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Witness Name Paula Anne Vennells
Statement No. — WITN01020100
Dated 8 March 2024
POST OFFICE HORIZON IT INQUIRY
FIRST WITNESS STATEMENT OF PAULA ANNE VENNELLS
I, Paula Anne Vennells, will say as follows:
Introduction
1. I am a former employee of Post Office Limited (“POL”). My career at POL
began in 2007 in the role of POL Network Director and ended in 2019 as Group
Chief Executive Officer (the role was known as “CEO”).
2. I make this witness statement to assist the Post Office Horizon IT Inquiry
(“Inquiry”), in response to a Rule 9 Request dated 9 August 2023 (“Request”).
Throughout this witness statement I will use the structure and headings of the
Request, adding further headings where it assists to signpost my evidence.
3. I have not been asked by the Inquiry to give a full account of every aspect of
my work, actions and opinions whilst at POL, but rather I have been asked a
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list of detailed and specific questions. Accordingly, this statement in response
to that Request is not a chronological list of all of my actions, but a series of
answers to questions. In most cases, if I have not been asked about a topic
then I have not addressed it.
The facts and matters set out in this witness statement are within my own
knowledge unless otherwise stated, and I believe them to be true. This witness
statement was taken after communicating with my legal representatives in
person, in telephone calls and remote meetings and by email. Where I refer to
information supplied by others, the source of the information is identified; facts
and matters derived from other sources are true to the best of my knowledge
and belief. I have done my best to refer to all relevant documents and answer
all questions fully. As the Inquiry is aware, in excess of 167,000 documents
have been disclosed at the time of writing this statement (of which around
30,000 have not yet been reviewed by my legal team or me). Whilst I have
been shown and have read thousands of documents and have done my best
to refer to all relevant documents and answer all questions fully, I am sure that
I will have inadvertently missed or overlooked some documents. I am also
aware that the disclosure process is still incomplete, however, I am keen to
assist the Inquiry so I am providing my statement in the knowledge that more
documents will be disclosed. I would of course be happy to serve a
supplementary statement addressing any further relevant documents.
5. I would like to offer my genuine and unreserved apologies to all those
affected by the matters giving rise to this Inquiry. I apologise that I and
those working for me and with me failed the sub-postmasters and their
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families. I am deeply sorry that they have suffered in such a distressing
way. I watched the Inquiry's Human Impact Evidence and heard the
subpostmasters describe what they had been through, how isolated they
felt, and how they had been unsupported by POL. They described the
life-changing experiences they and their families have endured for so
many years. I am so very sorry that so much of this happened while I was
a member of the senior management team and then CEO.
I also offer my apologies to Alan Bates, lan Henderson, Ron Warmington,
Lord Arbuthnot and all those who worked with them to secure justice for
the sub-postmasters. They had the right insights. They were right to
persevere and I am sorry for where I made their task harder.
The personal tragedies of the sub-postmasters and their families have
affected me profoundly and reconfirmed my view of how important the
Inquiry’s work is. It has been my priority for the last three years. I have
followed the evidence closely and read thousands of documents and
witness statements.
I have set out below the way in which we approached matters at the time.
I know that it will be difficult for many to read my statement and listen to
my evidence and I am genuinely sorry for the pain that this will cause.
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Background
1. Please set out a summary of your career and qualifications until joining Post
Office Limited ("POL")
9. I graduated from Bradford University in 1981 with a degree in Russian and
French Interpreting, with Economics.
10. Having initially intended to pursue a career as an interpreter, I decided against
this and joined Unilever in 1981 on their graduate trainee scheme. I was
assigned to work at a Unilever group company called Van Den Bergh &
Jurgens. I started as a trainee accountant and began a foundation course in
accountancy. After a few months, I decided that I wanted a broader, business-
orientated role and moved into marketing. After that, I worked for another
Unilever group company as a junior product manager for pharmaceuticals.
Over the next few years, I worked in product manager and marketing manager
roles for L'Oreal, BAA, and Hamleys. I was then appointed Marketing Director
for Lunn Poly and subsequently held similar roles with Reed International
Exhibitions, Dixons Group and Sears Plc.
11. From 1998 to 2001 I held the role of Marketing and eCommerce Director at
Argos / Gus Plc, following which I held the roles of Marketing Director and then
Group Commercial Director at Whitbread Ple until 2006.
12. I was ordained as a minister in the Church of England in 2005.
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2. Please describe what experience you had in respect of (a) managing a large
IT_system_ such as Horizon and (b) managing a company involved in the
prosecution of criminal offences prior to joining POL.
13. I had no experience of either managing a large IT system or of criminal
prosecutions when I joined POL.
3. Please summarise your roles and responsibilities whilst you were at POL
14. I started at POL in January 2007 as Network Director. I reported to the
Managing Director (“MD”), Alan Cook. I was responsible for approximately
15,000 Post Offices in Crown and Agency branch networks. I moved into the
role of Network and Sales Director in late 2009. I continued with the same
responsibilities as I had in my role as Network Director, but with additional
responsibility for the national sales department, which included the Financial
Services sales team and associated regulatory compliance duties. Although
the title changed, the role continued to be known as Network Director and I
have used that description in this statement.
15. I was promoted to Chief Operating Officer on 1 April 2010 and stayed in that
role for six months, before becoming MD on 18 October 2010. I reported to
Dave Smith, who at the time was MD. When I became MD, I still reported to
Dave Smith, who had been promoted to be the Royal Mail Group (“RMG”)
Commercial Director.
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16. From approximately June 2011 I reported to the RMG Chief Executive, Moya
Greene. I then reported to Alice Perkins, the POL Chair, from approximately
November 2011.
17. I was appointed as CEO on 1 April 2012 and was in post until 30 April 2019. I
reported to Alice Perkins until Tim Parker took over the role of Chairman in
2015.
18. In 2017, my title changed to Group CEO, after POL acquired and built more
businesses.
19. So far as my responsibilities in each of these roles is concerned, I will address
them below where I answer questions about each of my specific roles.
4. Please provide an overview of your professional career since leaving POL.
20. After leaving POL, I held various Non-Executive Director (“NED”) roles with
Cabinet Office, Dunelm, Ethical Investment Advisory Group (“EIAG”), Imperial
College NHS Trust (as Chair), and WM Morrisons Supermarket Ltd
(“Morrisons”).
21. My role as a NED at Morrisons began in 2016, while I was at POL. I was
approached by the then Chairman of Morrisons, Andrew Higginson, to see if I
would be interested in joining the board. This was followed by a formal search
and interview process. My appointment to Morrisons was approved by Tim
Parker, POL’s Chair, the POL Nominations Committee, and the UK
Government as POL’s sole shareholder. I made a commitment to POL before
I took up the role that it would not affect my job and that I would do most of my
work for Morrisons in my own time, which I did.
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22. From 2017 to 2021 I was a member of the Church of England’s EIAG. The
group met around four to six times per year.
Network Director
Background
5. Please describe your role as Network Director within POL. In particular,
please address the following matters:
5.1 Please describe the background to your appointment as Network Director
and the application process.
23. Before joining POL, the emphasis in my previous work was on retail and
marketing. I was approached by a head-hunter to apply for the role of POL
Network Director. It was a competitive process. I underwent psychometric
testing, and separately had interviews with (from memory) the MD of POL, POL
Directors, the CEO of the RMG, the Chairman of the RMG, and the RMG
Human Resources Director (“HRD”). It is possible, though I cannot remember,
that I met a representative of HM Government (“HMG’).
5.2 Please set out the nature of your role as Network Director and explain your
responsibilities.
24. As Network Director, I sat as a Director on three boards and eight associated
board committees, including the following: POL, Post Office Financial Services
(‘POFS"), First Rate Exchange Services (“FRES”). POFS and FRES boards
were joint venture boards with Bank of Ireland (“BOI”). I had five senior
managers who reported to me. General Managers had the following areas of
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responsibility: Network Change (branch closures, HMG size of network
commitment, local consultation on Post Office closures, moves, opening,
liaison with national oversight bodies such as Post Watch, Ofcom, Consumer
Focus, Age Concern/UK, Citizens' Advice, Which); Network Operations (field
and central services to ensure Post Offices remained open and trading, agency
contract management, branch cash audits & training), Agency Development
(the National Federation of SubPostmasters (“NFSP”) liaison, new product
introductions, agents' remuneration); Crown Network (franchising &
operations; Union negotiations, sales support); Agency Network (field and
sales support). The latter two had been restructured to General Manager
Commercial and General Manager Community by 2009.
My responsibilities included oversight of the national Post Office closure
programme (the “Network Change Programme’), franchising of Crown Post
Offices, oversight of industrial relations, cost reduction and restructuring to
HMG / RMG/ POL targets. They also included Retail Network strategy and its
impact on operations and sales and marketing branch campaign planning, with
particular focus on peak season mails targets for RMG and financial sales
targets.
I was involved in strategy, working closely with executive colleagues and senior
managers to improve prospects for the network of Post Offices. For example,
we developed two new retail models of Post Office, which were later rolled out
to more than 7,500 locations. These models (Post Office Mains and Locals)
improved the sustainability of Post Offices and removed the need for future
closure programmes, which had devastated local communities during the
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Network Change Programme. The overall POL strategy expanded the financial
services products offered and encouraged RMG to invest in more competitive
parcel offerings, to capitalise on the growth of the UK online shopping market
and sought to prevent high value customers from moving to our competitors.
27. Throughout my time in this role, and indeed throughout my time at POL, I was
keen to ensure that I spent sufficient time in Post Offices, balancing that with
the other demands of the role. I visited hundreds if not thousands of branches
in my twelve years at POL. Understanding the needs of Post Offices,
postmasters, colleagues and their customers was a priority to me, and of
significant value to the business.
28. When I became Network Director in 2007, POL was a wholly-owned subsidiary
of Royal Mail Holdings (“RMH”). POL had a board of Directors, which reported
to the RMH Board.
29. ThePOL MD was a member of the RMH Board and reported to the RMG Group
CEO. The POL executive team reported to the MD and on occasion to the POL
Board. Some specialist functions (such as Human Resources (“HR’), IT, Legal,
Finance, and External Communications) had additional "matrix" reporting lines
to their respective RMG Directors. While in theory at least RMG was
responsible for reporting on behalf of the group to HMG, in practice the POL
MD and Directors met separately with the Shareholder Executive (“ShEx”).
5.3 Executive decision-making structure within PO when you joined as Network
Director
5.4 Please consider POL00043805 (PowerPoint of Executive Team). Does page
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1 accurately describe the posts within the executive management team that was
responsible for the operation of POL at the time you became Network Director?
If not, please state in what way it is inaccurate.
5.5 In respect of the executive management team, please summarise the
following:
5.5.1 The nature and responsibilities of each role (i.e. “the Marketing Director’s
role involved...”)
30. I have no current recollection of the precise roles and functions of those who
reported to me as Network Director. However, I can see from (POL00043805)
that they were:
a. Head of Network Change (Sue Huggins). Whilst I do not recall all
the responsibilities of this role (these are outlined in
(POL00043805)), I do remember clearly that the Head of Network
Change had responsibility for the Network Change Programme.
This programme closed thousands of Post Offices. Its impact was
devastating for all affected communities and for many sub-
postmasters (“SPMs’”). It was almost universally opposed and
required sensitive handling, sometimes impossible in the face of
deep opposition but it was Government policy and I and my team
were entrusted to deliver it. It involved much of my time, including
liaising with Members of Parliament (MPs), to explain the number of
closures, how they were balanced nationally across constituencies
and how the closures would take place / be supported.
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b. Head of Agency Development (Kevin Gilliland). I am reminded from
(POL00043805) that the team reporting to the Head of Agency
Development included work on managing business activities
relating to agents within the Network and the development of policy
for the same (including contractual policy). This work looked into
business opportunities and remuneration support / growth for all
types of Post Offices. The team was responsible for retail projects
to help develop the commercial sustainability of Post Offices. One
major responsibility was the annual SPM pay negotiations with the
NFSP, including intervening changes to remuneration, where clients
(e.g. RMG) varied their input pricing, or liaising with the NFSP on
potential changes to branch processes. For example
(FUJ00157278), a document from 2008, notes that Kevin Gilliland’s
team would be the liaison point with the NFSP for a POL-wide review
of cheque acceptance processes to improve branch conformance.
c. Head of Outlet / Network Support (Lynn Hobbs). I do not remember
exactly what Lynn Hobbs’ role entailed in 2007, however
(POL00043805) indicates that she oversaw National Contract
Managers and Field Support. She has described her own duties at
this time in her witness statement (WITN09010100). An email from
2008, at page 15 of (POL00105417) suggests that she was involved
in the Network Transformation Programme ("NTP") (including roll-
out of pay-station terminals and improved compliance) as well as
costs and cash holdings. A number of documents show her
involvement in devising branch standards at the relevant time
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(POL00006123; POL00021422; POL00005580; POL00005872).
General Manager Commercial (Richard Barker). As shown in
(POL00043805), Richard Barker had responsibility for the
management of Crown and WH Smith branches, and for the specific
Financial Services Sales and coaching team which was a joint
endeavour with the BOI, covering financial services and Bureau de
Change sales. My involvement with this area of my responsibilities
was also significant, as the conversion of Crown Post Offices to WH
Smiths agency branches was complex and deeply opposed by the
CWU and CMA unions. My role in relation to the Crown Post Offices
carried the additional responsibility alongside the HR Director for
pay negotiations.
General Manager Community (Adele Henderson). I recall, prompted
by (POL00043805), that Adele Henderson led a large team of field
based regional and area managers who had oversight of the Agency
Network across the UK, with a focus on business development. I
spent much time with the regional and area managers on branch
visits to talk with them and the SPMs they supported to understand
better how POL could create a more commercially sustainable
network. This work led to the later Network Transformation
programme, which saved thousands more branches from closing by
introducing new Post Office models which were designed to open
longer and to operate at lower cost for POL and for SPMs.
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31. I While serving as Network Director, I was a member of the Executive Team.
The team was comprised of a number of roles, all of whom reported to Alan
Cook (as shown in (POL00043805), an organisational chart from 2009):
a. A Marketing Director, whose responsibilities covered mails, financial
services, telephony and government services, marketplaces
product selection and commercial negotiation with providers
(clients), consumer pricing and margin construction in addition to
market research, advertising and public relations.
b. A Sales Director, who worked closely with the Marketing Director,
but with a focus on building sales strategy and capability across the
board. The role had a particular focus on financial services sales
through a field based coaching team. The Sales Director additionally
had the responsibility for delivering online sales through digital
channels.
c. An HR Director, whose role was to steer, implement, oversee and
where necessary adapt group HR policies and processes, as well
as handling industrial relations (inclusive of pay negotiations). The
HR Director had responsibility for recruitment, training, succession
planning, internal communications and payroll.
d. An Operations Director, whose responsibilities included IT, Security
& Investigations, POL’s cash supply chain and logistics, property,
equipment and project management of major changes. The Heads
of Security, Supply Chain, IT Services, Change, Property and I think
Procurement at one stage all reported to the Operations Director.
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e. A Finance Director, responsible for financial and management
accounting, government funding, Product and Branch Accounting
("P&BA"), Agents' and Former Agents’ Debt, Risk, Compliance and
Regulatory Oversight and the Annual Report and Accounts. This
role also included branch trading support: the National Business
Support Centre ("NBSC"), issuing of transaction corrections ("TCs")
branch audit requests, and dispute resolution.
f. A Strategy Director, who was tasked with the development of POL
strategy, (including preparation for annual Board and Executive
Team strategic planning meetings and the working through of these
draft plans with RMG). This person together with the Head of
Funding who reported to the Finance Director, oversaw applications
for and negotiation of governmental funding, as well as State Aid
negotiations and budget planning. They were responsible for the
programme management office, which oversaw all company-wide
programmes, notably a major business restructure and cost
reduction programme to reduce Government subsidy.
The Head of Legal Services had a dual reporting line. Their primary reporting
(ie. ‘solid line’) was to the RMG General Counsel ("GC"), with a secondary (i.e.
‘dotted line’) to the POL MD.
From memory, this matrix (i.e. solid/dotted line) reporting structure also applied
to individuals leading IT, Security and HR but the ‘lines’ were the other way
round — i.e. the individuals holding these roles reported directly to a POL
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Director or to the MD but with an additional dotted line to the relevant Group
(RMG) Director.
34. External Communications were handled by RMG, with POL's Head of Internal
Communications as the primary interface. If this included personal relations
issues, the Marketing Director would be consulted.
5.5.2 The level of technical IT expertise of the members of the executive
management team.
35. So far as I am aware the only member of the Executive Management Team
with technical IT expertise was the Operations Director. When I joined in 2007,
that position was held by Ric Francis. When he left, David Smith took over his
responsibility for IT on an interim basis. The role was then filled by Mike Young.
I do not know the precise level of IT expertise that any of these individuals had.
5.5.3 Who was responsible for the management_and_ communications of
possible or identified problems in the Horizon IT System
36. In respect of the Executive Management Team, the responsibility for the
management and communication of possible or identified problems within the
Horizon IT system would fall to either the Operations Director or Finance
Director, depending on the nature of the issue and the process by which it was
identified.
37. Issues relating to Horizon software or hardware would usually be identified by
the IT team and would fall under the remit of the Operations Director, who had
oversight and responsibility for IT. Issues identified through wider systems such
as branch trading support, NBSC, or the transaction correction process would
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be the responsibility of the Finance Director, who had oversight of these
processes. My understanding is that, in practice, issues often required input
from both IT and Finance (P&BA) so these teams worked closely together.
38. The responsibility for communicating such issues to the POL Board and wider
executive team fell to the Executive Team Director who was managing the
issue. This would either be done on an ad hoc basis or through routine
reporting channels such as the performance reports provided to the Board and
Executive Team by the Operations Director / ClO or a senior manager in the
IT team.
5.5.4 What internal POL resources were available to the executive team for
expert advice on technical IT matters.
39. Where input was required on technical IT matters, the first ports of call were
the Operations Director who oversaw IT, the Head of IT Services, the Head of
IT & Change, and senior managers in their teams were the first ports of call for
expert advice. (Titles changed over time to include e.g. Chief Information
Officer.) As far as I recall, where additional input was required to supplement
their personal expertise, external (consultancy) advice was available.
POL corporate governance
6. Please summarise your views on the responsibilities of a Board of directors
in the operation of a company solely owned by HM Government. In particular,
please address the following issues:
40. The Board of Directors was subject to duties imposed by the Companies Act
2006. Its responsibilities included the strategic and operational decisions for
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42.
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ensuring that the company met its statutory responsibilities. This was no
different for the Board of Directors of a company solely owned by HMG. In
general, and in contrast to my previous commercial experience, POL was
operating in the public domain and also had to have regard to the delivery of
public services, the proper use of public money and the need for good working
practices. POL had responsibilities towards numerous stakeholders, including
postmasters.
When I first joined POL, and until the company was separated from RMG, POL.
governance was the responsibility of RMG. The POL Board met infrequently
and stopped altogether in 2009, save I believe for very limited meetings of
Directors to sign off the annual accounts. I recall this was because of overlap
with both the POL Exec team and the RMH Board.
At this time there were no HMG representatives on either the POL or RMG
Boards or the RMH Board. I do believe that was a shortcoming. This changed
when I became MD / CEO. The POL Board had an HMG Director, which I
welcomed, as I had positive working relations with HMG.
Post-separation the POL Board undertook regular governance training and
briefings, including updates on upcoming changes relevant to a company
wholly owned by HMG. I understood from a POL Board discussion that POL
was one of the first HMG companies to work towards full compliance with the
corporate code.
The POL Board took its responsibilities as a company owned solely by HMG
seriously and would arrange for briefings by external individuals and agencies,
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so that lessons could be learnt from other companies' / institutions’ experiences
of corporate governance challenges and events.
The POL Board met with HMG officials in the ShEx / UK Government
Investments ("UKGI"), whose NED Directors were active in their challenge and
contribution in board meetings; POL met with ShEx / UKGI / HMG regularly —
both formally for review meetings and informally at different levels and across
differing functions, proactively offering briefings, frequently responding to
challenges and queries from HMG.
As I state above, POL had responsibilities towards numerous stakeholders,
including postmasters. Various feedback mechanisms were put in place to
seek their views and input - from surveys to a stakeholder forum, to support of
the NFSP, to the independent Post Office Advisory Group, to pre-mutualisation
work groups, to the branch user forum, to SPMs appointed as informal advisors
to the Group Executive ("GE"), some of whom also engaged with the POL
Board.
Post Offices offered a vital service to communities across the UK and keeping
those open and operating in the best interests of millions of customers and tens
of thousands of colleagues required responsible oversight. POL’s own
reputation was of small import compared to protecting the trust built up daily by
those colleagues working in Post Offices across the country. This was a view I
held very strongly and spoke about at conferences and in meetings, including
POL Board meetings. What has happened to these postmasters, their
colleagues and their families is the very opposite. They have suffered
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immeasurably and the governance of POL, and of Fujitsu Limited ("Fujitsu")
and of HMG, fell short for them.
The Inquiry asks me to summarise my views on these responsibilities. Although
POL colleagues (and I believe those I worked with in HMG) did subscribe
wholeheartedly to all the above — there were in hindsight areas that could have
been improved. The principal three being:
a. First, to raise data sharing and reporting on Legal and IT matters to
the same levels of detail and frequency as financial matters;
b. Second, to find ways of not losing sight of the individual — at a data
and detailed level. An institution that works in the public sector,
responsible for public money and mindful of public interest, is
constantly dealing with challenges of scale, which can obscure the
individual and problems specific to them;
c. Third, to protect corporate memory and to use it wisely, including to
keep it alive by encouraging colleagues to be open about difficulties
and past errors, so that exposing problems and issues was
welcomed. I recall I introduced at one stage a positive "reward" for
the "best" problems shared / lessons learnt.
6.1 Oversight of criminal prosecutions brought in the name of the company.
49.
When I joined as Network Director, I had no understanding of the responsibility
of a / the Board of Directors for oversight of criminal prosecutions brought in
the name of the company. I do not think that I appreciated that the company
itself brought private prosecutions.
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6.2. Oversight of civil litigation brought by or against the company.
50. My understanding when I joined as Network Director was that the day-to-day
responsibility for civil litigation was that of the Legal Director (1 am not sure if
that is the correct title) who at the time was Clare Wardle. She reported to the
RMG GC, who reported to the RMG Board.
6.3. Oversight of the company’s IT.
51. I do not remember clearly but when I joined POL, I have a recollection that IT
was an expert support function, reporting to the Operations Director. I think that
the POL Operations Director, with responsibility for IT, reported to Alan Cook,
MD of POL and also to the RMG CIO.
6.4. Oversight of any accounting system the company used to collate individual
transactions, cash and stock declarations etc. used for the purposes of
preparing management and statutory accounts.
52. The Finance Director and Operations Director had oversight of different
aspects of the accounting system used by the company to collate individual
transactions etc. used for preparing management and statutory accounts.
53. This work had to be overseen by qualified accounting individuals internally and
independently assured by external auditors.
54. Where auditors raised issues, the POL Board (usually via the Audit, Risk and
Compliance ("ARC") Committee) was responsible for ensuring that those
issues were addressed. The POL Board had further responsibilities to assure
itself of the objectivity of the executives preparing the accounts and would meet
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separately (i.e. without the CFO, Financial Controller, CEO) with the Audit
Partner.
6.5. Oversight of the company’s compliance with the Race Relations Act 1978
and / or the Equality Act 2010
55. I do not recall, whilst I was Network Director, being involved in any discussion
of either of these Acts of Parliament or of POL’s need to comply. Responsibility
for compliance with those statutory obligations rested with the MD and HRD of
POL. Oversight of the company’s compliance rested with the POL Board and
ultimately the RMH Board.
7. Please summarise the corporate structure of POL in relation to the Royal Mail
and any other parent or associated company.
56. The corporate structure as between POL, RMG, and HMG was complicated
and went through various iterations whilst I was employed by POL. I
understand that this question relates solely to the time when I was Network
Director, between 2007 and the end of March 2010. I will attempt to summarise
the corporate structure at that time insofar as I can recall it. The corporate
structure changed both pre and post separation.
57. The first iteration: from 2007 to (I believe) October 2009, my recollection is that
POL had its own Board, chaired by a senior NED appointed by RMG. I do not
remember all of the POL Board members but the RMG CFO was one. I think
that the POL MD sat on either the RMG Board or RMH Board (I cannot recall
which) and reported on POL matters. A number of POL Directors reported to
the POL MD and, I believe, to RMG Functional Directors: Finance, Legal,
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59.
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Operations (IT, Security, Estates), the Company Secretary (“CoSec”) and HR.
In my recollection, the RMG Risk & Compliance (“R&C”) Director chaired the
POL Risk and Compliance Committee ("RCC"). I do not recall the other
committees.
The second iteration: from October 2009 until I left my role as Network Director
in March 2010, I recall the corporate structure changing. The POL Board stood
down a small number of Directors, including myself, around this time. I believe
the remaining POL Board NEDs met with the POL MD and CFO twice yearly
to fulfil the governance requirement to sign off the annual and half-yearly
accounts. As I recall it, post separation, POL set up an entirely new governance
structure, working towards the standards expected by the corporate code
(which had not yet been fully embraced by all HMG ALB Boards, as I describe
above). In addition, a full suite of Board committees was stood up and a
Company Secretariat was put in place.
Although I am confident that structural changes were made at this time, it has
proved impossible for me to recall the specific facts and extent of these after
so long. I would expect POL's corporate structure throughout this period to be
recorded in contemporaneous documents, but I have not been able to locate
this from the disclosure provided to date. However, should the Inquiry identify
any documents which shed light on this issue I would be very happy to consider
and comment on the same.
In respect of associated companies, POL’s corporate and governance
structure was shaped by the following:
a. The partnership with BOI for the provision of travel money and financial
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services was governed by two joint boards which had reporting lines to the
POL Board and the Board of BOI. The POL MD / CEO and two Directors
(Network / Retail Director and Financial Services ("FS") Director) were
Directors on the two joint boards. At a later stage, perhaps 2014, a POL
NED experienced in FS chaired a FS Committee as further oversight to the
PO Board.
b. Post Office Management Services ("POMS"), the Post Office provider of
motor and home insurance services sold through Post Offices and online
was originally set up for POL by BOI, and then bought out and run
independently by POL.
c. Post Office acquired Payzone Ltd in approximately 2017/18 and continued
to run it separately, as a subsidiary company. I cannot recall if the name
changed post-acquisition.
d. Additionally, Post Office was joint owner of The British Postal Museum and
Archive ("BPMA") and was involved in the refunding and rebuilding of the
facility. A Post Office Director sat on the BPMA board.
Additionally, further scrutiny was applied from the following stakeholder
companies: the NFSP, the Communications Workers Union and the
Communication Managers Association (CMA / Unite). The Chairs met with the
respective General Secretaries separately, the CEO had_ regular,
approximately quarterly, two-way update meetings and sometimes more
frequently if matters required. Other senior managers in HR, Finance and Retail
met with the General Secretaries and their teams more frequently. Additionally,
all POL colleagues from the Chairs down were available at short notice for
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many ad-hoc meetings. Other stakeholder companies included Postwatch /
Postcom / Ofcom, Consumer Focus, Which, Citizens’ Advice.
8. Please summarise how the POL Board operated when you joined the
company as Network Director.
62. I cannot recall exactly how POL’s Board operated when I joined as Network
Director. Alan Cook who was MD when I joined as Network Director will be in
a better position to answer these points in more detail. I will do my best to
answer, however, there has been limited disclosure of relevant documents
from this period (for example, a number of POL Board meeting minutes / packs
from the period appear to be missing). Three POL Board relevant minutes have
been disclosed:
a. POL Board minutes from a meeting on 21 January 2008
(POL00021496),
b. POL Board minutes from a meeting on 20 October 2008
(POL00021497). These minutes are headed "POLB(08)5'"", which
shows there had already been four other POL Board meetings that
year; and
c. POL Board minutes from a meeting on 19 January 2009
(POL00021498).
8.1. How often the Board met.
63. I have deduced that the POL Board met on the following occasions, based on
the three POL Board minutes that have been disclosed, references to other
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meetings within those minutes and the fact that the heading on
(POL00021497) (minutes from 20 October 2008) refers to four prior meetings
that year:
a. 21 January 2008;
b. 17 March 2008;
c. Meetings on two unknown dates in-between 17 March 2008 and 20
October 2008;
d. 20 October 2008;
e. 19 January 2009; and
f. 20 April 2009.
64. These dates suggest that the POL Board met every two to three months in
2008. My recollection is that it did not meet more often than that, but I cannot
be sure.
8.2. The leadership style.
65. Although my memory of this specific period is imperfect, I believe that the POL
Board and its Chairman, Sir Mike Hodgkinson, relied heavily on the MD, Alan
Cook, who was moving POL into a more commercial space. Sir Mike
Hodgkinson, and the POL Board more widely, did not get involved with day-to-
day operational decision-making.
66. My recollection from when I was Network Director is that the POL Board
operated in a light touch way. The primary board was the RMG Board, to which
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POL matters were reported by Alan Cook. Alan, who was MD for most of my
tenure as Network Director, was dynamic and hands on as MD. I recall that he
was very charismatic.
8.3. Who determined the agenda of the meetings.
67. My recollection is that the POL Board’s agenda would be set jointly by RMG,
POL’s MD and the CFO.
8.4. Who regularly attended the Board meetings (including from any Royal Mail
company).
68. I regularly attended POL Board meetings at this time in my capacity as Network
Director. In addition, the POL Board minutes referred to above show that the
following individuals regularly attended POL Board meetings:
a. MD: Alan Cook;
b. Finance Director: Peter Corbett;
c. Operations Director: Ric Francis / Mike Young;
d. Sales Director: David Glynn;
e. Marketing Director: Gary Hockey-Morley;
f. P&OD / HR Director: Deborah Moore;
g. Strategy Director: Sue Whalley;
h. Head of POL Legal: Clare Wardle;
i. Head of Accounting: Neil Owen;
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j. Head of Strategy Planning: Simon Whale; and
k. Chairman of RMH Allan Leighton (although he provided his apologies on
the three occasions for which we have minutes. He did so on a number
of occasions).
69. I remember that individuals from the RMG, such as the CEO, CFO, GC / other
legal directors, would sometimes attend. I also recall that other RMG Directors,
particularly HR, Estates and Security, would also attend but only infrequently.
8.5. The POL Board’s subcommittees, their membership and their terms of
reference.
70. ‘I have little recollection of what sub-committees existed at this specific point in
time, although a number of sub-committees were created in subsequent years.
71. As Network Director I attended the Risk and Compliance Committee. This is
reflected in three documents relating to the Risk and Compliance Committee
that have been disclosed, at the time of writing. The first is (POL00021422),
the Risk and Compliance Committee minutes from 26 March 2008. This shows
that, other than myself, the following individuals also attended the meeting (with
their job titles inserted from the documents / my memory where possible):
a. Peter Corbett (Chair and Finance Director);
b. John Scott (Head of Security);
c. Lynn Hobbs (General Manager, Network);
d. Keith Woollard (Head of Compliance);
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e. Shaun Delaney;
f. Luke March (Compliance Director at RMG);
g. David Pardoe (Secretariat);
h. Alan Cook (MD) — apologies;
i. Kevin Fairbotham — apologies; and
j. Martin Ferlinc — apologies.
72. The second document that has been disclosed to date is (RMG00000074), a
briefing paper dated November 2008 provided by Peter Corbett, Finance
Director, ahead of a committee meeting that month.
73. The third disclosed document is (POL00031322), a Risk and Compliance
Committee Report dated June 2009. The Committee members listed, other
than myself, are:
a. Luke March (Chair);
b. Alan Cook (MD); and
c. Gary Hockey-Morley (Marketing Director).
74. Other attendees at the meeting, which are recorded as the leads on reporting,
are listed as follows:
a. John Scott (Head of Security);
b. Peter Tansley (Internal Audit & Risk Management);
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c. Keith Woollard (Head of Compliance);
d. Lynn Hobbs (General Manager, Network);
e. Andrew Spice (Head of Financial Services); and
f. Kiron Farooki (RMG Legal).
75. Having reminded myself of the documents, I now recall that the Risk and
Compliance Committee was attended by a range of people including the MD,
Marketing Director, Head of Security, General Manager of Network etc and
other people less regularly.
76. I have not seen any terms of reference for the Risk and Compliance Committee
for the relevant period. However, (POL00000168) shows the Committee’s
terms of reference as approved in July 2016. In addition, at page 120 of
(POL00026973), a noting paper from the Committee dated 10 November 2014,
states that the terms of reference in force at that time required the Committee
to review and update its terms of reference annually.
8.6. What reports would be regularly submitted to such meetings and by whom.
77. The POL Board documents referred to above show that the following reports
were submitted to the meeting on 21 January 2008:
a. A status report on actions from the previous meeting;
b. A finance functional report;
c. Anetwork functional report;
d. Asales report; and
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78.
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e. Astrategy report.
The above documents also show the following reports were submitted to the
meeting on 20 October 2008:
a. A status report on action from the previous meeting;
b. A finance functional report;
c. A network functional report;
d. Amarketing functional report;
e. Asales report;
f. An operations report;
g. AHR report; and
h. Astrategy report.
The same documents show that the following reports were submitted to the
POL Board meeting on 19 January 2009:
A status report;
A finance functional report;
A network functional report, which is at (POL00095532);
A marketing functional report;
e. A sales report;
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f. An operations report;
g. AHR report; and
h. A strategy report.
80. It follows that the same kind of reports would regularly be submitted to POL
Board meetings, as listed above. They would be written by senior managers in
the relevant functional teams and submitted by the functional directors.
8.7. The level of technical IT expertise of those attending the Board.
81. Asset outin paragraph 35 above, I cannot recall the level of technical expertise
of those attending the POL Board.
8.8. If any members of the executive management team did not attend POL
Board meetings, how those persons would report to the POL Board.
82. My memory is that if Executive Team members did not attend POL Board
meetings, they would report to the POL Board via the MD. Such individuals
also attended POL Board meetings in-person when they were invited to do so.
9. Please describe any material change to the corporate structure of POL or the
operation of its Board at the appropriate point in your witness statement.
83. In line with the Inquiry's request, I have set out my recollection of material
changes to POL's corporate structure or to the operations of POL's Board
within the appropriate sections of my statement. In doing so, I have relied
heavily on documents disclosed by the Inquiry to aid my recollection, especially
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since there were numerous operational changes during my 12-year period of
employment by POL.
10. Did you consider POL's corporate governance to be effective when you
joined the company? If your view changed at any time, please set this out in
your witness statement.
84. As set out above, I joined POL as Network Director in January 2007. As well
as being on the POL Board (POL00021496) I was part of the Executive Team
(POL00043805) and I also sat on the Risk & Compliance Committee
(POL00021422).
85. Prior to June 2009, POL's Risk & Compliance Committee (RCC) was chaired
by the POL Finance Director, Peter Corbett. The RCC meeting on 26 March
2008 (POL00021422) was attended by others including John Scott, Lynn
Hobbs, Keith Woollard, Shaun Delaney, and Martin Ferlinc. I see from
(POL00031322) that in June 2009, it was chaired by Luke March, the RMG
RCC Director. I believe post-separation it was chaired by the POL GC. Other
RCC members were Alan Cook, Luke March, the RMG RCC Director (initially
as member before becoming Chair); Network Director (myself and later Kevin
Gilliland) and David Pardoe provided the Secretariat. As regulation increased
in respect of FS compliance, I see that the Head of Financial Services, Andrew
Spice, was also an attendee at the meeting in June 2009; that remained the
case. Other POL Executive Directors attended when issues arose relating to
regulation or compliance in their functional areas e.g. Sales/Financial Services;
mails regulation. These meetings addressed risk exposure across the
business, with a particular focus on areas affected by regulation and
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compliance, and although I did not recall this, I see from the minutes that the
Head of Risk and Finance Director discussed the losses report at this meeting,
with a request to set up controls over Crown losses and classification of agents'
losses.
In terms of the effectiveness of POL's corporate governance in 2007 (i.e. the
effectiveness of accountability, transparency, fairness and responsibility), I set
out below my recollection of the way in which POL managed risks, whether
Board composition was balanced, whether (and, if so, how) Board members
were regularly evaluated and, whether directors and auditors were
independent. I understand from my lawyers that (at the time of drafting) there
has been very limited disclosure of POL's governance documents relating to
the period when I joined POL as ND, so the detail below is largely based on
my memory, and it may be that I have misremembered or forgotten certain
details, given the passage of time and the (current) absence of relevant POL
Board and other minutes relating to governance issues from the 2007 period.
a. Risk management: As the RCC minutes indicate, POL followed a
standard approach to risk management. I would not, at the time that
I was Network Director, have been able to evaluate how satisfactory
that approach was.
b. Board composition: It is difficult to comment with any thoroughness
as I am unsure of my memory on the POL Board composition.
c. Board evaluation: I do not recall a POL Board evaluation taking
place before separation.
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d. Independence of directors and auditors: At that time, I do not recall
considering one way or the other whether the NEDs were sufficiently
independent from the POL Executive. Looking back now, there were
no independent directors on the POL Board during the time I was
Network Director, as even the NEDs came from RMG. In hindsight
I can see this was not effective governance.
87. POL's approach to governance changed considerably post-separation. I
address the changes and their effectiveness at the relevant points in my
statement.
41. Please summarise the nature and extent of any reporting lines between (a)
the POL executive management team or (b) the POL Board and the following:
11.1 Royal Mail; and
11.2 the Department for Business, Enterprise and Requlatory Reform and/or
Department for Business, Innovation and Skills (or the relevant department).
Executive Management Team and POL Board reporting lines to Royal Mail
88. During the period that I was Network Director of POL, I was a member of the
Executive Team (POL00043805). The 2009 POL _ organogram
(POL00043805), shows that the other Executive Team members at this time
included:
a. Gary Hockey-Morley, Marketing Director;
b. Mike Young, Operations Director;
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89.
90.
91.
92.
93.
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c. David Glynn, Sales Director;
d. Debbie Moore, HR Director;
e. Peter Corbett, Finance Director; and
f. Sue Whalley, Strategy Director.
I was also a member of the POL Board from the time that I joined as Network
Director until it was disbanded in October 2009. From the POL Board Minutes
of 19 January 2009 (POL00021498) I can see that the POL Board members
and the Executive Team members were the same people.
The Executive Team members reported directly to POL's MD, Alan Cook.
Equally, the POL Board also reported to Alan.
Alan was the only member of the POL Executive Team and POL Board to
attend RMH plc Board meetings. From memory, at the time that I joined POL
as Network Director in 2007, Alan would report on POL matters directly to
Adam Crozier, the RMH plc Group Chief Executive, as well as more widely to
the RMH plc Board; see for example Alan's February 2007 update to the RMH
plc Board at RMH07/23 paragraph (k) (RMG00000029).
Although he was POL MD, Alan was also the only POL Board / Executive Team
member to sit on the RMH plc Board. I recall that from time to time, other POL
Directors were called to the RMH plc Board or to RMH ple Board Sub-
Committee meetings to provide updates when required.
Without sight of relevant Board minutes, I do not know how often Alan attended
RMH plc Board meetings, but I believe he would have had reviews with the
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RMH plc Board during the 2007 to 2010 period that I was Network Director. I
believe there were also additional reporting lines between the POL and RMH
plc Boards, but I do not think I was ever aware of the formalities surrounding
this.
94. Although the Executive Team and Board members were the same people, at
this time, they were still regarded as separate bodies and they met separately.
The POL Board used to meet from a formal governance point of view, until it
was disbanded later that year. I appreciate that, from a governance
perspective, the effect was that there was no independent oversight of the POL
Executive Team by the POL Board. The fact that there were no longer any
RMH plc NEDs or Executives in regular attendance at POL Board meetings
may have contributed to the POL Board eventually being disbanded, but I was
not involved in discussions relating to the decision to disband the POL Board.
Executive Management Team and POL Board reporting lines to the Department
for Business, Enterprise and Regulatory Reform and _/ or Department for
Business, Innovation and Skills (or the relevant department).
95. I recall that that there was a regular, reporting structure between the POL Board
and BERR (Department for Business, Enterprise and Regulatory Reform) / BIS
(Department for Business, Innovation and Skills), which I generally attended
together with other POL Board directors.
96. I believe there were also occasional meetings between the POL Executive
Team / Board members and the relevant government minister responsible for
oversight of POL, but I do not remember how often these meetings took place
or who attended them.
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97. I think there may also have been infrequent meetings between POL and the
Secretary of State but again, I do not know how often these meetings took
place, nor do I know who attended them.
98. For the period that I was POL's Network Director, I believe the POL Executive
Team / Board's reporting lines to BERR / BIS were through POL's MD, Alan
Cook. Alan sat on and reported to RMH plc's Chief Executive, and I believe the
RMH plc Chief Executive and Board members would have reported directly to
BERR / BIS.
99. I recall that certain POL Board directors, as leads for specialist areas such as
HR, IT, Legal and Finance, had a dual reporting line to the POL MD, and also
to their respective RMH plc Board directors.
100. As far as I can recall there were no BERR / BIS representatives on the POL
Board when I was Network Director. I believe that was a shortcoming and when
I became Chief Executive of POL in 2012, this changed, and a shareholder
representative then also attended POL Board meetings, which I welcomed.
12 Why did you, Michael Young, David Glynn, Gary Hockey-Morley and Deborah
Moore resign as directors of POL on 31 October 2009? Further, please explain
the following:
12.1. any changes that were made to POL corporate governance at this time;
and
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12.2. how your day-to-day role changed.
101. I have not been able to locate within the Inquiry's disclosure a copy of my 2009
resignation, nor copies of the resignations for Mike, David, Gary or Debbie. Nor
have I been able to find in the RMH plc or POL Board minutes currently
available on Relativity any reference which explains why we were required to
resign.
102. My only memory on this is that I think we were asked to resign from the POL
Board by Alan Cook. I believe Alan explained that we were being asked to
resign to avoid unnecessary duplication of effort with the work that the RMH
plc Board was already conducting.
103. My day-to-day role did not change after I resigned from the POL Board. Even
though I was no longer an executive director of the POL Board, my title
remained ‘Network Director’ and then ‘Network and Sales Director’. I performed
the same role in relation to Network activities until I became POL's Chief
Operating Officer in April 2010.
Knowledge of Horizon
13. What knowledge did you have of the Horizon IT System when you started as
Network Director? In particular, please address the following:
13.1. Please describe whether you were aware of either (a) bugs, errors or
defects in the Horizon IT system (“BEDs”) (b) a lack of integrity in the same or
(c) complaints addressing BEDs or concerns with integrity.
13.2. Please describe any training provided to you in respect of the same.
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13.3. Please set out what steps you took, if any, to increase your knowledge of
the Horizon IT System at the appropriate point of your witness statement.
104. I had no knowledge of the Horizon system when I joined POL. I had not heard
of any problems with the system before I joined, nor was I briefed on any during
my induction. No-one at POL told me that there were bugs, errors or defects
("BEDs"), or that the system lacked integrity, or that there had been allegations
or concerns about BEDs or system integrity.
105. As far as I can recall, my induction process as Network Director did not include
any specific briefings or presentations about Horizon. I spent time with my
executive colleagues discussing their roles, reporting lines, current issues, and
agendas. We discussed how their function and the Network function needed to
work together. Although I do not recall the meeting, I will have met with the then
Operations Director, Ric Francis, who had responsibility for IT provision,
including Horizon as well as other areas of importance to the retail network, for
example cash distribution to branches and retail security.
106. I spoke to the senior Network managers who reported to me directly (Lynn
Hobbs, Sue Huggins, Richard Barker, Adele Henderson and Kevin Gilliland)
and spent time with their teams to understand their functions, objectives, and
workloads. I also visited many Post Offices to understand the diverse nature of
the retail network, and the challenges facing SPMs and Crown colleagues
working in branches of different sizes and in very different community contexts.
These branches were chosen by the Network field teams and selected across
the UK, to make sure I was given as wide as possible an understanding of Post
Offices.
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107. Senior managers were expected to work in Crown Offices over the Christmas
period to help with the seasonal surge in business. We therefore had an annual
training session in the run-up to Christmas on how to operate a Horizon
terminal. From recollection, it was basic training to enable us to make sales of
the most common products, such as stamps. The training did not cover
accounting or any technical IT issues. If I was working in a branch and had a
query, or a customer presented with a more complex transaction, I deferred to
one of the Crown staff members for help.
108. I recall some basic counter terminal training before the first Christmas after I
joined. I sat in on some classroom training, which could have been for new
colleagues and / or the introduction of new products. I cannot recall specifically
but I have a vague memory of requesting a demonstration on HNGx as I
remember it covered the improved (i.e. reduced) screens for mails products.
Although my roles (Network Director, COO, MD and CEO) did not allow for
detailed familiarisation, whenever I could, I would take the opportunities above,
and not infrequently I would request meetings in what was known as the model
office, so that I could keep up to speed with Horizon developments.
14, Please consider POL00090428 and FUJ00118186.
14.1. Please set out the detail of any briefing you received on contract between
POL and Fujitsu relating to Horizon.
14.2. Please consider page 23 of POL00090428. During your employment with
POL, were you aware that the Second Supplemental Agreement between POL
and Fujitsu provided that Cash Account Discrepancies across the TIP Interface
were not to exceed 0.6% between 3 October 1999 and 14 January 2000
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otherwise POL would be entitled to postpone the resumption of the Horizon IT
System?
14.3. Please consider clause 5.3 of the Third Supplemental Agreement
(FUJ00118186). During your employment with POL, were you aware of this
clause?
14.4. If the Horizon IT System was allowed an error rate of 0.5% in respect of the
preparation of cash accounts, would you consider that to be robust?
109. I was not given any briefing about the contract with Fujitsu or made aware of
these clauses when I joined POL.
110. I understand that “robustness” is a technical IT concept. I do not have the
knowledge or expertise to form a view on whether an error rate of 0.5% is
indicative of robustness or a lack of robustness.
15. Please set out to what extent the POL Board and / or the executive
management team would, prior to February 2009, discuss (a) the Horizon IT
System (b) the actual or possible existence of BEDs (c) actual or alleged
integrity issues in Horizon or (d) sub-postmasters difficulties in balancing their
branch accounts. Please provide details of any discussions that took place.
16. The Inquiry has heard evidence that employees of POL working at the
operational level were told on occasions, both before and after you joined as a
Network Director, that there were no systemic issues with the Horizon IT
System or problems with integrity. Were you ever given such a message prior
to February 2009? If so, please set out the following (a) who told you this (b)
and (c) what, if anything, you did to test the accuracy of that
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position.
17. If not addressed above, please provide details of the first time you became
aware of allegations of BEDs or a lack of integrity in the Horizon IT System at
the appropriate point of your witness statement.
111. I do not recall any discussions by either the POL Board or the Executive
Management Team of any of these issues prior to February 2009. If any
concerns about Horizon had been escalated to the POL Board or the Executive
Management Team between 2007 and February 2009, it would have come to
us from Ric Francis, David Smith or Mike Young.
112. I do not remember management being given any particular message about
Horizon prior to February 2009. This may be because I was not conscious that
there was any challenge to the system that required a message. I believe the
first I was aware that anyone was questioning Horizon was after the Computer
Weekly article on Horizon was published in May 2009 (POL00041564).
113. I remember the Computer Weekly article because it was mentioned by Mike
Young at a meeting of the Executive Management Team which I attended. To
explain, the team met weekly and monthly. Only the monthly meetings were
minuted. My lawyers have been unable to find a record of the discussion with
Mike Young in the disclosure provided to date, so it is possible that it occurred
at a weekly meeting.
114. Mike told us that that the article was critical of Horizon and had been picked up
by a Welsh language television station. I remember this reasonably well
because Mike was dismissive of Computer Weekly. I recall he said it was a
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trade magazine that did not know what it was talking about in relation to
Horizon. Mike said he was handling it. I spoke to him about it after the meeting
because I was still concerned. He assured me that there was nothing wrong
with the system and that the article was nonsense (or words to that effect).
115. I now have no memory of reading the Computer Weekly article in 2009,
although I have read it since. It is likely that it was circulated in media cuttings
and if it was, I probably would have read it; I do not recall. I was assured by
Mike, POL’s most senior IT manager, that it was no cause for concern and that
the system was working properly. I have no recollection of Mike taking the
article to the POL Board, however several members of the Executive Team
were also on the POL Board.
Prosecutorial function
18. Please set out what you knew of POL’s role in prosecuting sub-postmasters
for theft_and false accounting when you were appointed to the position of
Network Director.
19. Please describe to what extent the POL Board and the executive
management team would, prior to February 2009, discuss POL’s involvement in
prosecuting sub-postmasters. Please provide details of any discussions that
took place.
116. I did not know that POL brought prosecutions against SPMs when I joined POL.
I have no recollection of the POL Board or the Executive Management Team
discussing prosecutions prior to February 2009.
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20. Please describe the functions and responsibilities of the Risk & Compliance
Committee. What was your role in attending its meetings?
117. The RCC was established before I joined POL. I can see from the minutes of
the POL Board meeting on 15 December 2004 (POL00021486) that it had
recently been established. The minutes state that the primary objective of the
RCC was to ensure that the service and conformance elements of the business
were working together properly, and that this required co-operation between
POL’s Risk and Control, Network, and Sales and Services functions. The scope
of the RCC's activities at that stage covered audit, compliance, and legal
issues, including branch control, Vital Few Controls, (I do not now recall a
definition of this, but imagine it refers to a risk management approach), audit
reports, the activities of the Group Audit Committee, anti-money laundering
measures, and crime and fraud.
118. My primary role as Network Director was to support the RCC in its objectives
to achieve the required level of branch conformance to the various regulatory
and governance processes, to be delivered through the branch network.
119. As this was the responsibility of Lynn Hobbs as the General Manager of
Network Operations, I requested her ongoing attendance at the RCC. This was
approved: I can see from the minutes of the RCC meeting on 26 March 2008
(POL00021422) that Lynn was to attend future meetings and be copied into
the RCC’s arrangements and meeting papers. My other areas of responsibility
which came to the RCC from time to time were reporting on Network closures
and branch responsiveness to financial services rules and regulations (as POL
increased the number of BOI financial services products that it sold).
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Additionally, the network was sometimes impacted by reports and issues
raised by other attendees. Lynn or I was asked to respond and or assist with
these issues.
21. Please consider POL00021421 (the minutes of the Risk and Compliance
Committee dated 6 September 2006).
21.1. Please describe the role and responsibilities and David Pardoe. Why did
he attend meetings of the Risk & Compliance Committee?
21.2. Please explain what the Committee discussed regarding “Fraud and
control”. Did this relate to alleged fraud by SPMs or POL staff when balancing?
21.3. What were the “Investigation Activity” and “Branch Audit Activity”
reports. Please explain the nature and frequency of these updates.
21.4. In respect of the Branch Audit Activity Period 4 Report, please expand on
“The key factor appeared to be the targeting of audit resource on branches that
had not responded to a request to return surplus cash”. What, if anything, was
discussed about either (a) the extent of the surplus cash not returned or (b)
whether the surplus was disputed.
21.5. Please set out the discussion on “Arrange a presentation re:
IMPACT/POLEFS to Risk & Compliance Committee — what went well and what
could have gone better”.
21.6. Please describe the discussion on “Confirm with Head of Security that
appropriate links exists with specialist Police Units on relevant matters”.
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120. I did not attend the RCC meeting on 6 September 2006 because I only joined
POL in 2007. I recognise the name David Pardoe but cannot recall his roles or
responsibilities. The minutes of the RCC meeting on 26 March 2008, which I
did attend, record that David Pardoe provided the RCC secretariat function.
22. Please consider POL00021422 (the minutes of the Risk and Compliance
meeting on 26 March 2006).
22.1. Please describe the role and responsibilities of John Scott. Why did he
attend meetings of the Risk & Compliance Committee?
22.2. Please describe the discussion on “Scope the possibility of splitting the
types of former Sub-postmaster losses to provide greater clarity between fraud
losses and other”. What was the purpose and outcome of this?
121. I believe that this URN (POL00021422) refers to a meeting of the RCC on 26
March 2008, rather than 2006.
122. John Scott was Head of Security in 2008. His responsibilities in that role are
set out in paragraphs 9 to 13 of his first witness statement (WITN08390100). I
was not the Chair of the RCC, but I assume he attended because of the breadth
of his role and responsibilities.
123. I do not now remember the discussion at the RCC meeting on 26 March 2008
about splitting different types of SPM losses. The summary of action points at
the start of the minutes indicates that the analysis would be used by the
Finance function to create a more detailed loss report for greater clarity in
POL’s profit and loss accounts.
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23. Please set out your understanding, at the time you joined POL, of what risks
and / or compliance issues could arise from POL (a) prosecuting SPMs for theft
and false accounting and (b) pursuing civil litigation against SPMs to recover
alleged shortfalls in branch accounts. Please describe any material changes to
your understanding during the relevant period at the appropriate point of your
witness statement.
24. Please describe what steps you took as a member of the Risk and
Compliance Committee to satisfy yourself that POL acted in compliance with
its legal obligations in bringing prosecutions and civil proceedings against
SPMs.
25. Do you think these steps were adequate and / or effective? Please provide
reasons for your answer.
124. When I joined POL, I was not aware of any risk or compliance issues relating
to prosecutions or civil litigation against SPMs. As Network Director, I had no
responsibility for prosecutions or litigation, and I have no memory of being
briefed about them when I took up my role.
125. I donot remember the RCC reviewing or considering the manner in which POL
conducted prosecutions and civil litigation against sub-postmasters. It was not
part of the mandate of the RCC to review legal issues and legal policies. I note
in paragraph 117 above that in 2004 the RCC amongst other topics considered
"legal issues" and "crime". This was three years before I joined POL. The type
of legal issues and crime issues I recall being discussed during my time related
to, for example: mails security, the Dangerous Goods Act, or armed robberies
of Post Offices.
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126. Ihave recently seen prosecution policies that were in force when I was Network
Director (POL00030800; POL00030580; POL00030578). They appear to be
RMG and POL policies. The POL Fraud Investigation and Prosecution Policy
in force from 4 April 2010 (POL00030580) provides in section 3.15 that criminal
investigations will be conducted in accordance with the legal powers,
restrictions and guidelines provided by the government or governed by RMG
policies. Section 4 provides that decisions to prosecute will be taken by
nominated representatives of the business, with consideration being given to
the advice provided by the RMG Criminal Law Team. I was not aware at the
time that these policies existed.
Computer Weekly
26. Please consider POL00114930 (Email chain ending on 8 May 2009) and
POL00027890 (Letter from Robert Porteus to Alan Cook dated 29 April 2009).
26.1. Please describe how POL handled the information within Ms Thomson and
Brian Binley MP’s correspondence, both internally and_ externally. Please
provide the following details:
26.1.1. Which members of the POL Board and executive management team were
briefed on this correspondence. If not all members, please explain why.
26.1.2. Any views on the correspondence shared by members of the POL Board
or the executive management team.
26.1.3. Who was involved in preparing and signing off the response to this
correspondence. In particular, please address the extent to which, if at all, you
were involved.
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26.1.4. The factors that _were considered to _be important _to POL when
responding to the issues raised.
127. As far asIcan see from the documents, the emails and the letter were not sent
to me or my personal assistant ("PA") and I have no memory of seeing them,
or being briefed about them, or discussing them at the time.
27. Please consider POL00041564 (Copy of article in Computer Weekly dated 11
May 2009).
27.1. When did_ you first become aware of the Computer Weekly Article
published on 11 May 2009?
27.2. What was your initial reaction to the article? Please set out the basis upon
which you agreed or disagreed with the contents of the article.
27.3. Was the article discussed by the POL Board and / or the executive
management team? Please explain what was discussed and with whom.
27.4. What actions did the POL Board or the executive management team take
in response to the article? In particular, please set out the following:
27.4.1, Whether there were any discussions concerning POL’s external and / or
internal communication strategy in relation to allegations concerning the
Horizon IT System and, if so, the detail of them.
27.4.2. Whether the nature or extent of the discussions you referred to in
addressing paragraphs 0 and 19 above changed following the publication of the
Computer Weekly article in 2009.
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128. Please see my evidence in response to Question 17.
28. Please consider the following BEDs identified by Fraser J in the Horizon
Issues judgment (POL00112816): BED2, Callendar Square / Falkirk Bug, and
please also consider POL00030241, the evidence of Gary Blackburn
(WITN04650100) and Shaun Turner (WITN04640100); BED6, Remming Out Bug,
and please also consider FUJ00121071 and the evidence of Gary Blackburn;
BED9, Reversals; BED10, Data Tree Build Failure Discrepancies; BED15,
Phantom Transactions; BED18, Concurrent Logins; BED23, Bureau de Change;
BED24, Wrong branch customer change displayed; BED26, TSPC 250 Report;
and BED27: TPS.
28.1. Were you, the Board and / or senior management aware of some or all of
these BEDs when the Computer Weekly article was published and / or after any
investigatory work that was carried out in order to respond to the same?
28.2. If not, why not?
28.3. If POL carried out any investigation in relation to the integrity of Horizon
in order to respond to the Computer Weekly article, why do you think that it did
not identify all or some of the BEDs?
129. I did not know about any of these BEDs, because no-one told me about them.
As I have mentioned, IT was the responsibility of Mike Young, who was
Operations Director at this time. As Network Director and a member of the
Executive Team, it is difficult to see how I would have come to know about a
BED unless it was communicated to me via the IT function. I do not know
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whether anyone on the POL Board or within senior management knew about
some of or all of the BEDs in 2009. If they did, they did not tell me about them.
29. Please describe what role you had, if any, in facilitating the move from
Legacy Horizon to Horizon Online.
30. What assurances and checks did the Board and / or executive management
team conduct to satisfy itself as to the quality of the Horizon Online product?
31. Were you aware of any bugs, errors and defects in Legacy Horizon and/or
Horizon Online during the transition to the new software?
32. Did you consider the transition to Horizon Online to be successful? Please
explain your answer
130. My role in relation to the migration was to ensure that the Network function
supported branches in the transition to Horizon Online.
131. I can see from the Network Function Report for May 2010 that there was a
focus on migrating cash from the old to the new system, conformance, and
compliance (POL00039463). The document shows that Network had recruited
a team of over 300, including volunteer agents to support migration activity. By
the time of the May 2010 report, the migration team had made over 500 visits
to branches for pre-migration support. There had been some very positive
feedback from SPMs. Cash checks had been completed at around 750
branches and conformance checks at 940 branches. The migration support
team were going to revisit migrating branches to go through recovery
information in case of any further issues during the migration process. I would
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add to the document, that throughout the migration process the Agents’
Development Team liaised with the NFSP.
132. I was not personally involved in any management or oversight process of
checking the new system but although I do not recall, I am sure it will have
been discussed at the Executive. The Royal Mail Board and the POL Board
were in effect in May 2010. However, I did not sit on the Board of either at the
time and therefore I was unaware of any Board level discussions. I was aware
that there was a bespoke governance framework led by Mike Young and Lesley
Sewell, to monitor the project and ensure that the product conformed to the
standards required by the contract. However, I was not involved and did not
know the details.
133. I was not made aware of any BEDs in Legacy Horizon or in Horizon Online
during the transition to Horizon Online. I now know that the BED known as the
“Payments & Receipts Mismatch” problem was identified in September-
October 2010. I have been shown (POL00028838) which appears to be a note
of or for a meeting between POL and Fujitsu in around October 2010 to discuss
the problem and how it would be rectified. Attendees from POL appear to have
been Julia Marwood from Network and Rod Ismay from P&BA. I was not told
about this problem at the time, nor about this meeting. As set out below, I
believe I was first made aware of the “Payments & Receipts Mismatch” problem
in May 2013.
134. I can see from the documents that I knew that branches had encountered
issues during the migration, principally system outages and migration failures,
and the migrations were suspended while these issues were resolved. The
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Network Functional Report refers to the additional support we were providing
to branches in relation to recovery information. Although I do not now
remember it, the extract from the Executive Management Team action log at
(POL00001573) records that Mike Young had briefed the Executive
Management Team about the current issues with Horizon. The Executive
Management Team was concerned that success criteria must be in place
for both the Medium and High-Volume rollouts (e.g. how many clear days
there should be with no errors occurring before further rollouts). It goes
on to state that “Mike and Paula will discuss further...with the
understanding that the Horizon rollout is priority and that we must not
move to high volume roll-out unless we are sure that the system will be
operational and stable in the network”.
135. The messaging from POL’s internal IT function and the team that managed the
project was that the migration was ultimately a success. It may have taken
longer than hoped, and clearly there had been problems during the migration,
but the positives far outweighed the negatives.
136. (POL00033200) is the POL end of programme report for HNG-X Release 1,
dated 4 November 2010, which was signed off by Mark Burley and Lesley
Sewell. I was not a recipient, but some of the themes in the document are
familiar. I note the following:
a. On page 8, it states that Horizon Online will provide significant costs
savings and that “this is crucial to POL IT achieving the 50% reduction in
IT costs needed as part of the transformation of the Business’.
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b. On page 9, it states that the programme is projected to be delivered below
the Business Case baseline costs, and that POL is receiving in excess of
the Business Case benefits, amounting to £56.1 million in 2009 / 2010 and
£58.6 million in 2010 / 2011 (both figures in excess of targets).
c. On page 12, the section on “plan slippage” states that, although the
programme had been delayed, POL had not been financially penalised due
to the contract protecting the business case benefits regardless of the date
of delivery. The reasons given for the slippage were: delays in solution
testing and development; branch router delays impacting the start of
migration; data centre migration delays; data centre outages leading to the
suspension of the roll-out.
d. On Page 24, section 6.2 states that: “...Programme Management has
consistently emphasised the importance of delivering a quality product.
Early indications are that the new system is working well and proving to be
popular with the Network users. This justifies the delays to product delivery
encountered.”
e. On page 28, Section 10 states that the design, development, and testing
of the HNG-X User Interface involved 400 users. Feedback was obtained
from SPMs and staff. A questionnaire managed by Kendata (an external
firm) had elicited positive feedback. Further, from the start of the
programme in 2005, POL conducted monthly interviews with up to 30
stakeholders (presumably SPMs) to gauge their satisfaction. While the
number of participants varied from month to month, the overall level of
satisfaction for the duration of the programme was high.
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137. I cannot say whether I saw this specific document but the overall positive
message from POL’s IT people is one that I recognise from the time.
33. Please describe the process by which you were appointed to the role of
Managing Director of POL.
138. Although I cannot recall the precise timings, I was considered for the role of
MD of POL in early 2010 through a process which included competitive
benchmarking by an external search firm, separate interviews with the RMG
chairman, the RMG CEO, RMG NEDs, and a day of psychometric testing.
139. David Smith (then the MD of Parcelforce) and I were the final two candidates
in the process. On 1 April 2010, David was appointed MD of POL, and I was
appointed COO. This role was second in the management hierarchy behind
the MD, but in practice my day-to-day role remained unchanged from my
previous role of Network Director.
140. In October 2010, David was appointed RMG Group Commercial Director, a
role which involved continued oversight of POL. I was promoted to MD of POL
with effect from 18 October 2010. I continued to report to David until he left the
Group in approximately June 2011, when I began reporting to the RMG Chief
Executive, Moya Greene. I reported to Alice Perkins, the POL Chair, from
approximately November 2011, keeping a line to Moya Greene until RMG and
POL separated following the privatisation of RMG.
34, What did you consider to be the biggest issues facing POL were when you
were appointed Managing Director?
141. I considered the biggest issues to be funding, separation and Network
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transformation.
142. Funding: POL had been heavily loss-making in recent years and required a
substantial investment from the UK government in the future of Post Offices.
This required negotiation with the government and clearance through the EU
state aid processes.
143. Separation: This was possibly the biggest issue facing POL when I took over
as MD. The separation of POL from RMG and its establishment as a fully
independent business was an enormous and complex exercise. The POL
Board minutes dated 4 June 2011 (POL00021500), "POLB/1131" refer to a
document setting out the timeline and milestones for separation.
144. Network Transformation: The NTP was announced in 2010. The core purpose
of the NTP was to maintain the size of the POL branch network, to stop branch
closures, and to improve financial sustainability. The NTP involved a complex
re-organisation of the Network which continued throughout my time at POL.
Key elements included the following:
a. The conversion of the majority of the Network into two new model Post
Offices: Post Office Mains and Post Offices Locals. Prior to 2010, most
sub-Post Offices (i.e. those run by SPMs) provided services from behind
dedicated screen counters and often on a standalone basis without any
other retail. Under the two new models, sub-Post Offices would be
integrated into retail premises such as newsagents, convenience shops,
and petrol stations. The intention was to increase footfall, increase opening
hours, and enable costs to be shared between the sub-Post Office and the
associated retail business. The main difference between the two models
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was that Post Office Mains were busier branches and had separate
dedicated Post Office counters. At Post Office Locals, Post Office
transactions were processed by the general retail business staff at a
combined Post Office-retail counter. Sub-Post Offices which did not
convert to one of the new models were known as “Community Branches’.
These branches tended to be in more sparsely populated areas, where a
Main or Local branch would not be commercially viable.
Through the NTP, funding was made available to SPMs to convert to the
new models. Some SPMs converted their existing premises into the new
models, others were established in new premises and some chose to take
a termination payment.
Consumer Focus, which later merged with Citizens Advice, as the statutory
consumer body, was given the role of reviewing each Post Office change
under the NTP and recommending steps to mitigate any identified
consumer detriment.
Another key thread of the NTP was to safeguard the availability of the Post
Office's services to the community. The government set targets for the
minimum total number of branches in the Network and distance access
criteria. In addition, POL sought to extend opening hours and improve
access for disabled customers.
SPM remuneration was changed so that operators of the new models
would be moved from a combination of fixed remuneration topped up with
commission on transactions to a purely commission-based structure.
Some branches remained on the old contracts for some time — either by
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choice or until a replacement branch / SPM was identified.
145. Market changes: Post Office had to react to the increasing diversity and
digitalisation of retail and government services, both to meet the needs of
consumers and to ensure sustainability. Some government services provided
by POL became available to the public directly online, which eroded sales
income for SPMs and for POL. POL therefore sought to increase its range of
services and enhance its own digital offering. One major part of this was a
partnership with the BOI to locate ATMs in Post Offices and to extend banking
and financial services products over Post Office counters. This again was a
complex project, as all branches needed to comply with applicable financial
services regulations.
146. IT: Anew front and back-end IT strategy to underpin all of the above and which
replaced or opened up Horizon to enable digital integration for branches and
customers. The contract with Fujitsu for Horizon was due to expire in 2015 and,
although I do not recall completely, POL faced a procurement challenge if it
renewed HNG-X without open tender. From memory, the ClO, backed by the
GE and Board, was keen to reduce dependency on Fujitsu. Whilst the core
HNG-X software could (if won in open tender) be kept, it was felt that other
services provided by Fujitsu should be spread across other suppliers. These
included engineering, hardware provision, communications network, and
service integration / service desk. Developing an IT strategy, reviewing
alternative options and considering migration issues (including ownership and
transfer of Horizon Intellectual Property Rights (IPR)) were major issues.
147. Culture change: Whilst culture change was not necessarily one of the biggest
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issues facing POL when I took over as MD, it was very high up on my personal
agenda.
148. Mutualisation: This was a significant additional issue that I dealt with as MD. It
was agreed as a policy by the coalition government, and POL undertook major
preparation work on how a mutualised POL would function. This was very
complex and involved wide consultation with various stakeholder bodies
involving the creation of a new Stakeholder Forum, and subsequently Post
Office Advisory Council.
35. What changes, if any, did you make to the corporate governance of POL
upon your appointment as Managing Director?
149. There will be documentation relating to very significant governance changes
when I became MD. I had to "stand up" POL as a stand-alone company in
preparation for separation from RMG. This was in addition to continuing to
report to the RMH Board until the flotation of RMG. A Chair and four NEDs
were recruited and appointed — bringing the experience of private and public
sector companies, Finance & IT, Pensions, FS, Retail & Commercial, PLC
governance experience and, additionally with NEDs from RMG. A full suite of
board committees was established (Remuneration Committee, Nominations
Committee, ARC Committee with additional committees for Pensions and
Financial Services); each with specific NED and Executive membership and
ToRs.
36 In respect of your time as Managing Director and Chief Executive of POL,
please address the following at the appropriate point of your witness statement.
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36.1 Whether you thought that there was sufficient IT experience on the Board
and _ within the wider executive team _to enable POL to monitor Horizon
effectively.
150. I have addressed this question in the appropriate section of my witness
statement.
36.2 Whether you thought that there was sufficient experience of criminal
investigation and prosecution on the Board and within the wider executive team
to enable them to provide effective oversight of POL’s prosecutorial function.
151. I have addressed this question in the appropriate section of my witness
statement.
36.3 Whether you felt the various Chairs and NEDs of the Board effectively
understood and challenged you on issues relating to Horizon and POL’s
prosecutorial function.
152. I have addressed these questions in paragraphs 116 to 126 (in respect
of POL's prosecutorial function) and paragraph 104 to 115 (in respect of
Horizon) of my statement.
36.4 On reflection, whether you still agree with above
153. I have addressed this question in the appropriate section of my witness
statement.
37. Please consider the BEDs set out in paragraph 28 above and those identified
by Fraser J in Horizon Issues (POL00112816): BED1, the Receipts and
Payments Mismatch Bug, and please consider _POL00117863; BEDS5, the
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Remming In Bug; BED7, the Local Suspense Account Issue; BED8, Recovery
Issues; BED13, Withdrawn Stock Discrepancies; and BED25, Lyca top up.
37.1. Were you, the Board and / or senior management aware of some or all of
these BEDs when you became Managing Director?
154. I was not aware of any of these BEDs when I became Managing Director.
I do not know if anyone else in POL’s senior management knew about
some or all of these BEDs. If so, they did not inform me.
37.2. If not, why not?
155. I was not aware of the BEDs because no-one told me about them. As I
have previously stated, IT was the responsibility of Mike Young at this
time. I would not have become aware of any issues with Horizon unless
they were escalated to me or to POL’s senior management level by
POL’s IT function.
37.3. If POL carried out any investigation in relation to the integrity of Horizon
in order to respond to the Computer Weekly article, why do you think that it did
not identify all or some of the BEDs?
156. I have seen no indication that POL carried out any investigation into the
integrity of Horizon to respond to the Computer Weekly article.
38. Please consider POL00030217 (Management letter for the year ended 27
March 2011), FUJ00086923 (email from Don Burgess to Bill Membery dated 28
April 2011), FUJ00086922 (Briefing note on Audit findings for Senior
Management), RMG00000005 (minutes of Royal Mail pic Board meeting on 20
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May 2011), POL00021500 (minutes of POL Board on 4 July 2011), POL00095550
(Status Report for Board), POL00030365 (minutes of POL Board on 22
September 2011), POL00021502 (minutes of POL Board on 10 November 2011)
and POL00021431 (minutes of POL Audit, Risk and Compliance Sub-Committee
meeting on 23 May 2012).
38.1. Please describe the background to the Ernst and Young (“EY”) 2009/10
audit and your involvement in the same.
38.2. Did you use this briefing note? If so, in what circumstances?
38.3. Did POL employees work with Fujitsu employees to prepare this brief?
38.4. What were your views on EY’s findings in relation to the Horizon IT
System, Fujitsu’s audit controls and POL’s contractual relationship with
Fujitsu. Please describe your understanding of the importance of the audit
controls described and EY’s recommendation for SAS70 audit.
38.5. What steps did POL take in response to EY’s findings?
38.6. To what extent did cost factor into POL’s decision making on this issue?
38.7. Please describe the background and function of the IT Audit & Control
Board. Why was the POL Board not aware of this initiative as at 20 May 2011?
38.8. Please set out what you told the POL Board on 4 July 2011 in respect of
the nature and function of the POL IT Audit and Control Board.
38.9. Please describe your meeting with Duncan Tait and Mike Young on 18
August regarding IT Audit and Control. What was the “Good progress”?
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38.10. Was there any discussion of the “Fujitsu — Viability of introducing a
SAS70 or Equivalent audit report” (POLB(11)55) at the 10 November 2011 Board
meeting? If not, why not?
157. EY’s 2009/2010 audit of the Horizon control environment was performed
as part of its audit of Royal Mail Group Holdings Plc. An extract from the
EY Audit Results Report for the year ended 28 March 2010 dealing with
Horizon is at (POL00030261). EY noted that they would normally seek
to rely on SAS70 audits, which are independent audit reports over the
control environments of IT suppliers. Because Fujitsu’s controls around
Horizon were bespoke to POL (as the only customer of the system) the
cost of a SAS70 would have fallen on POL and the costs of Fujitsu
obtaining a SAS70 audit were prohibitive. Therefore, EY had carried out
their own independent audit procedures to obtain assurance over the
control environment at Fujitsu.
158. EY reported that they had encountered difficulties in performing their
audit with Fujitsu in 2009 and that the completion of their work in 2010
was once again delayed by challenges in obtaining audit evidence in a
complete and timely manner from Fujitsu. EY were unable to identify an
individual within POL who owned the relationships with outsourced
providers, and they had required the intervention of senior POL and
Fujitsu finance staff to obtain the evidence they needed. A new contact
at Fujitsu had been identified to EY and they hoped to develop this
relationship so that the 2010/2011 audit could be conducted more
efficiently.
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159. During the audit, they had observed one issue in relation to the
revocation of user access. This was quickly remedied by Fujitsu.
160. I am not clear whether I saw the 2008/2009 or 2009/2010 audit results to
which this document refers. They were the responsibility of the Finance
and Operations Directors. The audit results were presented to the RMG
Audit and Risk Committee, which I did not sit on.
161. EY’s management letter for the year ended 27 March 2011 is at
(POL00030217). As the section dealing with IT was long and technical,
a briefing note on EY’s findings was prepared for POL senior
management (FUJ00086922). I can see from (FUJ00086923) that the
briefing was emailed by Don Burgess to Bill Membery and Mark Arnold
on 28 April 2011. Bill Burgess stated that, “following revision with Lesley,
this has been expanded to provide Paula Vennells with enough
information to handle questions that may arise from RMG regarding the
audit. to support this more non-technical description and examples have
been included”.
162. The briefing summarised the key EY audit findings as follows:
a. EY had identified ten issues connected to three main areas: Change
Management processes and controls; User Access and appropriate
authorisations; and the extent to which POL required proof of management
activities from Fujitsu.
b. EY’s key findings were set out in Appendix A. There were four high priority
issues, three medium priority issues, and three low priority issues.
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c. The summary of EY’s recommendations stated that following changes
during the past year to a shared services environment with other customers
including Government, actions should be taken to resolve three key areas
of audit findings.
d. First, the contract between POL and Fujitsu should clearly state
expectations and ensure the monitoring of control activities was in place.
e. Second, Fujitsu was to resolve issues in relation to access around financial
systems. In particular, they should resolve user or system accounts that
were inconsistent with the need to segregate duties, and ensure processes
were in place for regular reviews of access controls and the clean-up of
access rights due to personnel changes.
f. Third, Fujitsu should continue to improve the change management process
by (a) ensuring that process controls were visible to POL; and (b) ensuring
that approvals were traceable.
163. I am confident that I read the briefing, and it is possible that I asked for it
to be produced. EY’s management letter was a technical document, and
I would have welcomed and wanted a shorter document to help me
understand the scope of the issues and the key points. I do not now recall
if I used it to do anything other than to familiarise myself with the key
issues arising from the audit. It is unlikely that I would have used it to
present to RMG, as the RMG Audit and Risk Committee were going to
be presented with the results. I do not know who produced the briefing,
but I can see from (FUJ00086923) that Lesley Sewell was involved and
that it was being discussed between POL and Fujitsu employees. I can
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see from (FUJ00086924) that Fujitsu put in place a formal response
dated 18 May 2011, with actions and owners to respond to the EY
findings.
164. The letter to management was discussed at a meeting of RMG's Audit
and Risk Committee on 20 May 2011 (RMG00000005). Lesley Sewell
and Mike Young attended for the discussion about the IT audit. The
minutes of the meeting record that:
a. Alison Duncan from EY reported that the audit process identified significant
control weaknesses, which reflected a need for improvement by Fujitsu,
but also a change in approach by POL to the management of the Fujitsu
contract. Fujitsu’s approach to the audit had resulted in an unduly lengthy,
unpredictable and inefficient audit.
b. Mike Young stated that the recent re-negotiation of the contract had offered
POL significant costs savings, but he accepted that POL had not
demanded SAS70 audit evidence.
c. POL had now established an IT Audit and Control Board to manage
contract governance going forward.
d. Les Owen noted that the POL Board were not aware of this project and
asked that in future the POL Board be kept fully up to date on all such
projects. It was actioned that the POL Board would be updated at its next
meeting. Les Owen was a NED of RMG, and also sat on the POL Board.
165. There was a meeting of the POL Board on 27 May 2011, which I attended
(POL00021499). The minutes record that EY had raised concerns about
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access controls and POL's oversight and assurance of key activities.
Lesley Sewell was to advise the Board on steps taken to improve the
controls. There were two items for noting in relation to this:
"The board noted that the auditors had raised concerns about the IT
change management processes, access controls, the Fujitsu managed
service and POL’s oversight and assurance of key activities. Lesley Sewell
had been invited to advise the Board on the steps taken to improve the
controls ...
"...the Board noted that activity had already commenced to remedy the
issues identified by Ernst & Young, including establishing a POL IT Board.
The Board agreed that the end result should be that either SAS70 applies,
or a set of controls be established that E & Y are happy with."
166. In the briefing note to me dated 28 April 2011 (FUJ00086922), there is
an explanation for why the audit was inefficient and overbudget.
According to the note, POL and Fujitsu had undertaken significant
changes to the financial systems environment over the past year. This
involved the entire counter and branch support environment being
converted from Legacy Horizon to HNGX along with the consolidation of
the SAP back-office environment to POLSAP and the provision of
supporting change management processes and systems within Fujitsu
to support POL's customer requirements. The note went on to explain
that the complexity of the POL / Fujitsu environments had required a
more technical understanding from EY as compared to previous years
and the utilisation of the shared service approach (i.e. the use of a shared
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data centre with other Fujitsu customers) had introduced further
complexity and difficulty in obtaining audit evidence. The briefing note
went on to mention that EY had used a new team for the 2011 audit,
which had no experience of the POL estate.
167. The information I have summarised from the briefing note was also given
to me, I believe, by Mike Young and Lesley Sewell. It is possible that the
briefing note was produced because I asked either Mike or Lesley for a
note because I was not sure I would be able to keep it in my head.
168. Mike Young told me that a number of changes had been made to the
system and Fujitsu had not got all of the control documentation right, and
that those matters needed to be improved. He felt that this was not a
major crisis.
169. I understood that the 2011 EY management letter reported deficiencies
in controls at Fujitsu which required action by POL and Fujitsu.
