the SPMs to stop that business
as usual is to be regretted.
6.21 Despite public commitments on the part of the Post Office and Ministers to full, fair and
prompt compensation, the Inq might conclude that until a change in political
momentum in January 2024, behind the scenes an overly legalistic, slow and potentially
obstructive attitude operated to constrain the amounts of compensation paid. Loud echoes
of that obstruction continue.
6.22 Fair redress for harm caused by the State ought never to hinge on the glare of publicity or
political expediency. Ministers ought not to be first motivated by being seen to do the right
thing; but rather by the moral imperative that when the State harms its citizens it is
accountable both politically and financi
ly for putting things right and for doing so
quickly,
6.23 Many historic compensation and redress schemes have been repeatedly criticised for the kind
of bureaucratic failures which the Inquiry has heard have undermined the SPMs’ confidence in
the veracity of Ministers’ repeated public commitments to do the right thing.
309 1NQ00001202. 6 November 2024, 48:6 — 50:6.
310 1NQ00001205. 11 November 2004, 165:22 — 167:25.
aul RLIT0000540 National Audit Office, Lessons learned: Government compensation schemes (July 2024), Session
SHC 121, at [1.12], with reference to the 2023 edition: “Government schemes, irrespective of how they have
come into being, are within scope of HM Treasury ’ Managing Publie Money (MPM) guidance. It sets out factors to
consider when deciding whether financial compensation is appropriate, including whether the action or inaction of
the public body has caused knock-on effects, hardship or additional costs. It says that the design of a compensation
scheme should aim towards the same key goals as the design of any other services, including good management,
efficiency, effectiveness, and value for money, MPM observes that some specific issues should be taken into
consideration, including attention paid to: * scheme coverage; * scheme rules; * issues of fairness and
proportionality; + testing of systems, such as piloting: + designing in sufficient flexibility; * avoidance of excessive
administration costs; and + assurance that the scheme is acceptable generally if it is to set a precedent.”
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6.24 In July 2024, the National Audit Office (“NAO”) concluded that a lack of a “central coordinated
approach” to compensation within Government resulted in a “relatively slow, ad-hoc approach”
to these critical schemes.*!* This had led to mistakes and inefficiencies in design and delays in
getting money to those who needed it. Confidence could be further undermined by a lack of
independence from those who had caused the harm. It recommended that “Redress should be
swift, decisions fair, proportionate and transparent and those harmed should be at the heart of
decision making.”*'*
6.25 Examining schemes from Windrush to the Infected Blood Compensation Scheme and taking
evidence from officials and others on the operation of the Horizon schemes, the NAO observed
repeated problems in need of a consistent solution. The work done by the NAO is not the first
time that Government has had to grapple with criticism of the approach to compensation in the
face of a major scandal.*!* The NAO noted that it had reported on many of these problems
before.*'* Their observations are mirrored in the evidence before the Inquiry. To take only a few
examples:
(a) “Long time lags before introducing compensation can increase both the harm to those
who have suffered, and the difficulties presented for those who are eventually tasked with
designing and operating the schemes” (at [1.7]) Time and again, those we represent have
underlined that delay is extending their suffering. Even as the Government promises to
introduce an appeal in the HSS, we have no idea of the shape of that process. Announced
with fanfare in 2024, it will not be operational until an as yet unclear time in 2025.
(b) “Involving stakeholders in the design of schemes can help to achieve buy-in and improve
the quality of the scheme” (at [2.8]). While the first of the Horizon schemes, HSS, flows
from the GLO settlement; the design and operation of the scheme (and others) have
changed and evolved as a result of the criticisms levelled at their performance before this
Inquiry and informed by the experiences of SPMs. A more collaborative approach from
the outset would have avoided delay, frustration and further trauma.
(c) “It is important for the scheme’ credibility with claimants that both its design and
operation can be seen to be independent from those judged to have caused the harm” (at
[2.9]). The NAO recognises that there are different models for ensuring independence
and highlights the conclusion of the Interim Report on the potential for the HCAB to play
in “extremely important safeguarding role.” The HCAB was, of course, a late addition.
It plays no role in individual claims. We, of course note, the appointment of Sir Gary
Hickinbottom at the OCS Panel in April 2024 and the HCRS very recently; and Sir Ross
312 RLIT0000540 National Audit Office, Lessons learned: Government compensation schemes (Suly 2024), Session
2024-25 HC 121
313 Ibid.
34 The Inquiry will be familiar with the work done by Sir Brian Langstaff most recently in the Infected Blood Inquiry;
in his RLIT0000537 Second Interim Report (5 April 2023) and his work in his RLIT0000536 Compensation
(7 June 2022), leading to the creation of the Infected Blood Compensation Authority earlier this year.
38 See, for example, the NAO, RLIT0000523 Briefing: Administration of time-limited compensation schemes, 2008,
which reported that it in tum drew on influential work already done by the PHSO, in their Principles for Remedy. In
2008, even then the NAO sought to supplement existing learning, including as reflected in the then current edition
of Managing Public Money. Other more recent, relevant work includes the report of the RLIT0000SS5 APPG on
Fair Business Banking, Building a Framework for Compensation and Redress, February 2023 (which considers
learning from both private and public schemes). This in tum draws on earlier relevant research including, for
example, the Cranston Review of the RLIT0000556 Griggs Review. Recent academic writing has included, for
example, from King’s College London, Pal, Shaila and Nowell, Elly, RLIT0000561 The Windrush Compensation
Scheme: A Comparative Analysis (February 9, 2024). Further consideration of this work at a KCL Legal Clinic
Roundtable led to proposed recommendations building on the work of the NAO (RLIT0000548 King’s Legal Clinic,
Reforming Redress Schemes, Roundtable Report, October 2024).
