PAUL MARSHALL
CORNERSTONE BARRISTERS
2-3 GRaY’s INN SQUARE
LoNnDoN
WCIR 5JH
21st July 2020
Dear Mr Jones,
THE POST OFFICE ~ A FLAWED AND CORRUPT CORPORATION?
Iam a barrister in private practice. I am writing to you in connection with
‘the Post Office scandal’ and because I know your Committee is considering the
Post Office.
I write this letter to you out of a sense of public duty. I believe that what
Ihave to say is important. So far as I can ascertain, what I have to say is neither
widely appreciated nor understood.
I am writing to you because recent public statements by the government
suggest that little is understood about the gravity of the Post Office Limited’s!
conduct towards its sub postmasters and sub postmistresses over a period of
almost 20 years. That conduct, as I shall show, was not a matter of oversight or
error, but rather deliberate and intentional wrongdoing. This includes, most
concerningly, systematic and sustained intentional wrongdoing by the Post
Office in its engagement with the courts. This has given rise to what is arguably
the most extensive miscarriage of justice in English legal history.
That the Post Office’s conduct was intentional is not widely understood
and may explain why the government’s response, to date, has been so plainly
inadequate.
There is a real risk that the government will be seen to be aligning itself
with the Post Office, that it owns, and with the Post Office’s interests. Given the
nature of the conduct in question, that would be unfortunate, as you will
understand from what I explain in this letter.
As you know, prosecution by the Post Office frequently resulted in sub-
postmasters losing their livelihoods, and, in many instances, resulted in their
Formerly, so far as branch post offices are concerned, Royal Mail. Both, for convenience, ‘the Post Office’.
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imprisonment. It appears that some sub postmasters took their own lives by
suicide as a result of serious unfounded allegations made against them and their
treatment at the hands of the Post Office. Mr Martin Griffiths is one example. Mr
Griffiths walked under a bus at a time when he was being pursued by the Post
Office for alleged shortfalls at his branch of tens of thousands of pounds. Other
sub postmasters were subject to civil claims and were made bankrupt. For one
former sub postmistress the Post Office’s conduct has resulted in her being
made homeless. The scale of the human suffering contained in the words ‘Post
Office scandal’ is immense. That suffering was the consequence of what
appears to have been intentional wrongdoing by the Post Office over a period
of 19 years. This is not generally appreciated.
A_ POLICY OF DELIBERATE AND SYSTEMATIC DECEPTION BY THE POST
OFFICE
My primary purpose in writing to you is to explain that the Post Office
carried out its policy of prosecuting its sub postmasters and others and making
civil claims knowing of failures and weaknesses in its computer system but
withholding that knowledge and information - including from the courts. That
information provided an available explanation for shortfalls at branch post
offices that were the occasion for prosecutions and civil claims. Put another
way, the Post Office over two decades set out to deceive, and did deceive, both
its sub postmasters and the courts. Until 2019 it succeeded in that deceit with
calamitous consequences for its victims. It is not lightly that the Criminal Cases
Review Commission, a noticeably (and understandably) cautious and
restrained public institution, says of applicants whose convictions it has
referred to the Court of Appeal that “it is an affront to the public conscience”
that the sub postmasters and postmistresses concerned were ever prosecuted
- never mind convicted. This is the single largest group referral by the CCRC to
the Court of Appeal in history.
Had information and documents evidencing those known flaws and
failures in the Post Office’s Horizon computer system been disclosed at the
material time, as in law they were required to be, these would almost certainly,
in every prosecution and claim, have undermined the prosecution and
exonerated the sub postmaster or Post Office employee concerned. In short, the
issue is not about mistakes having been made by the Post Office in the past, itis
about a policy of systematic deception by the Post Office over a period of two
decades. The questions that require to be addressed include how this was
allowed to happen:
(i) _ by the Post Office’s board of directors?
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(ii) By the government that had oversight of the Post Office and that wholly
owned it?
It is not clear to me how the latter can be satisfactorily addressed by the
government or any government-led inquiry or review. Any attempt to do so,
that appears to be the approach presently adopted by the Department for BEIS,
is open to the obvious criticism that the government acts as judge in its own
cause.
The fact that the Post Office’s wrongdoing was on the face of it deliberate
and intentional (below) and not merely ‘mistaken’ is a matter of the utmost
seriousness and is insufficiently recognised, including by government (below).
This fact has received virtually no attention - the reason, I apprehend, is that
the point and the (admittedly complex) legal and factual underpinning are not
well understood. In my experience at the Bar, a single instance of obtaining a
judgment by fraud is both extraordinary (in the sense of exceptional) and of the
utmost gravity. The Post Office scandal, on the face of it, suggests many
hundreds of such instances.
GOVERNMENT MISUNDERSTANDING AND UNDERPLAYING THE ISSUE
By way of illustration of how poorly understood the real issues are, in a
recent written parliamentary answer to a question by Chi Onwurah MP on 13%
July 2020 the Under Secretary of State for BEIS, Mr Alex Chalk MP, stated: “Post
Office Limited (POL) has accepted that it got things wrong in the past in its
dealings with a number of postmasters and has apologised’. That formulation
(if not intentionally euphemistic) is scarcely adequate to the circumstances and
might, to those whose lives have been destroyed by the conduct of the Post
Office, appear offensive. To suggest that the Post Office ‘got things wrong’ isn’t
adequate to the freight the expression is required to carry. It would be odd to
say that the Third Reich officials present at the Wannsee Conference ‘got things
wrong’ with regard to their racial policies towards the Jews - such a statement
would suggest a conspicuous lack of understanding or worse. Mr Chalk’s
formulation is both misleading and also exhibits conspicuous lack of
understanding. Both erode public confidence.
Further, Mr Chalk’s statement suggests an inability or unwillingness on
the part of the government to engage and deal with reality. This is unfortunate.
The routine and systematic prosecution and imprisonment of citizens on flawed
and misleading evidence, known to the prosecuting authority to be false and
misleading, is not ‘getting things wrong’ as that expression is ordinarily
understood, that is to say as in some way ‘mistaken’. This is the sort of thing
that in the public imagination happens under despotic and oppressive regimes,
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it should not happen and must not be allowed to happen in a liberal democracy
under ‘the rule of law’. That it has happened at all is of the utmost concern. That
it was caused by a wholly government-owned corporation is very troubling.