170. The POL Board discussed the audit again at its meeting on 4 July 2011,
which I attended (POL00021500). The minutes of the meeting record the
following discussions around IT:
"(h) Technology: Paula Vennells confirmed that the new POL IT Audit &
Control Board would pick up all the issues and actions from the SAS70
audit and that Ernst & Young were not sitting on the Board. Matthew Lester
asked if the Audit picked up other systems as well as Horizon. Paula
Vennells explained that when the issue came to the last POL Board and
the RM ARC it referenced other Group systems as well as Horizon...
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(i) Matthew Lester asked that they also pick up the Separation issues for
technology. Les Owen emphasised that the advantage of asking Fujitsu to
comply with SA70 audits meant that we could rely on those reports. The
Board discussed the best way to engage with Fujitsu. Paula Vennells
explained that she was meeting them and would raise the issue;
(i) a detailed technology paper to cover these issues to be presented at the
next POL Board meeting."
171. APOL Board status report dated 4 July 2011 (POL00095550) states that
I was to engage with Fujitsu regarding compliance with SAS70 audit
standards. It records that Mike Young and I met Duncan Tait (Fujitsu’s
CEO Europe) on 18 August 2011, and that good progress was made and
Fujitsu were investigating moving to SAS70. I do not now recall that
meeting.
172. It also states that a detailed technology paper to cover SAS70 would be
presented at the next POL Board meeting, which was the September
2011 meeting. The status update indicates that Mike Young was to
produce the paper, but I believe that the work was reallocated to Lesley
Sewell, who was now co-ordinating POL’s audit response, although she
still reported to Mike at this stage. I believe it was Lesley who had the
idea of setting up what I described at the July POL Board meeting as the
POL IT Audit & Control Board. I think “steering group” would be a better
description, as it was not a formal committee or board of the company. I
can see that it is described in this way at paragraph 3.1 of
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(POL00029438), which I believe is the technology paper for the
September 2011 POL Board meeting referred to in the status update.
173. The technology paper states that the “Audit Steering Group” had now
met on three occasions. It provided the appropriate level of governance
and oversight to ensure that audit actions were completed as agreed and
that there would be alignment of all of POL’s compliance audit
requirements. I do not recall what I told the POL Board about the Steering
Group at its meeting on 4 July 2011, but I am sure that Lesley would have
briefed me about it to enable me to describe the purpose and the
functions of the Steering Group as set out in the technology paper. I
cannot say why the POL Board was unaware of the existence of the
Steering Group at the time of the RMG's Audit and Risk Committee
meeting on 20 May 2011. It is possible, though this is speculation, that
the establishment of a Steering Group was more of an action point within
POL IT at that time than something that was already up and running.
174. The technology paper reported, in summary, that:
a. A project team had been established at Fujitsu to manage the
implementation of EY’s recommendations.
b. All of EY’s recommendations were being actioned and in some cases were
already completed. All remaining actions were on track to be completed by
October 2011. In addition, POL had learned lessons from the audit, and
were working closely with EY and Fujitsu to put these improvements in
place ahead of the current year’s audit.
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c. Group Risk & Audit and Fujitsu were to undertake an independent review
of the completed actions during October and November to provide
assurance that all actions had been satisfactorily completed. The key
review findings would be shared with EY.
d. The Steering Group was continuing to consider adopting SAS70 for future
audits and had discussed the benefits of adopting this approach with EY
and Deloitte.
e. There were already commercial discussions taking place with Fujitsu,
relating to the future of their service contract with POL, when HNGX was
due for renewal in 2015. The intention was to make clear to Fujitsu that the
SAS70 audit standards would be necessary for the longer term (i.e. part of
any tender document and supplier framework model that POL would move
to).
f. Furthermore, it would be made clear to Fujitsu that POL had an expectation
that Fujitsu would move to the standard for the 2012/2013 audit.
g. The summary in paragraph 8 stated: “In summary, we will have enhanced
controls, governance and a reporting mechanism in place with Fujitsu,
covering the recommendations made by Fujitsu, by the end of October, with
an intention to move to SAS70 by the end of 2012 for use as part of the
12/13 audit.”
175. The POL Board September 2011 meeting was held on 22 September
2011 (POL00030365), which I can see was the same day as a meeting
of the Audit Steering Group (FUJ00086948). The agenda sets out a
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Status Update on the 2011 audit findings in the form of a table setting out
each EY recommendation, the steps that POL and Fujitsu were taking in
response, and the current status of the workstreams. I do not know who
created this document. It is unlikely that I saw it at the time as it was
prepared for the IT Steering Group, of which I was not a member.
176. I can see from the POL Board minutes for the September meeting that
the IT Audit paper was noted, but Les Owen clarified that the original
question from RMG Audit and Risk Committee was why Fujitsu had not
used SAS70 audit standards: it had not suggested that POL should push
Fujitsu to perform SAS70 audit checks if POL had to pick up the cost.
Chris Day explained that Fujitsu do not undertake a SAS70 audit, but
they recognised that customers, including POL, would expect it and that
POL would be looking to pass the costs on to Fujitsu before going down
this route. The Chairman (Donald Brydon) suggested that POL should
align itself with other customers to ensure that Fujitsu appreciated that
the SAS70 standard was a requirement. Alice Perkins (who had begun
to attend POL Board meetings as a NED) stressed that the business
needed to be influenced by the cost in deciding whether to adopt SAS70.
Further clarification was required, and a noting paper would be submitted
for the next POL Board meeting. I see the minutes do not list Mike Young,
Kevin Gilliland and Nick Kennett (all GE Directors) as present or
attendees of the meeting, however they are all noted in the minutes as
making comments. It is possible therefore that Mike Young was in the
room for the IT audit discussion. This must have been a secretariat
protocol at the time, as the same applies to the minutes of the November
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2011 POL Board meeting, where Nick Kennett and Susan Crichton are
quoted but not listed as attendees (POL00021502).
177. I can see from the minutes of the POL Board meeting on 10 November
2011 (POL00021502) that the POL Board received a noting paper on the
viability of introducing a SAS70 or equivalent audit report. However, there
is no discussion recorded in the minutes and I do not know whether there
was any discussion.
178. The audit issues were discussed at the next RMG ARC meeting on 8
December 2011 (RMG00000003). There were four attendees from POL
at that meeting: Chris Day (CFO), Lesley Sewell (Head of IT), Rod Ismay
(Head of P&BA) and Paul Meadows (Head of Risk & Compliance). The
minutes of the RMG ARC December 2011 meeting record that:
a. Unlike other RMG suppliers, Fujitsu did not carry out SAS70 audits with the
consequence that EY were required to perform full testing of all systems
which were integral to the financial results of the group.
b. A number of IT control issues were identified during the 2010-2011 audit,
which were largely centred on Fujitsu. Overall, EY were satisfied that the
control environment was reliable, but additional work had been required to
reach this conclusion.
c. EY’s recommendations in their management letter had been implemented.
d. The control issues identified during the audit did not relate to the integrity
of the accounting data in the system. Rather, the recommendations
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concerned the documentation and authorisation of changes to systems
and opportunities for more streamlined assurance processes.
e. Fujitsu had now committed to covering the cost of implementing a SAS70
approach for the 2012-2013 audit. EY would carry out the work. The
activities completed during the 2011-2012 audit would provide the
foundation for moving to SAS70 in 2012-2013. EY had ratified the
approach POL was taking to the current audit year, and planning was
underway for the 2012-2013 audit.
179. The minutes do not record who made these statements, but as
mentioned above, I can see that Lesley Sewell attended the December
2011 RMG ARC meeting, along with three attendees from EY: Richard
Wilson, Kath Barlow, and Ben Marle. I am confident that the part of the
minutes I have outlined above was a summary of a briefing by Lesley
and EY.
POL Suspense Accounts
39. Please explain the suspense accounts POL operated during your time as
Network Director, Managing Director and Chief Executive.
40. Please explain whether there were ever unexplained or unattributed
surpluses held in that/those suspense account(s) or otherwise. If so, please
explain the nature and frequency of such surpluses.
41. Please explain how you, or POL, satisfied yourself that any such surpluses
were not derived from the recovery of false shortfalls generated by the
Horizon IT System.
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180. I had no understanding of how POL’s suspense accounts operated
during my time as Network Director and MD. If there were any issues or
questions about the suspense accounts during these periods, I was not
made aware of them.
181. As far as I can recall, questions about suspense accounts were brought
to my attention for the first time, certainly at any level of detail, in January
2015, when I was preparing to give evidence about Horizon and the
Mediation Scheme to the House of Commons BEIS Select Committee.
The evidence session was scheduled for 3 February 2015, and the other
witnesses included the JFSA and Second Sight.
182. The first email to me on this issue that I have seen is an email from
Belinda Crowe on 20 January 2015 (POL00109892). Belinda stated that
Second Sight had been pressing for a meeting to discuss "suspense
accounts" and that "there is something of a history to this matter’. She
had met Chris Aujard and POL's new CFO, Alisdair Cameron ("Al
Cameron") and they had agreed that POL would provide written
information in the next week. This would be followed by a meeting
between Second Sight and Al Cameron and his team on 2 February
2015. Belinda asked me to confirm that I was content with this approach.
She added that this was one of Second Sight's "pet issues" and they
might raise it with the Select Committee. On the same day, Avene
O'Farrell replied to Belinda that I was happy with the proposal and
content with timings if they suited our needs.
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183. As I set out in more detail below, by this point in time, relations between
POL and Second Sight had become strained. I therefore emailed Ron
Warmington of Second Sight on 28 January 2015 to let him know that
lines of communication to me were open if Second Sight felt the need to
speak (POL00109933).
184. Ron replied on 29 January 2015 (POL00109933). He wanted to meet me
so that Second Sight could provide comments and thoughts on the work
they had done to date. He set out in his email a list of possible points for
discussion. These included a “concern about the operation of Post
Office’s Suspense Account and the possibility that Post Office may have
benefitted from amounts charged to Subpostmasters”. At the end of the
email, Ron stated that he and his colleague lan Henderson were due to
meet Al Cameron , on 2 February 2015 to discuss POL’s suspense
account.
185. I can see from (POL00109933) that at 18:09 on 29 January 2015, my
executive assistant, Avene O'Farrell, forwarded Ron’s email to a group
within POL, with a message that I had not yet seen and inviting views on
how to respond. I cannot see from the version of the email which the
Inquiry has disclosed who Avene sent the message to, but I assume it
was the same group I emailed in the same thread later that day at 19:44.
186. Al responded at 18:18 on 29 January 2015 (POL00109933). He thought
that POL must listen to what Second Sight had to say, but also
emphasise to Second Sight that POL was keen to see any evidence they
had to support their concerns. He felt that if I did meet Second Sight on
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2 February 2015, it might make them feel they could be more explicit
during the Select Committee hearing the following day. In his view,
although either route could backfire, he was inclined to offer them dates
for a meeting with me later that week.
187. At 19:44 on 29 January 2015, I emailed Al and cc’d several POL
managers (POL00109933). Since I was to be out of the office for two
days on leave with a longstanding personal engagement, it was
impossible for me to meet Second Sight on 2 February 2015. However,
I was happy to meet them at a convenient time, with an agenda and
topics for discussion. I asked Al to let me know how his meeting with
Second Sight went.
188. Al replied to me at 11:28 on 30 January 2015, stating that he would drop
Angela Van Den Bogerd and me a note after the meeting
(POL00109933). My lawyers have been unable to find this note if Al
produced it. He added that his “general policy is to be helpfully non-
committal, as the new boy, so I don’t make things any harder for you on
Tuesday either by inadvertently setting hares running or by appearing to
Stall”. I do not remember speaking to Al about his meeting with Second
Sight at the time. It is possible that what Al meant by his email was that
he would tell Second Sight that he would look into whatever their
concerns were.
189. On 30 January 2015 at 12:09, I emailed Al alone. As I say above, I told
him that we needed to speak about the suspense account question
before Tuesday, as it was likely to come up in the Select Committee
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hearing if questions were planted (POL00109933). One of Second
Sight's concerns was about suspense accounts, so it would have been
unprofessional, in my view, not to have at least enquired as to the issues
involved. At 15:01 on the same day, Avene informed me by email that Al
was available to speak by telephone after 18:30 on 2 February 2015 or
from the early morning onwards on 3 February 2015.
190. At around the same time as my emails with Al and Avene on 30 January
2015, I was involved in a separate email chain with Mark Davies and
others about the briefing materials for the Select Committee evidence
session (POL00117080). On 30 January 2015 at 12:35, Mark updated
me that he and his team were finalising my briefing. He aimed to finish
by 3pm that day and offered to get the train to deliver a copy in person. I
replied at 12:39 stating that I had briefed Gavin Lambert on a couple of
areas where I felt “unsighted”. Gavin set these out in an email to Mark at
13:06 on 30 January 2015 (POL00117080). They included:
“Suspense accounts —
- what's the issue
- what to say/not to say
- if we’ve found something — flag ongoing work
- if not, let’s rule it out”
191. On 2 February 2015 at 17:54pm, Jane Hill (POL Head of Public Affairs)
sent me an email attaching “two final briefing documents”
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(POL00117096). She described one of the documents (POL00117097)
as an addendum to the briefing pack, and stated that it included POL’s
position on claims, suspense accounts, Second Sight’s information
requests, and remote access. It stated in relation to suspense accounts:
e "A suspense account is part of standard accounting practice. It is a place
in the books of an organization in which items are entered temporarily
before allocation to the correct or final account.
e /f money is not attributed after three years, it is taken to P&L.
e We do not put anything in the suspense account until we have
thoroughly investigated and ascertained that it does not belong to a
subpostmaster.
e The funds in a suspense account represent a tiny fraction of the
transactions that take place in Post Office branch.
e SS have requested information about our suspense account. We have
agreed a process for sharing information in a way relevant to individual
"
cases, and manageable — given the complexity and volume of information.
192. I spoke to Al about the suspense account issue more than once, but I
cannot recall when this happened. The first conversation must have
occurred after my email to Mark Davies at 12:39 on 30 January 2015
(POL00117080) because I indicated in that email that I felt “unsighted”
on the suspense account issue. It is possible that I spoke to Al around
this time. I remember needing a second conversation with Al at, I believe,
a later point. For reasons which I do not recall, neither Al nor his team
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had finished looking into Second Sight’s queries. He apologised and said
he would do so. There was a further conversation, which I remember
reassured me that he had resolved the issue. It is possible that the
second conversation related to a meeting between Second Sight and
POL on 4 March 2015. The note of the meeting (POL00063428) records
that “/t was agreed that the suspense accounts item had been dealt with
at the proceeding meeting with Alisdair Cameron which Jane McLeod
had also attended.”
193. At some stage, I remember Al explaining to me that Second Sight had
misunderstood the nature of the POL suspense account. It held client
money (e.g. DWP, DVLA, NS&l, and Santander) where reconciliations
were outstanding, and the account was reviewed as part of the annual
ARA audit. I can see from (POL00102388) that, on 10 April 2015, Mark
emailed Al (cc Jane MacLeod and Neil Hayward) about Second Sight’s
Part 2 Report. Mark stated that the report claimed that POL was
potentially profiting through money in suspense accounts that could be
due to postmasters. Al copied me into his reply to Mark:
“Thanks, hugely frustrating that they have misunderstood (wilfully?) what
we have told them. I gave Mark and the team some rebuttal words
yesterday, being the balances of £96m and £66m were routine trading
balances yet to be settled with the organisation at that particular month
end. In other words, they represent amounts due not amounts that are
unreconciled. This description is therefore misleading. As previously
reported to SS, the statistic that gives genuine comfort is that neither
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account had any unreconciled balances which were over six months old. If
the client accounts were being operated as an alternative suspense
account, this would not be the case. Taking this with the work previously
shared on the suspense account, we can see no evidence for any ongoing
concern.”
194. Whilst I do not remember the full details today, I remember that I
accepted Al’s explanation.
Shoosmiths litigation
42. Please consider POL00107689 (letter of claim dated 23 August 2011),
POL00107695 (note of conference with Richard Morgan KC on 26 October 2011),
POL00021503 (minutes of POL Board meeting of 21 January 2012),
UKGI00016088 (minutes of POL Board meeting of 15 March 2012), POL00096033
(POLB(12)42) and POL00058211 (a briefing note on the current status of claims
involving Horizon):
42.1 When was the first time you became aware of Shoosmiths intimating civil
proceedings against POL concerning deficiencies in the Horizon IT System?
195. I do not know when I first became aware that Shoosmiths were intimating
civil proceedings against POL in connection with Horizon. On 4 February
2011, Mike Granville emailed me a letter from POL’s solicitors, CMS
Cameron McKenna, to the BBC in connection with a proposed broadcast
in the BBC Inside Out (South) series about Horizon, which was
scheduled for 7 February 2011(POL00120458). The letter states that the
BBC had mentioned in an email on 31 January 2011 that it had
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interviewed a lawyer at Shoosmiths, who was seeking to launch a civil
action against POL on behalf of 55 former SPMs. I do not remember Mike
Granville’s email or the attached letter.
196. Based on the documents disclosed by the Inquiry, it appears that I was
first given details of the letters before action sent by Shoosmiths in
December 2011. The minutes of the Board meeting on 13 December
2011 record on page 7 under the heading “Noting Papers” that the
Significant Litigation Report (POLB(11)65) was noted and that Susan
Crichton was asked to give an oral update at the January Board meeting
(POL00027270). I have not seen this Significant Litigation Report in the
Inquiry’s disclosure to date.
197. The Inquiry has disclosed a Significant Litigation Report (POLB(12)13)
(POL00095595) which appears to have been prepared by Susan
Crichton for the POL Board meeting on 12 January 2012. The minutes of
that meeting (POL00021503) refer to POLB(12)13 in the section on page
6 under the heading “Significant Litigation Report’. I will discuss
POLB(12)13 in more detail in my answer to Question 42.2, but I note that
it deals only with the Shoosmiths claims. Although I cannot recall, it
seems likely, based on these documents, that the Shoosmiths claims
were mentioned in the Significant Litigation Report for the December
2011 meeting, and that the POL Board asked for further details of the
claims to be provided at its January 2012 meeting.
198. The Shoosmiths claims were mentioned in my letter to Mike Weir MP
(POL00001976) in December 2011, which I discuss further in my answer
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to Questions 43 to 44. The letter is dated “December 2011”, but I can see
from (POL00120490) that it was in the final stages of preparation on 9
December 2011.
199. The letter deals with the letters before action from Shoosmiths on page
4 under the heading “Legal Action”. This section states that a tiny number
of former SPMs appeared to be making distinct allegations with respect
to the operation of Horizon. In all of these cases, significant shortages
were found at the former SPMs’ branches for which they could not
account. Shoosmiths had been claiming for around a year that they
represented a number of these former SPMs. To date, Shoosmiths had
sent four letters before action, making allegations about Horizon (among
other issues) and seeking information. In two of the cases, the individuals
had pleaded guilty to false accounting and the cases stretched back over
five years. POL did not accept any of the allegations made and would
robustly defend its position if any civil claim was brought against it.
42.2 Please describe your involvement in responding to the Shoosmiths’ claim.
What did you understand about these pre-action claims? Did you consider them
to have any merit?
200. I do not remember having any involvement in responding to the
Shoosmiths claims. As I set out below, the POL Board was informed
about the claims, but it was not asked to take or authorise any action in
respect of the claims.
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201. As I have mentioned above, the Shoosmiths claims were the only piece
of litigation addressed in the Significant Litigation Report for the January
2012 POL Board meeting (POL00095595).
202. The first section of the report, entitled “Significant Litigation Cases”
stated, in summary:
a. POL had received letters before action from four former SPMS who had
been dismissed when discrepancies were discovered in their branch
accounts.
b. Two of the claimants had previously pleaded guilty to false accounting.
c. Each claimant alleged (based on alleged failings in POL’s processes and
computer system) that POL had wrongfully terminated their contract and
each claimed c. £150,000 in damages.
d. A further claim had been issued but not served. POL was seeking to
challenge a stay in respect of this claim and would, if necessary, assert
that it was time-barred.
e. It was possible that POL would receive a large number of similar claims —
possibly between 55 and 150 according to press reports.
f. POL’s strategy was to defend each claim robustly to deter future claims. It
would be responding to each claim in full. At present, POL considered the
legal claims to be weak and the damages claim to be inflated.
203. The second section, entitled “Summary” began with the statement that
“The considered legal view is that the claimants are unlikely to succeed”.
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Nonetheless, given the potentially high volume of claims that would be
issued in the county courts, POL had been advised by its QC, Richard
Morgan, that “the quality of the judges would be unpredictable making it
more likely that one or two cases might be lost.” In light of this litigation
risk, and the fact that a large volume of claims may be received (that
collectively may pose a material financial risk), it was prudent to flag the
cases at this stage.
204. The minutes of the POL Board meeting on 12 January 2012
(POL00021503) record on page 6 that Les Owen (a NED) asked Susan
Crichton for assurance that there was no substance to the claims brought
by SPMs which had featured in Private Eye. Susan’s response was to
explain that the SPMs were challenging the integrity of the Horizon
system. However, the system had been audited by RMG Internal Audit
with the reports reviewed by Deloitte. The audit report was very positive.
The business had also won every criminal prosecution in which it had
used evidence based on the Horizon system’s integrity. Susan
suggested that she would clear the audit report with external lawyers and
would circulate it to the POL Board if was possible to give the report
privileged status.
205. The minutes of the POL Board meeting on 9 February 2012
(POL00027579) contain no record of any discussion of the Shoosmiths
claims. On page 5 under the heading “Noting Papers”, a Significant
Litigation Report (POLB(12)23) was noted. This appears to be a
reference to (POL00095835). The document is a POL Dispute
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Resolution Paper dated January 2012, with details of claims over
£500,000 or those of a sensitive nature. The document records that POL
had engaged Bond Pearce in relation to Shoosmiths claims and gave
brief details of each of the claims. In summary:
a. POL had rejected three claims (those of Scott Darlington, Julian Wilson,
and Terence Walters) on the grounds that they had each admitted to false
accounting and that Mr Darlington and Mr Wilson had been convicted.
b. POL had responded to the claim by Thakshila Somaskandarajah on the
grounds that the claim was time-barred.
c. Lynne Prosser had commenced, but not served, proceedings in June 2011.
POL only became aware of the proceedings in October 2011. In the
meantime, Shoosmiths made an application to extend time for service of
the Claim Form and Particulars of Claim, and an order was made by the
Court to extend time. POL had now applied to have that order set aside. If
POL was successful, the claim would be struck out.
206. The minutes of the POL Board meeting on 15 March 2012
(UKGI00016088) contain no record of any discussion of the Shoosmiths’
claims. However, they refer on page 9 to a Significant Litigation Report,
POLB(12)42, which can be found at (POL00096033). This is a version of
the Dispute Resolution paper for the February 2012 POL Board meeting,
which had been updated to include recent developments. In summary:
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a. POL had sent its last correspondence to Shoosmiths in relation to Mr
Darlington, Mr Wilson and Mr Walters on 14 December 2012. Shoosmiths
had taken no further action in relation to these claims to date.
b. Nothing had been heard from Shoosmiths in relation to the Thakshila
Somaskandarajah case since POL had asserted that the claim was time-
barred.
c. Ms Prosser’s claim had been struck out and the Court of Appeal had
rejected her request for permission to appeal on 22 February 2012. Ms
Prosser still had an option to apply to the Court of Appeal at an oral hearing.
lf Ms Prosser applied for an oral hearing and her appeal ultimately
succeeded, POL would face evidential difficulties in responding to the
claim, as the branch papers had been destroyed in accordance with POL’s
document destruction policy.
207. My answer to the Inquiry’s question about my understanding of the claims
is that, while I do not now remember reading the documents, I have
summarised above, my understanding at the time would have been
derived from the information I received from Susan Crichton, the GC. So
far as I can tell from the Inquiry’s disclosure, the only information I
received about the claims in documentary form was the information in the
Significant Litigation Reports, and I cannot recall being given any other
information.
208. The Inquiry has also asked me whether I considered the claims to have
merit. The Significant Litigation Report for the January POL Board
meeting (POL00095595) stated that the considered legal view was the
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claims were unlikely to succeed. At the time, I believe I would have
accepted that view as the professional view of a lawyer, which I was not
in a position to challenge. The details in the Significant Litigation Reports
suggested that the claims were being appropriately handled by POL’s
external lawyers and appeared to have stalled. Ms Prosser’s claim had
been struck out for a procedural reason, and none of the claimants in the
other claims appeared to be pursuing their allegations with any vigour.
209. In the course of preparing this witness statement, I have been shown
documents connected to the Shoosmiths' claims which do not appear to
have been sent to me or to the POL Board.
210. (POL00073165) is an email dated 16 December 2011 from Alison
Bolsover (POL P&BA) to Emily Springford and Sabrina Jethwa. I
understand from other documents that Ms Springford was a RMG in-
house lawyer, and that Ms Jethwa was an in-house lawyer at POL. Ms
Bolsover had identified 23 known live cases (out of 533) where the SPM
had challenged Horizon. Of the 23, Ms Bolsover recommended pursuing
10 prosecutions/civil claims as first and second priority. Six further
prosecutions should be put on hold until POL had proved the first batch.
“I have reviewed all the cases myself but believe that a sensible way
forward would be to hold a meeting with Emily, Sabrina, Rod and myself
just to confirm we are happy with the recommendation and if we have
any concerns with evidence, we also need to consider cost and which
Solicitors to use then a paper will need to be written for Susan to gain
authority to proceed”.
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211. (POL00085749) is a note of advice dated 20 December 2011 by Ms
Springford. The advice summarises the pros and cons of starting (or re-
starting) civil actions against SPMs “which had been put on hold because
of concerns about the allegations made about Horizon by the relevant
spmr.”
a. The benefits were:
i. Pursuing the claims would demonstrate confidence in Horizon and its
other systems and processes and send a strong message to SPMRs.
ii. Where the SPM has sent a letter before action via Shoosmiths,
actively pursuing claims against them would put POL on the front foot,
rather than waiting for the SPMR to start court proceedings.
iii. POL would have some control over the court in which the claims were
issued.
b. The risks included:
i. lf POL pursued claims in several County Courts, there was a risk that
POL could lose some of the cases, as the quality of judges is variable.
POL could mitigate this risk by seeking to have all of the claims heard
in one of the better County Courts, but this was not guaranteed to
succeed.
ii. POL could be accused of acting prematurely if it were to start claims
against Mr Darlington and Mr Walter while POL was still in pre-action
dialogue with Shoosmiths.
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iii. Arguably, bringing more claims increases the risk of systemic
problems coming to light (such as training or support failures). There
was little that could be done to mitigate this risk, apart from analysing
the claims carefully at the outset, and bringing them in batches, with
the strongest first.
iv. There would be much work to do to prepare each case, which could
place strain on resources.
212. These documents appear to contemplate that POL would go on the
offensive, by starting proceedings against SPMs who had challenged
Horizon. I have no memory of these proposals and I understand that
there is no indication in disclosure that they were communicated to me
or to the POL Board. I also have no recollection of being told, as stated
in (POL00085749), that any civil claims by POL had been put on hold
because of concerns that the relevant SPMs had made allegations about
Horizon.
213. I also do not fully understand why RMG lawyers became involved in
claims against POL. A possible explanation is that since POL was a
subsidiary of RMH at this time, a claim of significant value against POL
would need to be considered for the purposes of the group accounts. In
that context, (RMG00000084) is the Fines, Compensation and Material
Litigation Report half year update to the RMH Audit and Risk Committee.
There is a section on the Shoosmiths’ claims between paragraphs 27
and 30. The author of the section, which is dated November 2011, is Jeff
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Triggs. He was an external lawyer, who I believe at one stage was Acting
General Counsel for RMG.
214. There are two points that stand out about this document. The first is that
the text of the section on the Shoosmiths’ claims is virtually identical to
the text of Susan Crichton’s Significant Litigation Report for the January
2012 POL Board meeting (POL00095595). The second is that the RUG
Audit and Risk Committee appears to have been briefed on claims
against POL before any detailed briefing was given to the POL Board.
The Inquiry has disclosed letters from Alan Cook and David Smith who
expressed similar views at the time: (POL00094288), (POL00090575),
and (POL00094820).
42.3 Did POL action Mr Morgan’s suggestion in conference on 26 October 2011
that it request an expert to inspect and report on the Horizon IT System? If not,
why not?
215. I have considered (POL00107695). I understand from my lawyers that
this document appears to be a solicitors’ attendance note by Bond
Dickinson of a conference on 26 October 2011 with Richard Morgan QC.
The attendees of the conference were two lawyers from RMG Legal
Services (Rebekah Mantle and Emily Springford), Sabrina Jethwa, and
two lawyers from Bond Dickinson (Anna Maxwell and Helen Watson). I
have no memory of seeing this document before I began preparing this
witness statement or ever being briefed about the advice.
216. I would have been aware from the Significant Litigation Report for the
January 2012 POL Board meeting (POL00095595) that POL had
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consulted Richard Morgan QC. However, the only piece of his advice
mentioned in the Significant Litigation Report was his comment that the
quality of county court judges was unpredictable, making it more likely
that one or two claims might be lost.
217. I have no recollection of being made aware that Richard Morgan QC
recommended that POL should invite the SPMs to appoint an expert to
investigate and report on Horizon. On my reading of the relevant section
of the note of the conference, Richard Morgan QC was not suggesting
that POL should instruct an expert, but that the SPMs should be asked
to engage an expert. I understand from my lawyers that there is no
indication in disclosure that there was any such investigation or report.
42.4 To what extent did POL rely on Mr Morgan’s advice in responding to claims
brought by SPMs? In particular, please address the following aspects of the
recorded advice:
42.4.1 “a hard line in respect of those SPMs who had been convicted of false
accounting”;
218. I do not recall being informed about this advice, but I can see from the
Significant Litigation Reports that the claims by Scott Darlington and
Julian Wilson were rejected by POL on the grounds that they had
admitted to, and had been convicted, of false accounting.
42.4.2 for the non-convicted claimant, “wait until her claim becomes statute-
barred at the end of November 2011, and then write to Shoosmiths explaining
that she is out of time”; and
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219. I do not recall being informed about this advice. I do not know whether
POL relied on the advice, although I can see from the Significant
Litigation Reports that POL raised a time-bar argument in the Thakshila
Somaskandarajah case.
42.4.3 for any further claimant without conviction or limitation issues, “an
aggressive stance would be adopted...and demand any debt owed to POL”.
220. I do not recall being informed of this advice, and I do not know whether
POL relied on it.
42.5 Did the Board discuss the Shoosmiths claim during the meeting? If so,
what was said and why was the discussion not recorded in the minutes? If not,
why not?
221. I do not recall any discussion of the Shoosmiths’ claims at the POL Board
meeting on 15 March 2012.
Correspondence with Members of Parliament (2010-2011)
43. Please consider UKGI00013994 (Nicholas Brown MP question to Edward
Davey MP on 22 November 2010) and RLIT0000040 (your letter to the House of
Commons dated 30 December 2010).
43.1. Please describe how your response was prepared.
43.2. Please describe how you assured yourself _as to the accuracy of its
contents.
43.3. Please explain the sentence “the system has proved to be very robust
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since its introduction”. On what evidence did you base this comment?
44, Please consider UKGI00014000 (Mike Weir MP’s question to Edward Davey
MP_on 27 October 2011), POL00001976 (your letter to Mike Weir MP dated
December 2011) and POL00114516 (Mike Weir MP’s letter to you dated 21
December 2011): 44.1. In respect of your letter of your December 2011, please
explain:
44.1.1. How this letter was prepared and how you assured yourself as to the
accuracy of its contents.
44.1.2. Whether you, or your team, consulted with members of POL’s or
Fujitsu’s IT services or problem management teams. If not, why not?
44.1.3. The basis on which POL was “fully confident that the Horizon computer
system... enabled sub postmasters to account accurately for the transactions
they undertake in their branch”.
44.1.4, The basis on which you wrote that “there is no evidence at all that the
Horizon system has in some way been at fault with respect to any financial
irregularities discovered in a sub postmasters account”. Please confirm
whether or not you believed this statement at the time.
44.2. On reflection, do you consider that the investigations and / or preparation
that went into writing this letter were adequate?
222. POL took letters to MPs very seriously. They often involved branch
closures, which could be an emotive issue (both for MPs and the
communities they represented) or problems encountered by individual
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constituents when using POL services. In my experience, POL always
attempted to respond to MPs’ concerns promptly, courteously, and in
detail.
223. When the issue raised by an MP involved one or more of the specialist
functions within POL, managers from the relevant functions would be
asked to respond internally to the MP’s concerns and have input into
POL’s letter to the MP. A single piece of correspondence could therefore,
depending on its subject matter, involve multiple POL managers and
generate a substantial amount of internal discussion and email traffic.
224. I can see from the email from Martin Humphreys of POL Government
Affairs to my assistant Theresa lles on 9 December 2011
(POL00120490) that the content of my December 2011 letter to Mike
Weir MP was the product of collaboration between managers from
several arms of the business.
225. Martin sent Theresa what appears to have been the final draft of a letter
from me in response to the four parliamentary questions asked by Mike
Weir MP. Martin asked Theresa to arrange for the letter to be signed. He
went on to say that, due to the nature of the issues raised, the letter had
been pulled together by Mike Granville and had been through several
iterations with input and clearance from a number of people. Martin then
set out what appears to be a non-exhaustive list of the individuals who
had provided input and assistance during the preparation of the letter.
226. These included Rebekah Mantle and Emily Springford (who I understand
were both RMG_ in-house lawyers) individuals from RMG
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communications, and Rod Ismay (the head of P&BA). Three very senior
POL managers were also involved: Mike Young (POL’s most senior IT
manager), Chris Day (the CFO) and Susan Crichton (the GC).
227. I am sure that the drafting process for my letter to Mike Weir MP
generated many more emails than have been disclosed. I am also
confident that my letter dated 30 December 2010 to the House of
Commons in response to Nicholas Brown MP's questions to the minister,
Edward Davey MP (RLIT0000040), was the product of a similar process
of collaboration.
228. Mr Brown MP’s questions to Edward Davey MP, to which my letter dated
30 December 2010 was a response, concerned any recent assessment
of the performance of the Horizon system, and (a) whether any errors
relating to the reconciliation of accounts were reported; and (b) whether
any remedial action was taken in the latest period for which figures were
available.
229. Mike Weir MP asked parliamentary questions about four topics, to which
my December 2011 letter was a response:
a. The number of (a) prosecutions and (b) investigations of SPMs instigated
by POL as a result of apparent financial irregularities on the Horizon
computer system, which had subsequently been abandoned.
b. The number of complaints POL had received from SPMs concerning
difficulties with the Horizon computer system in each of the previous five
years.
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c. Whether any operational faults had been identified with the Horizon
computer system used by POL since its introduction, and what remedial
action had been taken.
d. The monetary value in current prices of (a) the original estimate and (b) the
final cost of the Horizon computer system, and what additional costs at
current prices had been incurred since its completion.
230. I have no recollection of the letters in relation to Nicholas Brown MP’s
and Mike Weir MP’s questions. I can say with confidence, however, that
the answers and the background to those answers were not within my
knowledge. I knew from POL’s approach to correspondence such as
these letters, that their content was sourced from senior specialist
managers, and often reviewed by internal communications and, where
necessary, the internal legal team. At the time, I relied on the team who
worked on the letter to provide accurate information and to ensure that
the letter was accurate. I would never knowingly have put my name to a
letter to an MP which contained inaccuracies.
231. The Inquiry has asked me specifically about three passages in the letters:
My statement in my letter in response to Nicholas Brown MP’s questions
that “the system has proved to be very robust since its introduction”.
My statement in my letter to Mike Weir MP that POL was “fully confident
that the Horizon computer system... enabled sub postmasters to account
accurately for the transactions they undertake in their branch”.
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c. My statement in my letter to Mike Weir MP that “there is no evidence at all
that the Horizon system has in some way been at fault with respect to any
financial irregularities discovered in a sub postmasters account’.
232. I believed these statements to be true, and justified by specialist
knowledge, because I understood that these statements came from, or
were approved by, senior specialist managers with detailed knowledge
of the Horizon system and the operation of SPM accounts. In particular,
I can see from Martin's email that Mike Young (POL’s most senior IT
manager) had input into the letter to Mike Weir MP. I should add that I
would not have been surprised by the statements at the time. As I have
mentioned above, I had never been told about any BEDs in Horizon and
the consistent message from POL’s IT function since the Computer
Weekly article in May 2009 was that it was confident that Horizon was
not the cause of branch shortfalls.
233. I accept that these statements were wrong. In relation to Question 44.2 I
do not know precisely what investigations or preparations went into the
two letters. As I have stated above, I believe there would have been
emails between the individuals involved in the production of the letters. I
do not feel able to say what an adequate investigation of the MPs’
questions would have involved.
Separation of POL from the Royal Mail Group
45. Please summarise how the corporate structure and governance of POL
changed upon its separation with Royal Mail.
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234. I cannot recall every aspect of how the structure and governance of POL
changed upon its separation from RMG. It appears from the minutes of
the POL Board meeting dated 12 January 2012 that the changes in the
governance of POL were documented in a governance paper which was
presented to the Board at this meeting (at page 9 of (POL00021503)). I
understand from my lawyers that they have been unable to find a copy
of this document in disclosure. However, some details to the changes of
the structure and governance of POL are set out in (UKGI00018222).
235. First and foremost, POL ceased to be a subsidiary of RMG and became
operationally independent upon separation. From my perspective, the
key governance change was that POL had a completely independent
Board, chaired by Alice Perkins, a former senior Cabinet Office and HM
Treasury civil servant with considerable public sector experience. The
purpose of appointing Alice, together with NEDs with experience in key
areas (such as retail and IT) was to ensure that the directors had the
experience and expertise to offer improved challenge and oversight. Neil
McCausland, for example, was appointed for his strong background in
retail. From 1 April 2012, a ShEx representative, Susannah Storey sat on
the POL Board to directly represent the Shareholder. POL's new status
as an independent company owned by the Government required it to
adopt new Articles of Association.
236. Other key changes included the establishment of committees (e.g.
Remuneration and ARC); Alice and I, and the POL Board, underwent
governance training; there was an annual POL Board effectiveness
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review; the NEDs would hold regular meetings without executives; Alice
held regular one-to-one meetings with the NEDs; there were feedback
sessions from the Chairman to the CEO, CFO and Company Secretary
after each POL Board meeting; and the senior management had training
to produce best practice board papers.
46. Please consider POL00021431:
46.1. Please describe what_work was undertaken to assess the risks and
compliance issues to POL following the separation from Royal Mail Group. In
particular, what thought was given to POL’s involvement in prosecutions.
46.2. Please expand on “The auditors found that_the IT systems were
insufficiently effective to be fully relied upon for audit control purposes”.
237. I recall discussions at the POL Board and the ARC about risks around
new contracts, the novation of contracts between POL and RMG, IT
services, and the transfer of corporate skills. I do not recall any work or
any discussion about the risks and compliance issues arising from POL’s
involvement in prosecutions. The separation of POL and RMG was a long
and complex project, which was managed by Mike Young with external
support. The project would have generated a huge amount of
documentation. If the issue of prosecutions had been considered from a
tisk and compliance perspective, I would have expected it to be
documented.
238. The Inquiry has asked about the Audit Results Report by Angus Grant
from EY. The minutes record that Mr Grant anticipated that EY would
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issue an unqualified audit report. On the IT component, EY recognised
that IT controls in the business had improved and that there had been a
change in the governance and management of POL’s control with
Fujitsu. The auditors had found that the IT systems were insufficiently
effective to be fully relied on for audit control purposes. However, by
adopting mitigating procedures, EY had been able to rely on the IT
systems supporting the POL financial statements. It was noted that POL
and EY IT teams were working closely on an agreed plan of further
improvements in the 2013 financial year.
239. My understanding of the phrase in the minutes “the auditors found that
the IT systems were insufficiently effective to be fully relied upon for audit
control purposes’ is that, as had happened during the 2011 audit (at page
5 of (RMG00000003)), EY had to carry out additional work to satisfy itself
that the controls were reliable. In other words, I believe that “/T systems”
in the quotation from the minutes means “controls”. Consistently with this,
the recommendations in the draft management letter for the 2012 audit
(POL00029485) are all concerned with controls. I certainly have no
recollection that EY reported that the Horizon IT system itself was
ineffective and I do not think that that is the meaning of the minute.
47. Please describe your interactions with Members of Parliament in so far as
they related to the Horizon IT System or POL’s treatment of SPMs, managers
and _ counter assistants in connection with the same. In particular, please
provide the following details:
47.1. Your communications strategy and how you prepared for any meetings.
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47.2. What your objectives were and whether you thought you achieved those
outcomes.
47.3. Whether you became aware of (a) any BEDs or (b) other actual or potential
problems with the integrity of the Horizon IT System prior to any meeting with
these parliamentarians.
48. Please consider POL00095973 (email chain on 23/4 February 2012),
POL00107702 (email chain between you and Alice Perkins on 13 March 2012)
and UKGI00000050 (minutes of POL Board meeting on 15 March 2012).
48.1. Please describe the detail of the interactions you had with Alice Perkins
in early 2012 concerning her meeting with Lord Arbuthnot and the suggestion
for an independent study into the Horizon IT System.
48.2. Please expand on the entry in the minutes at POLB12/41(c) in
UKGI00000050. Was POL’s strategy to seek to persuade MPs that their
constituents’ concerns were wrong or to listen to and investigate them?
48.3. Please explain what action you took to “look... at_a further independent
study of the issues” following the 15 March 2012 POL Board meeting. What was
the strategy and purpose to commissioning an independent study?
48.4. Why did the intervention of Lord Arbuthnot lead to a discussion on
engaging an independent study into the Horizon IT System? In answering this
question, please explain why such a study was not implemented following (a)
numerous complaints that had been made by SPMs and MPs (b) the May 2009
Computer Weekly article and (c) the identification of significant BEDs, such as
the Receipts and Payments mismatch bug.
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49. Please consider POL00105597 (email chain on 3 April 2012 regarding Oliver
Letwin MP) and POL00107710 (letter from you to Oliver Letwin MP dated 4 April
2012).
49.1. Please describe the conversation you had with Alice Perkins, referred to
in POL00105597.
49.2. To what were you referring when you wrote “We are both of the view that
this is inappropriate” in your email of 4 April 2012? Why did you consider this
to be inappropriate?
49.3. In respect of your letter to Oliver Letwin MP, on what basis did you write
“The Horizon system has been rigorously tested using independent assessors
and _ robust procedures... Very often the ‘missing’ funds are a keying or
balancing error that can be put right, and training given to ensure it doesn't
happen again. These checks and procedures resolve virtually all discrepancies
satisfactorily”.
50. Please consider POL00112984 (pack for meeting with Lord Arbuthnot and
Oliver Letwin MP on 17 May 2012) and POL00021507 (minutes of POL Board
meeting on 23 May 2012).
50.1. How were you briefed for this meeting? Please state who was responsible
for preparing your brief and the meeting pack.
50.2. Please explain to what extent POL’s IT and problem management teams
were involved in preparing your briefing.
50.3. Please provide a full account of this meeting, addressing what, if anything,
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you said about (a) BEDs (b) the integrity of Horizon or (c) Ernst & Young’s audit.
50.4. Please describe what you informed the Board about this meeting on 23
May 2012.
51. Please consider _POL00096640 (meeting pack for meeting with Lord
Arbuthnot and other MPs on 18 June 2012) and POL00096660 (email chain with
you, Lord Arbuthnot and Alice Perkins on 18/19 June 2012).
51.1. How were you briefed for this meeting? Please state who was responsible
for preparing your brief and the meeting pack.
51.2. On what basis were you “confident about the integrity of Horizon”?
51.3. Please comment on your statement that “Each transaction is protected
with a digital signature to prevent change or tampering. Which means if
someone was able to penetrate the many layers of security — they wouldn’t be
able _to_unlock the seal that protects the transaction — this prevents any
malicious manipulation”. To what type of manipulation were you referring: by
SPMs; by Fujitsu; by POL; and/or by third parties.
51.4. Please explain what you meant when referred to the “opportunity to
resolve transparently and robustly the outstanding queries”. How did you
envisage POL carrying out that opportunity.
240. On 23 February 2012, Alice Perkins forwarded to me an email she had
received from Lord Arbuthnot earlier that day (at page 2 of
POL00095973)). In the email, Lord Arbuthnot had asked to meet Alice to
discuss Horizon:
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"I know it is the position of the Post Office...that there is nothing wrong with
Horizon. I am deeply sceptical about this, and hope I can persuade you to
look afresh at the matter, rather than accepting that there should be a
closing of ranks round the computer."
241. Alice stated in her forwarding message to me that she would reply
stating that she would meet Lord Arbuthnot. She also asked whether I
thought she should take someone along, and whether there was anything
else she should know at this stage.
242. Alice also forwarded Lord Arbuthnot’s email to Susan Crichton, who
replied on 24 February 2012. Susan said that she had spoken to Mike
Granville, who had told her that Lord Arbuthnot had links to the JFSA,
who were believed to be behind the current legal activities of SPMs
against POL. It was Susan's view that:
". any meeting with him would need to be carefully handled. Obviously, it
would be a good opportunity to put our views forward but there are risks
associated with that approach, maybe we can have a word next time you
are in the office.”
243. I have not seen an email response from me to Alice. Although I am sure
that Alice and I discussed the forthcoming meeting with Lord Arbuthnot
— almost certainly more than once — I have limited memory of what we
spoke about. I recall that Alice was approached by Lord Arbuthnot, and
Mike Young saying that we should not bother with it (or words to that
effect). Alice and I both decided that she should meet Lord Arbuthnot on
the basis that if there was nothing in the challenge, then we had nothing
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to worry about; and if there were issues, it was better to review what they
were. I have a reasonable recollection that I recommended that Alwen
Lyons should also attend the meeting with Alice. This was because it was
not good practice for a NED, even the Chairman, to represent POL at a
formal business meeting without an executive present. Otherwise, the
boundaries between the executive and non-executive management
would become blurred.
244. On 13 March 2012, Alice sent an email to Susan, Alwen and me setting
out her thoughts following the meeting with Lord Arbuthnot
(POL00096052). Alice stated:
“I think JA genuinely wants to seek a resolution of the difficulties concerned
and is willing to believe that we will do the right things. There is a real prize
for us in finding an effective way of convincing him and his fellow MPs that
things are as they should be. He believes that this would quieten down
Private Eye and would prevent proposed escalation eg. adjournment
debate etc. To do this, we might commission a new independent review of
the Horizon related questions (my thought) or invite him accompanied by
someone from Computer Weekly to visit the Model Office and be shown
how Horizon works (his suggestion) or something else altogether.
I promised to get back to him once I had had the chance to consider all
this. I would like to do so by Easter, or at least have fixed a further meeting
by then. I am asking Glenda to set up a meeting to discuss this amongst
ourselves in the next couple of weeks.”
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245. I do not believe that Alice and I had discussed the idea of commissioning
an independent review of Horizon before she went to the meeting.
However, I stated when I replied to Alice on 13 March 2012 that her email
sounded like a good way forward (POL00107702). I was grateful that
Alice had responded openly to a difficult challenge and I thanked her and
Alwen for their time.
246. I see that (POL00105481) shows notes of a meeting with Lord Arbuthnot
on 13 March with action points plus, at the bottom, what appears to be a
document that he handed to Alice. I have no recollection of discussions
about the detailed points made by Lord Arbuthnot (adequacy of training
/ settling centrally) or the action points.
247. The minutes of the POL Board meeting on 15 March 2012, at page 9 of
(POL00021505) record that:
“The Chairman explained that she and the Company Secretary had met
James Arbuthnot MP, at his request to discuss the Subpostmaster cases
questioning the integrity of the Horizon system. The Chairman hoped that
she could find a way to convince him and other MPs that the system was
not at fault. This might mean looking at a further independent study of the
issues.”
248. I do not now recall Alice’s specific comments. However as far as I was
concerned, they did not describe or reflect a strategy of seeking to
persuade MPs that their constituents were wrong, as opposed to listening
to and investigating their concerns. POL believed at that time that the
Horizon system was working properly. We hoped that by taking the two
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MPs through the details of their constituents’ cases and if necessary,
commissioning an independent review of the system, the MPs would
come to share POL’s viewpoint. I do not, and did not, consider that to be
a strategy. We believed that the MPs could be persuaded that the system
was not at fault, because that is what we ourselves believed, and we
believed that the facts supported that conclusion.
249. I can see from (POL00105591) that on 21 March 2012 Alwen sent an
email to Susan Crichton, Kevin Gilliland, Mike Granville and Lesley
Sewell. She refers to notes (which she says are not for circulation) which
appear to contain action points before a meeting on 28 March “so she
can get back to James Arbuthnot before Easter’. These may well be the
same action points as in (POL00105481).
250. I can also see from an email exchange between me, Alwen and Lesley
on 26 March 2012 that Alice asked me to meet her on Wednesday 28
March in relation to Lord Arbuthnot (POL00107707). I have no specific
memory of this discussion.
251. I have seen documents which show that POL’s intention in April to May
2012 was to instruct Deloitte to conduct a review of Horizon. These
include:
a. (POL00057623) - a memo dated 20 April 2012 from POL legal services on
a proposal to instruct Deloitte to prepare a report in respect of allegations
by sub-postmasters regarding (a) the integrity of Horizon; (b) the adequacy
of training and support provided to SPMs.
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b. (POL00002000 / POL00028066) - a proposal from Deloitte entitled
“Project Spire”, dated May 2012 to carry out a review of Horizon. This
document is familiar, but I am not sure from when. I recognise the signpost
on the cover but that is possibly as I had reviewed it at some later stage. I
do not recall seeing the supplementary paper, with the Deloitte team
biographies before now.
c. (POL00057656) - a list of action points drawn up by Alwen following a
meeting I attended on 3 May 2012 to prepare for the meeting with Lord
Arbuthnot and Oliver Letwin MP in May 2012. These action points included
explaining that POL intended to use Deloitte as IT specialists to examine
the new system.
252. I have no memory now of the proposal to instruct Deloitte or of being
involved in any discussions or actions for their appointment. At some
stage, it was decided to appoint Second Sight as forensic accountants to
carry out a review. I do recall that I was keen that POL should engage a
company, which would understand the nature of SPMs’ post office / small
retail businesses and with which SPMs could engage easily. I was
concerned that one of the ‘big corporates’ such as Deloitte might not have
that approach.
253. Whether or not POL should commission an independent study of Horizon
was not an issue that I had been asked or advised to consider during my
time at POL since 2007. I wish to make a number of observations:
a. During my time as Network Director and Chief Operating Officer between
2007 and October 2010, allegations that there was a problem with Horizon
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were rarely brought to my attention. On the occasions when they were
brought to my attention, the message I received from POL’s senior IT
specialists was that the allegations were wrong, and that the IT system was
not at fault.
As I have mentioned previously, in 2009 Mike Young was adamant that the
Computer Weekly article was misconceived and should not be treated as
a red flag that there might be faults in the system. I believe that it was
because Mike (who was head of IT) took such a firm view, that the
Computer Weekly article was not escalated further or, it appears, taken
any further by Mike or by the MD, to whom Mike reported. As a non-IT
specialist, I accepted that Mike, with his knowledge of IT and the Horizon
system, had considered the article fairly and that it was no cause for
concern. This message was reinforced during my time as MD of POL
between 2010 and 2012.
In August 2010, Rod Ismay produced a report entitled “Horizon — Response
to Challenges Regarding Systems _ integrity’ (POL00090574 /
POL00088935). Section 4 (c) of the report contains a discussion by Rod
about whether POL should commission an independent expert to examine
Horizon to respond to SPMs' complaints: his conclusion was that it would
not be in POL’s interests to do so. I have no recollection of being consulted
by Rod about any of the matters covered in his report. I was not on the
distribution list for the report and have no memory of being given a copy of
it.
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d. There was a view among POL’s management, which I shared, that if there
was a serious problem or potential problem with Horizon we would already
know about it - because POL’s internal IT function would report any
specific faults which had caused SPM losses or other errors in the
accounts, or alert us that large numbers of Post Offices were encountering
problems which might be caused by the IT system.
e. However, we were never given any such report. On the contrary, we were
told consistently that, relative to the scale of the transactions processed by
the Network, the number of transactions that required investigation or
correction was small, that the cause of the vast majority of these
transactions was user error, and that in a far smaller number of cases POL
had established fraud on the part of SPMs in the criminal courts.
f. In that context, I was not made aware between joining POL in 2007 and
early 2012 that any BEDs had been identified in Legacy Horizon or Horizon
Online. The first that I knew that any BEDs had been discovered was in
mid-2013, when I was made aware for the first time of the BED known as
the Callendar Square problem in Legacy Horizon, and two BEDs in Horizon
Online known as the Payments and Receipts Mismatch problem and the
Local Suspense Account problem.
254. The reason why POL proposed an independent study of the system in
2012 was because Alice had come to the issue with a fresh pair of eyes
and decided that it might be necessary to reassure Lord Arbuthnot and
other MPs that the system was not at fault. I supported that decision. The
intervention of the MPs was important — I was especially aware of this
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having spent many hours in meetings with MPs over Network Change,
where POL closed thousands of Post Offices. We had reversed some
decisions as a result of MP input and in other cases we had had to uphold
the Government policy; so I knew POL had to approach their issues fairly
and be ready to listen. Unless POL dealt with MPs' concerns and did so
appropriately, there was a risk that they would increase the publicity
around the JFSA’s allegations that there was something seriously wrong
with Horizon. Alice and I (based on what Mike and Lesley had told us)
believed that those allegations were wrong, and that if we presented the
MPs with the facts as we believed them to be, we should be able to
persuade them that the IT system was not the problem.
255. I felt strongly that this issue engaged an important public interest. POL
was a critical national institution which was used by millions of individuals
every day to process transactions that, while they were often small in
value, were significant to them personally — I refer not only to processing
letters and parcels, but also pensions and social security benefits, paying
bills, savings and insurance etc. In my view, POL was obliged to take
active steps to ensure that public confidence in Post Offices was not
undermined by allegations which POL believed to be incorrect. If that
occurred, a Post Office's ability to deliver its critical services to the public
would be compromised.
256. On 3 April 2012, I received an email from Emily Pang, the Chief of Staff
to the RMG CEO, Moya Greene (POL00105597). Emily stated:
“Moya just got off the phone with MP Letwin. He feels there is a systemic
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issue. He knows of a postmistress (in) Axminster who noted there was
issues with horizon (‘bizarre occurrences’) and asked POL IT to come and
fix. She thought there were discrepancies between the receipts in Horizon
and her own of £2000. The PO then said no the discrepancy is £4000 and
she was suspended from using the system. Many people have come
forward to say she is honest and he personally vouches for her.
On top of this there was the subpostmistress of James Arbuthnot who is
the head of security for the houses of parliament. He said the exact same
thing happened with the same amounts (£2000 and £4000) with his
postmistress and he (James) also vouches for her).
Moya has committed that you and her will go brief Mr Letwin together in a
couple weeks. Mr Letwin has been a big supporter of RM Group including
PO so Moya would greatly appreciate if you can please initiate an
investigation of these issues in a fully challenging way as soon as possible
so that you two may discuss this in the next week or so and then go to Mr
Letwin together.”
257. On the same day, I forwarded Emily's email to Susan Crichton and Alwen
Lyons, referring to a conversation I had with Alice: "Below a note I have
discussed with Alice. We are both of the view that this is inappropriate
and I shall contact OL directly". Although I have no direct recollection of
the discussion, I believe that Alice and I discussed two matters.
258. The first was that we should take Oliver Letwin MP’s concerns seriously
and look into his constituent’s case. I mentioned in a letter I sent to Oliver
Letwin MP on 4 April 2012 (POL00107710) that Alice had invited Lord
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Arbuthnot to POL’s head office to see how the Horizon system worked,
and I extended the same invitation to Oliver Letwin MP, either with Lord
Arbuthnot or independently. I also asked Oliver Letwin MP to provide
details of the Post Office in his constituency that was encountering
problems, so that we could look into the matter.
259. The second is that it was inappropriate post-separation for the CEO of
the RMG to have committed POL to a meeting with Oliver Letwin MP.
POL and RMG were now entirely separate organisations and were run
separately. I had no objections at all to a meeting with Oliver Letwin MP.
If Moya had asked me whether I was prepared to meet him, I would have
agreed. However, Alice and I both felt that RMG should not be committing
POL to any course of action without prior consultation, (i.e. as though
POL was still its subsidiary). I did not consider this to be a significant
incident: it reflected the need for two companies which had been in the
same group for hundreds of years to learn how to operate independently
of each other. I got on very well with Moya. I see from (POL00114518)
that I emailed Moya to thank her for passing on the details. I said there
was no need for the joint meeting and I was in touch with Oliver Letwin
MP. I also confirmed that there was "no issue with Horizon — it has been
tested; and in fact upheld as robust by the courts". I realise now that was
an incorrect statement but it was what I believed and what I was told by
the senior IT and legal people advising Alice and me at the time, which
was consistent with the views shared when I was Network Director, and
by previous MDs. The Inquiry has disclosed letters from Alan Cook and
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David Smith who expressed similar views at the time: (POL00094288;
POL00090575; POL00094820).
260. Like virtually all letters to stakeholders such as MPs, my letter to Oliver
Letwin MP on 4 April 2012 (POL00107710) was written for me. I have
not been able to establish precisely how this letter was put together from
the documents disclosed by the Inquiry. However, I can see from an
email I sent to Martin Moran, Susan, Alwen and Lesley on 5 April 2012
that Susan had seen and amended a draft of the letter (POL00114518).
261. I have been asked on what basis I made the following statement in the
letter (POL00107710) that: “The Horizon system has been rigorously
tested using independent assessors and robust procedures... Very often
the ‘missing’ funds are a keying or balancing error that can be put right,
and training given to ensure it doesn't happen again. These checks and
procedures resolve virtually all discrepancies satisfactorily”. While the
letter was drafted for me, I generally read, and when I could, signed all
letters. There is nothing in this statement which would have surprised me
at the time — the first line is one I had heard from Lesley Sewell and the
“keying or balancing error” comment is one I believed to be true and was
at the root of many thousands of TCs over the years. However, as I said
further down the letter — “...if you could provide me with details of the
Post Office in your constituency that is encountering problems, I will
ensure we look into it as soon as possible.”
The meeting with James Arbuthnot and Letwin on 17 May 2012
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262. The preparation for the meeting was led by Susan and Alwen, working
with Lesley (POL00105494). Angela Van Den Bogerd from Network and
Rod Ismay from P&BA were also involved. I understand from the
documents that Simon Baker from IT acted as the project manager: his
role appears to have included collating information, liaising with the
various functions of POL whose input was needed, and drafting the
briefing materials. I can see from a meeting invitation on 10 May 2012
that, in addition to this team, Jarnail Singh from POL legal and Chris
Darvill were invited to a preparation meeting (POL00057711). I do not
recall meeting Jarnail Singh and I am not certain that I knew of his
involvement at the time. I do not recall Chris Darvill, but I now understand
that he was a solicitor at Bond Dickinson.
263. On 3 May 2012, I attended a meeting with Alice, Alwen and Susan to
discuss the meeting with the MPs. (POL00057656) are Alwen’s notes
and actions from the meeting. They begin by stating that:
“The best outcome of this meeting would be a position where they believe
our evidence in their individual constituent’s cases and support how we are
handling the situation.
“Longer term, once they are assured by the review of Horizon they could
‘help’ to win others round.”
264. This reflects what I have already said above about POL’s objectives: we
hoped that if we gave the MPs a clear presentation of the facts as we
believed them to be, we should be able to persuade them that their initial
stance towards Horizon was wrong.
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265. The next section of the note sets out an outline agenda for the meeting.
In summary:
a. We would begin by acknowledging the importance of the issues to Lord
Arbuthnot and Oliver Letwin MP and stress that we wanted to be open and
give them confidence that we were taking this very seriously.
b. We would then give factual context about the size of the POL branch
Network, the amount of money and transactions it deals with, the relatively
small number of issues with losses compared to the scale of the network
and its business, and the need to protect public money.
c. We would explain how SPMs were appointed and trained, the support
systems in place for the first few weeks of their appointment, and the
ongoing support provided through the helpline. This included support if
money went missing, which SPMs were given time to pay.
d. We would state that only a small number of cases led to prosecutions and
explain the process for bringing prosecutions and how seriously we took
this.
e. We should explain the old and new Horizon systems and that any live
system review would have to be on the new system, although POL has an
audit trail of every key stroke in the old system going back seven years.
f. We would possibly talk about the JFSA cases and explain that most of
these cases concerned the old system, and how each one was dealt with,
with prosecution as a last resort.
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g. We would take Lord Arbuthnot and Oliver Letwin MP through their
constituents’ cases.
h. We would then suggest that the way forward was for POL to use Deloitte,
as a technical IT expert, to review the system. The note records that we
hoped that if the review gave Horizon a clean bill of health, this would
persuade them that the system was not at fault.
266. The final section of Alwen’s notes sets out the key action points. These
were:
a. To understand and be able to show the chronology and chapter and verse
on the two constituency cases.
b. To set out clear evidence on no more than four or five key pieces of paper.
c. Toset out what POL had done on training, support for balancing and cash
holding monitoring, including any lessons learned.
d. Answers to the questions that Lord Arbuthnot had set out in the note which
he handed to Alice in March.
e. Feedback from Lesley on why we were proposing to use Deloitte, her views
on the Computer Weekly article, and what we were doing about them.
267. I believe this document is a fair summary of what we were aiming to
achieve by meeting and how we proposed to do that in terms of the
presentation and the information we needed.
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268. Alwen’s notes state that a team (i.e. the team that I have described
above) was collating the information set out in the action points. I was
not involved in that process. I was confident that the team, collectively,
had the necessary knowledge and experience, and the support within
their own specialist functions, to deal with the issues raised by the MPs.
Lesley was able to deal with the IT issues, Angela would address issues
of training and support, Rod would assist on accounting issues and
Susan on the legal issues. I understood that the briefing and the meeting
pack would be the work of many hands, even if each person would not
personally draft the sections dealing with their area of expertise, they
would sign it off. It was obviously important that Lesley was involved in
the process to provide information and her views on the Horizon IT
system.
269. I was confident that the team would produce what POL required for this
meeting, namely a full and clear account of the facts. The document was
produced by a team of senior managers, including the GC, for the
Chairman and the CEO to present to two important MPs. In my view, this
document had been subject to a high level of scrutiny by a senior team.
That was really the source of my confidence that I could rely on the
document.
270. As far as I can tell, I was sent a draft of the briefing document for the first
time on 11 May 2012, when Alwen sent what she described as “the initial
papers’ to Alice, Susan and me (POL00105601). Alice replied on 13 May
2012 setting out her view that while the document was thorough, she
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thought that the structure and tone of the document were wrong. Alice
felt, in light of Lord Arbuthnot’s comment in his initial letter, that POL
should not ‘close ranks’, and her wish not to be seen to be doing that,
that the document should not create the impression that POL believed
that everything was perfect. Alice stated:
“We are now planning to do things which ought to command their
confidence not just re-iterating that everything is fine and always has been,
which is unconvincing.
I think I have to open the meeting with references to what we’re thinking of
doing in answer to what we’ve heard rather than leave that to the end.
So ! would start by saying that we take this very seriously both for the
individuals, public money and our reputation. I would say that we want to
find a way of convincing them and others who are sceptical about these
issues that we are handling this properly and fairly...We do believe that our
IT system is and has been sound and that our support for Sub-Ps is much
better than has been claimed. We would like to take them through some of
this and would also like to take them each through the details of their
individual constituency cases. But we are always open to improving and
for that reason we are doing 2 things — looking at how we can improve the
training and support which we give to Sub-Ps...and commissioning a study
of our current Horizon system (referring to the fact that this is a different
system from the one in operation when the cases which are pending legal
action occurred). I would then ask for their patience as we explain what the
Situation is and at the end ask them for their reactions, including to the
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Deloittes [sic] idea.”
271. I do not remember the email sent by Alice Perkins and do not recall the
original draft briefing to know how much it changed over time. I had no
issues with being open and transparent. Alice knew both MPs well and I
trusted her judgment — I would have supported her comments.
272. The final version of the meeting pack is at (POL00033825). The
proposed structure of the presentation to the MPs was that Alice would
make introductory remarks (which I can see reflected the changes she
proposed in her email on 13 May 2012), I would provide background on
the scale and infrastructure of the branch network, and Lesley would
speak about the Horizon IT system. I would then pick up with an outline
of the recruitment and training processes. Susan would introduce the two
case studies of Lord Arbuthnot’s and Oliver Letwin MP’s constituency
cases, which Susan and Angela would then discuss in detail. The
meeting would be closed by Alice.
273. I prepared for the meeting by reading the brief and the meeting pack and
by having pre-meetings with the other POL participants. (POL00107719)
is an email from Alice’s PA, Glenda Hansen, to Rod, Susan, Angela,
Lesley and me referring to a pre-meeting on 16 May 2012. It is possible,
but I have been unable to confirm this from the documents, that there
were other briefing sessions. In addition, although I cannot remember all
the details, I had one-on-one discussions with some of the other
participants. I have a recollection of speaking to Lesley about the
technical issues at least once before the meeting, and that she talked me
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through the reasons why she would tell the MPs that POL was confident
in the integrity of the system.
274. Although I cannot be sure, I think I asked Angela to talk me through the
graph which showed inflated cash figures at the South Warnborough
branch, so that I could understand it better.
275. I have some recollections of the meeting:
a. Iamconfident that the team followed the brief and spoke on their allocated
topics. While I cannot be certain, it is unlikely that I strayed from the brief
into discussing BEDs or the integrity of Horizon.
b. I do not recall mentioning the EY audit at this meeting. It is unlikely that I
did so. It was not included in the topics allocated to me and I do not believe
I would have raised it of my own initiative. It would not have crossed my
mind at the time to refer to it in the context of the discussion with the MPs.
c. Angela gave an impressive presentation on the two case studies.
(POL00096748) are the notes of the Post Office Communications Action
Group meeting on 29 May 2012. Page five of the document records an
update from me which refers to the meeting with Lord Arbuthnot and Oliver
Letwin MP:
“PV shared with the CAG her recent experience of meeting with two
prominent MPs on their concerns over the accuracy and validity of
the Horizon system, following lobbying from Subpostmasters at
branches where financial discrepancies have been discovered. PV
praised the work of Angela Van Den Bogerd, Head of Network
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Services, in meticulously unpicking the MPs claims step by step and
turning an openly initial hostile stance into one of understanding and
acknowledgement of our position on the cases concerned.”
d. Iamnot certain that I would have used the phrase “meticulously unpicking”
but the note captures the impression. I can still recall that POL had
demonstrated from the facts presented step by step by Angela in the two
constituency cases that the SPMs in question had been at fault, which can
be seen at page 5 of (POL00096748).
e. Lesley gave a presentation focussing on the integrity of Horizon, in line with
the notes in her sections of the briefing.
f. The proposal that POL should engage a forensic accountant came from
Lord Arbuthnot. Looking at the documents has triggered a recollection that
he seemed to accept what Lesley had said about the integrity of the
system. What he therefore wanted was for a forensic expert to establish
precisely what had happened in the individual cases referred to MPs where
SPMs denied responsibility for losses.
276. The outcome of the meeting was recorded in an email to me from Alwen
on 21 May 2012, in which Alwen set out Alice’s recollection of what had
been agreed with Lord Arbuthnot (POL00105491). It was agreed that
POL would find a forensic accountant with good people skills and ask
them to look at each case, talk to the SPM, review the records and files,
and look at how the Horizon software was validated. At the same time,
Lord Arbuthnot would speak to the other MPs with similar concerns and
offer them a similar meeting to the one we had just had. At that meeting,
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POL would put to the MPs the proposal of a forensic accountant and a
review by Deloitte. Alwen had also agreed with Michele Graves, Head of
Executive Correspondence, that any new MPs' cases would be brought
to Alwen. The email accords with my recollection of how the meeting
concluded. I must have printed the email out because the version
disclosed by the Inquiry contains my manuscript notes. These state: "/)
Forensic accountant; ii) brief, milestones, timing... iii) phone call to speak
to JA; iv) Susan / Alwen re briefing notes."
277. The minutes of the POL Board meeting on 23 May 2012 (POL00021507)
record that Alice and I reported these developments to the POL Board
as follows:
“The Chief Executive and the Chairman updated the Board on the
meeting with James Arbuthnot MP and Oliver Letwin MP, taking them
through their constituency cases which, they believed, had challenged
the integrity of the Horizon system. The meeting had been a success
and JA had now agreed to facilitate another meeting with the other MPs
who also had cases in their constituencies. The business had also
agreed to use a forensic accountant to investigate the system and give
further comfort to those concerned about these cases.”
278. I have no memory of what was said to the POL Board beyond what is set
out in the minutes. I believe that the meeting was judged a success
because Lord Arbuthnot had agreed to collaborate with POL in what we
hoped would be a structured, evidence-driven review of his and
potentially other MPs’ cases.
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Meeting with MPs on 18 June 2012
279. On 22 May 2012, my PA, Mia Porter, sent an email on my behalf to
Alwen, Lesley, Susan and Angela, following a discussion I had had with
Alwen (POL00096545). Alwen and I had agreed that the agenda for the
meeting would follow “the well worn path” from the meeting with Lord
Arbuthnot and Oliver Letwin MP and that we would attempt to replicate
the conversation we had had with the two MPs with the larger group. I
asked Alwen to update or reshape the briefing note and that the rough
outline of the Lord Arbuthnot / Oliver Letwin MP meeting had been as
follows:
. “JA — Overall introduction.
. Alice intro -— take the issues seriously etc
. Paula follow on — confirm this and outline the challenges we face
in addressing these issues and how we plan to explain to them
the integrity of the system and the improvements that have been
made in our training/support/escalation processes.
. Angela — talk through two or three anonymous examples.
. JA — explain how he was persuaded/reassured and to present
his recommendations of a forensic accountant.
. Paula — explain/offer to investigate MP’s individual cases and
have the process validated by the FA.
. Alice/JA — gain agreement/finish meeting’.
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280. My email could have been clearer. What I was setting out in the section
above was not in fact an account of how the meeting with Lord Arbuthnot
and Oliver Letwin MP unfolded, rather I was suggesting it as guidance. I
said “update / reshape the briefing note” i.e. to set out how the agenda
from that meeting could be adapted for the meeting with the larger group
of MPs. I believe that the “challenges” in addressing these cases that I
referred to were that, even where POL believed the SPM was at fault,
and in some cases had proved in the criminal courts that the SPM had
acted fraudulently, the situation was still upsetting and very personally
distressing to those individuals, and the information about these
individuals needed to be handled sensitively. Throughout the years
during which POL was reviewing SPM Horizon / legal cases, POL
colleagues — myself included — were frequently reminded about the
importance of confidentiality concerning the sensitive nature of the
personal SPM data.
281. On 24 May 2012, Mia Porter arranged a conference call for 25 May 2012
to discuss preparation for the meeting with the larger group of MPs
(POL00096544). The attendees were to include Angela, Susan, Alwen
and Lesley. I do not recall if I was able to make the call. It was chaired
by Lesley. and I do not recall whether I participated or not. On 25 May
2012 Simon Baker sent an email (POL00096557) to Susan, Alwen,
Lesley, Angela and me containing a list of action points from the
conference call. The action points include that Simon and Lesley would
agree and document our preferred option on the forensic accountancy
proposal, that I would call Lord Arbuthnot's office to obtain a list of the
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MPs, and that Simon would arrange update meetings and a pre-meeting
for me. In terms of the agenda for the meeting, the plan was as
suggested, to re-use the key messages from the meeting on 17 May
2012 with additional points on the forensic accountancy proposal and a
proposal that we would meet with each MP individually to take them
through their constituent’s case.
282. Simon circulated the draft briefing pack to the usual team and me on 29
May 2012 (POL00096558). The final version of the document is at
(POL00096640). I understood at the time that the briefing pack was put
together in the same way as the briefing for the meeting in May, i.e. that
it reflected the views of the team who were working on this project
(Lesley, Angela, Alwen and Susan), using information sourced from their
specialist functions. I note that one difference from the May briefing is
that Lesley was not going to attend the meeting with the group of MPs. I
do not know why this was. I presume this is the reason why the briefing
allocated a speaking segment about Horizon to me. I would have
prepared for the meeting in the same way as the May meeting, namely
by having one or more pre-meetings with the other participants together
with one-on-one meetings.
283. The Inquiry has asked me to consider two statements in the sections of
the briefing which I was to present to the MPs.
284. The first is the comment in the fifth bullet point in the section on
“Background” that “! am confident about the integrity of Horizon”. I have
been asked about the basis on which I made this statement. I believed
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that Lesley had reviewed these notes, and in any case, they are
essentially a re-working of the notes that Lesley herself had used at the
meeting in May, with some phrases lifted verbatim. In addition, Lesley
had explained the basis on which POL could be confident in the integrity
of system to me personally prior to the May meeting. I felt able to say that
I (as a non-IT expert) felt confidence in Horizon because that was the
view of POL’s most senior IT manager. I did not have the expertise myself
and did not have any reason not to trust Lesley’s explanation.
285. I have also been asked to consider the second indented bullet point in
the same section: “Each transaction is protected with a digital signature
to prevent change or tampering. Which means if someone was able to
penetrate the many layers of security — they wouldn't be able to unlock
the seal that protects the transaction — this prevents any malicious
manipulation”. The Inquiry has asked whether I was referring here to
manipulation by SPMs, by Fujitsu or by third parties. I cannot recall what
I had in mind — it is possible that I was briefed at the time on what this
comment was directed at. As I read it today, I think it is likely I understood
the comment to relate to those working on audit data in Fujitsu.
286. The Inquiry has also asked me to explain what I meant in an email to
Lord Arbuthnot in an email on 18 June 2012 (POL00096660), when I
referred to the “opportunity to resolve transparently and robustly the
outstanding queries’. What I was referring to was that we would get to
the bottom of the MPs' cases by using a forensic accountant.
52. Please consider POL00096574 (proposal for an independent review of past
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fraud_and_ theft cases), POL00096575 (email from Susan Crichton to Alice
Perkins and you dated 6 June 2012), POL00096576 (draft terms of reference),
POL00113792 (email from Alice Perkins to you and Susan Crichton dated 8 June
2012), POL00096604 (email chain between you and Alice Perkins on 9 June
2012), POL00096606 (email chain between you and Alwen Lyons on 9 June
2012),
52.1. Please explain the background to the appointment of Second Sight
Support Services Limited (“Second Sight”). In particular, please address the
following issues: how was Second Sight identified to lead the review; who at
POL was responsible for the decision to appoint Second Sight; and did POL
receive or rely upon legal advice in appointing Second Sight?
52.2. Please provide a full description of all conversations you had with
members of POL concerning the Second Sight’s terms of reference. What were
your objectives in drafting the terms of reference?
52.3. Please describe what you understood Second Sight’s role to be.
52.4. Please explain what preparatory steps POL took to prepare information to
provide to Second Sight.
52.5. Please set out the reasons for the position on 11 June 2012 that “Sub
postmasters who have been prosecuted will not be involved although their
cases will still be reviewed”. Was this position consistent with POL seeking to
investigate _past_action taken _on the basis of Horizon data fairly and
transparently?
52.6. Please describe the conversation you had with Ron Warmington on or
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around 21 June 2012. What did you consider to be “exactly the right quality
level of engagement”.
Questions 53 and 54 omitted as general questions
55. Please consider POL00105487 (letter from Lord Arbuthnot to you dated 4
October 2012), POL00097030 (email from Martin Edwards on 4 October 2012),
POL00097115 (email from Simon Baker to you _on 7 November 2012),
POL00097116 (draft agreement), POL00097309 (email from Jorja Preston to you
and others on 19 December 2012) and POL00097310 (attachment to prior email).
55.1. Please describe the negotiations you had with JFSA and _/ or Lord
Arbuthnot concerning the inclusion of JFSA cases in the Second Sight review.
If POL objected to JFSA cases, please explain why.
55.2. Please explain to what extent, if at all, POL considered volunteering cases
for Second Sight to consider based on known instances of BEDs materialising
in the Horizon IT System.
55.3. Please consider the following from the briefing: “The JFSA have requested
that_we inform the sub-postmaster community about the investigation, to
encourage them to come forward. Post Office has not yet done this due to the
concern of creating a high volume of low value cases”. Please explain (a) what
was considered to be a low value case (b) what was considered to be “a high
volume” and (c) why it would not be important to consider a high volume of low
value cases in circumstances where POL relied on Horizon’s ability to handle
large numbers of transactions accurately to justify its integrity.
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287. The appointment of forensic accountants to conduct a review was
unusual and outside my previous experience of engaging third party
consultants. While POL was to engage and pay for the forensic
accountants, we would be appointing them to implement the agreement
with Lord Arbuthnot and the other MPs that we would engage forensic
investigators to look at each of their cases. Because of these unusual
circumstances, any accountant would need to be acceptable not only to
POL, but also to Lord Arbuthnot and the MPs, and (as matters
developed) to the JFSA.
288. Although the precise terms of reference and the scope of the review were
debated and refined during June and July 2012, I understood from the
beginning of the process of Second Sight’s appointment that their
fundamental role would be to carry out the review as independent
investigators. This meant that Second Sight’s work product was to be
objective and independent.
289. Second Sight were recommended by Susan Crichton. She knew Ron
Warmington from earlier in her career and socially at a local tennis club,
although I understood that he was not a close acquaintance. She
suggested that Second Sight had the right combination of skills and
experience to carry out the review. Second Sight had worked on a
number of fraud matters involving IT and had worked with MPs in the
past. As a smaller firm, they would also satisfy Lord Arbuthnot’s
requirement (and something I felt strongly about too, having worked as
Network Director) that the forensic accountants should have good people
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skills and be able to understand the operations of a small business,
probably much better than an organisation like Deloitte.
290. I do not remember the process for the decision to seek to appoint Second
Sight, but I am sure that Alice Perkins and I ultimately approved the
recommendation that they be engaged. I cannot be sure, but I have a
recollection that Alice met them before I did.
291. My email to Susan, Alice, and Alwen on 21 June 2012 (POL00105477)
indicates that I met Ron Warmington for the first time on that date. This
was after POL had recommended their appointment to Lord Arbuthnot. I
commented in my email that I thought that Ron would do “an excellent
job for us: exactly the right quality level of engagement etc., we're looking
for. I made it very clear to Ron that our primary objective of this exercise
is to be transparent and to deal with whatever outcomes and conclusions
he comes to.” I do not recall the conversation, but what I believe I meant
was that my impression from meeting him was that Second Sight was a
good fit for the task.