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Cranston as the independent reviewer for the GLO Scheme in September 2023. This
model stands in contrast to the recent establishment of the Infected Blood Compensation
Authority as a non-departmental body in its own right, following the recommendations
of Sir Brian Langstaff. Structural independence is obviously critical to credibility. Yet,
Ministers and officials told the Inquiry that the initial approach — with HSS and OCS run
by POL — was based on a belief the Post Office ought to take responsibility for redr
order that it might clean up its own mess.*!° This was contrary to the views expressed by
Post Office senior management. This approach was patently wrongheaded from the start.
in
6.26 If Ministers had learned more effectively from the past in their approach to redress, the
commitment to full, fair and prompt compensation may have been a more credible and
achievable promise. If compensation for SPMs (and their families) destroyed by the biggest
miscarriage of justice in modern legal history can falter despite political will, then something
must change before the next near-inevitable national scandal.
6.27 The recommendations of the NAO in July 2024 call for consistency of approach in future
compensation schemes. We invite the Inquiry to build on their work. A centre of expertise
within government ought to be established to provide guidance, expertise or a framework
for public bodies seeking to set up any compensation scheme. The Cabinet Office must
review arrangements to allow such schemes to begin and operate in a more timely, efficient
and effective way as recommended. This must ensure effective participation by those
harmed and structural independence from the outset.
6.28 We invite the Inquiry to include a recommendation that Government commit to the
creation of a standing public body to act as a compensating authority to administer future
schemes. The Inquiry might consider that the impact of its own oversight on decision
making on compensation in this scandal proves the point made by the NAO.”””
6.29 The establishment of such a central repository of experience within Government and an
independent body with expertise and autho: would provide an opportunity to create
binding principles to govern the development and operation of any such scheme. Such
principles must be designed in consultation and must ensure accessibility and fairness in
any scheme, including through the provision of appropriate advice and advocacy for those
harmed by the actions of the State. This would be a lasting legacy for all those harmed by
the State, including SPMs and their families.
b) Rebuilding trust: Work yet to be done
6.30 The Secretary of State recognised that the pace of payments had substantially increased in the
four months following the general election in July 2024. He insisted that he did “not believe
316 See, e.g. Thomas Cooper, WITN00200300, 02 October 2024, p 11, par 30.
317 We note Mr Hollinrake’s apparent acceptance that a standing body might help resolve issues in compensation more
quickly than those in embroiled in an issue: “And I think this is what the National Audit Office have said. I don't
think a select committee can ever play that role. It might do some oversight or an advisory board can do some
oversight but it needs somebody right in the middle who is not incentivised for this process to take longer... So if
somebody in the middle can say, “No I’m not worried about this small element of this claim or that particular legal
point you're raising, I'm taking a view on this.”... so that it is generous and seen to be generous to the claimants
who are involved in the scheme; I don t think you can do this just by lawyers arguing on either side.” INQ00001202,
6 November 2024, 102:19 ~ 103:14.
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that increase in pace has been at the cost of fair or accurate compensation being made” >'* The
Inquiry heard evidence on continuing problems in each of the schemes and gaps in the
Government’s approach to compensation, not least in the operation of fixed sum offers (which
appear to be the primary reason for the apparent increase in pace). There are a number of issues
of principle which arise in the evidence before the Inquiry (and in the wider experience of
Hudgell Solicitors’ clients) which require resolution to ensure fairness.
Fixed offers and access to legal advice
6.31 The primary reason for an increased speed in the processing of claims is the proportion of
applicants recently now accepting a fixed offer in settlement. In response to questions from the
Chair, it was accepted that progress now hinges on the numbers taking the up-front offer"! The
Inquiry heard of an intent to ensure that such offers incorporate an element of jeopardy. So, in
the HSS and GLO, a £75,000 fixed offer is available; but if refused in favour of a full assessment
that decision is final. Similarly, where £600,000 is offered as a fixed offer whether in the OCS
or (it appears) in the HRCS, the offer is a one-time offer available to secure swift settlement as
an alternative to full assessment. In both cases, neither offer is treated as a floor. If an applicant
opts for full assessment, it must be in the appreciation that they may be offered less than the
fixed-sum. In the HSS, there was evidence this was capped at £50,000. In our experience, this
sum is not a given and sums in question, by reference to existing offers, can be significantly
lower. Where a £600,000 offer is available; interim payment will be made at £450,000.
6.32 While setting the fixed sum at a value which makes it a good deal for many; for others, the
jeopardy is real in the absence of a true understanding of the value of their claim. There is no
right to funding for legal advice in the HSS prior to consideration of the fixed offer and
therefore, early settlements at the fixed sum may be reached with no appreciation by the person
concerned as to whether they are full and fair. This stands in stark contrast to previous practice
where — prior to the introduction of the fixed offer — any offer would trigger a right to funded
legal advice. The Secretary of State appeared to accept that this was a known and intended risk
of this policy. (He went on to explain that however the new HSS appeals policy might operate,
no appeal would be open to anyone who accepted a fixed sum.)
6.33 The Inquiry is invited to recommend a consistent approach which provides for individual
applicants to access funded legal advice prior to the acceptance of a fixed sum offer. If a
case is obviously low in value (or such that the claimant chooses to proceed without
exercising an option to legal advice) it may be that the option is not pursued by many.
Keeping the option open ensures that any choice to accept any fixed sum is a true choice;
such that the compensation available is fair (regardless of whether it may be full).
6.34 Any decision on a fixed sum offer is a one-off decision. This rigid “once and for all” approach
shortsighted. Aside from those who might refuse the offer and proceed to full assessment
without legal advice; many participating in these schemes are vulnerable and fatigued. A
decision to move on to full assessment may prove too much when the process is begun. It is not
hard to imagine how a change in circumstances might create an even greater incentive for
settlement to be prompt rather than full or fair, The only option then is for the client to
i
proactively make an offer to settle at the fixed sum; with any response being at the discretion of
318 1INQ00001205, 11 November 2024, 5:14 — 7:4.
3i8 1NQ00001201, 05 November 2024, 86:7-21.