It is a matter of detail that Mr Chalk’s stated justification to Ms Onwurah
for not taking action on the legal evidential presumption that Ms Onwurah had
raised and about which she asked (which was a major contributory factor in the
wrongful convictions of many sub postmasters) viz. “We do not intend to
review the presumption as it has wide application” exhibits a complete failure
by him to understand the issue in point; it is becausethe presumption has ‘wide
application’ that the evidential ‘presumption’ (urgently) requires to be
reviewed. It is a separate subject of its own.
Given that the Post Office is a public institution, is wholly owned by the
government and is financially supported by it, the Post Office’s concealment of
its knowledge and the consequence of concealment is necessarily a matter of
serious public concern. The government's role and its support for the Post
Office is understandably a matter of some sensitivity for the government.
Nevertheless, the temptation to underplay the seriousness of what has
happened runs the risk of the government becoming complicit in the Post
Office’s wrongdoing, after the fact. Such an outcome will be very damaging to
the government, given the seriousness and extraordinary scale of wrongdoing
by the Post Office. It is likely to be more damaging in the long run than bold and
transparent engagement with the issues by the government now.
In the interests of brevity I will explain the factual basis for my stating
that the Post Office deliberately engaged in conduct that was intentionally
wrongful, I shall give three examples. The material facts are all a matter of
public record, being set out in two judgments of Mr Justice Fraser in Bates and
ors v Post Office [2019] EWHC, 606 and 3408 QB (the ‘Common Issues’ and
‘Horizon Issues’ judgments). The examples are illustrative, not exhaustive.
1. Apparent agreement or understanding between the Post Office and Fujitsu
to withhold important material evidence from the court.
2. Withholding disclosure of Known Error Logs from the defendants and the
court.
3. Mrs Stockdale’s treatment as a claimant in the Bates litigation at the hands
of the Post Office.
In this letter I have confined myself to a summary description of these
points. For your assistance I have attached as Appendices the relevant sections
of Mr Justice Fraser’s judgments that set out the detail. In connection with the
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issue of disclosure of the Known Error Logs and Mrs Stockdale’s treatment at
the hands of the Post Office, these are extensive. The importance that the judge
himself attached to the issues, given the meticulous care, detail and length with
which he addressed them, is apparent. These should be read.
Having read the material I have sent to you, I am confident that you will
agree that Mr Chalk’s recent characterisation of the Post Office’s conduct as
‘getting things wrong’ is both wholly inadequate and also seriously misleading,
albeit presumably inadvertently so.
AN_UNDERSTANDING BETWEEN FUJITSU AND THE POST OFFICE ON OR
ABOUT 29% SEPTEMBER 2010 TO WITHHOLD IMPORTANT EVIDENCE FROM
THE COURTS
Appendix 1
The account of this meeting is provided by Mr Justice Fraser at
paragraphs [428]-[430] of his judgment on the Horizon Issues (16 December
2019). What happened is set out in the judge’s description at paragraph [428].
There was a meeting on or about 29% September 2010 attended by 10
representatives of the Post Office and Fujitsu (see paragraph [430] - it was
important enough for Mr Winn of the Finance Department of the Post Office to
be present). The judge describes this meeting, the document that records it,
and what happened as “most disturbing in the context of this group litigation”
and he refers to the Post Office’s decision to keep the material “secret” and the
circumstances that they disclose “wholly wrong” and “very concerning”.
The circumstances that Fraser J is addressing is the discussion of what
in the litigation was described as “the Receipts and Payments mismatch bug” in
the Horizon system. This was discovered in the upgraded ‘Horizon Online’
system introduced from 2010. It was supposed to resolve problems that had
been experienced with what was called ‘Legacy Horizon’ (that was originally
incepted as an offline system and was prone to serious failure, not least caused
by a communication interface called ‘Riposte’).
It may be stating the obvious to observe that the prosecutions of the
Post Office’s sub postmasters invariably concerned unexplained and
unaccounted for ‘shortfalls’ at branch accounts. Because of the accounting
system and contractual arrangements such shortfalls were frequently alleged
by the Post Office to be the result of theft by the sub postmaster concerned.
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The effect of the Receipts and Payments Mismatch bug was recorded
in a document referred to by Fraser J in his Horizon Issues judgment at
paragraph [428]. The document provided as follows:
“ «ae What is the issue?
Discrepancies showing at the Horizon counter disappear when the branch follows certain
process steps, but will still show within the back end branch account. This is currently
impacting circa 40 Branches since migration onto Horizon Online, with an overall cash
value of circa £20k loss. This issue will only occur if a branch cancels the completion of
the trading period, but within the same session continues to roll into a new balance
period.
At this time we have not communicated with branches affected and we do not believe
they are exploiting this bug intentionally. (emphasis added)
The problem occurs as part of the process when moving discrepancies on the Horizon
System into Local Suspense.
When Discrepancies are found during Stock Unit rollover into a new Transaction Period,
then the User is asked if the discrepancy should be moved to Local Suspense. If the
branch presses cancel at this point the Discrepancy is zeroed on the Horizon System.
Note at this point nothing into feeds (sic) POLSAP and Credence, so in effect the
POLSAP and Credence shows the discrepancy whereas the Horizon system in the
branch doesn't. So the branch will then believe they have balanced.
If at the next screen the rollover is completely cancelled, then no harm is done. However
if the Rollover is re-attempted at this point, the rollover will continue without any
discrepancy meaning Horizon doesn't match POLSAP or Credence.
This has the following consequences:
. There will be a Receipts and Payment mismatch corresponding to the value of
Discrepancies that were "lost"
Note the Branch will not get a prompt from the system to say there is Receipts and
Payment mismatch, therefore the branch will believe they have balanced correctly.
° When the Branch begins the new Branch Trading period the discrepancies will
show at Zero, however the Receipts and Payment mismatch will carry over into
the next period.
Impact
. The branch has appeared to have balanced, whereas in fact they could have a loss
or a gain.