292. Second Sight still needed to be approved by Lord Arbuthnot. As Alice
reported to the POL Board at its meeting on 4 July 2012, POL had
arranged for Second Sight to meet Lord Arbuthnot (at page 6 of
(POL00021508)). He emailed Alice and me after the meeting, stating that
he would be happy for Second Sight to proceed, subject to the points he
set out in his email. One of the points was that the MPs were keen for
SPMs to support this process and that Alan Bates of the JFSA was
important to this. Lord Arbuthnot had therefore offered Alan a meeting
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with Second Sight. Although Lord Arbuthnot was clear that the JFSA
should not have the power of veto over the appointment of Second Sight,
he would like as far as possible to have Alan’s support. For this reason,
Lord Arbuthnot cautioned against proceeding with Second Sight until he
had heard from the JFSA.
293. The meeting between Second Sight, Lord Arbuthnot, and the JFSA took
place on 12 July 2012. Lord Arbuthnot wrote to me immediately after the
meeting (POL00096810; POL00096811; POL00096823;
POL00107750). He said that it had been a very good meeting and that
Ron Warmington and lan Henderson had answered the questions of Alan
Bates and Kay Linnell (a forensic accountant who had accompanied
Alan) to their satisfaction. He added:
“However, the other MPs and I take the view — which I think you share —
that so far as we can we should ensure that as the investigation goes on it
retains the buy-in of the sub-Postmasters. To this end I should be grateful
if you would agree to setting aside a small amount of money (capped at
£5,000) for a forensic accountant nominated by the Alliance (likely to be
Miss Linnell) to carry out sporadic review of SS’s findings. We discussed
this at the meeting and felt it would be the key to the entire process working
for everyone — my constituents and those of other MPs, the spms, and of
course the PO and its reputation.”
294. On the same day, Mia Porter replied on my behalf: “Absolutely no
problem with this suggestion. Alwen will ensure the process is put into
place”.
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295. It was only at this point that the appointment of Second Sight was agreed
in principle between the three stakeholders in the review: POL, the MPs,
and the JFSA. However, the discussions around the scope of the review
continued. I will deal with these discussions in the next section of my
witness statement.
296. The earliest version of a terms of reference that I have seen in the
documents is (POL00096576). This is a proposal dated 1 June 2012 from
Second Sight to POL to carry out an independent review of past fraud
and theft cases to determine whether the facts supported POL’s findings
and the charges brought against individuals. I have no recollection of
seeing this document at the time. Second Sight proposed that they would
consider, by reference to a sample of cases, whether:
. “the Post Office has thoroughly investigated the facts, including the
alleged perpetrator’s claims about Post Office systems and other
inadequacies
. there is any indication that assertions that “Horizon is the real culprit”
have any basis in truth
e the courts have been presented with all relevant investigative findings
and that any evidence that might support any defendant's case has
also been properly considered by the company’s investigators and
then disclosed to the Court
e there is any indication, or pattern, and to where the missing funds
really went (the point here being to review defendants’ claims that the
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false accounting — that most of them have admitted — was their only
way out when those ‘mysterious shortfalls’ hit them)
. there exists any evidence of systemic flaws or control weaknesses
within the old or new Horizon systems and POL’s related operational
procedures
. the Post Office has failed to do anything that it should have done...or
done anything that it should not have done...in regard to the
investigations and prosecutions”
297. The next version of the terms of reference was prepared by Susan on 6
June 2012 (POL00029815). Susan sent this version to Alice, Lesley
Sewell, Alwen Lyons, Angela Van Den Bogerd, Simon Baker and me
during the evening of 6 June 2012. In this version, the scope of the review
was as follows:
“The Post Office has instructed an independent third-party organisation,
2nd Sight Limited provide a proposal to conduct a review which would
include the following tasks:
Select a representative sample of cases that have led to prosecutions/court
appointed restitution. The sample needs to cover cases:
e where defendants claim they didn’t take any cash
e where assertions have been made that ‘The System’ (i.e. Horizon)
caused the shortage (include old and new versions of Horizon if possible).
e which have been taken up by MPs.
Carefully review all company-held documentation focussing heavily on
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probable reasons why shortfalls occurred or built up.
Interview company investigators to gain insights and to verify fairness of
findings.
Review defence submissions focussing on evidence of innocence
(consider separately False Accounting and Theft).
Try to establish why the shortages arose (assign each case to a Probability
Category such as: Skill shortfall; Diversion to Failing Business;
Straightforward Theft (by whom?); Mysterious Disappearance; etc).
Review all materials from the viewpoint of the Defence (seek Proof of
Innocence and test evidence indicative of guilt)
Study and selectively test the “Horizon” system in order to find any ‘Black
Hole’, Program Bug etc that might have caused mysterious shortages.
Reach conclusions on each case and identify any systemic
issues/concerns.”
298. On 7 June 2012, Susan sent Alice, Alwen, Lesley, Simon and me a
redraft of the terms of reference she had sent on 6 June (POL00105472).
The proposed terms of reference were now as follows:
“This review would include the following:
A review of all company-held documentation focussing heavily on probable
reasons why shortfalls occurred or built up,
Interview company investigators to gain insights and to verify fairness of
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findings,
Review defence submissions focussing on evidence of innocence.
Try to establish why the shortages arose.
Review all materials from the viewpoint of the Defence,
Study and selectively test the ‘Horizon’ system, to the extent possible given
the change in systems,
Reach conclusions on each case and identify any systematic
issues/concerns
Meet with any MP, subpostmaster / mistresses plus legal representatives
if required.”
299. Susan’s covering email for the revised draft indicates that she had
revised the wording to take account of a discussion involving Alice and
me that morning: “Alice and Paula...hopefully this picks up the issues
raised this morning” (seen at page 1 of (POL00105472)). Susan then
raised the following additional point, which does not appear to have been
one of the issues discussed earlier:
“In addition, and following a review of the cases listed, which I had not seen
this before, I have been giving some further thought to our position
particularly in respect of the cases where we have criminally prosecuted
the sub postmaster / mistress. In those cases I do not think that we want
to be seen as re-opening the cases but rather position this as a review of
the existing evidence to enable an understanding of the outstanding
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concerns and the facts in so far as they concern the Horizon system. For
those who have not been prosecuted we can offer a full independent
investigation.
The overall outcome would be a general conclusion which critically reviews
the evidence already in existence and new evidence from the work done
by the independent forensic auditor.
If you agree with the above then the TOR would need to be slightly
amended to take this into account.”
300. On 8 June 2012, Alice circulated a further revised version of the terms of
reference (POL00113792). Her three substantive issues were as follows.
First, she was unclear why the earlier version of the terms of reference
stated that Second Sight would review all materials from the perspective
of the defence. She stated “won't the investigators want to look at all the
relevant material whether defence or prosecution? If we focus too much
on the defence in the TOR, does this suggest that we think there is
something we've overlooked in the past?”. Second, to avoid POL being
accused of being selective in the material it provided to Second Sight,
Alice suggested they be given access to all relevant material held by
POL. Third, she thought that POL should make a commitment to
publishing the findings in full. Alice’s re-drafted terms of reference stated:
“The Post Office has instructed 24 Sight Limited to conduct an
independent review of existing cases where concerns have been raised by
MPs, and/or Shoesmiths [sic] have issued proceedings.
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This will include the following:
Reviewing all company-held documentation focussing on why shortfalls
occurred.
Interviewing company investigators to gain insights and to verify their
findings.
Reviewing defence submissions.
(Reviewing all materials from the viewpoint of the Defence — DN Don’t
understand this; do we need it? And if so, why do we need the previous
bullet, and do we want only to focus on the viewpoint of the defence ?).
Studying and selectively testing, the ‘Horizon’ system (to the extent
possible given the change in systems in 20...).
The reviewers will meet any MP or any of the SubPostmasters /
SubPostmistresses affected at their request.
The review will reach conclusions on each case and identify any systemic
issues/concerns.
Timescales and Costs
It is anticipated that the review will commence in late June or early July.
Post Office Limited hope to be in a position to publish its findings in the
autumn.”
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301. Alice’s email did not, however, engage with Susan’s view that former
SPMs who had been convicted should not be offered an independent
review by Second Sight in case this re-opened past convictions.
302. On 9 June 2012, Alice sent an email to Susan, cc’d Alwen and me,
following a conversation with Alwen on 8 June (POL00096603). I was not
involved in that discussion, as my email in the same URN shows. Alice’s
email appears to refer to a disagreement between her and Alwen about
whether the review should include cases where the SPM had been
convicted or had brought proceedings against POL via Shoosmiths. Alice
stated:
“1 am clear that we should include ALL the MPs cases, irrespective of
whether they have been decided in Court. If we try to draw a distinction
here we will be accused of picking cases to suit ourselves and being
vulnerable on the ones we omit. We'll have a row about that instead of
moving the issue on. On reflection, I don’t buy the argument that we would
somehow undermine the Court process by doing this. There are plenty of
ways in which people go over ground which has been settled in Court and
if there weren't, no-one would ever be able to get a conviction overturned.
And if (which we don’t believe) there were new evidence in a case which
had been decided, we would want to do, and be seen to do, the right thing
by that.
So I stick by the TOR as drafted yesterday on this important point.
Where I think there may be more of an issue is the line between
Shoesmith’s [sic] cases which have been declared to us and those (many
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more) which they have merely hinted at. I suggest the way to deal with
those may be by time, ie we'll include those we know about as of Monday
week but not those which come after. As we said at our meeting, it would
be open to the independent reviewers to say in their findings that they think
we should extend the review.
1am sorry to be bothering you with this on a Saturday but time is against
us, especially as Paula is seeing James Arbuthnot on Monday afternoon
and I feel very strongly about this.”
303. On the same day, Alwen emailed me on the same topic (POL00096606;
POL00096603):
“Paula in case Susan doesn't pick this up as she is in Berlin and before you
speak to Alice. The issue that came to light with the list of MP cases was
that they included the Mishra [sic] you will remember the case and the
publicity she went to prison and had (redacted). The husband got publicity
through radio and press. (Redacted) and she raised this at the meeting
with Alice before you joined was whether now contacting her to tell her we
review the case would be a red rag to a bull. Alice feels this is the business
pushing back unnecessarily and she feels this has happened throughout
the process and she is having to keep pushing us! Susan is getting external
advice on the effect this would have on cases which have been through
the courts. If you want a call before you call Alice my phone is on.”
304. I replied “Thx — don’t worry. We spoke and it’s OK. We'll pick up
tomorrow’.
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305. On 11 June 2012, Alwen sent me an email stating that “following is as
we discussed” (POL00096608). The email stated that, at the meeting the
following Monday with Lord Arbuthnot and other MPs, POL would offer:
e "Each MP a review of their individual case carried out by 2"? Sight an
independent forensic accountant
° This will be private and confidential
° 2nd Sight may involve the sub postmaster in their review if they deem
it to be necessary
. Sub postmasters who have been prosecuted will not be involved
although their cases will still be reviewed."
306. An email from Alwen on 12 June 2012 to Angela, Simon, Mike Granville
and Susan shows that the attached version of the terms of reference
(which I understand to be POL00096615) had been sent to Lord
Arbuthnot by 12 June at the latest (POL00027713; POL00117119). This
version states:
“The Post Office has instructed 2°¢ Sight Limited to conduct an
independent review of existing cases where concerns have been raised by
MPs and/or Shoesmiths [sic].
This will include the following:
Reviewing all company-held documentation focussing on why shortfalls
occurred.
Interviewing company investigators to gain insights and to verify their
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findings.
Reviewing defence submissions.
Studying relevant evidence with regard to the ‘Horizon’ system.
The reviewers will meet any affected MP at their request on a private and
confidential basis.
The review will reach conclusions on each case and identify any systemic
issues/concerns, including training and support processes.”
307. There are differences between the version of the terms of reference sent
by Alice on 8 June 2012 and the version sent to Lord Arbuthnot. While
Alice’s version stated that Second Sight would meet any affected MP or
SPM at their request, the later version states that Second Sight would
only meet MPs on a private and confidential basis. The later version also
made no mention of the publication of Second Sight’s findings.
308. I have no recollection of any discussions which led to the changes to the
terms of reference set out above, though it is evident from the documents
that Alice’s wish to include criminal cases in the review was of concern
to Susan and Alwen.
309. In that context, in the course of preparing this witness statement I have
seen a file note of a conference on 12 July 2012 with two barristers,
Richard Morgan QC and Daniel Margolin. The attendees were Gavin
Matthews, Susan Crichton and Hugh Flemington (POL00006484). The
note appears to record advice from the barristers that instructing an
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expert to prepare an expert report on the Horizon system was the highest
risk response to SPM complaints. It states: “What will it achieve? It will
not be able to address any of the civil/criminal cases dealt with under ‘Old
Horizon’.” This is described in the note as a no-win situation for POL: “/f
the findings are that there are no issues with Horizon people will see that
as a ‘whitewash’ whereas if the findings are negative that will open the
floodgates to damages claims by SPMs who were imprisoned for false
accounting and Access Legal will start to pursue all the civil claims they
are currently sitting on.” A less risky approach would be to take the MPs
through the cases in which they were interested. I have no recollection
of ever seeing the file note or being briefed about the advice.
310. As I have mentioned above, Lord Arbuthnot was sent a copy of the last
version of the draft terms of reference by 12 June 2012. He emailed Alice
and me on 13 June 2012 to raise some issues with the terms of reference
and asked for our thoughts (POL00096622). The first was that POL was
proposing that the forensic accountants should meet with MPs, but not
necessarily with the relevant SPM to allow them to put their side of the
story:
“And MPs will not know as much as the sub-Postmasters will, and so
the issue will not be resolved unless the MPs are also given the chance to have
their constituents at the meeting. What about their advisers? Surely they ought
to be included as well? Since we are trying to clear the matter up in...a robust
and transparent manner, it does seem to me that this needs further thought.”
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311. I responded to Lord Arbuthnot on the same day. I assured him that Alice
and I intended total transparency, and that the queries he raised were
valid. I made the point that each case was different. We were dealing
with particularly sensitive and personal situations, combinations of fact
and misunderstandings, and in some cases (as we believed at the time),
fiction and / or fraud, as we had explained at the meeting in May. I went
on:
“Rather than a blanket approach, we would take each case separately —
we are dealing with individuals’ lives and livelihoods. But, the guarantee for
each one is complete transparency and handled in the most appropriate
and sensitive way. Therefore in some, we may need to go further than the
draft TOR suggests, with SPMRs in joint meetings; in others, that might be
difficult and/or embarrassing for them and their MPs. We would however
Start with each MP in order to explain/explore the background.”
312. The email sets out my understanding and position at that time in relation
to whether the forensic accountants would meet the SPMs. My view was
that this issue should be approached with flexibility on a case-by-case
basis, and that in some cases a meeting would be appropriate.
313. I met Lord Arbuthnot on 14 June 2012. I wanted to see him in advance
of the meeting with the group of MPs on 18 June 2012 to explore whether
we could present them with an agreed position. I reported to Neil
McCausland (one of the POL NEDs) in an email on 14 June 2012 that
the meeting with Lord Arbuthnot had gone to plan: he had agreed POL’s
draft terms of reference and to an individual rather than “blanket”
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approach (POL00096642; POL00096638). I am not able to recall
whether my reference to a “blankef’ approach referred to the discussion
about whether there would be meetings between the forensic
investigators and the SPMs, or whether this referred to a broader view
that the investigation should aim to identify what had happened in each
of the individual cases, as opposed to investigating the system as a
whole. In that context, it was certainly my view at the time that if Horizon
had caused these SPMs' losses, this would be identified by an
investigation of their cases. However, the small number of cases being
presented by MPs did not justify a system-wide investigation as the
starting point.
314. POL and Lord Arbuthnot had now agreed on a way forward, as he set
out in an email to parliamentary colleagues on 18 July 2012, the day of
the meeting between POL managers and the group of MPs
(POL00096937):
“I believe we are approaching a consensus. The consultants from 2” Sight
offered that their investigations should be checked by a forensic
accountant to be nominated by the Alliance; the Post Office has agreed not
just to this, but to funding it. I believe this tends to confirm that the Post
Office is genuinely keen to resolve this matter in an open and transparent
way.
“The process is therefore that 2° Sight will conduct an initial investigation
of a selected number of cases, from which they will see if conclusions can
be drawn that lead to further work being required.
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“But it is important that we do not get ahead of ourselves at this stage. It is
already clear that some individuals are expecting that a very wide-ranging
and expensive investigation into the computer code behind the Horizon
system will take place. This is not at the moment what is envisaged. It may
turn out to be necessary, but the initial investigations will show whether this
is so."
315. Lord Arbuthnot also wrote to Shoosmiths, on 19 June 2012, to update
them on what had been agreed (POL00096665):
“As you know, prior to yesterday’s meeting, I met privately with the
Chairman of Post Office Ltd and members of her staff. On each occasion
the meeting was cordial and productive. From these meetings, we have
come up with a plan for the Post Office to appoint an individual forensic
accountant (to be chosen in consultation with me) who will examine each
case individually in order to establish exactly what has happened. The
individual SubPostmaster / mistress concerned will be given the
opportunity to be involved, as will his or her MP. Interviews will be
conducted, data investigated, and in this way itis hoped that an explanation
can be arrived at that will put to rest any question over what exactly has
occurred.”
316. After the consensus on the way forward was reached with the MPs, the
next stage of the discussions was the involvement of the JFSA. There
were a number of distinct issues.
317. On 13 September 2012, Lord Arbuthnot sent me a copy of a letter he had
received from Alan Bates (POL00026752). Alan stated that, in his view,
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the review should not only consider the historic cases but also complaints
from serving SPMs about current problems with Horizon. Alan suggested
(repeating what he had said in a letter to Lord Arbuthnot on 13 July 2012)
that POL should open the review up to serving SPMs and advertise it in
Subspace (the Network magazine) and offer serving SPMs immunity if
they came forward with complaints. In his covering letter, Lord Arbuthnot
asked me to consider both the immunity point and the possibility of
advertising the review in Subspace.
318. I had no objection in principle to encouraging current SPMs to submit
cases of current errors to Second Sight and I offered that POL would
trawl recent call centre records to see if there were any unresolved issues
with Horizon which could potentially be submitted to the investigation.
(POL00097030) is a note of a discussion between Lord Arbuthnot, Alan
Bates and me on 4 October 2012. The note records that Alan said that
he wasn’t looking for complete immunity from prosecution, rather for POL
to provide assurance that serving SPMs would not be victimised or
disadvantaged for raising claims. I assured him that I could absolutely
guarantee there would be no negative comeback and that all cases would
be handled appropriately.
319. Simon Baker emailed me on 7 November 2012 with an update on the
progress made since my meeting with Lord Arbuthnot and Alan Bates
(POL00097115). By this point, POL had received a draft “immunity
agreement’ from the JFSA and had created a revised version, which
Simon attached to the email. A brief for a meeting with Lord Arbuthnot on
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19 December 2012 records that the “immunity agreement’ had been
approved by the JFSA, Second Sight, and POL (POL00097310). I have
not seen the final version, but I understand that the agreement took the
form of a joint paper of the JFSA and POL called “Raising Concerns with
Horizon”, of which (POL00097116) was a draft. As far as I recall, I did
not see this paper, but I would have supported what was agreed, namely
that while POL would not waive its legal rights against any participant in
the review, no-one would suffer any detriment for submitting a concern
to Second Sight honestly and in good faith.
320. I also had no objection in principle to the JFSA referring cases to Second
Sight. I can see from (POL00096965) that it had been agreed with the
JFSA by 18 September 2012 that, although the primary route for cases
to be referred to Second Sight would be via MPs, the JFSA would submit
their best five to 10 cases. Indeed, the whole point of the immunity
agreement was Alan Bates’ claim that he knew of current SPMs who
would come forward if they were given assurances that they would suffer
no detriment. One of the functions of the immunity agreement was to
remove this obstacle.
321. The Inquiry has asked me to consider a comment in the briefing at (at
page 3 of (POL00097310)) that: “The JFSA have requested that we
inform the sub-postmaster community about the investigation, to
encourage them to come forward. Post Office has not yet done this due
to the concern of creating a high volume of low value cases.” It is difficult
for me to say what the author of the document had in mind. In any case,
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POL did advertise the review to serving SPMs on Subspace and in NFSP
meetings.
56. Please consider POL00027553 (minutes of POL Board Meeting on 21
November 2012). Please describe what update was given to the Board on
Horizon and / or Second Sight.
57. Please consider POL00021510 (minutes of Board meeting on 23 January
2013).
57.1, Please describe what update was given to the Board on Horizon and / or
Second Sight.
57.2. Who reported that “To date there was no evidence to suggest fault”? On
what basis was that comment made?
322. I cannot assist the Inquiry on what update was given to the POL Board
at its meeting on 21 November 2012 (POL00027553).
323. As regards the POL Board meeting on 23 January 2013 (POL00021510),
I have no memory of what Alice Perkins said to the POL Board about
Horizon and Second Sight. I do not know the source of Alice’s comment
that “To date there was no evidence of fault” (with Horizon).
58. Please consider POL00097589 (briefing on MPs cases review of Horizon)
POL00107889 (email chain between you and Alwen Lyons on 11 March 2013)
and_POL00097884 (emails_on 26 March 2013 from lan Henderson, Lord
Arbuthnot and others).
58.1. Please describe your view of the problem themes identified by Second
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Sight and recorded at paragraph 4.3 of POL00097589. What steps, if any, did
you or others in senior management take to ascertain what others in (a) Fujitsu
or (b) POL (such as the within the problem management team), knew of these
potential issues with Horizon?
58.2. Please expand on your concerns in your comment in POL00107889 that
“Now my biggest concern — we are taking big decisions on IT currently and
irrespective of the independence of the SS work, which it is critical to protect,
I/we should be aware asap if there are emerging issues with Horizon. Who from
IT is in the loop, do you know? And do you know if we have a view as to how
robust the SS findings are — ie, there may be similarities of accounts from
Spmrs — but are they being born out by analysis of what actually happened with
the system itself’. In particular, please explain whether there was anyone (a)
with technical IT experience or (b) with problem management experience,
analysing the work of Second Sight for POL. If not, why not?
58.3. Please set out your recollection of the meeting of 24 March 2013.
58.4. Please expand on your comment “I’m a bit disturbed by lan’s. James
seems to be even handed in his comments, which makes lan’s look as though
he_had_an agenda”. What agenda were you concerned Mr Henderson had
formed?
58.5. Please set out your views on Second Sight by this point.
324. On 7 March 2013, Lord Arbuthnot wrote to Alice Perkins to notify her that
he was to host a meeting on 25 March 2013 at which the MPs in his
group, and Alan Bates and Kay Linnell of the JFSA would be given an
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update on the progress of the review from Ron Warmington and lan
Henderson (POL00097588). Lord Arbuthnot said that he was initially
concerned that inviting POL to attend might affect MPs’ perception of
Second Sight’s independence from POL, but he had been persuaded by
Second Sight that POL should be represented.
325. On the second page of the letter, Lord Arbuthnot said that he would like
to raise two matters. These were:
“In my discussions with Ron and lan, I gather that questions have been
raised over the absolute integrity of Horizon, though without their being so
fundamental as to say that the system is not fit for purpose. Since it is a
system that remains in current use, there is the risk that existing
SubPostmasters and mistresses may find themselves in exactly the same
position as those whose cases are being investigated. I know that definitive
results are not yet available, but I hope the Post office would be ready to
address this issue.
As I mentioned earlier, I am not inviting media to this meeting.
Nevertheless, it would be expecting too much of MPs, if they were told that
there were question marks over Horizon, to demand that they keep their
constituents in ignorance of a potentially promising outcome. It would
damage the process we are all committed to if the Post Office were not well
prepared with a ready solution to this problem, among others, that could
be offered publicly in this meeting.”
326. Alwen Lyons emailed me a copy of this letter on 11 March 2013
(POL00097587) together with a second attached document
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(POL00097589). This document is a March 2013 update on the progress
of the review prepared by POL. Paragraph 3.1 stated that rather than
carrying out a full examination of each case, Second Sight had adopted
a preliminary step of conducting spot reviews. A spot review would
examine a specific problem identified in a case. POL had received three
spot reviews from Second Sight to date and expected to receive up to 30
in total. A team had been assembled from P&BA, Network, Legal, IT,
Security, and Fujitsu (for technical assistance and data extraction) to
respond to the spot reviews. This team was currently working on
responding to the first three spot reviews.
327. Second Sight had identified eight common problem themes, that
occurred across multiple cases and which, in their view, warranted
further investigation. These themes were listed at paragraph 4.3 of the
document as follows:
. "Transaction anomalies following communications or power failure
° Transactions not entered by SPMR or staff
. Missing or duplicated transactions associated with Postage Labels,
Phone Cards, GIRO payments, ATMs or Cheques
. Training and Support issues
. POL team at Bracknell
. Loss of Audit Trail
. Accounting issues at end of trading period
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. Contract between POL and SPMRs"
328. I responded to Alwen on 11 March 2013 (POL00097592). I can see from
my email to Alwen that I had read the March update on the review and
commended its quality.
329. The Inquiry has asked me to describe my views on Second Sight’s
common themes, and to state what steps I or others in senior POL
management took to ascertain what others in POL or Fujitsu knew of
these potential issues with Horizon.
330. My answer to the first part of the question is that it was difficult to form
any view of the common themes. As I understood it, the evidence for the
common themes would be set out in the spot reviews. Second Sight had
produced three spot reviews by this point, which were being considered
by POL’s response team. Whether these problems were well-founded
would depend on what came out of the fuller individual case reviews
when they were complete. Spot reviews were a preliminary step. Looking
down the list, I would not have regarded any of them as illegitimate areas
for inquiry, except possibly, with hindsight, the “contract between POL
and SPMRs’” (POL00097589). However, it is unlikely that I picked up at
the time that there was a potential issue of competence and expertise in
a forensic accountant commenting on a legal contract.
331. As regards the second part of the question, I understood that the spot
reviews would be investigated by a team drawn from specialist teams
within POL (P&BA, Network, Legal, IT, Security), which would call on
Fujitsu for data and technical support (see the note sent to me by Alwen
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at (POL00097589)). It seemed that the process by which we would learn
initially whether the common issues were problems or not would be by
the analysis of the spot reviews.
332. Returning to my email to Alwen on 11 March 2013 (POL00097592) I can
see that I raised Lord Arbuthnot’s letter to Alice:
“Now to my biggest concern — we are taking big decisions on IT currently
and irrespective of the independence of the SS work, which it is critical to
protect, we should be aware asap if there are emerging issues with
Horizon. Who from IT is in the loop, do you know? And do you know if we
have a view as to how robust the SS findings are — ie., there may be
similarities of accounts from Spmrs — but are they being born out by
analysis of what actually happened within the system itself?
1 am surprised that I picked this up only by reading a letter from James to
Alice. I'd have thought that a loyal supplier would have let us know — it’s
pretty important in terms of POL risk management and it would be good if
SS had flagged it to us as the work unfolded. That shouldn’t compromise
their independence in anyway. Do you have any insight into this?
I don’t want us being defensive as I’m pleased to find these things out (sort
of!) — but goodness, this is very very serious if either true and/or leaked.
Who is now working up the Comms, will you arrange a pre-brief for 25/3
and who do you think should attend?"
333. Alwen replied to me on the same day:
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“My view of the SS findings is mixed. I believe they are doing a good job
albeit taking longer than we would have hoped but their process means
that they have collected all the ‘evidence’ from subpostmasters before
inviting our comments or explanations. They have therefore found similar
issues, either because they are real issues or because they are good
excuses when things go wrong. Until we see the evidence which is
beginning to come through now it is difficult to say.
We, Susan, Simon, Angela, Alana, Rod and myself, have regular meetings
with SS and there is now a working group to look at the evidence.
Susan, Simon, Mark, Angela and I are having a meeting next week to
discuss the comms before we have a per meet with SS.
They have assured me today that they need James and the mps to
understand the way they are conducting their work, and that issues will be
live at the moment but they then look to disprove them.
It is disconcerting but we need to work through each point as they raise it
without being defensive. At least in James’ letter he acknowledges that we
are working well with SS. It will be hard not to be defensive as we disprove
subpostmasters’ evidence.”
334. I have been asked by the Inquiry to expand on my concerns in my email
to Alwen. I do not recall fully what I had in mind when I wrote this email.
There are two issues covered. First, POL was reviewing its IT strategy,
with a view to making changes in 2015, when the HNG-X contract was
due for renewal. It would have been imperative to know about any
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underlying problems with HNG-X / Fujitsu in that light. Second, in respect
of the current operation of Horizon, I can see that I was troubled that
Second Sight had apparently told Lord Arbuthnot about potential issues
with Horizon, but not POL. I felt that that Second Sight could and should
communicate any issues with the system to POL, and this would not
compromise their independence. In terms of whether anyone with IT or
problem management experience was analysing Second Sight’s work, it
can be seen from the March update that the team tasked with analysing
and responding to the spot reviews included individuals from POL’s
P&BA and IT functions, and Fujitsu was available to provide technical
support. I have seen many other documents disclosed by the Inquiry
which show POL IT and Fujitsu involvement in reviewing the Second
Sight work. Simon Baker, who sat on the Working Group which liaised
with Second Sight worked in the IT department (POL00097592).
335. On 19 March 2013, Alwen emailed Alice (cc’d to me) to update her on a
discussion she and Susan Crichton had had with Second Sight earlier
that day (POL00097704). Alwen reported that Second Sight were
surprised that Lord Arbuthnot felt there was harder evidence against the
system. “They used the phrases; no evidence of widespread systemic
failure; the number of cases we are seeing is small; the pattern aligns
with themes that are already in the public domain.” They had assured
Alwen and Susan that they intended to make clear at the meeting on 25
March 2013 that they were consolidating and distilling allegations to
which POL had not had the opportunity to respond. Some of the evidence
from SPMs was plausible but it had not been tested. They were nervous
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about the meeting on 25 March 2013 because Shoosmiths were
attending, and they knew that loose language may end up in the press.
Alice responded on the same day (POL00097705). She said that her
account of the meeting with Second Sight left her mystified as to what
Lord Arbuthnot had been saying, but on the other hand words like
“plausible” could easily be misinterpreted.
336. I received a very similar message in an email from Susan the same day
(POL00097719). Susan reported that she had spoken to Second Sight
to establish what they had said to Lord Arbuthnot that had led to his letter
to Alice on 7 March 2013. According to Susan:
- “Their intention for the Monday meeting was that they would explain
that they were at an early stage of the investigation, that they have
developed a process which they believe to be efficient and cost
effective and to explain that process including the fact that they did
not intend to review most of the MPs’ cases — JA has agreed that
approach.
- That there is no evidence of wide spread systemic failure of the
Horizon system from the work that they have already completed
- That the themes which are coming out of the work they are doing are
the eight which Simon included in his update and which we discussed
yesterday and those are the same issues which we have known about
for some considerable time here is the list.
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- Second Sight were at a loss to know what "glitches" JA was referring
to, other than those set out above”
337. The position by 19 March 2013 was that it appeared that there had been
a miscommunication between Second Sight and Lord Arbuthnot. I
emailed Susan Barton on 20 March 2013, referring to a difficult day
because of Second Sight leaving Lord Arbuthnot with the impression that
there was a serious problem with Horizon, which led him to call a meeting
of MPs (POL00097732).
338. I did not attend the meeting on 25 March 2013. Alice declined Lord
Arbuthnot’s invitation to send a POL representative because she felt that
it would be better for POL to engage once it had considered the evidence
and analyses submitted by Second Sight: see the draft letter from Alice
to Lord Arbuthnot at (POL00097781). The draft states “...we have not
yet had an opportunity to submit our own evidence on the issues reported
by sub-postmasters. Clearly this needs to be a facts-based investigation
that allows all relevant parties to submit information on the matters under
review.”
339. On 26 March 2013, Alwen forwarded me an email which contained lan
Henderson’s account of the meeting and inline comments from Lord
Arbuthnot (POL00097879). Having read the two accounts side by side, I
emailed Alwen and Martin Edwards to say that I was a bit disturbed by
lan Henderson’s comments. I said that Lord Arbuthnot’s comments on
the other hand seemed to be more even-handed and he had sought to
correct lan's note, which made lan’s look as though he had an agenda.
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My concern was that lan was being overly critical of POL at an early stage
of the process and before Second Sight had completed their
investigations.
340. Martin Edwards spoke to Second Sight after I sent my email and replied
to me later that day (POL00097883). He thought, based on the call, that
Second Sight didn’t have an agenda, “but rather have just been a bit
cack-handed in the way they've handled this read-out. It was clearly one
of those messy meetings which could be interpreted in a number of ways.
Their unvarnished account picks up some of the strands of discussion,
whereas James is aiming for the more diplomatic “official” account (which
is generally more helpful to us).”
341. I do not want to overstate the episode. I think I was struck on first reading
by Lord Arbuthnot’s more measured language, and the fact that lan
Henderson’s version included criticisms of POL that Lord Arbuthnot could
not recall. I would have deferred to Martin Edward’s view that this was
just a messy meeting from which different people could take different
messages.
342. I have been asked to set out my view of Second Sight at this point. Most
of my personal dealings with Second Sight took place in 2013 when we
were setting up the review. I seem to recall that I had dealt mostly with
Ron Warmington, who I found to be courteous and professional. I was
not close enough to the details of the review to form an impression of
how well they were performing their role as independent forensic
accountants. At that time, I would have deferred to those at POL who had
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regular dealings with Second Sight. In that context, in her email to me on
11 March 2013 (POL00097592) Alwen stated that she thought they were
doing a good job but were taking longer than anticipated. At the time I
would have had no reason to disagree.
59. Please consider POL00098158 (email exchange between you and Alice
Perkins on 8 May 2013). Please describe “the challenge” Alice Perkins gave you
on 8 May 2013. What was the “suggestion that could wrap this up for us and
James”?
343. As I have mentioned above, the way in which the review was progressing
was that Second Sight were producing issue-based spot reviews rather
than trying to establish the full facts of each case. Lord Arbuthnot’s note
of the meeting on 25 March 2013 stated that while MPs accepted this
approach, they would in the end want to know how their individual
constituent’s case concluded and whether they had been wrongly
accused.
344. I can see from (POL00097887) that Alwen referred to this in an email to
Alice, cc’d to me, on 27 March 2013. She said that the main area of
contention from the meeting seemed to be the MPs’ views of how their
cases would be treated. Investigating each case in full would be costly
and time consuming. On 5 April 2013, Alwen emailed Janet Walker, Lord
Arbuthnot's Chief of Staff (POL00097952). Alwen stated that it appeared
that we were a long way from getting agreement from MPs on Second
Sight’s suggestion of investigating themes rather than all of the cases.
She asked Janet to consider a call between Lord Arbuthnot and me to
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agree what could be done to avoid it costing the POL Board “a fortune”.
Janet replied that he was away but was considering his response to this
issue. I was not copied into this email exchange.
345. Although Alwen’s email was to the point, it is fair to say that there were
increasing concerns at POL about the escalating cost of the review and
the time it was taking (see POL00122393; POL00098379;
POL00100200). POL therefore began considering ways of bringing the
review to a conclusion within a reasonable time and in a cost-effective
manner. Key to this was securing the agreement of Lord Arbuthnot, as
the key parliamentary stakeholder.
346. (POL00115881) is a speaking note for a call between Lord Arbuthnot and
me on 23 May 2013. It sets out a proposal that the future form of the
review would be that Second Sight would produce a report on three
cases by the parliamentary recess and submit a final report in October
2013 on those MP cases where there was sufficient evidence to
investigate. The germ of this idea was that POL understood that Lord
Arbuthnot had already suggested that Second Sight should aim to deal
with three lead cases in an initial report.
347. My email to Alice on 8 May 2013 (POL00098158) stated that the team
had a suggestion “that could wrap this up for us and James. (Based on
something he wrote to Alan Bates of the JFSA, which is helpful.)” I
believe the “suggestion” was an idea that was subsequently developed
into the proposal set out in the speaking note. However, I have no
recollection of the “challenge” that Alice gave earlier that morning. It
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appears she gave a challenge to the team as I go on to say “Alwen, Mark,
Susan and Simon have just finished briefing me”.
60. Please consider FUJ00083375 (Gareth Jenkins’ note entitled “Local
Suspense Problem”).
60.1. Please describe whether you were made aware of the Local Suspense
Problem.
60.2. Did it concern you that Fujitsu had in 2013 identified a BED that arose in
2011, which had caused discrepancies in branch accounts?
60.3. Please explain who you informed of this issue. If you did not inform the
Board, Second Sight, Members of Parliament, the JFSA or SPMs, please explain
why
348. I was made aware of the Local Suspense problem at some point between
9 and 16 May 2013. Around the same time, I was also made aware of
another bug, known as the Receipts & Payments Mismatch problem, that
had affected Horizon Online in 2010. At the time I would not necessarily
have known the bugs by these names, as they were also known by other
names, such as the “14 branch” and “62 branch” issues respectively.
349. The first indication that my lawyers have found that anyone in POL knew
about the problem is an out of office reply on 28 February 2013 from
Laura Darby of POL in response to an email from Anne Chambers of
Fujitsu. The subject line of the email is “FW: Suspense Data in 14
branches” (POL00097564).
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350. On 14 March 2013, Anne Chambers sent Andrew Winn at POL (cc. Steve
Bansal, Steve Parker, and Gareth Jenkins) “As requested, a full
explanation of the problem”, setting out a technical explanation of how
the problem arose (POL00098151).
351. There were a number of email exchanges between Anne Chambers and
Andrew Winn on 2 and 3 May 2013 (POL00098151):
a. Andrew Winn wrote to Anne Chambers on 2 May 2013: He was having
difficulty reconciling some of the figures. One of the affected SPMs appears
to have settled centrally some of the loss but Andrew Winn thought this
strange, as a loss of £3.34 should not have qualified for settling centrally.
Andrew Winn asked Anne Chambers to look at the first draft of his letters
to the affected branches: “...to see if / have simplified and condensed what
happened without losing meaning or key detail?” (these appear to be:
POL00002188; POL00002217; POL00002226; POL00002242;
POL00002260; POL00002265; POL00002275).
b. Anne Chambers replied to Andrew Winn on 3 May 2013: In discussing the
figures, Anne Chambers mentioned that “There was a problem at the time,
not fixed until Jan 2011, where if they chose ‘Make Good Cheque’ it
actually Settled Centrally — I think this is probably what happened on
9/12/2010". Anne Chambers had made amendments to the letters “which
hopefully make the cause and scope of the problem clearer’. She had tried
to call Andrew Winn “because Gareth Jenkins mentioned that this problem
is still being discussed at a high level as part of the ongoing
investigations/checks into Horizon, and I would hate anything I have put
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here to compromise that — I don’t see why it should but just wanted to flag
it. Iassume anything going out to the branches will be reviewed in light of
that.”
c. Andrew Winn replied on the same day: “/ intend this to go through our
Solicitors before it gets sent out’.
352. On 9 May 2013, Andrew Winn sent Simon Baker (cc. Gareth Jenkins)
two summaries of the Suspense Account bug (POL00098186) and a
short version, (POL00098185):
a. The two branches with the largest discrepancies in 2011 alerted POL FSC
in 2011 after they had “settled centrally’. According to Andrew Winn “These
discrepancies were resolved with no inappropriate payments being made”.
b. The same two branches alerted POL again when the same discrepancies
appeared in 2012.
c. When the problem first occurred in 2011, “the values relating to the 2
branches above were associated to equal and opposite values held on the
branches’ Customer Account and cleared. The other values were written
off to Profit & Loss as no explanation could be found”.
d. The resolution of the issue included: a revised archiving strategy
introduced in 2011 prevented a reoccurrence of the issue; Fujitsu were
considering a check to ensure the local suspense account netted off to
zero; and “FSC will write to all non Crown branches impacted to summarise
what has happened. The intention is to return any incorrect losses but not
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attempt to recover resultant gains. Letters will go through Legal prior to
dispatch.”
353. On 10 May 2013, Gareth Jenkins created a first version of a document
entitled “Local Suspense Problem” (FUJ00084744). The stated purpose
of this document was to provide a “management level summary’ of the
Local Suspense problem. Section 2.2 records that Fujitsu had developed
alerts to indicate to support staff that the problem had occurred, enabling
immediate investigation. I have no memory of seeing this document.
However, I do recall seeing a version of the table at the end of the
document. This may have been cut and pasted into another document or
email. I had asked for details of the branches affected, as I wanted to
know that POL had responded correctly and that none of the affected
SPMs was disadvantaged.
354. Around the same time as these documents, I can see that senior POL
managers were considering the Receipts & Payments Mismatch
problem.
355. (POL00029610) is a note dated 16 May 2013 by Gareth Jenkins on the
Receipts & Payments Mismatch issue. It begins: “The purpose of this
note is to document a request that we have had from Post Office in terms
of presenting details of what happened as a result of a bug in HNG-X in
September 2010 which caused a Receipts and Payments mismatch and
also resulted in Discrepancies being lost.”
356. (POL00098283) is an email from Gareth Jenkins to Simon Baker (cc.
James Davidson) on 16 May 2013 attaching version four of the note on
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the Receipts & Payments Mismatch issue (POL00029610). The covering
email refers to “tomorrow’s meeting with Lesley.”
357. I do not believe that I saw any of the documents I have referred to above
concerning the Receipts & Payments Mismatch issue at the time they
were created, nor I believe at any time before I left POL. I do not recall
being involved in any of the discussions they refer to. I do not recall ever
having had any dealings with Gareth Jenkins or Anne Chambers of
Fujitsu.
358. I have seen emails dated 9 May 2013 which show that Alwen Lyons and
Simon Baker were trying to contact Lesley Sewell and me about an
urgent matter. (POL00098176) is an email from Alwen to me: “Sorry
Paula I need to speak to you about this as something has come up.” I
replied saying that I would call within the hour. Alwen also emailed Simon
Baker twice on the same day saying: “You need to warn Lesley’
(POL00098179) and “.../ have put out a call to Paula I am going to have
to tell her what has happened at a high level’ (POL00098180). I do not
recall the issue that arose on 9 May 2013. I cannot rule out that this was
about the Local Suspense Problem or Receipts & Payments Mismatch
problem. If it was about the bugs, I do not know if I was told about them
on that date.
359. I have seen a series of emails dated 16 May 2013, some or possibly all
of which may have related to this issue (POL00098276):
a. At 07:44 I asked Alwen for an update on the “mini-crisis last week’ and for
an update on our normal workplan with Second Sight. I went on: “A/so, has
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Alice mentioned it and/or have you updated her? I wanted to send her a
note this am, just to reassure we are still on top of everything.” The mini-
crisis related to having to make short-term diary changes, liaising with Lord
Arbuthnot’s office, agreeing to bring forward a meeting and then agreeing
to move it back to a few weeks later.
b. Alwen responded that she, Simon and Lesley were meeting that morning.
She had given Alice an update yesterday and Alice was calm that the
meeting with Lord Arbuthnot being delayed. She had updated Alice on the
spot reviews and would send me a paragraph later so that I could send
Alice a note.
c. At 07:48, I emailed Alice saying that “one other issue arose overnight,
which I may need to brief you on over the next couple of days, so will try to
get a phone slot” (POL00098278).
d. Alice replied at 08:17 stating that she was unexpectedly free that afternoon.
360. At 13:05 on 16 May 2013, Alwen sent me a speaking note to use on a
call with Alice that afternoon (POL00029587). It appears that if I had been
told about the bugs at a “high level” the previous week (see paragraph
358), I now had more detail and wanted to brief Alice:
“I have a call with James on the 23rd May....when we will discuss how he
wants the investigation to continue, including the 2 MP cases he has asked
2nd Sight to focus and the spot reviews.
However some instances are coming to light where there is evidence that
there are bugs in Horizon, which I am being told is normal in any large
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computer system. But I am still being assured that the system’s integrity is
not in doubt.
Lesley is meeting Fujitsu tomorrow morning to go through the technical
assurance that the subpostmaster’s trading statement cannot be changed
without their knowledge (sic)
Alwen is meeting with them on Monday to look at with a layman’s eyes and
understand what it might have looked like for a subpostmaster using the
system (sic)
The Good News is that where we have found to (sic) bugs since HNGX
(new Horizon) they have been detected and put right with no loss to the
subpostmaster and Fujitsu now monitor the suspense account for any such
problems.
Alwen will specifically ask on Monday if anything else could be happening
we do not know about eg too small to register at the office, and Old Horizon
bugs.
This is not good Alice, but from what we have seen so far our response to
bugs has been effective.
I have asked for some time in our diaries next week to talk through our
approach, and would welcome you (sic) counsel before the James
meeting.”
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361. Alwen’s note refers to “bugs” in the plural. I believe this is because I had
been made aware of the “Receipts & Payments Mismatch" bug by the
time of this email.
362. (POL00098777) indicates that I attended a meeting with Lesley to
discuss the Local Suspense Problem on or around 27 June 2013. In an
email to me of that date in the chain, Martin Edwards referred to Lesley
explaining to us “transient data’ and ‘archiving processes”.
363. A speaking note I was given for a meeting that I was going to have with
Lord Arbuthnot and Alice on 3 July 2013 sets out the following information
about the “Receipts & Payments Mismatch” problem, referred to as the
“62 branches exception” (at pages 5 and 6 of (POL00115923)):
e “Affected 62 branches...
° Sub-postmaster losses ranged from £115.60 down to 8p
e Identified by Horizon’s built in checks and balances which are
designed to flag up these types of discrepancies. Appropriate action
taken to rectify.
. 17 sub-postmasters were adversely affected i.e. had a loss
attributable to their branch.
. Sub-postmasters notified in March 2011 and (where appropriate)
reimbursed.
. Sub-postmasters who had made a gain through the anomaly were
not asked to refund this.”
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364. The Local Suspense problem, referred to as the “14 branch exception”
was described as follows:
. “Financially impacted 14 branches...
. Concerns an error where historic accounting entries in the 2010/2011
financial year were replicated for 2011/12 and 2012/2013 only
showing up a year later.
. Raised by 2 sub postmasters affected by the exception.
° 1 sub postmaster and 4 multiple partners were adversely affected...
. We suspended attempts to recover known losses from affected sub-
postmasters.
e Letters to notified sub-postmasters will be sent out immediately.
e The worst loss to a branch would have been £9,799.88. This was one
of the first cases notified, so no recovery action was progressed.
Other losses ranged from £113.14 down to a penny.
. Action underway to modify the system to prevent any repeat of this
exception”.
365. The narrative about the “exceptions” (I accept that they should have been
termed “bugs”) stated that, in both cases, our processes had picked up
these issues, that appropriate remedial action had been taken, and that
they had not led to any disciplinary action. Neither related to cases under
investigation with Second Sight.
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366. While I have no distinct recollection of my discussions with colleagues
about the bugs, I have a firm recollection of thinking, from the time I was
first told about them in May 2013, that the business had managed them
well. I was told, as set out in speaking notes for the call with Alice and
the meeting with Lord Arbuthnot, that the bugs had been identified by
POL’s processes, that no SPM had been left out of pocket, and that
measures either had been or were being taken (the “Local Suspense”
having been recently identified in May 2013) to eliminate the possibility
of reoccurrence. I set up a number of meetings with Alwen Lyons, Lesley
Sewell and others to ensure that I was briefed on progress of the Local
Suspense bug, until I was content POL that had resolved the issues for
the SPMs affected. I suspect that this is where I saw the table referred to
in paragraph 353 above. This was in line with how I worked — making
sure colleagues understood that problems that affected even one Post
Office were important to resolve and for POL to care about.
367. I was therefore satisfied that the bugs did not call into question the
reliability of Horizon. In particular, I understood that the Local Suspense
problem had affected only 14 branches across the entire Network, that
the effect of the bug occurred annually, and that it had been picked up in
the first year that it reoccurred. It was reassuring that a bug which had
limited effect within the scale of the network had been identified and was
being rectified.
368. My speaking note for Alice did say that the bugs were “not good”. I think
this was for two reasons. First, I didn’t want any branches to be impacted
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by a problem in the system, even one which was corrected. Second,
though less important to me, there was a timing issue against the
background of the Second Sight review. If the facts around the bugs, as
I understood them to be, were not clearly communicated there was a risk
that people would confuse issues and draw conclusions that were not
factually justified.
369. I have been asked whom I informed about the bugs and address these
questions below.
370. The Board: I informed the POL Board at its meeting on 1 July 2013
(POL00099516) that: “Horizon, like any large computer system, would
occasionally have anomalies and two were know(n) of over recent years.
The Business has dealt with these anomalies to ensure no sub
postmaster was out of pocket and these anomalies had not affected any
of the cases which Second Sight had reviewed.” This was part of a
broader update to the Board on the Interim Report. In terms of the timing
of the update, I was advised by Martin Edwards in an email on 20 May
2013 containing his comments on the agenda for the 21 May 2013 Board
meeting (POL00098321) that he and Alwen Lyons agreed that it would
be premature to brief the Board on developments with Second Sight at
the May meeting but that we would need to update the Board in July 2013
as part of the CEO report. The reason why an update in May was thought
premature was because I was due to speak to Lord Arbuthnot on 23 May
2013 to discuss whether there was a way to bring Second Sight’s work
to a quicker and more cost-effective conclusion (Martin’s email refers to
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a meeting between me, Alice, and Alwen after the May Board meeting to
discuss the approach to Lord Arbuthnot). It is very likely that I and / or
Alwen or Alice informed the Board about this forthcoming meeting. The
minutes of the May Board meeting (POL00021513) record that the Board
asked for a note to update on the Horizon position with the Second Sight
review.
371. A Board call was scheduled for 1 July 2013: see the email from Alwen
Lyons to the Board on 29 June 2013 setting out my weekly update to the
Board at the bottom of the email chain at (POL00098816). Having seen
that email, Alice emailed me, Martin Edwards, Alwen Lyons and Susan
Crichton on 30 June 2013 (in the same URN) stating, “/ think we will have
to tell the Board about SS as there is a danger that we could be ina
difficult situation in the midst of all this about before we have another
opportunity to tell them. And we do owe them an update’. Alice asked if
we could think about what we should say, and that we should let her
know how we intended to describe the situation. She said it would be fine
if Susan Crichton joined a call with the Board.
372. I replied to Alice shortly afterwards (in the same URN) stating that we
had decided to do exactly that and rather than send the Board a written
brief at this stage, we thought it would be better to wait to get a steer from
Alwen Lyons’ meeting with Janet Walker (from Lord Arbuthnot's office). I
added that Susan was due to meet Second Sight the following Monday,
so it made sense for her to update the Board after that meeting. The
reference in my email to a meeting between Alwen and Janet Walker is
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likely to refer to a meeting on the morning of 1 July 2013 to discuss POL’s
idea that the publication of the Interim Report should be delayed until
Second Sight had completed its work on the spot reviews which the
Interim Report was to address: see the email from Alwen to me on 28
June 2013 at (POL00098789), which refers to this meeting.
373. Second Sight: Second Sight knew about the two bugs and mentioned
them in the Interim Report. It appears from the documents that they knew
from 25 June 2013 at the latest: on that day, they sent Simon Baker a
draft section of the Interim Report dealing with the two bugs:
(POL00029618). I did not authorise anyone at POL to provide the
information to Second Sight, but it was not my role to decide what would
be provided to Second Sight. That was a matter for the POL team who
were working on the review. I was repeatedly told and believed at the
time that POL had informed Second Sight about the bugs. For example:
a. The speaking note for my meeting with Lord Arbuthnot on 3 July 2013
stated that “both were voluntary communicated to SS (although not directly
related to the cases under review.)”
b. In an email to me on 27 June 2013, Rodric Williams stated that “where we
have identified "bugs" in Horizon, we have shared these with Second
Sight.” (POL00098774).
c. In an email to me on 28 June 2013 (POL00098789), Alwen stated: “We
think SS will present the 4 cases some of which will not be finished, but we
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are not sure yet. They will also raise the issue of the ‘bugs’ which were
outside the cases but which we disclosed to them.”
d. I have a recollection that Lesley was incensed that POL was accused of a
cover up, on the grounds that it had not disclosed the bugs to Second Sight
when, in fact, it was POL that had disclosed the bugs to Second Sight.
374. Since I left POL, I have seen a written legal advice by Simon Clarke of
Cartwright King dated 15 July 2013 (POL00006798). It records that two
lawyers from Cartwright King spoke to Gareth Jenkins on 28 June 2013,
who told them it was he who informed Second Sight about the two bugs.
As set out above, that was not my understanding at the time.
375. Members of Parliament: Any communication to MPs would have been
through Lord Arbuthnot. As I set out in my answers to Question 62, I
decided that it would be appropriate to discuss the bugs with Lord
Arbuthnot at a face-to-face meeting. This only occurred on 3 July 2013,
after he had seen a draft of the Interim Report.
376. The JFSA: I did not tell Alan Bates about the two bugs. I cannot recall
any conscious decision to tell him or not to tell him. Alan was in regular
contact with Second Sight, whom I knew had been asked to “keep the
JFSA on board” (POL00098192: “Ron calls Alan and Kay routinely once
a week to give a full update”). I was not in regular contact with Alan Bates
and I believe I just did not think to tell him.
377. SPMs: I thought it was important that the SPMs of affected branches
were informed. I understood that that had been done in relation to the
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“Receipts & Payments Mismatch” problem and was in hand in relation to
the “Local Suspense” problem. It did not occur to me to suggest the wider
publication of the bugs. I had been told all affected branches had been
identified.
61, Please consider FUJ00086811 (draft report by Helen Rose dated 12 June
2013).
61.1. When was the first time you became aware of this report, or a similar one,
by Helen Rose? Please describe your knowledge of the same.
61.2. Please consider “However, my concerns are that we cannot clearly see
what has happened on the data available to use and this in itself may be
misinterpreted when giving evidence and suing the same _data_for
prosecutions”. Please explain what action, if any, POL took in response to this
report.
378. My answer to Question 61 should be considered together with my answer
to Question 94. Shortly before the publication of the Interim Report I was
briefed orally by Angela Van Den Bogerd on the spot review relating to
Lepton Post Office. I do not recall her mentioning Helen Rose or "the
Helen Rose Report" at this stage. This oral briefing was followed up with
a written briefing note on the interim report sent to me by email on 3 July
2013 (POL00113369). The written briefing note did not mention Helen
Rose but set out the facts relating to what had happened at Lepton Post
Office.
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379. I do not recall exactly when I first became aware of the Helen Rose
Report. The only clear recollection I have of discussing itby name was at
an ARC meeting when Carla Stent was the chair of the ARC. I do not
remember the date of that meeting. I believe that this was in connection
with the issue of whether the change request recommended by Helen
Rose in her report had been implemented. I see now from emails
between Rodric Williams and Martin Edwards in October 2013
(POL00108163) that there was discussion about whether to include
reference to the Helen Rose Report in the CEO report for the October
board meeting. I do not remember whether I was briefed on this but I can
see that the report was not referred to by name in my CEO report. I see
also from (POL00147248) that Chris Aujard prepared a paper for the
POL ExCo about expert witnesses, dated 17 January 2014, in which he
referred to the "Helen Rose, or Lepton P.O. Report". In paragraph 2c, he
said that "the effect (if not the substance) of this report was to cast a
further shadow over both HOL and those who had asserted its reliability
in court documents and in court." I do not recall seeing this paper, but I
may have been briefed about it at the time. I note that the Helen Rose
Report was also mentioned by name in the Second Sight Briefing Report
— Part Two dated 21 August 2015 (at pages 14-15 of (POL00030160)).
62. Please consider POL00098316 (email from Martin Edwards dated 20 May
2013), POL00098317 (briefing attached to the prior email), POL00115880 (email
from Alwen Lyons to you dated 22 May 2013), POL00115881 (briefing attached
to the prior email), POL00105632 (email from Alwen Lyons to you dated 23 May
2013), POL00098378 (email from Alwen Lyons to you dated 24 May 2013) and
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POL00098379 (attachment to prior email).
62.1. Please explain what prompted the “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”.
In particular, please state:
62.1.1. who was responsible for this decision;
62.1.2. what factors were taken into account;
62.1.3. was this viewed as a significant change; and
62.1.4. on what grounds did you previously believe there were “no bugs in
Horizon”.
62.2. Please describe if and when you explained this change of position to Lord
Arbuthnot.
62.3. Please describe your conversation with Lord Arbuthnot on 23 May 2015.
In particular, please address:
62.3.1. What Lord Arbuthnot said that led to the minute “JA said that SS had
certainly not said that they ‘had not come across systemic problems’”’. Did you
pass this information onto others?
62.3.2. Your conversation on remote access. Please set out what your
understanding of Fujitsu’s remote access privileges were at this point.
62.3.3. What did you say to lead to the minute “PV explained the E&Y audit at
year end which gave the IT controls a good report”.
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380. I had a call scheduled with Lord Arbuthnot for 23 May 2013. This was
intended by POL to be a continuation of the discussions we had initiated
with his office earlier in the month to explore a more cost and time
effective solution for the review.
381. On 20 May 2013, Martin Edwards emailed me a paper on the Second
Sight investigation for my call with Lord Arbuthnot (POL00098316;
POL00098317). The section entitled “Background” was a summary of
POL’s assessment of the current status of the review. Around 49 cases
had now been submitted. It appeared unlikely that the review would
conclude anything definitive or satisfactory to the stakeholders, as the
remit had been blurred, different stakeholders had different
interpretations, and the evidence was open to interpretation. There was
no defined endpoint to the investigation and the costs would increase
from the current spend of £180,000 to £750,000 if it continued to July
2014. Further, after a year of investigation, no evidence of systemic
failures had been found. POL’s proposal to Lord Arbuthnot was that:
a. He would ask Second Sight to complete their investigations on two or three
MP cases, selecting those which they felt best indicated systemic
problems.
b. The scope of the review would be defined by answering the question: have
systemic defects in the Horizon system resulted in the wrongful conviction
of sub-postmasters (in either civil or criminal court)?
c. There would be a meeting before the Parliamentary summer recess at
which Second Sight would provide a preliminary report.
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d. POL would commit to working on the areas for improvement that had come
to light (e.g. training, help desk, and SPM support).
382. There was a section at the end of the note entitled “Other things Paula
needs to know”. These included at para. 5.3:
“Defects/bugs/glitches in Horizon. Post Office is not saying Horizon is free
from defects. All large systems of this nature occasionally encounter
problems. We are confident though that no sub postmaster has been
wrongly convicted or suspended due to Horizon defects.”
383. On 22 May 2013, Alwen Lyons emailed me a second briefing note for the
call: (POL00115880; POL00115881). It contained a set of speaking
notes which made a number of introductory points, including (i) stressing
that POL wished to get to truth the about the allegations made against
Horizon; (ii) that we would take steps to address any systemic issues;
and (iii) we wanted the review to be finished in such a way that we could
respond quickly to its findings. The review had taken longer than
anticipated and POL always had to have regard to the best use of public
money.
384. The briefing then set out a proposal that was slightly different from that
set out in the briefing from Martin:
a. Second Sight should now concentrate on three of the MP cases with a view
to producing a report on those cases before the summer recess, and we
understood that Lord Arbuthnot had already suggested this to them.
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Second Sight would review the rest of the MPs where there was sufficient
evidence for them to analyse and produce a final written report by the end
of October 2013. This would exclude approximately half of the 29 MP
cases: we understood from Second Sight that in half of the MP cases there
was insufficient evidence for them to take the review forward.
To enable these timelines, no new cases would be accepted into the
review.
POL was already conducting a business review process and we would deal
with any new cases as part of that process. I would assure Lord Arbuthnot
that there would be a new senior management oversight over the conduct
of these cases.
We also thought it would be helpful for Lord Arbuthnot to reiterate to
Second Sight that their review should focus first and foremost on whether
there were systemic issues with the Horizon system itself. Whilst it might
be appropriate for Second Sight to identify process improvements, it was
imperative that a clear distinction was drawn between the IT system and
the surrounding processes — otherwise, it could lead to confusion and
misleading media headlines to the detriment of public and sub-postmaster
confidence.
385. This second briefing did not contain a section on BEDs.
386. On the morning of the call, I received an email from Alwen stating that
the only thing that was not in my brief was our move away from “there
are no bugs in Horizon’ to ‘there are known bugs in every computer
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system this size but they are found and put right and no subpostmaster
is disadvantaged by them’ it would be good to go on and say ‘or has been
wrongfully suspended or prosecuted’. I do not think that is a phone call
conversation but needs to be aired at some time with James, I would
suggest at your meeting.” (POL00105632).
387. I have been asked by the Inquiry to explain what Alwen describes in her
email as a move away from our former position that there were no bugs
in Horizon.
388. I do not think I ever turned my mind to whether there were any bugs in
Horizon (which could include entirely harmless glitches). My
understanding until May 2013 was that no bugs had been found in
Horizon which could affect branch accounts. I believed that because it
was what I had been told by a series of senior IT managers over many
years.
389. After the Local Suspense and Receipts & Payments Mismatch problems
came to light in May 2013, we were simply in a different situation. We no
longer lived in a world where no bugs had been found in the system. That
turned my attention to how the business had dealt with the bugs, and it
was my understanding that the bugs had been well managed — I had
been assured that they had been detected, rectified, and no SPM was
left out of pocket. I understood how POL had dealt with the bugs to be a
positive. I don’t recall if POL had ever specifically said ‘there are no bugs
in Horizon’. However, Mark Davies flagged that our communications had
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to be clear about what our position was. I was in complete agreement
with him.
390. I viewed the bugs as significant, primarily because branches had been
impacted and that was not something I wanted to happen. There was
also an obvious timing issue, though this was much less important to me.
Against the backdrop of the review, if POL did not explain the bugs
clearly, people might draw conclusions which were not justified by what
I understood had happened. For that reason, I did not want to discuss
the bugs on a call with Lord Arbuthnot. I intended (as Alwen advised in
her email on 23 May 2013) to address this issue with him face-to-face.
391. For this reason, I did not discuss the bugs with Lord Arbuthnot on the call
on 23 May 2013. I did not tell Alan Bates about the two bugs. See
paragraph 376 above.
392. I have no recollection of the call with Lord Arbuthnot on 23 May 2013
beyond what is set out in the minutes (POL00098379). I do not recall the
discussions which led to the minutes in relation to remote access or EY.
In relation to POL’s proposals, I can see from the minutes that Lord
Arbuthnot thought that Second Sight were already progressing in a
structured way to produce an interim report dealing with two to three
cases or spot reviews, following a meeting. All of this should occur before
the parliamentary recess. He stated that Second Sight were reacting to
the JFSA and they needed to keep the JFSA happy. Although the JFSA
should not be running the review, it was important to keep them onside,
as if we did not, they would see the review as a whitewash.
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393. He agreed to write to Second Sight and clarify how they should proceed
with two to three cases and restate the terms of reference and the need
to draw the review to a close. He also agreed that we needed to stop new
cases coming in and that future ones could be dealt with via a POL
internal process.
394. I emailed Alwen, Martin, Susan and Lesley on 24 May 2013 to update
them on the meeting (POL00098373). I said that Alwen had a full set of
notes from the meeting, which they were welcome to consult for a full
debrief (presumably these are (POL00098379)). In short, Lord Arbuthnot
had agreed to most of what we asked him to do, although he was going
to speak to Janet Walker before taking any action. I wrote that the most
important outcome was to secure clarity around the two parts of the terms
of reference. I wanted to keep up the momentum from the call to secure
the narrowing of Second Sight’s terms of reference via a letter from Lord
Arbuthnot. I asked Alwen to speak to Janet.
395. Alwen emailed me on 24 May 2013 (POL00029589):
“Good call with ss but James has definitely caused confusion with his cases
or themes or topics etc. SS have agreed they will look at 3 cases, they will
tell JFSA which 3 cases to keep them on board but SS are choosing which
One of these will be dealing with the issue of remote access to a
subpostmasters account, which James specifically raised
1 have just spoken to Lesley who has engaged Fujitsu today and is
confident that within a week they provide evidence about access and audit
trails etc. Lesley and I will meet Fuj on the 3rd to go through this, and then
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if we are comfortable go through with SS and Fuj on the 6th, so let the
technical people can discuss in detail. That’s all the good news. But I have
heard nothing from Janet...and she is in NZ until after recess, so that
conversation will have to be on hold until then, but I think we can use the 2
weeks in the meantime to make some real progress with SS”
396. On 5 June 2013, Janet forwarded to Alwen an email which Lord
Arbuthnot had sent to Second Sight, setting out his proposed way
forward (POL00098459). Lord Arbuthnot stated “My belief is we should
be moving to some form of closure” and he made the following points:
Second Sight needed to produce an interim report to be presented to MPs
before 18 July 2013, when the summer recess began. MPs were aware of
this deadline and would raise awkward questions if it was not delivered.
The report should concentrate on a few (two or three) of the strongest
complaints against POL.
The report should consider whether there were (a) flaws in Horizon and /
or (b) flaws in POL’s processes or training.
If such flaws were found, agreement would need to be reached on how this
was communicated to POL, individuals who have faced or were facing
prosecution, and to Shoosmiths.
The report must make absolutely clear whether or not there were problems
with Horizon.
397. Having set out his proposed approach, Lord Arbuthnot asked Second
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Sight to give particular thought to two points relating to stakeholders:
a. With respect to POL’s position, he explained that he had spoken to
me and I had requested that any further cases be investigated by
the POL Company Secretary rather than Second Sight. This was
due to concerns about costs and the lack of detailed information and
therefore investigation in some of the cases submitted by Second
Sight to date. As were set out here, I accepted that the procedures
currently in place to investigate such cases at POL would not be
sufficient but felt that the Company Secretary could adequately
perform this role. Lord Arbuthnot stated that he understood my
concerns and asked Second Sight to consider this suggestion.
b. Lord Arbuthnot noted that the JFSA did not have the power to veto
his proposed approach and asked Second Sight to bear that in mind.
Nonetheless, he was very clear that he considered it essential to
keep them positively involved and confirmed that he would seek
Alan Bates’ views on the proposed way forward.
398. Janet emailed Alwen again on 13 June 2013 with an update from Lord
Arbuthnot (POL00098534):
“1. Alan Bates — Interim report. James had an extremely good telephone
conversation with Alan Bates today. He has asked me to let you know that
Alan was content with the proposed content of the interim report. Alan was
more concerned with what happens after this has been delivered....James
touched on the point Paula has made about potentially bringing the
investigation of further cases in-house within the Post Office. Alan has said
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he was not entirely comfortable with this, but James persuaded him to put
this matter into abeyance for the time being, and Alan agreed. We can
return to this after the interim report when we have all seen what it has to
say. Media - ....Alan said he was not responsible for the article in this
week’s Private Eye, and James believes him. Alan said he was happy not
to go public on anything while the investigation process was underway.
"2. Meeting 8 July. lan and Ron have agreed to present an interim report
based on 3 cases to MPs, here at Westminster on 8 July. James has said
to both them and Alan that at the moment, he is not minded to invite
representatives of the Post Office to attend......
399. Alwen emailed me, Lesley, and Susan on 21 June 2013 with an update
on Second Sight (POL00098655):
“As you will remember JA is hosting a meeting on 8th July where SS are
going to present their interim findings to MPs and JFSA, on 3 MP cases.
We had a call with Second Sight today and have now put in place calls
every day from next Tuesday to take us through to their report being ready.
There are still risks with what the report will say. Not around the System
but around the wider issues eg. Training and support (which SS are
counting as part of the Horizon operating model).
1 am sure there will be enough in the report for JFSA to cause mischief if
they want to with the Media, and Ruth is involved in updating the comms
plan.
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SS have a call with James on the 2nd July and you have a call with him on
the 3rd and we should know in advance what the report will say and
therefore what they are likely to say to James.
Things will get clearer next week. But my biggest concern at the moment
is if the review focuses on training etc how JFSA will respond. I think you
can make some positive noises to JA on the 3rd including improvements
in training and support and also our idea of a horizon user group made up
of existing subpostmaster (sic) who use the system.”
64. Please consider POL00098774 (email from Rodric Williams to you dated 27
June 2013). Please explain the background and purpose of your conversation
with Rodric Williams on or around 27 June 2013. Please address the following:
64.1. What would constitute a problem “on a widespread basis”?
64.2. In respect of “No cases since at least separation have seen convictions
secured on Horizon-based evidence alone, e.g. there has also been a paper trail,
money in bank account, confession, and/or lies at interview exposed”, please
explain why the date of separation was considered relevant.
400. The situation by the end June 2013 was that a timetable had been fixed
for Second Sight to present an Interim Report to MPs on 8 July 2013.
Lord Arbuthnot was going to speak to Second Sight on 2 July 2013 and
I was going to speak to him on 3 July 2013. The intention was that we
would know by that point what the Interim Report would say. This was an
extremely tight timetable. As of 21 June 2013, when Alwen Lyons sent
me her update at (POL00098655), it was not clear what topics the Interim
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Report would cover. Alwen anticipated that it would not report any
problems with the IT system but might criticise training and support. I see
from an update Alwen sent to me on 28 June 2013 that some of Second
Sight’s case studies might not be finished (POL00098789). This was not
what POL intended when we proposed to Lord Arbuthnot that Second
Sight should report in advance of recess on two to three cases: we
wanted them to present a complete and not a partial analysis.
401. By 25 June 2013, POL was aware, though I am not certain when I
became aware of it, that the Interim Report was likely to contain a section
on the Suspense Account problem and the Receipts & Payments
Mismatch problem. We therefore had to prepare a response in a very
short timescale.
402. On 27 June 2013, Rodric Williams sent me what he described as a
summary of a discussion with me on the Horizon investigation with some
additional points on criminal prosecutions (POL00098774). I have no
memory of our discussion, but one reading of the document is that we
had not discussed the prosecution points and he added this section for
completeness, or I had asked questions on this area and wanted him to
follow up so I was clear. However, I cannot say for certain. It is clear that
the context of what we discussed was that Second Sight were now going
to report on the two bugs. I’ve been asked to comment on the following
parts of the document:
“Horizon generally
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“...Transactions and balances accurately recorded; i.e. — if there was a
systemic problem, we would have seen it replicated on a widespread basis.
“Criminal prosecutions
“...No cases since at least separation have seen convictions secured on
Horizon based evidence alone, e.g. there has also been a paper trail,
money in bank account, confession and /or lies at interview exposed.”
403. I have been asked to comment on two aspects of the above. The first is
to provide my view on what would constitute a problem on a “widespread
basis’. The point I would make is that I would never have attempted to
assess myself whether a problem was “systemic” or “widespread”. I
regarded this as a matter of IT expertise, and I relied on POL’s internal
IT function for advice on the implications of any criticisms or any actual
defects in Horizon. I recognise now that the use of the words widespread
and systemic was unhelpful. What was at stake was whether any
individual SPM had been mistreated and / or wrongly convicted or
suffered in some other way because of a single BED in the Horizon
system.
404. I have also been asked to consider Rodric's comment that no cases since
at least separation from the RMG have seen convictions secured on
Horizon evidence alone. I do not recall any conversation about this with
Rodric. I do recall, although I’m unclear when, that the Board had asked
about prosecutions since separation, wanting reassurance that POL’s
approach was appropriate.
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65. Please consider _POL00098777. Please explain whether you _or other
members of the POL senior management team were considering legal action
against Second Sight prior to the release of its interim report. If so, please
explain why.
66. Please consider POL00029625 (internal briefing note to you on 1 July 2013),
POL00098878 (notes for Board update on Second Sight investigation dated 1
July 2013), POL00021515 (minutes of the POL Board meeting on 1 July 2013),
POL00021745 (email from Simon Baker to you and other on 5 July 2013),
POL00021746 (draft Interim Report into Alleged Problems with the Horizon
System v24).
66.1. Had you read a draft of the Second Sight interim report before the Board
meeting on 1 July 2013?
66.2. Was the reference to “Other Anomalies — Falkirk” in the briefing new to
you? Did you take any steps to understand better the Callendar Square bug at
this point? Please explain whether you took any steps to ensure that Second
Sight had been informed of what POL knew about the Callendar Square bug.
66.3. Please explain the update you gave to the Board on 1 July 2013. In
particular, please address the following:
66.3.1. On what basis did you say that “The investigation to date had found no
systemic issues with the Horizon computer system but had highlighted areas
for improvement in support areas such as training”. What did you understand
a “systemic issue” to be?
66.3.2. Please describe how you explained your concern that “the report from
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the independent forensic accountants was not as factual as expected and could
lead to loose language at the MP_meeting”. What was your basis for this
concern?
66.4. Please your involvement in POL seeking any amendments to the draft of
Second Sight’s interim report.
66.5. Did you read the V24 draft_of Second Sight’s interim report? Please
consider:
“6.1 There is still much work to be done on the cases Second Sight has been
asked to investigate... 7.1 It has become clear that whereas the Horizon
system appears to achieve its intended purpose almost all of the time and
operates smoothly for most SPMRs and their staff, some combinations of
events can trigger situations where problems occur.... 12.2(a) We have so
far found no evidence of system wide (systemic) problems with the Horizon
software”
66.6. What were your views to this aspect of the report?
405. I can see from the documents that, during 27 to 28 June 2013, POL was
considering how to manage the situation with the Interim Report. Our
preferred option was that the report and the meeting with MPs would be
deferred. There were a number of reasons for this:
a. POL was being given very little time to prepare its response to a very
serious and important report.
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The feedback from the POL team who were liaising with Second Sight was
that, in their view, Second Sight placed too much reliance on the
recollection of the Mediation Scheme's applicants and did not place
sufficient weight on what they considered to be hard evidence.
The message I received was that this approach made it difficult for Second
Sight to reach any conclusions.
The Interim Report was likely to be incomplete and therefore inconclusive
because Second Sight had not finished their case reviews. POL was very
nervous about this, and I believe rightly so. There was a danger that any
provisional views expressed by Second Sight would be reported in the
media as established fact. That would be hugely damaging to Post Offices
across the country, to many customers — from small businesses who relied
on the Post Office to some very elderly and vulnerable persons. It would
also be a problem for Government who would share POL's concerns. POL
was unable to delay the report — I cannot now recall why now, but it is
possibly because Lord Arbuthnot had been very clear in his requirement
for a report before the summer recess, to respond to his colleagues.
406. On 27 June 2013, Rodric Williams sent an email to Andrew Parsons of
Bond Dickinson (POL00021822). He referred to Second Sight’s
forthcoming presentation of their Interim Report. POL wanted all
concerned to be aware of the responses POL had given to the issues
raised in the inquiry. He asked Andrew Parsons to prepare a document
referring to Second Sight’s obligations under the terms of reference to
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consider the evidence POL produced, and summarising POL’s
responses on four specific Spot Reviews. I do not recall any conversation
with Susan Crichton or Rodric before commissioning Bond Dickinson to
do this work. As I set out below, any suggestion that POL might take legal
action against Second Sight was very quickly dropped.
407. (POL00098777) indicates that I attended a meeting on 27 June 2013 with
Lesley Sewell and Martin Edwards and most likely others I cannot
remember. I can see from emails in this thread that we discussed the
bugs and POL’s overall response to the Interim Report. I can see from
my email to Martin after the meeting that I asked him whether he had any
further thoughts on Lord Arbuthnot. He responded:
“My only other concern at the meeting was around the feasibility of some
of the options/levers that were raised. As discussed we need to think about
a Plan B given the likelihood that James won't agree to delay the
meeting/report. We also need to be very careful not to overplay our hand
with SS — they could turn out to be quite dangerous if we threaten them
with legal action or attempt to replace them with another firm. Easy for this
to be portrayed in the media as heavy handed tactics because we don’t
like their findings (it plays directly into the existing perceptions we're trying
to counteract). So I think we're stuck with the softer option of explaining to
JA calmly but firmly why he cannot allow SS to disseminate a misleading
interim report — it either needs to be delayed or repositioned as a very
neutral status update (with more detail on the one case that has been
resolved).”
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408. The discussion about how best to handle the Interim Report continued
on 28 June 2013.
409. On 28 June 2013 at 10:57, I forwarded Martin’s email at (POL00098777)
to Alice Perkins stating in my covering email:
“Alice, the team are currently reviewing all options and Alwen has a
meeting...with Janet on Monday. The note below from Martin is also helpful
— just to reassure we have the best brains on it. We will get a note from
Alwen later today on who is doing what/next steps. Susan has cancelled
the last day of her holiday and is coming in on Monday as soon as she
lands, to meet SS. All very tricky but I am happy at least that the team are
working closely and with pace. Ps. Ignore the cryptic comments re transient
data etc. You don’t want to go there (I am).”
410. At 13:12, Alwen sent me an email setting out the next steps, which I
forwarded to Alice (POL00098789). Alwen’s email included the following
points:
“Rod Ismay and Lesley working the detail of the 2 bugs, to understand them
and then get them into language that is clear and can be communicated.
“Mark is putting in place expert external comms resource to be dedicated
to this issue from Monday (this will be from an external agency which he
trusts).
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“We have a call with SS this afternoon and we will run through the individual
cases to see how far they will have got by next Tuesday’s briefing with
James and the meeting date on the 8th, this will inform my conversation
with Janet on Monday.
‘1 am going to spend time with Janet at 09.00 on Monday morning, she
Says she can give me as long as it takes. My approach will be to try to get
to understand the status of the review and the risk to James and us of an
incomplete interim report. I will share the fact that SS are not using all the
evidence they are being given and our concern is that there [sic] approach
to try and keep everyone happy is not how we would expect a forensic
accountant to behave. I do think this is the right place to share the ‘bugs’
we have found and how we have dealt with them, which is why the report
from Rod/Lesley checked by legal and Mark is important. My objective is
to get Janet to a place where she also wants the meeting to be cancelled.
1am also going to mention the timing of the report aligned with the funding
and James’ unhelpful comment to Jo about ‘unfair convictions’. I will have
to play this meeting a bit by ear!
“...We think SS will present the 4 cases some of which will not be finished
but we are not sure yet. They will also raise the issue of the ‘bugs’ which
were outside the cases but which we disclosed to them.”
411. I wish to comment on two aspects of this email. The first is Alwen’s
statement that Rodric and Lesley were working on the details of the two
bugs to understand them and put them into language that was clear and
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could be communicated. My understanding at the time was that technical
details of the bugs and their financial impact were fully understood by
Fujitsu and POL. I would have read this at the time as an exercise in
putting the details into a form which a non-IT expert would understand.
What this document also reflects is that it was always my intention to
share information about the bugs with Lord Arbuthnot — but, as I have
already mentioned, I wanted to do that in the setting of a face-to-face
meeting.
412. Alice replied to Alwen, Martin and me at 14:50 (POL00098797):
“Thanks for the updates. I am glad we have the best people on this.
...Second, I agree with Martin about the risks of getting heavy with SS -
deeply unattractive. But I haven't heard anything yet which gives me hope
we can get this properly back on track. Which is worse? (I don’t know the
answer.) (Keep aiming high here! That is for the goal of no interim / no
meeting. But I recognise that this is not within our control.) Third, a
constructive suggestion!, shall we ask Oliver Letwin to help us turn this
around?”