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the PO (if considered to be permitted within the bounds of the scheme). This may create undue
pressure — and the unnecessary continuation of legal costs — whether to accept the fixed offer
up front or to continue on with an assessment regardless of any impact on the applicant’s health,
wellbeing or other personal circumstances. Continuing and significant delays in decision-
making combine with this impossible position to create wholly undue pressure on applicants to
accept the fixed-sum offer. While innovation is welcome, the Inquiry might consider that
deliberately putting the squeeze on the vulnerable in order to bring this saga to a close is
unedifying.
The Inquiry is invited to recommend that any fixed sum offer is available in circumstances
where applicants have access to funded legal advice should they choose to take it.
Similarly, should an applicant opt for full assessment (particularly in the absence of legal
advice) and later take a different view, the fixed sum offer should remain available as an
alternative. While this may remove the element of jeopardy; this jeopardy will bite principally
in borderline cases where there is the greatest chance of unfairness.
Low offers, value for money and legalism
The assessment of claims continues to see initial offers which are at best, at the very bottom of
any reasonable range or, at worst, derisory. The experience of Sir Alan Bates in his own first
offer in the GLO being at 30% of his total claim is well reported. More recently Mrs Betty
Brown, one of the oldest surviving victims of the scandal, at 91, described her initial offer, of
29% of her claim, as “being treated like dung”. This is a familiar gambit. Entire heads of loss
are neglected or claims are undervalued where applicants proceed to claim in the absence of
legal advice (and consistent with the data produced by the You Gov Survey (as above)).
Examples were given by Hudgell Solicitors to the Inquiry with tens and hundreds of thousands
of pounds difference after challenge.**! While HSS offers are subject to consideration by Panel,
it remains an enduring concern for those we represent that the Panel are supported by HSF and,
without any allegation of intentional impropriety, the practice of an adversarial, legalistic
approach appears entrenched.” Regrettably, a similar approach to initial low first offers appears
in each scheme, including the GLO scheme which is a step apart from Post Office and HSF,
assessed by DBT with the input of Addleshaw Goddard and Dentons. For those who have had
their claims subject to assessment, this process has been time consuming and re-traumatising.
A tit for tat approach to the valuation of claims is at odds with the stated intention of
Government, and more in keeping with the Post Office’s reputation for aggressive litigation
conduct recognised by Mr Justice Fraser in the Common Issues judgment. A fairer, simpler
model must be found to reduce the adversarial style which is currently required to reach
settlement in each of the schemes. Such an approach might be one which reduces the stages in
RLIT0000522 BBC News Online, Oldest Post Office victim offered a third of payout, 2 Dec 2024.
HUIJO0000007
The Inquiry has the view of Mr Cameron on the role of HSF and the initial stages of the HSS, elicited in questions
from the Chair: INQ00001189 1 October 2024, 213:8 — 214:9: : “So it was set up on the basis of a negotiation
between lawyers and, essentially, there was an element of that in the way that HSS was constructed. And I think that
was a mistake -- and Simon Recaldin, again, will talk about this, I'm sure - but my recollection of him coming in was
challenging everyone to say: should this be a negotiation between lawyers or should this be, you know, a genuine
attempt at remediation, that people feel, at the end of it, that they're satisfied, justice is satisfied, we can move on,
and that they've been properly compensated for everything that's happened to them? And I think that did conflict with
the sort of legal advice, committees, you know, bureaucracy of the schemes, you know, quite badly.”
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the process with associated savings in unnecessary costs, including legal costs.°*° It would do
much to ensure that more constructive settlements could be reached sooner and with less
likelihood of exacerbating the existing trauma of applicants.
6.37 The Inquiry is invited to recommend that the Post Office and the Department take steps
to stop the seemingly normal practice of very low first offers. Without such a change,
progress for any claimant who does not accept a fixed sum offer will remain slow. Without
such a change, for example, any promise to process all claims submitted in the GLO by
Christmas before March 2025 will mean little. A first offer, in the experience of Hudgell
Solicitors, has historically been the start of a process which resets the clock for the
Department and Post Office and begins a very long wait of up to 2-3 years for applicants.
These offers are not made without reference to existing guidance and practice, but they
are informed by the work of lawyers working on behalf of the Post Office and the
Department in turn. If necessary, as shareholder, the Secretary of State might be invited
to intervene to discover how this practice has seemingly become entrenched and to take
steps to direct change. The capacity, skill and resources of the Panel ought to be considered
and supplemented as necessary.
Bureaucracy, trauma and want of care
6.38 The NAO recognises a critical element of any scheme must be to avoid the re-traumatising of
those harmed by the State.>** While delay is re-traumatising, the processes of these schemes are
themselves damaging at present. The Inquiry has heard from SPMs how the request for further
information process has landed. Detailed applications, supported by legal and accountancy
advice, with a multipage response requesting hundreds of answers. In our experience, while
some of these questions may be well warranted, ofien questions are already answered in the
application and sometimes, questions may be impossible to answer for an SPM (we have heard
of one example of an SPM being asked for evidence from a deceased parent (the bereavement
being painful and spelled out in the application documents)). In reshaping the approach to all of
these schemes to remove some of the skills garnered in seemingly sharp litigation practice, a
little humanity could go a long way.
Disclosure and evidential sufficiency
6.39 Ministers and officials remain conscious of the significance of disclosure to effective legal
advice on value. While a fixed sum may be appropriate for many; speedy (or indeed, any)
disclosure may yet be critical for some to make that decision and essential for effective
assessment to proceed. Similarly, in order for a fixed sum offer to be an informed choice, an
individual must have legal advice and disclosure sufficient to understand their claim. Where
expert evidence may be essential (including medical evidence) that ought to be agreed and
facilitated without delay and without unnecessary need for multiple examination by battling
experts. An essential shift in attitude designed to truly afford some benefit of the doubt to those
2 After the close of evidence at the Inquiry, figures were provided by HSF in Parliament as to the substantial legal
costs incurred by the Post Office in the running of the HSS. This included discussion of an estimated average figure
of £21,000 per case (which Alan Watts for HSF, considered reasonable). Business and RLIT0000541 Trade
Committee, Oral evidence: Post Office Horizon scandal: fast and fair redress (19 November 2024), HC 341 Q. 197.