* Ouraccounting systems will be out of sync with what is recorded at the branch
* If widely known could cause a loss of confident [sic] in the Horizon System by
branches
* Potential impact upon ongoing legal cases where branches are disputing the
integrity of Horizon Data
* _Itcould provide branches ammunition to blame Horizon for future discrepancies.
Identifying the issue and forward resolution
The Receipts and Payment mismatch will result in an error code being generated which
will allow Fujitsu to isolate branches affected this by this problem, although this is not
seen by the branches. We have asked Fujitsu why it has taken so long to react to and
escalate an issue which began in May. They will provide feedback in due course.
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Fujitsu are writing a code fix which stop the discrepancy disappearing from Horizon in
the future. They are aiming to deliver this into test week commencing 4t% October. With
live proving at the model office week commencing 11° October. With full roll out to the
network completed by the 21* of October. We have explored moving this forward and
this is the earliest it can be released into live.
The code fix will on stop the issue occurring in the future, but it will not fix any current
mismatch at branch.
Proposal for affected Branches
There are three potential solutions to apply to the impacted branches, the groups
recommendation is that solution two should be progressed.
SOLUTION ONE - Alter the Horizon Branch figure at the counter to show the discrepancy.
Fujitsu would have to manually write an entry value to the local branch account,
IMPACT - When the branch comes to complete next Trading Period they would have a
discrepancy, which they would have to bring to account.
RISK- This has significant data integrity concerns and could lead to questions of
"tampering" with the branch system and could generate questions around how the
discrepancy was caused. This solution could have moral implications of Post Office
changing branch data without informing the branch.
SOLUTION TWO - P&BA will journal values from the discrepancy account into the
Customer Account and recover/refund via normal processes. This will need to be
supported by an approved POL communication. Unlike the branch "POLSAP" remains in
balance albeit with an account (discrepancies) that should be cleared.
IMPACT - Post Office will be required to explain the reason for a debt recovery/ refund
even though there is no discrepancy at the branch.
RISK - Could potentially highlight to branches that Horizon can lose data
SOLUTION THREE - It is decided not to correct the data in the branches (ie Post Office
would prefer to write off the "lost"
IMPACT - Post office must absorb circa £20K loss
RISK - Huge moral implications to the integrity of the business, as there are agents that
were potentially due a cash gain on their system.
{bold present in original)
Mr Justice Fraser said of this document:
“[429] I find this to be a most disturbing document in the context of
this group litigation. It is a 2010 document and issues between the Post
Office and many SPMs concerning the accuracy of Horizon had, for Legacy
Horizon, gone on for a decade (2000 to 2010) and these continued under
Horizon Online (introduced in 2010). Under “Impact”, some of the bullet
points incorporate a summary of these issues.
‘© The branch has appeared to have balanced, whereas in fact they
could have a loss or a gain.
. Our accounting systems [ie Horizon or the Post Office's] will be out
of sync with what is recorded at the branch
. If widely known could cause a loss of confident [s/c] in the Horizon
System by branches
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. Potential impact upon ongoing legal cases where branches are
disputing the integrity of Horizon Data
. It could provide branches ammunition to blame Horizon for future
discrepancies.”
(Judge’s own underlining)
“[430] The attendees at this meeting included at least one member of
Post Office (rather than Fujitsu) personnel, Andrew Winn of POL Finance.
There were obviously legal cases going on at the time, hence the reference
in the underlined bullet point to “ongoing legal cases”. If these were
criminal cases, the Post Office would be the prosecuting authority, with
certain important duties. If these were civil cases, the Post Office would be
a party with disclosure obligations. An affected branch would believe it
had balanced its accounts correctly; it would not have done so. There is an
evident concern amongst those at the meeting which is recorded in this
document that this issue should not become “widely known” in order to
avoid causing “a loss of confidence in the Horizon System”.
Mr Justice Fraser commented (Horizon paragraph [457]) that:
“... To see a concern expressed that if a software bug in Horizon were
to become widely known about it might have a potential impact
upon “ongoing legal cases” where the integrity of Horizon Data was
a central issue, is a very concerning entry to read in a
contemporaneous document. Whether these were legal cases
concerning civil claims, or criminal cases, there are obligations upon
parties in terms of disclosure. So far as criminal cases are concerned,
these concern the liberty of the person, and disclosure duties are
rightly high. I do not understand the motivation in keeping this type
of matter, recorded in these documents, hidden from view;
regardless of the motivation, doing so was wholly wrong. There can
be no proper explanation for keeping the existence of a software bug
in Horizon secret in these circumstances. [458] The degree to which
either, or both of, Fujitsu and/or the Post Office, expressly or
constructively, knew exactly what and when, is for future trials in
this litigation ..
The word used by the judge - keeping the existence of the Receipts and
Payments mismatch bug “secret” is devastating in its wider implications.
The wider implications of this were not addressed by the judge in his
judgment because these were not before him on the technical issues that were
to be determined by the (technical) Horizon Issues trial.
It is acutely concerning that within a few weeks of that meeting Mrs
Seema Misra was prosecuted in Guildford Crown Court for theft of some
£74,000. (I have agreed to represent Mrs Misra, pro bono, in her appeal to the
Court of Appeal.) Her criminal trial commenced on Monday 11* October 2010.
The Post Office’s case was that the Horizon computer system was robust and
reliable. Further, it was the Post Office’s explicit case that any error in the
computer system would necessarily be observable to the operator at the branch
terminal. Mr Jenkins, who had been the most senior Fujitsu employee present
at the 29th September 2010 meeting, gave evidence for the Prosecution against
Mrs Misraas to the reliability of Horizon and that a failure of the Horizon system
would be observable to the sub postmaster.
The contrast with the meeting on 29th September 2010 and the
prosecution’s opening at Mrs Misra’s trial on Monday 11 October 2010 (for
example) could not be more striking. Prosecution counsel said this:
“So it has got to be a pretty robust system and you will hear
some evidence from an expert in the field as to the quality of the
system. Nobody is saying it is perfect and you will no doubt hear
abouta particular problem that was found, but the Crown say it isa
robust system and that if there really was a computer problem the
defendant would have been aware of it.
That is the whole point because when you use a computer system
you realise there is something wrong if not from the screen itself
but from the printouts you are getting when you are doing the stock
take.” (Transcript Day 1 Monday 11 October 2010, 21A-C, 23H-
24A).