413. This was the end of any suggestion — which I never endorsed — that POL
should take some form of legal step against Second Sight.
414. Shortly afterwards at 14:57, Lesley Sewell emailed me (copying Alwen
Lyons, Martin Edwards and Mark Davies) some information on what had
been done by POL in relation to the Local Suspense problem
(POL00190016). She stated in the email that the problem had affected
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14 branches of which five had losses and seven had gains, and that
letters to the affected branches were being reviewed by Legal and P&BA.
The email also contained a summary explanation of the root cause.
Under the heading in the email "How we know there aren't anymore",
Lesley stated that Fujitsu had interrogated the local suspense data and
found only these 14 cases. They had also taken steps to delete the
temporary data which had caused the problem. Lesley sent a follow up
email at 16:19 following a call she had had with Rod Ismay. The email
contained further details of how individual branches had been affected.
There were two branches with substantial discrepancies. Willen Village
had a loss of £9,799 however the SPM was not disadvantaged by this.
The branch at Bowness Road had made a gain of £6,000 over two years.
In addition, Lesley stated:
"The problem was identified by P&BA earlier this year due to aged items in
the Local Suspense, this was further supported by the two larger amounts
detailed below that had been raised by the SPMR. At this point P&BA
raised through their usual process to Fujitsu as detailed below for
investigation".
415. There was a POL Board meeting by telephone conference call at 17:15
on 1 July 2013. I do not know whether by this point I had read any draft
of the Interim Report. I do not recall being sent or given a copy and my
lawyers have so far been unable to find any indication that this had
occurred by this stage. It is far more likely that my view of how the Interim
Report was developing was based on feedback from the team who were
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liaising with Second Sight. I would have deferred to their views on its
quality.
416. (POL00098878) is a speaking note prepared for the POL Board call on
1 July 2013. It was emailed by Martin Edwards to Alice, copying me,
Alwen, Susan Crichton and Mark Davies on 1 July 2013 at 15:58
(POL00098877). It sets out the timeline for the release of the report and
outlines POL’s communication plans. It also sets out POL’s position on
the Second Sight review:
The key point to emphasise was that we understood that Second Sight had
not identified any systemic issues with Horizon itself.
However, the report would still present reputational risks. Second Sight
were nervous about perceptions of a “whitewash” and so may draw
attention to two points.
The first were issues with POL’s wider support training and investigations
processes. POL’s response would be that we accept that there are lessons
to be learned and have a proposal on how to address them while closing
down the Second Sight investigation.
The second was that POL had disclosed two previous anomalies with the
Horizon system. It might be said that POL cannot be confident that there
are not more widespread problems. POL’s response would be that in both
cases the errors were picked up and addressed; a comprehensive audit
had been performed to check that there were no further cases we weren't
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aware of; and new procedures were being put in place to ensure that such
anomalies would be spotted at any early stage in the future.
e. POL’s view of Second Sight was that they hadn't yet reviewed all the
evidence POL had given them and may not be in a position to set out
definitive conclusions on the case studies in the Interim Report. It also
appeared that they were not focussing on empirical evidence, instead
tending to rely on the recollection of sub-postmasters.
f. POL believed that the Second Sight review should now conclude.
417. The minutes for the POL Board meeting (by teleconference) on 1 July
2013 record the following discussion about Second Sight and the Interim
Report (POL00021515; POL00099516):
“The CEO apologised for the short notice in keeping the Board updated but
explained that issues had arisen over the last couple of days. She gave an
update on the Horizon review which was being undertaken by Second
Sight and their interim report which was to be presented at a meeting of
MPs on the 8" July. The investigation to date had found no systemic issues
with the Horizon computer system but had highlighted areas for
improvement in support areas with the Horizon computer system but had
highlighted areas for improvement in support areas such as training.
“The CEO explained that the Horizon, like any large computer system,
would occasionally have anomalies and two were know(n) of over recent
years. The Business has dealt with these anomalies to ensure no sub
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postmaster was out of pocket and these anomalies had not affected any of
the cases which Second Sight had reviewed. Second Sight had been told
of these anomalies and they would include them in their report.
“The CEO was concerned that the report from the independent forensic
accountants was not as factual as expected and could lead to loose
language at the MP meeting.
“The Board asked the Business to challenge Second Sight to ensure
changes were made to the report where possible and asked the Business
to prepare their communication to combat any inaccuracies.”
418. The Inquiry has asked me to comment on what I meant when I stated
that the investigation to date had found “no systemic issues with the
Horizon computer system”. As I have already mentioned in this witness
statement, whether or not an issue with Horizon was “systemic” was not
something on which I could form my own view. It was a matter of
professional IT expertise.
419. Second Sight had been engaged by POL to investigate and report on the
very question of whether there were systemic issues. I understand that
for the purposes of their report, Second Sight defined “systemic” as
meaning “system-wide”: see paragraph 8.2 of the Interim Report. I do not
imagine I was focussing on that precise definition when I spoke to the
POL Board. My understanding at the time of the meeting was that
Second Sight had not informed POL that there was any issue with
Horizon that they regarded as “systemic”. POL’s own technical people
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were of the same opinion. All I believe I was conveying to the POL Board
was the current status of the investigation as I understood it to be, based
on what I had been told.
420. I am also asked about my statement that “the report from the independent
forensic accountants was not as factual as expected and could lead to
loose language at the MP meeting”. As I have already indicated, I have
no memory of having read a draft of the Interim Report by this point. It is
more likely that I made this comment based on feedback I'd received
from the POL team who were liaising with Second Sight. I played no role
myself in attempting to make any changes to the Interim Report. Nor did
I encourage anyone at POL to challenge or amend any particular aspect
of the Interim Report. I knew that the POL team working on this matter
were exchanging drafts with Second Sight and proposing amendments.
It was for them — who were far closer to the detail than me — to decide
how they approached that task.
421. At 19:48 on 1 July 2013, Rodric Williams sent an email to Alwen Lyons
and Susan Crichton copied to Hugh Flemington (POL00029626). He
attached a draft briefing note on the Interim Report. Alwen Lyons replied
all noting amongst other things "this is the first I have heard that Falkirk
is different to the 64 we had assumed it was the same so do we have 3
anomalies. That's not good, we have told the Board and Janet 2 we knew
of!". This appears to make clear that we did not know about the Falkirk
bug before the board call.
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422. At 22:07 on I July, after the POL Board meeting, I sent an email update
to Alice Perkins, having first spoken to Susan Crichton, who had met
Second Sight earlier that day to get an update on their progress
(POL00098887):
“1 caught up with Susan this evening after we finished. She had finished
her meeting with SS and wade [sic] of the view that they do now understand
the risk of being caught up in something bigger and more sensitive. She is
hoping their report will be more balanced, should say they have found no
evidence of systemic Horizon (computer) issues but will confirm
shortcomings in support processes and systems. And that PO has already
identified and corrected a number of these. I hope when they speak to
James tomorrow that they will confirm all this. They will also want to say
their work is not finished and therefore still not conclusive.
“Not a final position by any means nor one that controls what they might
say rather than write but sounding slightly better.
“Rest assured there will a thorough lessons learnt exercise, which if you’re
comfortable, I’d like to suggest reports to the ARC. As you said tonight, we
need to get through this first though."
423. The Inquiry has also asked me to comment on (POL00029625). This is
a draft of an internal briefing note to me dated 1 July 2013 which was for
my meeting with James Arbuthnot on 3 July 2013. The document is a
draft containing many gaps and questions. I would not normally be given
a briefing paper until it reached its final form. I have no memory of seeing
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the draft, nor have I have seen any documents to suggest that it was sent
to me. I can see from (POL00027852) that Martin Edwards emailed Alice
Perkins and me what appears to be the final version of the document at
02:06 on 3 July 2013 in preparation for our meeting with James Arbuthnot
that day. I did become aware of the Falkirk bug, but I do not believe I was
informed about it before the POL Board meeting on 1 July 2013.
424. I cannot recall whether I took steps at this stage to understand the
Callendar Square bug better nor can I recall what steps were taken to
ensure that Second Sight had been informed of what POL knew about
the bug. I can see now from emails at (POL00144918) that Simon Baker,
Lesley Sewell and Alwen Lyons were in discussion with Second Sight in
June 2013 about "The Calendar [sic] Square, Falkirk Problem".
425. At 09:46 on 5 July 2013 Simon Baker sent v24 of the draft Interim Report
to me and a number of others suggesting that we "regroup at 1pm... to
agree our final position" (POL00021745). I assume that I read the report
at the time. I can see from (POL00167937) that at 15:39, Simon Baker
sent a copy of the report with POL's comments to Ron Warmington and
lan Henderson. I was then sent a marked up copy of the report at 17:39
by Lesley Sewell (POL00167937). I do have some comments on the
sections that the Inquiry has referred me to. I was very much aware that
Second Sight’s position was that their investigative work was incomplete
and the conclusions in the Interim Report were provisional and subject to
further work. I therefore understood that Second Sight were not saying
that there were definitely no systemic issues in the software, only that
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they had found no evidence of systemic problems up to this point. I was
aware of non-systemic issues in the sense that all sorts of things could
happen at the level of an individual Post Office — from mis-keying, to a
network failure, to the egg-timer issue, to losing a lottery print out or
receipt, to not using ATM-fit notes, to miscounting a rem in or out — the
possibilities were endless and all could have affected the branch Horizon
data in some way. The whole point of sitting down with Second Sight in
reviewing each case individually was to try to establish in each case the
cause of the issue encountered by the SPM.
426. (POL00099096) is a POL commentary on the Interim Report which I was
sent on 8 July 2013. I can see from this that the team took a fairly light
touch to amendments: they were seeking to avoid any suggestion that
POL had attempted to rewrite the report or compromise its
independence. Therefore, POL focussed on asking Second Sight to
tighten up the report (such as using hard numbers rather than phrases
like “in a number of cases”) or asking Second Sight to use more neutral
language to avoid the report being misinterpreted.
67. Please consider POL00115923 (email from Martin Edwards to you and others
on 3 July 2013), POL00115924 (briefing for a meeting with Lord Arbuthnot on 3
July 2013), POL00098916 (your email to Alice Perkins on 3 July 2013),
POL00029649 (your letter to Lord Arbuthnot on 4 July 2013) and POL00107985
(your email on 4 July 2013). Please describe your meeting with Lord Arbuthnot
on 3 July 2013 and you preparation for it. In particular:
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427. I cannot recall exactly what preparation I did for the meeting with Lord
Arbuthnot on 3 July 2013. I can see from Alice Perkins’ email to me on 2
July 2013 (POL00098887) that the two of us set aside two hours on 2
July 2013. The briefing papers were emailed to us by Martin Edwards at
02:00 on the day of the meeting, 3 July 2013 (POL00115923). In his
covering email, Martin thanked Susan Crichton, Alwen Lyons, Mark
Davies and “everyone else involved” for the briefing papers. I assume
this was a reference to the other individuals copied into the covering
email: Hugh Flemington, Rodric Williams, and Simon Baker. The briefing
papers consisted of two documents: a briefing for the meeting with Lord
Arbuthnot containing speaking notes (POL00115924) and a note
addressed to me on the Interim Report (POL00113369). Both documents
were attached to Martin’s email as PDFs, and he had put the text of the
briefing into the covering email.
428. I was to meet Alice before 09:00 at Portcullis House, Westminster, and
Alwen was to meet us there with hard copies of the briefing papers:
(POL00098912). The electronic versions of the briefing papers were
readable on a phone or tablet. I can see that I read them early in the
morning of 3 July 2013: I sent an email to Mark and others at 07:40 on 3
July 2013 (POL00098915) to ask whether we could share them with Lord
Arbuthnot, as they were so clear. However, Mark’s advice was not to
share the papers, but to send Lord Arbuthnot a letter after the meeting to
summarise the key points we discussed. That is what we did.
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429. I cannot remember the meeting, but I can see from (POL00029649) that
I wrote to Lord Arbuthnot on 4 July 2013 to summarise the key points we
had discussed:
I reiterated that POL was keen to work collaboratively with the JFSA and
sub-postmasters to conclude the review process and identify areas for
continuous improvement.
To help achieve this aim, we intended to create a new body within POL,
known as the Branch User Forum. The Branch User Forum would be a
permanent body to give sub-postmasters a voice at the heart of the
business.
It would be chaired by a senior executive and the JFSA, NFSP and CWU
would be invited to join.
The first priority of the Branch User Forum would be to work together to
bring the Second Sight review to a conclusion. It would then continue as
an outlet to consider future issues and concerns.
We discussed the small number of exceptions or anomalies which POL
had brought to the attention of Second Sight, which had been dealt with in
the appropriate way. This meant that they had been identified and
corrected, and that the sub-postmasters concerned had been contacted
where it was relevant to do so. Lord Arbuthnot acknowledged during the
meeting that such exceptions were common in large computer systems —
the important thing was that they were handled in an appropriate manner.
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We agreed that we would share media statements in advance of the
publication of the Interim Report.
We discussed the importance of drawing a clear distinction between (i)
systemic issues with the Horizon system; and (ii) the wider support
systems. Confusion about this distinction could have a serious impact for
POL, sub-postmasters and customers. It was essential that the distinction
was applied and followed in the Interim Report and all associated
communications.
430. I emailed Mark, Martin, Susan and Lesley in the morning on 4 July 2013
with my thoughts on the meeting (POL00098973; POL00107985). I said
that the meeting went better and at moments worse than hoped but the
overall balance was positive. Lord Arbuthnot was turning to recognition
that the Horizon IT system was ok, but that (and this was my summary
of his position): “...we have behaved in a heavy handed way with some
spmrs who panicked, which resulted in them inadvertently getting into a
muddle and committing fraud. There is no suggestion that it is wide-
spread and there is recognition that other prosecutions were correct.”
431. I wrote that if it were the case that POL had behaved in a heavy-handed
manner, I wanted it called out. It did not fit with our current values and
would undermine trust in the brand. However, we needed to be very
careful about proportionality, which was a point I made consistently, i.e.
that the vast majority of transactions were carried out without problems.
I asked Susan to find out how many prosecutions there had been in the
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last ten years and Angela to find out what flags we have in place at the
NBSC to make sure we picked up any signs of concern or incompetence
or inability regarding SPMs balancing etc.
432. On 4 July 2013, Alice emailed me with her thoughts about the next steps
in light of what was discussed at the meeting with Lord Arbuthnot
(POL00098986). Alice’s view was that we should not commit ourselves
too firmly to any future arrangements while everyone was tired and
dealing with immediate issues. She recalled that Lord Arbuthnot had
mentioned at the meeting that we should see what ideas came out of the
meeting with MPs on Monday: her view was that we should leave the
arrangements open while committing in principle to working with Horizon
users and the JFSA. She also wanted to change the approach with
Second Sight: “If we have to continue with SS, my firm belief is that we
need a totally different approach to managing and rewarding them and
that the significant over-run in the budget to date should feature in our
negotiations.” Picking up on a suggestion that I had made of an ARC-led
post-mortem, Alice suggested that Alastair Marnoch could lead this
project.
67.1. Why did your briefing not refer to the Callendar Square bug? Did you raise
this with Lord Arbuthnot; if not, why not?
433. The note on the Interim Report which Martin Edwards sent me on 3 July
2013 (POL00113369) contains a section on the Callendar Square /
Falkirk bug between paragraphs 28 and 33. However, it was not
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mentioned in the speaking notes set out in the body of the email. I do not
recall whether I noticed this at the time. I do not remember whether I
mentioned the Falkirk bug to Lord Arbuthnot during the meeting. It is
possible that I did, because my letter to him on 4 July 2013 refers to “the
small number of exceptions or anomalies which POL had brought to the
attention of Second Sight’ (POL00029649).
434. If I did not mention the Falkirk bug, it was not deliberate. I have a
recollection of being told that POL had made Second Sight aware of the
Falkirk problem and I believe this is the bug they refer to in paragraph
6.10 of the Interim Report. As set out above, there had been discussions
with Second Sight about the Falkirk bug in June 2013.
67.2. In respect of your email at POL00098916, please expand on your reason
for writing “This isn't just about SS - don't want to make them central. It is about
no system issues, some improvements to be made, and keeping perspective so
that_our brand reputation is protected”. What did you mean by “no system
issues”?
435. Alice Perkins and I discussed how we would start the meeting by email
on the morning of 3 July 2013 (POL00098916). Alice suggested that,
since we would not have the chance for a pre-chat, we should begin by
asking Lord Arbuthnot to share his thoughts with us. She proposed that
we mention in our opening remarks that the position with Second Sight
was not where we wanted it to be, with an incomplete Interim Report
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being circulated very late for the presentation meeting to MPs on Monday
8 July 2013.
436. I responded that I had “advice from the ranch”, and it was my own view,
that this was not quite front foot enough. I can see from (POL00098911;
POL00098912; POL00098921) that I consulted Mark Davies and Martin
Edwards after receiving Alice’s email. I felt her approach would give Lord
Arbuthnot the opportunity to take control and put us on the defensive. I
thought that the three headline points in the briefing were good, and we
should lead with those. If the meeting started as a general conversation,
we might lose the opportunity to make them.
437. The Inquiry has asked me to expand on the words I used in my email to
Alice:
“This isn’t just about SS — don’t want to make them central. It is about no
system issues, some improvements to be made, and keeping perspective
so that our brand reputation is protected”.
438. My response to Alice meant no more than it would be better to follow the
speaking note than to begin with a general conversation and raising
Second Sight. The three headline points in the briefing which I thought
we should start with were as follows:
. “We take sub-postmasters’ concerns very seriously which is why we
set up investigation in the first place.
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. No evidence of systemic failures in the system. But does highlight
some important lessons on wider support processes. Many of these
are historical issues which have already been addressed, but we're
determined to continue making improvements (with input from a new
user forum).
° Important this is seen in context — 6 million transactions per day
across 11,800 branches. Inevitable that some issues will arise on a
system of this scale, the important thing is that they are handled
properly.”
439. I believe that the phrase in my email to Alice, “no system issues”, was
shorthand for the second bullet point in the briefing, beginning “no
evidence of systemic failures in the system”.
a9
67.3. On what basis did you distinguish “System ‘exceptions’” and “systemic
issues with the Horizon computer system”?
440. The Inquiry has also asked me to explain the distinction between two
phrases in the speaking note: “System exceptions” and “systemic issues
with the Horizon computer system”. “System exception” was the term
used in the briefing to describe the Local Suspense problem and the
Receipts & Payments Mismatch problem. In retrospect it would have
been better to have called them “bugs” or “defects”: indeed, that is what
they are called in section 6 and paragraph 8.2 (b) of the Interim Report.
The difference between them is that I had been told by POL’s IT function
that the two bugs were not systemic issues or evidence of systemic
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issues. That also appeared to be Second Sight’s own conclusion as set
out in paragraphs 8.2 (a) and (b) of the Interim Report.
68. Please consider POL00098940. Please describe your meeting with Duncan
Tait on 4 July 2013. Please describe your involvement with Fujitsu in relation to
Second Sight at the appropriate point of your witness statement.
441. On 4 July 2013, I had a meeting with Duncan Tait, the CEO of Fujitsu
Europe.
442. During the afternoon of 3 July, Richard Bryant emailed a briefing for the
meeting to Sarah Paddison (cc. Gina Gould and Lesley Sewell), which
Gina forwarded to Martin Edwards and Theresa Iles (POL00098940).
Martin emailed Lesley that evening. He had noticed that the briefing did
not cover the Second Sight investigation, and he understood from
conversations with me that I intended to raise it with Duncan Tait. Martin
asked Lesley to respond.
443. At 20:30, Lesley emailed Martin some points on the investigation, which
Martin then emailed to me. Lesley suggested, in summary, that I should
thank Fujitsu for their past support in responding and providing the
information requested by Second Sight and ask for their support going
forward as we responded to the Interim Report. She also suggested that
I single out James Davidson at Fujitsu (a name I recognise from Inquiry
documents, although I do not believe I knew him) for having done a good
job. In addition, Lesley assumed that Duncan Tait would want my view
on how the matter would move forward.
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444. I do not remember what I said to Duncan Tait during our meeting. The
email at (POL00098940) indicates that the meeting was mainly about
matters other than Second Sight, which is why Second Sight was not
mentioned in my briefing. I knew that Fujitsu had been supporting POL
throughout the Second Sight investigation with the extraction of the
Horizon data for the cases in the investigation and with technical support
in relation to questions about the workings of the IT system. It is likely
that I said something along the lines suggested by Lesley, but I cannot
recall the conversation.
69. Please consider POL00099021 (email chain over 4/5 July 2013).
69.1. In your email of 4 July 2013, please explain your basis for the “cause for
concern in relation to the overall quality and professionalism of the drafting and
the widespread use of subjective (and at _times somewhat emotional)
statements of opinion rather than more neutral and evidence-based insights”?
Please provide examples of (a) any subjective statements of opinion and (b) a
somewhat emotional statements of opinion on which this opinion was based.
445. At 20:26 on 4 July 2013, Martin Edwards sent me a draft of an email to
the POL Board to update them on where we were with the Interim Report
(POL00099003). He apologised for its length but felt that the issues could
not be discussed without providing a reasonably full explanation. At
22:52, I sent the Board a version of the email which I had amended
(POL00099021).
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446. The third paragraph of the draft, and the final version of the email stated
that POL expected Second Sight to send a full draft of the Interim Report
on 5 July 2013, and that they had shared today (4 July 2013) the
introductory section. Before sending the email to the Board I made a
change to Martin’s draft to state that POL was concerned “in relation to
the overall professionalism of the drafting and the widespread use of
subjective (and at times somewhat emotional) statements of opinion
rather than more neutral or evidence-based insights.”
447. I do not know whether I had read the draft introduction to the Interim
Report when I emailed the Board on 4 July 2013. I have not seen any
document which indicates that I had been sent a copy by this point. It is
more likely that my comment to the Board was based on a discussion
with the POL team who were reviewing the draft sections of the Interim
Report as they were circulated for comments by Second Sight.
448. As I have mentioned in my answer to Question 66, on 8 July 2013, I was
sent a POL commentary on a then current draft of the Interim Report
(POL00099096). I can see from this document that the POL review team
had a number of areas of concern:
Second Sight sometimes wrote in a way that could give the impression that
the concerns they were investigating had been reported by a larger number
of SPMs than was in fact the case: they used phrases like “in almost all of
the cases”, “in a number of cases” and “multiple SPMRs”, instead of the
actual numbers, which were small.
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At points, Second Sight appeared to criticise POL’s approach to their
investigation. POL’s review team believed these criticisms were unjustified.
For example, POL’s commentary on paragraph 2.4 of the draft Interim
Report responded to a suggestion that delays in obtaining information had
added to the length and cost of the investigation. The POL investigation
team pointed out that POL was meeting the costs of the review, and that
they had responded to Second Sight’s requests for information by collating
it from a range of sources across the business. They felt there should have
been recognition by Second Sight of the effort POL had put into providing
them with information.
Another example is POL’s commentary on paragraph 3.5 of the draft
Interim Report. Second Sight had complained that POL’s responses to the
Spot Reviews were technical and would be inaccessible to the SPMs.
However, the POL team had drafted the responses to be reviewed by
Second Sight as forensic accountants, and that level of detail was required
to understand what had happened in each of the cases in the review.
In paragraph 3.5 of the draft, Second Sight stated that there had not been
“closure” for SPMs. The POL review team pointed out that this was not
surprising given that Second Sight had yet to conclude its work on the 4
Spot Reviews analysed in the Interim Report.
449. Although I did not see this document until after I emailed the POL Board
on 4 July 2013, the criticisms it made of Second Sight are familiar to me:
the POL commentary contains the type of feedback that I was given by
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the POL review team — in meetings and conversations — since they had
started looking at the drafts of the Interim Report earlier in July.
450. At the time, I believed that POL’s criticisms of Second Sight were fair: I
trusted that the POL review team had collated the available evidence,
and looked at the evidence, and Second Sight’s findings, in an objective
way. This team had no brief other than to be transparent and objective —
all the correspondence and interaction from the Chair, POL Board, CEO
and down was focused on POL undertaking this work objectively.
69.2. Please explain what information you provided to BIS regarding Second
Sight’s work at this time.
451. At this time, leading up to the publication of the Interim Report, the
shareholder's representative on the Board was Susannah Storey. She
was a recipient of my email update to the Board on 4 July 2013 and a
further email update from me to the Board on 5 July 2013 (both in the
chain at (POL00099021)).
452. I stated in my update to the POL Board on 4 July 2013 that I had briefed
the BIS minister, Jo Swinson MP, on 3 July 2013 and that POL was
staying in regular contact with her officials. (POL00098928) is a speaking
note which appears to have been prepared for me to use when I spoke
to the minister. The headline points I was to address were to provide
reassurance on the extent of the problem:
a. Based on what POL had been told by Second Sight, we expected them to
conclude that there was no evidence of systemic problems based on the 4
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cases they had assessed in detail. However, they would draw attention to
issues and areas for improvement with our wider training and support
processes.
b. I Many of the reported issues with support systems were historic and had
already been addressed — but POL was determined to keep on improving.
c. It was important to keep these issues in perspective: there were 6 million
transactions per day across the Network’s 11,800 branches and many
more transactions per second (1,500) than there were in the entire review.
d. There was no reason to believe that any past convictions were unsafe.
453. The note also mentions that there was a significant reputational risk if the
Interim Report was not communicated in a careful and balanced way. I
was to update her on the meeting with Lord Arbuthnot and flagged that I
might ask for her support (either directly or through other ministers) to get
him to a better place. In that context, I can see from my email to the team
on 4 July 2013 (POL00098973; POL00107985) that the minister had
spoken to Lord Arbuthnot, though I do not know if this was at POL’s
request.
454. I can also see that on 3 July 2013 (POL00098923) I asked Martin
Edwards to send BIS the briefing for the meeting with Lord Arbuthnot
(POL00115924) together with the note addressed to me on the Interim
Report (POL00113369).
69.3. Did you agree with Mr Smith’s suggestion in his email of 5 July 2013 that
“One of the main reputational and potentially financial risks arising from the
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review relates to possible attempts to reopen past prosecutions based on its
findings”. To what extent was the POL Board and / or senior management
concerned that convictions had been secured on the basis of potentially
unreliable data generated by Horizon?
455. On 5 July 2013, Martin Edwards sent me a draft of another update email
to the POL Board (POL00099021), which I sent to the POL Board on 6
July 2013, having made some amendments (POL00115961). The Inquiry
has asked about the penultimate bullet point in Martin's email, which
reads as follows in the amended version I sent to the POL Board:
“One of the main reputational and potentially financial risks arising from the
review relates to possible attempts to reopen past prosecutions based on
the findings. James Arbuthnot was certainly focussed on this. We had a
stronger exchange on this point. It is not clear that any new evidence has
emerged. If it does, as I pointed out to James, legal routes to appeal
already exist. Susan and the legal team are working with our external
lawyers to consider whether there are any implications from the report for
past cases, and we can provide a further update on this work next week.”
456. I did agree with Martin's suggestion that attempts to re-open past
prosecutions posed a reputational and financial risk to POL. That is why
I retained this statement in my message to the POL Board.
457. The question of past prosecutions raised a number of issues. There was
of course the legal issue of whether the Interim Report raised implications
for past cases. There was also the human aspect. I do recall having
conversations at POL, with Alice Perkins in particular, about how terrible
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it would be if SPMs had been sent to prison for crimes they hadn’t
committed. However, that was not an issue on which the POL Board or I
could draw any conclusions. I considered that issue to be a matter of
legal expertise, and I understood that Susan Crichton and the external
lawyers were considering whether there was any evidence that this had
happened.
458. One of the roles of the POL Board was to consider risks to the business.
It was only right that the POL Board should be informed that the
possibility that convicted persons might try to re-open their convictions
was a potential financial and reputational risk to the business.
70. Please consider POL00099063 (Second Sight’s interim report). Please set
out your views on the Interim Report and what steps you took after having read
it.
459. Between 3 July 2013, after the meeting with Lord Arbuthnot, and 8 July
2013, when the Interim Report was published on POL’s website, POL
worked to formulate its immediate response to the Interim Report. This
was an extremely busy period. It is clear from the documents that I had
many meetings, discussions, and emails with colleagues, the Board, BIS,
and the key stakeholders in the Second Sight investigation, Lord
Arbuthnot and Alan Bates of the JFSA.
460. I cannot remember most of these discussions and communications. I set
out below a chronology of the key events during this period in which I
was involved based on the documents and the recollections they trigger.
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Before doing so, I wish to address what POL was trying to achieve during
this period:
POL wanted to ensure that media reporting of the Interim Report was as
accurate and proportionate as it could be. A major area of POL’s concern
with the Interim Report was that Second Sight had defined “Horizon” to
mean not only the software, but the surrounding infrastructure and
processes, including training and support. Second Sight’s view of their
remit was not itself the concern: I agreed with them that training and
support fell within their terms of reference.
However, there was a real danger that public and network confidence in
Horizon would be undermined unfairly if stakeholder comments and media
reports failed to capture the distinction between Second Sight’s findings
about the software and their findings on other aspects of what they defined
in the Interim Report as the “system”, such as training and support.
Relatedly, we wanted to ensure that public statements and media reports
described accurately what we understood to be the broad thrust of the
Interim Report, namely, that while Second Sight had identified no systemic
faults in the Horizon IT system, there would be criticisms of POL’s training
and support for SPMs.
There are references in the documents from this time to POL’s “reputation”.
To me, this did not mean POL’s reputation as a company or the reputation
of anyone who worked for it. Reputation in that sense was not my concern.
My overriding concern was that the public should not lose confidence that
their local Post Office would be able to carry out their transactions (many
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of which were very personal to them, such as pension payments) honestly
and accurately and they could trust the Post Office with their affairs. If this
confidence was undermined by inaccurate or unfair reporting of the Interim
Report, it would be a huge disservice to the general public.
e. The way in which we sought to achieve these objectives was by close
engagement with the stakeholders. It came as a relief that Alan Bates was
also of the view that the JFSA did not want the media to (in his words) go
“pallistic’.
f. Asecond, but complementary, workstream was that we wanted to identify
a package of measures POL could announce alongside the Interim Report.
These needed to cover both the completion of the investigation begun by
Second Sight and ways of making improvements in the future. Again, it
was very important that these measures would satisfy the stakeholders and
we engaged with them closely between 3 and 8 July 2013.
Emails with Lord Arbuthnot'’s office
461. During the morning of 4 July 2013, POL engaged with Lord Arbuthnot’s
office to gain clarity about what he intended to say when the Interim
Report was published. At 10:42 that morning, Janet Walker emailed Mark
Davies (POL00098991). She would share Lord Arbuthnot’s media
statement with POL but added “it would be extremely helpful if we could
have sight of the definition of ‘Horizon’ you will be citing, and vital that it
is made absolutely crystal clear that it is not just the computer software
programme. But I’m sure you know this!”.
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462. As I mentioned above, the importance of communicating the distinction
between Second Sight’s findings in relation to the Horizon software on
the one hand, and the surrounding support structures on the other, was
one of POL’s key concerns. Janet's message indicated that those
boundaries were at risk of being blurred in Lord Arbuthnot’s public
statement.
463. I must have been told about Janet’s email, because I emailed Alice
Perkins at 11:34 on 4 July 2013 (POL00098990) stating that: “/ have
been reflecting (calmly) and I think we have to change our tack a bit both
to support James and to share the lead on our story. He is still briefing
more against us rather than with us.”
Emails with Alan Bates and internal discussion on 4 July 2013
464. On 4 July 2013 at 20:36 (POL00099012), Alan Bates emailed me the text
of an email he had sent to Lord Arbuthnot setting out his “initial jottings”
on a future structure for dealing with Horizon issues. Alan suggested that
POL should appoint an independent external adjudicator supported by a
team of technical and legal staff to resolve disputes with sub-
postmasters.
465. I forwarded the email to Mark Davies and Martin Edwards:
a. I stated in my email to Mark and Martin that I thought there was some merit
in Alan's ideas, although I preferred the idea of an ombudsman or expert
rather than adjudicator: however, I would defer to the experts on
terminology.
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b. Mark replied that he agreed in principle, but there would be some issues
and there would need to be safeguards. He suggested that, in the first
instance, Alan could bring his idea to the Branch User Forum and perhaps
appoint an independent person to carry out a review of the proposal. Mark
also mentioned that he was musing on an idea of an independent and
confidential hotline. He said these were good ideas politically.
c. I replied to Mark and Martin that the adjudicator/ombudsman role had an
attraction.
d. However, Martin disagreed (POL00099011). He thought that the structure
proposed by Alan would be cumbersome, resource intensive and
inconsistent with where we wanted to take POL as a business, ‘i.e. a
modern, professional retail business, working through a network of equally
modern and professional retailers, with models of engagement built on the
best principles of mutualisation”.
e. I replied (POL00099011): “let’s discuss tomorrow then. I imagined this
could be a mechanism for delivering just that. Without some significant
changes to the way we run the business — ie., forcing us to act differently,
it won't happen quickly enough. I do like the helpline. Very much. But if
(when) it doesn’t work, an independent safety net is not a bad idea. Happy
to remain open though :)”
The first draft of POL’s public statement
466. In the evening of 4 July 2013, Mark Davies sent the senior team and me
a draft of POL’s public statement on the Interim Report (POL00099005).
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c.
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He stated that he had been working with POL’s in-house communications
team, together with an external PR advisor, Portland Communications,
and that the text “takes in comments and overall positioning set out by
Paula earlier.” I have not seen an email with my comments and
suggestions on positioning, but I have no doubt that Mark and I at least
spoke to discuss the content. The draft contained the following:
A statement that the Interim Report “suggests that there are no systemic
problems with the Horizon system but calls on the Post Office to improve
its support and training systems for subpostmasters.”
A commitment to create a Branch User Forum to provide a way for sub-
postmasters and others to raise issues around business processes,
training and support at the highest level. Interested parties such as the
JFSA would be invited to join the Forum.
Comments from me personally, including:
“We take this very seriously and apologise to any subpostmaster who
has felt that our standards of support and training have not met their
needs or believes we simply have not been ‘human’ enough in our
dealings with them. I am determined to act on this...
We take our responsibilities to them very seriously and recognise that
we can always improve the way we support them and their business.
We will also be conducting a review of our support processes and
training to ensure they meet the standards expected of us. We have
made many changes over the last few years but are not at all
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complacent...”
My Board update on 4 July 2013
467. At 22:52 on 4 July 2013, I sent an update to the Board (POL00099016). In
summary, I informed the POL Board that:
a. POL understood from engaging with Second Sight that they had not found
any evidence yet of systemic issues with the Horizon system. However, as
expected, they intended to draw attention to wider failings in the training
and support provided to sub-postmasters.
b. POL was working to ensure that (i) the final version of the Interim Report
would be accurate; and (ii) POL had given feedback on concerns about the
accuracy and professionalism of the drafting it had seen to date. However,
we had to respect the independence of the report, and it was POL’s firm
view that it would not be credible or appropriate to take a firmer approach.
There would inevitably remain elements in the final draft which would make
for uncomfortable reading.
c. We were focussed heavily on media and stakeholder strategy. I stated:
“To summarise very briefly, we have taken the view that the best way to
minimise the reputational risks associated with the review and to do the
right thing for the business and the people is to welcome the broad thrust
of the report and commit to acting on its key findings in relation to the need
for improvements in our support and training processes. This is entirely
consistent with the broader imperative for cultural change across the
organisation which the Board has discussed in recent months.”
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468. As regards the specific stakeholders:
a. I described Lord Arbuthnot as a “pivotal figure”, who would be hosting the
presentation of the Interim Report on 8 July 2013. I informed the POL
Board that Alice and I had had a constructive but at times challenging
meeting with him on 3 July 2013 in which we had emphasised the
importance of an even-handed approach which would not undermine
public confidence in POL. I had a further call scheduled with him for 5 July
2013, and we were staying in close touch with his office.
b. We planned to engage with other MPs who may be attending the
presentation, including Oliver Letwin MP, with the aim of ensuring they
could help promote an even-handed discussion at the meeting.
c. Ihad spoken that evening to Alan Bates of the JFSA. It was a constructive
conversation. I reassured him that POL intended to take the key findings
of the Interim Report seriously and would like to work collaboratively with
him to identify process improvements.
5 July 2013
469. Alice responded to my update to the Board at 07:22 on 5 July 2013. She
stated: “You are doing the right things and I have nothing further to
suggest at this point” (POL00099016). I responded that I had received a
text from Alan Bates and had had a further conversation with him. I also
stated that “we will get through this and I hope deliver the ‘triumph’ not
the disaster.” I believe this was a reference to achieving the objectives I
have set out at paragraph 460.
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6 July 2013
6 July 2013 update to the Board
470. At 08:43 on 6 July 2013, I emailed the POL Board with a further update
on the Second Sight review (POL00099026; POL00099027;
POL00115961). By this point I had had two constructive conversations
with Alan Bates, which I believed confirmed his willingness to work
collaboratively with POL in taking forward its response to the review. In
particular, he agreed to participate in a new user forum to provide
feedback on training and support issues related to Horizon and bring the
existing review process to a conclusion. I gave the POL Board the
following information:
a. I understood from speaking to him that Alan's main issue was not “the
computer” but the human aspect. In his view, POL had failed to support
vulnerable and “muddle headed [sic]” SPMs. I wrote those words in that
way as the phrase “muddle headed” was Alan’s and not mine.
b. He would collaborate with us in the user forum but would also need
reassurance that we would not just ignore past cases. We would work with
him to understand what had happened and I had offered again to meet him
and one or two of his colleagues personally. (This time he accepted).
c. He also raised the idea of setting up a new independent third party that
SPMs could approach if they were facing issues with Horizon which could
not be resolved through the normal Post Office processes. This aligned
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with some of POL’s own thinking. We were inclined to agree in principle
without committing to any specific structure.
d. One of the main reputational and potentially financial risks arising from the
review related to possible attempts to reopen past prosecutions based on
the findings. Lord Arbuthnot was certainly focussed on this when I met him
on 5 July 2013. I had told Lord Arbuthnot that it was not clear that any new
evidence had emerged. If it had, as I pointed out to him, legal routes to
appeals already existed.
e. Susan Crichton and the legal team were working with our external lawyers
to consider whether there were any implications arising from the report for
past cases, and we could provide a further update on this work next week.
f. I Wehad received a full draft of the Interim Report on 5 July 2013, and would
send Second Sight a version with tracked changes where POL and Fujitsu
believed that it was inaccurate or open to misinterpretation.
Emails with Alan Bates and internal discussions on 6 July 2013
471. Alan Bates emailed me at 09:51 on 6 July 2013 (POL00099029). He
understood that the meeting with Lord Arbuthnot on 5 July 2013 had gone
well. Alan asked me to provide a document to outline the way in which
we proposed to deal with issues in the future. One issue that concerned
him was the name of one of the bodies we had discussed setting up. Alan
thought “user group” was inappropriate because the bulk of the JFSA are
ex-SPMs. He proposed “task group”, “working party” or “review board”
instead.
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472. I replied to Alan at 10:35 (POL00099029). I began: “Yes, I thought the
meeting with James was positive too. My main concern is still how we
manage the publicity, to avoid — as you said — it “going ballistic.” I stated
we were re-working our media report and liaising with Second Sight on
changes to the report where it is factually inaccurate. Once I had a final
draft, I would send it to him.
473. I forwarded my exchange with Alan to the team. At 16:46 on 6 July 2013,
Mark Davies emailed me in reply (cc. Martin Edwards, Mark Davies,
Lesley Sewell, Susan Crichton and Alwen Lyons) (POL00099043). He
thought my emails with Alan pointed to the need for our package of
measures to include two or possibly three initiatives:
"1. A Branch User Forum.... Chaired by Exco and reporting to Exco. But
this doesn’t cover historic issues (ie the JFSA and MP cases) so we could
also have (2)
2. A working party, to use Alan’s phrase, to complete the MP and JFSA
cases. This could "take over" the Second Sight review (perhaps involving
them but perhaps not as they have effectively "cleared" Horizon, the remit
of their inquiry). This would involve the JFSA and us working collaboratively
on the remaining cases. We might wish to include an external party in this
too (a PWC?). This is the area of greatest risk — looking back at historic
cases which have gone through the courts. But it is also completing the job
we asked SS to do.
3. A review by a Mike oConnor [sic] or Patrick Burns figure to consider
potential independent levers which could be developed to give SPMRs a
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means of independent adjudication or (non statutory) ombudsman.
This package, it feels to me, covers all bases. It looks ahead to fix internal
issues and create independent balancing view, but it also completes the
review and has the potential for doing so with SS playing a different, or no,
role."
474. Alwen replied (POL00099050) “/ think the only thing missing from James’
agenda maybe not Alan’s is what we do about past cases to scorch the
suggestion os [sic] unfair convictions’. Mark Davies replied that that was
the Working Group (the second of his measures). Martin replied that he
thought the boundaries between the groups in Mark’s email were
becoming blurred and confusing:
“I thought the focus of the working group involving the JFSA would be
primarily thematic (i.e. the 8 or so themes which emerged from the SS
process) — rather than focussing on resolving specific cases, which we
would pick up through the separate 1:1 briefings with MPs. The description
below [in Mark’s email] appears to shift it more towards the latter. Perhaps
this is an academic distinction which we can’t sustain in practice, but it
certainly feels like safer territory to have the JFSA focussing on themes to
do with training and support (which would then morph into the branch user
forum) rather than individual cases...
We also need to think about how the review of past cases by our external
lawyers plays into the messaging (if at all). Certainly not something we
would put in our proactive media statement I would have thought, but would
we refer to this in meetings as an avenue if pushed by MPs or the JFSA?”
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475. I replied to everyone thanking them for their input (POL00099051). The
position I thought we had reached was based on a variant of Mark’s
suggestion:
1) a working party over the next three/four months. This comprises PO
working collaboratively with the JFSA and does three things:
- Firstly explores the SS (8) themes for improvement (can we get less
than 8?) and agrees how they can be implemented.
- Secondly, looks at the remaining past cases with JFSA (and MPs if they
wish) to see if either further themes or new evidence emerge.
- Thirdly, our external lawyers review all prosecutions in the past 12/18
months since PO has been independent of RM, in the light of the SS
findings. The JFSA/PO working group reviews the findings...
2) setting up of a review (chaired by PB/MO'C type) again via joint working
between PO and JFSA, to determine how an independent safety net
might be introduced ie., a commitment to an independent adjudicator or
(non-statutory) ombudsman and the clear intention to agree scope and
TOR.
3) the future introduction of an ongoing branch user group, once the
working party has completed it's [sic] task. This will ensure ongoing
independent involvement of Spmrs/(inc JFSA if they would like) to ensure
the business listens to and acts upon issues as they arise; and as
importantly, consults users on future systems planning and changes.
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[4) a statement that although the system has been proved to have no
systemic issues, and our training, support processes and helplines have
worked for most of the 50-60000 colleagues over the past decade, we are
nonetheless genuinely sorry that some of our Spmrs, who were struggling
did not feel we offered them sufficient help and support when they needed
it. And that we are grateful to JFSA and JA for highlighting the issues.
Many are historic and already improved but we are always open to new
ways to improve how we do business to ensure the PO stays as trusted
and effective in its communities as it ever was.]..."
476. Inthe email, I asked two questions of Susan in order better to understand
the situation regarding prosecutions:
a. First, why would the external lawyers not review all cases of false
accounting, e.g. over the last five to ten years.
b. Second, would we ever ask our lawyers to consider reviewing past
prosecutions? I asked Susan whether that was what we were talking about
but not actually using those terms. If not, why not? And of the 500 past
prosecutions, how many were for false accounting?
7 July 2013
477. Mark Davies replied to my email at (POL00099051) on 7 July 2011 at
07:27, not copying the group (POL00099053). He wanted to speak to me
about how far POL should go in terms of the wording in my email. He
was concerned that we could go so far in our commitments that it would
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fuel the story and that there was real danger in going too far in
commitments about past cases. He said this was for two reasons:
The substance of the Interim Report did not justify this response. In his
view, the content of the Interim Report would lead to some coverage, but
not very much, and from what he called “the usual suspects”. “If we say
publicly that we will look at past cases (and whatever we say to JA and
JFSA will be public) whether from recent history or going further back, we
will open this up very significantly, into front page news.”
Mark was concerned that this would have the “ballistic” impact that Alan
Bates was keen to avoid. It could lead to a narrative about the business,
raise questions about Horizon, and have an impact on public views of POL
and widening the issue to the whole network.
478. I replied to Mark Davies (copying in Martin Edwards) at 7:48
(POL00099055). I thought we were not too far apart. “/ didn’t say this
approach would be our media statement but they would need to be
aligned. You are right to call this out. And I will take your steer. no issue.”
I went on:
‘there two objectives, the most urgent being to manage the media. The
second is to make sure we do address the concerns of JA and Alan Bates,
mainly looking forwards (but we should be aware AB’s driver is really
justice for the past); otherwise they will call for re opening cases. It may be
that we get to manage AB/JA by playing on the ‘go ballistic’ view: ie., — I
will meet him privately to hear his views about these cases but that we
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cannot refer to anything in relation to past convictions. Any challenge must
go via normal legal routes.”
479. What I meant here was that I understood Alan Bates' concerns about
past cases and I was utterly genuine in wanting to meet SPMs who had
suffered. But I could not get in the way of the legal reviews that were
ongoing and so it would need to be done confidentially and not given
media exposure. The future Mediation Scheme set out to do something
similar — there was no intention of supressing the request to review past
cases; there was simply at that time, no reason to do so.
480. In the meantime, Martin had replied to the group (POL00099054). He
would defer to Susan Crichton’s views, but his instinct was to keep the
review by external lawyers as a parallel workstream that we would not
refer to in our public statements and did not report to the Working Group.
481. Lesley Sewell agreed (POL00099056). In her view:
"If we state that we will review the cases since Separation, that implies that
there are material findings in the review and leaves us open to challenge
against all cases. It may be better to offer in the spirit of the review and
how we have listened to those who have been affected, and how we want
to change our business.
This is the delicate line we are balancing and from memory Susan quoted
more that [sic] 500 cases in the last 10 years. It may be an option to allow
SPMRs to come forward to request a review. I agree on the points around
the working group and user group.
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A clear ToR for the WG will ensure that that is closed down whilst we start
to establish the User Group. We also need to bring Kevin in or our thinking
and how this will work with / alongside the engagement we already have
with the NFSP."
482. On 7 July 2013 at 16:30, Simon Baker emailed others and me a copy of
the final version of the Interim Report (email at POL00099062, Interim
Report at POL00099063). In his covering email, Mr Baker stated that the
good news was that the first finding in the summary was still: “We have
so far found no evidence of system wide (systemic) problems with the
Horizon Software.”
483. On 7 July 2013 at 20:26, I emailed Alan Bates a copy of the current draft
of POL’s press statement, stating that I believed he had received a copy
of the final version of the Interim Report (POL00099102). I told him in the
email that we had worked on the statement to maintain balance but also
to demonstrate that POL was very serious about how it responded to the
Interim Report — with openness to listen and with keenness to improve
where things could be better. I drew his attention to the three
commitments in the press statement (which I discuss further below).
484. Alan replied at 21:59 on 7 July 2013. The JFSA would have a few general
points, but there was one comment in the POL press statement that the
JFSA, if asked, would say they had a problem with. This was the
comment that:
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“The report confirms that no systemic problems have been found in relation
to the Horizon system, but suggests that the Post Office should examine
its support and training processes for subpostmasters.
It is the ‘no systemic problems’ comment, and from reading the report it
seems to be because they replaced the word ‘systemic’ with ‘thematic’.
In the past I have made it very clear to many others that it is the ‘systemic
failures of Post Office’ in areas relating to investigation, support, training,
etc that we believe have been the root cause of so many victims problems.
With that comment as it stands undoubtedly I would be asked many
questions about it.
It seems the use of the word ‘systemic’ is causing us both concern, is there
an alternative?”
8 July 2013
485. I forwarded Alan’s email at (POL00099102) to Martin, Susan, Alwen and
Lesley on 8 July 2013 at 7:30. I asked if we could do something to diffuse
the problem over the word “systemic” and asked them for a line before I
spoke to Alan on a call at 9am. I wrote:
“The problem is that the statement he doesn’t like is in the SS report, which
of course produced the outcome we needed in respect of Horizon. I do not
wish to change that. We could show him willing by adapting something in
our statement. But I need to understand better from him what is wrong as
we have clearly said there were shortcomings in handling and response.
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Mark, if you are in, it might be good if you sit in the 9am call, so that you
can hear his issue.
What is good news is that he is looking for another word (last line). It would
be good to find one because if he goes back to using ‘systemic’ in relation
to PO failures to respond, we are not necessarily in a much better place.”
486. Mark replied at 6:48 stating that he would think things through “But you
are right — we must stick with systemic.”
487. Lesley responded at 06:49 (POL00099103). She said she did not believe
we could use the word “systemic” in relation to POL, and that Alan had
missed the point that the use of that word related to Horizon, which
should not change. If it did change, we would need to agree with Fujitsu.
“Thematic” would work in relation to support and processes, as long as it
was clear that it related to the cases which had been raised — these were
a small proportion of POL’s vast number of agents.
488. Susan also replied, at 06:54 (POL00099104). “...to state the obvious it
is difficult to find a different word for ‘systemic’ as that goes to our
argument re proportionality ie it cannot be a systemic issue if we haven't
had many more complaints from sub postmasters.”
489. The upshot of this discussion was that, although I was open to
possibilities, there was no real alternative to “systemic” because that was
the word used by Second Sight themselves in the Interim Report. In that
context, I wish to comment on my statement that the Interim Report had
produced the result we “needea”. In retrospect, I do not think this word
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quite captures the position. Second Sight had reported the position as
we hoped and expected it to be. However, if Second Sight had reported
systemic defects in Horizon we would have to deal with that squarely.
What really underlay these discussions was that Second Sight had
detected no systemic defects so far, and we believed that POL’s public
statement should reflect that finding.
490. At 14:57 on 8 July 2013, I emailed the Board with an update, having first
spoken to Alan Bates and Lord Arbuthnot (POL00099126). I wrote:
"I'm attaching the latest draft of our media statement, which we will be
issuing later this afternoon. It sets out the 3 key strands of our response to
the findings of the report:
a. Establishing a ‘working party’ (involving) the JFSA to complete the
review process and look at the thematic issues which have emerged
(particularly related to training and support);
b. conducting a review of how we might set up an independent ‘safety net’
to adjudicate in disputed cases in the future; and
c. setting up a new ‘Branch User Forum’ involving sub-postmasters and
other relevant stakeholders to provide feedback on our training and support
processes on an ongoing basis.
I spoke to Alan Bates again this morning and will be meeting him in person
shortly. Overall he appears to be content with the package of measures
outlined above and is striking a very constructive tone. He had one
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relatively minor concern with the drafting of the media statement, which we
have now resolved to the satisfaction of both sides."
491. I also described my call that day with Lord Arbuthnot. He was positive
about POL’s proposed response but wanted to draw attention to the
concerns highlighted in the Interim Report relating to the wider processes
associated with Horizon. We were currently challenging some of the
drafting in his statement where we believed he had drawn misleading
conclusions from the review. The most significant remaining concern was
his continued determination for POL to review past prosecutions and to
make this review part of the next stage of the review process. On this:
“_.we are already planning to conduct review with our external lawyers
of the implications of the report for past prosecutions — something we
would have a duty to do in any case — but this significantly adds to the
pressure and expectations around that process.” I say in my email “we
will send you in a separate email a copy of the SS _ report.”
(POL00099121). The report was also uploaded to the Board Reading
Room, and a copy of the email at (POL00099215) confirms this.
492. The Interim Report was published on POL’s website later that day. The
accompanying press release stated that the Interim Report “confirms that
no system wide problems have been found in relation to the Horizon
software but suggests that the Post Office should examine its support
and training processes for sub-postmasters” (POL00099129). It also
contained comments from me that POL welcomed the broad thrust of the
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interim findings and that the review underlined POL’s cause for
confidence in the overall system. However, I continued:
“It does however raise questions about the training and support we have
offered to some sub-postmasters and we are determined to address those
issues.
The people who work in the post office network in communities across the
country are the lifeblood of our business and we take our responsibilities
to them very seriously.
We therefore regret very much if any sub-postmaster feels that our
Standards of support or training have not met their needs, and we are
grateful to James Arbuthnot MP and the Justice for Sub-postmasters
Alliance (JFSA) for raising these issues with us.
In many of these cases I am confident that steps have already been taken
which have improved support and training but we are always open to
feedback and insights from sub-postmasters. So we will make further
improvements in this area and take better account of individual
requirements and circumstances going forward.”
493. Within the statement, POL announced that it was taking three measures
in response to the Interim Report:
a. The creation of a working party to complete the review of the cases brought
forward for investigation by MPs and the JFSA. The Working Group would
examine the themes identified by Second Sight in the Interim Report
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together with any new themes that emerged from the individual cases. The
JFSA had been invited to join this working group;
b. A review, chaired by an independent figure, to determine how an
independent safety net might be introduced to adjudicate disputed cases
in the future. Again, the JFSA had been invited to participate in the process;
and
c. Anew Branch User Forum to enable SPMs to provide feedback on training
and support processes to senior management on an ongoing basis.
494. The thinking behind each of these elements was as follows:
a. The investigation to date had developed in a piecemeal fashion without any
structure, oversight, or clear lines of communication between the key
stakeholders. The Working Group was intended to fill these gaps by
creating a formal structure for the key stakeholders to collaborate and to
give direction to the investigation.
b. A review to consider creating a mechanism for resolving future disputes
stemmed from Alan Bates’ ideas in our email exchanges as set out above.
c. The Branch User Forum was a longstanding idea at POL that there should
be a formal structure for SPMs to raise concerns directly with POL
management.
495. The announcement did not refer to any ongoing role for Second Sight.
There was certainly a school of thought at POL, which I recall Alice
Perkins subscribed to, that if the engagement of Second Sight was to
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continue beyond the Interim Report at all, it would need to change
fundamentally (see: (POL00116114) and paragraph 634 below). Various
possibilities were canvassed, including addressing the remaining cases
bilaterally with the JFSA through the Working Group, or bringing in a
larger firm to assist or possibly replace Second Sight. On the other hand,
we were aware that the stakeholders, i.e. the MPs and the JFSA, may
expect Second Sight’s role to continue. We had not discussed this in any
detail by the 8 July 2013 and so the position was left open.
496. The feedback I received from the POL review team was that, although
POL had cooperated fully with Second Sight, they had concerns about
Second Sight’s performance and their approach to the evidence
(POL00113369). I shared those concerns because I trusted the team
who were working on this project. My own perspective was that Second
Sight's work was not achieving its objective for SPMs and MPs, and that
it was late and over budget. However, I felt strongly that it was necessary
for POL to put those concerns aside in responding to the Interim Report.
In my view, POL’s interests, including its reputation, and the interests of
sub-postmasters in the Network, would be best served if POL used the
Interim Report as an opportunity to demonstrate, contrary to the
perception of some, that it was concerned for the welfare of the
individuals and that it could listen to and act positively in the face of
criticism.
71. Please consider POL00099153 (email from Lesley Sewell to you and others
on 9 July 2013). Please describe the discussion on the following bullet point:
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“Consider a ‘suspense account’ at a branch level.
Cost/process/implementation.”
497. I have been referred to (POL00099153) which is an email sent by Lesley
Sewell on 9 July 2013 to myself, Martin Edwards, Hugh Flemington,
Susan Crichton, Alwen Lyons, and Mark Davies, with Simon Baker and
Dave Hulbert cc’d. It appears to have been circulated in advance of a call
due to take place that afternoon and records a list of proposed actions in
response to the Interim Report which had been published the previous
day. Under the heading "/mmediate actions from the SS report" it states
“consider a ‘suspense account’ at a_ branch _ level.
Cost/process/implementation.” Although I can clearly see that I received
this email, I do not recall it now, nor do I recall discussing its contents.
498. Having refreshed myself of the documents, I am aware that the Interim
Report raised concerns that the end of trading period arrangements was
too complex and this was said to be related to the absence of a ‘suspense
account’, which would enable disputed transactions to be dealt with
‘neutrally’ (at page 6 of (POL00099063) and page 8 of (POL00099063)).
Again, although I believe that I read the Interim Report at the time, I do
not have any independent recollection of this being raised within it.
499. I can see from (POL00006546), which is an update to the Board dated
12 July 2013 provided by Susan, that paragraph 3.3 refers to the IT team
undertaking a review which included considering the possibility of
introducing a suspense account at branch level (at page 2 of
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(POL00006546)). Again, although I must have been part of these
discussions, I do not recall them.
500. I have reflected on why it may be that I do not recall these discussions.
My understanding at that time — which I now recognise was incorrect —
was that the ‘settle centrally’ function itself provided a neutral space for
SPMs to identify disputed transactions so that they could be investigated
and resolved. In that sense, I conflated the ‘settle centrally’ function with
the function offered by a suspense account. As a result of this
misunderstanding, I do not think I recognised the potential significance
or value of a suspense account, which may be why I do not recall this.
Certainly, I did not know that Horizon previously had a suspense account
function or that this function had been removed in 2004.
501. I accept without hesitation that Fraser J’s conclusion — to change the
contractual burden of proof — was the only sensible solution, as then
settle centrally would work for SPMs and work as it was intended, and as
was my understanding at the time.
502. I have considered how I came to misunderstand how settle centrally
worked. I think it was likely to have been as a result of two factors. First,
I relied upon what I was told about how ‘settle centrally’ worked. Although
I cannot now say precisely when these conversations took place, I recall
at least two or three conversations from 2013 onwards with Angela Van
Den Bogerd, including during the GLO process, in which she reassured
me that the ‘settle centrally’ function allowed for disputes to be raised and
resolved without SPMs being forced to accept responsibility for disputed
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discrepancies before they could roll over into the next trading period.
Second, I have seen a number of documents which show that the ‘settle
centrally’ function was frequently described in terms which suggest that
it was such a neutral space.
503. For example, (POL00045457) is a memo prepared by Andy Winn dated
1 September 2005 which was seemingly prepared to explain the ‘settle
centrally’ function to branches. In it, settling centrally is said to entail
accepting the loss/gain “unless you follow the dispute process.” The
memo goes on to explain how one would challenge a loss/gain through
the dispute process, including by asking for more time for the matter to
be investigated.
504. (POL00039089) is the Operating Level Agreement on Product and
Branch Network Accounting, Network and Service Delivery version 1.0,
dated 28 March 2009. In discussing Transaction Corrections, the option
to "make gooa" is explicitly contrasted with settling centrally, such as in
paragraph 3.1.11 where it is said that “(ij/f a branch receives
compensating Transaction Corrections, they must settle these both in the
same way, either both make good or both settle centrally” (at page 10 of
(POL00039089)). Later, when ‘settle centrally’ is defined at paragraph
3.5 it is said that:
“(C)hoosing the option to “Accept and settle Centrally” signifies the
acceptance of a loss or gain within a branch unless the dispute process is
instigated. “Settle Centrally” does not prohibit further investigation which
might offset all or part of the loss/gain accepted earlier, but this is a
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branch’s responsibility to initiate” (at page 14 of (POL00039089)).
505. This document goes on at paragraph 3.7 to describe the dispute process.
It emphasises that “settled centrally debts are not recovered from sub-
postmasters without reasonable time to investigate, challenge and
resolve individual amounts” (at page 16 of (POL00039089)). The detailed
description of this resolution process describes the debt recovery
process being suspended pending investigation and attempts to resolve
the dispute in cases where an amount has been settled centrally but is
disputed (at page 16 of (POL00039089) and at page 17 of
(POL00039089)). This understanding of how the system functioned
persisted and appears to have been widely accepted. Paragraphs 5.22
to 5.26 of the Linklaters report dated 20 March 2014 discussed the ways
in which losses are calculated and concludes at paragraph 5.26 (at page
11 of (POL00105529)): “SPMRs are asked to agree accounts regularly.
We understand that they signify their agreement by an appropriate entry
on Horizon. If a SPMR disputes the state of his account, he is free not to
agree that account on Horizon.” I reviewed this report, and it reconfirmed
my view. It was also reviewed by the POL Board, without challenge to
this characterisation of how the system functioned. This included the
CFO, whose teams operated the ‘settle centrally’ process, and Chris
Aujard, the Interim GC.
506. Although I do not recall seeing these documents at the time, the way that
they describe the ‘settle centrally’ function captures how I understood it
to work. I fully accept that my understanding of this was incorrect. I did
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not know that at the time and I considered it appropriate to rely upon the
reassurances I was given by Angela. I thought that the settle centrally
function already provided an effective tool to help SPMs if they had a
dispute, so would not have challenged this proposition if this is what
happened. I recognise now that, regrettably, my understanding was
inaccurate.
72. Please explain the background to Project Sparrow, how it was established,
its management structure and reporting lines. To what extent was the Board
involved in establishing Project Sparrow?
507. I have been asked to explain the background to Project Sparrow, how it
was established, its management structure and reporting lines, and set
out to what extent the Board was involved in its establishment. I address
Project Sparrow elsewhere in this statement. To avoid duplication, I will
address these issues as well at that point in my statement.
73. Please set out full details of your involvement with POL’s strategy and
actions in respect of past convictions of SPMs that involved the use of data
from the Horizon IT System in evidence. Please explain to what extent you
communicated information about such issues and POL’s response to the same
to the Board, ShEx/UKGI or BEIS. The following questions are not intended to
limit your response to this paragraph.
74, Please consider POL00021516 (minutes of the POL Board meeting on 16
July 2013).
74.1. Please expand on the discussion that led to the minute “The Board also
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asked for earlier warning when risks and issues arise to ensure that they were
not blindsided.” To what extent, if at all, do you think the Board’s effectiveness
was hampered in respect of oversight of Horizon and its associated issues as
a result?
508. I have been referred to the minutes of the POL Board meeting which took
place on 16 July 2013 (POL00021516). The first substantive item on the
agenda was the Board Effectiveness Review, which had been carried out
in June/July 2013.
509. The Board Effectiveness Review, at pages 2 to 8 of (POL00099210), was
conducted by Alice Perkins and, as is set out in her report, was the result
of interviews with the Board Directors and Company Secretary and
feedback from the Executive Committee ("ExCo"). Alice's report notes
that, overall, this was a well-functioning POL Board, characterised by a
spirit of respectful challenge, which had come a long way since its
formation in the Autumn of 2011 (at page 3 of (POL00099210)).
510. The Board Effectiveness Review was conducted as part of the constant
learning processes which we engaged in as a business. Overall, the
review was positive, but there are always ways to improve and this review
aimed to identify how we might do this.
511. During my time as CEO there were several other Board Effectiveness
Reviews. (POL00027315) is an agenda for the meeting on 25 March
2015 in which Alice Perkins discusses the review. (UKGI00002414) is a
POL “Going Forward Agenda” which lists “Board Effectiveness Review
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(July)” under the annual events. This was something which happened
regularly.
512. In discussing the Board Effectiveness Review, we talked about many
points relating to overall efficiency. These included ensuring that POL
Board papers arrived in good time so that the POL Board had a good
opportunity to consider them. The minutes also record that we discussed
measures aimed at making the best use of POL Board members’ time
and the time available for meetings (such as ensuring that Board papers
were an appropriate length). This desire to ensure that time was used
efficiently is reflected in the POL Board minutes (at page 2 of
(POL00021516)):
“The Chairman asked the Board to contact the ExCo member responsible
for a paper before the meeting if they were unclear or didn’t have the
necessary detail. The Board also asked for earlier warning when risks and
issues arise to ensure that they were not ‘blindsided’.”
513. By ensuring that the POL Board had sufficient notice to consider the
issues raised in POL Board papers and by ensuring that requests for
further details were dealt with in advance, we aimed to ensure that the
meetings were as productive as possible. However, POL Board papers
were not the sole or even main focus of this Board Effectiveness Review.
As the minutes show, we also discussed initiatives such as arranging
branch visits for NEDs and offering them the opportunity to attend
meetings with stakeholders, should they wish to (at page 2 of
(POL00021516)).
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514. Although I do not recall the precise details of this discussion, the
reference to ensuring that the POL Board is not “blindsided” is likely to
be a reference to the need to provide POL Board papers in good time,
something which did not always happen. From recollection, there had
been a few late papers around the time of the Board Effectiveness
Review, which may be why this was raised as an issue.
515. For example, (POL00099215) is an email sent at 17:37 on 12 July 2013
from Alwen Lyons to the POL Board apologising that they still have not
received two of the POL Board papers for the meeting on 16 July. The
papers are described as a Horizon paper, which was to be circulated later
that day (and which I discuss more below) and a funding paper, which
would not be circulated until 14 July. Once ready, both were to be placed
in the board papers section of the POL Board application, "BoardPad"
and additional supporting papers were to be placed in the "Reading
Room", an online repository of supplementary documents for NEDs. In
this email, Alwen Lyons points the NEDs to the fact that "all the Horizon
documents eg JS statement, the Second Sight report. etc" will be loaded
to the Reading Room "for ease of reference".
516. Similarly, the minutes of the POL Board conference call on 1 July 2013
note that I “apologised for the short notice in keeping the Board updated
but explained that issues had arisen over the last couple of days” (at page
1 of (POL00021515)). This was a very busy time and, although I always
tried to keep the POL Board updated, there were times when the pace
meant that it was only possible to provide information at short notice.
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517. I do not consider that the issues flagged in the Board Effectiveness
Review resulted in the POL Board being hampered in respect of its
oversight of Horizon for two reasons. First, because, as the review itself
noted, this was a well-functioning board. Although there were areas we
could improve upon, overall, the review judged us to be effective. It is
important to note that this was a board self-assessment, with the intention
that the next review would be independently conducted. However, as the
paper shows, the Chair received a range of opinions on matters. The
POL Board was comprised of NEDs who were independently minded and
challenging. Second, if a POL Board paper had to be circulated later than
anticipated, then POL Board members responded to it regardless. If
necessary, this would involve raising questions and challenges by email
or in ad hoc phone calls outside of POL Board meetings. This feature of
our working practices was also noted in the Board Effectiveness Review
report (at page 16 of (POL00099210)):
“All the NEDs commented on how willing the Executives were to engage
with them outside Board meetings and were impressed by the extent to
which most of them, and especially the CEO, were open to challenge. In
return, the Executives commented that the NEDs were very generous with
their time outside the Boardroom.”
518. Ultimately, the POL Board took its role seriously and part of that role was
to challenge and look for ways for the business to improve. As is noted
in the minutes of this meeting, I was very clear that I expected the
business to be challenged: it is part of effective oversight (at page 1 of
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(POL00021516)). This Board Effectiveness Review was one of the many
ways that we looked to identify, and make, improvements.
74.2. Please describe how you briefed the Board on the Interim Report. In
particular, please explain precisely how you told the Board that “no systemic
issues had been found with the Horizon computer system.” Was the report
submitted to the Board?
519. The report appears to have been provided to the POL Board via the
Reading Room. Alwen Lyons' email on 12 July 2013 confirms that she
will upload it to the Reading Room alongside other relevant material so
that the POL Board could review it in advance of the meeting
(POL00099215):
"...the Horizon paper will be circulated by email tonight ... and put on the
iPad on Monday morning and I will also set up a file in the reading room for
all the Horizon documents, eg., JS statement, the Second Sight report, etc.
. for ease of reference."
520. The minutes of the POL Board meeting on 16 July 2013 (at pages 6 to 7
of (POL00021516)) record the details of an update on Horizon I gave
which notes, amongst other things, that the Interim Report had been
challenging but that no systemic issues had been found with the Horizon
computer system. This was my understanding based on the briefings I
was receiving. I can see that the phrase had already been used in several
other places before I communicated it to the POL Board, for example:
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(POL00021746), which I understand to be the draft Interim Report
dated 1 July 2013, states at paragraph 12.2 on page 17 “we have
so far found no evidence of system wide (systemic) problems with
the Horizon software.”
In a conference call on 1 July 2013, I told the POL Board that “(t)he
investigation to date had found no systemic issues with the Horizon
computer system” (at page 1 of (POL00021515)). I explained that
the report had highlighted areas for improvement including in
training and support and Second Sight had found two "anomalies"
which would be referred to in the report.
Martin Edwards’ draft briefing to the POL Board, which was sent to
me on 4 July 2013, states that Second Sight “have not found any
evidence yet of systemic issues with the Horizon system” though
they had identified wider failings in the support provided to SPMs (at
page 1 of (POL00099003)).
The Significant Litigation Report dated 11 July 2013, which was
provided to the Board for the meeting on 16 July (as noted in the
minutes at page 10 of (POL00021516)), states that “(W)hile there
are no systemic problems with Horizon, there are two specific
“pugs”, which gave rise to errors in a number of branches’ accounts”
(at page 105 of (POL00099210)).
Susan Crichton prepared a Horizon Update paper for the Board
meeting. I believe that the final version is at page 2 of
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(POL00006546), which also contains the phrase “no systemic
problems”.
74.3. Please expand on “The Board were concerned that the review opened the
Business up to claims of wrongful prosecution.” In particular, please state (a)
who expressed these concerns and (b) the basis for these concerns.
521. The POL Board minutes for the meeting on 16 July 2013 (at page 6 of
(POL00021516)) note that “(t)he Board were concerned that the review
opened the Business up to claims of wrongful prosecution. The Board
asked if Susan Crichton, as General Counsel, was in anyway implicated
in the prosecutions.”
522. I do not recall the specifics of this conversation but my broad recollection
is that this was a concern shared by the POL Board generally rather than
one only expressed by specific individuals. I cannot recall whether there
was any basis for this concern beyond the information provided to the
POL Board by Susan in her report (POL00006546) and in the details
recorded in the Significant Litigation report discussed above. Susan's
paper refers to concerns being expressed by MPs and the JFSA about
the possibility of unsafe convictions (at page 1 of (POL00006546)); if you
are told that this is a possible concern by your General Counsel, then it
is, in my view, appropriate for the POL Board to be concerned.
523. I cannot recall who introduced the term ‘wrongful prosecution’ as none of
us present had legal expertise. I can see that Susan used the terms
‘wrongful conviction’ and ‘wrongful termination’ in (POL00006546). It is
possible that the Board picked up on the ‘wrongful’ adjective; or simply it
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was how the Company Secretary felt best described a point being made.
The POL Board and executive relied on Susan to provide us with legal
insight and advice. I had many conversations with her at this time, but it
is very difficult now to recall what precisely I was told and when. I
understood that Susan was working closely with our external lawyers,
Cartwright King, as I mentioned this in my email of 6 July 2013 to the
Board (at page 2 of (POL00099026)). However, I was not personally
involved in this work.
524. I remember that I was informed at some point that the expert from Fujitsu
whom POL had been using in legal proceedings had not disclosed in
Mrs Misra's case that he was aware of two bugs in the system and so the
cases he was involved in needed to be reviewed. My understanding
came to be that this was because he had proved to be an unreliable
witness, but I cannot say with any certainty when I was given this
information. I do remember being specifically told that these bugs had
not affected Mrs Misra’s case.
74.4. Please expand on “The Board expressed strong views that the Business
had not managed the Second Sight review well and stressed the need for better
management and cost control going forward.” In particular, please state (a) who
expressed these views and (b) what they said.
525. The POL Board minutes record that “(t)he Board expressed strong views
that the Business had not managed the Second Sight review well and
stressed the need for better management and cost control going forward”
(at page 6 of (POL00021516)). I cannot recall the specific details of this
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conversation, but my overall sense was that they were views shared by
the whole Board. My broad recollection is that the POL Board was
concerned that the business had paid a significant amount of money to
external consultants from whom they had expected to receive to a final
report — instead what had actually been produced was an Interim Report
which had been published containing, in the eyes of those working on
the project, identifiable inaccuracies. The POL Board took the view that
the work had taken too long, had already cost more than was expected,
was not yet complete, did not take account of POL's responses and was
now going to cost even more going forward. They could not understand
how we had reached this position; they were very challenging.
526. I understood why the POL Board had these concerns and, to some
extent, I shared them. It was a unique situation in my experience to have
engaged specialist consultants for a specific purpose only for the project
(as it seemed to me at the time) to have taken on a life of its own as time
and costs had escalated and individual case reviews were far from
completion. However, as the minutes note, it was a complicated situation
and, given the input from MPs and the JFSA, there were many factors
beyond the business’ control.
527. The minutes record that the "Chairman asked for a review", reporting to
the ARC, to explain how the contract was awarded and managed (at
page 6 of (POL00021516)). I discuss this review in more detail in my
responses to Question 86 below.
74.5. What effect, if any, did the Board’s challenges at this meeting have on
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POL’s approach to the Second Sight review?
74.6. Was Susan Crichton asked to lead the Second Sight issue because of this
challenge? Who lead it before?
528. Susan Crichton had led the Second Sight work prior to this and, to my
mind, remained the right person to lead it going forward, despite the POL
Board's challenge.
529. In response to the POL Board's challenge and to assist Susan Crichton,
Belinda Crowe was brought in as Project Director and reported to Susan.
Additional support was given by Angela Van Den Bogerd, who was
tasked with running the Business Improvement Programme alongside
this. She was also assisted by an experienced team to provide support
for the detailed data work and case reviews being conducted under the
remit of the Working Group and the Mediation Scheme. I also reallocated
one area of Susan's broader responsibilities to others in order to free her
up to focus on this work.
74.7. To what extent, if at all, did POL’s ongoing negotiations concerning the
future of Horizon impact_on your or others’ decision making in respect of
Second Sight and / or the handling of allegations regarding the Horizon IT
System?
530. To the best of my recollection, the ongoing negotiations concerning the
future of Horizon had no impact on my or others’ decision-making in
respect of Second Sight and the handling of the allegations relating to
the Horizon system. These were very different strands of the business.
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531. There was an awareness on the part of everybody involved in IT that we
were too dependent on Fujitsu and there was a need to reduce our
reliance on them. However, I do not think that anything in that broad IT
strategy had an impact on the Second Sight review or how the allegations
were handled. In part, this was because the IT strategy was inherently
future-facing, whereas the Second Sight review was a backwards-facing
analysis of what, historically, had or had not been going wrong. Although
one aim of the Second Sight review was to identify improvements which
could be made for the future and so the results of their investigation could
foreseeably impact upon future IT strategy.
75. Please consider POL00040001 (email from Susan Crichton to Andrew
Parsons dated 23 July 2013) and POL00040002 (draft Update to Post Office
Limited Board re: Horizon Legal Issues — 22 July 2013):
75.1. Why at this stage was it considered necessary to obtain advice on
directors’ personal liability for disclosure failures in a criminal case?
532. I have been referred to an email from Susan Crichton to Andrew Parsons
dated 23 July 2013, which refers to a previous request to advise on
Directors’ liabilities in respect of POL’s disclosure obligations
(POL00040001). The email attaches a draft update to the POL Board
dated 22 July 2013, which provides legal advice on various issues and a
placeholder for “AP” (which I presume is Andrew Parsons) to include a
paragraph on personal liability for disclosure failings (POL00040002).
533. I do not now recall any conversation about seeking advice on personal
liability or why it was requested. The only issue I recall discussing around
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this time which may be connected is that, as recorded in the minutes to
the POL Board meeting on 16 July 2013, Chris Day was asked to confirm
the insurance position in light of the findings of the Interim Report and
ensure that both RMG and the business’ insurers were given notice of
the same (at page 7 of (POL00021516)). I can see that this was followed
up in subsequent emails between 19 and 22 July 2013 (POL00099349;
POL00099331).
75.2. To what extent, if at_all, did the Board and / or senior management’s
concerns about personal liability arising from the convictions of SPMs affect
POL’s decision making on how to approach past prosecutions based on
Horizon data?
534. As set out above in my response to Question 75.1, I have no recollection
of concerns around personal liability being expressed so, for my part, I
do not recall having those concerns or them influencing my decision
making. I cannot speak for others, but I do not recall this being discussed
by the senior management team.
76. Please consider POL00108049 (email from you to Simon Blagden on 25 July
2013). Please expand on “we are planning carefully how we bring the
independent review to completion: it needs to progress at pace but not so
quickly that we fail to close it down.” What did you mean by this and why were
you raising it with Fujitsu?
535. My email of 25 July 2013 to Simon Blagden (the then Chairman of Fujitsu
UK) was sent in response to his email of 24 July, which asked how things
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were going further to a meeting I had recently had with Lord Arbuthnot
(POL00108049).
536. In my reply, I explained that the meeting had been positive, noting that
Lord Arbuthnot was reassured by the fact that POL did not want to cut
short the reviews being conducted by Second Sight. I then provided a
more general update on the situation at POL further to the release of the
Interim Report and outlined the next steps we were considering (at page
2 of (POL00108049)):
“The situation is difficult and the PO Board left me in no doubt that they
thought so. My team is taking good advice and we are planning carefully
how we bring the independent review to completion; it needs to progress
at pace but not so quickly that we fail to close it down. We will leave any
prosecution challenges where they belong — with the courts; and are
considering a mediation approach for non-criminal unresolved cases.”
537. I have discussed the POL Board's response to the Interim Report in detail
in my response to Question 74 above, where I addressed a number of
challenges raised at the POL Board meeting on 16 July 2013
(POL00021516). Chief amongst these was that the POL Board took the
view that work that Second Sight had been commissioned to undertake
had taken too long, had already cost more than was expected, was not
yet complete, did not take account of POL's responses, and was now
going to cost even more going forward (see especially my response to
Question 74.4, at paragraphs 525 to 527).
538. This sense that the project was over time and over budget forms the
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background to my comments to Simon Blagden. We were concerned by
the delay which had already taken place and the fact that we did not yet
have a final report. We wanted to bring the situation to a satisfactory
resolution but, since the project had already run for much longer than
anticipated, there was a desire for that to happen quickly.
539. However, although it was important to move the project along, it was vital
that whatever the end result was, it did actually achieve a final resolution
to the complaints. If the cases were not investigated and resolved in a
way that was satisfactory to the stakeholders involved — the JFSA, MPs,
and POL as well as the SPMs makings the allegations — then it would all
be for nothing because it would not actually put the issues to bed.
540. I think that is what I was getting at when I said, “it needs to progress at
pace but not so quickly that we fail to close it down.” Closing the issues
down properly required there to be a real resolution because only that
would give the matter finality. We should not move quickly at the cost of
achieving that finality: achieving a genuine resolution that all parties
could be content with was always the most important goal.
541. I am asked why I raised this with Fujitsu. To the best of my recollection,
I raised it in my email to Mr Blagden because he had asked me, and it
was in the spirit of our ongoing working relationship for me to keep him
abreast of what was happening in broad terms. I did not know Simon
Blagden well, but I always tried to maintain productive relationships in
professional situations because it benefits everyone involved.
542. Working in an open and cooperative way does not prevent you from
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raising challenges and, in fact, might assist in resolving such challenges.