See also at Q. 204 Watts confirms that the £21,000 figure is incorrect. The agreed amount with POL is £15,000 per
case.
RLIT0000540 National Audit Office, Lessons learned: Government compensation schemes (July 2024), Session
2024-25 HC 121, pp. 7, 27 and 33.)
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SPMs disadvantaged by the years of denial of this scandal ought to extend to the agreement of
reliable expert evidence and a sensible approach to disclosure where necessary.
6.40 Mr Recaldin asserted that evidential uncertainty in the HSS was always resolved in favour of
the SPM. Yet, discounts are routinely applied (seemingly without consistency) to reflect
evidential insufficiency. Mr Recaldin accepted this was the case when shown a series of offers
made to Hudgell clients routinely reduced.*?* These are not exceptions to the rule but the norm.
Rather than any benefit of the doubt, this leaves applicants with a sense that their case remains
subject to question or that they are disbelieved.
6.41 The application of repeated discounts for want of evidential sufficiency (including
discounting entire heads of loss) continues to be at odds with the stated intention to give
SPM applicants the benefit of any doubt in this process. A change in approach truly
designed to achieve a fair result would move away from the application of discounts in this
way (there being little to nothing an applicant can do in circumstances where evidence has
been lost to time and the actions of the Post Office) unless there was a firm basis for saying
that the applicant’s claim must be wrong.
Inclusive and fair: scope of redress
6.42 There remain gaps in cligibility under the existing schemes which do not cover the
recoverability of loss (including for personal injury and trauma) for a range of persons who have
suffered pecuniary or non-pecuniary loss as a result of these events. Mr Recaldin accepted that
the HSS is an anomaly in excluding joint losses of a partner or a spouse (recoverable in other
schemes).*”° This may be all the more surprising in the light of the broad evidence the Inquiry
has about many victims who ran their branches as true family businesses. The Inquiry may
recommend to Ministers that consideration be given as a priority to the scope of each of the
existing schemes and the outstanding legal and moral responsibilities for redress which may be
outstanding. A first step may be consistency in approach to joint losses. The Minister accepted
that conversations are ongoing in respect of the approach to compensation for assistants and
managers and also, for family members, whose losses (including for personal injuries) are not
recoverable under existing schemes. The Minister confirmed that while these conversations
were ongoing, he had not received any official advice on possible costings.*”’ It is concerning
that consideration of these kinds of losses and impacts have not been rigorously considered and
costed before now (not least in the light of the Secretary of State’s positive messaging on
budget).
6.43 For example, the Inquiry heard of the work being done by Lost Chances for Subpostmaster
Children to secure support from Fujitsu to recognise their trauma and their lost opportunities
suffered as a result of their families’ experiences with Horizon. They began this work because
they had no route to redress for the harms they suffered through any existing scheme. The
Minister admitted that he had not heard of their work.??*
325 1NQ00001201, 5 November 2024, 79:14 — 81:15.
326 HUJ00000006, INQ00001201, 5 November 202:
327 1INQ00001205, 11 November 2024, 11:13 — 1
328 INQ00001205, 11 November 2024, 73:22 — 7:
86:23 — 87:3.
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6.44 As the form of redress for these groups are identified, that work must be done in collaboration
and consultation, with SPMs, their representatives and the groups affected. As above, the
benefits of early collaboration are significant. It would be deeply regrettable if the Department
failed to learn from the omissions of the past and further, new delay was the result.
6.45 We invite the Inquiry to recommend that priority ought to be given to identifying a form
of redress for the families of SPMs who have suffered pecuniary and non-pecuniary loss
as a result of these events. This must be a collaborative process designed to ensure the
proposals made get it right from the start.
6.46 Other access issues continue. For example, an application is made by someone who operated
within a franchise or a partner operation; the scheme makes provision for any application to be
made by that business (e.g. Morrisons, WH Smith etc and not directly by the person suffering
the loss or harm).
6.47 The Inquiry is invited to recommend that the Department conduct a review of access to
each of the Schemes with a view to providing adequate resource to ensure that advice is
ibility and the process / substance of their
application without up-front cost or delay (we address legal advice pre-application,
above). Where third parties are required to act to ensure access to redress for any
individual then those routes must be clear to both the applicant and the third party and
fair in their administration.
available to prospective applicants on eli;
Clarity and consistency: Acquittals and Cautions—
6.48 There remains enduring uncertainty on the correct and fair route to redress for those who were
not convicted, but who were prosecuted and for those who were administered cautions.*? A
number in these categories had been signposted into the HSS. Others dealt with on own
circumstances in a manner akin to OCS. Plainly, that uncertainty must be removed as soon as
possible.
In addition, specific problems continue in each of the individual schemes:
HSS
6.49 Where an initial offer is contested in the HSS, and further information provided, the Post Office
Remediation Unit routinely sends the whole claim back to the Panel for further consideration.
SPMs are then often waiting many months for a revised offer. Mr Recaldin accepted that this
practice departed from the procedure envisaged by the scheme, which provided instead for the
dispute resolution process (DRP) to begin. Mr Recaldin has indicated that applicants will now
have a choice.*"° Where Government is working towards greater speed in the settlement of
claims, it is surprising the insertion of a second layer of bureaucracy and further delay was ever
considered appropriate.
6.50 The proposal that applicants choose whether to return to Panel or not is new. It again
means that SPMs bear the responsibility to drive the process forward in the face of
aad 1NQ00001202, 06 November 2024, 212:21 — 213:21. See also, INQ00001204. Transcript, 08 November 2024, 38:9
39:20.
a0 1NQ00001200, 04 November 2024, 99:12 — 100:5.
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possible further delay. SPMs should be asked instead, proactively, by the Unit whether
they wish their challenge to proceed to the DRP or instead to rejoin the queue for Panel.