No reference was made at her trial to the recently discussed Receipts and
Payments mismatch bug, the effects of which were recognised by the Post Office
and Fujitsu to be not identifiable to a sub-postmaster at a branch Post Office.
Mrs Misra was convicted and sentenced to 15 months imprisonment. She was
eight weeks’ pregnant.
Mr Jenkins has been referred to the Director of Public Prosecutions by Mr
Justice Fraser. Whilst entirely understandable, that fact does not detract from,
nor is it relevant to, the wider issue that from the record of the September
meeting there appears to have been agreement or understanding between
Fujitsu and the Post Office that information about the Receipts and Payments
mismatch bug should not be disclosed, either to the Post Office’s sub
postmasters or to the courts.
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It was explicitly recognised by both the Post Office and Fujitsu that
knowledge of this bug would potentially impact upon legal cases where the
issue for the court (including, obviously, juries) was the integrity of the Horizon
data. The implications are, as the judge noted, very serious indeed.
Any such agreement or understanding where it was appreciated that
disclosing information about the Receipts and Payments mismatch bug might
foreseeably impact upon and harm a defendant’s defence (as appears to have
been recognised) would disclose, on the face of it, a conspiracy to pervert the
course of justice.
There is nothing to suggest that the Post Office disclosed information
about the Receipts and Payments mismatch bug in any legal proceedings after
29th September 2010 until the Horizon Issues trial before Mr Justice Fraser in
2019.
This is not merely historic and an issue within the Bates litigation. On
10 October 2017 Mr Chirag Sidhpura was subject to a Post Office audit at
which a shortfall of £57,000 was alleged against him by Post Office auditors. Mr
Sidhpura was so surprised that he collapsed with shock. Despite his paying
that sum to the Post Office, his contract was terminated and he lost his
investment. On 18 June 2018 when the Post Office was re-opened under new
management, and the branch had not been trading since Mr Sidhpura had had
his contract terminated, the Horizon branch terminal showed a further shortfall
of £5,050 when the safe seals were broken by the Post Office. In August 2018
the Post Office invoiced the incoming sub postmaster for this amount.
POST OFFICE WITHHOLDING FROM DISCLOSURE THE HORIZON KNOWN
ERROR LOG ‘KEL’ - DENIAL OF A FAIR TRIAL
Appendix 2
The foregoing documented sensitivity of the Post Office to disclosure of
information about the Receipts and Payments mismatch bug as (i) having the
potential to impact upon “ongoing [Post Office] legal cases” and (ii) that might,
if widely known cause “loss of confidence” in the Horizon system and the Post
Office’s decision to withhold that information from a defendant such as Mrs
Misra in her criminal trial, that occurred within a fortnight of the September
2010 meeting, is revealing of the Post Office’s general approach to withholding
information about known errors in the Horizon system. The role played by
Womble Bond Dickinson LLP, the Post Office’s solicitors for most of the period
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10
including the Bates trials in 2018-2019 is concerning for reasons that are
apparent from the judge’s comments to which I make reference.
To avoid overmuch detail, I have annexed the section from Mr Justice
Fraser’s judgment that deals with the ‘Known Error Log’ (KEL). That the judge
went to so great lengths to set out in narrative form the misleading nature of
the Post Office’s (changing) position on the KEL is instructive.
As will be apparent from Fraser J’s judgment, the Post Office objected to
giving disclosure of the Known Error Log. It did so on the basis that (i)
(bizarrely) the KEL might not exist at all, (ii) the KEL was ‘not relevant’ and (iii)
that the KEL was not, in any event, a document ‘in its control’ so that it could
disclose it even if it wished to do so. Each contention was wholly wrong and
seriously misleading.
At a hearing on 19* October 2017 the Post Office’s leading counsel, Mr
Antony de Garr Robinson QC told Mr Justice Fraser that the request by the
claimants in the Group Litigation for disclosure to them of the Known Error Log
was “a complete red herring’ (Transcript p 86E).
To make the point clear, at paragraph [559] of his Horizon Issues
judgment Mr Justice Fraser said:
“There are certain categories or descriptions of classes of
documents that have featured heavily in the evidence at the
Horizon Issues trial. The path to disclosing them has not always
been smooth. The majority, if not all, of the technical documents
that relate to how Horizon was actually operating in fact in IT terms
are in the possession of either the Post Office or (more usually)
Fujitsu. The two most important categories, in my judgment, are
Known Error Logs (also known as “KELs”) and PEAKs. The first of
these records or logs known errors, which means errors with the
Horizon system. The latter is a browser-based software incident
and problem management system used by Fujitsu for the Post
Office account, in other words for incidents and problems
associated with Horizon that occur.” (My underlining.)
At paragraph [940] of that judgment Fraser J said this:
‘Here, the categories of documents that are most illuminating in
terms of specific incidents with Horizon over the years are the very
numerous PEAKs and KELs. These emanate from, and are created
within, Fujitsu. They are, in my judgment, a very good means of
getting at the truth in this case. They show what was going on and
the type of unexplained problems that numerous SPMs were
experiencing in practice over the years, as they were reported to
the SSC. They contain statements made when Fujitsu personnel’s
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11
“guard is down and their true thoughts are plain to see’. Some of
them also record that Romec engineers, or the Post Office’s own
auditors, have seen what has occurred and ruled out user error.
Notwithstanding this, Fujitsu attribute user error to what has
occurred.” (My underlining.)
The Post Office, until directed to do so by Mr Justice Fraser, objected to it
disclosing Known Error Logs - that is to say, logs of errors with the Horizon
system.
As is clear, it is from these KEL records, together with narrative PEAKs,
that the judge was able to determine the full and true extent of the known
unreliability of the Horizon system.