As I mention in my email to Simon Blagden and when forwarding that
email to Chris Day, Second Sight had complained that Fujitsu were not
always prompt in providing support. Ensuring that Fujitsu continued to
provide the necessary support to Second Sight was important for the
progress of the investigation. Having open lines of communication with
Simon Blagden where I could raise concerns such as this could only help
in investigating and resolving any such problems if they were occurring.
77. Please consider POL00039994 (letter from CCRC to you dated 12 July 2013),
POL00039995 (draft paragraphs for insertion into reply to CCRC), POL00099346
(draft letter to CCRC addressed from you), POL00116111 (email from Amanda
Brown to CCRC dated 24 July 2013) and POL00116112 (letter from Susan
Crichton to CCRC dated 24 July 2013).
77.1, What was your understanding of POL’s obligations in relation to convicted
persons prosecuted either by POL or RMG at the time of receiving the CCRC’s
letter?
543. As of 12 July 2013, I understood that POL was obliged to pass on any
new information which undermined the conviction of a person who had
been prosecuted and convicted of theft or false accounting.
544. I was given this information by Susan Crichton. (POL00006546) appears
to be the final version of Susan’s update to the POL Board for its meeting
on 16 July 2013. Paragraph 3.6 states that, on the advice of POL’s
external criminal lawyers, POL had begun a review of criminal cases
conducted since separation from RMG on 1 April 2012, and that more
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details of this were set out in Annex 1 to the paper. Paragraph 1 of Annex
1 stated:
“Post Office have been advised by our external criminal lawyers to
undertake a review of all cases going back to the time of the migration from
Old Horizon to Horizon Online (aka HNGX) — 18 January 2010 — and this
has already begun. They are essentially looking and whether or not
anything in the SS interim report should be drawn to the attention of any
defendants (current or past) and if so they will be writing to the relevant
defendants providing them with a copy of the interim report. We have a
continuing legal duty as the prosecutors to do this.”
545. In the first two sub-paragraphs of paragraph 1 of Annex 1, Susan
explained that:
It was believed that POL had undertaken about 55 prosecutions a year for
the last 10 years, although there was difficulty in obtaining historic files from
RMG. The external lawyers had advised that POL would need to disclose
the additional evidence in 5% of cases and then it would be up to the
defence lawyers to consider the evidence and apply to the Court of Appeal.
Each individual would need to seek leave to appeal from the Court of
Appeal if they wanted to overturn their conviction. The Court of Appeal
would look at each case on its merits and consider the evidence that the
person was convicted on. For example, there might be Horizon evidence
but also other paper trail evidence or even admissions of guilt. It was by no
means clear that each appeal would be successful.
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546. (POL00006590) is a paper by Susan Crichton to the POL Board dated
26 July 2013 entitled “Update on the work programme arising from the
Horizon Report’. \t states in paragraph 1 that it was produced further to
the Board discussion on 16 July 2013.
547. It stated in paragraph 14, under the heading “Prosecution Case Review”
that:
“There is a separate process in train for those cases which have been
Subject to criminal prosecution. As we discussed at the last Board, as a
prosecuting authority we have a continuing duty to act properly and fairly,
and that requires us to disclose to the defence any information which
undermines the prosecution. This assessment is made on a case by case
basis. Through our criminal law solicitors, Cartwright King, we are
complying with this duty by reviewing past and present prosecutions to
identify any cases where the Second Sight ought to be disclosed. It is then
up to the defendant to decide whether to apply for permission to appeal a
conviction based on the additional information.”
548. In paragraph 15, Susan reported that, as of 22 July 2013, Cartwright King
had reviewed 124 cases, with the following outcomes:
« “the prosecution has been discontinued in three cases as not being
in the public interest;
e disclosure to the defence has been provided in 6 cases;
° in all cases, the recommendation is that we oppose any attempt to
appeal; and
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‘it is not believed that any of the cases would satisfy the test for
compensation from the Government for a miscarriage of justice under
the Criminal Justice Act.”
549. Paragraph 16 of the paper stated that the next step was to "review pre-
separation case files held by Royal Mail, initially dating back to the start
of 2010".
550. Paragraph 17 stated that POL was “consulting Brian Altman QC, a
leading barrister...to provide additional advice and independent
oversight on this case review process and any wider criminal law
questions that arise (for example questions from the Criminal Cases
Review Commission ("CCRC") about how we are handling this matter)".
Counsel’s scope of work would also include recommendations about
POL’s future prosecutions strategy, to inform POL’s thinking.
551. Although I cannot remember when it happened, or what exactly I was
told, I can see from the documents that Susan had informed me at some
point in early July 2013 that she was working with external lawyers on a
review of past criminal cases. In my email update to the POL Board on 6
July 2013 (POL00099026; POL00099027; POL00115961), I stated that
“Susan and the legal team are working with our external lawyers to
consider whether there are any implications arising from the report for
past cases, and we can provide a further update on this work next week’.
In an email update to the POL Board on 8 July 2013 (POL00099126), I
stated: “...we are already planning to conduct a review with our external
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lawyers of the implications of the report for past prosecutions —
something we would have a duty to do in any case — but this significantly
adds to the pressure and expectations around that process”.
552. My emails to the POL Board on 6 and 8 July 2013 could only have been
based on briefings Susan had given during meetings or emails or one-
on-one conversations. I would not write to or brief the POL Board on
POL's legal activities without that input. I have not seen any written
briefings about the prosecution case review before Susan’s paper for the
16 July 2013 Board meeting.
553. I cannot recall Susan giving me any more information about the nature
of the review, or about POL’s duties to people who had been convicted,
other than the information I set out in my emails to the POL Board on 6
and 8 July 2013 and the information contained in Susan’s two written
updates later in July 2013.
77.2. Please describe your initial thoughts on the CCRC’s involvement in 2013
and how POL’s response was handled. Did you consider this to be a significant
matter?
77.3 Why was POL’s response sent by Susan Crichton despite the initial letter
being addressed to you?
554. The CCRC’s letter dated 12 July 2013 was marked as being received by my
office on 15 July 2013 (POL00039994). Although I cannot recall doing so, I am
sure that I read it. My office received a huge amount of correspondence every
day, which was reviewed by my PA, Theresa Iles. I am confident, given its
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importance, that she would have given me a copy of the letter. A copy of the
letter was sent to Susan Crichton (POL00039997) by Amanda Brown, PA to the
POL HR & Corporate Services Director on 15 July 2013.
555. I have a recollection that I was relieved that the CCRC was involved, although I
cannot remember whether this is a recollection from July 2013 or from a later
stage of POL’s engagement with the CCRC. My understanding was that the
CCRC would add a layer of objective oversight to how POL was dealing with the
past prosecution cases.
556. In its letter to me dated 12 July 2013, the CCRC described its role and referred
to the recent media coverage of the Horizon IT system. It went on:
“Clearly it would be very useful for us to have more information directly
from the Post Office, especially accurate information as to number of
criminal convictions that might be impacted by the issue and what action
is proposed, or being taken, in that respect.
We see that the Attorney General was called upon on Tuesday to set
up an enquiry and we are in contact with his office about that.
In essence, the Commission’s role in this is likely to relate to anyone
who is convicted of a criminal offence... where evidence from the
Horizon computer system is relevant, where (i) they have already tried
to appeal against that conviction or (ii) they were convicted in the
Magistrates Court following a guilty plea."
557. The subject matter of the letter fell within Susan Crichton’s area of management
responsibility. In addition, Susan was, at this time, managing POL’s review of
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past criminal cases in response to the findings in the Interim Report. She was
the person at POL who was best placed — in terms of expertise and direct
knowledge of the subject matter of the CCRC’s questions — to respond to the
letter. I do not recall when or how we decided that Susan would reply on my
behalf, but it would have been a sensible action: the CCRC would most likely
have queries and / or follow-up requests, which would need to be dealt with by
Susan and her team.
558. I do not recall whether I saw Susan's responses to the CCRC in July 2013 or if
I was shown any earlier drafts of the responses. I and the Board, who were
informed about the letter in a Board report (POL00006590), would have
considered that the task of responding to the CCRC was in expert and capable
hands.
559. I can see that, on 24 July 2013, Susan sent the CCRC what was in effect a
holding letter (POL00040012) into which I do not believe I was copied. She
stated that POL was looking at the findings of the Interim Report in detail and
investigating whether those findings had an impact on any historic or ongoing
prosecutions. She hoped to be able to send the CCRC a more comprehensive
response by the end of the week.
78. Please consider POL00006798 (Simon Clarke’s advice on expert evidence
dated 15 July 2013).
78.1. Please explain your knowledge and / or involvement with the instruction
of Cartwright King to review the use of expert evidence in prosecutions.
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560. I was not involved in instructing Cartwright King to review POL’s use of
expert evidence in prosecutions.
561. The extent of my knowledge at this time was that Susan Crichton was
working with external lawyers to review past cases, as set out in my
emails to the POL Board and Susan’s update for the July 2013 POL
Board meeting.
78.2. Did you read Simon Clarke’s advice of 15 July 2013; if so, when? If not,
were you briefed on it?
562. I did not read Simon Clarke’s advice until after I had left POL, when it
was made public in 2021 during the Hamilton v Post Office appeals to
the Court of Appeal. I do not recall exactly what I was briefed about the
advice in 2013.
563. I do recall that Susan told me, that as a result of advice given by an
external lawyer, we had to commission a review to ensure that proper
disclosure had been given in previous criminal cases. At around this time,
I also had a conversation with Lesley Sewell. She also told me that POL
had been advised that the expert witness that POL had used in criminal
cases to give evidence about Horizon had failed to mention there were
bugs in Horizon, including in the Seema Misra case. As a result, he had
disqualified himself as an expert witness and POL would need to find
itself a new expert for future cases. Lesley was unhappy about this,
because she said the bugs were irrelevant to the cases in which the
witness had given evidence. The issue was presented to me by Lesley
as more of a practical problem than (as I now know it was) a serious legal
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issue. I have no memory of being told by Lesley the name of this witness
(who I now know was Gareth Jenkins): I was not told that the legal advice
about the expert witness had been given in writing.
79. Please consider POL00006799 (Simon Clarke’s advice on the duty to record
and retain material dated 2 August 2013).
79.1. Please explain if and when you became aware of this advice.
564. I was not aware of the existence of Simon Clarke’s advice of 2 August
2013 until after I had left POL, when it was made public in 2021 during
the Hamilton v Post Office appeals to the Court of Appeal.
79.2. What steps did you and / or POL take in response to it?
565. I can recall being told by Susan Crichton that POL had been advised to
set up a hub for Horizon-related information so that all relevant data was
kept together, and there would be weekly calls to add new data. This
seemed to me to be an entirely sensible suggestion, although I cannot
recall being told that POL had received a legal advice to do this.
566. It may have been in the same conversation, or a separate conversation,
but I remember Susan telling me that an external lawyer had criticised
the Head of Security, John Scott, for directing that the discussions at
these weekly meetings should not be recorded in minutes. I recall telling
Susan that this was a stupid thing for John Scott to have done. I told her
that she should speak to him to make clear that this was serious and
unacceptable and that these meetings should be minuted.
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567. I do not recall Susan mentioning anything about John Scott giving
directions that emails and notes from these meetings should be
“shredded”. As far as I can remember, I only became aware of that when
Mr Clarke's advice of 2 August 2013 was discussed in the media in 2021.
80. Please consider POL00006583 (Brian Altman KC’s advice of 2 August 2013).
80.1. When did you read and / or were you briefed on this advice?
568. I did not know, because I was not told, that Brian Altman QC had
produced his advice of 2 August 2013. I therefore did not read the advice
and I was not briefed about it.
80.2. Did you or senior management give any consideration to Mr Altman’s
query as to whether non-disclosure by Gareth Jenkins was the only potential
issue to review (see paragraphs 11 and 12)?
569. I was not aware that Brian Altman QC had raised this query. I do not
know whether any other person in POL’s senior management gave
consideration to the query.
80.3. What, if any, steps did you and / or senior management take to the issues
raised at paragraphs 15 and 24 of Mr Altman’s advice?
570. I did not see Brian Altman QC’s advice of 2 August 2013, but paragraphs
15 and 24 appear to contain his recommendations for Cartwright King to
consider a number of legal issues.
81. Please consider POL00027667 (email from Susan Crichton to you dated 13
September 2013). What was your reaction to reading that Mr Altman “confirmed
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that this duty [of disclosure] was ongoing and continued after conviction”?
571. I have no recollection of this email. Given that Brian Altman QC was an
expert in criminal law, I believe that my reaction would have been to
accept that this statement was correct. I do recall that I had asked Susan
a number of questions about the removal of the Fujitsu expert witness
and I am sure that Lesley Sewell did too. I know I wanted to understand
the extent of the legal obligation, as this was now a serious undertaking
involving external lawyers and a QC. I cannot remember what we
discussed but this may be confirmation of what she had explained to me
and to others about disclosure obligations.
82. Please explain POL’s basis at this point for not disclosing (a) the Second
Sight interim report (b) the identification of bugs that led Simon Clarke to
conclude that Gareth Jenkins had not complied with his duties as an expert
witness and / or (c) the Helen Rose report to all SPMs convicted on the basis of
data generated by the Horizon IT System.
83. On reflection, do you consider POL’s approach to have been justifiable?
Please provide reasons.
84. Do you now consider this to have been a missed opportunity to seek the
overturning of unsafe convictions nearly eight years earlier than in fact
occurred?
85. To what extent did you rely on legal advice when making decisions in
respect of what to disclose to persons convicted using Horizon data? Did you
consider that advice to be adequate; do you now?
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572. The question of what should have been disclosed to individuals who had
been convicted of theft or false accounting is a legal issue on which I am
not able to give an opinion. I do not recall the precise legal basis ever
being explained to me, but I understood that our external lawyers
(Cartwright King) were reviewing previous prosecutions and Brian
Altman QC had been tasked with looking at their approach and POL’s
approach to prosecutions more generally. The message the POL Board
and I received was consistently positive. See, for example, the summary
given in Susan’s update paper for the Board meeting on 25 September
2013, in which she explains that Mr Altman QC “agreed with the
approach taken by our external lawyers and confirmed that the protocol
was well thought through being correctly applied in the cases he
reviewed” (at page 41 of (POL00027907)). I set out the updates I
received on these issues in detail in my response to question 94 below.
573. I did not make any decisions about what should or should not be
disclosed and I do not have the knowledge or expertise to say whether
the disclosure of this material would have resulted in those convictions
being overturned earlier than they ultimately were. I understood that
those decisions were made by experienced criminal lawyers, acting in
good faith and applying the law. I was reassured that Brian Altman QC
had offered an expert second opinion which had concluded that the case
review was being conducted properly. However, as a non-lawyer, it is not
for me to say whether the advice POL received at the time was adequate.
Lessons Learned Review
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86. Please consider POL00040029 (email chain on 29/30 August 2013 between
you_and Susan Crichton), POL00040032 (‘Lessons Learned” Review of
handling of alleged issues / concerns about Horizon: Terms of Reference) and
POL00116123 (email chain between you and Alice Perkins on 6 September
2013).
86.1. Please explain why you commissioned the Lessons Learnt Review. What
did you see as its objective?
574. Before I respond to this question specifically, there are two general points
it is essential to make in order that the Inquiry understand my answers.
The first is that ‘lessons learned reviews’ were a frequent practice we
employed as a business. It was an important part of our culture to reflect
on our actions and try to learn from them (I have addressed above the
POL Board effectiveness reviews which set the example at the top of the
business), so a "/essons learned review" was just that.
575. The second point to be made is that, in respect of this specific review, it
changed and evolved over time, with different parts of the business taking
ownership of different aspects as and when it became clear that they
would be better suited to investigate them. In what follows, I try to trace
the history of this review, but I must emphasise that I have been heavily
reliant on the documents disclosed by the Inquiry in responding to
questions on this topic.
576. I believe this Lessons Learned Review was formally initiated at the POL
Board meeting on 16 July 2013. In my response to Question 74.4 above,
I noted that the POL Board expressed strong views that the business had
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not managed the Second Sight review well and stressed the need for
better management and cost control going forward. In this meeting, Alice
Perkins requested a review, which would report to the ARC, of how we
had awarded and managed the Second Sight contract. Even prior to this
meeting, I recognised that such a review would be useful: in my email of
9 July 2013, I wrote “as we have already said, there will need to be a
thorough lessons learnt as well as a way forward” (POL00099133).
577. Asis clear from the minutes of the POL Board meeting on 16 July 2013,
the focus of this review was narrow, and it was envisaged that the review
would be conducted quickly. Speed was important here: we had an
ongoing working relationship with Second Sight, and this was as much
about how we managed that going forward as it was about ensuring the
good management of future projects.
578. The POL Board Action Log records that the task of taking the review
forward was assigned to Susan Crichton (at page 12 of (POL00021516)).
Because the POL Board had been critical of how the Second Sight
investigation had been managed prior to this, it was particularly important
to me that Susan who had been and continued to be the lead Director
understood the purpose of the review and supported it. At 06:49 the day
after the POL Board meeting, I sent an update to Susan setting out an
overview of the ongoing workstreams arising. I can see that we arranged
to meet and to discuss this (amongst other things, notably her
dissatisfaction at being stood down from the meeting by the Chair)
(POL00108019).
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579. My ‘update on the work programme arising from the Horizon report’ dated
26 July 2013 records that the work had already begun (at page 8 of
(POL00006590)):
“In response to the Board’s request for a post-mortem, Internal Audit has
now been tasked with carrying out a review of our response to the Second
Sight investigation, reporting to the ARC. The terms of reference will be
agreed with the Chair of ARC over the coming weeks.”
580. As this indicates, the original intention was for this review to be carried
out internally by Internal Audit ("IA"). IA is an independent body within
the organisation which reports to the Chair of the ARC. Assigning this
work to the IA team was a significant step which indicated the depth of
the POL Board’s concerns.
581. I subsequently went away on holiday and, when I returned, Alice Perkins
told me she had approached Richard Hatfield to undertake the review. I
can see from an email from Richard Hatfield to Alasdair Marnoch on 14
August 2013 that the proposed terms of reference had grown far wider
than the POL Board had initially requested and, with that widened scope
in mind, Richard Hatfield described the 20-day turnaround time proposed
as “quite tight’, suggesting instead a deadline of the end of October (at
page 4 of (POL00108064)). I was not involved in the appointment of
Richard Hatfield and did not know him. I came to understand that he had
expertise in large-scale reviews of organisational culture.
582. In his reply of 15 August 2013, Alasdair indicated that he would need to
clear Richard Hatfield’s proposed terms of reference with Alice and me.
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He also questioned the proposed involvement of third parties because
the review had been envisaged as an internal exercise and, as he notes,
the report “will be more forthright if it is only for internal purposes” (at
pages 2 to 3 of (POL00108064)).
583. The comment that he would need to clear the terms of reference with me
to ensure my “proper buy in” I believe, partly reflects the fact that I did
not know Richard Hatfield and had played no role in choosing him.I
believe that the Chair of ARC recognised that I would naturally want to
understand more about Richard Hatfield and the work proposed.
However, my involvement was also seen as important in terms of
managing team dynamics. My recollection is that the relationship
between Alice and Susan had broken down somewhat, but as noted
above, there was also a continuing need to ensure that Susan remained
on board with the review. In his email of 20 August 2013 to Richard
Hatfield, Alasdair wrote that he had spoken to Alice and me and there
were concerns about refining the scope and sponsorship of the review
(at page 2 of (POL00108064)). My recollection is that I was asked to
sponsor the review because, if I was supportive of it, that would
encourage Susan to buy in to it as well. I was her boss, but I also think
(and would hope) that she trusted me.
584. Throughout this time, I was concerned to manage Susan's perception of
this review and to ensure that she understood its aims and value. I had
spoken to her the previous day, so that the draft did not come as a shock
and I emphasised that “the intention is to approach it positively, to see
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what lessons can be learned to help us manage the business in the
future” (at page 1 of (POL00040029)). I wanted her to understand that
the aim of the review was not simply to assess her individual actions and
performance.
585. I met with Richard Hatfield and I agreed to sponsor the review. In an
update circulated to the Board by Alwen Lyons on 28 August 2013, I
wrote that (at page 2 of POL00027792)):
“lam also in the process, with the help of Alasdair and Alice, of setting up
a lessons learned review to understand what we could have done better in
the independent review carried out by Second Sight, but also to understand
how the Business responded to the Subpostmasters’ challenges and
whether our process for dealing with balance queries, suspensions,
prosecution etc. were fair.”
586. The objective set out by the POL Board was to understand how we
awarded but especially how we had managed the Second Sight contract.
The need for this was two-fold: first, to ensure better management and
cost control for the Second Sight investigation going forward and,
second, to bring that learning to bear on future projects involving external
consultants.
86.2. Please expand on _ the following in the draft_terms of reference
(POL00040032) “What is the function(s) of Horizon? When it was developed /
introduced — were there problems? Who is responsible for a) day to day
operations b) the system c) overall integrity process”. Had this work not been
carried out already in responding to SPM complaints; if not, why not?
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587. On 29 August 2013, I received a copy of the draft terms of reference,
which I forwarded to Susan Crichton. As I say in my email, I had
discussed them with "Richard" (this was Richard Hatfield) and Alwen. I
noted a need to avoid “scope creep,” saying (at page 1 of
(POL00040029)):
“We flagged potential pitfalls, especially around going back too far, or
spending too long on cultural issues we are already aware of,
(acknowledging that Richard will need to explore some of this ground as
context and I am keen to have his observations). Richard is also very aware
of not duplicating existing work.”
588. The draft terms of reference themselves (POL00040032) are a brief
document accompanied by a two-page appendix. In the first two pages
of this document, Richard Hatfield sets out the draft terms of reference
including the background to the review, which notes that it is one of
several pieces of follow-on work commissioned by POL further to the
Interim Report. His draft states (at page 1 of (POL00040032)):
“The purpose of the review is to not duplicate the work already done or
under way; nor is it intended to investigate individual cases. Rather it is an
internal review to see a) whether there are any lessons to be learned by the
Post Office about how it handled the work leading up to the Second Sight
interim report, in relation to process, governance and_ stakeholder
engagement; and b) to highlight any cultural observations, which could be
of use as the business continues its transformation to more mutual ways of
working.”
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589. The draft terms of reference set out a three-point scope (at page 1 of
POL00040032)):
a. Toidentify what POL could have done differently, so that POL and its
stakeholders (he refers to Lord Arbuthnot, the JFSA, and Second
Sight) could have worked collaboratively and constructively from the
start;
b. To identify whether the changes already made to how the Second
Sight investigation is proceeding reflect good practice and, if there are
gaps, to identify them; and
c. Toidentify what broader cultural lessons can be learned.
590. The reference to not duplicating work was important. The POL Board had
originally requested a review with a narrow, practical scope, which could
be conducted quickly so that it could usefully inform POL’s relationship
with Second Sight going forward. There were several different
workstreams ongoing at this time and I was conscious that the process
needed to be efficient and focused to be valuable. While I understood
that cultural issues formed the background context to his review, they
were not the focus of it.
591. As set out above, the draft terms of reference are accompanied by a two-
page Appendix in rough note form, which sets out a series of bullet points
and questions grouped by topic. This gives an indication of how Richard
Hatfield intended to go about his review.
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592. In a section entitled “Background — preparation for the report only’
Richard Hatfield has written (at page 3 of (POL00040032)):
“Establish basic understanding of PO organisation and identify
potentially relevant responsibilities. How does the relationship with
SPMs work? What is the function(s) of Horizon? When it was developed
/ introduced — were there problems? Who is responsible for a) day to day
operation b) the system c) overall integrity of process.”
593. I am asked whether this work had already been carried out in responding
to SPM complaints and, if not, why not. I think this question indicates a
misunderstanding. This part of the document is not part of the terms of
reference. It is instead explaining the background information which
Richard Hatfield and I had discussed he would need to enable him to
prepare his report, hence the title of the section “Background —
preparation for report only.” Certainly, there would be no need for POL to
commission an external review in order to “establish basic understanding
of POL organisation.” Here, Richard Hatfield is setting out his
methodology and process. The next paragraph states “(e)stablish outline
of chronology of relevant events in order to arrange and structure initial
interviews,” which would seem to support this interpretation.
86.3. Why did the draft terms of reference (POL00040032) state that the matters
under “Early Indicators?” were “not to be reported on”? Had this work not been
carried out already in responding to SPM complaints; if not, why not?
594. The next section within the Appendix is entitled “Early Indicators? —
preparation for the report only (ie not to be reported on)”. I am asked
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whether this work had been carried out already in responding to SPM
complaints and, if not, why not.
595. As with my answer to Question 86.2. above, this section of the document
is contained within the Appendix to the draft terms of reference. Richard
Hatfield was not setting out the terms of reference but rather his
methodology and a rough indication of how he intended to approach the
task of preparing his report. This was not work which we were proposing
he complete as part of his review. It related to background matters he
would need to understand in order to conduct the review.
86.4. Why was “going back too far” a “potential pitfall”, as you describe in your
email of 29 August 2013 (POL00040029)?
596. In my email I note that, having reviewed Richard Hatfield's draft terms of
reference I had raised with him the need to avoid “scope creep.” I then
wrote (at page 1 of (POL00040029)):
“We flagged potential pitfalls, especially around going back too far, or
spending too long on cultural issues we are already aware of,
(acknowledging that Richard will need to explore some of this ground as
context and I am keen to have his observations). Richard is also very aware
of not duplicating existing work.”
597. There were two central reasons why I considered that going back too far
would be a potential pitfall:
a. First, as I have explained above, the objective set by the POL Board was
to understand how we awarded and managed the Second Sight contract.
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Given this, the report needed to focus first and foremost on our interactions
with Second Sight and the time period during which they occurred. Although
I recognised that Richard Hatfield would need to go beyond this to some
extent to understand the context in which these interactions had occurred,
the review itself needed to focus on quite a specific period of time to serve
its purpose.
b. I Second, this review had been commissioned with a narrow, precise scope
so that it could be produced quickly and therefore play a useful role in
informing our existing relationship with Second Sight and how we managed
that going forward. I was concerned when reviewing this draft that it could
create overlaps, especially on cultural work elsewhere and not deliver on
the matter in hand.
86.5. Why were the various issues and recommendations raised by Simon
Clarke and Brian Altman KC in respect of the handling of past convictions not
included within the scope of this review?
598. The objectives of the review (see my response to Question 86.2 and (at
page 1 of (POL00040032)) were: to identify what POL could have done
differently, so that POL and its stakeholders (he refers to Lord Arbuthnot,
the JFSA, and Second Sight) could have worked collaboratively and
constructively from the start; to identify whether the changes already
made to how the Second Sight investigation was proceeding reflected
good practice and, if there were gaps, to identify them; to identify what
broader cultural lessons could be learned.
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599. Accordingly, I would not have expected the work being done by
Cartwright King or Brian Altman QC to appear in this review as their work
focused on issues of law rather than operational matters. As was set out
in the draft terms of reference, this was expressly not about examining
individual cases, whereas that was the focus of the Cartwright King
review. To the extent that I was aware of the work being done by Richard
Hatfield, Brian Altman QC, and Simon Clarke, I considered that they had
different aims and objectives.
86.6. What was the outcome of this review?
600. This review had originally been conceived as a focused, internal
exercise which could usefully feed into our ongoing management of
Second Sight's work.
601. By 6 September 2013, I had discussed the issues with Alice Perkins. I
can see that I mention the possibility of standing Richard Hatfield down
in my email of 10:49 (though had not done so yet) (at page 1 of
(POL00116123)). Alice replied at 11:49 saying she had not understood
that the proposal was to stand him down and asking for my reasoning
with reference to other options we had considered, including drafting
much narrower terms of reference. She refers to a comment I had made
about the difficulty in conducting the review given changes in personnel
(at page 1 of (POL00116123)).
602. I replied at 13:04, clarifying my comments, and saying (at page 1 of
(POL00116123)):
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“...if Susan and Simon Baker had left the business, then we couldn't
effectively do Richard’s review. I heard you say that you had the same
thought. I felt we should stand him down, as the context is now different.”
603. As I mention above, both Susan Crichton and Simon Baker had been
involved in managing and overseeing the project; the approach to project
management during their time was to be considered and likely to be
criticised in the review. In my email of 13:04 I suggested that, once those
involved had moved on, the business could conduct the review internally,
as originally intended. As my response shows, I was still keen to
undertake the review and, indeed, Martin Edwards was drafting revised
terms of reference at that time.
604. Once she understood my explanation, Alice agreed with the proposal to
stand Richard Hatfield down and I can see from my email to Alasdair
Marnoch on 11 September 2013 that we had taken that step. In that
email, I noted that the revised terms of reference were “more tightly
focused on our internal handling of the investigation” and proposed the
use of an internal facilitator (as originally intended), with the opportunity
for external challenge and input on the conclusions (at page 2 of
(POL00108113)). I can see from my email of 21:21 that day that I already
had Belinda Crowe in mind as a person well placed to conduct the review,
as she ultimately did (at page 1 of (POL00108113)).
605. Belinda was highly recommended by Alice. Belinda had worked as a
project director in Treasury at the time when Alice also worked there.
Alice was sure that her experience of dealing with complex situations,
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multiple stakeholders and particularly delivering on sensitive projects
would be excellent. I recall that she had taken early retirement but agreed
to change some personal plans and was brought in on a short-term
contract to see the work through.
606. At the POL Board meeting on 25 September 2013, I provided an update
explaining that an internal lessons learned review, led by Belinda would
be undertaken for Project Sparrow over the next few weeks (at page 8 of
(POL00021518)). There were then frequent updates to the POL Board
regarding this report, although it was delayed by several months. For
example, the POL Board Status Report dated 16 January 2014 noted
that the review would be presented to the February 2014 ARC (at page
2 of (POL00027472)), see also the minutes of the POL Board on 21
January 2014: (at page 5 of POL00021521)), but this did not in fact take
place. At the POL Board meeting on 26 March 2014, the POL Board
requested that Belinda provide “a one page lessons learned covering 3
or 4 areas by the next Board meeting” (at page 3 of POL00006564)).
607. The review ultimately culminated in a paper prepared by Belinda dated
24 April 2014, which made a number of recommendations
(POL00100592). This was presented to the ARC on 15 May 2014. The
minutes record that Belinda's paper was discussed and _ its
recommendations were considered (at pages 4 to 5 of (POL00021426)).
As indicated in those minutes, the ARC noted the need to introduce a
formal protocol for an enterprise-wide response to crises, risks, and high-
profile issues and the possibility of establishing an in-house team for this
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purpose. Chris Aujard was tasked with raising the matter at the ExCo
with a view to bringing the proposal to the POL Board in due course.
The establishment of the Initial Complaint Review and Mediation Scheme
87. Please consider POL00027792 (email from Alwen Lyons to Alice Perkins and
others on 28 August 2013), POL00099510 (email chain between you and Alice
Perkins on 28/29 August 2013), POL00116131 (email from Martin Edwards to
you dated 24 September 2013), POL00116132 (attachment to the prior email)
and POL00116136 (note of meeting with Sir Anthony Hooper on 24 September
2013). Please describe your involvement with the implementation of the Initial
Complaint Review and Mediation Scheme (“the Mediation Scheme”) as well as
POL’s conduct in relation to the same. Please explain to what extent you
communicated information about complaints about the Horizon IT System and
POL’s response to the same to the Board, ShEx/UKGI or BEIS. Without limiting
your answer, please address the following issues:
608. By June 2013, there was a recognition that the work that Second Sight
was doing needed to be brought to some kind of closure and we were
looking at how that might be achieved. I can see from his email of 4 June
2013, that Lord Arbuthnot communicated this to Ron Warmington and
lan Henderson. In that email he referred to a conversation he had had
with me where I had proposed that any further cases submitted be
investigated in-house by the Company Secretary and asked for them to
consider this (at page 2 of (POL00098459)).
609. An email sent by Janet Walker on behalf of Lord Arbuthnot on 13 June
2013 indicates that he had discussed this with Alan Bates: “James
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touched on the point Paula has made about potentially bringing the
investigation of further cases in-house within the Post Office. Alan said
he was not entirely comfortable with this, but James persuaded him to
put this matter into abeyance for the time being, and Alan agreed” (at
pages 4 to 5 of (POL00098592)).
610. As noted in Lord Arbuthnot’s email of 4 June 2013, the Second Sight
investigation had, by this point, run for longer than anticipated and at
higher cost, and we had concerns about the quality of the work being
produced. More generally though, it was never intended that we would
retain Second Sight indefinitely. Ultimately, as a matter of good business
practice, you would always look to bring learning and skills back into the
business, rather than bear the cost of hiring external consultants on an
ongoing basis. However, there was always an intention to improve
mechanisms for SPMs to be involved and raise complaints, for example,
through a ‘Horizon User Group’ made up of existing SPMs, which was
being considered as part of the Business Improvement Programme.
611. I can see that Alan Bates emailed me on 4 July 2013 suggesting that
POL could use an external independent adjudicator to review cases (at
pages 2 to 8 of (POL00099013)). I can see from this email chain showing
our internal discussions that we considered this proposal. In his email of
4 July within that chain, Mark Davies noted that we had just proposed the
Branch User Forum and “a working group to review our processes
around support and training” (at page 2 of (POL00099013)).
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612. My initial thoughts were that the idea had merit, but I preferred an
ombudsman or independent expert to an adjudicator. At this stage, I
recall that what I really wanted was a way through the difficulties and a
resolution of the complaints being made which both sides could be
satisfied with. I can see that I met with Lord Arbuthnot on 5 July 2013 and
we discussed these suggestions and the issues surrounding them, which
were myriad (POL00115958). I recognised that there was a real need for
SPMs'’ voices to be heard, there was also a desire for independence, but
we also needed a process which could provide resolution and finality for
those involved.
613. The next day, on 6 July 2013, I provided an update to the POL Board,
setting out the progress of these discussions. I noted there that Alan
Bates’ main focus was less on the computer system, but more on the
human issues: “how in his view Post Office failed to support and help
vulnerable and ‘muddle-headed’ [sic] Spmrs” (at page 1 of
(POL00115961)). The phrase ‘muddle-headed’ was Alan Bates’
terminology and I repeat it here without any intention of disrespect. I
understood him to be attempting to capture the concern that these
problems arose primarily because SPMs needed more help and support
to work with the Horizon system and that providing that support could
avoid these problems in future. I suggested that we work closely with
Alan Bates, rather than indirectly through Second Sight, to provide
reassurance to him and others on this issue.
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614. Later that day I exchanged emails with Alan Bates and then sought input
from Mark on what was discussed. His email of 16:46 draws out a key
issue at this time which is that the processes being put in place needed
to be both backwards-facing — to arrive at resolution on the existing MP
and JFSA cases — and forwards-facing — to provide an ongoing
programme of support and improvements going forward (at pages 2 to 3
of (POL00099051)).
615. Mark noted that the working party being proposed by Alan Bates could
“take over’ the Second Sight review, with POL and the JFSA working
collaboratively to resolve the remaining cases, perhaps with the oversight
of an external party. He suggested that this would carry the risk of looking
at historic cases which had been decided by the courts, but it would also
enable us to complete the work Second Sight had been asked to do.
Martin Edwards’ comments at 20:08 within this chain show that it was still
a live question at this point whether the existing cases would be best
resolved through the Working Group or through more direct one-to-one
engagement with MPs. He also expressed a concern about having the
JFSA so directly involved in resolving individual cases.
616. I did not share this concern and was content for the JFSA to be involved
in looking at cases. Throughout this process, my view was that we
needed to be open with them. My response of 21:46 to these emails (at
pages 1 to 2 of (POL00099051)) makes clear that I imagined that we
would be working collaboratively with the JFSA to resolve past cases. I
also foresaw that the JFSA might play an important role in reviewing the
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findings of any review of past prosecutions conducted by our external
lawyers. Nonetheless, I took seriously the need to consider all angles
and so (as recorded in my email) I asked Susan Crichton to advise on
the legal implications of the options being considered.
617. On 8 July 2013, I provided an email update to the POL Board. I can see
from this that JFSA’s involvement had been confirmed (POL00099126).
I noted that Lord Arbuthnot was determined that the review of past
prosecutions remain part of the review process. As I noted to the POL
Board, we were already planning to engage our external lawyers to
conduct a review of the implications of the report for past prosecutions,
but this would be kept separate from the wider review.
618. In the press release statement on the findings of the Interim Report dated
8 July 2013, I set out three new initiatives including the creation of a
working party including MPs and the JFSA, tasked with completing the
review of cases started by Second Sight (POL00090219). This was not
to say that Second Sight would not continue to have a role. However, it
reflects the wider issues noted above that, even leaving aside the
concerns being passed to me about the quality of the work that Second
Sight had produced, it was never the intention that they would become a
permanent fixture (POL00099510): that is simply not the purpose of
external consultants.
619. Those at POL working closely with Second Sight repeatedly expressed
their concerns to me about the quality of Second Sight’s work, the delay,
and whether they had the expertise to assist going forward. However,
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against this, there was a firm (and understandable) desire amongst MPs
for Second Sight to remain involved and we had to respect this: POL is
a public body and the MPs are our shareholders. As is clear from Mark's
email of 9 July 2013, the day after the release of the Interim Report, it
was already understood that Second Sight would remain involved, and
our attention had shifted to how we could support them to bring the
investigation to a timely resolution (at page 1 of (POL00099146)).
620. At this point I was managing competing priorities from different sides: the
MPs wanted their cases looked at and wanted Second Sight firmly
involved, but the Board was dissatisfied with the fact that Second Sight’s
investigation had run over time and over budget. I had to navigate a way
through this that would give us what seemed most important to me: the
resolution of the cases for the SPMs and for POL. Regardless of the
outcome of the Second Sight investigation, our main priority had to be
finding a way to achieve resolution.
621. That was one fundamental intention behind the establishment of the
Mediation Scheme. I can see that (POL00116076), an email from Mark
Davies to me sent on 15 July 2013, reflects some of this thinking. Here
he suggests an independent panel, “chaired by a QC or perhaps a former
MP/peer’ to which we proactively encourage SPMs to submit their cases
for evaluation or, in Mark's terms, "judgement". This would run alongside
the final Second Sight report and allow us to achieve finality for those
involved and for POL. As Mark says there it was an opportunity to make
a big statement about the kind of business we were and intended to be
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going forward. I agreed: resolving the cases would be good for the SPMs
and it would be good for POL.
622. By 19 July 2013, this new proposal was being described in terms of
mediation as set out in an email from Simon Baker to me that day. He
records a list of actions, including communicating the proposal to Second
Sight, Alan Bates, and Lord Arbuthnot (POL00117036). The reasoning
behind the proposal was set out by Simon in this email: (a) it would
provide independence through Second Sight and an independent
mediator; (b) it should be faster as Second Sight and the mediator could
share the workload; (c) it would provide a professionally trained mediator
and so, hopefully, would bring resolution; and (d) it would get Second
Sight out of the role of both mediator, judge, and "sub postmaster
advocate(s)" so that the process could continue after the MPs’ cases had
been completed.
623. Although I do not recall this email, I recognise the thinking behind these
factors. I think it is a recognition of the fact that Second Sight were
themselves in a challenging position. In a POL Board update sent on 26
July 2013 (at page 2 of (POL00006590)) which I discuss in more detail
below, I note that:
“T)heir approach of seeking to reconcile the conflicting evidence and
views of the Post Office and sub-postmasters — which stems from James
Arbuthnot that they needed to ‘keep the JFSA onside’ — is pushing them
into an almost impossible situation, which both extends the time taken to
conclude each case and, more worryingly, creates a tendency for them to
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place greater weight on the sup-postmaster’s [sic] version of events,
irrespective of the evidence we present.”
624. I believe that the reference to the difficulty in Second Sight being
mediator, judge, and SPM advocate is a reference to the same kind of
impossible situation I described here.
625. Throughout this time, we were also trying to manage the cost of Second
Sight’s engagement going forward. As noted above, the investigation had
overrun in time and cost and it was a significant concern to the POL
Board that, despite this, Second Sight had not finished the work they
were tasked with completing having, so far, only produced an Interim
Report. The budget for this project had essentially been exhausted and
the Board felt that POL had paid for work which had not been completed.
Alongside this, POL was now going to have to fund the Mediation
Scheme, at further cost. As discussed in emails between Susan Crichton
and me on 22 July 2013 (see (POL00099341) and (POL00099342)) we
engaged in robust negotiations with a view to persuading Second Sight
to either complete the further work within the original budget or at a
severely reduced rate. From recollection, the proposal that they complete
the work pro bono was a negotiation tactic which was originally
suggested by the POL Board.
626. This increased focus on management is also clear from an email I sent
on 21 July 2013 in advance of the meeting on 22 July to discuss the
proposal with key figures involved (see below) (POL00108037). This
records that Alasdair Marnoch was to be fully briefed in his capacity as
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Chair of the ARC to make any challenges he saw fit. As I say here, it was
important that we could demonstrate concrete proposals for monitoring
progress and keeping the POL Board updated. I was aware that, prior to
this, the POL Board had had relatively little exposure to the work, and I
wanted them to understand the complexities of the project by bringing
them in closer. The POL Board had significant commercial experience
but, with the exception of the Chair and perhaps the Chair of the ARC,
little experience of public and political stakeholders in something this
complex. I felt strongly that bringing Alasdair in would assist us by
providing constructive challenges and enhanced support.
627. On 22 July 2013, Susan, Mark and I attended a meeting with Ron
Warmington, lan Henderson, and Lord Arbuthnot, to discuss the
proposed mechanics of the Mediation Scheme. I can see that we
discussed the provision of an independent advisor to assist SPMs in
preparing material but also explained that we did expect costs to be
controlled and overseen by the ‘MOB,’ which although I do not now recall
the name, is the Monthly Oversight Board ("MOB") (POL00099354). I
recall being pleased that we were working collaboratively together.
628. A detailed update was prepared, which I sent to the Board dated 26 July
2013 (POL00006590). This set out the different workstreams and their
objectives, including: the completion of the review of cases started by
Second Sight; continuing to review disclosure obligations in cases
subject to criminal prosecutions; identifying improvements to be made in
training and support; and reviewing how best to resolve disputed cases
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in the future. Resolving the existing cases, with Second Sight’s
involvement, was of central importance. However, the previous way of
working had not enabled them to do this.
629. The report sets out the changes we intended to make so that we could
achieve resolution, including by providing them with senior level resource
to respond to queries and ensure they could prepare an accurate
evidence base quickly and efficiently and by restricting their remit to
preparing an impartial evidence base from which an independent
mediator could assist the parties in agreeing a resolution. My belief was
that this process would still identify any shortcomings on the part of POL
(as noted at paragraph 7 and paragraph 26) and so would allow us to
make changes to our ways of working where these were warranted (at
pages, 2, 6 and 7 of (POL00006590)). I recognise here that there may
be cases where financial compensation is warranted but that was not the
fundamental purpose of the Mediation Scheme and such payments
would be the exception rather than the norm (at pages 2, 6 and 7 of
(POL00006590)).
630. The desire to achieve better management and oversight of Second
Sight’s investigation going forward, and to ensure that costs did not
continue to spiral as they had previously, was an ongoing concern at this
time. The POL Board was provided with a table of estimated costs at
paragraph 25, although these were necessarily provisional (at page 6 of
(POL00006590)). The anticipated costs included improvements to the
helpline and to our IT and other processes, aimed at preventing future
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problems arising. These included an investment in software designed to
highlight high-risk situations / opportunities such, as amongst other
things, flagging where SPMs made repeated calls so that support could
be proactively offered. From memory, I believe this was led by Angela
Van Den Bogerd and was called Horice (an acronym).
631. I can see from (POL00118496), an email I sent to Alice Perkins on 26
July 2013 about a meeting I had had with Susan, that management of
the project and of costs in particular (including the negotiations with
Second Sight) remained a central concern. I set out three key objectives:
costs control; discipline and delivery and monitoring of work in progress;
maintaining close and frequent communication with JFSA / Alan Bates.
It is natural that costs were a central theme. As a publicly funded
organisation we had responsibilities to the public and to our shareholders
to ensure that we were managing our costs efficiently.
632. Susan updated me and others in an email at 11:53 on 26 July 2013,
which detailed a workshop attended by Alan Bates and Second Sight on
25 July 2013, where the proposed scheme had been discussed in detail
(POL00116113). This felt constructive, although it was clear that there
remained areas of disagreement. I can see that there was discussion of
who would fund the provision of an independent advisor to assist SPMs.
This would assist SPMs and of course would also improve the efficiency
of the process by ensuring that the necessary details were provided in
the first instance. Susan emphasised again to Second Sight that there
was “considerable internal concern about the time and money taken so
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far’ as I have noted above. Alan Bates considered that this should be
paid for out of central government funds, but POL was already subject to
budgetary pressures from ShEx, as well as compensating SPMs for Post
Office closures and conversions as part of the Network Transformation.
We were tightening our belts in every area — it was by no means just this
project where costs were a concern — and I did not consider that we could
secure funds from the government for this. This was an operational
matter for POL, which it would be expected to fund itself.
633. On 26 August 2013, the POL Shareholder team shared a draft mediation
pack, draft press statement, and draft letter to MPs with ShEx updating
them on progress (POL00099504). A copy of the draft mediation pack
had already been sent to Lord Arbuthnot on 21 August 2013
(POL00095442).
634. (POL00116114) records the response from members of the POL Board
to my update paper discussed above (POL00006590). Alice's email to
the POL Board sent on 31 July 2013 refers to the need to ‘pin down and
cap SS’s costs’ and to cap their involvement at the 47 existing cases. For
my part, I recognised that Second Sight would remain involved and did
not consider that we could or would draw a line at 47 cases: they would
remain involved until their work was complete. However, I shared these
broad concerns about the situation: POL had hired Second Sight to get
to the bottom of the cases and find out what was going on and they had
not done this. Reflecting on this now, if they had completed those
individual cases then we might have got closer to the real problem — the
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large numbers (600+) of unknown bugs and defects being corrected by
Fujitsu without POL’s (as I believed at the time) or my knowledge.
635. On 28 August 2013, I provided an update to the POL Board addressing
the announcement of the Mediation Scheme, amongst other things. I
explain in summary terms how the Mediation Scheme would work, noting
my central aim of achieving resolution to the complaints that had been
made. I explained to the Board that “(i)here is the clear risk that in some
cases the sub-postmaster will argue that financial compensation is
appropriate, which again will have to be assessed carefully on a case by
case basis” and outlined how financial settlements will be managed (at
page 1 of (POL00027792)).
636. I can see that Alwen Lyons prepared the initial draft of this note on 27
August 2013 and I responded with my comments, cc’ing in Susan for her
input (POL00116218). I noted that the POL Board will want to know the
risks of mediation, including the financial risk of compensation payments,
and receive reassurance on how POL would manage these. That kind of
oversight was essential to the POL Board’s role and I knew we had to be
upfront about the financial risks in explaining this to them. The parts in
my final note relating to costs reflect this.
637. In my email I say, “when we discussed this, the hope of mediation was
to avoid or minimise compensation but as far as I can see, the pack
doesn't really suggest any other outcome” (at page 2 of (POL00116218).
This referred to a conversation I had had with Susan about the purpose
of mediation and what value it could add. Although I expressed this badly,
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I was making the point that we needed to clearly emphasise that the aim
of mediation was resolution, not simply paying compensation to close an
issue. As the final POL Board note shows, it was always understood that
compensation would be paid in appropriate circumstances, but I felt it
was extremely important that everyone involved (including the POL
Board) understood that the aim was to achieve resolution: that was the
real value of the Scheme. I did not want it to be misunderstood as simply
being a compensation scheme so we had to be clear that, although
compensation was possible, there should be no expectation that it would
be the end result in every case.
87.1 What was the purpose and objectives of the Mediation Scheme?
638. As I have set out in detail above, the Mediation Scheme had several
objectives. The most important one for me was that it offered a way to
bring resolution to seemingly intractable cases, which would be good for
the SPMs and good for POL. I recognised that it was vital that SPM
voices were heard and essential that POL engage in meaningful dialogue
with SPMs, recognising where we had fallen short and identifying
improvements and, in appropriate cases, providing financial
recompense.
639. Crucially, the Mediation Scheme also offered a way to complete the
review with which Second Sight had been tasked in an independent, fair
but also efficient (and cost effective) manner. The Second Sight
investigation to date had seemed unable to achieve resolution and the
Mediation Scheme offered a route through this. By finding new ways of
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working with Second Sight we could ensure that they were adequately
supported to complete the work in a way which would not compromise
their independence (and so, the value of the end result). Closer, more
collaborative, working would also ease the transition when Second
Sight’s work came to an end and allow us to bring that work back in-
house, as we intended to do.
87.2 In your note dated 28 August 2013 (POL00027792), why did you write
“There are a range of outcomes, from an acceptance that...the subpostmaster
was at fault_and that_no specific redress should will [sic] be required; to
recognition that the Business could have more effective support which will feed
into the process re-engineering work now underway”. Did you not consider that
one of the outcomes may have been that SPMs’ complaints may have been
caused by BEDs?
640. My view was always that, if the review was conducted thoroughly,
particularly by re-looking at individual cases, any BEDs would be
identified. In my note I refer to Second Sight's remit being the specific
task of preparing an impartial evidence base. Working impartially,
Second Sight would flag any BEDs, of that I was sure. Additionally, I refer
several times to the fact that this approach should enable us to identify
“shortcomings” and make changes where these were needed (at pages
2, 6 and 7 of (POL00006590)). I was not intending here to set out an
exhaustive list and I accept I could have been clearer about BEDs - but
both I and the POL Board knew that the identification of BEDs was one
possible outcome because we had already received the Interim Report
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by this stage. I think it was also true that although open to the possibility,
I / the POL Board did not expect to find many bugs at all; our
understanding was not that there were 600+ as became known but that
there had been three, which it was understood had been dealt with
satisfactorily.
641. The minutes of the Working Group (at page 2 of (POL00026641))
illustrate POL’s continued openness to the potential existence of BEDs:
"Clause 4.10 was ...accepted subject to the Post Office commitment
(which was reaffirmed in the meeting) that should they make any firm
admissions during the mediation on the basis of a newly discovered flaw
or fault in Horizon... they would report this back to the Working Group."
642. It should be borne in mind that the purpose of this document was not to
outline all the possible outcomes of this process. I was conscious that
the POL Board had concerns about the delay and cost of the Second
Sight investigation to date and here I was setting out a programme of
future work which would require yet more resources and costs. It was
essential that they understood the purpose and value of the Mediation
Scheme and that was what the document was trying to convey.
87.3 What were Alice Perkins’ views on the scheme and its terms of reference?
643. On 28 August 2013, I exchanged emails with Alice Perkins about the
terms of reference for the Mediation Scheme. In her email of 15:24 she
states “(y)ou should by now have my thoughts on the TOR” (at page 1 of
(POL00099510)). I have not been able to identify precisely what this
refers to but believe it is likely to refer either to a separate email or a
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printed and annotated document. I do not think I have yet seen the
document or email, if the same has been disclosed to the Inquiry. I have
no independent recollection of what it might contain but would be happy
to comment if the Inquiry is able to locate and provide me with that
document.
644. Although I do not recall precisely what this reference was to, as I have
noted above, Alice had several key concerns throughout including: (i)
controlling costs; (ii) ensuring that Second Sight did not become a
permanent fixture; (iii) ensuring good management and effective
reporting lines back to the Board; and (iv) ensuring effective corporate
governance of the project going forward.
87.4 Please explain what you meant by “Angela will work hand in glove with SS
over the next few months to enable this, and_as importantly, to give SS the
reassurance that they can safely hand over to her’ in your email dated 28
August 2013 (POL00099510). Why did you intend to phase out Second Sight at
this stage?
645. In the series of emails with Alice Perkins on 28 August 2013, we
discussed costs going forward and I stated that (at page 1 of
(POL00099510)):
“The intention is for Second Sight to have finished their work by year end
(I think calendar year?). And then for any ongoing activity to be handed
over to Angela and her team, so that it becomes a BAU process. Angela
will work hand in glove with SS over the next few months to enable this,
and as importantly, to give SS the reassurance that they can safely hand
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over to her. So far, I understand this is working well and they have
expressed respect for her input and capability.”
646. I can see that Chris Day provided further explanation later on in this email
chain where he provided specific details of Second Sight’s costs going
forward and noted (at page 1 of (POL00099513)):
“SS have agreed to transition out (subject to our in house team being
sufficiently competent/independent in both carrying on with existing
investigations and supporting SPMRs appropriately) over the coming
months; depending on (a) the incidence of new cases arising, and (b) the
rate of take up of the mediation scheme, Susan’s view is that this is likely
to be achievable by the end of this calendar year or latest first quarter
2014.”
647. This provisional handover is also noted in Susan Crichton’s update of 30
August 2013 where she explained that a cost cap had been agreed with
Second Sight and “(t)hey have also agreed that subject to Angela and
her team being able to provide the right level of investigative support to
subpostmasters they will hand over the work to her, we are aiming to put
that process in place by the end of the year (at page 1 of
(POL00108087)).
648. These emails provide a good overview of our intentions for the Mediation
Scheme going forward. As I have noted above, no organisation wants to
retain external consultants indefinitely: POL looked to bring knowledge
and skills in house — if possible, so as to become a BAU process. We
had this in mind throughout and discussed how that transition could occur
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with Second Sight. However, as the above discussions make clear, there
was never a hard and fast cutoff date for Second Sight’s work and the
handover was always subject to caveats, most importantly, Second Sight
being satisfied that POL had the competence and independence to do
the work.
649. When I suggested to Alice that Second Sight’s work was likely to be
completed within the year (and hopefully the calendar year), that was my
expectation based on how long I expected their review to take, not a
suggestion that we would end their involvement on an arbitrary date. We
had already dismissed the viability of simply imposing a deadline
because it would not be credible or in the best interests of the business
overall (see my POL Board update of 26 July 2013: (at page 3 of
(POL00006590)) and it was certainly foreseeable that their work would
continue until the end of the financial rather than calendar year: my
update to the POL Board of 28 August 2013 envisaged that the work
would be concluded by March 2014 (at page 1 of (POL00027792)).
650. As I have explained in several places above, one fundamental
requirement going forward was that POL bring the skills, experience, and
learning from the Second Sight review in-house. Although there were
concerns about the quality, cost, and timeliness of Second Sight’s work,
this would have been an aim of the business in any case where external
consultants were engaged. We would never look to retain external
consultants indefinitely and it would not be a responsible use of public
funds to do so.
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651. However, as these discussions show, although we were looking for that
reason to phase out Second Sight’s involvement, that intention was
caveated and subject to the more fundamental requirement that the
cases be resolved in a way which was fair and which was seen to be fair.
Ultimately, the intention was always that Second Sight would finish the
task with which they had been assigned before their involvement came
to an end, even though I understood why some on the Board such as
Alice wanted their involvement to be curtailed more swiftly.
88. Please consider POL00066817 (email from Martin Smith to Susan Crichton
dated 26 September 2013). Were you aware of this advice; if so, how did it affect
POL’s position in respect of convicted SPMs?
652. On 24 September 2013 Alasdair Marnoch and I met with Sir Anthony
Hooper, (Martin Edwards also attended) to explain the purpose and
requirements of the Mediation Scheme and assess his suitability for the
role of Chair. Prior to this meeting, Martin had sent me a briefing for it
((see POL00116132) and Martin's email providing that briefing
(POL00116131)).
653. Although my recollection of the meeting itself is limited, I recognise the
points detailed in Martin's note (POL00116136) which he produced and
emailed to Alasdair Marnoch, Susan Crichton and me on 25 September
(POL00066817). This email chain shows that Susan forwarded the note
without comment to Martin Smith the next day, who responded with his
views.
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654. I was not aware that these notes were sent to Martin Smith, nor was I
aware of his comments in response. I was reliant on Susan, as GC, to
advise me on the legal implications of our approach to this work. I do not
recall Susan briefing me on Martin Smith’s email, if she ever did. Given
this, I am unable to comment on how, if at all, it may have affected POL’s
position in respect of convicted SPMs.
89. Please consider POL00116166 (email chain on 2 October 2013), POL00099695
(email chain on 3 October 2013), POL00099702 (your email of 4 October 2013)
and POL00099711 (your email to Alice Perkins on 4 October 2013).
89.1. Please explain what you meant by the application making for “disturbing
reading”.
655. I have been referred to an email Ron Warmington sent me at 16:04 on 2
October 2013 attaching eight example applications for my consideration
(POL00116166).
I can see that I responded to Ron Warmington at 21:30 the same day to say
that I had read the applications. I described them as “very disturbing”. I said
that I took the issues very seriously, and commended the format of the form he
had devised as being helpful in removing some of the emotion and clearly
setting out the issues we needed to discuss (at pages 1 to 2 at (POL00116166)).
656. I forwarded Ron Warmington’s email and attachments to Martin
Edwards, Belinda Crowe, and Mark Davies in the first instance at 21:50
that evening, noting that they “make disturbing reading” (POL00099695).
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I can see that Martin replied at 21:55 saying he would look at them in the
morning (at page 1 of (POL00116166)).
657. I will use Lee Castleton’s application as an example of why I used the
words "disturbing reading". There are words within the application which
really concerned me at the time and still do, in particular the statement
that POL "vindictively pursued" Mr Castleton in court proceedings. I was
the CEO of an organisation which I cared deeply about and which I
considered existed to serve communities. The idea that Mr Castleton felt
that POL had behaved that way was deeply disturbing. He paints a picture
of POL’s support services as inadequate, hard-hearted, sloppy, and
unprofessional and describes making 91 calls to the helpline without
receiving assistance. I was deeply concerned by the whole tenor of how
POL was said to have responded in his case.
658. I have since heard the human impact statements provided as part of this
Inquiry which portray deep human suffering. I heard people, SPMs who
had served their communities, describing losing houses and businesses,
becoming ill with stress and in almost all cases, their families being
impacted. POL was meant to support vulnerable people and for the
organisation to treat people, whatever it felt they had or had not done, in
this way was unacceptable.
659. I recall it being powerful to read about these accounts in the applications,
just as it was difficult to hear them in the SPMs' own words in the human
impact sessions.
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660. It was undoubtedly also striking to read so many accounts laid out
together so black and white with no media narrative around them. The
structure of the applications starkly laid out the facts and those facts were
deeply upsetting because of their content. That is what I meant when I
said to Ron Warmington that the format was so effective.
89.2. What was the Executive Committee’s reaction to these applications?
661. On Friday 4 October 2013 at 13:56 I forwarded the email and
attachments from Ron Warmington to Alwen Lyons, Chris Day, Fay
Healey, Kevin Gilliland, Lesley Sewell, Mark Davies, Martin Edwards,
Martin George, Nick Kennett, Susan Barton and Susan Crichton, asking
them to read the applications (POL00099702). I asked them to do this,
firstly, because I considered it important that they were aware of them,
and, secondly, because I wanted wider input on how best to disseminate
and learn from them.
662. I have not been able to identify any replies from the ExCo to my email in
the material disclosed by the Inquiry to date. However, in the email
attaching the applications I had said "/f we get time at Monday's Weekly
ExCo, I would like to raise it then, otherwise we will pick up during AOB
on the 15 October". I believe that we discussed this material at the ExCo
meeting on the following Monday. I remember in particular, that Martin
George, who was new to POL, was shocked by this material. Although I
do not recall the discussion, I recall that everybody was affected by the
material.
89.3. To what extent, if at all, did your or senior management's approach to SPM
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complaints _about_the Horizon IT System change _after_reading these
applications?
663. I do not think reading these applications necessarily changed how we
approached this — the Mediation Scheme had been designed to address
these complaints: there would be an investigation and review to establish
the precise facts in each case. However, reading these accounts did
reinforce the importance of what we were doing and made clear how
critical it was that we saw it through. Those working closest on Business
Improvement, Angela Van Den Bogerd in particular, had been closely
involved in reviewing applications for a lengthy period of time and so
would have been very familiar with their content.
664. I considered it important to share this material with the wider team
because I felt that if anyone had any doubts about the overall seriousness
of Project Sparrow, then it was clearly important that they saw the raw
data. Whether these accounts did change how others responded though,
I cannot say, but it was my intention to do what I could to set the standard
of care and challenge and commitment to change where it was needed
and by circulating these accounts, I was trying to show a commitment to
care and challenge.
89.4. Please explain what you meant by Ron Warmington having been “fickle
with his loyalties” (POL00099711). Did you consider that Mr Warmington owed
POL loyalty?
665. On 4 October 2013, shortly after I sent the material to the Executive
Team, I forwarded Ron Warmington’s email and attachments to Alice
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Perkins separately, noting that they will “depress and distress” her
(POL00099711). In that email I also flagged a number of points for her
to keep in mind including that:
“Second Sight are now fully back on board and very complimentary about
how we are handling the process for such cases. My phone call with Ron
Warmington could not have been more positive. I remain wary of Ron as
he can be emotional and has been fickle with his loyalties, but I will forward
you a mail trail that shows his support.”
666. I cannot recall precisely what I meant here but I believe this was an
attempt to reassure Alice that we had already made good progress with
Second Sight without overemphasising the positive response we were
currently receiving from Ron Warmington. I have mentioned already that
Second Sight had to walk a difficult line in terms of maintaining
independence while keeping the JFSA on board and, perhaps as a result
of this, Ron Warmington had tended to blow rather hot and cold in the
past.. While I felt we could take some comfort from his positive feedback,
I think I was also sounding a note of caution.
667. On reflection, "/oya/ty" was the wrong word to use because it does not
capture what I intended to convey. Certainly, Ron Warmington did not
owe POL loyalty. I did consider that Second Sight held professional
duties in relation to the work they were undertaking. Notwithstanding this,
I recognised that he had a difficult role to play and was under pressure
from all sides to manage different groups of people.
90. Please consider POL00116181 (email from Martin Edwards to you on 8
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October 2013). What was the “the hiccup around the due diligence on Sir
Anthony Hooper”.
668. On 8 October 2013, Martin Edwards sent me an email which addressed,
amongst other things, POL’s relationship with Bond Dickinson. Martin
wrote (at page 2 of (POL00116181)):
“I discussed with Hugh whether there were any particular issues you should
be aware of or raise with Simon related to the wider work they are doing
with us. In short, no — generally the relationship is working well and BD are
providing high quality support. They are particularly involved in Project
Sparrow as you know (I thought Andy Parsons was very good today on the
compensation policy. If there’s time you might want to ask Simon for his
thoughts on this issue). I probably wouldn’t mention the hiccup around the
due diligence on Sir Anthony Hooper — without Susan around to confirm
it’s not clear exactly what support they were asked to provide ahead of the
interview (i.e. the blame might partly be with us if we didn’t ask them to do
a thorough pre-vetting). They are also heavily involved in NT strategy work
and potential agreements with the Fed, where again they are providing high
quality support.”
669. I am asked what Martin was referring to by “the hiccup around due
diligence”. I cannot now recall this matter precisely and my response
within this email chain does not shed any further light. From memory, I
vaguely recall that I had heard that Sir Anthony Hooper had been
involved in Hillsborough in some way when Jack Straw (who was married
to Alice Perkins) was Home Secretary. Alice was not involved in Sir
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Anthony's appointment, but I believe she may have been concerned after
that time about the potential for the appearance of conflict, which Bond
Dickinson had not identified from their work on the due diligence. My
memory of this is very vague, but I do not recall it ever being a matter of
any consequence.
The death of Martin Griffiths
91. Please consider POL00116133 (Mark Davies’ email to you on 24 September
2013), POL00027757 (email chain on 11 October 2013), POL00108132 (email
from you to Angela van den Bogerd on 12 October 2013) and POL00116188
(email from Rodric Williams to you and others on 13 October 2013).
91.1. Why did you consider the exchange between Susan Crichton and Alan
Bates to be “unhelpful” (POL00116133)?
670. Mr Griffiths' death was a deeply sad event. It has been difficult to write
about this and I can hardly imagine how much harder it must have been
for Mrs Griffiths and her family. I am deeply sorry.
671. As is shown in (POL00116133), the picture of what had happened was
initially very confused. We were exchanging emails late at night and
trying to understand what had taken place. Earlier that day I had been
informed that Alan Bates had said that Mr Griffiths had attempted to take
his own life and that POL was to blame. There had then been two sets of
separate information (from Susan Crichton, and the following day from
Mark Davies) countering this, which suggested that Mr Griffiths had been
involved in a car accident. In her email to me at 21:38 on 23 September,
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Susan Crichton explained that she had spoken to Alan Bates again and
understood that Mr Griffiths had indeed attempted suicide (at page 1 of
(POL00116133)).
672. As my reply of 22:12 shows, my first priority was to find out how Mr
Griffiths was (at page 1 of (POL00116133)). We needed to support him
and his family and so we needed to establish the facts and understand
what had happened. From past experience of suicide, I knew that nothing
is ever as simple as it seems and I recognised that there were likely to
be more aspects to this incident, all of which would be needed to be dealt
with sensitively, than any of us knew late that night. I really wanted to
make sure that we did the right thing for Mr Griffiths and his family. I
immediately offered to reach out and encouraged support and
condolences from POL. As is indicated in his email of 07:20 on 24
September 2013, this contact was initially through Mr Griffith’s contract
advisor, who passed our sympathies to his family (at page 1 of
(POL00116133)).
673. Secondly (and, as I say in my email of 22:12, it was "very definitely" the
second priority), I wanted to bring some calm to what was obviously a
fraught and distressing situation. I was disappointed that Alan Bates had
jumped to the conclusion that POL was to blame and was voicing these
opinions in this situation. This was a time of great distress for Mr Griffiths’
family (and for my colleagues who were handling this tragedy) and I felt
that accusations of blame were unhelpful.
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674. This is what I intended to express in my comment about his exchange
being “unhelpful: it was an expression of regret and disappointment.
Both in this situation and going forwards into mediation, I wanted to build
a relationship of trust with SPMs and challenge Alan Bates’ assumption
that POL was uncaring or could not be relied upon. I recognise now that
he was, of course, right, and as was shown in the group litigation and
Court of Appeal judgments, his mistrust of how POL had treated SPMs
was entirely well-founded.
91.2. Why did you request someone to look in Mr Griffiths’ background,
including his mental health?
675. First and foremost, I wanted to support Mr Griffiths and his family and
offer what possible care we could. When I received the sad news of Mr
Griffiths’ passing on 11 October 2013, his family were my first thought.
As I said in my email of 21:28 responding to the news, I have close
personal experience of suicides and additionally had ministered to
families where loved ones had taken their own lives. I was very aware
both that the background to suicide can be complex and is sometimes
not apparent until long after the fact, and that there is often a desire by
those closely affected by such a death to look for an explanation
(POL00027757).
676. As my email shows, I wanted to offer my personal assistance in any way
which would be helpful. I offered to speak to or meet with Mr Griffiths’
family. This was something I had done in other cases where SPMs or
their families had lost loved ones and I offered to do it here, if it was
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something that would help them. I wanted them to understand, as I said
in my email, that we would look after them as much as we could and as
much as they would allow.
677. Secondary to this, but also very important, was the duty of care I owed
to my colleagues at POL. I was conscious that Glenn Chester knew Mr
Griffiths best and was closest to him and I wanted to ensure that Glenn
received support. As I note later in my email, I was aware of the toll that
this incident had taken on Angela Van Den Bogerd and did not want to
put further strain on her when deciding who would undertake which tasks
going forward. Throughout my involvement, I tried to offer care and
support to those involved in this deeply sad event before looking to the
needs of the business.
678. Whilst supporting the people involved was my major concern — Mr
Griffiths’ family being the top priority — I did also need to understand what
had happened from a business perspective. It was my duty to provide
information to the POL Board and I wanted to give them a full and
accurate picture. As I said in my email, I had previously been given
information suggesting that there were pre-existing mental health and/or
family issues. I cannot recall who had suggested this but, as I note there,
we did not yet have a full formal report into the incident and so I asked
for what background we had, including whether or not this suggestion
had been confirmed.
679. I recognise that such rumours are unhelpful. I am so sorry, especially to
Mr Griffiths’ family, because reading this now it seems a very intrusive
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question. I was clumsily trying to establish the facts and, although this
did need to be done, I should have waited.
91.3 What was “Alan’s reaction” to Mr Griffiths’ death? What were your views on
his reaction?
680. This imperative to try and understand what had taken place is also clear
from the email I sent to Angela Van Den Bogerd on 12 October 2013, the
day after receiving the news of Mr Griffiths’ death (POL00108132). As I
said there, this was a tragic case, and, inevitably, one with many complex
factors involved. However, especially given all the work that was going
on at the time, I wanted us to be proactive in learning from it, if there was
learning to be done. From a business perspective, we also needed to
understand what role, if any, POL may be asked to play in any
subsequent coronial proceedings. I can see that Rodric Williams
provided legal advice on this issue and others by email on 13 October
2013 (POL00116188).
681. In my email on 12 October 2013, I note that Alan Bates’ reaction to Mr
Griffiths’ death was one reason why it was so important for us to do this
work (at page 1 of (POL00108132)). As set out in my response to
Question 91.1 above, Alan Bates’ initial response had been one of anger
and blame. Those working more closely with Alan Bates will be able to
recall this better but, my sense of the situation was that he had been very
difficult to deal with and was essentially accusing POL of causing Mr
Griffiths’ death.
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682. Although his reaction, at the time and even more so with hindsight, was
understandable, I was concerned that he was reaching conclusions
without evidence and that his views would lead to a breakdown of trust
which would hinder the Working Group and Mediation Scheme and
prevent them from bringing about positive changes for SPMs. My role
was to demonstrate the very sincere care that I felt for Mr Griffiths and
his family (and that I wanted POL to show to them throughout), and, at
the same time, to attempt to steer a route through this incredibly
distressing situation and learn any lessons we could, especially if POL
was implicated in any way.
683. This was very difficult to navigate. My colleagues at POL were
desperately sorry, especially those who knew Mr Griffiths and had been
working on his case, and Alan Bates’ attitude of blame would make
working together harder. Nonetheless, it was essential that we did
continue working together.
91.4. What effect, if any, did Mr Griffiths’ death have on how you and POL
handled SPMs’_ complaints concerning the Horizon IT System?
684. For me, Mr Griffiths’ death heightened the importance of the Mediation
Scheme and the need to provide answers and resolution to the SPMs
involved. It reinforced the need to understand our culture, how
complaints were dealt with, and how we could support SPMs in all
aspects of their professional life.
685. This was a tragedy that affected all those involved. As I emphasised in
my email of 12 October 2013 discussed above, I wanted to know that
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senior managers involved were following the correct procedures and
whether any other cases needed to be reviewed or any colleagues re-
briefed. I also wanted to ensure that any challenge to POL's culture
needed to be taken seriously.
Brian Altman QC’s Second Advice
92. Please consider POL00006581 (Brian Altman KC’s advice of 15 October
2013).
92.1, Please explain if and when you reviewed Mr Altman’s advice.
686. I did not read Brian Altman QC’s advice of 15 October 2013
(POL00006581) until it was provided to me in the course of this Inquiry.
687. AsI have explained above, I have no legal experience or expertise myself
and I was entirely reliant on POL’s legal team. On matters such as legal
advice I had trust in particularly POL’s GC (Susan Crichton, then Chris
Aujard, then Jane MacLeod) to keep me abreast of any relevant legal
issues.
92.2, Please consider paragraphs 70 and 130 of Mr Altman’s advice. Were you
aware at the time Mr Altman prepared his advice that there had been BEDs in
Legacy Horizon? If so, please explain the basis on which POL accepted Mr
Altman’s advice to limit its review of past convictions to 1 January 2010.
92.3. What was your view of Mr Altman’s statement that the Callendar Square bug
“represents an isolated instance, which has no relevance to events falling within
CK’s review but if during mediation an individual complained of, for instance,
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the identical issue during the period before the 2006 fix, then the Falkirk event
would almost certainly fall for disclosure as being a highly material issue in that
case”.
688. I did not read Brian Altman QC’s advice of 15 October 2013
(POL00006581) until it was provided to me in the course of this Inquiry.
I have no legal experience or expertise myself and I trusted POL’s GC
(at this time, Susan Crichton then Chris Aujard) to keep me abreast of
any relevant legal issues.
689. As I set out in my response to Question 82 above, I was informed about
Mr Altman QC’s work only in very general terms: I understood that he
was evaluating the review of past prosecutions being conducted by our
external lawyers, Cartwright King. The updates I received were positive
(see POL00027150; POL00027667; POL00027134) and I took from
them that the approach that had been adopted was fundamentally sound.
690. In drafting this statement, I have considered the contents of paragraphs
70 and 130 and the comments on the Callendar Square bug which the
Inquiry has identified. I did not read the advice at the time and so had no
view on Mr Altman QC’s comments. I do not recall being briefed on these
points and do not think that the legal basis for any consequential
decisions was explained to me. Given this, I cannot say on what basis
POL accepted or acted upon the advice received.
92.4. Please explain what steps POL took in relation to past convictions based on
Horizon data following this advice.
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691. As I have explained, I did not see Mr Altman QC’s advice and was only
briefed in broad terms on his work.
692. My understanding based on the information given to me by those
including POL’s GC and wider legal team, was that Cartwright King had
reviewed POL’s approach to past prosecutions, identified cases where
disclosure needed to be made, and had notified the Defence in those
cases. Mr Altman QC had been instructed to consider the adequacy of
this review and had concluded that it was “fundamentally sound’. I am
not a lawyer and have no expertise or experience of matters of criminal
law but I was assured, and I accepted, that we were doing everything
that we needed to do.
POL’s change in approach to the Mediation Scheme
93. Please describe POL’s approach to the SPMs’ complaints relating to Horizon
thereafter and your involvement with the same. Please explain to what extent
you communicated information about such complaints and POL’s response to
the same to the Board, ShEx/UKGI or BEIS. The following paragraphs are not
intended to limit your response to this request.
693. The questions immediately preceding this in the Request concern Brian
Altman QC’s advice, which was dated 15 October 2013. I am then asked,
by the Inquiry, to describe POL’s approach to the complaints of SPMR’s
“thereafter, which I am taking to mean after the events I describe
immediately above, in October and November 2013.
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694. The Board, ShEx / UKGI and BEIS were briefed regularly, as was the
case before this timeframe.
695. Because the HMG NED sat on the Board and on the Sparrow Sub-
Committee, the Government was fully aware of all matters brought to
those meetings.
696. In response to questions 94 to 97 below, I set out the chronology of
meetings (including Board, Steering Group and ExCo) and the matters
which were discussed on each occasion. Those are examples of the way
in which POL’s directors were kept informed of the on-going progress of
complaints and investigations into those matters.
697. Rarely would those meetings discuss individual cases in detail. Instead,
those meetings would be used to discuss and explore thematic and
strategic issues.
94. Please consider _POL00027136 (your report _to the Board dated 24
October 2013) and POL00021519 (minutes of POL Board meeting on 31 October
2013):
94.1. Please explain what you told the Board regarding the Second Sight review,
the Mediation Scheme and POL’s approach to criminal prosecutions.
698. I cannot specifically recall the discussions in this meeting and so am
unable to add anything beyond what is recorded in the contemporaneous
documents.
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699. As these set out, in my CEO report of 24 October 2013 I provided an
update on the Mediation Scheme. I explained that Cartwright King were
conducting a review of past prosecutions to assess whether POL had
complied with its duty of disclosure, and in particular whether POL was
under a duty to disclose the findings of the Second Sight report and
associated issues. The expression “associated issues” was included in
the CEO report by members of my team. I do not recall questioning what
this meant at the time. I recorded that Cartwright King had concluded that
further disclosure to the defence teams was appropriate in 10 of the 301
cases reviewed, writing to the teams to tell them (at page 5 of
(POL00027136)).
700. I went on to explain that a paper would be submitted to the November
ARC which would consider POL’s overarching policy in respect of
investigating and prosecuting future cases, and which would be informed
by a report being prepared by Brian Altman QC which would consider the
effectiveness of our current approach to prosecutions more broadly (at
page 5 of (POL00027136)). As I explained in my response to question
92, I did not read Mr Altman QC’s advice of 15 October 2013
(POL00006581) until it was provided to me in the course of this Inquiry,
and was not aware at the time that he had provided it as a separate piece
of written work. I have no legal experience or expertise myself and so
was entirely reliant on POL’s legal team and, particularly, POL’s GCs
(Susan Crichton, Chris Aujard, then Jane MacLeod) to keep me abreast
of any relevant legal issues and to facilitate my understanding of legal
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advice (both its content and the format in which it would normally be
given).
701. My understanding of these issues was based on the updates I received
from my legal team, chiefly Susan, in briefings and papers prepared for
the POL Board, such as her paper dated 18 September 2013 which set
out the work being done by Cartwright King and Brian Altman QC for the
POL Board meeting on 25 September 2013 (at pages 40 to 43 of
(POL00027907)).
702. The text of the CEO report itself was drafted for me by others.
Contemporaneous emails show that Rodric Williams, Andy Holt, and
Martin Edwards all had input into this part of this particular report
(POL00108163) and that Chris Aujard and Belinda Crowe were asked
to review and approve the text suggested (at pages 3 to 5 of
(POL00114194)).
703. This input from others was necessary given my role as CEO. I had to
have sufficient understanding to explain and respond to questions at a
high level, but the CEO report covered a wide array of work. I could not
have a detailed knowledge of every part of it, nor, particularly where it
concerned legal or technical knowledge, could I be an expert on every
issue within it. However, any text which appeared in my report would
have been either written by or checked by the ExCo Director responsible
for the relevant area of work. I relied on their input for this and to brief me
on whatever I needed to know to explain it to the satisfaction of the POL
Board.
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704. In the meeting itself, I can see that the report was noted and only a few
specific items were discussed, including a brief discussion of Project
Sparrow which explained that Sir Anthony Hooper had been appointed
as Chair and setting out how the work was progressing (at pages 4 to 5
of (POL00021519)). I did not usually present my reports in full as there
were always many other papers to consider and discuss; the whole report
would of course be available for the POL Board to read, before and
indeed after the meeting. Where I could, I would answer questions, with
or without the assistance of others present who may be working on the
projects themselves. If there were questions I could not answer, they
would be passed by the Company Secretary, Alwen Lyons, to the
relevant Director.
705. As an example, I can see that the minutes record that “there were likely
to be up to 150 cases put to the Working Party for a decision on whether
they progress into the mediation process” (at page 5 of (POL00021519)).
This is not something contained within my CEO report, so I can only
assume that this was a figure provided by one of the other people present
who had knowledge of Project Sparrow. As Susan did not attend that day
it may have been Alwen Lyons, who was also close to that work, but I am
speculating: I cannot recall this question or this response.
94.2. Please expand on the following from your report to the Board: “Our
external firm of criminal solicitors, Cartwright King (CK), has now completed a
review of 301 cases subject to past prosecution to identify whether we have a
duty to disclose the findings of the Second Sight report and associated issues”.
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What were the associated issues?