6.51 Although the scheme has always provided for POL to depart from the recommendations of
Panel, until very recently, POL was extremely reluctant to depart from any Panel
recommendation, even where the adjustment of the award significantly upwards was plainly
warranted. It would, of course, be unconscionable if recommendations were adjusted
downwards. Very recently, Hudgell Solicitors have observed a seeming change in practice, with
POL showing willingness to negotiate in the manner which the original Dispute Resolution
Process had anticipated. In one example (without breaching confidentiality), Post Office noted
that a Panel decision had offered over £100,000 less than had been considered by the business
at an escalation meeting. A discretionary offer was made which split the difference. Tentatively,
this appears a positive step in the right direction, but only if such discretion were to be applied
with consistency and transparency.
6.52 The latest statistics on the HSS (3rd December 2024) make for difficult reading. Of the 4,802
claims received, 2,511 have been paid (with 34 more awaiting payment). 637 applicants have
offers which are not accepted. However, there are, at present, 1,620 applicants awaiting
33! This plainly raises significant concerns for many in that group of over 2,000 people
awaiting resolution. The Inquiry heard that the HSS continues to receive around 30 new
applications a week, with that number expected to “ramp up significantly”>*? It is plain that a
significant increase in capacity at Panel (beyond anything so far envisaged) will be necessary
to keep up, let alone, to significantly increase the speed of resolution.
offers.
iad
o
There is insufficient detail in the public domain as to the scope of the proposed appeals
mechanism in HSS for us to comment much beyond offering a constructive welcome. As we set
out above, we retain considerable concern over settlements reached without any legal advice
(whether on a fixed offer or otherwise). As above, evidence supports the conclusion that loss
can be under-settled in the absence of advice and support.
6.54 Any HSS appeals mechanism ought to make provision for access to appeal in relation to
any settlement where legal advice had not historically been available (or where there is
evidence that the applicant was unaware of any right to secure funded legal assistance).
io
iD
2)
a
on
The history of redress for those with overturned convictions has not been straightforward. Many
clients — on the back of the early promise of full, fair and prompt compensation — were deeply
disappointed at the time taken to make any significant progress towards settlement. However,
after years of work, the OCS stream is now working better. Cases which remain tend to be
more complex. The appointment of Sir Gary Hickinbottom has brought a new collegiate
approach to case management not reflected in other schemes. While offers no take around 3
months from the submissions of a claim, this has been built on the back of delay for some of
those whose claims spearheaded the process. Turnaround of full, considered claims could be
quicker. This timescale could yet be reduced by a third if some layers of governance between
331 RLIT0000565 DBT, Post Office Financial Redress Data as of 29 November 2024, published 3 December 2024.
a 1NQ00001201, 5 November 2024, 86:3-6
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the Post Office and the Department were simplified. Some issues continue. For example,
claims for loss of a chance remain challenging to resolve. It is proposed that Sir Gary will give
guidance (which may also be helpful in other schemes).°** In the same manner as Lord Dyson’s
role in the ENE improved progress, an independent, authoritative steer may get things moving.
The HCAB has encouraged this approach and the production of formal guidance routinely
where appropriate. Where possible to publish principled guidance without impinging on the
privilege and privacy of individual claimants, this ought to be done swiftly.
6.56 For many in this group, and those who are now eligible for the HCRS, their loss has been
catastrophic and can never be truly remedied in cash terms. However, for those now able to
settle mortgages, repay debt and even think of a holiday for the first time in decades, payment
(albeit delayed) may bring relief, a renewed dignity and, for some, an opportunity to start a
recovery that once appeared impossible. Money can never replace years lost nor undo the
indignities imposed upon them by the Post Office.
GLO
6.57 Continuing delay is felt particularly acutely by those in the GLO who are still awaiting
compensation. Priority should be given to the administration of GLO claims submitted by
Christmas before the end of March 2025 — as stated by Ministers. While the Secretary of State
was firm in his view that he did not wish to set a deadline which might result in injustice;***
targets ought to be set without risk of injustice. Resource ought to be added or prioritised to
ensure that these claims are processed swiftly to offer and beyond. The offer within 40 days is
only the first step. The steps necessary to reduce post-offer delay are in the gift of Ministers.
The approach taken to offers shouldn’t be derisory but constructive and designed to achieve
settlement; progress to settlement should be negotiated in good faith and unnecessary
bureaucracy avoided wherever possible.
HCRS
6.58 There remains the considerable risk that there are individuals who were wrongly convicted who
remain unaware of their eligibility for redress. The measures being taken to publicise the scheme
must be subject to close scrutiny. The Secretary of State expressed his frustration with the
limitations of the records available and the difficulties in tracing individuals. He said “the
nightmare scenario frankly would be someone receiving a letter who wasn t eligible to receive
9335
it,
6.59 In the latest published Ministry of Justice statistics on quashed convictions (5"" December 2024)
a total of 957 individual cases have been identified as in the scope of the Redress Scheme. Of
those 957 cases, 875 have been assessed by the department.**° There remains 82 cases to be
assessed, some 5 months after the scheme was opened. Of the 875 cases assessed, these fall
into three categories. First, those cases where convictions have been identified as suitable for
quashing, those number 561. Letters have been issued on 526 of those cases, leaving 35 more
letters to go out. Another 157 cases have been identified where further information is
aa RLIT0000533 HCAB, 18th Meeting, Minutes, 31 October 2024.
bad 1NQ00001205, 11 November 2024, 30:5 — 32:
385 1INQ00001205, 11 November 2024, 37:3 — 23.
eee RLIT0000564 MOJ, Quashed Convictions Management Information: 5 December 2024, 5 December 2024.
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requested. In relation to those, 125 letters have gone out leaving 32 to go. There have then
been another 157 cases where the individuals convictions are seen as out of scope of the
legislation. There are a number of concerning features that emerge from the latest statistics
Although 526 letters have been issued to individuals about the quashing of their convictions,
only 251 thus far have applied for interim compensation. Of those only 98 have received final
compensation. This leaves a disconnect of 275 people, some of which will be in the system,
but most not it seems. Somewhere of the order of 200 individuals have yet to seek compensation
from that cohort alone.