At Mrs Misra’s trial in October 2010, there is only one reference in the
entire trial, that lasted more than a week to “Known Error Log” (a full transcript
of her (unsatisfactory) trial is publicly available2). Professor McLaughlin for
Mrs Misra had asked to see the detailed Horizon records. This was refused by
the trial judge, His Honour Judge Stewart. Three separate applications by the
defence in connection with inadequate disclosure by the Post Office were
dismissed by three different judges, none of whom thought that the Post Office’s
approach to its disclosure obligations was objectionable and considered these
could otherwise be left to the jury to evaluate. Neither Judge Stewart, nor
defence counsel appear to have appreciated the KEL’s full importance and
significance. Mr Jenkins, the senior engineer and architect of the Horizon
system employed by Fujitsu, who gave evidence for the Post Office, disavowed
even having looked at the PEAK records. This, ina trial where the prosecution's
case against Mrs Misra depended fundamentally upon the Horizon data being
both accurate and reliable and the Horizon system being similarly reliable.
After the Bates Horizon Issues trial had concluded, the Post Office
disclosed an additional 5,000 KEL records.
The reliability of the Horizon system was the central issue and evidential
premise in many prosecutions and claims. For example in Mr Castleton’s case
in 2007 His Honour Judge Havery QC, sitting as a judge of the High Court, by his
judgment Post Office v Castleton [2007] EWHC 5 (QB) dismissed Mr Castleton’s
contention that there appeared to him to be something wrong with the Horizon
system. Ms Anne Chambers, a senior employee of Fujitsu, who worked closely
with Mr Jenkins, gave evidence for the Post Office. Judge Havery recorded that
Mr Castleton’s defence was that the shortfall in his branch accounts of some
£26,000 that he experienced “... was that the losses apparently shown by the
R. v Seema Misra, 720090070, in the Crown Court at Guilford before His Honour Judge N. A.
Stewart and jury, 12 Digital Evidence and Electronic Signature Law Review (2015) Introduction,
44 - 55; Documents Supplement, https:/ /journals.sas.ac.uk/deeslr/article/view/2217
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Balance Lists and Cash Accounts (Final) were illusory not real. It was entirely
the product of problems with the Horizon computer and accounting system
used by the claimant. The apparent shorttalls were nothing more than
accounting errors arising from the operation of the Horizon system”. (Mr
Castleton had repeatedly been telephoning the helpline to report balancing
shortfalls he was experiencing.)
Judge Havery rejected Mr Castleton’s defence. The only evidence
disclosed by the Post Office of errors in Mr Castleton’s branch was of three error
notices. On that exiguous and misleading evidence the judge reached his
(erroneous) conclusion that: “Zhe paucity of their number is consistent with
the proper working of the Horizon system’. The Post Office was awarded its
costs against Mr Castleton that its solicitors Bond Pearce LLP (later Womble
Bond Dickinson LLP) claimed in the sum of £321,000.
The Post Office did not disclose to Mr Castleton or to the court the Known
Error Log nor did it disclose PEAK records.
I refer to Mr Castleton’s case because it illustrates the devastating effect
on individual postmasters of the Post Office’s decision, over the entire period to
2019, as would appear, to withhold and not disclose the Known Error Log - a
log and record that Mr Justice Fraser found to be of fundamental importance.
The Post Office’s approach to this issue is of immense, but not widely
understood, importance. Its importance is reflected in the meticulous care and
detail in which the judge records the evolution of the Post Office’s opposition to
disclosing these fundamentally important documents. I have set out the judge’s
full account in the Appendix, that you should read, but for present purposes I
highlight the following points.
In April 2016 the claimants’ lawyers asked for disclosure of the KEL. The
Post Office’s response was that: “In circumstances where you have not
particularised any factual basis on which Horizon is defective, disclosure of these
documents (if they exist) is not relevant, reasonable or proportionate.”*
This is of importance in connection with Mr Chalk’s written answer to Chi
Onwurah MP that I have referred to above. Under the law as it is at present it
is for a person who objects to a computer from which information in documents
is derived being treated as reliable to show why the computer should not be
‘presumed’ to be reliable. Commonly, as will appear, sub postmasters were
unable to do this. The reason was that the information necessary to do so was
contained in the KEL - that the Post Office objected to disclosing without a clear
explanation for why it should do so. Catch-22. I suspect that the Under
Secretary of State, Mr Chalk MP, doesn’t understand this.
My emphasis in bold text, here and below.
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Be that as it may, of the Post Office’s position on disclosure of the KEL -
that can be assumed to have been its position up until that date (vizit objected
to disclosing these documents), Fraser J said this:
@)
(b)
©
“ The suggestion in that letter that the Known Error Log was not relevant,
is simply wrong, and in my judgment, entirely without any rational basis.
The further suggestion, viewed with the hindsight now available, that the
“known error log” may not exist, is disturbing. The claimants’ request
used the precise title - “known error log” - and this clearly did exist. To
suggest in an answer “if they exist” is somewhat misleading.”
[578] “Item 23 in the same list of documents sought was “Internal
memoranda from Fujitsu and POL referred to by Second Sight as
identifying a ‘Horizon bug’ within Horizon Online.” [579] The answer
against that item was: “We do not recognise the document to which you
refer. Please provide further details.” [580] In my judgment, the
documents sought in that entry must clearly include any PEAKs that
identified a bug within Horizon Online. “Internal memoranda” is a plural
reference, yet it was interpreted by the Post Office’s solicitors as though
it were singular, and the request was for a single document, or a document
with the title “internal memoranda”. This is, in my judgment, obstructive.”
[581] “The claimants were not to be dissuaded, and sought the Known
Error Log or KELs again. A reply from the Post Office’s solicitors on 13
October 2016 is relied upon by the claimants as showing that the Post
Office was denying the relevance of the Known Error Log. This reply
stated: “The claims which you have particularised concern errors with the
Core Audit Log. Following a review of the Known Error Log, Fujitsu have
confirmed that there have been no logs in respect of Core Audit Log. The
remainder of the Known Error Log does not relate to the claim which you
have_particularised_and_as such disclosure of this document is not
relevant.” [Judge’s own emphasis]. [582] Existence of the Known Error
Log was at that stage accepted, but its relevance to the proceedings was
now challenged. The Post Office’s solicitors stated that its contents “did
not relate to the claim” and that “disclosure of this document is not
relevant”. Disclosure of it was plainly resisted. The claimants did not
therefore have it when the Generic Particulars of Claim was pleaded on 6
July 2017. In the Generic Defence, which is dated 18 July 2017, the Post
Office changed its position, and now pleaded that the Known Error Log was
not in its control. At paragraph 50(4) of the Generic Defence, the Post
Office stated: “It is admitted that Fujitsu maintain a "Known Error Log".