706. As set out above, this part of my report was drafted for me by others, and
I relied upon the briefings being given to me by my legal team for my
wider knowledge and understanding. I do not have any specific
recollection now of what the phrase “associated issues” refers to, but I
can see that it is used verbatim in other documents from around this time,
including the POL ARC Board Sub-Committee Briefing Book which
also contains an update on this work (at page 35 of (POL00027138)).
707. Cartwright King were disclosing both the Second Sight Report and Helen
Rose Report by this point, so it is possible that whoever drafted this
section of the Report was referring to either of those Reports, however, I
was not aware of the Helen Rose Report at this time and so cannot say
if this was the case or not.
94.3. Were you aware of the Helen Rose report at this point in time? If not, why
not?
708. Please see the answer that I have given at paragraphs 378 and 379
above as to my knowledge of the Helen Rose Report.
709. In respect of Brian Altman QC’s review, I did not read the advices
themselves (where the Helen Rose Report is mentioned by name, (at
page 5 of (POL00006801); page 10 of (POL00006801); page 20 of
(POL00006803); page 54 of (POL00006803)).
710. Although the issues at the Lepton branch were discussed in the Interim
Report, it was not until the Briefing Report Part Two, dated 21 August
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2015, that the Helen Rose Report was referred to by name in relation to
these issues (at pages 14 to 15 of (POL00030160)). As set out in
paragraph 379 above, I do not recall seeing the January 2014 Chris
Aujard paper (POL00147248), but I may have been briefed about it at
the time.
711. Perhaps the clearest indication that I was not aware of the report in
October 2013 was that the discussions which took place by email
between Rodric Williams and Martin Edwards on 23 and 24 October 2013
while they were preparing the text for my CEO report, indicate that (i)
myself and the POL Board were not aware of the Helen Rose Report;
and (ii) there was a decision made not to include reference to it in the text
then provided to me (POL00108163).
712. Subsequent emails suggest that Martin requested a briefing to be
prepared for me on these issues on 28 October 2013 (POL00108161).
In this chain, Martin provides Belinda Crowe (cc’ing Chris Aujard,
Rodric Williams, and Sarah Paddison) with the final text on Project
Sparrow for the CEO’s report and asks Belinda to coordinate the briefing
for me ahead of the POL Board to prepare me for any questions from the
NEDs. Although we know that the CEO report text he sends does not
address the Helen Rose Report, he asks for them to prepare a short
briefing addressing, amongst other things (at page 1 of
(POL00108161)):
“Any explanation of the issues around the review of past criminal cases,
which Rodric can help provide, covering: a) what exactly has been
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disclosed so far; and b) our best guess of the implications of these
disclosures (i.e. explaining that at this stage we have no reason to believe
this means past cases will be found to be unsafe). I’ve attached an email
from Rodric which contains some of the answers to these questions, but
would be useful to have this together in one place.”
713. The attached emails from Rodric referred to are the ones in the chain
discussed above (POL00108163). The POL Board Meeting referred to
is the one which takes place on 31 October 2013 and the material
provided to the POL Board makes no reference to the Helen Rose
Report. I have not been able to locate the briefing referred to, if it was
prepared, and I do not recall being briefed on the Helen Rose Report at
this stage.
714. It is difficult to say why I was not aware of the Helen Rose Report at this
time without simply engaging in speculation. I was receiving high-level
briefings from members of my legal team who were aware of these
issues, most notably Susan Crichton and Rodric Williams. They did not,
as far as I can recall, brief me on this matter at this time.
94.4, Please explain the basis on which you believed that POL should not
disclose Second Sight’s interim report and / or the Helen Rose report to SPMs
convicted on the basis of data produced by Horizon.
715. I am nota legal expert and have no knowledge or expertise of disclosure
obligations in the context of criminal or civil proceedings. My
understanding, based on what I was told by my GC and POL’s legal team
was that we had instructed our external lawyers, Cartwright King, to
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investigate these issues and I assumed that this work was being done
fully, fairly, and competently. I had no expertise which would enable me
to assess this myself but my understanding of what I had been told of
Brian Altman QC’s work was that the processes we had put in place were
solid.
716. Although I was not aware of these underlying discussions at the time, I
can see from the documents that Rodric Williams discussed the
disclosure of both documents on 10 July 2013 (POL00066789).
Cartwright King advised that they should be disclosed and Rodric
appears to accept this and instructs that appropriate disclosure be made.
On 15 January 2014, Martin Smith of Cartwright King appears to confirm
to Chris Aujard that the documents have been disclosed in cases where
Cartwright King assessed that they should be (POL00006776). This
appears to have been confirmed to Bond Dickinson and is referred to in
their risk management document dated 24 January 2015
(POL00040061). I can see that I state in my CEO report of 24 October
2013 that Cartwright King had concluded that disclosure was appropriate
in 10 cases and had written to the defence in each case to notify them of
this (at page 5 of (POL00027136)).
717. Leaving aside the fact that I do not think I was aware of the Helen Rose
Report at this time, I had no belief one way or the other as to whether
these documents were or were not disclosable: I simply was not qualified
to make this assessment. I relied upon those who were qualified to make
that determination and to perform consequential actions, including
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disclosure, in cases where that was appropriate. Insofar as I was
receiving updates on this process, I was told that disclosure was being
made in cases where it was deemed appropriate.
95. Please consider POL00116189 (email from Andy Holt to you and others on
16 October 2013) and POL00116190 (slides for Sparrow Weekly Steering
Group).
718. The Inquiry directs my attention to (POL00116189), an email which Andy
Holt sent to me, and others due to attend the next day’s Sparrow Steering
Meeting, on 16 October 2013. Attached to it was a PowerPoint document
entitled “"Sparrow Weekly Steering Group 17th October 2013".”
(POL00116190).
719. The agenda, at the second slide of the PowerPoint deck, begins with
“Update on Brian Altman’s work". The slides do not contain any detail
about what that update was. These slides were of course sent the day
after Brian Altman QC completed his advice, as I now know.
95.1. What update was given on Brian Altman KC’s work?
720. I have not seen any minutes of this meeting disclosed by the Inquiry. I
can see from an email from Andy Holt to me on 20 October 2013
(POL00027677) that Rodric Williams had provided an update at the
Steering Group meeting on Brian Altman QC's work to date. I am unable
to assist the Inquiry in describing the nature of the update on Brian
Altman QC’s work. I do not recall this, more than 10 years later.
95.2. Did the committee discuss Simon Clarke’s advices? If not, why not?
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721. I do not recall other advices being discussed at the meeting. There is no
mention of these in the slides, nor in Rod Williams' email.
96. Please consider POL00027150 (agenda for POL Executive Committee on 12
November 2013), POL00038678 (minutes of the POL Audit, Risk and Compliance
Sub-Committee_on 19 November 2013), POL00021520 (minutes of the POL
Board meeting on 27 November 2013), POL00026626 (meeting pack to former
meeting), POL00099976 (email from Alwen Lyons to you and others on 29
November 2013), POL00099977 (attachment to the prior email) POL00100193
(note on prosecution policy dated 4 February 2014), POL00030900 (note on
prosecution policy dated 7 February 2014), POL00027692 (email chain between
7 — 10 February between ARC members), POL00100223 (your email to Alasdair
Marnoch on 11 February 2014), POL00021424 (minutes of POL Audit, Risk and
Compliance Committee on 11 February 2014) and POL00116285 (email from
Chris Aujard to you on 23 February 2014). Please describe your involvement
and knowledge of the discussions concerning POL’s change in prosecutorial
policy. Without limiting your response to this paragraph, please address the
following:
722. I am asked by the Inquiry about my involvement in, and knowledge of,
the discussions within POL concerning its changes in prosecutorial policy
between November 2013 and February 2014.
723. My 24 October 2013 CEO report (POL00027136) stated at page 5: “We
will submit a paper to the November ARC reviewing our overall policy for
investigating and prosecuting future cases.” That gave rise to Chris
Aujard’s Prosecutions Policy paper on 8 November 2013 (at page 2 at
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(POL00027150)). That paper was considered by an ExCo meeting which
I attended on 12 November 2013. I do not recall that meeting in any
detail.
724. I delivered my CEO report on 31 October 2013 at the Board meeting
(POL00021519). A briefing was prepared for me, in addition to what was
in the CEO report, at the request of Martin Edwards. This was to include
“anything more to say on the prosecutions ‘policy’ paper’ (at page 2 of
(POL00108161)). I have not been able to identify that briefing within the
documents disclosed by the Inquiry and do not recall it.
725. I next attended the ARC meeting on 19 November 2013, which took place
by conference call (POL00038678). The minutes record in some detail
the update which Chris Aujard gave the Sub-Committee in relation to
prosecutions. In summary:
a. Chris updated the Sub-Committee on the current and historical approach
and sought views on potential changes to the policy “before any formal
recommendation could be made for any changes to the prosecutions
policy”.
b. IThe Sub-Committee raised various concerns with the proposal including
that any changes now “might influence the mediation process by raising
questions on previous prosecutions”, and whether prosecutions served
an important deterrence function.
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c. The Sub-Committee asked whether, if prosecutions stopped, “the
business would still be able to recover branch losses through the Civil
Courts”. Chris said that this would be “slower and not recover as much’.
d. I thanked the Sub-Committee for these challenges and stated that there
were other methods of deterrence in addition to this.
e. I said that the business intended to be more circumspect in the cases it
chose to take.
f. The decision was to be taken at the January Board.
726. The Board met on 27 November 2013 (POL00021520). There was
discussion of the approach to future prosecutions:
“Alasdair Marnoch, Chairman of the ARC, reported that a paper on
future prosecutions had been discussed at the ARC but that no
decision had been taken. Chris Aujard explained that the Business
had no special prosecuting rights but brought cases in the way that
any individual could do. The CEO explained that prosecutions were
not brought lightly and the Business was reviewing its approach
alongside other deterrents, such as suspending, or giving notice, to a
sub-postmaster.
... The Board agreed that it would be appropriate to consider the
future approach to prosecutions at a future Board alongside the
improved support processes for sub-postmasters which should see a
reduction in cases.”
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727. Chris and Angela Van Den Bogerd had prepared a paper as an Update
on Horizon. It described that Project Sparrow initially “comprised two
main initiatives, both of which were launched in response to the Second
Sight Report released in July 2013”: the establishment of a mediation
scheme, and the development of a business improvement programme
(‘BIP”). The Steering Group had “recently agreed that the Post Office’s
interests would be better served, and greater focus would be achieved,
by separating these activities into two distinct projects with Belinda
Crowe being appointed as Programme Director for the first (the
mediation scheme) and Angela Van Den Bogerd acting as Programme
Director for the second (the BIP)” (at page 2 of (POL00026626)).
728. A Status Report for the POL Board, dated 4 December 2013, records
that Chris and Angela were to “consider future approach to prosecutions
alongside the improved support processes for sub-postmasters” (at page
4 of (POL00099991)), arising from the November 2013 meeting.
729. Cartwright King produced a note entitled “Observations and Analysis of
the Cartwright King Prosecution Review Process Relating to duties of
disclosure in Criminal Prosecutions” dated 4 December 2013
(POL00040194).
730. I attended the Initial Complaints Review & Case Mediation Scheme
Steering Group on 16 December 2013 (POL00100032). Chris did not
attend. There is no record of discussion of prosecution policy in the
minutes.
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731. On 6 January 2014 I received a written briefing for my one-to-one with
Alice Perkins (POL00116241). It included the prosecutions policy as an
area “where it might be useful to update Alice”. The update I was given
was:
“Firstly Hugh is making good progress on the paper on our approach
to Prosecutions which will shortly be going to ExCo and then the
Board...”
732. The Board met on 21 January 2014 (POL00010084). An updated version
of the Status Report showed that the action assigned to Chris and Angela
in respect of the future approach to prosecutions was “Underway; being
led by Hugh Flemington” (page 54).
733. The Board did not discuss the prosecution policy, but in a document
prepared for the meeting by Chris it said, ‘it is anticipated that POL’s
approach to criminal prosecutions will be discussed at the February 2014
Board meeting” (page 68). I am not clear from the documents I have seen
in preparing this witness statement, when or by whom the decision was
taken not to discuss the matter at the January meeting as had initially
been planned. However, I see that the Board “agreed that the February
ARC would consider an update on Sparrow including lessons learned
along with the Prosecuting Authority paper” (at page 5 of
(POL00021521)).
734. Belinda sent a briefing to Alice and me on 21 January 2014 for a meeting
with Lord Arbuthnot, ahead of a meeting on 28 January 2014
(POL00093696). As part of the proposed agenda for that meeting, it was
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suggested that we would explain to Lord Arbuthnot that the Board was
overseeing a review of prosecutions, and clarify with Lord Arbuthnot the
basis of such prosecutions.
735. That briefing note was updated the day before the meeting
(POL00100124). This included a speaking note which said, among other
things:
“Given that we are now suspending fewer people and expect to
prosecute fewer too the Board is reviewing Post Office’s approach to
prosecutions. Although we are conscious that we need to design a
prosecution policy which fits with the new approach and not the old
prosecution volumes.”
736. A note of the meeting includes, in this regard (at page 136 of
(POL00090358)):
“PV then raised Post office’s prosecution policy. First she clarified with
JA that Post Office was not a prosecuting authority and had not been
so since 1985. Since 1985 Post Office had been taking forward private
prosecutions on the same basis as any company or individual in
England and Wales can. The Post Office Board had not yet taken a
view on what the final policy should be but they were considering how
(including looking at how retailers and banks prosecute) what the
policy should be moving forward particularly as Post Office expected
the numbers prosecuted to decrease in a similar way to the decrease
in suspensions. JA commented that this would be a difficult dilemma
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for Post Office to balance supporting their agents and protecting
public money."
737. Chris Aujard’s paper on prosecution policy was sent by email to Alwen
Lyons, Rodric Williams and Belinda Crowe on 5 February 2014
(POL00027760). It was noted in an email from David Oliver that I had
“asked if ExCo could consider this paper [as] quickly as possible”. I had
also asked for Kevin Gilliland, Neil Hayward and Chris Day to sign off the
paper. The paper was forwarded to me (POL00100192).
738. Chris Day, as Chief Financial Officer, responded the next day saying that
he supported Chris’ approach but wanted “reassurance that the process
of reviewing each case against the range of factors... is no more onerous
and time-consuming... than the current one”.
739. In discussing Chris Aujard’s paper by email, Alice raised a specific
concern: why should POL prosecute its own matters when other financial
institutions were content to hand over the responsibility of prosecution to
the CPS? I described Alice’s questions as “a good set of challenges” in
an email to Chris Aujard, and noted in response that our business was
significantly larger (by many multiples) than most businesses that Brian
Altman QC had compared us to (POL00027688).
740. This email which I sent shows some knowledge of the detail of the advice
given by Brian Altman QC. I still do not think I had read his written advice
at this stage, but rather I was aware of certain points of it in some detail
from other sources.
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741.
742.
743.
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Alasdair Marnoch replied to Alice. I replied to Alasdair. Alasdair shared
Alice’s concerns, as well as others. I shared my thoughts with the group
in relation to the scale of the business (largely repeating what I had said
to Chris separately) (POL00027692).
Susannah Hooper had similar concerns to those of Alice and Alasdair
(POL00027687).
I sent an email to Alasdair Marnoch, the chair of the ARC, on 11 February
2014 (POL00100223):
“Hi Alasdair
“As I’m going to be travelling during the ARC call and may have
problems with the signal, I thought I'd send you quick note in advance
summarising my thoughts on the prosecutions paper.
In short, on balance I agree with the recommendation to pursue option
B, at least for the time being.
As I set out in my email on Sunday, I do believe there are a number
of factors which distinguish us from other financial institutions who are
content not to pursue their own prosecutions — our scale, our unique
relationship with sub-postmasters, the amount of cash that is handled
by our branches (and in many cases by individuals who are not
employees), our large number of vulnerable customers who are more
easily defrauded, and the fact that public money is at stake.
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While I can appreciate the attractiveness of a ‘clean’ option like C, the
three key considerations in my mind are as follows:
e With the sub-postmaster mediation process underway and
continued close interest from the media and MPs in all our
actions in this area, any change of policy is likely to be closely
scrutinised and over-interpreted — with the likely inference
drawn that this is an admission that we were wrong to pursue
prosecutions in the past. This is compounded by the fact that
we will be shortly launching the procurement process for the
replacement to the Horizon system — something which we were
due to do now in any case, but the media will inevitably attempt
to link the two stories and suggest this is an admission that we
needed to fundamentally overhaul our systems and processes
in the wake of the Second Sight report. This will overshadow
the positive story we have about the actual changes we're
making in the context of the Business Improvement
Programme.
e Secondly, I do believe there is a need to have an effective
deterrent effect and to protect our vulnerable customers. If the
view is correct that the CPS is overstretched, then relying on
the CPS is likely to be inadequate in this respect. By retaining
the option to pursue prosecutions in certain circumstances, but
putting in place effective filters to reduce substantially the
number of cases which go down this route and outsourcing the
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associated investigatory activity, we will still be able to meet
these objectives while extracting the PR and operating cost
benefits of option C.
e Thirdly, I do not believe it is currently in the business interests
(including those going through the mediation process) to put
anything relating to this policy adjustment on our website, nor
to communicate that adjustment proactively. The few cases
coming through, the fact that fewer ‘on hold’ cases will proceed
to prosecution and the improved ways of working should speak
for themselves. We may want to revisit this view over time and
the end of the mediation process would be a sensible moment
to do that.
If the ARC agree with the overall conclusion in the paper, we should
of course review the situation in 12 months and periodically thereafter
to check that the filters are operating as effectively as intended and
we're still striking the right balance between these difficult situations.”
744. I did then go on to join the ARC meeting by conference call (as did other
attendees) (POL00021424). The Sub-Committee approved the
recommendation in the paper.
745. The recommendation was different from Chris Aujard’s original
recommendation in his initial paper in November 2013. The final version
(POL00030900) cross-referred to the November paper and reached the
following conclusion:
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“6.1 It is proposed that:
a) A revised prosecution policy be implemented and applied against more
stringent financial and conduct criteria set out in paragraphs 4.3 and 4.4.
b) Consideration be given to whether the policy be published on our website
and if so what elements of it, to comply with best practice and transparency
while not undermining our ability to implement the policy.
c) The new policy, its interpretation and application be reviewed by a
committee of ExCo every twelve months.
d) An individual within Post Office Limited be appointed to take
responsibility for deciding whether or not an individual case should be
prosecuted against that policy (currently this accountability is shared across
a number of individuals).
e) Any prosecutions be conducted through an external law firm.
f) The Communications team maintain a living strategy for dealing with all
PR issues arising from any and all prosecutions.
g) In conjunction with BIP, we work to improve our civil recovery operation
to maximise the losses it can recover.”
746. An email which I sent to Mark Davies after the ARC shows that I was
involved in conversations about POL’s communications on the
prosecutions policy (POL00116262). I shared the ARC’s discussion of
communications considerations with Mark (and others), noting that “the
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same point was made by Alice re the comms sensitivities, ie., avoiding
the conflation of various unrelated events,,..”
747. On 13 February 2014, the ExCo discussed prosecution policy, receiving
a copy of Chris Aujard’s latest report (POL00027478).
748. On 21 February 2014, whilst I was on holiday, I sent some comments on
the prosecutions paper to Angela, Belinda, Chris Aujard and Mark
(POL00116281). Chris replied with brief comments in line with mine
(POL00116285).
749. On 26 February 2014, the POL Board, as agenda item 17, considered a
Review of the Current Prosecution Policy (at pages 2 to 3 of
(POL00021522)). The POL Board noted the summary of discussions
which had taken place at ARC and ExCo and approved the
implementation of the option which Chris had recommended in his final
version of the paper.
96.1. Please explain to what extent you considered it appropriate to bring
criminal, rather than civil, proceedings against SPMs because of the perceived
efficiency of the former. Did you and others in senior management at the Post
Office understand the difference between criminal prosecutions and
proceedings in the civil courts?
750. In the context of decisions which POL made between November 2013
and February 2014, the Inquiry has asked that I explain the extent to
which I considered it appropriate to bring criminal, rather than civil,
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proceedings against SPMRs because of the perceived efficiency of
criminal proceedings.
751. I understand the premise of the question to be Chris Aujard’s November
2013 paper on Prosecution Policy (at pages 2 to 7 of (POL00027150))
which was provided to ExCo for its meeting on 12 November 2013. At
paragraph 4.4, Chris states:
“Option a) above was felt to be, at best, sub-optimal and was not explored
to any great extent, other than to ask the question of Brian Altman whether
it was “efficient” in terms of the criminal process (which it is)”
752. This was in the context of Chris’ paper discussing the future of the
business’s prosecutions policy. Option a) in Chris’ paper was “preserving
the status quo”. The paper concluded that it was appropriate for POL to
prefer:
“Ceasing all prosecutorial activities as per option c) BUT coupled with work
(as yet not formally defined but some of which has already started as part
of project Sparrow and NT):
e to gather better MI from the network;
e toimprove the overall control framework around the branch network; and
e to provide more support to sub-postmasters.”
753. Iam not entirely clear in what way Chris and Brian Altman QC considered
that criminal prosecutions were “efficient”, and I do not recall the nature
of any discussion of this point at ExCo or in any other setting. To the
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extent that it means that a criminal prosecution was an efficient method
of recovering lost funds from an SPM, that is not a consideration that I
recall playing any material part in my thinking at this time (if I was aware
of it at all).
96.2. Please set out your recollection of the Board’s discussion on 27
November 2013 relating to POL’s approach to past prosecutions and/or the
Mediation Scheme. In particular, please address the following:
96.2.1. Why did the Steering Group decide that “Post Office's interests would
be better served, and greater focus would be achieved, by separating these
activities into two distinct projects with Belinda Crowe being appointed as
Programme Director for the first (the mediation scheme) and Angela Van Den
Bogerd acting as Programme Director for the second (the BIP)”. What interests
of POL were being referred to here?
754. By separating out the projects of the Mediation Scheme and the
establishing of the BIP, POL was able to ensure far greater focus was
placed on actions to assist post offices. For example, Angela Van Den
Bogerd was encouraged to be rigorous in identifying all possible
improvements, which would then be prioritised. Getting colleagues to be
open about past shortcomings was not easy but was imperative. The
Mediation Scheme was to be run separately and overseen by Belinda
Crowe to ensure the clear accountability and project management which
had been missing previously on Second Sight’s work.
96.2.2. On what basis did the Working Group anticipate that they would receive
only around 75 applications to the mediation scheme?
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755. I do not now recall the basis on which the Working Group made this
assessment.
96.2.3. How was the budget for the mediation scheme agreed? What factors
were taken into account when increasing the budget from £1.3m to £2.2m?
756. The ARC met on 19 November 2013 (POL00038678). The POL Board
then met on 27 November 2013. I address that meeting elsewhere in this
statement in more detail, at paragraphs 726 to 727, 764 and 783. The
meeting pack prepared for that meeting included a paper by Chris Aujard,
dated 21 November 2013 (at page 2 of (POL00026626)) headed “Project
Sparrow Update”. At paragraphs 3.5 to 3.6 it stated:
"3.5 The scheme has received more applications than originally anticipated
(140 as against an initial planning estimate of 75) and, given this fact and
the complexity of some of the applications, additional resources have now
been allocated to the project, principally aimed at ensuring that each
application is investigated thoroughly and professionally. It is expected that
the full team will be in place by 6 December 2013.
3.6 The increased number of applications will also increase the overall
costs of the scheme, much of which will be incurred on a "per case" basis.
Thus, an initial budget of £1.3m (ex vat) based on 75 applications has been
increased to £2.2m (ex vat) for 130 cases proceeding all the way through
to a concluded mediation. This does not included the costs of any financial
compensation which may be offered to facilitate resolution of individual
cases (as to which, see para’s [sic] 3.8 and 3.9 below [re. "expectation
gap").
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757. That paper was noted by the POL Board on 27 November 2013 (see
POLB 13/126).
758. The reasons for making that decision were discussed in the ARC meeting
on 19 November 2013 (at page 4 of (POL00038678)), as minuted:
"(g) The CEO updated the Committee on Project Sparrow... The CEO drew
the Committee's attention to two risks to the delivery of the Project.
(h) The first risk highlighted was the Business has envisaged that the final
number of cases would have been under 100, but as the scheme neared
the deadline for application the number of applications was nearer 150, with
nearly 50 received in the last couple of days before applications closed. As
a result, the timetable will have to be extended as each case will need
individual investigation and Second Sight will need to be with us for longer.
There will also be a resource cost to the Business which the CFO is aware
of.
(i) The second risk that had arisen concerned the compensation that
subpostmasters believed they were entitled to. It has become clearer from
the applications for mediation that there was an expectation gap which the
Business needed to mitigate where possible."
759. I had said to Chris Aujard, on 14 November 2013, that the budget needed
to be restated to take into account additional resource and additional
length of time for the scheme to reach its conclusion (POL00116209).
That was against a background of the initial assumptions in the budget
being that there would be 75 cases (POL00116190), but the Mediation
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Scheme had already received 64 applications by 12 November 2013,
with a week left until the deadline (at page 7 of (POL00027150)).
760. Given that this figure more than doubled, the documents show that the
assumption of “under 100” was an under-estimation and the business
had to respond to that. I do not recall the detail of how the costs broke
down, but I would expect that the additional applications added direct
marginal costs but that the fixed costs varied less.
96.2.4. Why did the Board seek a note from POL’s GC on “who was named in
past prosecutions the liability for the Business and individual Board members”.
761. I do not now recall exactly why this request was made. I have some
recollection of a conversation about whether past directors and
colleagues would need to be alerted at any stage on the risk.
96.2.5. Did you consider there to be a real risk that POL had inappropriately
prosecuted SPMs at this time?
762. I was always open to the possibility that some convictions could have
been unsafe, and I always sought to be questioning in my approach.
However, investigations which had been carried out and advice which we
received consistently presented the position that Horizon worked as it
should, and that some SPMs had found themselves out of their depth
and in some cases had covered up discrepancies.
763. I was always open to receiving new information.
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764. The views I expressed in the 19 November 2013 ARC and the 27
November 2013 POL Board meeting were that prosecutions should not
be pursued lightly and the business should be circumspect in choosing
when to prosecute.
96.2.6. Which was considered more important to you and the Board: avoiding
liability arising from_past prosecutions; or seeing that POL took all steps to
ensure that past convictions were safe?
765. The most important outcome for me, and the POL Board, was to ensure
that POL complied with its legal obligations regarding past convictions.
Indeed, it was important for me to resolve all issues for the SPMs.
96.2.7. Were the Altman and / or Clarke advices discussed or provided to the
Board?
766. The Brian Altman QC advices were discussed at the POL Board but I do
not recall copies being provided. On 26 July 2013, following the POL
Board meeting on 16 July 2013 board members were sent an "Update
on the work arising from the Horizon report" (POL00298004) which refers
to Brian Altman QC's advice.
767. I have addressed elsewhere in this statement that I did not see Brian
Altman QC’s advice of 2 August 2013 (at paragraph 570), although the
POL Board was led to understand that Brian Altman QC had reviewed
the approach taken by Cartwright King and considered that the approach
was well thought through and being correctly applied across the samples
of cases which he saw.
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768. On 18 September 2013, Susan prepared a paper for the POL Board
(which it was asked to note) which included at paragraph 6.2 and 6.3
reference to Brian Altman QC being asked to advise POL and its external
solicitors on continued disclosure obligations, with particular reference to
concluded cases. It makes reference to Brian Altman QC having given
initial advice, and specifically that there was a meeting on 9 September
2013 (at pages 41 to 42 of (POL00027907)).
769. My October 2013 CEO report stated that “we have also asked our
criminal barrister Brian Altman QC, to conduct an independent review of
the overall process we have taken to review past cases, reaching the
conclusion that our approach is “fundamentally sound” (at page 5 of
(POL00027136)). This report was delivered at the 31 October 2013 POL
Board meeting (POL00099806).
770. In a report on prosecutions policy prepared for the POL Board by Chris
Aujard in February 2014, he made reference to advice from Brian Altman
QC at paragraph 2.2, describing POL’s prosecution policy as “perhaps
anachronistic” (at page 6 of (POL00026629)). I do not recall ever seeing
Brian Altman QC’s 6 February 2014 advice until I saw it as part of this
Inquiry's disclosure (POL00105068).
771. The POL Board was made aware in the Significant Litigation Report on
25 September 2014 that Brian Altman QC would be asked to review
comments from stakeholders in relation to the proposed prosecution
policy which he had drafted (at page 179 of (POL00040271)).
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772. Later in March 2016, Jane prepared a paper for the POL Board which
made reference to advice from Brian Altman QC in respect of the
publication of the prosecution policy (POL00027210).
773. I do not recall the Simon Clarke advices being discussed at or provided
to the Board. However the Board update paper (see paragraph 766
above), refers to the prosecution case review being undertaken to ensure
that POL complied with its ongoing disclosure obligations.
96.3. To what extent, if at all, did the Board apply pressure to limit the scope of
the mediation scheme and/or POL’s approach to it because of costs concerns?
774. The POL Board was consistent in its cost challenge on all programmes
and Sparrow was not exempt.
775. However, at no time did I feel the team was held back from taking good
decisions or completing work professionally because of cost constraints.
The follow up POL Board paper attempts to quantify the compensation
costs and sets out clearly that the case questionnaire prompts for
compensation requests and includes e.g. "pain and suffering". The POL
Board balanced well its desire and obligation to do the right thing with its
need to apply responsible cost and timing pressure on management.
96.4. To what extent, if at_all, did the Board and / or senior management take
account of the Post Office’s corporate brand when considering whether to
change its prosecutorial function? If _it_ did, please explain why that_was
relevant.
776. I do not recall this being a discussion point.
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96.5. Please explain why you took the ongoing mediation into account when
considering whether POL should continue to bring prosecutions.
777. The Sub-Committee considered whether a change in position in relation
to prosecutions would influence the outcome of the mediation scheme.
This was one of a number of matters considered by the Sub-Committee
in that meeting, and did not represent the Sub-Committee's final
conclusions on the issue.
778. The number of different angles considered shows the full consideration
which meeting attendees gave to discussions such as this, whether that
is in the ARC, the Sub-Committee or the POL Board. There is no
indication in the documents I have seen that this was a factor which any
meeting took into account when considering the February 2014 paper
which Chris Aujard prepared.
97 Please consider _POL00116209 (email chain on 14/15 November 2013
between you, Martin Edwards and Chris Aujard), POL00099929 (your email to
Chris Aujard dated 20 November 2013), POL00027506 (agenda for POL
Executive Committee on 19 November 2013), POL00021520 (minutes of POL
Board meeting on 27 November 2013), POL00100032 (agenda for Initial
Complaints _Review_and Case Mediation Scheme Steering Group on 16
December 2013), POL00116241 (briefing for 1-2-1 with Alice Perkins on 6
January 2014), POL00021521 (minutes of POL Board Meeting on 21 January
2014), POL00116284 (Belinda Crowe’s email to you dated 22 February 2014)
POL00100321 (email from Belinda Crowe to you on 23 February 2014),
POL00100322 (briefing for meetings with Sir Anthony Hooper and Second Sight
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dated 22 February 2014), POL00100323 (annotated agenda for meeting with
Second Sight on 24 February 2014), POL00116305 (email from you to Belinda
Crowe dated 23 February 2014), POL00100337 (file note of meeting with Second
Sight on 24 February 2014), POL00116312 (email from you to Belinda Crowe on
26 February 2014) and POL00116313 (speaking note for Board meeting on 26
February 2014) and POL00027337 (minutes of POL Board meeting on 26
February 2014).
779. On 14 November 2013, Theresa Iles sent an email on my behalf to Chris
Aujard and others, following a one-to-one meeting I had had with him that
day (POL00116209). On the topic of Project Sparrow, I noted:
a. That the budget needed restating to take account of additional
resource and additional length of time for the scheme to complete,
to be presented to the next Steering Group;
b. That Angela Van Den Bogerd and her investigation team, as well as
the team of network mediation representatives “are working to
Belinda re the delivery of Sparrow”. and
c. The role of Second Sight “going forward” is to do an independent
authentication of reports produced by Angela’s investigation team,
which should cause their rates to reduce (subject to negotiation).
780. This final point — that Second Sight would have a different role in the
future, authenticating reports rather than writing them — follows on from
the matter I addressed above in relation to Question 87.4. It was never
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POL’s intention to retain external consultants indefinitely and that would
not have been an appropriate use of funds.
781. The ExCo met on 19 November 2013. Chris Aujard prepared an update
and provided a draft "Settlement Policy for the Initial Compliant Review
and Mediation Scheme" (at page 2 of (POL00027506)). ExCo was asked
by Chris to approve the policy and “note the arrangements for managing
the Expectations Gap”. By that last point, Chris meant that there was a
risk that SPMs would be dissatisfied with the scheme because POL
would expect any settlements to be “reasonable and based on properly
evidenced facts” and “not necessarily... financial”. Chris considered that
POL should use opportunities presented in meetings with MPs and
others to restate and reaffirm its original position in respect of
settlements.
782. The next day, Chris sent a briefing for Alice Perkins’ meeting with Sir
Anthony Hooper. I queried it: the briefing suggested that Second Sight
would continue to write reports, rather than verify reports which POL had
written internally (POL00099929).
783. The Mediation Scheme was discussed by the POL Board on 27
November 2013 (POL00021520). The POL Board, as an action, asked
for “a regular update showing cases received, where they are in the
process and the overall costs attached to the claims where possible”.
784. The Steering Group met on 16 December 2013 (POL00100032).
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a. There was discussion of matters including Second Sight’s workload,
and the incoming workload for POL’s investigation team.
b. It is recorded that I asked that Chris develop a relationship with
Second Sight to ensure that POL and Second Sight would work
through any problems together.
c. Belinda Crowe was to work with Martin Edwards and Chris to
“design a firm proposal for sign off’ in respect of managing the
increasing workload and managing ‘the accountabilities in light of
this in the context of the programme”.
d. Chris was to chair a workshop on 18 December to look at how POL
might develop the content of its investigation reports to satisfy the
Chair and Second Sight, to ensure an appropriate outcome at
mediation.
785. As I note above in response to Question 96, I met with Alice in a one-to-
one on 6 January 2014. In the briefing note prepared for me, I was
reminded that POL had agreed the high-level process for moving a report
from Second Sight via the Working Group into mediation, but the detail
still needed to be worked out (POL00116241). The briefing note also
said:
“We are in the process of recruiting Post Office representatives for the
mediation process. Successfully recruiting the right calibre of staff and
securing their release for both training and mediation will be crucial for the
programme, and will be challenging.”
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786. The note recorded that the capacity of Second Sight was becoming more
of an issue and said that “we have taken steps to minimise the burden
on them by taking on the administration of the scheme and encouraging
them to make their reports on each case as focussed and concise as
possible (with a common generic report)”. POL had by this time taken
over the administration of the Mediation Scheme from Second Sight and
had instituted more rigorous monitoring and proactive chasing of
deadlines, to ensure all cases moved through the scheme as quickly as
possible.
787. At the POL Board meeting on 21 January 2014, I gave an update that
Sparrow “was taking longer than we had originally expected but that
cases should start to go into mediation in March” (POL00021521).
788. Belinda provided a written briefing to me on 22 February 2014 for
meetings with Second Sight and Sir Anthony Hooper, both of which were
due to take place on 24 February (POL00100322). The purpose of the
meeting was “to allow [me] to explore the issues with a view to informing
a plan to discuss with the Board” (POL00100321). She suggested that I
speak to Second Sight about their capacity to deliver their role in the
mediation scheme, among other topics. She wanted me to set out POL’s
position:
e “The generic report is being produced for the Working Group
and the need to avoid any publication that will skew the mediation
process while it is in progress.
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e Scope of the Working Group is narrow and designed to oversee
the mediation Scheme and not other issues.
e MPs cases and any consequential investigation is now
subsumed in the Scheme — as you confirmed with James
Arbuthnot the work for MPs is now subsumed within the Scheme
and Second Sight should be focussed on that.
e A final report that you are happy for a final report to be produced
by at the end of the scheme and do not want a running commentary
during the scheme.”
789. I was also asked to address Second Sight’s capacity and the final report
with Sir Anthony.
790. I refer above to an email which I sent on 21 February 2014 to Angela,
Belinda, Chris and Mark whilst on holiday (POL00116281). I described
Chris’ reply (POL00116285). Belinda responded with a lengthy email
(POL00116284) the following day. Belinda was not overly positive about
the scheme but did say that it was “too early to say” whether it was going
well. Belinda was happy that the “investigators are good and fully
operational”. Much of the email concerned the need to manage the
expectations of SPMs participating in the Mediation Scheme.
791. On 24 February 2014 I met with Ron Warmington and lan Henderson of
Second Sight, along with Chris. I had a pre-meeting with Belinda
(POL00100321). An annotated agenda was prepared (POL00100323)
for the Second Sight meeting. It included matters such as the fact that
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POL “need a firm commitment on the number of cases Second Sight will
be able to review and report on a week”. The current pace of work of
Second Sight was “concerning” because there was a backlog.
792. I raised some questions the night before, by email, to Belinda
(POL00116305). I expect we discussed the answers in our pre-meeting.
793. The meeting, as is recorded in the file note held by POL, was at my
request “in order to discuss the progress of the mediation scheme with
SS”. We discussed the projected value of the claims, the fact that some
claims involving criminal prosecutions could have a “quite significant”
value but that some were, in the view of Second Sight, unmeritorious.
We also discussed the timescales of the next stages of work, and the
contents of the thematic report.
794. I met with Sir Anthony that afternoon.
795. At the POL Board meeting on 26 February 2014, I gave a report on my
meetings of 24 February with Second Sight and Sir Anthony
(POL00027337). I reported that Sir Anthony felt unable to form a view on
the best way to manage the Mediation Scheme. The POL Board
discussion records “possible support for Second Sight to enable a more
efficient process”. I had a speaking note for the POL Board meeting,
prepared by Belinda (POL00116312; POL00116313) to which I added
some of my own notes.
97.1 What thought did you give to the POL personnel who would be deployed
to work on the Mediation Scheme? Please describe what, if any, IT expertise
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there was within this cohort.
796. My understanding was that if there were IT issues arising in the course
of the Mediation Scheme, those would be passed to Fujitsu for
investigation. For example, in Belinda Crowe’s email to me of 22
February 2014 she wrote that:
“... Fujitsu has appointed a project manager to work with us on this and
Angela’s team speak regularly with IT colleagues to resolve issues/delays.”
97.2 Why did Second Sight’s role change from it writing reports to it reviewing
work produced by Angela van den Bogerd?
797. I have addressed this in the narrative above 780 as well as earlier in the
statement in reference to Question 87.4. I cannot remember anything
further.
97.3 Please explain the work of the Initial Complaints Review and & Case
Mediation Steering Group.
798. The Steering Group is defined in POL’s draft Initial Complaint Review
and Mediation Scheme as ‘the internal Post Office steering group that
supervises Post Office’s response to the criticisms of Horizon” (at page
33 of (POL00027506)).
799. It held meetings which I chaired, such as on 16 December 2013
(POL00100032). It was established to ensure that the project was given
support and oversight to assist the POL Board and to manage the detail
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of the Sparrow work better, with appropriate professional project
management.
800. This was vital work as POL had committed to undertake in-depth reviews
of SPMR cases, it had made commitments to the minister and to MPs
and it was genuine in its desire to do this.
801. It was the responsibility of the CEO to ‘step in’ to a project if it was not
progressing as it should and so I believe I chaired the group until Chris
Aujard took over and/or the Working Group became fully functional.
97.4 Please describe your work in the Mediation Scheme, including both
external meetings with the Working Group and / or Second Sight and internal
POL discussions.
802. As CEO I could not realistically lead the work in the Mediation Scheme
given the volume, but I was briefed on an ongoing basis. I was hugely
supportive of the work and my involvement was to provide that support
but also challenge where appropriate.
803. There were experienced senior managers leading the work, including (i)
key staff being taken from their ‘day jobs’ to be dedicated to Sparrow;
and (ii) funding being allocated. And when issues became difficult, my
role was to step in and to try to facilitate a way through, when asked
either by the team, or the Board, or stakeholders including Lord
Arbuthnot, Second Sight, Alan Bates and Sir Anthony Hooper.
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804. For example, I describe below that I met Sir Anthony with Chris when
there seemed to be disagreement between the POL Board and Sir
Anthony as to the scope of the Scheme.
97.5 Please explain what, if anything, you did to test the views expressed by
members of your team that progress with the scheme was slowed by the
capacity of third parties (i.e. Second Sight and Howe & Co.)?
97.6 Please explain the concerns you had with the ambit of Second Sight’s
investigation. Why did POL take steps to limit it?
805. I address these two Questions, 97.5 and 97.6, together.
806. This follows on from the evidence I have given above.
807. As I say above, the need to limit the number of themes which Second
Sight was addressing was led by concerns as to Second Sight’s capacity,
and the fact that their slower work was creating a bottleneck in the
mediation scheme. Such a bottleneck was contrary to the expectation
that the Scheme would be completed appropriately quickly and
efficiently, so that nobody would wait unnecessarily long time and it would
be at a reasonable cost.
808. I explored the capacity of Second Sight with all involved.
809. We brought in extra resource to supplement the work POL was doing to
support Second Sight. I considered whether to add to their capacity by
adding resource from another external consultancy, but I was aware how
much work and effort Second Sight had invested. This was a complex
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project and it was important to see it through. I understood the capacity
issues and worked to address them.
97.7 Please describe the discussion at the Board on 21 January 2014 that led to
the minute “The Board asked if the Terms of Reference agreed with 294 Sight
precluded them from working with claimants against the Post Office”. Did you
or the Board trust Second Sight; if not, why?
810. By the time of this discussion the Board was aware of threats of litigation.
811. I believe, from my recollection, that this was a concern raised by a NED
and discussed with Chris Aujard. The concern from some was that if the
work Second Sight was doing could be used against the Post Office, this
should at least be the subject of some discussion and consideration. It
was a sensible conversation about risk. I don’t recall much more than
this, but I note that Second Sight were retained for another 12 months
from this time.
812. I see that after this meeting, Alwen sent an email (on 24 January 2014)
to attendees stating (amongst other things) (POL00100121):
“As reported to the Board late last year, we have been endeavouring to
formalise SS’s engagement by putting in place a formal appointment letter,
one of the terms of which will expressly restrict SS’s ability to act against
PO. For a variety of reason (mainly related to defining the scope of their
work), this letter has proved very difficult to finalise, though good progress
has been made in the last few days. Ss are, however, still (mildly) resisting
the inclusion of a clause imposing any form of restriction on their ability to
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undertake future related work. That said, we do expect that over the course
of the forthcoming week (and ahead of the next face to face meting of the
working ground) all outstanding issues, including this one, will be resolved
in our favour. In the meantime, the provision of the confidentiality
agreement that was put in place at the start of their engagement continue
to provide some, albeit limited, protection in that they expressly prohibit SS
divulging, without our consent, any confidential information obtain by them
as part of their work.”
813. This provides useful further context to the discussion which is not in the
POL Board minutes.
814. There were individuals in POL who believed Second Sight were acting
against POL’s interests and working for the SPMRs (as I discuss below).
My view was that they were working for the SPMs independently, as they
had been commissioned to do. and that they believed they had found
issues to be explored. I had different reactions over time about Second
Sight, depending on the matter at hand, but overall my view was one of
frustration, rather than lack of trust, in that they were not taking account
of POL’s input and responses in that process. I owe them an apology, as
with hindsight, they were right in terms of what needed to be looked at
and I was wrong.
97.8 Please expand on the discussion that led to the minute of the 26 February
2014 Board meeting (POL00027337) stating “it was acknowledged that, in light
of the facts now available, and the projected level of legal claims and costs, it
would be sensible to commission more generic legal advice on the overall level
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of legal and financial exposure...This advice should consider the steps that
could be taken to mitigate any exposure including considerations of alternative
structures that might be available to deal with mediation cases”. In particular,
please identify any legal advice that had been received to that point and explain
the type of advice the Board sought.
815. I do not have any independent recollection of this discussion apart from
what is set out in the minutes. I discuss the instruction of Linklaters,
arising from this meeting, below in response to Question 98.
Instruction of Linklaters and Deloitte
98. Please describe your knowledge of and involvement with the instruction of
Linklaters and Deloitte in 2014 and any steps taken by POL following their
reporting. Please do not limit your response to this request when addressing
the matters below.
816. The decision to instruct Linklaters was made by the POL Board at its
meeting on 26 February 2014. I attended this meeting and provided an
update on the progress of the Initial Complaint Review and Mediation
Scheme (POL00027337). By this time, we had significant concerns about
the lack of progress and escalating costs of the Mediation Scheme and
were actively seeking other ways to resolve the cases in a timely and
cost-efficient manner.
817. The POL Board received a paper entitled ‘Review of the Current
Prosecution Policy’ dated 18 February 2014 prepared by Chris Aujard (at
pages 2 to 5 of (POL00026629)). This paper addressed Project Sparrow
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and POL’s prosecutorial role (and appended a further paper from Chris
dated 7 February 2014 which had already been presented to the ARC on
11 February 2014 (POL00021424) and ExCo on 13 February: see (pages
6 to 12 of (POL00026629)).
818. The POL Board also considered a paper by Belinda Crowe dated 20
February 2014 which set out the central challenges facing the Mediation
Scheme, which were considerable (at pages 16 to 18 of (POL00026629)).
They included:
a. Slower than expected Mediation Scheme performance: of the original
147 applications, 139 were still in the Scheme;
b. An increasing expectation gap: the applicants valued their claims at
around £100,000,000 but Bond Dickinson had provisionally estimated
the likely value of the claims (assuming they were successful) to be
£6,000,000. The Bond Dickinson advice was very provisional, however,
as it was extrapolated from a relatively small sample of claims;
c. High resource demands, including a considerable ongoing workload for
POL staff and our external lawyers;
d. Issues with the scope of the Mediation Scheme: Belinda described
attempts by Second Sight and the JFSA to widen the scope, seemingly
with the Chair's support. I can see that I was due to meet with Second
Sight and Sir Anthony Hooper to discuss this;
e. Stakeholder management, including concerns about how to manage
the expectations of MPs; and
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f. The standing difficulties associated with the release of Second Sight
reports: on the working assumption that the reports would contain
criticism and may well be leaked, this was an ongoing risk which we
needed to manage.
819. On 24 February 2014, Chris Aujard and I met with Sir Anthony. I can see
from the notes that we discussed the issue of compensation and Sir
Anthony expressed his opinion about the potential value of such
payments (at page 2 of (POL00100338)):
‘TH noted that the applicant’s CQRs often painted a very distressing
picture, where there had been a loss of livelihood, and other losses. His
view was that, should the evidence show that POL had not acted properly,
then the amount of compensation payable could be quite material (NB this
contradicts the legal advice obtained by POL from BD which categorically
States that the maximum loss POL could expect to pay would be limited to
3 months “pay” under the SPMR’s contract. When this was pointed out to
TH, he defended his contention because 3 months notice was a different
kettle of fish from summary termination, criminal record, no ability to sell
on/or only sell at a discount, etc. ie., therefore, compensation for causing
personal distress could be legitimate. (Can PO recheck this advice?) It was
not entirely clear whether TH had in mind criminal cases only when he
made these comments.”
820. These issues form the background to the POL Board’s decision on 26
February to commission further legal advice. This decision and the
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reasons for doing it are set out in the minutes (at pages 3 to 4 of
(POL00027337)):
“It was noted that, in respect of each individual application, the project team
were taking extensive advice about the Post Office’s potential legal
exposure. However, it was acknowledged that, in light of the facts now
available, and the projected level of legal claims and costs, it would be
sensible to commission more generic legal advice on the overall level of
legal and financial exposure (taking account of the possibility of class
actions). This advice should consider the steps that could be taken to
mitigate any exposure including considerations of alternative structures that
might be available to deal with the mediation cases. Such advice should
have regard to alternative dispute resolution mechanisms, such as the
Financial Ombudsman.”
821. The minutes and action log show that this task was assigned to Chris
Aujard (at pages 3 and 8 of (POL00027337)). As I recall it, Chris managed
the interactions with Linklaters and determined the scope and instructions
given. As GC, he had the knowledge and experience to do this. I had
never been involved in giving instructions to external lawyers and was not
involved in doing so in this case.
822. As Chris was handling the details of the work, my role was largely to
ensure that the team stayed on track to deliver what the POL Board had
requested. Given this, I was in regular contact with Chris and others. For
example, at 09:49 on 10 March 2014, Alice sent me an email asking for
an update on several issues including this work, in advance of the March
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POL Board meeting (POL00116321). My reply of 12:21 shows that I had
already obtained an update from Chris: “/ have already spoken to Chris
A: we will circulate a list of questions to the Board on Wed at the latest. I
have asked to see them this pm” (at page 1 of (POL00116321)). I then
forwarded this email chain to Chris and confirmed that deadline for the
proposed questions. As I say in this email, Alice was taking these matters
seriously (which was appropriate) and I wanted to ensure that everyone
was on top of what needed to be done (at page 1 of (POL00116321).
823. The meeting referred to (“/ have asked to see them this pm”) must have
taken place as I see that David Oliver sent me an email at 18:38 on 10
March 2014, cc’ing in Chris, Belinda Crowe, Angela Van Den Bogerd,
Martin Edwards, and Mark Davies saying (POL00027696):
“Following discussion with you this afternoon we have further cut down and
reconfigured the Linklaters paper...lt is with them overnight but conscious
you asked for sight of where we got to. Grateful for any comments — we
plan to finalise with Linklaters before submitting to the Board tomorrow.”
824. I do not recall having input into the content of the work so much as
overseeing the team. They were responding to the very clear questions
from the Chair and my additional request about advice on an external
adviser (ombudsman option). I needed to know where the work had got
to, but I do not believe David was asking for my input into the legal
content, which would have been inappropriate. It is more likely that I had
checked that we were on track and would soon be ready to circulate /
double-check with the POL Board, the list of questions to be commented
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upon by Linklaters. Additionally, I am sure that I commented on using
accessible language and keeping the paper to a reasonable length for the
POL Board, both of which the Chair was keen on and which enabled
better POL Board discussion.
825. The ExCo met on 13 March 2014 and I attended, along with Chris,
Belinda, Neil Hayward, and several others (POL00092172). I can see that
Belinda’s paper of 20 February 2014 was annexed to the agenda for this
meeting. It was the subject of separate discussion and was part of the
agenda slot on strategic risk review led by David Mason, Head of Risk
and Chris Aujard.
826. At 13:10 on 19 March 2014, Belinda appears to have sent Neil Hayward
a draft cover paper for the POL Board intended to accompany the
Linklaters’ advice, cc’ing Chris Aujard, Chris Day, Mark Davies, Martin
Edwards, David Oliver and me (POL00116348). With the exception of
Neil Hayward, we were all involved with Project Sparrow. I believe that
Belinda was asking for Neil's comments. I do not recall having any input
into this draft myself.
827. The documents show that Chris Aujard was in correspondence with
Linklaters between 19 and 20 March 2014 to finalise the Executive
Summary of their work, which would be presented to the POL Board.
Chris was aware that, given the amount of pre-reading for every POL
Board meeting, the summary would be an important document for the
POL Board members. In his remit as GC, he appears to have decided the
key legal points he wanted the POL Board to take away from this work
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and, in his email of 00:18 on 20 March, he asked Jonathan Swil of
Linklaters to bring them to the fore (POL00022012):
“The executive summary is still pretty long, and doesn't hit the reader
between the eyes with what I understand to be your main conclusion —
namely: Unless there is something wrong with the system, we are entitled
to rely on the accounts produced by Horizon as the basis of claiming sums
of money from SPMRs. Further that there can be no question of a claim for
consequential losses based simply on the recovery by the Post Office of
losses if the losses were properly payable and the Post Office was entitled
to the money. These 2 statements together are quite powerful, and need to
be brought our (sic) clearly, and it also needs to be said that in consequence
the amounts that could be successfully claimed in court are a fraction of the
aggregate amounts (c£100m) that has been claimed under the scheme.”
828. Chris prepared a brief cover paper dated 19 March 2014 which seems to
have been circulated alongside an Executive Summary which does
indeed emphasise these points (POL00105529). Linklaters’ overall
conclusion is said to be that “in strict legal terms, many, if not all, of the
claims submitted under the Scheme would be unsuccessful if they were
considered by a Court’ (at page 2 of (POL00105529)). At paragraph 2.2
of his paper, Chris summarised the work in the following way (at page 1
of (POL00105529)):
“A)t a high level and by way of an indication of the direction of their advice,
it may be helpful to note that one of Linklaters many conclusions, is that:
‘There can be no question of a claim for consequential losses (by an SPMR)
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based simply on the recovery by the Post Office of losses (i.e. the amounts
that POL believes were owing to it) if the losses were properly payable and
the Post Office was entitled to the money.”
829. Linklaters’ Executive Summary advised that POL’s potential liability was
very limited (at page 4 of (POL00105529)):
‘In summary, we think that, absent proof that Horizon is malfunctioning
(either generally or in the specific case) the Post Office has a right to
recover losses from SPMRs, the SPMRs have no right to compensation for
such losses and the circumstances in which there will be a consequential
loss claim are limited to those in which inadequate notice of termination was
given, will depend on their facts and should be limited.”
830. As is clear from the POL Board's initial request for advice, the primary
aim was to obtain a definitive opinion on the possible level of
compensation and to understand the legal principles at a general level.
We had already received advice on the individual cases, but we did not
know, for example, whether consequential losses or damages for distress
would be awarded (which, as Sir Anthony had noted in the meeting on 24
February, could substantially change the overall sums). Given this, the
advice we sought was at a more general level and looked at, for example,
what followed from the contract.
831. Because what we needed was an assessment of the applicable legal
principles, the advice was provided subject to a key factual assumption:
that Horizon was well-functioning. My understanding is that this was a
working assumption which was made to allow Linklaters to focus on the
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general principles. This assumption was very clearly identified in their
advice (at page 5 of (POL00105529)):
“We note that there is, so far as we understand it, no objective report which
describes and addresses the use and reliability of Horizon. We do think that
such a report would be helpful, though there is a decision to be made about
how broad and/or thorough it needs to be.”
832. We discussed this advice at the POL Board meeting on 26 March 2014
and Christa Band attended from Linklaters to present the work. As they
were managing the project, Chris, Belinda, and Angela also joined the
meeting for this part of the discussion (POL00006564).
833. As with every POL Board meeting, there was a significant amount of pre-
reading and, although I do not specifically now recall reading the report
itself in advance of the meeting, I am confident that I would have
familiarised myself with it. The volume of reading meant that it was not
usually possible for me to have digested every detail of every item, but I
would always try and ensure that I was well versed enough to provide
useful input through questions and challenges.
834. I vaguely recall that others had not had the chance to really engage with
the report in advance. I remember Alice Perkins introducing Christa Band
and asking her to walk the POL Board through the work for the benefit of
those who had not yet had the opportunity to digest it fully. My
understanding would have been shaped by her presentation as well as
by reading the report and Chris' summary.
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835. I do not recall much of this meeting beyond what is recorded in the
minutes. Ms Band presented the executive summary discussed above
and criticised Second Sight’s work as lacking hard evidence to back up
their conclusions. She also advised us on the contractual relationship
between POL and SPMs, telling the POL Board that under the terms of
the contract POL would not be required to pay compensation. The
minutes record that she advised that there was no entitlement under
English law for damages for distress in this situation (at page 2 of
(POL00021523)). Although I did not (and do not) have the legal expertise
to evaluate the accuracy of this advice, it fits with my broad recollection
that our legal position was strong.
836. After Ms Band left, the POL Board discussed further work. They agreed
to (i) set up the Project Sparrow Sub-Committee; and (ii) commission a
piece of work to complement the work undertaken by Linklaters “to give
them and those concerned outside the Business, comfort about the
Horizon system”. The POL Board requested that the work cover (at pages
to 2 to 3 of (POL00006564)):
“The work undertaken by Angela Van Den Bogerd explaining how the
system works
A review of the data integrity aspects of the system
A reference to all audits and tests carried out on the system
A response to the most significant thematic issues raised by Second Sight.”
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837. Linklaters had provided advice on the applicable legal principles and a
view on POL’s financial exposure if Horizon was well-functioning. At the
time we certainly thought that it was and so we anticipated that this work
would show this. We also hoped that it would help with the mediation
process: I do not recall any intention at this stage that the work be made
public or published widely, but I believe we thought it would help in
understanding the unresolved issues in the individual cases.
838. The POL Board directed that Linklaters be provided with the terms of
reference for this further work so that they could advise on whether it
would play the complementary function envisaged. The terms of
reference were then to be agreed by the Project Sparrow Sub-Committee.
As the minutes and Board Action Log shows, Chris was tasked with taking
this work forward (at pages 3 and 11 of (POL00006564)).
839. Although I was not involved in this, I can see that Linklaters provided a
draft advice dated 28 March 2014 which commented on the proposed
scope of the further work (POL00022093). It is unclear to me from this
document whether Linklaters were provided with draft terms of reference
in a separate document and, if they were, which document that is. I have
no recollection of seeing any draft terms of reference myself.
840. I do not think I saw this advice, but Linklaters explain that the further work
could potentially be useful in lots of ways including by reassuring SPMs,
countering criticisms of Horizon, and showing that POL were taking the
allegations seriously. To do some of those things the work would need to
be disclosed more widely. Linklaters note that one option would be to
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make the final report (or an edited version of it) public. They suggest,
amongst other things, that the report be prepared by an expert who is
independent of POL and Fujitsu and advise that the expert consider all
existing assurance work on Horizon to avoid needless duplication of work.
I did not see this advice and was not involved in deciding how it should
feed into the further work to be done: Chris handled this.
841. I exchanged emails with David Oliver on 28 March 2014. He updated the
Sparrow team on a further delay in the Second Sight reports and said he
intended to convene a meeting of the Sparrow group the next week (at
pages 1 to 2 of (POL00027800)). My response characterises my role
more generally: I said I would like David to walk me through a draft plan
which should already include input from senior managers/directors
because “/ will add most value where I can iterate and challenge the
options, ie., not as part of a working meeting” (at page 1 of
(POL00027800)).
842. Although today, I wish I had been much more closely involved, as CEO I
was handling so many projects concurrently that it simply was not viable
for me to have useful input at working level. However, I did see it as my
role to challenge at a stage where initial thinking had been done and to
ensure that the project was on track. There were senior people
responsible for managing this work, chiefly Chris (as GC) and Belinda (as
the Project Director), and I trusted them to do this.
Deloitte
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843. The documents suggest that Rodric Williams finalised the formal request
for advice with Gareth James at Deloitte. On 2 April 2014 at 18:58,
apparently having had a telephone call with him that day, Rodric emailed
Gareth James, cc’ing in Belinda, Chris, and Lesley. He described the
broad scope of the work as being that POL “wants to demonstrate that
the Horizon system is robust, fit for purpose, and/or operates within an
appropriate control framework”). He enclosed five documents “to
determine whether or not Deloittes (sic) can help us in this regard” in
advance of a further call due to take place the next day (at page 3 of
(POL00108396)).
844. At 12:17 on 4 April 2014, Rodric emailed Gareth James again, referring
to a meeting on 3 April 2014, and providing six additional documents.
Gareth James replied to both Rodric and Belinda at 17:20, thanking
Rodric for the material and confirming that Deloitte had started drafting a
letter of engagement. He described the Part 1 timetable as “quite
challenging” so Deloitte would limit the scope “fo the key areas we
discussed,” with Part 2 remaining a deeper dive (at pages 1 to 3 of
(POL00108396)).
845. I was not involved in these discussions and do not know what the “key
areas” were. These emails suggest that the scope of the instructions was
informed by meetings between POL’s legal team and Deloitte and
depended, at least in part, on factors such as how quickly the work could
be done. We were working to tight deadlines from the POL Board. The
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decision to divide the work into two parts is likely to have been influenced
by this point.
846. I can see that Belinda emailed Chris at 17:48 on 4 April 2014, referring to
a conversation about who should agree and sign the letter of
engagement. She suggests that Lesley lead on this (at page 1 of
(POL00108396)). I have no first-hand knowledge of what followed, but
the documents disclosed suggest that Chris, Belinda, and Rodric were all
involved in deciding the final scope and specific instructions for Deloitte
and, as suggested here, the original intention was for Lesley to sign them
off.
847. On 7 April 2014, Belinda responded to Gareth James suggesting that
Lesley sign the letter of engagement and asking for a copy of the draft
letter (at page 1 of (POL00108399)). Around the same time on 7 April,
Gareth James emailed Rodric asking him to confirm who the appointment
was with (at page 2 of (POL00108404)). Having received Rodric’s “out of
office” reply, Gareth James forwarded his query to Belinda at 17:24,
asking whether POL would want Deloitte to take into account the POL
Board report prepared by Linklaters in March 2014 (which he seems
aware of, but does not appear to have) (at pages 1 to 2 of
(POL00108404)). At 18:19, Belinda responded saying “(w)e discussed
this” and asking if he can speak to Lesley at 12:00 the next day (at page
1 of (POL00108404)). Mr James replies at 18:49 (at page 1 of
(POL00108405)).
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848. I am aware from the documents disclosed that a draft letter of
engagement addressed to Chris Aujard and dated 7 April 2014 was
provided by Deloitte (POL00108408). Chris appears to have provided
comments on at least one draft of this letter. The version dated 9 April is
described as “v6” (POL00108412). I was not involved in the process of
drafting the letter of engagement and do not recall seeing these drafts or
being consulted on them. As far as I can discern from the documents, the
work of formulating the final letter of engagement was done by Chris,
which is in line with my recollection of his role in the project.
849. From comparing the two drafts I can see that:
a. By 7 April 2014, the decision appears to have been made to divide
the work into two parts with Part 1 being a summary of existing
assurance work (I recall Chris Aujard describing this as a “desk-top”
report) and Part 2 being additional work which may be completed at
a later date depending on the outcome of Part 1 (at page 1 of
(POL00108408) and at page 1 of (POL00108412)). I was not
consulted on the division of the work into two phases, but I do recall
that the work was divided into two parts.
b. Both drafts stipulate that, in completing Part 1, Deloitte was not
required to comment on or test the quality of the existing assurance
work or the integrity of the processing environment (at page 3 of
(POL00108408) and page 3 of (POL00108412)).
c. Chris’ amendments to the 9 April draft focus the work on the Horizon
HNG-X system, as opposed to "Horizon" alone (POL00108412).
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Chris’ draft of 9 April appears to introduce a timeline for the work,
including a proposal that Deloitte present their work at the April
Board meeting (at page 5 of (POL00108412)).
Both drafts record that some or all of Deloitte’s work was likely to be
subject to legal professional privilege and Rodric, as POL’s litigation
lawyer, is named as the person at POL who will facilitate wider the
circulation of correspondence and preparatory material, if required
(at page 2 of (POL00108408) and at page 2 of (POL00108412)).
Both drafts record that, unless otherwise instructed, Deloitte will
have no direct contact with any third parties other than the named
Fujitsu contacts that POL provides (at page 7 of (POL00108408) and
at page 8 of (POL00108412)). I do not know why this was included
so these comments are necessarily speculative, but I recall that the
Linklaters advice on the scope of this work (which I did not see at the
time) emphasised the importance of independence from both POL
and Fujitsu. It is also possible that time was a factor here as
consulting Fujitsu would likely take longer.
Both reports state that POL is unlikely to make any public reference
to Deloitte’s work and, if this changes, the wording of any public
announcements will be agreed between the parties (at page 6 of
(POL00108408) and at page 6 of (POL00108412)).
Both reports state that the client team at POL is comprised of Lesley,
Chris, Belinda, and Rodric, who will report to me as CEO (the latter
draft also includes Julie George, who will deputise for Lesley if
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absent) (at page 2 of (POL00108408) and at page 2 of
(POL00108412)). I do not believe I was aware of this until reading
these documents for this Inquiry and I do not recall having any
specific oversight or reporting role in relation to this work at the time.
850. As far as I can discern from the documents, the final signed version of the
letter of engagement is (POL00117611) which is dated 9 April 2014, but
it was signed by Chris on 25 April 2014 (at pages 1 and 9 of
(POL00117611)). It appears to include Chris’ proposed amendments and
states that Deloitte will provide an Executive Summary of their findings to
the POL Board on 30 April 2014 (at page 5 of (POL00117611)).
851. On 9 April 2014, I attended the inaugural meeting of the Project Sparrow
Sub-Committee. The minutes record that I was present from item PS 14/3
onwards (at page 1 of (POL00006565)). I do not recall any lengthy or
significant discussion at this meeting.
852. Alice set out a range of issues (20 in total) relating to the nature and
progress of the Mediation Scheme. I do not recall any lengthy discussion
at this meeting but can see from the minutes that the Chair outlined a
number of significant issues the committee should consider:
a. The so-called “expectations gap” between POL’s anticipated liability
if Horizon was functioning (now confirmed by Linklaters to be low)
and the sums being claimed by applicants (at page 3 of
(POL00006565)).
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b. How, if at all, POL could communicate the essence of the Linklaters’
advice to applicants without waiving legal privilege (at page 3 of
(POL00006565)).
c. The assurance work being considered by Deloitte (which was also
said to be privileged) and how, if at all, that could be communicated
to applicants (at page 3 of (POL00006565)):
“The handling and sequencing of what would be a public message will
be crucial and would need to take account of the position of key
stakeholders, in particular, Tony Hooper, James Arbuthnot, and other
MPs.”
853. A preparatory paper setting out various options for the Mediation Scheme
going forward seems to have been provided for this meeting (at pages 4
to 5 of (POL00116439)), but I do not recall it being discussed. It seems
more likely from the documents that the discussion on this paper took
place at the meeting on 30 April 2014, as the minutes for that meeting
record that we considered “a paper on the options for the closure of the
Scheme and for the acceleration of its completion” (at page 3 of
(POL00006566)).
854. The options paper sets out several possible ways to resolve the cases in
the Mediation Scheme. The final recommendation is expressed as being
“s)ubject to a satisfactory outcome from the Deloitte assurance
assessment’ (at page 9 of (POL00116439)). I think we hoped that this
work could play a role in helping decide the future of the Mediation
Scheme. At this time, we believed from the other assurance work that had
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been done that Horizon was working well and thought it likely that the
Deloitte work would confirm this, which would be relevant to the issues in
the Mediation Scheme.
At the meeting on 9 April 2014, the Sub-Committee also considered an
update on the progress of the Deloitte assurance work (POL00006565).
A one-page paper appears to have been provided for review (at page 16
of (POL00116439)). I do not recall the discussion but the minutes record:
a. The Part 1 work is described as “a largely desk-based exercise to
assess the control framework within which Horizon operates” which
“will not consider the integrity of the Horizon processing
environment. That would form Part 2 of the work” (at page 4 of
(POL00006565)). I note that this describes the work as concerning
Horizon generally rather than just HNG-X. This seems in conflict with
the terms of the engagement letter prepared by Chris, which
narrowed the work to HNG-X.
b. The Part 2 work is described as being contingent upon the outcome
of Part 1 and not essential. Part 1 was presented as sufficient in and
of itself, regardless of whether the Part 2 work was also completed:
“Although no system could be absolutely ‘bullet proof’, no issues had
yet been identified through the cases being investigated or any other
route that has called into question the integrity of Horizon on-line was
implemented. These two points, along with the Part 1 work
(depending on the results) should be sufficient to assure Post Office
that Horizon is fit for purpose” (at pages 4 to 5 of (POL00006565)).
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c. If commissioned, the Part 2 work would look at “the adequacy of
Horizon at implementation, user acceptance testing etc, to determine
whether the system was set up correctly. This would be a larger and
more costly exercise and should not be undertaken unless deemed
necessary based on the results of part 1” (at page 5 of
(POL00116439)).
d. Lesley was to attend the April POL Board meeting to present the
findings of Part 1, and the next Project Sparrow Sub-Committee
meeting was to provide a detailed update, including whether Part 2
was required and, if so, how long it would take (at page 5 of
(POL00116439)).
856. A brief additional paper also seems to have been provided which
addressed the Deloitte work. It explains (at page 16 of (POL00116439)):
“Following the last Board meeting, discussions have been held with
Deloittes (sic) with a view to commissioning a short, cost-effective, external
‘assurance’ assessment of Horizon. Although the precise scope of this
assessment is still under review, currently it is proposed to undertake it in
two parts, with a summary of Part 1...being completed by the end of April
in time for presentation to the Board.”
857. This note summarises Part 1 as “primarily a desk-based exercise
reviewing existing documentation” which will involve, amongst other
things, “(s)ome limited testing of Horizon functionality and responses to
themes identified by Second Sight.” Part 2 is described as “non-essential
at this stage” and consisting of more detailed forensic activity, which could
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include more comprehensive testing and analysis in a number of core
system areas.
858. I do not recall these discussions although I do broadly recall that the work
was ultimately divided into two parts. However, I do not think that I
understood it in the way these documents present it at the time. I
remember that Part 1 was desk based and would rely upon the assurance
work which had previously been done. A lot of assurance work had
already been done and we did not want to replicate work, but I thought
that this review would assist by drawing together all that work to show
that Horizon did what it was designed to do.
859. The understanding that I formed of the Part 2 work at the time was that it
focused on the implementation of Legacy Horizon. My recollection is that
the division came about because looking at this would require us to look
at Legacy Horizon from 1995 onwards and one significant concern was
that we may no longer have the data from this period. As such, we would
need to attempt to reconstruct the architecture in place at the time, which
might not be possible and would certainly be time-consuming and very
costly. I remember Lesley emphasising that it might not be possible to do
this and, even if it was possible, it would come at considerable cost. If the
Part 1 work was sufficient to provide assurance — and we were told that it
would be — then the business had to consider carefully whether it was
justifiable to also undertake costly additional work with no obvious gain.
860. In relation to Fujitsu’s involvement, I can see that Julie George appears
to have asked Gareth Jenkins to attend a meeting with Gareth James of
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Deloitte, but he declined on 10 April 2014, seemingly on the instruction of
James Davidson (POL00100513). I do not recall this so I cannot shed
any further light on the decision making here.
861. Between 14 and 17 April 2014, I exchanged emails with Chris Aujard
reflecting on the first Project Sparrow Sub-Committee meeting and he
confirmed that the Deloitte assurance work was underway (at page 3 of
(POL00108440)). I was on leave, but I said that "before I finally switch off,
I want to be sure I am clear on next steps” and I challenged on the
efficiency of attendees at the last Sub-Committee. This was followed by
a further update on 17 April in which Chris noted that various workstreams
were ongoing “that I! am conscious are not particularly visible to you”,
including the Deloitte work (at page 1 of (POL00108440)). This fits with
my recollection: although I was keen to keep track of progress, the
updates I required to do this were high level and I was not involved in the
detailed work.
862. On 30 April 2014, there was a POL Board meeting followed by a Project
Sparrow Sub-Committee meeting. I attended both meetings but do not
recall everything captured in the minutes.
863. The POL Board meeting took place in the morning and Gareth James of
Deloitte attended to present the draft report. I can see from the minutes
that Lesley and Chris also joined for that part of the meeting because they
were so involved in the project (at page 6 of (POL00021524)). I cannot
be certain, but the draft report provided by Deloitte appears likely to be
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the draft Executive Summary marked "For validation in advance of Board
discussion on Wednesday 30% April’ (POL00105635).
864. The minutes record that the Chair thanked Gareth James for his draft
report and explained that there were a number of people who were
sceptical about Horizon. She said that the POL Board was keen to know
the truth about the reliability of the system, and the report needed to be
accessible because it needed to be capable of persuading lay people (at
page 6 of (POL00021524)).
865. Lesley then summarised the work, describing the objective of Part 1 as
“to give assurance that the control framework, including the security and
processes for changes in the system, were robust from an IT
perspective.” The minutes record that Gareth James reported that all
Deloitte’s work to date suggested that the system had strong areas of
control and the testing and implementation was in line with best practice
(at page 6 of (POL00021524)). This minute fits with what little I do recall
of this meeting: my lasting memory is that having heard from Gareth
James, the mood was one of relief and reassurance. I remember feeling
positive about the feedback he gave and thinking that this work should
also be useful in helping us resolve the cases within the Mediation
Scheme which, as ever, was a key concern for me.
866. The POL Board asked what assurance could be given pre-2010 when
Legacy Horizon was in place. As mentioned above, I recall Lesley Sewell
saying that the further work of examining Legacy Horizon would be much
more costly and difficult, if it was even possible. There was a concern
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that the data required to do this work no longer existed, and so we would
need to reconstruct it which would be time-consuming, expensive, and
not necessarily reliable or authentic. Nonetheless, it was agreed that
Gareth James would produce and cost a proposal to address this
addition work for the POL Board to consider. As indicated by the minutes
and the Board Action Log, Lesley and Chris were tasked with overseeing
this (at pages 6 and 10 of (POL00021524))).
867. Later that day, the Project Sparrow Sub-Committee met. There was some
overlap in attendance with those who attended the Board meeting: Alice
Perkins, Chris Aujard, Alasdair Marnoch, Richard Callard, Alwen Lyons,
Lesley Sewell, and I all attended some or all of both meetings.
868. The Sub-Committee meeting minutes record that we discussed Chris’
paper dated 24 April 2014, which advised on the legal issues surrounding
the potential dissemination of the Linklaters and Deloitte work. This was
provided further to the request made by the Sub-Committee at the
meeting on 9 April 2014. Chris Aujard’s paper states that he sought
additional advice from Linklaters on these issues. The paper looks at
whether and, if so, to what extent, POL might share the Deloitte report
and “the essence of the legal position from Linklaters.” The potential
audience for these seems to be chiefly limited to those involved in the
Mediation Scheme: “advisors, applicants and MPs including action
planning, comms and stakeholder engagement.” As he notes here (and I
recall this being a concern throughout) dissemination could result in POL
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inadvertently waiving legal privilege over privileged material which is
something we wanted to avoid (at page 1 of (POL00022123)).
869. Chris advised that publishing a letter from Linklaters summarising POL’s
legal position to applicants was felt to be inappropriate as it may be
portrayed as bullying. He also rejected the suggestion that the Chair might
commission legal advice on this. Instead, Chris’ advice at this stage was
that an open letter be sent to the Chair of the Working Group summarising
POL’s legal position and the Deloitte report. The letter could then be
disseminated to applicants and made available via POL’s website. He
flagged that this risked damaging POL'’s relationship with other members
of the Working Group and expressed the view that the media reaction,
combined with the dissemination of POL’s legal position itself, was likely
to be “severe,” albeit he had been advised that it was nonetheless
manageable (at page 2 of (POL00022123)). A first draft of this letter,
prepared by Linklaters, is said to be annexed to this paper but I have been
unable to locate it within the Inquiry’s disclosure.
870. The minutes of the discussion record a concern that the Linklaters report
was too long and not sufficiently clear to be understood by a lay person.
The Sub-Committee agreed that neither the Linklaters advice, Linklaters
draft summary, nor Deloitte report would be disseminated at this stage
but that the Sub-Committee would reconsider dissemination at a later
date (at page 2 of (POL00006566)).
871. At the POL Board meeting, Chris Aujard had explained to Gareth James
that there were allegations of so-called “phantom transactions” and so
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assurance work by Deloitte on the integrity of the system record logs
would be very valuable (at page 6 of (POL00021524). I do not recall much
of the discussion on this at all. I vaguely remember that Chris had
mentioned the idea of the transaction log in the POL Board meeting, but
I think we had run out of time, which may be why he picked it up with
Gareth James after the meeting.
872. By the time of the Project Sparrow Sub-Committee meeting later that day,
Chris seems to have spoken to Gareth James and told him about the
visibility of Transaction Corrections on the transaction log, which he said
Gareth James thought might mean that assurance work on this could be
completed more quickly. When Chris relayed this to the Sub-Committee,
I can see that the Committee asked him to establish with Deloitte what
level of assurance could be provided in one, two, or three weeks and at
what cost (at page 2 of (POL00006566)). This would be additional work
over and above the work requested by the POL Board, so the Committee
would have wanted to know the time and cost implications before deciding
whether or not to take it forward.
873. I can see from the Sub-Committee minutes that we also discussed the
potential difficulties with conducting pre-2010 assurance work. As I
explained above, my understanding was that the data for this was not
available and so assurance work on Legacy Horizon would be a
significant further step which, if possible at all, would be far more time
consuming and costly. Although I cannot now recall, I think the reference
to the Sub-Committee discussing “the use of the detailed logs provided
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for the Court cases as evidence for Deloitte” relates to this. I think the
idea came from a question about whether the court files might contain
records of data which we otherwise thought we no longer held (at page 2
of (POL00006566)).
874. Further to the POL Board meeting, I can see that draft instructions (dated
9 May 2014) to Deloitte were prepared (POL00031388). I do not recall
seeing these at the time, but they include a request for assurance work
on system records and transaction logs (presumably as a result of the
“phantom transactions” issue discussed above) and confirmation of what
assurance is available for both pre and post 2010 Horizon.
875. The Change Control Order for this amendment to the terms of
engagement appears to be set out in (POL00117612), although the dates
on this document are very unclear: the header is dated 9 April 2014, the
letter is dated 6 May 2014 and Chris Aujard’s signature is dated 15 April
2014. The focus of the additional work was on the transparency and
auditability of the records. I was not consulted about the scope of this
change order, and do not recall seeing a copy of it at the time.
876. The POL Board met on 21 May 2014 and the minutes show that Chris
and Belinda provided an update on Project Sparrow (at page 9 of
(POL00027400)). The minutes refer to a draft executive summary of the
Horizon Assurance Review prepared by Deloitte said to have been
circulated in advance but it is not clear to me from the documents
disclosed which document this is. The minutes note that the full Review
should be available on 23 May 2014, but Chris is recorded as saying that
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he will circulate this to the POL Board “once he was satisfied with its
drafting and the clarity of expression.” The Chairman is recorded as
emphasising the importance of the report being clearly written “so that it
could be used to give assurance to a wider audience” (at page 9 of
(POL00027400)).
877. There is a draft report dated 23 May 2014 which may be the version
referred to above (POL00028062). I do not recall either myself or the POL
Board being provided with copies of this, but I do have a vague memory
of seeing someone else’s hardcopy version (I do not recall who), weighing
up whether I had time to read it there and then, and deciding that, given
its length and level of detail, I did not. As CEO, there were countless
demands on my time and it was not possible to read everything. I had to
make judgments every day about where my time would be best spent and
where I could add the most value. I have read the report since but, at the
time, I think it likely that I relied upon the executive summary and the oral
briefings provided by Gareth James and those working on the project,
which I trusted to be accurate and sufficiently comprehensive.