6.60 Hudgell Solicitors who represent 234 registered individuals in the HCRS — separately from the
CPs in this Inquiry — have some insight on why people may be falling through the gaps. There
are 32 people who cannot be written to as a result of the MOJ not holding their current address.
However, letters are not routinely dispatched to individuals as not seen within the scope of the
Act. This leaves them with continuing uncertainly, and no proactive invitation to seck legal
advice to check the approach is correct. (The cohort of identified individuals increased by 8 in
the last two weeks, as a result of all 8 self-identifying with the Ministry of Justice).
6.61. Where Ministerial concerns hinge on wrongly informing a person they might be
exonerated and eligible for redress under the HCRS, the greater injustice might be in the
risk that another SPM might die without an acknowledgement that their unlawful
conviction has been quashed and redress was available. The approach taken to
correspondence with this group must be more proactive. Whether leaving confusion for
those entitled to compensation (and so, further delay) or creating false hope for those who
are ineligible, uncertainty is unhelpful for everyone. An appropriate publicity campaign
in different media to reach those who may be eligible might be recommended.
6.62 We are conscious that convictions pursued by other agencies, including DWP, during the
Horizon era remain subject to consideration. The position of those who pursued appeals without
success who would otherwise have been captured by the application of the statutory exoneration
remains outstanding. These are complex issues of considerable concern with which the
Department must grapple before this sad chapter for the Post Office can truly be closed.**”
Restorative Justice
6.63 Beyond the immediate need for financial redress, the Inquiry is invited to consider that not all
redress need be financial. Non-financial redress, including apologies to those harmed, can be
powerful in contributing to putting things right and restoring trust. In this case, those we
represent have heard apology upon apology during the context of this Inquiry, both from the
dispatch box and from witnesses at the Inquiry. The few which were believed to be genuine
apologies have impacted powerfully. However, for the most part, while wrangling continues
over responsibility for the past, many apologies have appeared insincere.
6.64 The focus has been on the critical question of financial compensation. That is where focus
rightly remains. It remains disappointing that so many are without redress and there are very
badly damaged groups who appear to remain at the periphery of contemplation. Where thought
has begun on restorative justice options — for example in the work of Lost Chances for
337 INQ00001205. 11 November 2024, 37:24 — 39:21
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Subpostmaster Children — there has been (so far) little or no constructive engagement by the
parties.
6.65 The Prime Minister should be invited to issue a further formal full apology on behalf of
Her Majesty’s Government be issued following the conclusion of this Inquiry, in full
consideration of all of its conclusions, to cover the true institutional responsibility for the
harm suffered by SPMs and their families. We anticipate that such would not be
controversial. We would regret if the Inquiry’s conclusion (at least at a Government and
corporate level) was met with anything other than contrition and an informed apology. In
light of the damning evidence heard, including as to the failings of governance and
oversight, any other approach would be unacceptable.
6.66 We welcome the indication by the Minister and by Fujitsu that they would be open to
engaging with Lost Chances for Subpostmaster Children. A more innovative and open-
minded approach to restorative justice for those impacted by this scandal is well
warranted. Engagement and innovative thinking on restorative justice options should
complement rather than distract from the primary goal of full and fair compensation.
Timetable, deadlines and resourcing
6.67 The Inquiry has the measure of the work yet to be done. It is aware that SPMs, including those
in the GLO, continue to suffer, and not in silence. Mr Bates is willing to go back to Court. If he
were to ask, this time around, his costs might be healthily crowdfunded. While a hard deadline
ought not to rush or exclude anyone, public targets for officials and Ministers to meet such that
can be monitored by Parliament and by the HCAB are
swift progress without further wasted cost or further wasted time.
itical. Change needs to happen to ensure
6.68 Yet, even on the best case scenario; with many accepting fixed sum offers, the complexity of
claims outstanding means that compensation will continue for years (with 18 months to 2 years
standing as the best conservative estimate). We address the HSS statistics and the 30 new
applications a week, above. This could run far, far longer than 2 years, with all predictions
hinging on the numbers accepting the fixed sum and nothing else changing.*** In that time, how
many more will die waiting for redress? How many are likely to be tempted to bend to the
jeopardy of the fixed offer, when they really should stand their ground?
6.69 If time pressure is likely to force choices by the most vulnerable SPMs, steps need to be taken
to ensure those choices are as fair as possible. Legal advice, disclosure, a step back from
aggressive low-ball tactics and towards a true benefit of the doubt, are urgently needed for all
who opt to proceed to full assessment. The input of the Inquiry has (slowly) pushed Ministers
to accept that progress must happen and happen as soon as is possible. Many OCS claims are
now subject to full and final settlement and others are well progressed. We anticipate the HCRS
will build on the principles established in the OCS (together with the learning from this inquiry).
However, a sea change in approach is required to secure fairness and speed for all. If this change
is not effected soon, and before this Inquiry publishes its final report, any conservative best
estimate timetable will be yet another scandal. That timetable might prove unrealistic in any
event, as the scheme may yet have to adapt and expand to address issues with which Ministers
338 INQ00001201. 05 November 2024, 84:21 — 86:6.
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continue to grapple (above). The impact of the Capture miscarriages of justice and
compensation for the pre-Horizon era remains to be considered.
6.70 This simply isn’t good enough. Even before considering that the timetable is conservative
and the schemes might shift and expand, applications continue to come in and are expected
to ramp up. The Post Office and the Department must treat this as a priority. As above,
processes and attitudes need to change to remove delay. However, if more resource is
needed and greater numbers of staff required, or significantly greater capacity at Panel,
this ought to be done as a priority.
6.71 These schemes ought to have been administered wholly independently from the start. We
express the hope that the experience of the Infected Blood Compensation Authority and the
recommendations of the NAO trigger a real change in approach on the part of Governments for
others who suffer at the hands of the State. While this would have created a different story for
Horizon compensation, we are where we are. We regret that wholesale change now might be a
cause of fresh delay, with learning lost and cost incurred in administration. However, the Post
Office and Ministers must act now and with radicalism. Every wrongfully convicted SPM lost
without resolution is a source of enduring national shame. This scandal simply cannot be
allowed to stretch on, year upon year.