This is not used by Post Office and nor is it in Post Office's control. To the
best of Post Office's information and belief, the Known Eor (s/c) Log is a
knowledge base document used by Fujitsu which explains how to deal
with, or work around, minor issues that can sometimes arise in Horizon
for which (often because of their triviality) system-wide fixes have not
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been developed and implemented. It is not a record of software coding
errors or bugs for which system-wide fixes have been developed and
implemented. To the best of Post Office's knowledge and belief, there is
no issue in the Known Error Log that could affect the accuracy of a
branch's accounts or the secure transmission and storage of transaction
data.””. (Underlining, the judge’s).
[589]: “So far as the content of the Known Error Log is concerned, when
asked by the court “does it contain any errors at all?” the following answer
was given by the Post Office’s leading counsel [Mr ee Garr Robinson QC]:
“It contains things like there's a problem with printers. There's a printer.
You have to kick it on the left-hand side to make the printer work. I mean
there's a vast range of hardware problems of that sort and maybe some
software problems .... but not the kind of bugs, errors and defects that the
claimants are wishing to pursue in their particulars of claim so far as Post
Office is aware.” [590] This exchange with the court then continued. “Mr
Justice Fraser: Well, that's the rider which slightly might concern--- A [Mr
De Garr Robinson QC]: Well, my Lord, unfortunately, that's all that Post
Office can say because it's not Post Office's document. It's Fujitsu's
document. Fujitsu are the experts.”
“... The explanation of what the Known Error Log was, what it contained,
and its lack of relevance, was not remotely accurate.”
[605] “I consider it verging on entirely unarguable, given the express
terms of the Fujitsu contract which is now available to the court, that the
Known Error Log was not in the control of the Post Office. Mr Parson’s
witness statement had merely stated “it was not within Post Office’s
control” and I simply cannot understand the basis for that statement, given
the express terms of the contract that the Post Office had with Fujitsu. It
plainly isin the Post Office’s control,... The fact that the Post Office has
submitted that in July 2017, on its understanding then, the KEL was not a
“record” that “related to the performance” of the Fujitsu services
demonstrates a worrying lack of knowledge on the part of the Post Office,
about both Horizon, and Fujitsu’s record keeping. It also means, when this
is put together with what the Post Office, by its leading counsel [Mr de Garr
Robinson QC], submitted to the court at the 1stcase management
conference, that Fujitsu were extraordinarily inaccurate about the
information it provided to the Post Office at that stage of these proceedings.
As at 2017, the Horizon system (both Legacy Horizon and Horizon Online)
had been in use for about 17 years. ...”.
On the issue of the KELs the judge said that “The KELs provided to the
experts prior to their reports featured centrally not only in Mr Coyne’s two
reports, but those of Dr Worden too. They were also the subject of a great deal
of cross-examination by both sides. I consider that disclosure of the KELs to the
experts ... has been central in the discovery and investigation of the bugs, errors
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and defects that the experts agree were, or are, present in the Horizon system,
and also of the bugs, errors and defects that are not agreed, but upon which both
experts opine and in respect of which I make findings in the Technical Appendix.
.-The notion that they were not relevant, or did not contain relevant material, is
extremely difficult to fathom, ...”.
Disclosure of the Known Error Log was central to determination by Mr Justice
Fraser of the unreliability of the Horizon system in 2019.
The point is that, so far as is known, in no previous proceedings or
prosecution prior to the Bates litigation did the Post Office give disclosure of
these plainly important documents. Without them, the Post Office’s sub
postmasters were disarmed in defending the claims and criminal charges
against them. It is to be noted that in those trials Fujitsu witnesses gave
evidence for the Post Office against the sub postmasters. In many cases, of
course, having no knowledge of these matters many sub postmasters simply
decided (often on legal advice as in Mrs Janet Skinner’s case) that it was best to
plead guilty to false accounting in the hope (often vain, as in Mrs Skinner’s case)
of avoiding imprisonment.
It is a matter of serious concern that the Known Error Log was not
disclosed in previous proceedings brought by the Post Office. It should be a
matter of concern that the Post Office adopted and maintained its objection to
disclosing those critically important documents, a position variously described
by Fraser J “without any rational basis’, “misleading’, “obstructive’, and on
statements of fact made to the court that were “extraordinarily inaccurate’ and
exhibited a “worrying lack of knowledge’ on the part of the Post Office and its
legal advisers. That was litigation in which 550-odd claimants were involved
and reflected a position adopted by a government-owned institution that had
been routinely prosecuting its sub postmasters and making claims against them
since about 2000. It made those claims and brought prosecutions on the
express basis that its Horizon computer system was “reliable” and “robust”
while at the same time denying to defendants to those claims and criminal
charges the critical documents and information known to it that would have
shown otherwise.
In short, the Post Office by withholding from disclosure the Known Error
Log, it denied to defendants to its prosecutions a fair trial (as the Criminal Cases
Review Commission has observed in its Statement of Reasons to the Court of
Appeal). For the same reason the Post Office’s conduct over the entire period
infringed the Article 6 rights of sub-postmasters under the European
Convention on Human Rights.
It stretches the meaning of a phrase past breaking point, and is simply
misleading, to describe the Post Office’s failure to disclose, over the entire
period of its prosecutions, critically important documents evidencing the
unreliability of its Horizon system as ‘getting things wrong.
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THE POST OFFICE’S TREATMENT OF MRS STOCKDALE
Appendix 3
The third matter that I draw to your attention is the treatment of Mrs
Stockdale by the Post Office and its solicitors Womble Bond Dickinson LLP.
Mrs Stockdale was the sub postmistress of the Sandsacre Post Office, a branch
in Bridlington, East Yorkshire from 8 May 2014 to 16 September 2016. Mr
Justice Fraser devotes no less than 53 paragraphs of the Common Issues
judgment ([275] - [328]) to her evidence and the treatment she received at the
hands of the Post Office. Mrs Stockdale had previously managed a clothes shop
and also had responsibility as the administration manager for 13 other stores.
She wanted to run her own business, and she also wanted to become a sub
postmistress.