878. I can see that on 28 May 2014 Rodric Williams sent Jonathan Swil and
Christa Band at Linklaters a copy of POL’s “Factfile” (which had originally
been prepared to assist Second Sight and the Working Group) and a copy
of Deloitte’s draft Board Update, stating that they already have a copy of
the full draft Deloitte report. It seems that Rodric Williams is seeking
Linklaters’ help in producing an accessible and understandable report. He
comments that “(o)ur CEO is concerned about the time available to knock
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Deloitte’s work into shape” and asks them to set out their preferred
structure so that Deloitte can repackage their work accordingly
(POL00006556).
879. As this comment indicates, there was a concern by this point about the
length of time the work was taking. The POL Board had asked for the
report some time ago. In general, if I promised a deliverable to the POL
Board within a certain timeframe, I wanted to make good on that promise.
I was of course able to and did ask the Board Chair for extensions to time,
but timeliness for this report was also important because it was hoped
that the work would inform other decisions that we had to make, most
notably trying to resolve the SPM cases and decide the future of the
Mediation Scheme. Everyone wanted to get this done. It was my role to
try to help the team make that happen.
880. Chris appears to have spoken to Deloitte on 29 May 2014, after which
Gareth James confirmed the structure of the work that would be provided
(at pages 1 and 2 of (POL00031400)). Chris forwarded this to Martin
Edwards, Alwen Lyons, Julie George, Rodric Williams, and me later that
day apologising for the delay. He wrote that Deloitte were running
significantly behind schedule and described the draft report as “opaque”
and failing to answer the questions set. He was keen to stress that,
although they were having to push Deloitte to finish the work, this was a
result of Deloitte’s internal review progress rather than because there
were concerns about the substantive issues (at page 1 at
(POL00031400)):
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“(T)here is no suggestion from Deloitte that there is somehow something
‘wrong’ with the system, or that it is not fit for purpose, rather our experience
is that their internal review partner approach is such that any positive (and
helpful) statements that are made in early drafts are edited out before the
draft is released to us.”
881. I continued to track the progress of Deloitte’s work and keep the Chair
updated. In an email of 3 June 2014, I asked Chris whether Deloitte were
on track to deliver their work by 4 June (his reply confirms that he thought
they were). I asked whether he had made any progress in respect of
Deloitte agreeing to be named in any disclosure of the report. He replied
that Deloitte had not moved on that but that the Linklaters’ advice was
being “titivated by Roa”, so as to stand alone even without reference to
the Deloitte work (POL00116581). We had been considering all options
including publishing the report in the public domain. Although the desire
to maintain legal privilege might always have prevented us from making
the report public, it also became clear that Deloitte were opposed to this,
perhaps because such reports were more usually produced as client
internal documents, as this one too had initially been briefed.
882. Nevertheless, we had hoped that the work might provide reassurance to
those outside of the business, including the Working Group, and to assist
in resolving the cases in the Mediation Scheme. I recall a sense of
frustration on the part of those more involved in the detail of the project at
the way the final report was developing. The POL Board meeting with
Gareth James had been overwhelmingly positive and reassuring but the
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report that then emerged from Deloitte’s checking process was heavily
caveated and increasingly complex and, because of this, less intelligible
to a lay person. Deloitte appeared to be less and less willing to commit to
anything unequivocal. We had hoped that the report might assist in
resolving the cases under review, but an inaccessible, heavily caveated
report could not do this: it would not serve to explain how Horizon worked
and could not provide a clear view (reassuring or otherwise) on whether
the system was well-functioning.
883. Deloitte prepared a draft Board briefing dated 4 June 2014
(POL00030159), which I believe I did read at the time. My understanding
was that Deloitte had conducted a desktop review based on previous
assurance work and design and system documents and had concluded
that, provided the system was implemented as designed, it ought to be
well-functioning. However, there was still a significant amount of work to
do to fill in the gaps, check the assumptions, and validate the information
they had looked at.
884. My first impression was that this was a critical report which raised serious
concerns. I needed to understand whether the caveats could be
addressed. If they could not, it could have serious implications for whether
we continued to use the system. While I recognise the limitations in this
thinking now, I certainly felt at the time that I had some contextual
reassurance that the system was working simply from the enormous
number of successful transactions which were completed each day.
However, it was clear that we needed to understand the gaps and caveats
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and whether they could be addressed. There were also parts of the report
I did not understand. For example, I do not think I understood the
reference to the exceptional balancing transaction incident in 2010.
885. I spoke to Lesley Sewell and my recollection is that she assured me that
POL had more background documents which had not been taken into
account, but which provided assurance with respect to the caveats. On
the balancing transaction incident, I was told that it was an emergency
measure and had only been used once, it was not about remote access,
and that POL had documents showing that the SPM was aware of the
incident. I trusted what I was told and, on the basis of that reassurance,
felt able to put that issue aside.
886. The response given to me (and subsequently to the POL Board) was
reassuring. We were told that a lot of the caveats within the report either
had already been addressed in other work and POL had the material
which would show this, or could be dealt with through further work. We
initiated that further work and this is when I recall the name "Project
Zebra" starting to be used, although it seems that the name had been
used before this time.
887. My understanding was that POL had the material which would assuage
many of these concerns and caveats, and, because of this, I recall a
sense from the team that Deloitte had not really listened to them. I was
told that the report painted too bleak a picture and Deloitte had not given
sufficient regard to the assurance that POL was able to provide through
documents which could have been provided if they had been requested.
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The team seemed to feel that the report protected Deloitte’s position but
at the cost of giving a clear picture.
888. After such a positive initial meeting with Gareth James, the negative tone
of the report did come as a shock to me. The final report which emerged
from the checking process seemed at odds with what we had initially been
told. As CEO, I had to manage the disappointment and frustration of the
project team and the concerns of the POL Board as well as ensuring that
assurance work was conducted to address the caveats identified in the
report.
889. I can see that Chris and Lesley circulated this briefing document
alongside an update to the Project Sparrow Sub-Committee (myself
included) at 19:26 on 4 June 2014. They explained that the report
remained somewhat technical, and was heavily caveated. This was
because it was a desktop review, based on currently available
information, which did not include information relating to the original
implementation of Horizon in 1995. They highlighted the limitations and
assumptions which contextualised the work then summarised its key
findings, emphasising the positives. They noted that there was unlikely to
be time to discuss the briefing at the Sub-Committee meeting on Friday
but expressed the hope that we could agree how to put the material to
the Board (at pages 1 to 3 of (POL00029733)).
890. Prior to sending this email, at 18:42 on 4 June, Rodric Williams appears
to have emailed me a draft of what Chris and Lesley proposed to say. I
replied in a light-hearted way (with two smileys) saying “/’m getting out of
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the way! Chris can decide — I’m not checking ExCo emails!” (at page 1 of
(POL00027797)). For the avoidance of doubt, what I was pointing out was
that these were senior group executives who were more than capable of
sending a short note to the POL Board — we all knew how difficult it was
and the Chair was already in the loop and the note simply needed to be
sent.
891. Although I did not comment on Chris and Lesley's covering email
(POL00029733), reflecting on its tone now my sense is that they were
attempting to bridge the gap between the POL Board’s last exposure to
this work — the very positive meeting with Gareth James in May — and the
much more qualified and caveated report which they now had. The tone
of the final report was much less reassuring than the POL Board might
have expected from the previous meeting and I suspect they were trying
to lay the groundwork and context to assist the Board in understanding
what they were receiving and how we had got here.
892. Mark Davies and Chris subsequently prepared a paper for the Project
Sparrow Sub-Committee dated 6 June 2014 which did address the
assurance work being done, amongst other things (POL00027153).
Although they noted that the Deloitte report should give comfort to the
POL Board in respect of the designs for processing and storing
transaction data, they did say that “it is highly unlikely that we will be able
to extract any further comfort or assurance without their doing
substantially more work” (at page 3 of (POL00027153)). As was noted in
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this paper at paragraph 5.4, Deloitte themselves were not recommending
any further ‘backward looking’ work:
“For the avoidance of doubt Deloitte are not recommending that any further
‘backward looking’ review of the Horizon system would be appropriate. In
fact they have said ‘One could thus do a lot of work and not be any further
forward’. They have however though [sic] gone on to say that, if Post Office
were looking to gain a greater degree of assurance over the Horizon system
there are approaches that could be considered...”
893. The paper distinguished between two sets of issues: those relating to
Project Sparrow and those relating to wider business learning (at page 3
of POL00027153)). I do not recall discussing this and I am not sure what
this relates to. The further assurance work would not be available in the
short term so could not assist in resolving the issues in the Mediation
Scheme (which may be what is meant by “Project Sparrow issues’). It is
possible that is why longer-term work (which would be unlikely to be
delivered in time to assist with the Scheme) would instead be managed
by the ARC or RCC as wider business learning.
894. Chris and Mark's paper dated 6 June 2014 noted that Deloitte would not
consent to the publication of their report, nor to the use of their name to
publicly assert that the system was working with integrity unless they
undertook specific testing (at page 3 of POL00027153)). Having only
completed a desk-based exercise and recognising that they had not
considered all of the available material, Deloitte would not stand behind
an expression of support that strong. I can understand this position, given
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the limitations in the review to date. This was not to say that the system
did not have integrity, it was simply a statement that they could not
confirm it one way or the other based solely on the work that they had
done.
895. Against the background of these findings, Chris and Mark advised that
the public facing version of the Linklaters advice was being reworked to
reflect this (at page 3 of (POL00027153)). The updated version of this
paper dated 18 June 2014 records the “current thinking” in the following
terms (at page 3 of (UKGI00002392)):
“Public statement of legal position (as informed by Linklaters advice
note). Current thinking is to inform the Working Group and applicants of the
Post Office position in time and linked to individual cases. It is anticipated
there will be an opportunity in the near term to advise the Working Group
of our position on consequential loss in relation to the case with the largest
claim (M001).”
896. I do not recall any conversations at this time about whether the report
impacted on criminal prosecutions or fell within POL’s duty of disclosure.
Looking at it now, this seems surprising and I wish we had discussed this.
Having said that, Chris had the report, as did a number of other legal
individuals, including Linklaters and Rod Williams. I trusted and expected
Chris, as GC, to have the legal expertise and professional integrity to
identify any such issues and take whatever action was required.
Disclosure was not a new issue. It was a topic which I understood our
internal and external lawyers to be considering on an ongoing basis.
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Looking back, I regret that I did not ask more about these issues.
However, especially in view of the ongoing reviews of criminal cases that
were reported on at the Sub-Committee, I would have expected that if the
report was disclosable, the legal team would identify this and act
appropriately, without any additional prompting by me or the POL Board.
897. Chris and Mark concluded their paper by advising on the future of the
Mediation Scheme. They stated that option one (maintaining the status
quo) was no longer tenable. They advised that POL should either
continue the Mediation Scheme but be proactive in controlling cost and
timescales (option two) or complete the case investigations and move the
governance and management of the Scheme in-house (option three) (at
pages 3 to 4 of (POL00027153)).
898. This paper was provided for the Project Sparrow Sub-Committee on 6
June 2014, which I attended. The Sub-Committee considered that option
three was preferable, subject to an assessment of the level of ministerial
support and probability of challenge by way of judicial review. Chris was
tasked with obtaining advice on the latter (at pages 1 to 2 of
(POL00006571)). It was agreed that a recommendation would be made
to the POL Board that option 1 (maintaining the status quo) was no longer
tenable and directions were made for the further work required to decide
between options 2 and 3 (at page 2 of (POL00006571)).
899. It had been hoped that the assurance work would assist in deciding the
future of the Scheme more than it in fact did. However, it was not the only
factor which impacted this decision making. The challenges facing the
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Mediation Scheme still existed and, given the time which had passed,
were arguably more pressing.
900. I can see from the "Zebra Action Summary" document signed off by Julie
George on 12 June 2014 that a number of remediations were
subsequently recommended to address the issues raised in the Deloitte
report, particularly insofar as they related to governance, document
management, and risk and assurance work (POL00027054).
901. An undated paper prepared by Chris for the RCC entitled "Project Zebra
— Horizon review by Deloitte" set out his summary of the Deloitte work, its
findings, and recommendations along with an assessment of the
prioritisation of these recommendations said to be informed by
discussions by Legal, Risk, Information Security, Financial Service
Centre and Internal Audit (POL00031410). He asked the RCC to note the
work that had been conducted and to support the further work proposed.
Although I do not specifically recall this paper or the discussions around
it, I attended the RCC meeting on 21 July 2014 at which the committee
approved the recommendations proposed in the paper (at page 5 of
(POL00109004)). I have not been able to ascertain from the disclosure
currently available what work was then undertaken following this.
99. Please consider UKGI00002213 (email from Alwen Lyons to you and others
on 11 March 2014), POL00107317 (Linklaters’ Report into Initial Complaint
Review and Mediation Scheme dated 20 March 2014), POL00021523 (minutes of
POL Board meeting on 26 March 2014), POL00105529 (Chris Aujard note of 19
March 2014 with attachments) and POL00022093 (outline of Linklaters report).
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99.1. Please explain to what extent you were involved in instructing Linklaters
to provide legal advice on Second Sight and the Mediation Scheme. In
particular,
please address (a) why Linklaters were only provided four spot
reviews and (b) why Linklaters were not instructed to contact Fujitsu.
902.
903.
904.
I have set out a detailed narrative of my involvement in the instruction of
Linklaters in response to question 98 above. As I explain, it was limited.
As GC, Chris Aujard finalised the instructions based on the POL Board’s
request. He had the legal expertise, knowledge, and experience to do this
and I trusted him to do it well. I had never been involved in deciding or
giving instructions to external lawyers and did not do so here. It was not
part of my role and would not have been an efficient use of my time or
skills given that there were others better placed to do this work.
I have been asked why Linklaters were only provided with four spot
reviews. Having considered the Linklaters’ report dated 20 March 2014,
this question appears to be based on a false premise. The report states
at paragraph 4.1.1 that Linklaters were provided with “10 spot reviews
and 4 cases” which, for the purposes of their report, they assume “are
indicative of the types of complaint that have been accepted into the
Scheme” (at page 4 of (POL00107317)). I can only assume that the report
is correct when it states that this was the material provided.
In paragraphs 5.12.1-5.12.9 of their report, Linklaters set out the scope of
the issues arising in those 10 spot reviews and four case reports,
including (at pages 6 to 7 of (POL00107317)):
“5.12.1. wrongful “loss recoveries” in respect of amounts reported by
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Horizon as due to the Post Office, including in some cases, various
categories of consequential losses...
5.12.2. Horizon-related customer payment malfunctions or lost cheques
and transaction corrections resulting in the loss of limited sums (in some
cases, under £100);
5.12.3. unauthorised foreign exchange transactions being entered into the
Horizon system without a SPMR’s knowledge, but without any specific
allegation of loss incurred by the SPMR as a result;
5.12.4. printing of excess receipts in respect of a 67p postage transaction;
5.12.5. an inability of Horizon properly to account for GIRO payments and
SPMRs having to trust the Post Office about transaction corrections;
5.12.6. criminal charges: in circumstances where the SPMR has been
subject to criminal allegations of false accounting but where they say the
false accounting arises from cheques being lost in the mail or where they
have retracted an admission made under caution to the criminal conduct;
5.12.7. wrongful termination of SPMRs’ contracts;
5.12.8. inadequate training given to SPMRs by the Post Office in respect of
Horizon; and
5.12.9. inadequate telephone or other day-to-day support services provided
by the Post Office to SPMRs.”
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905. I was not involved in deciding what material would be given to Linklaters.
I trusted Chris as GC and the legal team to provide sufficient material to
enable Linklaters to provide legal advice on our general level of financial
exposure. That is a judgment which requires legal knowledge and so was
not one I was able to make.
906. With respect to the number of case reviews provided, there had been
substantial delays by Second Sight in producing case reviews and there
were very few complete at this time. I note that the minutes of the
inaugural meeting of the Project Sparrow Sub-Committee on 9 April 2014
state that Post Office had passed around 20 cases to Second Sight for
review, but Second Sight had only produced three case reviews, all of
which had been rejected by the Working Group (at page 2 of
(POL00006565)). I have been unable to confirm how many had been
produced at the time of Linklaters being instructed and the documents do
not give a clear picture on this, but it is clear that there were only a limited
number of these reviews.
907. I have been asked why Linklaters were not instructed to contact Fujitsu.
At paragraph 4.2.2 of their report dated 20 March 2014, it is said that “we
have had no contact with Fujitsu, the company which designed, provided
and supports the Horizon system” (at page 5 of (POL00107317)).
908. I was not involved in deciding the scope of the instructions and cannot
say what, if any, instructions they were given in respect of their contact
with Fujitsu. The report makes clear that Linklaters did not contact Fujitsu,
but I do not know why this was. I assume that POL’s legal team
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considered this question and had reasons for whatever instructions they
gave on it.
909. Because I was not involved, what follows is necessarily speculative, but I
note that the primary purpose of the advice was to consider POL’s legal
exposure to claims rather than to establish whether Horizon was well-
functioning. At the time, Second Sight were working to produce a report
which described the functioning of Horizon (Linklaters discuss this work
critically in paragraphs 5.30-5.39 of their report (at pages 8 to 10 of
(POL00107317)) and we were keen to avoid replicating work. The focus
of the advice is on POL’s actions (for example, with respect to training
and support) and relationship with SPMs, including through the contract.
It is not clear to me that Fujitsu could usefully contribute. Finally, there
was some time pressure throughout this time because we wanted to
resolve the cases in the Mediation Scheme, this may have meant that the
instructions were more focused and less wide ranging than they might
otherwise have been. However, this is all post hoc speculation. I was not
involved in determining the scope of the instructions and so I cannot say
whether these factors were considered by the legal team when deciding
their scope.
99.2 When did you first read, or be briefed on, the report prepared by Linklaters
(POL00107317)? What were your initial views on it?
910. To the best of my recollection, I was given the report for the POL Board
meeting on 26 March 2014. I have set out my recollection of this meeting
in 827838response to Question 98.
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911. To the extent that I can recall my initial views on the report, I remember
that the POL Board and I felt reassured by this work. Provided that
Horizon was working as it should (and, as I have explained, we thought it
was), POL’s legal liability to SPMs was very limited. Further work would
have to be done to confirm whether Horizon was well-functioning and so
the POL Board commissioned that work.
912. However, I do remember feeling slightly uncomfortable in this meeting.
The discussions of legal liability felt very impersonal and obviously did not
touch upon the human aspect of this and the impact on the people
involved. We had not ruled out making payments as a matter of policy
rather than because of legal obligations, but it felt difficult to talk about the
legal issues in this black and white way.
913. The advice given about the nature of the contractual relationship was
obviously completely undermined in the litigation that followed and I wish
that we had identified the flaws in it at this stage. However, I trusted and
expected a firm as well established as Linklaters to give us sound and
reliable legal advice and this was the advice that we were given. Although
I had no legal expertise, this way of understanding the relationship also
fitted with my broad understanding of SPMs as_ independent
businesspeople running small businesses. This was a_ consistent
message and, to the extent that I thought about these issues, I thought of
SPMs as agents and not employees.
99.3 Please consider paragraph 2.3 of the report, namely that “We note that
there is, so far as we understand it, no objective report which describes and
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addresses the use and reliability of Horizon. We do think that such a report
would be helpful, though there is a decision to be made about how broad and/or
thorough it needs to be”. Please explain what steps, if any, POL took to address
this suggestion.
914. I am asked to consider paragraph 2.3 of the Linklaters report and the
suggestion that it would be useful to have a further piece of work
describing and addressing the use and reliability of Horizon, explaining
what steps, if any, POL took to address this suggestion. I have set out the
steps POL took to address this suggestion, including through the Deloitte
work, in response to Question 98 above. I have nothing additional to add.
99.4 Please explain the basis on which you thought that lawyers could advise
on legal risk arising from the use of Horizon data in prosecutions without
examining the reliability of the Horizon IT system.
915. I am asked on what basis I thought that lawyers could advise on the legal
tisk arising from the use of Horizon data in prosecutions without
examining the reliability of the Horizon IT system. I understand why one
might ask this question but, in the context of the Linklaters’ advice (which
I take to be what the question refers to), we did not ask Linklaters to
provide us with an unqualified assessment of the legal risk of the claims.
916. In my response to Question 98 above I have set out why the POL Board
commissioned this advice. The primary aim was to obtain a clear view on
the possible value of the claims if successful. My understanding is that it
was not necessary to determine whether Horizon was or was not well-
functioning to answer that question. We certainly appreciated that it had
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not been answered by the Linklaters’ advice because that is why we then
commissioned the Deloitte work. It was always made clear that there was
a key untested working assumption in the Linklaters’ work and I think we
all understood that.
917. We did all think that Horizon was well-functioning and that there were
good reasons for believing this. That was certainly my belief at the time.
This belief seemed to be supported by the Second Sight investigations
and the Interim Report as well as by the sheer number of transactions
processed each day without apparent problems. However, to answer the
question: I did not think that it was possible for Linklaters to advise on risk
more generally without looking at the underlying reliability of Horizon.
That was not what we asked Linklaters to do. The issue of whether
Horizon was in fact well-functioning was a separate matter and we
recognised this and commissioned the Deloitte work in response to this
recognition.
99.5. Please set out your recollection of the Board meeting on 26 March 2014
minuted under Project Sparrow.
918. I am asked to set out my recollection of the Board meeting on 26 March
2014 minuted under Project Sparrow. I have described my recollection of
this meeting in response to Question 98 above (at paragraphs 832 to 838
above). There is nothing further I wish to add.
99.6. Did you advise the Mediation Scheme Working Group and / or Lord
Arbuthnot about the instruction of Linklaters and / or Deloitte? If not, why not?
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919. I do not recall whether I advised the Working Group or Lord Arbuthnot
about the instruction of either Linklaters or Deloitte and cannot recall any
discussions or decisions on it being made by the POL Board.
920. It would not have been my usual practice (or normal business practice
more generally) to advise third parties of instructions from the POL Board
or the contents of POL Board discussions and papers which, generally
speaking, were assumed to be confidential. Equally, I was not a member
of the Working Group and did not attend their meetings. If the information
did need to be shared with the Working Group, I would have expected
either Belinda Crowe or Chris Aujard (who were members of the Working
Group and attended meetings on behalf of POL) to do this. As GC, Chris
would also have been the person to advise on whether sharing such
information could waive legal privilege.
921. I met infrequently with Sir Anthony and Lord Arbuthnot. I can see that I
discussed compensation with Sir Anthony at the meeting on 24 February
2014 (although this was before Linklaters and Deloitte were instructed (at
page 2 of (POL00100338)). Similarly, I recall discussing the so-called
“expectations gap” with Lord Arbuthnot because the significant difference
between the applicants’ and POL’s estimation of the possible
compensation was an ongoing concern. However, I do not recall
discussing the instructions at any of these meetings. In the absence of a
reason to do so, I expect that the general expectation that POL Board
matters were confidential would have meant the information was not
shared.
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100. Please consider POL00117519 (email from Rodric Williams to Gareth
James on 2 April 2014), POL00021524 (minutes of the POL Board meeting on 30
April 2014), POL00006566 (minutes of Project Sparrow Sub-Committee meeting
on 30 April 2014), POL00028062 (Deloitte report dated 23 May 2014) and
POL00028069 (Deloitte report dated 4 June 2014).
100.1. Why did POL initially only instruct Deloitte in respect of Horizon Online
and not Legacy Horizon?
922. I am asked why POL initially only instructed Deloitte in respect of Horizon
Online and not Legacy Horizon. I have set out my understanding of how
these instructions were finalised in response to Question 98 above (at
paragraphs 838 to 850 above). There is nothing further I wish to add.
100.2. Please set out your recollection of Mr James presentation to the Board on
30 April 2014. In particular, please identify what, if anything, Mr James said
about (a) transaction corrections or (b) any other matter that called into
question the reliability of the Horizon IT System.
923. I am asked for my recollection of Gareth James’ presentation to the POL
Board on 30 April 2014. I have set this out in at paragraphs 862 to 873
above in response to Question 98. I have nothing further to add.
100.3. Please describe the discussion of Mr James’ work in the Project Sparrow
Sub-Committee on the same day.
924. I am asked to describe the discussion of Gareth James’ work in the
Project Sparrow Sub-Committee meeting on 30 April 2014. I have set out
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my recollection of this in paragraphs 862 to 873 above in response to
Question 98. I have nothing further to add.
100.4. On what basis did you think it was appropriate not to disseminate either
the Deloitte or Linklaters reports further?
925. I am asked on what basis I thought it was appropriate not to disseminate
either the Deloitte or Linklaters reports further. In paragraphs 894 to 901
above, I have set out the discussions around dissemination and Chris
Aujard’s final advice of 18 June 2014.
926. Essentially, we had hoped that the work might assist in resolving disputed
issues in the Scheme cases so there was an ongoing discussion about
what, if anything, could be shared with that aim in mind. However, the
work also served as legal advice and we were repeatedly told that
disseminating it to third parties could risk waiving legal privilege over the
advice and, potentially, over other legal advice (see, for example, Chris
Aujard’s paper dated 24 April 2014 (POL00022123)). I am not a legal
expert and cannot say whether this is correct but I trusted their
assessment of our General Counsel and legal team.
927. Even without the complications of privilege and Deloitte’s consent to
publication, we certainly would not have made these reports public in full
lightly. We were acutely aware that negative press about POL and the
business could undermine the public trust in every local Post Office up
and down the country, regardless of whether that was fair or appropriate.
Before we put anything into the public domain (or even shared it with the
Working Group, given the risk that it would subsequently be leaked to the
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press) we had to give very careful thought as to whether it might cause
damage in that way. Material which was caveated or unclear (which we
thought the Deloitte report was) carried a clear risk of being
misinterpreted and causing damage. It would be too easy for someone
to read it and conclude that the system lacked integrity, which was not
Deloitte’s conclusion.
101. Please consider POL00116439 (agenda for Project Sparrow Sub Committee
meeting on 9 April 2014), POL00006565 (minutes of Project Sparrow Sub-
Committee meeting on 9 April 2019) and POL00006571 (minutes of Project
Sparrow Sub-Committee meeting on 6 June 2014).
101.1. Please explain the reasons for formalising Project Sparrow as a
subcommittee of the Board and its terms of reference.
928. To the best of my knowledge, the Project Sparrow Sub-Committee was
first proposed by Alice Perkins in her email of 09:49 on 10 March 2014.
In that email, she set out a number of issues around the Mediation
Scheme for substantive discussion at the March POL Board meeting
including in relation to the possibility of legal challenge, costs, lessons
learned for the Business, and the management of Second Sight’s work.
She finished by saying “! am going to propose a Board sub-C’tee chaired
by me with you and at least one other NED on it’ (POL00105552).
929. I replied at 12:21, although I did not address the suggestion of a Sub-
Committee explicitly. I then forwarded Alice Perkins’ email to Chris
Aujard, copying in Belinda Crowe, Mark Davies, Martin Edwards, and
Chris Day, noting “the suggestion of a Board Sub-Ctte is a good one. It
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will help manage the comms., bring some reassurances to the NEDs, and
help us — by having a smaller group to steer and shape rather than the
whole Board” (POL00116321).
930. The ExCo met on 13 March 2014 and considered, amongst other things,
an update on the allegations relating to the integrity of the Horizon system
from Chris. He explained that the Initial Complaint and Mediation Scheme
programme (known internally as Project Sparrow) had moved into a
critical phase and was currently carrying a substantial level of risk (at
page 4 of (POL00092172)).
931. The nature of these risks was summarised in Belinda's paper of 20
February 2014, which was annexed to this update (at pages 12 to 15 of
(POL00092172)). They included the slow progress of the Mediation
Scheme, an increasing expectation gap, high cost, a risk of the scope
being broadened yet further, stakeholder management challenges, and
the impending generic Second Sight report.
932. Chris explained that further to discussions of these issues at the POL
Board meeting on 26 February 2014 (POL00027337), three mitigations
had been put in place: (i) CEO participation in stakeholder
communications, (ii) strengthening the POL resources available, and (iii)
close POL Board involvement (at page 4 of (POL00092172)).
933. These documents essentially set out the background to the formation of
the Project Sparrow Sub-Committee: the Mediation Scheme was entering
a critical phase and was experiencing a number of issues which required
management. The proposal was that this management would come from
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a Sub-Committee, of which would provide closer oversight of, and
involvement in, this process by the POL Board. The idea originated with
Alice, and I supported her suggestion.
934. At the POL Board meeting on 26 March 2014, the POL Board agreed to
set up the Sub-Committee, chaired by Alice and involving myself, Alasdair
Marnoch (being Chair of the ARC), and Richard Callard (ShEx NED). The
minutes record that other NEDs were invited to join if they wished (at page
2 of (POL00021523)). I can see from the updates surrounding this note
that the concerns and issues around the Mediation Scheme were at the
fore of the discussions.
935. The inaugural meeting of the Project Sparrow Sub-Committee took place
on 9 April 2014. The terms of reference for the Sub-Committee, including
its purpose, composition and governance, were discussed. The purpose,
as set out in the terms of reference paper was: “to make
recommendations to the Board in respect of Project Sparrow and provide
strategic oversight of the delivery of the project and the development of
the Initial Complaints Review and Mediation Scheme” (at page 2 of
(POL00116439)). Its primary duties and responsibilities were to (i) keep
under review the progress of Project Sparrow, in particular the
development of plans to restructure the Scheme; and (ii) to undertake any
other oversight function delegated to the Committee by the full POL Board
(at page 3 of (POL00116439)).
101.2. Why was the Sparrow Sub-Committee considering ending the Mediation
Scheme at this stage?
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936. As was indicated in the terms of reference, one of the primary functions
of the Sub-Committee was to review the development of plans to
restructure the Mediation Scheme. At the very first meeting, the Sub-
Committee considered a paper which set out several options for the future
of the Mediation Scheme, including that it should be terminated (at pages
4 to 15 of (POL00116439)). The other options under consideration were
maintaining the status quo, restructuring the Mediation Scheme, and
devising a new alternative dispute resolution structure (at page 7 of
(POL00116439)).
937. The reason that it was necessary to consider all options, including
terminating the Mediation Scheme, was that the status quo was
increasingly unsatisfactory. The reasons for this were set out in Belinda
Crowe’s paper of 20 February 2014 (at pages 12 to 15 of
(POL00092172)) and reiterated in the options paper : the Mediation
Scheme aimed to provide a formal mechanism to resolve the complaints
and allegations but it was increasingly costly and delayed; there were
concerns about Second Sight’s capacity to deliver the work required;
there was a growing “expectation gap”; and the ongoing management of
the Mediation Scheme was proving a significant drain on POL’s
resources, including in respect of senior management's time (at page 5
of (POL00116439)).
938. POL still wanted to achieve resolution of these complaints — that was
always the aim — but the current system seemed incapable of achieving
this, so we were looking for other options. I can see from the minutes of
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this meeting that the first discussions were wide-ranging and touched
upon many of these issues and more. As I have set out at paragraph 852
above, the Chair outlined a list of significant matters, which the Committee
was to consider. This was a complex, evolving situation with many
important matters to weigh (at pages 1 to 4 of (POL00006565)). It was a
very difficult situation to manage and find a way through and these were
not cold, impersonal decisions we were making. We wanted to find a
resolution because it was in the best interests of both the SPMs and POL
but, at times, the difficulties felt intractable.
101.3. What factors were taken into account_in deciding to terminate
Second Sight’s engagement?
939. Chris Aujard and Mark Davies prepared a further paper dated 3 June
2014, which continued the exploration of options for the future of the
Scheme and noted that “the rationale for change has been well
articulated elsewhere and the urgency has not lessened since the Sub
Committee last met’ (at page 1 of (POL00027369)). Progress was still
very slow and the concerns about Second Sight’s capacity to deliver on
their assignment were ongoing. Nonetheless it remained a very difficult
situation, both in terms of how best to achieve resolution and in respect
of stakeholder management.
940. The same three broad options were still under consideration and the pros
and cons in respect of each still required careful consideration, as the
discussion in this paper shows. In the concluding section, Chris and Mark
noted that the options had to balance the best interests of the business,
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its people and customers, as well as the applicants. Commercial factors,
including the cost and management time being consumed by the
Mediation Scheme, were relevant to this evaluation, as was stakeholder
management and the need to retain the confidence of the Government.
As this paper states: “This is an extremely challenging judgement call
with a number of factors at play” (at page 7 of (POL00027369)).
941. Having weighed these options, the advice of Chris, as GC, and Mark, as
Head of Communications, was that the third option — that of moving the
Mediation Scheme in-house — was in the best interests of the business
in a purely commercial sense. No business would look to retain external
consultants indefinitely if the knowledge, experience, and work could be
brought in-house. However, as is noted here, it was also a significant
factor that POL considered that, despite two years of investigation,
nothing had emerged which undermined the operation of the Horizon
system (at page 7 of (POL00027369)).
942. Regardless of this assessment of what was in the best commercial
interests of the business, the intention was to complete the review of
SPM cases. It was recognised that wider considerations, including
stakeholder management, required POL to discuss any decisions
regarding the future of the Mediation Scheme with ShEx. Regardless of
which option was ultimately pursued, POL needed to take a more
proactive role in the Working Group to ensure that Second Sight worked
within the terms of reference set out (at page 7 of (POL00027369)).
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943. Having explored these options in detail, Chris and Mark recommended
that option one — maintaining the status quo — was untenable and steps
be taken to begin detailed planning of options two and three (at page 7
of (POL00027369)).
944. This paper appears to have been circulated by Alwen Lyons on 3 June
2014 at 17:32 and I can see that Richard Callard and Mark had some
initial discussion by email (UKGI00002358; UKGI00002359).
945. The paper was discussed at the meeting of the Project Sparrow Sub-
Committee on 6 June 2014. The minutes record that the Committee
assessed the options against the fundamental principles agreed by the
business for its approach to Project Sparrow (to gain a_ fuller
understanding of the facts, to ensure a fair outcome and to highlight
lessons learned, so that improvements could be made to Business
processes). The Committee agreed that option three was its preferred
option, subject to Ministerial support and a fuller understanding of legal
tisk. In the interim, planning for options two and three should proceed on
a contingency basis (at pages 1 to 2 of (POL00006571)).
Second Sight's thematic report
102. Please consider, POL00116416 (email from David Oliver to you dated 31
March 2014), POL00116417 (attachment to the prior email), POL00004439
(Briefing Report Part 1 by Second Sight dated 25 July 2014), POL00030160
(Briefing Report Part 2 by Second Sight dated 21 August 2014) and
POL00002415 (POL’s Reply to Second Sight’s Briefing Report Part 2 dated 22
September 2014).
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946. Before addressing the Inquiry’s specific questions, I will set out my
involvement with, and understanding of, Second Sight and their work at
this time. Overall, I was concerned that they progress their work as this
would enable a better understanding of the facts and hopefully lead to
resolution. However, I did not work with Second Sight on a day-to-day
basis and I was reliant on those who did to keep me informed. Given my
role, my knowledge of their work was high level and I lacked the detailed
technical knowledge to have any significant input on that front.
947. On 19 July 2013, Bond Dickinson produced a paper explaining the aims
of the mediation process and setting out a flow chart proposal to progress
cases through it (POL00117035). This proposal was made as a result of
POL’s very serious concerns about the lack of progress being made
towards resolving the cases and the delay and cost of the work
completed to date by Second Sight.
948. My overwhelming concern was to resolve these cases. This would be
best for the SPMs and for POL. However, Second Sight appeared unable
to achieve this. Their review was progressing extremely slowly, the work
was over budget and delayed. The primary output to date was the Interim
Report, which those working on the project at POL considered to be
incomplete and, in places, inaccurate.
949. I can see from the minutes of a Working Group meeting on 3 January
2014 that Second Sight were asked to produce “a generic report covering
regularly occurring issues and a case specific report for each individual
case” (at page 2 of (POL00026638)). I was not a member of the Working
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Group and did not attend this meeting, but my understanding is that this
“generic” report is what ultimately came to be known as the thematic
report. At this stage, consideration was still being given to whether this
document would be a joint document prepared with POL.
950. An agenda for the meeting on 23 January 2014 records an update from
Second Sight that they were a “(c)ouple of weeks away from being ready
to release thematic report. AVDB raised joint report — Action Ron and
AVDB to discuss” (at page 5 of (POL00026640)). Again, it is noted that
discussions were ongoing in relation to whether this should be a joint
report between Second Sight and POL (at page 7 of (POL00026640)).
951. I can see that on 27 January 2014, lan Henderson emailed Janet Walker
with an update for Lord Arbuthnot (at page 1 of (POL00100132)):
“I think the Thematic Report (previously called the Mediators \(sic) Briefing
Document), will be a good way of briefing MPs. However, we’re probably
2 or 3 weeks away from having something that is much more than an (sic)
very early 1° draft.”
952. The minutes of a Working Group meeting on 30 January 2014 (which I
did not attend) record that there was discussion around the nature and
content of the reports that Second Sight would provide, including the
generic report. It was agreed that POL would provide Second Sight with
the “Factfile” document at the earliest opportunity and consideration
would be given as to whether it could be included in the generic report
(at pages 2 to 3 of (POL00026641)).
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953. At a Working Group meeting on 20 February 2014 (which I did not
attend), I can see that Second Sight explained that only two individual
reports would be ready by the deadline of 27 February and that the
generic report was unlikely to be ready on time (at page 5 of
(POL00026636)).
954. On 24 February 2014 I met with Second Sight. Later that day Chris
Aujard and I met with Sir Anthony Hooper to discuss concerns about the
progress of the Mediation Scheme, including in relation to delays and
cost. By that date, the total cost was around £5,000,000 and we were not
confident that Second Sight could handle the volume of material or
produce reports within a meaningful timeframe. I can see that we
explained that Second Sight had been unable to provide any assurance
that they could complete their work by October 2014, which was the
projected end date of the Scheme at that time (at page 1 of
(POL00100338)).
955. Sir Anthony is recorded as agreeing: Second Sight were “resource
challenged, and it would be difficult for them to meet the current
timetable” albeit he recognised that they had a difficult role to play. I can
see that we then discussed the different ways forward, including
terminating the Mediation Scheme entirely (and allowing SPMs to pursue
legal remedies through the courts and / or paying formulaic
compensation), restructuring the Mediation Scheme, or supplementing
the resourcing available to Second Sight. Sir Anthony contended that
POL should do nothing until Second Sight had produced some case
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reports and POL had seen the thematic report, which he thought would
be done within four weeks (at pages 1 to 2 of (POL00100338)).
956. The POL Board met on 26 February 2014. I can see that Belinda Crowe
sent me an email to at 07:59 attaching a speaking note for that day's POL
Board meeting. The speaking note summarises these meetings,
including one with Second Sight at which they confirmed to me they
would not hit the required timescales for any of their reports. The
speaking notes confirm that we had accepted Sir Anthony's suggestion
to wait for the reports before making further decisions (at page 2 of
(POL00116313)).
957. I replied to Belinda's email noting that she had not mentioned the option
that POL find a “face saving” exit for Second Sight, for example, at the
conclusion of the thematic report. On this option, Second Sight would
remain involved in the Working Group and POL would use a better
resourced supplier to deal with the cases (at page 1 of (POL00116312)).
The motivation for this, as was discussed with Sir Anthony, was that
Second Sight were under-resourced and, given the delays, seemed
unable to cope with the volume of cases within a reasonable time. As
ever, my fundamental concern was that we had to find a way to resolve
the outstanding cases which had already been delayed so long. Whilst
critical of their output, I recognised and respected that Second Sight had
worked with commitment; a face save was my suggestion.
958. At the POL Board meeting later that day (26 February 2014) I provided
an update on the challenges facing the Mediation Scheme and explained
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that I had met with both Sir Anthony and Second Sight to discuss these.
I noted that Second Sight were yet to produce their first written report for
the Scheme and flagged Sir Anthony’s advice that POL should not act to
change the Mediation Scheme yet (at pages 3 to 4 of (POL00021522)).
959. On 6 March 2014, I exchanged emails with Belinda. She informed me
that Second Sight had raised the issue of making their thematic report
available to MPs in advance of the meeting on 24 March 2014. Belinda
asked if she could refer to previous discussions I had had with Lord
Arbuthnot, in which he had accepted the view that Second Sight needed
to keep matters internal (I believe this would be internal to the Working
Group, as opposed to public) while the mediation was ongoing (at page
1 of (POL00116320)).
960. I replied to Belinda indicating that I had no objections to her proposal to
share the content of those discussions, but suggested we discuss the
best approach: “/ think we should discuss: eg. Why is it unhelpful and see
whether actually letting them publish could be helpful. And if not, have
some good reasons that would resonate with TH and with JA” (at page 1
of (POL00116320)).
961. On 7 March 2014, the Working Group met. I did not attend this meeting
but I can see that they discussed the nature and progress of Second
Sight’s work, including on the thematic report (at page 5 of
(POL00026656)):
“There was a discussion of the Second Sight generic/thematic report. It
was noted that this would not cover the factual position of what Horizon did
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and how it acted. The Working Group agreed that a document that clearly
documented the role of Horizon and the Post Office was key to successful
mediation and that this document could not be produced by one of the
parties to mediation. Therefore the Working Group agreed that Second
Sight would produce the factual Part One briefing document. It was agreed
that case report work should be paused to allow Second Sight to focus on
the production of the Part 1 and the thematic report (referred to as part 2).
“It was agreed that the Working Group would return to reviewing the
individual reports after they had looked at Part One and Part Two reports
which would be circulated by close of business 26 March at the latest...”
962. POL was tasked with providing Second Sight with a copy of the Factfile,
which Second Sight were to review urgently and consider using as a
basis for the Part One Report (also described as the “mediator briefing”).
Angela Van Den Bogerd and Second Sight were to liaise to discuss any
outstanding issues or disagreement prior to the circulation of the Part
One and Two reports (at page 5 of (POL00026656)). As this shows, it
was always anticipated that POL would work with Second Sight in
producing these and it was the Working Group who determined that POL
should have that input.
963. On 9 March 2014, I can see that Belinda provided an update to Peter
Batten at ShEx, explaining that the thematic report was now expected by
26 March and Second Sight had been advised by the Working Group to
stop work on the individual reports to meet this deadline (at page 2 of
(POL00100387)).
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964. On 13 March 2014, POL provided Second Sight with the Factfile.
Working Group minutes for 20 March 2014 noted that the Factfile had
been provided (at page 4 of (POL00026642)) and the minutes of 27
March 2014 noted that this had been done on 13 March (at page 4 of
(POL00026644)).
965. On 18 March 2014, I had a telephone call with Lord Arbuthnot to discuss,
amongst other things, what information could be communicated to MPs.
I see from the note that both Second Sight and POL were concerned
about what they could communicate, given Sir Anthony’s direction to
maintain confidentiality. The speaking note for this meeting records my
ongoing concerns about the speed and quality of Second Sight’s work,
although we were working where possible with SPMs to resolve issues
(at pages 3 to 5 of (POL00108346)).
966. At a meeting on 20 March 2014, the Working Group was assured that
Second Sight was on track to provide the thematic report by 26 March
2014 (at page 3 of (POL00026642)). These minutes record that Second
Sight had provided POL with initial comments on the Factfile and would
provide more detailed comments the next week (at page 4 of
(POL00026642)).
967. On 24 March 2014, I attended a meeting with Lord Arbuthnot, several
other MPs and their representatives, Ron Warmington, and
representatives for the JFSA (Alan Bates and Kay Linnell). The note of
this meeting records Ron Warmington saying that the thematic report will
be released on 26 March (at page 2 of (POL00105634)). I see that Mark
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Davies circulated “a note and overview’ of the meeting by email later that
day, saying “/’d be grateful to colleagues who were in the meeting for any
observations/corrections”. I believe this is the note referred to in his email
(POL00116388).
968. By way of a letter dated 26 March 2014, Lord Arbuthnot wrote to thank
me for attending the meeting with MPs and to follow up on the question
of what information could be given to MPs and when (POL00100474).
969. Second Sight did not produce their thematic report for the 26 March
deadline. I see from the minutes of the POL Board meeting that day that
I conveyed to the POL Board that Sir Anthony had challenged Second
Sight on the quality of their work, but we did not dwell on this. The focus
of that meeting was on other matters including the formation of the
Project Sparrow Sub-Committee and the Linklaters' advice
(POL00021523).
970. The minutes of the Working Group meeting of 27 March 2014 recorded
that Second Sight’s thematic report would not be available for discussion
on 1 April 2014, nor would any further case reports be completed by that
date. Second Sight are recorded as having provided comments to Angela
on POL’s Factfile, which she was directed to consider before uploading
a revised version on 31 March (at page 4 of (POL00026644)). I do not
think I ever saw a copy of the Factfile document. Angela, who was
working closely with Second Sight throughout this time, was handling this
matter.
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971. The continuing delays were a source of frustration to POL and to others.
I can see that David Oliver provided an update for me and others
following the meeting on 27 March and noted that Second Sight “came
under a lot of pressure over their delivery — primarily from Tony Hooper
and JFSA"” (at page 1 of (POL00027800)). I replied “/ guess not a surprise
but serious and disappointing...l’m concerned that we continue to pay for
sub-standard work, could you think about what opportunities there might
be to contain/carefully fire a shot across their bows?” (at page 1 of
(POL00027800)). I shared the sense of frustration at these ongoing
delays and agreed with David Oliver's suggestion that the team meet to
discuss a way forward. I see that I instructed him to prepare a draft plan
for this meeting, with input from senior managers and directors so that
we could consider options and approaches. As I have commented above,
this was not due to a lack of interest on my part but a desire to allow
those closest and best informed to think through options first, so that
together we could review, evaluate and, if necessary, change or improve.
I realise that this rings hollow now but improvements were made,
including keeping Second Sight in a genuine and not just a "face save”
role. This reflects the division of work between those who were working
closely with Second Sight and the Working Group on a day-to-day basis
and me. I was handling this and many other matters from a higher-level
perspective. As I say here, I added value by iterating and challenging the
options presented to me by those who were more involved in the details
of the work, and who had the best experience to think through options
and draft plans.
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972. Apartial draft thematic report appears to have been provided to POL on
31 March 2014. I can see that David Oliver emailed me (cc’ing in Martin
Edwards, Belinda Crowe, Chris Aujard, and Mark Davies) on that date
attaching a copy (POL00116417) and explaining (POL00116416):
“It is 15 pages long but includes large amounts of direct quotes from our
instruction manuals. As with the individual case reports it contains a
number of unsubstantiated assertions and Post Office’s position is absent
or poorly represented.”
973. David Oliver also sent a copy to a wider group, including Rodric Williams,
Angela Van Den Bogerd, Andy Holt, Lesley Sewell, and Andrew Parsons
of Bond Dickinson. Andrew Parsons' reply was critical of this partial
report (at page 1 of (POL00006552)):
“In general, this report suffers the same problems as SS’ previous reports
—- a lack of detail, evidence and justifications to back up some fairly
Sweeping conclusions. On the positive side, if this is the best points that
SS can raise then there is little in here to concern POL. However, a report
that is this poor will add very little, if anything, to the mediation process and
may in fact confuse matters, making resolution more difficult.”
974. In his email, Andrew Parsons also advised that he had considered
whether the report would be opposed by Fujitsu, Camelot, or BO! but he
did not think there was sufficient substance to concern them. This email
was not sent to me, and I do not recall being told that we had sought or
received legal advice on this issue.
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975. At 15:20 on 1 April 2014, Lord Arbuthnot circulated an update following
the meeting on 24 March to recipients unknown, in which he expressed
concern. He stated that the process was taking “much longer than
anyone wants” and that there was no indication of when “any
investigation might yield results, and what exactly we might be told about
these results”. I can see that Belinda forwarded his email to Sophie
Bialaszewski, Mark Davies, Chris Aujard, and Martin Edwards, although
it does not appear to have been sent directly to me (POL00100491).
976. The Working Group also met on 1 April 2014 and discussed the progress
of the Second Sight reports. I did not attend this meeting but can see
that, subject to resolving the factual comments still outstanding, Second
Sight would take ownership and editorial control of the Part One Report.
Nonetheless, they were to work closely with POL, through Angela, to
complete the report “as soon as possible and certainly before the next
Working Group” (at page 3 of (POL00026633)).
977. At that meeting, it was agreed that the Part Two Report (previously
referred to as the thematic report) was too early in its development to be
discussed by the Working Group “but completion of the Part Two report
should not hold up the Part One report which was a priority (for individual
case reports” (at page 3 of (POL00026633)). The Part Two report was
then put on hold to enable Second Sight to focus on the completion of
the Part One report and case reports.
978. On 11 April 2014, I wrote to Lord Arbuthnot, responding to his letter of 26
March. I reiterated my support for a final report but explained that I did
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not support a further interim report, which I considered had the potential
to damage the integrity of the Mediation Scheme (POL00100671).
979. My understanding is that Second Sight submitted a draft of their Part One
Report on 29 April 2014. I was not included within this correspondence,
but I can see that Andrew Parsons sent an email providing comment on
the report to David Oliver, Angela Van Den Bogerd, Chris Aujard, Belinda
Crowe, Rodric Williams and others at 15:09 on 29 April. He was critical
of the draft Part One Report and considered that it contained opinions
which were at odds with the neutral, factual nature of the Part One Report
and which would be better placed in the thematic report, if they were to
be included at all (at page 1 of (POL00006554)):
“All the opinions are unsupported by either logical reasoning or evidence.
Even if these opinions were set out in the Thematic Report, SS need to
properly justify these views otherwise they should not be permitted to
advance them in any form.”
980. I can see from the minutes of the Project Sparrow Sub-Committee
meeting on 30 April 2014 (which I attended but do not recall) that Belinda
explained that Second Sight had produced only one of the three reports
they had committed to providing for the Working Group meeting on 1 May
and their performance continued to be less than satisfactory. The
Committee considered Chris Aujard’s paper of 28 April and agreed that,
provided that there was a satisfactory outcome from the Deloitte
assurance work, some version of option two would be pursued. That is,
to continue to investigate cases but to bring them in-house, with or
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without the support of an alternative professional provider to oversee the
investigations (at pages 2 to 3 of (POL00006566)).
981. On 1 May 2014, Lord Arbuthnot responded to my letter of 11 April asking
again about the possibility of providing a further interim report
(POL00105466).
982. At a meeting on 6 May 2014, the Working Group appears to have
discussed a copy of Second Sight’s draft Part One Report. The minutes
record POL’s comments on this report including that it contained
inaccuracies and, in other places, opinions, analysis, and conjecture, all
of which should be in the Part Two Report (and, if made, supported by
evidence). The minutes record that the document needed to be clarified
on several issues and Second Sight were then tasked with producing a
revised copy to the Working Group by 9 May 2014 (at pages 1 to 2 of
(POL00043627)). Although I was not present at this meeting, I was aware
of the broad nature of these criticisms from those who were working more
closely on the project.
983. A revised copy of the draft Part One Report appears to have been
considered at a further meeting of the Working Group on 20 May 2014.
A number of amendments were agreed by the Working Group and
Second Sight were tasked with providing a further draft copy by 22 May
2014 (at page 1 of (POL00026659). The final version of the Part One
Report appears to have been released on 25 July 2014 (POL00075178).
984. The Part Two Report was discussed at a Working Group teleconference
on 26 June 2014. I was not in attendance but can see that Second Sight
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are recorded as saying that it should be ready for review by the Working
Group by the week commencing 14 July, although 10 July was “an
unrealistic deadline.” The minutes again record that it was the Working
Group’s expectation that POL have input into this report, certainly insofar
as it lay factual groundwork (at page 7 of (POL00026665)):
“Post Office and SS agreed that the Part Two report must be factually
correct and dialogue should take place between the two parties to ensure
this is the case however SS stated that it is for them as editors of the report
to determine the issues covered in the report.”
985. This editorial control was reiterated at the Working Group meeting on 10
July, although again, the Working Group emphasised that Second Sight
should be working with POL to ensure accuracy. It is recorded in the
minutes that the Working Group agreed that the draft should be shared
with POL in advance to comment on its accuracy and there should be
further discussions between Second Sight and POL on this issue.
Throughout these meetings it is clear that the Working Group were in
agreement that, despite the fundamental editorial control that Second
Sight retained, POL should be given the opportunity to input into, and
comment upon, the report (at page 11 of (POL00026672)). In short, it
appears to have been agreed by all parties to the Working Group that it
was perfectly legitimate — and indeed beneficial — for POL to be involved
in the production of the report to that extent.
986. On 16 July 2014, Lord Arbuthnot provided an update on the progression
of the Scheme noting that it “is progressing, but at a slower pace than
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any of us would have liked” and attaching a note I provided setting out
what progress had been made since the last meeting with MPs (at pages
157 to 158 and 160 of (POL00090358)).
987. On 1 August 2014, Belinda emailed Andrew Parsons, Angela Van Den
Bogerd, Rodric Williams, David Oliver, Jessica Barker and Melanie
Corfield a copy of the draft Part Two Report (POL00022149). She
suggests that Rodric Williams provide a copy to Linklaters, which he
appears to have done later that day (at page 5 of (POL00021814).
988. In his email response of 6 August 2014, Jonathan Swil of Linklaters was
highly critical of the quality of Second Sight’s draft report (he comments
that this report alone would justify terminating their engagement) and
advised that they had strayed beyond their expertise and the terms of
their engagement. He described the report as “well below the standard
we would expect of a firm of ‘experienced accountants’ engaged to
prepare an independent, evidence-based report’ and considered that the
draft report failed to protect both POL and the applicants’ interests (at
pages 2 to 5, POL00021814). Mr Swil advised that POL approach the
Chair of the Working Group to attempt to impose greater control on
Second Sight and suggested that POL “make every effort to have the
report sufficiently amended such that it is ina more acceptable form” (at
page 3 of (POL00021814)).
989. On 6 August 2014, Belinda forwarded this response to Chris, Angela,
and Andrew Parsons explaining that she would like to write to Second
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Sight and provide an initial response with a detailed response to follow,
noting that (at page 1 of (POL00021814)):
“SS have been engaged continuously by Post Office since 2012 and we
would have expected that over that time they would have had sufficient
opportunity to provide a more substantive analysis than contained in the
report...the challenge over lack of facts/evidence/context is one we have
made a number of times. It is taking up considerable time and resource
within Post Office to comment on and provide input into products we are
paying SS to deliver.”
990. On 8 August 2014, Belinda sent Chris Day and Martin Edwards an email
to which she attached a draft of a letter to Second Sight (POL00305575).
Belinda stated in her email that I had asked Chris Day to clear the letter
to be sent to Second Sight if Chris Aujard was not able to do so (Chris
Aujard was on holiday at this time). Belinda also went on to say that I was
"generally supportive of a robust approach" to Second Sight. Although I
had not been copied into Belinda's email on 6 August 2014 (from which
I have quoted above), the concerns Belinda raised about Second Sight's
work reflects what I recall being told by those working closely with
Second Sight (Belinda, Angela Van Den Bogerd, Rodric Williams and
Chris Aujard).. The "robust approach" that Belinda said that I generally
supported was that POL should raise with Second Sight its concerns
about the quality their work and seek to find a way of working with Second
Sight to ensure that their reports were accurate, sufficiently reasoned
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where they drew conclusions and of assistance to applicants and the
mediation process.
991. On 15 August 2014 at 14:19 Gavin Lambert sent me a draft of an update
to the POL Board. . It is clear from this just how many significant issues
the business and I were managing at this time. On the Mediation
Scheme, it is noted that a draft of the Part Two Report had been received
“which we believe is of a very poor quality. It lacks evidence and analysis
and is unhelpful to applicants and Post Office in terms of assisting a
resolution of applications” (at page 2 of (POL00101176)). This reflects
my recollection of what I was told by those working with Second Sight
and I see also accords with the advice being given to POL by its external
lawyers.
992. This update appears to have been sent to the Board by Alwen Lyons on
16 August 2014 (UKGI00002436). The update sets out that POL sent a
letter responding to Second Sight voicing their concerns over the quality
of the work produced. Although I have not seen a draft of this letter, I can
see that Belinda and David Oliver sought assistance from our external
lawyers at both Linklaters (POL00022215; POL00022212;
POL00022213) and Bond Dickinson (POL00021814; POL00022186). I
was not copied into this correspondence and do not think I saw a copy of
this letter, although I was kept updated by Belinda on the broad actions
being undertaken, as is clear from our correspondence on 15 August
2014 (POL00101174).
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993. In that correspondence, Belinda provided me with “a very high level
update” and an offer to discuss. She notes that Sir Anthony would not
permit any further discussion at the Working Group prior to the report
being released to applicants and so, regardless of POL’s dissatisfaction
with its quality, it would be circulated. Against that background, Belinda
stated that she was considering three actions with Chris Day. First,
writing to Second Sight about the quality of their work and reserving
POL's legal position. Second, putting down a marker to the Working
Group that POL does not agree with the Part Two Report or to it being
issued to applicants in its current state. Third, completing POL's "rebuttal"
of the Part Two Report in a format that could go to applicants.
994. In my reply to Belinda, I said that what she told me was not unexpected
and that POL was already preparing what I called our "complementary
report". I stated that we would need to move straight to her third action.
As I said my "single-minded ambition" now that most of the case reports
were in was to move through them as quickly as possible. . As regards
to Belinda's first and second actions, I stated that they looked right and
that we should see what advice was given on those issues I went on to
say two further points (at page 1 of POL00101174)):
“.....am happy for you and Chris to decide what the subsequent action
should be. Keep Mark in the loop; and if you need someone more senior —
Alice...
“My only other thought is as you have always done, that you keep BIS fully
briefed but additionally, try to get a sense of what the minister's view is.”
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995. This interaction reflects my general level of involvement and my concern
that decisions were not taken in isolation from the Board and BIS. It was
important that I had the right people in place and had oversight of their
actions so that I could challenge and / or support. I asked Belinda and
Chris to decide on next actions and to involve Mark Davies. I suggested
that if they needed a more senior view, they should consult Alice. I
advised too that they should keep BIS in the loop. This would indicate
that I was going to be absent during the relevant period and wanted to
be sure that they felt supported, that wider views were considered, and
that stakeholders were in the loop.
996. On 19 August 2014, Belinda and Rodric appear to have received a draft
letter to Second Sight from Mr Swil at Linklaters which he noted “is
drafted in quite strong terms” (at page 1 of (POL00021800)). Belinda sent
this on to David Oliver, Melanie Corfield, and Andrew Parsons. In an
email of 21 August 2014, David Oliver summarised the work being done,
including letters to both Second Sight and Sir Anthony. I can see that a
draft letter was prepared on behalf of Chris (POL00040226) and what
appears to be a subsequent draft in the name of Rodric (POL00040230).
I can see from (POL00305792) that on 20 August 2014, Rodric emailed
Sir Anthony about the Part Two Report. Rodric asked Sir Anthony to
agree a short delay in sending the report to applicants. The purpose of
the delay was to allow time for POL to raise its concerns about the report
and how it intended to respond with the Working Group before the report
was issued. I do not remember whether I was aware of this proposal at
the time.
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997. Again, although I was not copied in correspondence on these letters or
emails, I can see that the team managing the project received
considerable support, advice, and assistance from POL’s internal and
external lawyers, which I consider to be appropriate. For example, on 26
August 2014, Belinda sent a final draft of POL’s letter to Second Sight to
Chris, having received a further draft of this from Mr Swil on 21 August
(POL00022237). Belinda noted in her covering email that “Chris Day and
Paula were (understandably) keen to get something on the record about
costs.” She asked Chris to advise before she proceeded further on this
work.
998. On 29 August 2014, Chris sent an email update to Neil McCausland,
Alasdair Marnoch, Richard Callard and me, providing an overview of the
issues surrounding the Part Two Report and actions undertaken by the
project team in response to it. Chris was critical of the quality and lack of
objectivity in the report and explained that, despite POL’s concerns, the
final version (which I understand to be (POL00030160)) was sent to
applicants on 26 August 2014. Chris explained that POL had written to
the recipients of the report to flag that POL did not endorse or accept its
findings and informed us that a detailed note setting out the areas of
disagreement was being prepared. He highlighted that, despite the report
being confidential, there was a risk that it could be leaked now that it had
been circulated, so Mark Davies and his team had been briefed (at pages
1 to 2 of (POL00116697)).
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999. It subsequently became clear that a copy of the report had been leaked
and I can see that I received an email from Mark on 5 September 2014,
confirming that he had been approached by a journalist who appeared to
have seen a copy. As I say in my response to him, this was “[ujnhelpful
but sadly not surprising” (POL00101301).
1000. Mark wrote to the POL Board at 17:33 on 9 September 2014, explaining
that Radio 4 had broadcast a report on the leak (POL00101325), which
he described as inaccurate. I can see that I clarified this with Mark and
he explained that the reporting had suggested that POL accepted that
there were issues with Horizon, something which the editor subsequently
apologised for: see (POL00101365). Neil McCausland responded at
18:10 asking if there was a way that POL could use the leak and the
damage to reputation it would cause “to stop/alter the process that we
are involved in. It’s a long shot, but it would be great to find a faster/better
way out of Sparrow.” I replied, explaining to Neil that I had met with Chris
that day and that “the team are pushing harder on all aspects, as we
agreed with the Board. That said, this is a useful further challenge Neil —
your point is well made (ie., capitalise the leak), thank you.”
(POL00101325).
1001.On 11 September 2014, the Working Group met and discussed the leak.
Chris proposed that, if it transpired that a professional advisor had leaked
the material, then they should be reported to their professional regulator
and receive no payment. If it transpired that an applicant had leaked it,
their case should be reconsidered and potentially withdrawn from the
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Mediation Scheme. The minutes record that the Working Group agreed
with Chris's proposals. David Oliver confirmed that POL would release
its response to the Part Two Report in time for the meeting next week (at
page 6 of (POL00026680)).
1002.On 15 September 2014, Fujitsu provided a written response to the Part
Two Report authored by Gareth Jenkins, James Davidson, Pete
Newsome, and Mike Harvey. They considered that the report was largely
unevidenced and “constitutes unsubstantiated subjective opinion which,
in our opinion, is without merit or basis” (at page 1 of (POL00029944)).
1003.Chris and Belinda provided an update paper to the POL Board dated 17
September 2014 which addressed the wider situation at that time
(POL00027363). As was always the case, there were numerous issues
which required my and the Board’s attention beyond the Mediation
Scheme. A sense of the breadth of ongoing concerns is provided by the
“Lead Team Update" document prepared for my CEO report to the Board
dated 12 September: these are Mark's notes for me setting out only the
work being done by his team (POL00101364). His team was one of
approximately ten teams, each of which produced similar updates.
1004.POL’s formal response to the Part Two Report of 22 September 2014
was developed over the course of around a month with input from several
sources. I can see that, on 22 August 2014, Belinda sought input from
several different teams which would then be fed into the draft being
prepared by Andrew Pheasant and Andrew Parsons (POL00021853). I
can see that there was extensive correspondence with senior managers
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asking for their input to this work, none of which I was party to (see, for
example, (POL00021853; POL00021773; POL00040246;
POL00021883)).
1005.As above, it was not my role to be involved in the work at this level of
detail: I did not have the day-to-day involvement in the project, nor did I
have the technical or legal expertise to input usefully into this work. This
work was, quite properly, completed by the project director manager,
Belinda, with input from our technical and legal teams. The updates I did
receive were at a much higher level: a representative example of which
would be the update Alwen Lyons sent me on 29 August 2014 in advance
of a briefing call. The actions relating to Project Sparrow were outlined at
a high level, being only some of a very large number of issues which we
needed to cover (POL00101244).
1006.1 understand that POL’s formal Response to the Part Two Report dated
22 September 2014 (POL00002415) was sent out under a covering letter
from Angela (POL00006561 appears to be a draft of this). Alwen updated
the POL Board on 24 September 2014 to confirm that the Response had
been sent (POL00101390). I can see from the minutes of a POL Board
meeting on 25 September 2014 (which I attended) that Belinda and Chris
provided a brief update on the progress of the Mediation Scheme,
although I note that the minutes of this meeting do not confirm whether
the POL Board was provided with a copy of POL’s Response
(POL00021528). The Response is likely to have been uploaded to the
Reading Room.
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102.1. Describe to what extent you were involved in seeking to influence the
final version of Second Sight’s thematic report.
1007.As the above indicates, I was not involved in influencing — or seeking to
influence — the final version of Second Sight’s thematic report. It was not
part of my role as CEO to challenge the report on that level of detail and
I did not seek to do so.
1008. The task of determining which parts of the report should be challenged
and seeking that those changes be made, fell to those working closely
on the project, notably, Belinda Crowe, Angela Van Den Bogerd, and
Chris Aujard. They were assisted in this work by a team from Fujitsu and
POL’s internal and external lawyers, who I can see they consulted
regularly.
1009. From my review of the documents, I would also like to make the following
points:
a. The Working Group directed that POL should have input into the report
because it was recognised that it would be beneficial for them to have this
input. POL was directed to input into the report through the provision of the
Factfile for Second Sight’s Part One Report, through discussions at
Working Group meetings, through meetings with Second Sight, and
through the provision of comments on the draft. It is unclear to me whether
these steps are what the Inquiry is referring to by the phrase “seeking to
influence.” \f these are properly construed as attempts to influence the
report then they seem to me to be appropriate forms of influence, aimed at
producing a better, more accurate, more useful report. That they are
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appropriate is suggested by the fact that they were actions which the Chair
of the Working Group directed POL to undertake.
b. The parts of the report which POL sought to challenge were challenged
because it was the view of those working closely on the project that they
were inaccurate or inappropriate. Although I was not involved in this level
of detail, I can see that the consistent view, shared by POL’s internal and
external legal teams, was that the Second Sight report was of poor quality,
contained inaccuracies, contained opinion which was unsuitable for
inclusion in a neutral factual report, and would be unhelpful both to POL
and to applicants. To the extent that I was aware of the steps being taken
to challenge and refine the report, those steps struck me as appropriate,
given this assessment of the draft report.
c. The amendments made to the report appear to have been agreed by all
parties to the Working Group following open discussions at Working Group
meetings. These meetings were also attended by Sir Anthony Hooper,
Second Sight, and the JFSA and those parties had every opportunity to
object to the suggested amendments. If POL was successful in
“influencing” the content of the final report, that appears to have been
because all parties to the Working Group agreed that it needed to be
changed. That the Working Group retained control over the final report is
clear from the fact that the final report was published despite POL’s
continuing dissatisfaction with its contents.
102.2. Please describe your views at the time on the Second Sight reports and
set out any action you took as a result of the same. Please set out which aspects
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of the reports you did not agree with, providing reasons for the same.
1010. Although I remember reading these reports at the time, I do not now recall my
views of them with precision. I have read them several times since and my
views now are necessarily clouded with hindsight. However, I do recall the
following as areas which stood out to me at the time of reading the reports. In
relation to the Briefing Report Part Two:
a. Paragraphs 1.6 and 1.8 contained unhelpful definitions of scale.
b. Paragraph 3.1 states that POL had accepted the need for a wide
definition of Horizon. However, in including contracts, audit, and
investigative processes without consulting POL, Second Sight had
gone outside of their brief ("scope creep" referred to in Board
minutes). POL had no choice but to accept and then challenge
where needed, through the review process.
c. Paragraph 4.5(h) states, regarding the statement that “(t)hhe
investigation division does NOT enquire into matters where crime is
not suspected”. This was inaccurate because this was not the role
of the investigation division. I understood that cases where crime
was not suspected were investigated elsewhere, usually starting in
Chesterfield. This unqualified statement about such a serious issue
was misleading.
d. Paragraph 5 onwards states that the way the report read was that
some of the issues complained about by SPMs were still current. I
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was aware that POL had resolved several of the issues prior to
engaging Second Sight, for example Lottery Scratch cards.
1011. I did not take any specific actions myself, but those working closely on the
project, assisted by POL’s internal and external lawyers, drafted a formal
Response to Second Sight’s reports.
102.3. Have you views on these reports changed?
1012. My view of these reports today is fundamentally different from what it was then,
having regard to the findings in the Common Issues trial, the Horizon Issues
trial, the judgment of the Court of Appeal criminal division and having listened
to the evidence in the Inquiry to date.
1013. I am in no doubt now that the Second Sight report was in principle right and
POL's focus in its Response was wrong. The work undertaken by Second Sight
formed the basis for the SPMs to be able to bring the Group Litigation. Without
this they would not have been able to do so.
1014. I fully accept the findings of Fraser J in respect of BEDs and, insofar as POL’s
Response conflicts with those findings, I accept that it was incorrect. However,
at the time, POL’s Response matched my understanding and what I was being
told by those I relied upon. I can also see from the documents that it was
supported by the advice from POL’s internal and external lawyers. I accept that
the GLO Proceedings vindicated, for example, what Second Sight said about
the nature of the contract but, at the time, POL was receiving legal advice which
forcefully rejected their approach to this so I can understand why POL
responded as it did.
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102.4. Explain to what extent you, or anyone else in senior management, sought
to enquire into the potential effects of the Falkirk bug outside of the Castleton
and Misra branches.
1015. I do not recall directing any such enquiry myself and I do not know whether
anyone else carried out such an enquiry during my time at POL. I first became
aware of the Falkirk bug in 2013, when I was informed that the bug had
occurred many years previously and had been fixed.
POL's change in approach to the Mediation Scheme
103. Please consider POL00027369 (Chris Aujard and Mark Davies’ report on the
Mediation Scheme dated 3 June 2014), UKGI00002392 (Chris Aujard’s update
report on the Mediation Scheme dated 18 June 2014), UKGI00002397 (Chris
Aujard’s July Update Paper dated 7 July 2014) and POL00021528 (minutes of
POL Board meeting on 25 September 2014).
103.1 Please describe POL’s approach to the SPMs’ complaints relating to
Horizon and the Mediation Scheme thereafter and your involvement with the
same. Please explain to what extent you communicated information about such
complaints and POL’s response to the same to the Board, ShEx/UKGI or BEIS.
The following paragraphs are not intended to limit your response to this request.
103.2 Please explain the basis on which it was thought appropriate not to
continue the Mediation Scheme in the form that it was initially designed.
1016. I have already set out POL’s change in approach to the Mediation Scheme and
explained why maintaining the status quo had become increasingly
unpalatable. The reasons for this had been articulated by Belinda Crowe as
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early as February 2014 (at pages 12 to 15 of (POL00092172)) and only
became more pressing as time went on. In outline: the Mediation Scheme was
ever more delayed and costly, we had doubts about Second Sight’s capacity
to deliver the work that progress depended upon, there was a consistent gap
between POL’s valuation of the claims and what the applicants expected to
recover (the “expectation gap”), and the ongoing management of the Mediation
Scheme was a significant drain on POL’s resources including in respect of
senior management.
1017. These were longstanding concerns. I can see that the note of my meeting with
Sir Anthony on 23 February 2014 records that we discussed restructuring the
Scheme but he advised against this until POL had seen more of Second Sight’s
work (at pages 1 to 2 of (POL00100335)):
“The various ways forward were discussed. These included a) terminating
the scheme entirely and allowing SPMR's to pursue their legal remedies
through the courts and/or paying out compensation to applicants in a
formulaic manner (as per the email that PV had received from the A
member of the Board earlier in the day) ; b) restructuring the scheme such
that it is looked more like a more like a [sic] mediation scheme (with nothing
being resolved until all the applicants CQRs had been received- this would
have the effect of pushing out any settlement payments for many months);
c) augmenting SS's resources with resources from one of the big
accountancy firms, either by displacing them in their investigative role, or
by placing resource alongside them; and d) reworking the process in the
scheme and streamlining it.
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“TH's strong contention was that POL should take no precipitous action
until such time as SS had produced, say, 5 reports, and until we had seen
their thematic report. He noted the adverse PR consequences of
terminating the scheme and also offered to make himself available to talk
to the Board to explain why he considered this approach appropriate,
should that be necessary or desirable.”
1018. Progress on the cases continued to be very slow and the work produced by
Second Sight was, in the view of those working on the project, of poor quality.
However, we were conscious that any decision to change our approach would
be significant and could hinder our efforts to resolve the underlying SPM
complaints or alienate stakeholders, including MPs. As was noted in the
options paper prepared for the inaugural meeting of the Project Sparrow Sub-
Committee on 9 April 2014 (discussed above), there was “no right answer’ but
the “most appropriate option for the business is one which ‘does the right thing
by SPMRs” (at page 9 of (POL00116439)). Finding a satisfactory resolution to
the claims themselves remained a central concern: the fact that the Scheme
was not achieving this was one reason it needed to change.
1019. Chris Aujard's and Mark Davies’ options paper dated 3 June 2014
(POL00027369) was prepared for the Sub-Committee meeting on 6 June. It
discussed three options in detail.
a. The paper rejected Option 1 (“continuing with the Scheme as
currently configured and managed”). This would cost too much in
terms of time and money and could “end up with applicants and
stakeholders being more dissatisfied at the end of the Scheme
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(having had their expectations raised as a result of the value
advisors are putting on their claims).”
b. Option 2 (“continuing with the Scheme but seeking to refine its work
within the existing Terms of Reference”) was acceptable and should
be considered in detail. Although it “could place strain on the
Working Group and may lead to one or more parties withdrawing
from the Group”, it “could, we believe, lead to the delivery of a
Scheme which provides greater value for the business while still
allowing for the prospect of a full investigation of all applicants
complaints under independent oversight.”
c. Option 3 was the Sub-Committee’s preferred option (“completing the
Post Office investigation in each case and moving the governance
and management of the Scheme in-house”). It resulted in the
greatest cost saving, and would allow the Post Office to control the
risks, such as adverse PR. It would require a commitment that POL
would “investigate all cases and disclose the findings to the
applicant and would mediate a substantial (but significantly reduced)
number of cases.”
1020. On 3 June 2014, Alice sent an email encouraging the Sub-Committee to
consider appointing alternative investigators, noting they might be better and
faster than Second Sight even if they were not cheaper (POL00116581).
1021. The Sub-Committee met on 6 June 2014 (POL00006571). The Sub-Committee
preferred Option 3 but requested legal advice on the risk of judicial review (at
page 4 of (POL00027153)). Paragraph 6.4 of their recommendation paper
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noted that "it would be imprudent to announce Option 3 in recess". Making the
announcement during the Parliamentary recess would have been completely
the wrong thing to do. It was important that POL announced this important
change at a time when it would get attention, so there could be no accusation
of trying to cover things up.
1022. Before the POL Board meeting on 10 June, Richard Callard expressed a
preference, as the Government NED, for Option 3 (UKGI00002358).
1023. At the meeting on 10 June, the POL Board unanimously preferred Option 2:
continuing the Scheme but seeking to refine its work within the existing terms
of reference. The POL Board asked that the business (1) consider the best way
to implement that course of action; (2) take legal advice on the risks inherent
with the changes proposed; and (3) come back to the POL Board with a paper
explaining the recommended next steps (POL00021526).
1024. Chris wrote an Update Paper dated 18 June 2014 which, amongst other things,
confirmed that the risk of judicial review was low (UKGI00002392).The minutes
of the POL Board meeting on 25 September 2014 (POL00021528) record that
Chris and Belinda reported on this matter but I have been unable to locate a
written update in the Inquiry disclosure.
1025. Drawing together all of the factors set out above, it was thought appropriate not
to continue the Mediation Scheme in the form in which it was initially designed
because:
i. POL wanted to achieve a case-by-case investigation of the complaints in
a reasonable time and at a proportionate cost;
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ii. I Second Sight’s work was of poor quality and delayed, suggesting they
lacked the capacity to deliver this work;
iii. I There remained a significant gap between some SPMs expectation of
sizeable financial compensation and POL’s view, based on the Linklaters’
advice, that it had little exposure generally and none for consequential loss;
iv. I That continuing with the Mediation Scheme, in its initial form in light of
POL’s view of the merits of many of the individual cases, could lead to
greater dissatisfaction than making significant changes to the Mediation
Scheme. There was a sense that more cases could be solved in a BAU
process; that some should have been solved via ‘BAU’ in the past. It was
thought that what was needed was investigation for all followed by a
thoughtful and structured BAU conversation for some and mediation for
others.
v. POL was reluctant to mediate cases with criminal convictions because
there was a limit to what could be achieved; but POL would re-review and
disclose any matters as per POL’s disclosure obligations.
vi. POL had sufficient confidence that POL’s case reviewers would look at
cases impartially; despite the tensions, Second Sight had complimented
the team on the quality of their work.
vii. POL had carried out a significant number of investigations by this stage,
and two years of reviewing cases had found nothing.
104, Please explain your understanding of the reason for Susan Crichton's
departure from POL.
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1026. Whilst I cannot recall all of the details surrounding Susan Crichton's departure,
my review of contemporaneous documents disclosed by the Inquiry has helped
to refresh some of my memory of events taking place at that time.
1027. On 1 July 2013, the POL Board held a meeting by conference call
(POL00021515). I recall that the POL Board, led by the Chair, was critical of
the way in which the business had managed Second Sight's work. As POL's
GC, Susan was responsible for this. She was sorry that it had turned out this
way and was concemed that the POL Board was unhappy with her oversight
and management of the work.
1028. I believe that Susan offered me her resignation between the date of the POL
Board meeting on 1 July 2013 and 11 July 2013.
1029. From memory, the POL Board's reaction at the time of the Interim Report led
to Susan's decision to resign. My recollection is that she felt she had let the
business down. She had been the lead director for the Second Sight work and
she felt responsible for that. Second Sight were about to publish a report that
had the potential to create serious issues for POL: a report that was critical,
lacking evidence, based on opinion, about areas in which its authors were not
experts.
1030. My recollection is that whilst I agreed with the Board that Susan may not have
managed Second Sight in the most effective way with as much oversight as
was required, I did not think it was necessary for her to resign. I believe my
view at the time was that with extra support from me and with more resources,
this was an opportunity for Susan and for the business to learn and to prioritise
resolving the SPM cases through good project management.
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1031. I can see that I was due to meet Susan for a face-to-face meeting on 12 July
2013 (at page 4 of (POL00099223)). At 11:33 on 13 July, Alice Perkins emailed
to ask me to let her know what Susan had decided to do or whether she was
reflecting over the weekend. I recall that I persuaded Susan that I thought she
could turn things around with greater personal oversight. I recall suggesting
that she talk it through with someone she trusted (I believe we discussed her
speaking to a partner at Bond Dickinson whom we both knew and rated, I think
that may have been Simon Richardson). My email to Alice on 14 July 2013 at
10:38 (at page 1 of (POL00099223)) suggests Susan did share her concerns
and talk things through with a lawyer, who told her that “she should get on with
itl”.
1032. I confirmed in the email to Alice that Susan had decided to stay (at page 1 of
(POL00099223)). I noted that I had also mentioned to Susan we might bring
forward a planned change to her role to remove HR duties that she had
previously assumed, so that she could concentrate on and prioritise the
Second Sight work.
1033. Alice's response to me on 14 July 2013 (14:50) (at page 1 of (POL00099223))
reflects that she wanted to discuss this further with me in our next one-to-one
meeting the following day. My recollection is there was some tension between
Alice and Susan over the handling of Second Sight. Alice wanted to test my
view that Susan was up to doing what was required to manage Second Sight's
work more efficiently.