Fujitsu
6.72 Fujitsu have repeatedly and publicly accepted that they have a moral obligation to contribute to
redress.*” This position was inevitable on the evidence heard by the Inquiry as to the shared
responsibility of Fujitsu for the failings in Horizon and in the action taken in support of
proceedings against SPMs in civil and criminal courts and again in the actions taken to defend
the system (above). These public promises appear designed both in their timing and
implementation to best protect the brand position of Fujitsu and to protect its commercial
interests, rather than serving any deeper underlying moral imperative to remedy their own
contribution to the failings of the past. For example, although Mr Patterson committed in
January 2024 to meeting with anyone impacted if asked to do so; it was over 8 months before
he met with Lost Chances for Subpostmaster Children and Hudgell Solicitors. He gave the
somewhat baffling response when asked about that engagement that beyond a financial
contribution, Fujitsu (a multinational company) were struggling to imagine how they could
help. (The Inquiry might be surprised at the lack of resource or imagination which sits behind
the public acknowledgement of moral responsibility.) Despite chasing by the legal
representatives of ‘Lost Chances’, that engagement petered out; until Mr Patterson committed
to reengage while giving evidence to the Inquiry. (He acknowledged that initiatives around
education and mental health had been discussed.) When pressed, Mr Patterson could not
confirm whether Fujitsu’s goal to act at the end of this process was meant to take place at the
conclusion of Phase 7 in December 2024 or following the publication of the Chair’s report
(whenever that may be). He gave the incredible intimation that this critical issue of timing had
not even been in his contemplation. This is indicative of the degree of credibility with which
the Fujitsu position on redress ought to be treated. (Since then he has indicated that Fujitsu will
contact Lost Chances and will discuss next steps after final submissions). The Inquiry is invited
to press Mr Patterson and Fujitsu to provide clarification on the intent of the business to act on
339 INQ00001117, 19 January 2024, 4:5-16 and 100:11 — 102:9. See also, INQ00001205, 11 November 2024, 218:16 —
219:23.
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its moral obligation, as well as the timing of any action, before the end of hearings. Action need
not wait, but if it must, Fujitsu ought to be absolutely transparent over its position.
6.73 Mr Patterson confirmed the existence of an as-expected standstill agreement in place between
the Post Office and Fujitsu (it is not clear precisely who the parties to the agreement are). The
approach to settlement and litigation between those who clearly share responsibility for the
scandal should not be a further cause of delay in steps taken towards redress and restorative
justice, whether now or once the Inquiry has concluded its Report. The evidence before the
Inquiry (and in the documents held by both POL and Fujitsu) ought to be adequate for all parties
to be effectively advised on risk, liability and responsibility. It is beyond belief that Fu
simply hasn’t taken advice at this stage (and throughout the Inquiry) on its likely legal liabilities
(and on how to limit such).
6.74 There is a public interest in transparency over the approach being taken to any settlement and
final contribution (if any) by Fujitsu to the cost paid from the public purse. The Inquiry remains
quite firmly in the dark. The public interest in transparency would be ill-served if that position
were set in stone by the agreement of behind-closed-doors confidential agreements on
settlement.
6.75 The Inquiry is invited to recommend that Government (and Fujitsu) commit to
arrangements being put in place (beyond the pursuit of individual FOI requests or
activities by Parliament) to publish/and/or ensure transparency around the final
contribution and any commitment Fujitsu makes to the enduring costs of this scandal not
only for Government but for SPMs and their families. While this may depart from the
traditional position where settlement of any civil proceedings might be achieved in
confidence; the public interest would not be served in speculation over the ultimate cost
of this scandal to the tax payer nor the continued engagement of Fujitsu in public
contracting without a full reckoning as to the extent their admission of moral
responsibility has hardened into a financial contribution to the cost of making things right.
6.76 Restorative justice must form part of the discussion on redress. In the light of Fujitsu’s
public commitment to adhere to its moral responsibilities, the Inquiry is invited to
recommend that work towards restorative justice programmes founded on moral
responsibility (if not strict legal liability) need not wait until the conclusion of any ongoing
or potential legal proceedings between the corporate parties involved in this scandal.
(One part of the moral commitment made by Fujitsu might just be to provide financial
and other support to restorative justice programmes designed to reflect the lost chances
of those impacted by indignity, stigma and poverty as a result of a parent’s wrongful
conviction.)
d) Conclusions
6.77 This is a scandal founded on flawed corporate culture and repeated corporate failings. A scandal
where the Post Office (with the support of Fujitsu) prioritised corporate interest, brand and
messaging over a substantive consideration of risk to SPMs and the wider business. In each
340 However, the Secretary of State gave evidence that he had not “received any specific information in relation to that”
when asked about approaches to Government in relation to Fujitsu’s contribution to compensation. INQ00001205.
11 November 2024, 55:13 — 56: 16.
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Phase, the Inquiry heard evidence of toxic, dismissive and aggressive attitudes to SPM
complaints; both within Fujitsu and the Post Office. Those attitudes were driven by corporate
interest and a repeated defensiveness of business and brand. It is perhaps ironic that the question
of redress has been only improved by the glare of publicity (and concern for the political toxicity
of the Post Office to damage the Fujitsu brand).
6.78 Where the actions of the State harm its citizens there must be a moral obligation to see justice
as more than simply an opportunity for good press or political popularity. This must extend to
circumstances where that harm is caused by a corporate entity which is in Government
ownership. True momentum to compensate those who have been wronged simply cannot
depend on television commissioning and the skill of artists willing to tell a good story.
6.79 As this Inquiry draws to a close, despite repeated public declarations of intent from Post Office,
Ministers and Fujitsu to do the right thing, there is considerable work yet to be done to ensure
that all those harmed by Horizon and the acts of the Post Office receive adequate redress in full
and fair compensation.