On 16 September 2016 Mrs Stockdale’s appointment as an SPM was
immediately terminated on the grounds of falsification of accounts and failure
to make good losses. Part of that letter, which was from Mr Carpenter (see
Appendix 3 paragraph [506]ff), states:
“By falsifying the Branch accounts you have failed to maintain an
accounting system in accordance with the Manual. In doing this
since December 2015 we consider this to be a failure to act honestly
in your operation of the Branch, which is a material breach of the
Agreement which is not capable of remedy. In reaching this
conclusion we have taken into account that you did not call the
NBSC reporting the Losses and did not request assistance in respect
of these Losses.”
Mr Justice Fraser observed:
“[324] Another part states:
“As noted above, your failure to act honestly by falsifying the
Branch accounts is a material breach of the Agreement that cannot
be remedied and which gives Post Office Ltd the right to terminate
immediately under clause 16.2.1.”
(Judge’s own emphasis)
[325] I Mrs Stockdale said that her confidence in the Horizon
system was so low that she had never signed the statement which
went with the Branch accounts saying they were accurate. This
passage of her evidence was as follows:
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“Q So would it be right that when, during that period, you
certified under the following words:
"I certify the content of this balancing and trading
statement is an accurate reflection of the cash and stock at
this branch."
That when you signed that in fact it was untrue?
A. [never signed it.
Q Who did sign it?
A. No one.”
No signed copy was produced or put to her, although she accepted
that the Branch Trading Statement was “presented” to the Post
Office who would treat it as though it were accurate.
[326] It is therefore the case that she was accused in the letter of
16 September 2016 of committing a criminal offence, which is
punishable by imprisonment.”
As Mr Justice Fraser notes, at the time at which her appointment was
terminated by the Post Office, Mrs Stockdale was already a claimant in the Bates
litigation.
At paragraph [516] Fraser J said this:
“... Shortly after proceedings were issued, the Post Office acted as
it did with Mrs Stockdale, shutting her branch and stating she was
considered to have committed a criminal offence. It also expressly
stated to her factually untrue statements, namely that she had not
contacted the NSBC or asked the Post Office for assistance. I find
that she had.
«» Whether the Post Office was guilty of acting in the ways
complained of by the Claimants can only be resolved later in these
proceedings after other trials. However, even putting it at its best
for the Post Office, such conduct towards Mrs Stockdale during this
early stage of the litigation could potentially be construed as
threatening, oppressive, and potentially discouraging to other
potential Claimants to become involved in the litigation, whether hy
accident or design. I can think of no reason why such an approach
was taken unilaterally by the Post Office in such a way, without the
Post Office's solicitors giving advance notice to her solicitors, so that
a Jess confrontational and aggressive path was adopted, given her
role as a claimant in the litigation. However, even once it was done
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and she was suspended, the Post Office continued to act in a highly
regrettable fashion.
Similarly importantly, you should read the following paragraphs of Mr
Justice Fraser’s judgment under his general observation concerning Mrs
Stockdale’s treatment at paragraph [519] where he said: “I am troubled by the
way that the Post Office has acted in relation to Mrs Stockdale since April 2016.”
(Text in bold is my emphasis.)
“(520] That concern is amplified by the approach of the Post Office to
specific disclosure requests made by the Claimants’ solicitors in this
litigation in the period following the audit. On 26 May 2016 Freeths asked
for disclosure of different categories of documents relating to Mrs
Stockdale. These were precisely drafted categories, and included (for
example) Helpline printouts, audit reports, and internal Post Office
correspondence including that relating to the basis for, and making of, the
decision to audit her branch and suspend her. The answer to that from the
Post Office’s solicitors Womble Bond Dickinson was in a letter dated 2 June
2016 and said “in circumstances where you have not set out any basis on
which you believe that our client’s actions have been unlawful or otherwise
affect Mrs Stockdale's ability to participate in the Bates High Court
litigation, we are not currently minded to engage in ad hoc piecemeal
disclosure connected to a live investigation.” All that the Post Office was
prepared to do was preserve the documentation, which it should be noted,
it would be required to do as a bare minimum to comply witha litigant’s
obligations of disclosure generally. am surprised that it even occurred to
the Post Office otherwise that it might not preserve such documents.
Offering to preserve potentially important documents in High Court
litigation, rather than destroy them, is not a concession.
[521] On 13 June 2016 Freeths tried again, and again sought disclosure
concerning Mrs Stockdale. That included a signed letter from Mrs
Stockdale expressly asking for the same information. The response from
Womble Bond Dickinson on 22 June 2016 was *...we find it difficult to see
how provision of certain of the information you have sought will progress
imatters (in the absence of any input from your client as to the cause of the
Josses, it looks like a fishing expedition)”. Yet again, the central thrust of
the Post Office was that there was an initial requirement upon a SPM to
demonstrate cause of the losses, in order for the Post Office to
engage. This was wholly illogical. The subject matter of the litigation, which
by then was well underway, included complaint that SPMs specifically
could not themselves identify cause. The claim form itself stated that
Horizon "severely limited their ability to access, identify, obtain and
reconcile transaction records and themselves investigate any alleged
shortfalls,”
[522] Some documents were provided by the Post Office on an
encrypted CD-ROM, but not all, and on 29 July 2016 Freeths wrote again,
Bold text my emphasis, here and below.
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seeking in particular, internal correspondence dealing with the decision
to audit and suspend her; correspondence and notes relating to visits to
the branch and contact with her; and documents identifying the root cause
of previous shortfalls in 2015. Again, this was refused. The letter of refusal
of 5 August 2016 from Womble Bond Dickinson stated that “we have given
you all requested information that could reasonably be said to assist your
client in identifying the cause of the shortfall” and “the relevance of these
further documents is not understood in relation to the current issues”. The
current issues must, on any sensible construction of that phrase, at that
time have included those on the claim form. In August 2016 no orders had
been made by me about future conduct of the litigation. Indeed, the GLO
itself was not made until 21 March 2017, and my Directions Order No.1
was not made until 26 April 2017. This statement by the Post Office’s
solicitors in August 2016 that the relevance of the documents ‘is not
understood” is simply unsupportable, It is also the case that all litigants
shave continuing disclosure obligations. Once Mrs Stockdale was chosen as
a Lead Claimant for the Common Issues trial, and at the very latest when
the Post Office decided (as at some point it must have done, given the way
she was cross-examined as to her credit) to accuse her formally of false
accounting, the documents underlying the audit (the result of which formed
the basis of the accusations) became highly relevant and clearly
[523] For the reasons I have expressed above, I have considerable
misgivings about the Post Office’s motivation for the treatment of Mrs
Stockdale during this litigation, and for the treatment itself in terms of
refusal to provide obviously relevant documents. The evidence by Mr
Carpenter, far from satisfying these concerns, actually increases them. The
Post Office appears, at least at times, to conduct itself as though it is
answerable only to itself: The statement that it is prepared to preserve
documents - as though that were a concession - and the obdurate to
accept the relevance of plainly important documents, and to refuse to
produce them, is extremely worrying. This would be a worrying position
were it to be adopted by any litigant; the Post Office is an organisation
responsible for providing a public service, which in my judgment makes it
even worse.”
In short, the judge is expressing concern that Mrs Stockdale was ‘targeted’
by the Post Office because she was a claimant in the litigation - and having
targeted her and made allegations against her of dishonesty, the Post Office
thereafter refused to disclose to her solicitors documents that were relevant to
the allegations it had made, and more importantly, that were, and in the Horizon
Issues trial were demonstrated as being, highly relevant to exonerating her
from blame (see the judge’s evaluation of Mrs Stockdale both as a sub
postmistress and as a witness in Appendix 3).
CONCLUSION
The matters to which I have referred are, I suggest, of considerable
gravity and far-reaching importance. Each of them is concerned with a
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technical legal issue, namely the obligation on a party and prosecuting authority
in law to give disclosure of documents that may assist the other party and
adversely affect its own case and the treatment by the Post Office of its sub
postmasters and sub postmistresses.
These matters reveal that the Post Office and Fujitsu in 2010, at an
important meeting, discussed a bug that had the propensity to cause shortfalls
between receipts and payments at branch Post Offices that would not be
apparent to a sub postmaster or at a branch Post Office. All the prosecutions
and claims by the Post Office against its sub postmasters concerned shortfalls
identified in branch accounts. Further, the Post Office and Fujitsu expressly
recognised and recorded that that issue and bug might impact upon Post Office
“ongoing legal cases”. As I have observed, Mrs Misra’s criminal trial took place
less than two weeks’ later, on Monday 11" October 2010. Mr Jenkins, who was
present at the 29th September 2010 meeting, gave evidence for the Post Office
against Mrs Misra. No mention of the Receipts and Payments mismatch bug was
made and disclosure of important relevant documents was withheld by the Post
Office. The prosecution’s general response to requests by the defence was to
require Mrs Misra to identify a particular issue or concern, which she was
unable to do. Disclosure had been sought by Mrs Misra’s counsel on three
separate occasions. Mrs Misra’s counsel sought to have the trial stopped as an
abuse of process. The Criminal Cases Review Commission has now concluded,
10 years later, that it was an abuse of process.
Knowledge of the bug was recognised at the 29t September 2010
meeting as foreseeably affecting confidence in the Horizon system and ongoing
legal cases. It is not difficult to speculate (as the Post Office and Fujitsu did) as
to the impact that disclosure of such a bug might have had upon a jury in any
trial where the fundamental issue was the reliability of the data derived from
the Horizon system.
So far as there was an understanding between the Post Office and Fujitsu
that the Receipts and Payments mismatch bug should not be disclosed,
including disclosed to defendants to proceedings and to the court while
recognising the potential impact that such disclosure might have on
prosecutions, and that understanding was acted upon, prima facie that
discloses a conspiracy to pervert the course of justice.
Second, the critical documents for understanding the errors to which the
Horizon system was prone were the contained in the Known Error Log. The
Post Office’s objection to disclosure of these documents in the Bates litigation
and the grounds upon which it objected to their production are very
concerning. These were the key source documents for recording failures and
bugs and for evidencing the (un)reliability of Horizon and yet had been
withheld from both defendants and from the courts by the Post Office, its legal
department and its external lawyers, for 19 years.
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Third, Mr Justice Fraser was concerned that the conduct of the Post Office
towards Mrs Stockdale as a lead claimant in the Bates litigation during that
litigation caused him “misgivings” as to its motivation and that its conduct could
be construed as “ threatening’.
I am confident that you will understand that government statements
about the Post Office having got things wrong’ in its conduct towards its sub
postmasters suggests that the government has failed to grasp the issues. If the
issues to which I have referred are understood by government, the statement is
both wholly inadequate and by its inadequacy seriously misleading.
Many would conclude from what I have explained in this letter, that
wrongdoing of the kind I have described is only properly capable of being
investigated by a tribunal that is demonstrably independent and appropriately
qualified and, more particularly, by a tribunal that has power to compel
Otherwise the clear impression will be left of the government
washing its own soiled linen and the very serious matters to which I have
referred will not be properly considered and addressed. Given that the
government owns the Post Office and is - and was - responsible for oversight
of it, a responsibility in which it appears to have signally failed, that would do
little for public confidence and will serve merely to erode such confidence as
presently exists.
I am copying this letter to the Secretary of State Mr Alok Sharma MP and
to Sir Bob Neill MP as Chair of the Justice Select Committee for information. I
am also copying it to Ms Chi Onwurah MP given that it is the inadequate
response of Mr Chalk MP to her written question that has prompted me to write
to you in detail and at length. I make no apology for the length of this letter. I
believe it to be necessary.
Yours faithfully,
Mr Darren Jones MP
Chair
Business, Energy and _ Industrial
Strategy Select Committee
House of Commons
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Encls. Appendices 1, 2, 3 Extracts from the judgments of Mr Justice Fraser from
the Common Issues and Horizon Issues judgments (Joc. cit).
c.c. (by email only)
The Rt. Hon. Mr Alok Sharma MP Secretary of State for Business, Energy and
Industrial Strategy
The Rt. Hon. Lord Arbuthnot of Edrom
Sir Bob Neill MP Chair, Justice Select Committee
Mr Kevin Hollinrake MP Chair, All Party Parliamentary Group on Fair Banking
Ms Chi Onwurah MP
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