6.80 The State must accept that when it is wrong and its citizens are damaged, the value of
compensating those who suffer must be measured in more than solely pounds and pence. This
is a lesson which appears long overdue. It ought to have been learned time and again in previous
schemes which have repeatedly created new trauma for individuals secking to pick up the pieces
of lives broken by State failures and wrongdoing. It is one which ought to be marked in this
Inquiry.
6.81 This injustice cannot be undone; it cannot be forgotten; redress for all may start to rebuild trust
for some. However, no SPM will truly be able to move on — nor can the Post Office even begin
to be rehabilitated in the public consciousness — until that is achieved.
7 WHERE ARE WE NOW?
7.2 When Mr. Read gave evidence to the Inquiry on 11 October 2024 he recognised that securing a
replacement for Horizon should be something that Post Office should quickly deal with.
Horizon has caused so much damage to so many lives that it must go as soon as possible.**! He
claimed that as long ago as April 2023 POL had developed a firm idea of how the New Branch
IT system (NBIT) would work. Under further questioning, he acknowledged that the plans to
replace Horizon were not as certain in June 2024. He was unaware of whether there was a firm
plan for a Horizon replacement in the Strategic Review as he had stepped back from his primary
role for six weeks in order to prepare for evidence to the Inquiry.
7.3. On 4 December 2024, the Daily Mail reported that Post Office had “dumped” plans for
introduction of NBIT.** Instead, Post Office has agreed a one year extension to its Horizon
contract with Fujitsu.
su 1NQ00001195, 11 October 2024: 122
342 RLIT0000544 Mail Online, Post Office dumps its replacement for scandal-hit Horizon IT system after setbacks
caused costs to skyrocket to around £2b, 4 December 2024.
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Whilst the ‘New Deal’ for postmasters was trumpeted on 13 November, it is now five years
since the Horizon Issues Judgment conclusively established the unreliability of the system. It is
ince the quashing of the convictions of 39 postmasters in Hamilton
over three and a half years
and others. There still appears to be no firm plan for the replacement of Horizon. It is not just
that plans have not been implemented, it appears that there is no firm plan for what to do. That
progre:
too slow.
Mr Cameron suggested of NBIT and its management over the past 5 years, that the problems
were both structural and individual.*# He and other witnesses agreed that the funding rounds of
central government were necessarily not suited to a dynamic business or the planning of longer
term commercial projects. However, he also appeared to accept that the failure to grapple with
this scandal went back to the failure of management during separation. That is an issue we
address above.
The Inquiry might also consider the roots of this scandal in a bigger sense: tied inherently to a
more fundamental schism in the Post Office, in an unhappy marriage between the public and
the private. At the inception of Horizon, the Post Office was in existential crisis; looking into
the future to a very different business model to support the move away from a network supported
by aclosed market in benefits collection. As the pension book system was ripped up, successive
Governments sought to both maintain the community model for the Post Office and, at the same
time, impose a more commercial, efficient operation designed with a long term goal to reduce
reliance on public funds.
Yet, through all the projects, and all the strategies, up to Network Transformation and beyond,
it must be asked whether anyone really considered whether a successful commercial operation
would or could ever operate on the same model as a network designed to preserve a nationally
valued community resource. The tension between these goals runs through the evidence before
the Inquiry. In failing to grapple with this problem effectively in 1999, and again and again and
again throughout the last 25 years, it might be said that successive Governments contributed to
the position of crisis and commercial hunger which drove the Post Office as an institution, and
individuals within it, to lose sight of the true value of the network and the individuals within
it. The focus of all in 2013 on the future of the Post Office as a free-standing entity - with an
eye on mutualisation as Royal Mail passed into private ownership - was plain in the evidence
of Ms Vennells and Ms Perkins. If Horizon were to fail, mutualisation, (the public goal for the
future of a commercially viable post office) would be impossible. The strategy for the future of
the Post Office — and the propriety of the harnessing of commercial enterprise as a tool of public
policy - is perhaps beyond the scope of this Inquiry. However, it is a problem with which this
1NQ00001189, I October 2024, 202-204: “settlements which might be for one year or might be for three years, but
that isn'ta brilliant way to fund a trading business where circumstances can change radically. Its really designed to
say, "Well, you'd like to spend 10 billion on green technology, we're only giving you £1 billion, do what you can",
and it doesn't really work. And I think we have - I'm not suggesting for a moment that Post Office hasn't muddled
some of this. So we simply didn't ask for enough money for the Horizon replacement, I mean, nowhere near enough.
And the more we got into it -- it was very early stage, and it was a sort of budget for software -- the more difficult,
complex and expensive the actual rollout looks like it's going to be. This is a software and a hardware change; it's
the first one for 20 years; the last one went catastrophically badly: So there is no trust in the system, and so you
know, I remember being part of a software rollout in a commercial company as an employee and, at one point, they
just said, "Look, we cannot cope with being on two systems at the same time. So we know it's not working brilliantly,
we're just going to push everything onto the new system and we'll fix it later”.
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Government and any that follows must grapple with honestly. A truthful strategy that
understands the value of the network to the communities we live in now must be the starting
point.
What happened to the SPMs can never be allowed to happen to others again. It is not acceptable
for decent, hard-working people of good character to be collateral damage in the pursuit of
commercial imperatives. Their value must be recognised. The value of what they do must be
recognised. ‘High net worth’ should not just be viewed as how much money a person has. It
should be measured by what worth the person is to the community in which they live; the
contribution to the lives of others; to education, to healthcare, to the arts and security. The role
of SPM is of high net worth and should be treated accordingly.
Although Post Office refused to hear the concerns of SPMs and dismissed them as subbies with
their hands in the till who lacked passion and had lifestyle problems, this Inquiry has listened
intently to them and evidence of the reasons for their plight. They are uniformly grateful for
that and now await the findings and recommendations of the Inquiry.
TIM MOLONEY KC
ANGELA PATRICK
DOUGHTY STREET CHAMBERS
HUDGELL SOLICITORS
9 DECEMBER 2024
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