1034. The tension in the relationship between Alice and Susan can be seen from the
email that I sent to Alice on 14 July (16:00) (at page 1 of (POL00099223)) in
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which I noted: “/ agree the two of you must restore the relationship; if not, it is
not tenable for Susan to continue with this...Susan shared her feelings with me
in confidence at a time she was feeling very low about ‘letting this happen to
the business she worked for”.
1035. Two days later, without notice, Alice decided to stand Susan down from a POL
Board slot on 16 July 2013. Susan had been due to brief the POL Board on the
Second Sight work. I explained to Alice that Susan would find it hard to take,
as she had prepared her update for the POL Board; plus, there would
undoubtedly be questions from the POL Board, which I may not be able to
answer.
1036. I can see from an email which Alwen Lyons sent to me later in the day on 16
July (POL00118494) that she told me she had spoken to Susan on the way
over to a meeting that day at Bond Dickinson. Alwen noted in her email to me:
“Spoke to Susan on the way over. She is very cross about not being invited
into the Board today and not being able to explain the process going
forward, including the criminal cases.
I told her that it wasn't an easy session and that the Board were concerned
about the way SS had been managed.
She asked whether Alice had explained the background to their
appointment, I didn’t comment, but Susan is right that Alice was involved
in the choice not to go with one of the Big 4 and that it had to be an
independent report.
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I didn’t feel I could add any more Paula, so I didn't, but I think Susan will
phone you tonight or tomorrow as she wants to understand her position
following the Board meeting.”
1037. From a file note I produced a few days later (POL00118496) I am reminded
that Susan and I agreed to have a face-to-face meeting on 24 July 2013 to
ensure we had time to revisit matters, and so that I could debrief her on the
POL Board discussion. My file note records that the purpose of meeting with
Susan was to make clear that she was accountable for the Second Sight work
going forwards and I had asked Alasdair Marnoch to exercise a degree of
oversight, since he was also the Chair of ARC. I explained to Susan that
following two or three conversations with Alice, who whilst “still very concerned
about the whole issue, was more reassured that we were taking the right
approach, which included Susan seeing this through.” I suggested that Susan
should also meet Alice and she confirmed that she had already fixed a meeting
with her for 31 July 2013.
1038. I recorded in my file note that Susan was “initially frosty in her manner” and I
thought she was “feeling the pressure”. From memory, I had to work hard to
re-engage her; but I think we got there. I was concerned that Susan needed to
be supported, which I was happy to do provided she remained committed and
was prepared to do the work required. I seem to recall that we agreed to see
how things went and I hoped that I had provided Susan with some reassurance
during what was a very difficult situation for her and for all involved.
1039. As I was about to go on annual leave, I noted that I would review the position
again in September.
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1040. I have been shown an email from Alice to POL Board members and others,
including Susan, on 31 July 2013, which was while I was on annual leave
(POL00116114). The email records that Alice and Susan had met that day to
discuss a note for the POL Board on Horizon (which I assume was prepared
by Susan). Alice noted three points that she wanted to put on the record — in
relation to her thoughts about the way ahead.
1041. The first point which Alice made was that she wanted to cap Second Sight's
involvement at reviewing the 47 cases which they were already to review. She
added that it was “extremely important that we cap their involvement at that”
and that "the moment they are involved in additional cases beyond these, we
will have lost the ability to end the relationship with them — an outcome which I
do not want to have to contemplate.” The second point concerned Second
Sight's costs. Alice was keen to pin down and cap their costs. Alice said that
she understood that Susan has told them that she (Susan) was "expecting
them to do the extra work pro bono but no deal has been done.” The third point
concerned the process for appointing the independent Chair of the working
party. Alice ended by noting that she had asked Susan to keep the POL Board
fully informed of future developments and to alert her “to anything which she is
unable to resolve which could get in the way of getting the job done in the way
it needs to be done. She will be seeking conversations about all this with all the
NEDs on an individual basis and will be in touch with you to arrange these.”
1042. On 1 August 2013, Alice sent my PA the file note of her meeting with Susan on
31 July (at page 2 of (POL00108058)). I have not yet been able to locate a
copy of this file note in the Inquiry's disclosure to date. Alice notes:
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“Theresa,
“Here is the document to which I was referring.
“I should be grateful if you could make sure Paula sees it on her return (but
no need for her to see during her holiday).
“Please can you make sure that no-one else sees it?”
1043. Without sight of Alice's file note, I am afraid I cannot recall its contents. It is
clear from an email that I sent on 2 August 2013 (16:52) to Alice that I had, by
this time, reviewed her note (at page 1 of (POL00108058)). I said the note
made me sad but did not come as a surprise.
1044. My email suggests I was sympathetic to Alice's views. Alice noted "how much
Susan sees as ‘beyond her control”. I replied that this was for me to deal with
on my return.
1045. Alice responded, also on 2 August (17:36) (at page 1 of (POL00108058)),
commenting on Susan's performance in the following terms and presumably
still referring to her file note:
“Yes. It is the fact that she sees so much as beyond her control which made
me most worried. It is her alibi. That is why I pushed back and also why I
asked her to flag up if there was anything she needed which she couldn't
get.
I am concerned that she won't cap SS off at 47 because it's too difficult.
And am also concerned about their costs and why we haven't nailed those.
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So / am sorry but I think you are right.”
1046. On my return from annual leave, which was around 5 August 2013, I recall that
Susan had been very unhappy that, while I had been away, Alice had set in
motion a 'Lessons Learned’ review into how the business had managed the
last year’s work with Second Sight. Susan regarded this as a further example
of criticism of her.
1047. I cannot recall how matters developed after this in August 2013.
1048. In an email to me on 7 September 2013, Alasdair suggested that Alice and I
meet with him to close off the Second Sight review discussions and agree the
way forward, he added: “/n the meanwhile I hope all goes ok with Susan on
Monday.” (at page 1 of (POL00116124)). My response on the same day noted:
“Alasdair, thanks it won't be easy....” (at page 1 of (POL00116124)). It appears
that I was due to have what I expected would be a difficult conversation with
Susan the following week. It seems that by this stage, I was going into the
meeting with a view to Susan leaving. Without sight of further material relating
to this time period, I cannot remember what had occurred, which seems to have
resulted in my expectation that Susan would agree to leave the business.
1049. I have no recollection of my meeting with Susan, which based on the content
of the emails above, must have been had at some point between 7 and 11
September. However, we must have agreed that Susan would leave and that
we would need to finalise her exit terms.
1050. I can see that on 24 and 25 September 2013, Chris Day, Alwen and I approved
and signed the terms of Susan's “RemCo Severance Request” (at page 3 of
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(POL00104258)). I can see from the terms of the agreement, signed by Fay
Healey on 24 September 2013, that Susan would continue with her normal
duties until 30 October 2013, after which time, she would be placed on garden
leave from 1 November 2013 until the date of termination of her employment
on 30 November 2013 (at page 4 of (POL00104258)).
1051. Whilst some of our conversations were difficult - especially for Susan, which
distressed me too, I was sorry to see Susan leave POL. We had shared similar
ambitions over the Mediation Scheme and I respected her as a colleague.
105. Please consider LCAS0001071 (letter from Greg Knight MP to you dated 14
November 2014). Why did the Post Office initially refuse to mediate cases such
as Mr Castleton's, which did not involve a criminal conviction?
1052. On 14 November 2014, the Rt Hon Sir Greg Knight MP wrote to me about Lee
Castleton (LCAS0001071). The letter stated that Mr Castleton was Sir Greg’s
constituent, and inquired as to why POL was not willing to put Mr Castleton’s
case and other similar cases, forward to mediation, despite Second Sight’s
recommendation that this should be take place.
1053. The letter was acknowledged by a letter dated 20 November 2014 (at page 2
of (POL00119548)).
1054. On 13 February 2015, Sir Greg wrote to me again, noting that he had not
received a substantive response to his letter of 14 November 2014 (at page 1
of (POL00119548)). In the following paragraphs, I explain the work which took
place in response to the 14 November 2014 letter.
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1055. After the 20 November 2014 letter of acknowledgment, there followed a series
of internal discussions. Of note, Gavin Lambert sent me an email on 25
November 2014, in which he noted Sir Anthony Hooper's opinion that the
Working Group was to decide whether any individual case should be mediated
(POL00101581). The Working Group's decision would be ‘informed but not
bound” by the recommendations of Second Sight. In the view of those advising
me, this was “reasonably clear from the Scheme documentation, and certainly
clear from the operation of the Scheme in practice”.
1056. In early December 2014, draft responses to Sir Greg were circulated by email.
The response that was sent did not come from me, but was similar in content
to the early drafts. In preparing this witness statement I have seen, for example,
an undated draft (POL00116840) and a draft dated 4 December 2014
(POL00109724). I am not sure when each of those versions of the draft was
circulated and by whom.
1057. I understand that a response was in fact sent to Sir Greg on 15 December 2014
by Angela Van Den Bogerd (LCAS0000979). I can see (albeit that it is redacted
on the version disclosed to me) that Angela signed this version, and it is on
headed paper. Accordingly, the clear inference is that it was sent.
1058. The 15 December response includes this:
“I would like to clarify that Post Office has never indicated that it would be
willing to mediate in all cases where Second Sight recommended
mediation. I can also confirm that Post Office has had no direct contact with
Mr Castleton since he entered the Scheme either about mediation or any
other matter.”
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1059. Angela also said that she had forwarded Sir Greg’s letter to Sir Anthony Hooper
who may wish to respond. I do not know if Sir Anthony did so.
1060. I was not involved in deciding whether any case should go to mediation. I had
no role in that process, formally or otherwise. Neither was I ever asked in any
ad hoc way to express a view on whether Mr Castleton, or any other person,
should be the subject of a case proceeding to mediation.
1061. The Project Sparrow Sub-Committee did not consider individual cases, nor
decide whether those cases should progress to mediation. When individual
cases did come up in discussion, they were generally anonymised (e.g. M001
for Mr Castleton’s case). Indeed, my recollection is that this was the case
generally when the Sub-Committee or the POL Board discussed legal cases
which concerned highly personal information.
1062. Specifically with regard to Mr Castleton, in preparing this witness statement I
have seen a draft letter which was to be sent to him in February 2015
(POL00077426) which was circulated by email amongst members of the
Working Group on 2 February 2015 (POL00077425). The draft letter includes
the following:
“As you will know, Second Sight concluded that the question of who should
bear responsibility for losses incurred in your branch was suitable for
mediation and the Scheme’s Working Group then recommended that this
issue be mediated.
I regret to inform you that, after careful consideration, Post Office takes a
different view and has decided against proceeding to mediation...
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Post Office considers that the question of responsibility of the losses
suffered in your branch has been conclusively determined through the High
Court judgment of His Honour Richard Havery QC on 22 January 2007. It
remains Post Office’s view that his determination remains entirely correct
and nothing in our own re-investigation, nor in the Review of your case by
Second Sight, represents a challenge to that position.”
1063. Patrick Bourke noted in his email that “we are refusing to mediate 3 cases
which the last Working Group deemed suitable for mediation”, two of which
involved an applicant with a criminal conviction (the exception being Mr
Castleton). In preparing this witness statement, I have not yet been able to
identify a final version of this letter being sent.
106. Please consider POL00101477 (email from Lord Arbuthnot to Alice Perkins
on 23 October 2014), POL00101484 (briefing on call with Lord Arbuthnot) and
POL00117030 (note of call between you and James Arbuthnot on 28 October
2014).
106.1 Please explain what your view was of Lord Arbuthnot's stance in relation
to the Mediation Scheme. Did you think it was justified?
1064. Lord Arbuthnot sent an email to Alice Perkins on 23 October 2014
(POL00101477). He said that he was “becoming increasingly worried about
how the sub-Postmasters mediation process is working” and that he perceived
that POL was treating the matter like a ‘legal battlefield”. He said this had the
potential “to call... into question” whether POL would carry through the
Mediation Scheme in good faith. Lord Arbuthnot said that he intended to
accede to requests to talk to the media, but wished to speak with me first.
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1065. On 26 October 2014, a briefing note was drafted for me by Patrick Bourke in
advance of my call with Lord Arbuthnot (POL00101484).
1066. I had a telephone call with Lord Arbuthnot on 28 October 2014 at 15:30. A note
was taken summarising the call (POL00117030). Lord Arbuthnot told me that
he could not currently support the Mediation Scheme for various reasons.
These included reports that POL was not prepared to enter into mediation, and
his concern that POL was taking an overly legalistic approach to the Mediation
Scheme.
1067. I cannot now recall this conversation. From the documents I have seen, Lord
Arbuthnot was clearly justified in raising these concerns. However, his position
was in many ways at odds with the information and advice which I had received
from my colleagues at POL.
106.2 Did you agree with the following statement in your briefing: “PO is entitled
to take the view that in the absence of evidence to the contrary, the presumption
must be that the system is working as it ought to. To start from _a contrary
position, whereby PO must prove the system’s reliability, goes against common
sense and established practice. Bluntly, it is not PO’s job to prove that Horizon
did_not_cause the losses incurred by Applicants to the Scheme, but for
Applicants to provide evidence that it did”? If so, please address the following:
106.2.1 How that position was justified in circumstances where POL were aware
of BEDs in the Horizon System?
106.2.2 How were SPMs supposed to provide evidence of system faults?
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1068. I have been asked by the Inquiry to comment specifically on paragraph 9 of the
briefing note (POL00101484).
1069. I have no recollection now of how I understood this paragraph at the time.
However, I am able to describe how I believe I would have reacted. In short, I
would have treated this entire document (including paragraph 9) as advice from
my team and trusted that factual matters were accurately described. Paragraph
9 is framed in a very “matter of fact’ way and I would have accepted that. I note
now that there is a strong correlation between paragraph 9 and the advice
which Linklaters had given POL on 20 March 2014, which states at paragraph
1.8:
“In summary, we think that, absent proof that Horizon is malfunctioning (either
generally or in the specific case) the Post Office has a right to recover losses
from SPMRs, the SPMRs have no right to compensation for such losses and
the circumstances in which there will be a consequential loss claim are limited
to those in which inadequate notice of termination was given, will depend on
their facts and should be limited.”
1070. Notwithstanding that I would have taken paragraph 9 in my briefing note as
accurate, that does not mean that I would have agreed with the phrasing, nor
would I have adopted that phrasing or tone of voice when speaking to Lord
Arbuthnot or publicly. Paragraph 9 is in the context of a briefing note: it is blunt
(paragraph 9 actually using the word “bluntly” to describe the advice), factual
and precise.
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1071. More generally, the briefing note (POL00101484) contained various
recommendations for points I should make on the telephone call including that
I should:
a. Reassert POL’s support for the original aims of the Mediation Scheme;
b. Firmly rebut the charge of lack of good faith, underlining the unusual
lengths to which POL has gone to respond to the concerns of the JFSA,
MPs and Applicants;
c. Place on record POL’s own concerns including over the effect of the
JFSA's refusal to participate fully in the business of the Working Group;
and
d. Emphasise that POL remains committed to a thorough investigation but
should not have to accept criticism where it is not at fault.
1072. I have been asked to comment whether a presumption that Horizon was
working as it should was appropriate in circumstances where POL was aware
of BEDs in the Horizon system. I do not recall focussing on this part of the
briefing. It was my belief at the time that POL was thoroughly investigating
every case in the Mediation Scheme. The information I was given (and which
was set out in paragraphs 6 and 8 of the briefing (POL0010484)) was that POL
had now completed its investigations into 80 of the cases in the Mediation
Scheme and that in not one of the cases investigated so far had a fault with the
Horizon system been established. Paragraph 8 of the briefing went on to say
that POL was not complacent about this issue and would apply the same rigour
in investigating the remaining cases as it had done to date. I knew about the
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Suspense Account bug and the Receipts & Payments Mismatch bug by this
stage and about the Legacy Horizon Falkirk bug (fixed I believed, nearly a
decade earlier). My understanding was that they had not affected any
Mediation Scheme cases, and that they had been identified by POL and Fujitsu
and rectified without any loss to the affected SPMs. I accept that this
information was incorrect and understated the defects in the Horizon system.
However, my understanding at the time was that the results of the investigation
indicated that the Horizon system was working properly.
1073. I have also been asked to comment on how SPMs in the Mediation Scheme
could have been expected to provide evidence of system faults. Although I was
not close to the details of how the ongoing investigation were conducted, I
understood that POL obtained and analysed the transaction records and liaised
with Fujitsu to understand any shortfalls or transaction anomalies reported by
SPMs in the Mediation Scheme. I can see this way of working was set out in a
briefing on the Interim Report I was sent on 2 July 2013: see paragraph 4 on
page 1 and Annex 1 at page 7 of (POL00113369). I believed that, in this way,
any system defect which affected a SPM in the Mediation Scheme would be
identified.
107. Please consider POL00022610 (instructions to counsel) and POL00022611
(note titled Post Office Complaints and Mediation Scheme dated 24 November
2014)
107.1 Please explain your recollection of the background to these instructions
and your involvement with the same
107.2 Please explain the basis for POL's instruction to counsel that "Candidly.
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almost all cases point pretty conclusively (or beyond any reasonable doubt) to
the complacency, incompetence and / or dishonesty of Applicants as the cause
of the losses incurred in the relevant post offices". On reflection do you think
this position could be justified?
107.3 Please describe the advice POL received from leading counsel further to
these instructions
108. Please consider POL00101578 (statement from Lord Arbuthnot),
POL00101586 (email chain between 18 — 20 November 2014), POL00026741
(email from Lord Arbuthnot dated 26 November 2014), POL00101596 (letter from
you to Lord Arbuthnot dated 28 November 2014), POL00101738 (email exchange
between you and Mark Davies on 9 December 2014), POL00101700 (letter from
Lord Arbuthnot to you dated 8 December 2014) and POL00101690 (letter from
Lord Arbuthnot to you dated 22 January 2015).
108.1 Please describe the meeting(s) on 17 November 2014 and your concerns
arising from the same.
108.2 Please expand on “this is just to confirm what I said last night — that I
want a board sub- ctte to debate next steps”. What issues did you envisage the
sub-committee debating?
108.3 Please explain the process for drafting your letter of 28 November 2014
and describe any legal advice you received on the same. What was Post Office’s
opposition to a presumption in favour of mediation at this stage?
108.4 On reflection, do you consider that Lord Arbuthnot and other MPs’
concerns about POL’s approach to the Mediation Scheme was justified?
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108.5 Please describe the action you and others in senior management took in
relation to the Mediation Scheme following Lord Arbuthnot’s letter of 8
December 2014.
109. Please consider POL00116824 (note titled Update for Board/Alice) and
POL00021530 (minutes of POL Board meeting on 26 November 2014). Please
describe the update you gave to the Board in respect of Project Sparrow on 26
November 2014.
1074. I have been asked by the Inquiry to explain the background to the instructions
to Leading Counsel to advise in conference which were prepared in late
November 2014 (POL00022610). Those instructions were headed “In the
matter of the Post Office Limited Complaints and Mediation Scheme”. On 25
September 2014, the POL Board met. Page seven of the minutes records the
update on Project Sparrow (POL00021528). Chris Aujard and Belinda Crowe
joined the meeting for this part of the discussion. It is noted at section (d) that:
“The Board was encouraged by the recent progress and the fact that all
the Post Office investigations should be finished by December. The Board
members understood that the next few weeks could be controversial as the
Business was about to refuse to put cases involving criminal convictions
into mediation.”
1075. On 14 October 2014, I wrote to Jo Swinson MP “regarding the recent media
attention relating to the Mediation Scheme” (POL00109487). I enclosed with
that letter “a note prepared by Post Office’s General Counsel, our lead member
on the Working Group” in an effort to provide “further background as well as a
brief update on the Scheme”.
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1076. On 17 October 2014, Lord Arbuthnot wrote to me, inviting me to meet with him,
Oliver Letwin MP, Mike Wood MP and Andrew Bridgen MP to discuss progress
of the Mediation Scheme (POL00105464). He proposed four possible dates,
between 27 October and 17 November 2014. The meeting did subsequently
take place on 17 November 2014.
1077. This letter was just less than a week before Lord Arbuthnot wrote to Alice
Perkins by email expressing his increasing concern about how the Mediation
Scheme was working (POL00116734).
1078. On 17 November 2014, I met with Lord Arbuthnot, Oliver Letwin MP, Andrew
Bridgen MP, Mike Wood MP and Alan Bates. The meeting was also attended
by some of my colleagues, including Angela Van Den Bogerd. Angela took a
significant role in addressing the MPs’ queries. See the note of the meeting
entitled "Update for Board/Alice" speaking note (POL00116824).
1079. I have seen an email sent on Lord Arbuthnot's behalf to his parliamentary
colleagues in which he summarised the 17 November 2014 meeting. He
described the meeting as "not an easy meeting from anyone’s point of view”.
MPs had expressed concerns about POL challenging too many issues before
cases went to mediation. He proposed that there should be a presumption in
favour of mediation, where mediation had been recommended by Second
Sight. Lord Arbuthnot recorded that I had said that I would take that proposal
to the POL Board and give it consideration.
1080. Lord Arbuthnot was right that it was “not an easy meeting”. Although I cannot
now, nine years later, recall the detail of the discussion, I do continue to recall
clearly how I felt during and after the meeting. I was accused of things, by the
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MPs, which were simply not true. I do recall that I remained professional and
ensured I continued to act in the way in which I wanted my POL colleagues,
who were present, to act.
1081. Between 18 November and 20 November 2014, I exchanged emails with Mark
Davies and Alwen Lyons (POL00101578) with the subject line “Sparrow sub-
ctte”. In my first email, I said:
“Hi this is just to confirm what I said last night — that I want a board sub-ctte
to debate next steps. I am about to flag that to Alice.”
1082. I do not recall now with confidence which issues I wanted to be debated.
However, I believe it would have been two matters. First, given how challenging
the MPs had been about how POL was dealing with issues and how involved
and complex those issues were, I wanted a conversation with my team, with
the Board Sub-Committee. Second, I believe I wanted the Sub-Committee to
meet, to discuss the proposal of Oliver Letwin MP (for a presumption in favour
of POL following any recommendation made by Second Sight as to which
cases should go to mediation) and to ensure that no angle was missed.
1083. Alwen responded to say that Alice did not want to call a Sparrow Sub-
Committee next week “as she thinks the process is working and we should
continue as is”, however she noted that Sparrow was on the ExCo agenda for
20 November 2014.
1084. I noted in response that “! hadn’t anticipated we would change our approach”
but that nonetheless I had wanted to have that conversation with the POL
Board. My email exchange with Alwen continued the following day with me
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saying ‘presumably we need to go back to James et al with a decision that the
Board wants to continue the approach we have. le. Not adopt Oliver's
proposition of a general undertaking that (with a few exceptions), we would
mediate if SS recommended it. So we do need a discussion.”
1085. I was absent from the 20 November 2014 ExCo meeting. Mark reported the
outcome to me on 20 November 2014 in the email chain at (POL00101578).
He reported that there had been “a frank and detailed discussion” about Sir
Oliver's proposal. The ExCo had concluded “that we should resist the
suggestion from the MPs on the grounds that it would effectively render the
working group meaningless, and put us in a very difficult position legally in
relation to cases which have been through the courts.”
1086. Mark went on to report:
“We came to the view that in terms of the Board, it would make sense for
you to refer to the meeting with MPs as you present your CEO report, and
to report the nature of the MPs’ proposal, but to say that having consulted
with Exco and relevant colleagues you do not intend to change course.
Assuming this is not challenged by the Board, we then recommend a letter
to the MPs which sets out our position and which stays true to the
confidentiality of the Scheme but which also sets out our over-arching
position — that having set up the inquiry and the Scheme — and paid for
both — we are determined to see it through. We will further say that as the
MPs made much of the media requests they had received, we would be
content for them to release the letter to the media. This allows us a vehicle
to get our position out there, strongly.”
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1087. In preparing this witness statement, as mentioned above, I have seen a two-
page document headed “Update for Board/Alice”, which I understand to be
dated 25 November 2014 (POL00116824). It is a speaking note for me to use
when updating the POL Board about the 17 November meeting. Looking at an
email chain to which it was attached, it appears that the note was written by
Mark (POL00116815). I have no reason to question its accuracy.
1088. The Inquiry has disclosed two versions of the speaking note. Neither document
has a date on its face, so it is not entirely clear which came first, or who made
changes. The second version is at (POL00116816). I think it is likely that the
changes were made by Gavin Lambert, and that the version which I used was
(POL00116824).
1089. In respect of the proposal that we should have a presumption that Second
Sight’s recommendations be adopted, the speaking note included this:
“. the team has considered the position, and has come to the conclusion
that we should not agree to the ‘general assumption’
“ there are several reasons for this. It would make the working group,
which was set up with TOR agreed by the JFSA, redundant as it would
simply be waving cases through. This would be outwith the balancing
nature of the working group, which was set up with a central role to decide
on whether any given case (ought) to be mediated
“ It would also undermine the Chair's stated position (in the decision on a
Specific case) that ‘the decision as to whether a case should go forward to
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mediation is entrusted to the WG’, with the necessary independence of the
group achieved by giving the Chair the casting vote
“ 'Pre-agreeing’ would also force us to mediate in criminal cases where the
legal processes have not been exhausted. We have strong legal advice
suggesting we should not take this course.
“ this will clearly be unwelcome for the MPs so we are preparing for every
eventuality. We could expect media coverage, probably at a low level, but
are well prepared for this. We are also proposing that our letter setting out
our position to the MPs be drafted so that it can be released to the media,
given the MPs point about media pressure. This gives us a chance to set
out our position and meet the "Clapham Omnibus" test.
“ the chair has previously expressed his discomfort at being deprived of
JFSA's views on those cases where POL disagrees with the
recommendation made by SS, since it leaves him as the dominant voice in
all cases (thanks to his casting vote). Maintaining our line on existing
position to review each case continues this discomfort, however we assess
the risk of the Chair epising [sic] this publically [sic] to be very low (he is
bound by a confidentially agreement and we believe he will want to
minimise any adverse publicity associated with the working group) we are
also making contact separately with Oliver Letwin to impress upon him the
nature of our position. We have a number of channels open to us here.”
1090. That final paragraph above is not in the other version (POL00116816). I think
it is likely that this paragraph was added by Gavin Lambert in response to
feedback which I gave that we should test the argument about making the
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Working Group redundant if we were to agree a general presumption of
mediation where mediation was the recommendation of Second Sight
(POL00116823).
1091. In respect of the Mediation Scheme more generally, the speaking note said:
“-given the potential collapse of the working group, we have also taken the
precaution of seeking further legal advice from a leading QC at Blackstone
Chambers. While we know that as a public body, we are susceptible for
judicial review, we wanted to test the position further around the nature of
the Scheme and the cases submitted to it
“ this is important since there have been significant developments since
the summer, not least the refusal of JFSA to take part in the bulk of the
Working Group’s business. We are now in a situation where the Scheme
could collapse through the actions of others, who might then seek JR
“ the view is that withdrawing the Scheme in its current form does not
expose POL to any significant JR risk. While POL is susceptible to JR when
it acts in a public law capacity, the Scheme and the cases in it, together
with any decisions associated with or taken during process, are private law
in nature and are not, therefore, susceptible to JR
“ It is worth noting that Leading Counsel expressed this view robustly”
1092. More generally, (POL00116823) includes an email from Mark in which he
quotes an email sent to him by Patrick Bourke. In turn, Patrick's email quotes
something said by Sir Anthony Hooper in the Working Group, following
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submissions which he invited from both POL and JFSA on the question of the
Working Group’s role in deciding whether or not a case should go to mediation:
“In my view this document (Overview of the Initial Complaints and
Mediation Scheme) makes it clear in a passage under the heading “Will my
case definitely be referred to mediation?” that the decision as to whether a
case should go forward to mediation is entrusted to the WG.
The JFSA stresses the need for independence and the role of SS. In my
view, the necessary independence is achieved by giving to the Chair of the
WG the casting vote.
1 exercise my casting vote in favour of the proposition that the WG decides
whether a case is suitable for mediation.”
1093. A POL Board meeting took place on 26 November 2014. The minutes include
this (at page 2 of (POL00021530)):
“7. The CEO recounted her meeting with four MPs to discuss the Sparrow
mediation scheme. She explained that the Business intended to write to
the MPs to explain the Business’ position on denying mediation for criminal
cases, and that this letter may become public. The Business had taken
further advice on the likelihood of a Judicial Review, if JFSA withdrew from
the process, and the QC’s advice was that the likelihood was low. The
Board asked for an update on where cases were in the scheme.”
1094. I note that the inclusion of these matters in my CEO report was consistent with
the steer that I had received from Mark following the 20 November 2014 ExCo
meeting. I had received a speaking note (POL00158173) from Gavin Lambert
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on 25 November at 16:47 (POL00158172) which would have informed my
update to the POL Board on 26 November. I also note that Gavin sent me a
further email at 16:56 on 25 November in which he provided me with further
background on Sparrow (POL00101581) to supplement a note that Mark
Davies had sent me that moming (POL00116815; POL00116816).
1095. I have also been shown a document headed “Post Office Complaints and
Mediation Scheme” dated 24 November 2014 which I understand to be legal
advice relevant to this decision (POL00022611). Reading that document with
(POL00022609) I believe that the legal advice document is the document
referred to as “Tom Weisselburg’s notes from the above call” which took place
on 24 November. I do not recall whether I saw any written legal advice.
1096. In emails on 26 and 27 November 2014, a proposed draft of a letter to Lord
Arbuthnot was worked up for me by Mark Davies and others. On 26 November
2014 (POL00101587), Mark made changes to a draft and said, “in view of the
timing, we need to get this to Paula now.”
1097. I was provided with a draft letter for consideration / approval by email on 27
November 2014 by Patrick Bourke (POL00101589). I can see that by 16:50
that day, the letter had been shown to Leading Counsel, Tom Weisselburg QC,
who had made some suggestions in tracked changes. That was sent to me an
hour later. I responded thanking the team “for the thought and rework” which
indicates that I may have had some comments on the draft I had seen earlier
that day (POL00116833) and / or I was referring to the input from Mr
Weisselburg QC. I can also see from that email that I was aware that Leading
Counsel had advised on the letter.
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1098. By the afternoon of 28 November 2014, Patrick and I had settled on a final
version to be sent (POL00109684).
1099. I sent the letter on 28 November to Lord Arbuthnot (POL00101596). I thanked
him for the meeting on 17 November and set out POL’s position on the
proposition put forward by Sir Oliver that there should be a general presumption
that POL would agree, save in a few exceptional cases, to mediate all cases
where that was the recommendation of Second Sight, regardless of their merits
and specific circumstances.
1100. I said as follows:
“Having considered the proposition carefully and having discussed it as
promised with my Board, I have concluded that I cannot agree to it.
“In my letter of 5 November, I set out in some detail the steps Post Office
has taken to address the concerns you raised with me in early 2012. That
letter made clear my belief that Post Office has done, at least as much, if
not considerably more, than might reasonably be expected to address
those concerns.
“To summarise, Post Office Limited, established the Scheme in good faith;
Second Sight and JFSA were principal drivers of its design, the
establishing of the Working Group and the recommendation for the
appointment of its independent Chair; Post Office Limited committed to a
comprehensive re-investigation of each and every case in the Scheme;
and it pays not only for the administration of the Scheme as a whole but
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also provides Applicants with funding to enable them to engage
professional advisers to support them in all relevant stages of the process.
“To agree to a presumption that all cases should be mediated prior to any
proper consideration of their merits would deprive the Working Group,
which was set up so rigorously and carefully by ourselves, JFSA and
Second Sight, of its most important role. It is difficult to see, in such
circumstances, how it could continue.
“1 would point out that Post Office has not prevented any case from
progressing through the Scheme as it was designed. Instead, as a
minimum, all cases will have the benefit of a thorough re-investigation and
an independent review by Second Sight. A discussion at the Working
Group about the resulting findings cannot be seen as an unreasonable
requirement. You will also be aware that, by its very nature, mediation is a
voluntary and consensual process and, accordingly, neither Applicants nor
Post Office Limited are bound to proceed to mediation even where it is the
Working Group’s view that mediation is appropriate.”
1101. I continued that it was my view that the Mediation Scheme and its processes
were operating as they were designed to do and that the scope of the Mediation
Scheme should not be broadened. I also noted that “no fault with the system
has been identified in any of the now 119 cases that have been
comprehensively re-investigated by Post Office or as part of Second Sight’s
general work’.
1102. I see now that the letter does not make reference to POL’s pre-existing decision
not to go to mediation in cases in which there was a criminal conviction. It was
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an unfortunate omission but was not an intentional one on my part. It should
have been included for clarity. The Working Group was aware, as was Lord
Arbuthnot, who raised the matter a week later with Alice. But with hindsight, POL
should have communicated the very strong legal advice it had received.
1103. After Lord Arbuthnot had received the letter, but before he had had the chance
to respond to it, Alice set out her account of their conversation in an email which
she sent to me and others on 1 December 2014 (POL00101604). Alice told
Lord Arbuthnot that POL would not allow him to have access to Second Sight
because “we couldn't have people second guessing an independent process
which they had agreed to”.
1104. Alice also recorded in her email:
“He then argued that the process was flawed. We should be willing to
mediate cases where people had been convicted. I said no; they were
matters to be settled through the courts. He moved on to people who had
pleaded ‘guilty under duress’ but who were in fact, innocent. I said we were
investigating every case and there was no evidence for that assertion.
He then said he thought Paula and I genuinely believed what we were
Saying — the implication being that we were being hoodwinked by others —
a somewhat backhanded compliment if it was intended as such....”
1105. Alice ended her email by saying “/ can’t predict what he will do next.”
1106. On 8 December 2014, Lord Arbuthnot responded to me in writing
(POL00101700). Lord Arbuthnot disagreed with my assessment that the
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Mediation Scheme was working as it should. He also disagreed that POL, and
I, were sticking to the “agreement that those who had pleaded guilty would be
able to take advantage of the Mediation Scheme”.
1107. Lord Arbuthnot recorded a particularly pointed criticism in paragraph 17:
“You put forward these arguments in secret, and when MPs asked you in
July how the mediation was going, you pleaded, in the interests of “the
integrity of the Mediation Scheme”, confidentiality. So, for example, despite
your knowing that I and other MPs had agreed to the Mediation Scheme
only on the basis that it would be available to those who had pleaded guilty,
you did not tell me, nor so far as I am aware any other MP, that the Post
Office was arguing that a plea of guilty should debar the SPMR from
mediation.”
1108. Lord Arbuthnot asked whether I would agree to MPs meeting Second Sight to
“near their take on the matter’.
1109. That same day, a press release from the House of Commons stated that MPs
had lost faith in POL’s Mediation Scheme (POL00101690). The press release
included quotations from MPs and included as attachments my letter of 28
November 2014 and Lord Arbuthnot’s letter in response dated 8 December
2014. Putting aside the business aspects, which seemed ever more difficult to
reconcile, I remember feeling a personal sadness when I read Lord Arbuthnot’s
letter. I had been as determined as he was to get to the truth of the individual
cases. The failure of that commitment and the breakdown of the relationship
weighed heavily. I was sorry at the time and remain so today. Lord Arbuthnot's
instinct was right. I fully accept my focus was misguided and wrong.
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110. Please consider POL00101796 (email chain on 10 December 2014) and
POL00101801 (email chain on 10 December 2014).
110.1 What was your view of Mr McCormack’s email of 10 December 2014?
110.2 Did you agree with his statement that “You have no personal knowledge
of operating Horizon nor probably any in depth technical knowledge”? If so.
please set out any steps you took to improve your personal knowledge of the
operation of Horizon.
110.3 On reflection, do you consider that you did enough to investigate the
concerns raised regarding systemic and / or intermittent errors in the Horizon
IT system?
1110. I have been asked by the Inquiry to consider two email chains with Tim
McCormack on 10 December 2014: (POL00101796) and (POL00101801). Mr
McCormack spoke about system errors and intermittent errors, saying that
POL was looking at the wrong problem and it was in fact intermittent errors
which caused financial problems for SPMs when they occur.
1111. I always took input seriously, no matter from whom it came. This was especially
true in respect of SPMs, Unions and the NFSP.
1112. I do not now remember the specifics of this series of emails. However, I do
remember emails with Mr McCormack more generally. He was a fairly frequent
communicator with people at POL. I have tried to remember whether I ever met
Mr McCormack, because reading his emails now they have a certain familiarity
to them which suggests that we had met; however, I cannot remember.
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1113. Whenever Mr McCormack emailed me, I would always approach it in a similar
way, which was to ensure that the concerns were seen and considered by the
right people. I would make clear to colleagues, as with any person offering
outside input, that we must not dismiss it out of hand.
1114. I am asked by the Inquiry whether I agree with this statement “You have no
personal knowledge of operating Horizon nor probably any in depth technical
knowledge”. The full paragraph in the email is this:
“Paula, as I keep saying, you are surrounded by people in your office that
tell you all is well. You have no personal knowledge of operating Horizon
nor probably any in depth technical knowledge. What if the people that are
telling you all is well have the same attributes?”
1115. I do not recall reading the specific words at the time, however I agree with Mr
McCormack’s second sentence. I fully accept that I did not have any in depth
technical knowledge, nor previous experience of managing a large IT system.
I was not an IT expert and nor would it have been appropriate for me to attempt
to become one. I took advice from the relevant teams on technical matters, and
looked to those with appropriate practical knowledge and expertise to explain
matters to me where I did not have expertise myself. For example, I relied on
Lesley Sewell’s technical knowledge or Angela Van Den Bogerd’s in-depth
operational understanding of the Horizon system.
1116. This is reflected in a draft email that I proposed to send in response to Mr
McCormack at 09:10 on 10 December 2014 (POL00101796), putting him in
touch with various subject matter experts whom I trusted to do so. I believe that
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Mark Davies amended this email before it was sent on my behalf “/ expect to
get to the bottom of it. And who I trust to do so”.
1117. In preparing this witness statement, I have looked at the documents disclosed
by the Inquiry which indicate how this particular correspondence from Mr
McCormack was dealt with. I am aware that Angela had “a pleasant discussion
albeit a long one” with him on 11 December 2014. Angela produced a helpful
note of that conversation which was forwarded to me by Gavin Lambert. In that
note, Angela noted that (POL00101852): “We discussed many Horizon related
topics most of which I was familiar with and able to discuss in great detail — I
think this helped the conversation as Tim realised I knew what I was talking
about. In bringing the conversation to a close I asked Tim what he was looking
for in contacting Paula. His response was that whilst he fully accepts that there
are no systemic problems with Horizon he wants us to acknowledge that there
are intermittent problems with Horizon and that these could cause Spmrs
discrepancies.”
1118. She had conceded to Mr McCormack that “there are intermittent issues such
as loss of power or loss of connectivity’. She explained that “the Horizon
system has a recovery process in place to deal with such instances. And as
long as Spmrs follow the recovery screens and answer the screen prompts
correctly they would not suffer any discrepancy as a result.”
1119. At the time, I felt that I had taken the right steps to ensure that the right people
were investigating the concerns. In particular, Gavin Lambert my chief of staff
was tasked with seeing this through. Whilst I see that Angela spent time making
sure that Mr McCormack’s concerns were understood, with hindsight, we
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clearly did not get to the bottom of the concerns raised regarding systemic and
/ or intermittent errors in the Horizon system.
One Show documentary
1120. One matter about which I have not been asked in the Request but which I want
to address head on is an email which I sent to senior colleagues on 17 December
2014, after the One Show documentary aired that evening (POL00109806). I
described the reporting as “unhelpful and inaccurate” and thoroughly regret
saying that “! was more bored than outraged” at the programme. There is no
excuse for what I wrote, and I am embarrassed by the words I used. Those
words do not reflect the example I hoped to set for my colleagues or my attitude
to the issues we were working on at the time. I was working hard to find a way
through. The difficulties of dealing with what seemed such an imperative yet
intractable problem to solve got the better of me that evening. I am sorry.
111. Please consider POL00022612 (instructions to counsel).
111.1 Please explain your recollection of the background to these instructions
and your involvement with the same.
111.2 Why was POL “keen to dispense with Second Sight’s services at the
earliest opportunity”? Was POL seeking legal advice to find a route to terminate
Second Sight’s engagement?
111.3 Please describe the advice that POL received in response to these
instructions.
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1121. In mid to late December 2014, Tom Weisselberg QC was instructed by POL to
give advice in consultation further to the advice he had given at the end of
November 2014. He was provided with copies, in addition to previous papers,
of:
a. Recent correspondence between Lord Arbuthnot and me (letters of 28
November 2014 and 8 December 2014);
b. Lord Arbuthnot's press release 8 December 2014;
c. The transcript of the Today Programme and Radio 5 Live broadcasts of 9
December 2014; and
d. Letter to the BBC from Cameron McKenna on behalf of POL dated 9
December 2014.
1122. The instructions (POL00022612) set out the “recent developments” in the
matter at paragraph 4 and 5:
“4. In the event, something close to the second of these two scenarios has
materialised in that the relevant MPs, led by James Arbuthnot, have
withdrawn their support for the Scheme and expressed a complete loss of
confidence in the POL Board’s determination to get to the bottom of the
issues first raised with it in 2012. Mr Arbuthnot communicated this to POL
by publishing both Paula Vennells' letter to him, and his in response,
together with a press release on 8 December 2014
5. However, this does fall somewhere short of scenario 2 in two respects.
First, it is unclear what JFSA intend to do in the light of these
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developments. Second, it is clear that Mr Arbuthnot intends that this matter
be pursued, though presumably through a different route, by Parliamentary
colleagues. Indeed, he has gone as far as handing the baton to Kevan
Jones MP (North Durham, Labour) while recusing himself from any further
involvement on the basis of his loss of confidence in POL and his decision
not to contest the next General Election.”
1123. The “desired outcome” for POL was described in these terms:
“9. However, while POL remains keen to act fairly, it is keen to capitalise
as fully as possible on the opportunity Mr Arbuthnot' s letter potentially
provides it with and, in particular, wishes to be free of the apparatus
currently supporting the Scheme, move its governance and management
in-house and dissolve the Working Group. Leading Counsel will recall that
the Working Group is already hampered in its work by the refusal of JFSA
to discuss any case which is not automatically waived through to mediation.
10. POL is also keen to dispense with Second Sight's services at the
earliest opportunity. We are mindful, however, that we may be constrained
in doing so because of the potential need for them to complete their review
of all cases and as a result of the Ministerial commitment given about their
ongoing role in the process. While POL is prepared to entertain the
possibility of a limited independent oversight element in the successor
process to the Scheme (but is by no means wedded to it), its position in
relation to the retention of Second Sight has hardened.
11. POL wishes to explore the options available to it for managing this
departure from current arrangements in such a manner so as to minimise
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the risk of its decisions in this regard being the subject of a Judicial Review
challenge. It also wishes to discuss the ramifications that a move away
from current arrangement may have on any litigation of the claims
underpinning the Applicants' cases in the Scheme, not least as to the
determination of costs.”
1124. He was asked to advise on five topics:
“a) In the light of Leading Counsel's previous advice that the Scheme and
the decisions taken in relation to it, as well as those taken in respect of
individual cases, should more properly be seen as matters of private law
and therefore unlikely to be susceptible to challenge by Judicial Review,
does it follow that POL is largely unconstrained in this respect as to what it
does next in relation to the Scheme;
b) Does Counsel share POL's preliminary view that the practical effect of
Mr Arbuthnot's letter, exacerbating as it does an already difficult situation,
could be said to be forcing POL to depart from current arrangements;
c) What is Leading Counsel's assessment of any residual JR risk and what
advice might Leading Counsel have in relation to any steps POL might
reasonably take to mitigate those;
d) Since POL expects that a number of Applicants with cases in the
Scheme may now seek redress through the Courts, what is Leading
Counsel's assessment of the impact, if any, of the decisions to move the
Scheme in-house may have on that litigation, including on possible cost
orders;
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e) What, if anything, does Leading Counsel recommend that POL do in
respect of the obvious breaches of confidence in this matter bearing in
mind POL's wish to kill this ‘story’ as rapidly as possible;
f) How POL might best reply to Mr Arbuthnot informal terms, noting that
POL's current view is that an extremely brief letter which simply
acknowledges his, expresses disappointment, and records, but does not
address, the fact of the inaccuracies in his letter may well suffice; and
g) More generally.”
1125. I have set out much of the background to these matters in answer to Questions
107 and 108 above. Part of the background is set out in the instructions
themselves.
1126. I am asked specifically to comment on the first sentence of paragraph 10 of the
instructions, which concerns POL wishing to end its relationship with Second
Sight. From the early days of Second Sight being appointed, it was always the
intention to finish their work and then bring their skills in house. By this time in
late 2014, POL had concerns with the speed, cost and inaccuracy of Second
Sight's work and thought that they were spending too much time concentrating
on generalised themes rather than completing the individual case reviews
which POL believed to be more significant and pressing.
1127. Finally, on this topic, I am asked to describe the advice received by POL in
response to these instructions. In short, I have no recollection of the advice and
at the time of drafting this statement I have been unable to locate either a
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written advice or a summary of oral advice in documents disclosed by the
Inquiry.
112. Please consider POL00102064 (email from Patrick Bourke to you on 26
January 2015) and POL00102065 (attachment to prior email).
112.1 What were your views of the sentence “it is difficult to escape the
conclusion that the Scheme no longer serves as an expedient and fair way to
explore and, where possible, resolve a small number of individuals’ complaints
but, instead, acts as a lightning rod for a campaign against Post Office as an
organisation”.
112.2 Did you agree that “Second Sight’s impartiality [was] a fiction”? If so,
please explain the basis for that belief.
1128. The comments about which I have been asked were Patrick Bourke's. I believe
that they represented the view of the team working with the Working Group.
That was how they perceived matters to be. Patrick and the POL members of
the Working Group dealt with related matters on a daily basis.
1129. My own view was that Second Sight had not given sufficient time to exploring
individual cases and getting to the bottom of issues. Whilst I may have used
different phrasing, I understood Patrick’s challenge and had also been frank
about my own concerns in the past about Second Sight having had their own
agenda (see email 26 March 2013 to Alwen Lyons at (POL00097879)).
1130. My views on these comments are set out in an email that I sent in response to
Patrick's email and paper on 26 January 2015 (emphasis added)
(POL00117054):
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“Hi Patrick, thanks for the work on this and do please excuse my notes
below in haste - I hope they might be of some use. Numbering refers to the
paras in the doc.
Overall, this is exactly the format I was hoping for. Thank you. And of
course, we might develop an option, which is a permutation of those you
helpfully set out: worth flagging that as a potential outcome. A watch out:
the paper clearly points to a conclusion. If that is the team's view, and I'm
sure you have considered many variations, many times(!), fine ...
But let's be open to debate tomorrow.
Some more detailed comments:
+ 3. didn't think it was possible to bring a ‘group action’? This was Chris’
view to the S/Ctte.
+ 4. I can see that there is truth in it, but worded as it is, this para leads to
a_conclusion of disbanding the scheme, before you have ‘gamed' the
options. More balance at this stage in the paper?
+ 5. can the summary of options be more balanced? Or offer pros and
cons? Again, this leads to a conclusion. Alasdair is looking to debate the
options first.
+ 5. "SS's impartiality is a fiction": this is too strong. I read a number of their
reports over the weekend, they are mostly balanced and factual because
they draw extensively on the PO investigation reports; where they lose
independence is around recommendations to mediate, though not all.
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Thanks again.
Paula”
1131. Mark Davies responded that evening saying that he thought in fact that
Patrick's “description of Second Sight is about right given their behaviour in
recent weeks”. I asked Mark “how many of the SS reports have you personally
read?”. He responded to Patrick and Tom Wechsler, but not to me, saying “I’m
going into the breach here. If I have gone too far please say now”.
113. Please consider _POL00102069 (briefing for meeting with Sir Anthony
Hooper on 27 January 2015). Please describe your meeting with Sir Anthony
Hooper and set out what you said to him regarding your views on the future of
the Mediation Scheme.
1132. On 27 January 2015 I met with Sir Anthony Hooper to discuss the Mediation
Scheme. It was the first time I had met him since the Working Group started its
work. A briefing note was written for me (POL00102069).
1133. I do not now recall what Sir Anthony and I discussed. I anticipate that I shared
concerns and options, but not in any detail as discussions had not yet taken
place with the POL Board.
1134. The briefing note lists a key point to raise, and then a series of other points I
might choose to raise. The key point was to ask Sir Anthony to provide updated
statistics on the cases in the Mediation Scheme. POL wished to provide the
statistics to the Select Committee.
114. Please consider POL00021531 (minutes of POL Board meeting on 28
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January 2015). Please describe the discussion that_occurred under the
headings “Sparrow”. In particular, what was discussed regarding the CCRC’s
letter?
1135. The POL Board met on 28 January 2015 and, at POLB 15/12, discussed
Project Sparrow (POL00021531). I have reviewed the minutes. I do not
remember this meeting.
1136. I note the email which Mark Davies sent to various colleagues after the POL
Board meeting: “Paula and I have briefed the Board today... It was fine: more
information sharing than anything else” (POL00117072).
115. Please consider POL00006575 (minutes of Sparrow Sub-Committee on 12
January 2015).
115.1 Please describe to what extent, if at all, any members of the Project
Sparrow Sub- Committee were considering termination the Mediation Scheme
at this point.
115.2 Please consider “The Committee discussed Second Sight and their ‘Part
Two’ report due to be finalised in April. The Committee agreed that the Business
was unlikely to be able to stop this report from being produced but should press
Second Sight to complete the individual case reviews by the end of March i.e.
giving the cases priority”. Please set out the discussion that led to this minute.
In particular please address:
115.2.1 Whether the committee wished to stop Second Sight finishing their Part
2 review, and if so, on what basis that was thought to be appropriate.
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115.2.2How the committee sought Second Sight to prioritise individual cases.
115.3 Please explain what “robust response” was envisaged to allegations in
the media.
115.4 In what circumstances did POL consider it appropriate to write to BBC
lawyers? What was the purpose of such communication?
1137. I cannot remember anything about the Project Sparrow Sub-Committee
meeting on 12 January 2015. I can only go on what the documentation says
about this meeting.
1138. (POL00006575) are the minutes of the meeting. The Sub-Committee decided
that POL would “continue to take a robust approach at the Working Group,
focussing on the agreed TOR in an attempt to set the Scheme back on track,
but with no presumption regarding the next steps for the Scheme”. The Sub-
Committee also wanted POL to “consider the most effective options to draw a
line under the Scheme for consideration at a future Sparrow Sub-Committee’.
1139. The minute continues:
“The Committee discussed Second Sight and their ‘Part Two’ report due to
be finalised in April. The Committee agreed that the Business was unlikely
to be able to stop this report from being produced but should press Second
Sight to complete the individual case reviews by the end of March i.e. giving
the cases priority.”
1140. The Inquiry has asked me to describe the discussion which led to this minute.
I do not recall the discussion at the Sub-Committee meeting. However, in an
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email that I sent to Gavin Lambert on 26 January 2015 (POL00117046), I
stated that, while Mark Davies and some of the team thought that POL should
try to stop the Part Two Report, Alice and I believed that this would be unhelpful
and play into a false narrative about secrecy.
1141. The Sub-Committee wished to focus on the individual case reviews. Second
Sight were directed to complete the individual case reviews by the end of March
2015.
1142. The Sub-Committee asked that a robust response be provided to allegations
in the media, including writing to BBC lawyers where appropriate and engaging
at a senior level with programme editors. I had an understanding that the BBC
as public broadcaster was required to comply with a broadcasting code. POL
would have taken advice on whether it was appropriate to raise compliance
with the code with the BBC's lawyers. One example of POL's external lawyers
writing to the BBC is at (POL00101715).
116, Please consider POL00040911 (Jane MacLeod and Mark Davies report dated
11 February 2015) POL00102167 (email from Tom Wechsler on 17 February
2015), POL00102168 (attachment to prior email), POL00102169 (attachment to
prior email), POL00006574 (minutes of the Project Sparrow Sub-Committee on
18 February 2015).
116.1 Please explain the basis for POL’s change in approach to a presumption
in favour of mediation.
116.2 Please describe the discussion on POL’s engagement with the CCRC. To
what extent, if at all, was there any resistance to providing information to the
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CCRC?
1143. (POL00102152) is an “UPDATE AND OPTIONS” paper dated simply
“February 2015”, which was prepared for the Project Sparrow Sub-Committee
for two purposes:
a. To update the Sub-Committee on Project Sparrow following the
Parliamentary Select Committee meeting on 3 February 2015; and
b. To seek authority from the Sub-Committee to implement changes to our
approach for handling this issue.
1144. I see that in the minutes of the Sub-Committee meeting held on 18 February
2015, the opening substantive paragraph notes that: “The Committee received
an update on Project Sparrow following the Parliamentary Select Committee
meeting on the 3" February. JM explained the background to the paper, which
was asking the Committee to authorise changes to the approach for managing
the issue” (POL00006574). The minutes go on to record: “The Committee
supported the proposal in principle and asked the Business work at speed... ”.
1145. I have little memory of this discussion. I will set out matters as I now understand
them by reference to documents.
1146. The "UPDATE AND OPTIONS" paper states its proposal at paragraph 3:
“3.1. We propose a fundamental change to our approach based on the
presumption that we will offer to mediate in all non-criminal cases, except
in the most exceptional circumstances (eg where Second Sight have not
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recommended mediation or there is a significant judgement against the
applicant through the Civil Courts).
3.2. This would mean we would meet our commitment to applicants at the
outset of the Scheme: providing them with a thorough re-investigation of
their case by Post Office, the opportunity of an independent review by
Second Sight and, where appropriate, mediation.
3.3. Our proposal in detail is that we:
- Adopt a presumption that Post Office will offer to mediate all non-criminal
cases in the Scheme
- Make clear that we do not intend to mediate criminal cases, except to the
extent there are areas in a case which do not relate to those which led to
the conviction. (Thus far we have seen no cases where the applicant has
a criminal conviction where mediation has been considered appropriate).
However, should we receive advice that it is safe to do so, we would also
offer "structured discussion" to applicants with criminal convictions, the
purpose of which would be to explain to the applicant.
- Release Second Sight from their engagement with Post Office, but make
clear that Post Office will meet its commitment to any applicant wishing to
avail themselves of a review by Second Sight of their case by providing the
necessary funding to do so on an individual case by case basis
- Continue to engage with Second Sight pro tem on issues relating to
individual cases: including issues such as suspense accounts where they
relate directly to individual cases.
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- Publish an end of term report - facts and figures - on the operation of the
Scheme and the branch support programme. The impact of this approach
would serve to make the role of the Working Group redundant because its
primary function is to decide on whether or not cases move to mediation,
a point that JFSA has forcefully contested.
3.4. Implementing this approach would require a careful handling strategy,
on which timing and stakeholder management will be key considerations.
A draft narrative is at Annex xx”
1147. Pages seven and eight discuss the pros and cons of the various options. These
are a clear indication of the factors which the Sub-Committee (and
subsequently the Board) took into account in the decision to make changes to
the Mediation Scheme.
1148. In respect of the option which was adopted, the paper said this:
“This is our preferred option. It makes a significant concession to JFSA and
MPs, and reduces the number of applicants for whom mediation is unlikely
to be available.
“The risks are as above: some cases will be incapable of resolution at
mediation, while the criminal cases are those around which most publicity
is taking [sic]
“Post Office has already declined to mediate 1 non-criminal case where
place there was a 13 page High Court judgement against the applicant -we
would advocate maintaining that flexibility at the margin.
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“This option does however have the potential to ease stakeholder and
media handling [though there is an associated risk around a perceived 'u-
turn’ which could be portrayed as a weakness in our position]
“Second Sight role continues in relation to individual cases through a
renewed engagement letter - which could restrict production of ‘part two’
report
“Our position on criminal cases is strengthened by our dialogue with the
Criminal Cases Review Commission, the independent public body
established to review possible miscarriages of justice, with which Post
Office is now engaged in correspondence.”
1149. At the Sub-Committee meeting on 18 February 2015 (POL00006574), the
attendees and I “discussed the proposal in detail as set out in paragraph 3.3 of
the paper’ (quoted in full above at paragraph 1146 of the document). The Sub-
Committee agreed with the proposal. The minutes did not record any further
reasons which went beyond the paper. I have no recollection of the discussion
itself so I can add nothing in addition to the reasons recorded in the documents
themselves, which shed light on the approach adopted towards mediation at
this time.
1150. The minutes at (b), record that:
“The Committee discussed the Criminal Cases in the scheme and
Supported the proposition that these should not be put forward for
mediation. The Committee received an update on the discussion with the
Criminal Cases Review Commission (CCRC) and asked the Business to
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consider how it could engage constructively with the CCRC and under what
circumstances it might share the report written by Brain [sic] Altman QC.”
1151. This is also mentioned at paragraph 2.8 of the "UPDATE AND OPTIONS"
paper:
“We have also been contacted by the Criminal Cases Review Commission
with a broad request for information based on Sir Brian Altman QC’s review
of our procedures in relation to prosecutions.”
1152. I have no recollection of the discussion in respect of POL’s engagement with,
and the provision of information to, the CCRC on this occasion or in respect of
that specific request. However, speaking more generally, I do not recall any
resistance on the part of POL to providing information to the CCRC. To the
extent that I recall this issue being raised it was quite the reverse: every time I
asked Rodric Williams for an update on their work, I was told that we were
waiting for a response from the CCRC. He always told me that we were
responding to the CCRCs requests and that we were waiting for a response
rather than the other way around.
117. Please consider POL00006366 (Brian Altman KC’s advice of 8 March 2015).
Please explain why POL instructed Mr Altman to provide this advice and what.
if anything, it did in response. Did you brief the Board on the content of this
advice?
1153. The advice discusses the offences of theft and false accounting, and then
considers the terms of a letter sent by POL to Second Sight on 24 February
2015.
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1154. To the best of my knowledge, I did not see the letter to Second Sight on 24
February 2015 at the time.
1155. Neither do I have any recollection of being involved in Brian Altman QC being
asked to advise, nor of seeing the advice which was produced. I am asked if I
briefed the POL Board on the content of the advice; the answer is that I have
no recollection of doing so and have not (to date) seen any documents to
suggest I did.
118. Please consider UKGI00003789 (your letter to Jo Swinson MP dated 9
March 2015) and UKGI00003615 (Alwen Lyons’ email on 9 March 2015).
118.1 Please explain what you saw to be the reasons for terminating the
Working Group.
118.2 Please explain what you saw as the reasons for terminating Second
Sight’s instruction.
118.3 To what extent, if at all, was the timing of this decision influenced by the
impending General Election?
118.4 To what extent, if at all, did POL rely on legal advice in making either
decision?
118.5 Would you accept that the effect_of this decision was to remove
independent and centralised oversight of the mediation scheme as a whole?
118.6 Did Post Office intend to mediate the outstanding cases without further
investigation into alleged BEDs in the Horizon IT System?
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118.7 Was the termination of Second Sight’s engagement and the Working
Group a missed opportunity (a) to uncover BEDs in the Horizon IT System and
(b) to refer the cases of convicted SPMs to the relevant appellate court to quash
unsafe convictions?
1156. On 2 March 2015, Alwen Lyons sent a number of documents for the POL Board
by email (UKGI00003467). I was one of the recipients. The attachments were
a suite of documents concerning the recommendation of the Project Sparrow
Sub-Committee, including the minutes of 18 February, the “UPDATE AND
OPTIONS” paper, which was prepared for that Sub-Committee meeting and
the additional grids.
1157. Alwen ended her email to the POL Board asking “Would you please let me
know if you are happy to support the proposal’.
1158. Tim Franklin, Richard Callard and Alasdair Marnoch sent brief emails signalling
their support for this position (UKGI00003501).
1159. Al Cameron responded the next day to say (UKGI00003467):
“[t]here is no risk free solution and the way we have to manage it today is
unattractive. I support the proposal because it allows us to get a bit on the
front foot and demonstrate our very positive intent to be fair to all
concerned. It also allows us to make a step towards an end game. Of
course, that could trigger a reaction, in parliament, the media or the courts
but if it does, it is probably only hastening the inevitable.”
1160. Making a decision by email to adopt a recommendation was exceptional. It
would only occur when something particularly important and time-sensitive fell
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between two POL Board meetings. It was an option we had, to agree
something by email. But it would require some reason for this to be appropriate,
such as a tight deadline. In this instance, the next POL Board meeting did not
occur until 25 March 2015.
1161. Without seeing any documents to indicate that the POL Board had concerns
about particular stages of the Sub-Committee’s reasoning in making its
recommendation, my understanding from the documents disclosed by the
Inquiry is that the POL Board made its decision for the reasons contained in
the Sub-Committee’s minutes and the "UPDATE AND OPTIONS" paper, which
the Sub-Committee had considered.
1162. I considered that the Working Group was no longer functioning properly. This
was in the context of Second Sight’s previous conclusions being undermined
by factual responses compiled by POL’s Sparrow team and there being no
evidence arising from individual cases as to systemic problems with the
Horizon system. By ending the Working Group and terminating the relationship
with Second Sight, POL was able to bring the investigation of applicants’ cases
back into business as usual. I believed that the Working Group could be closed
and the relationship with Second Sight terminated, whilst still keeping the
applicants at the forefront of our work. This was not a decision that I or the POL
Board took lightly but I was very sorry, and still am, that the relationship had
broken down.
1163. I did not think that the nature of the investigation would change when POL took
it “in house”. I had no reason to think that any investigation would cease to
consider the issues with Horizon about which the applicants had complained.
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1164. The Inquiry has asked about the extent to which POL took legal advice in
making this decision. I have no memory of what legal advice was taken on this
matter.
1165. I have been asked by the Inquiry whether the timing of the decision and
announcement was influenced by the timing of the General Election. I do not
recall the POL Board having any discussions to that effect.
1166. On 8 March 2015, I sent an email commenting on a draft letter to Jo Swinson
MP. I had made some amendments and noted particularly that I wanted us to
“avoid a class action” (POL00117187). The final version of that letter was sent
on 9 March 2015 (POL00119795). In this letter, informing Jo Swinson MP of
the decision, I summarised it in this way:
“Post Office has now decided to put forward for mediation all cases
remaining in the Scheme except those that have been subject to a previous
Court ruling... This will accelerate the conclusion of the Scheme in the
interests of Applicants and ensure that we will fulfil the commitments we
made to them at the outset.
“For those applicants who have been the subject of court rulings, two
important points need to be drawn out. Firstly, we will continue to consider
each of these cases carefully, on a case by case basis, even though
mediation cannot overturn a Court’s ruling. Secondly, as prosecutor, Post
Office has a continuing duty after a prosecution has concluded to disclose
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immediately any information that subsequently comes to light which might
undermine its prosecution case or support the case of the defendant.
“One of the consequences of our presumption in favour of mediating in as
many cases as possible is that it brings to an end the role of the Working
Group which recommends whether a case is suitable to go to mediation or
not. I have informed the Chairman of the Working Group, Sir Anthony
Hooper, and thanked him for his important contribution to this process.”
1167. The next day, Jane MacLeod wrote to Second Sight to give notice of the end
of their contract, that notice period being one calendar month (POL00000219).
1168. The Inquiry has asked whether I accept that the effect of the decision to end
the Working Group and terminate Second Sight was to remove independent
and centralised oversight from the Mediation Scheme. I do not agree with this
statement. First, given that there was to be a presumption that cases would be
put into the Mediation Scheme, there was no longer a succession of decisions
for which oversight was needed. Second, SPMs had the opportunity, funded
by POL, to have their cases reviewed by Second Sight. Third, all mediation
was to be conducted by the Centre for Effective Dispute Resolution ("CEDR")
and from what I understood, trained mediators would be independent of POL
and SPMs.
1169. I am asked the following question by the Inquiry:
"Was the termination of Second Sight’s engagement and the Working
Group a missed opportunity (a) to uncover BEDs in the Horizon IT System
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and (b) to refer the cases of convicted SPMs to the relevant appellate court
to quash unsafe convictions?"
1170. I simply cannot say what would have happened if Second Sight’s engagement
had not been terminated, and if the Working Group had continued to function.
I note though, that the Working Group and Second Sight’s work were brought
to an end for good reason, because neither was producing the results which it
should have done at the time. These were very difficult decisions I felt
uncomfortable about, but I was personally sorry that the Mediation Scheme
had not worked out as planned.
119. Please consider POL00027279 (minutes of POL Board meeting on 25 March
2015). Please describe what the Board discussed in respect of the Sparrow
Update on 25 March 2015 (see POLB 15/32).
1171. A POL Board meeting took place on 25 March 2015, minuted at
(POL00027279). In respect of the Mediation Scheme, it is recorded at POLB
15/32:
"SPARROW UPDATE (VERBAL)
(a) The Board welcomed Mark Davies, Director of Communications and
Corporate Affairs, to the meeting and received a verbal update from him
and the General Counsel on Project Sparrow.
(b) The Board thanked the Executive for progress being made and noted
the verbal update on Project Sparrow.
(c) Mark Davies left the meeting."
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1172. The Inquiry has asked me to describe what the POL Board discussed. I have
no current recollection of this specific discussion.
120. Please consider POL00102397 (email between you, Roger Gale and others
on 12/13 April 2015), POL00041076 (draft of Briefing Report Part — Two by
Second Sight) and POL00040957 (draft of Post Office Response to Second
Sight’s Briefing Report Part 2).
120.1. Please describe to what extent you were involved in seeking to influence
the final version of Second Sight’s thematic report.
1173. I do not recall having any involvement in seeking to influence the final version
of Second Sight’s thematic report.
1174. It was my understanding, POL’s input was sought and provided because this
was a formal part of the production of the report as directed for by the Chair and
agreed to by the parties to the Working Group (see, for example, the Chair's
direction on 14 November 2014 for POL to assist by responding to questions
posed by Second Sight (at pages 2 and 3 of (POL00043630)).
1175. This input was provided by the team who worked on the project day-to-
day, acting in accordance with the advice of POL’s internal and external
lawyers (see, for example, page 1 of (POL00040498), in which Bond
Dickinson advise on the questions described above). I did not attend
Working Group meetings and was not involved in the detailed work on
this project so did not assist with this, but I trusted that the team working
on the project had the knowledge and expertise to do this.
1176. As a member of the Project Sparrow Sub-Committee, I was kept abreast of the
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progress of the report's preparation in broad terms and had a sense of the team’s
views on it. Using the questions discussed above as an example, I recall that
the team had ongoing concerns that Second Sight were straying beyond the
terms of reference. This appears to be the thrust of Chris Aujard’s draft response
to Second Sight (POL00040499) which itself echoes the advice of POL’s
external lawyers (at page 1 of (POL00040498)). I can see from the documents
that the Chair agreed that the scope of some questions was too wide and
directed Second Sight to narrow them at the January meeting of the Working
Group (at pages 3 and 4 of (POL00043633)).
1177. This example is illustrative: although I was aware of the broad concern, I do
not recall my involvement extending to seeing the questions, POL’s response to
them, the legal advice received, or the response of the Chair. My work was
higher-level and strategic. For example, when this concern was raised at the
Project Sparrow Sub-Committee meeting on 12 January 2015 (which I attended)
the minutes record that we agreed that the business “continue to take a robust
approach at the Working Group, focussing on the agreed TOR in an attempt to
set the Scheme back on track” (at page 2 of (POL00006575)).
1178. As these minutes show, there was also concern about the lack of progress
being made on the individual cases. Some took the view that the production of
the report was preventing Second Sight from making progress on the cases and
so proposed that POL attempt to stop the report. As my email of 26 January
2015 to Gavin Lambert shows, this was not a view I shared (at page 2 of
(POL00117052)):
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“Could you make sure the above has a bullet on the SS Report and how
we plan to welcome, respond, comment, use it to show the progress we
have made on the themes it will cover, etc. At the last discussion, Mark
and some of the team were of the view that we should try and stop it.
Both Alice and I believe that would be unhelpful and play into the (false)
narrative about secrecy etc.”
1179. On 12 February 2015, I attended a meeting of the ExCo, which considered a
paper dated 12 February 2015 which set out POL’s response to the Second
Sight thematic issues (at pages 39 to 41 of (POL00027313)). The report
explained that, of the thematic issues identified, nine were due to user error, two
were due to fraud, four were due to lack of awareness by the SPM or their staff,
and one lacked evidence entirely. It then set out the training and improvements
which had been put in place to address these issues (at page 40 of
(POL00027313)).
1180. At the Project Sparrow Sub-Committee meeting on 18 February 2015 (which I
attended), the Committee discussed the Second Sight Briefing Report - Part
Two/Thematic Report and agreed that the business would publish its own
response to set out the facts and figures on the operation of the Scheme and
the Branch Support Programme, to be released alongside any announcement
of changes to the Scheme and prior to the release of the Second Sight report
(POL00006574).
1181. At the Board meeting on 25 March 2015 (which I attended), we received an
oral update from Mark Davies and Chris on Project Sparrow (at page 8 of
(POL00027279)). My draft speaking note for that meeting describes the draft
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report as “poor quality as anticipated, containing a number of misleading and
inaccurate statements some of which fall outside the scope of the Scheme and
Second Sight’s expertise” (at page 1 of (POL00117283)). My CEO report (also
discussed at this meeting) describes the report as “inaccurate and inflammatory”
(at page 4 of (POL00027308)). The text for my CEO reports was drafted by the
senior managers involved and I do not believe I wrote the speaking note.
However, these are strong words and I do not think I would have permitted them
to be included unless I agreed that they were appropriate.
1182. In summary, as a member of the Project Sparrow Sub-Committee I contributed
to decisions of POL’s high-level strategy in dealing with Second Sight, but had
no involvement in the detail of the report or any attempts to influence that. To
the extent that I was required to adopt a higher-level stance towards the
Thematic Report, it was to advise against any effort to prevent its publication.
1183. Although I did not share the views of those who wanted to prevent the
publication of the report, I understood the very significant concerns that
motivated it. We were duty-bound to consider the wider reputation of Post
Offices as well as POL as a business because criticism of POL threatened to
undermine public trust in individual Post Offices nationwide. It was vitally
important to me that we did not undermine this trust.
1184. In my capacity as CEO, I also provided updates to the Board on the progress
of the report and conveyed my understanding of its contents. As I was not
involved in the detailed work, that understanding necessarily relied in large part
on what I was told by the team working on the project. I trusted and supported
their judgment but was not afraid to challenge where I was familiar with the
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material (for example, having read some of Second Sight’s case reports I
challenged the contention that Second Sight's impartiality was "a fiction" (at page
3 of (POL00117056)).
1185. Given my role I could not have personal knowledge at that level of detail as a
matter of course. Where I could not, I conveyed the consistent message of those
working on the project which was that the report contained factual inaccuracies
which could be corrected. I supported the provision of evidence where it could
help correct demonstrably inaccurate factual statements but, ultimately, Second
Sight retained editorial control of their report and POL had no power to dictate
its contents.
120.2. Please describe your views at the time on the Second Sight reports and
set out any action you took as a result of the same. Please set out which aspects
of the reports you did not agree with, providing reasons for the same.
1186. I understood that the team working on the project took the following actions in
response to the report:
a. Produced a report rebutting the perceived inaccuracies which was
to be sent to applicants alongside the thematic report: see Mark
Davies email to me on 12 April in which he describes the thematic
report as containing “significant inaccuracies and
misunderstandings” (POL00102397).
b. Provided an update to the Board including a view on the detail of the
report: see Mark’s email, circulated by Al Cameron on 16 April,
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which states that the Second Sight Report “remains inaccurate and
contains a number of unsubstantiated assertions” (POL00102401).
c. Provided a copy of Second Sight’s report to BIS: see Tom
Wechsler’s email of 16 April (POL00103765).
d. Issued a press statement dated 19 April 2015 addressing the
release of the Report and confirming POL’s commitment to
mediating the remaining cases (albeit those where there had been
a previous court ruling would be considered on a case-by-case
basis) (CWU00000007). I provided comments on the draft on 20
April 2015, noting that it needed to address other aspects of the
reporting and copying in Angela Van Den Bogerd and Rodric
Williams because they were “the experts on the detail’ (at pages 1
and 2 of (POL00091399)).
e. Prepared a draft communication to the POL network on 24 April
2015 to provide reassurance in the face of the ongoing media
coverage. Mark circulated his draft for comment to Jane MacLeod,
Tom Wechsler, Patrick Bourke, Rodric Williams, Melanie Corfield,
and Angela Van Den Bogerd. He then forwarded it to Kevin Gilliland
and to me, suggesting that Kevin would be best placed to send it
(POL00027751).
1187. Save for the comment provided on the draft press statement, although I was
aware that the team were taking these actions, I was not involved in the detail
of them.
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1188. I do not recall whether I read the reports at the time and so cannot say what
my views on them were, beyond the impression I have set out above. Given my
role, this impression was largely formed on the basis of the information given to
me by the wider team.
120.3. Have you views on these reports changed?
1189. As was the case with the earlier Second Sight reports, although I do not recall
my views at the time with precision, the events which have taken place since
these reports were produced have radically changed my impression of them.
The findings of the Common Issues trial, the Horizon Issues trial, the judgment
of the Court of Appeal (Criminal Division), and the evidence which has come to
light in this Inquiry have demonstrated their fundamental value and legitimacy.
1190. My views at the time were formed in good faith and I had no reason to doubt
the complaints made of the quality of Second Sight’s work or the accuracy of
POL’s Response. The feedback I received on this was consistent and, I now
see, was firmly aligned with the advice of our internal and external lawyers. The
legal advice POL received on the nature of the contract between POL and SPMs
remains the biggest area of disappointment for me and, with hindsight, this is
where Second Sight had the greatest insight.
1191. I supported the POL Response at the time, although I was disappointed that
we had been unable again to work together to achieve the end result we all
wanted: to resolve the individual cases to the benefit of all involved. However, I
accept now that the Response was wrong. In light of what I now know, the value
and importance of the Second Sight reports are beyond doubt.
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121, Please consider POL00027309 and POL00027310 (Board meeting on 2 July
2015). Please explain to what extent, if at all, decisions in relation to POL’s
position on mediating SPMs claims and _/ or challenges to the integrity of
Horizon were influenced by the need to extend the contract to supply IT services
with Fujitsu.
1192. The background to the POL Board meeting on 2 July 2015 is indicated by the
minutes of the meeting on 21 May, which I attended. I can see from the minutes
that my CEO report addressed, amongst other things, the relationship with
Fujitsu. The minutes record that “the volatility in the relationship with Fujitsu
was an area of concern, because of the impact it could have on the IT
programme and value for money if the Fujitsu contract needed to be extended”
(at page 2 of (POL00021532)). Lesley Sewell joined the meeting to set out
more detail on the options and costs of extending their contract and explained
that it was not clear that Fujitsu wanted to sign the contract extension (at page
7 of (POL00021532)).
1193. I can see that a memo dated 29 June 2015 from Al Cameron and Lesley to the
POL Board provides a further update on the negotiations and seeks the POL
Board’s approval to extend the contract by one year to protect the continuity of
operational services from an otherwise unacceptable risk of disruption
(POL00027309). This request was approved by the POL Board at its meeting
on 2 July 2015 (POL00027310).
1194. Although I do not recall this discussion, I do not consider that the decisions
relating to POL’s position on mediating the claims and challenges to the
integrity of Horizon were influenced by the need to extend the contract to supply
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IT services with Fujitsu at all. Regardless of the issues arising in Project
Sparrow, there was an obvious need to ensure that any changes to the IT
arrangements did not result in unacceptable disruption to the operation of the
system. Given that this could not be assured without extending the contract,
the extension requested by Lesley and Alasdair was a sensible precaution.
122. Please consider POL00102438 (your email to Jane MacLeod and others on
3 August 2015).
122.1. Please consider “our priority is_to_ protect the business _and_the
thousands who operated under the same rules and didn’t get into difficulties”.
Does this accurately reflect your main priority in dealing with challenges
brought by SPMs to the Horizon IT System?
1195. In my email of 3 August 2015 to Jane MacLeod, Mark Davies, and Al Cameron
I sought input for a meeting due to take place with Baroness Neville-Rolfe,
explaining that (at page 1 of (POL00102438)):
“[Ojur priority is to protect the business and the thousands who operated
under the same rules and didn’t get into difficulties; the points and queries
below are not to reopen anything but to ensure that we are well briefed for
Thursday.”
1196. The points and queries referred to address a range of issues I anticipated we
may discuss, and they illustrate the breadth of the issues being raised
throughout this time.
1197. It was always a fundamental concern to me that the work being undertaken
should address and resolve the complaints and allegations made by SPMs. I
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believed that this was best for them and also best for the business. I had
repeatedly emphasised how important it was that these cases be resolved in a
way which both sides could be satisfied with.
1198. However, as I have set out above, I also felt a deep responsibility to protect
both the business itself (which, as CEO, I was duty-bound to do), and the
interests of the vast numbers of SPMs running Post Offices up and down the
country, who did not appear to be experiencing difficulties with the system, but
whose livelihoods would inevitably be impacted by any depreciation in trust in
POL, the business. It was vital that we did not needlessly destabilise the
business (understood as the individual Post Offices themselves), staff, and
customers. A loss of trust in POL would inevitably result in a loss of trust for
them and for their customers, whether that was fair or not.
1199. This was an acutely difficult balancing act because both interests were valid
and important. On both sides there were people who could suffer through no
fault of their own. I consider the desire to protect the business and the
businesses of SPMs up and down the country to be a perfectly legitimate aim,
and I do not think that this aim compromised POL’s desire to achieve resolution
for those SPMs who did enter into the Mediation Scheme. Despite the adverse
publicity in doing so and without the benefit of hindsight, my understanding
from all the briefings, papers and discussions was that we had listened to the
SPMs’ complaints and were trying to respond. We had put the Mediation
Scheme in place, advertised it broadly, and put in vast resources to support it.
I, the Board, the GE and colleagues working with Second Sight and the
Working Group thought that we were doing everything we could and should do.
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122.2. Do you accept that POL’s priority ought to have been to investigate
whether there was a real possibility that a conviction it had secured based on
data produced by the Horizon IT System was unsafe?
1200. I agree that this should have been a priority and my understanding was that it
was. I am not a lawyer, and I did not have the expertise to assess the work we
were doing myself. However, my understanding was that we were doing what
we needed to do.
123. Please consider POL00021683 (Jane MacLeod’s letter to Second Sight
dated 4 August 2015). Why did POL send this letter?
1201. Jane MacLeod’s letter of 4 August 2015 refers to a letter sent to Second Sight
on 27 July 2015 (POL00113697), which she describes as setting out the
confidentiality and publicity restrictions under their terms of engagement letter
dated 1 July 2014 and the extension of services agreement dated 15 April 2015
(at page 2 of (POL00021683)).
1202. I can see that Jane emailed me on 2 August 2015, while I was away on holiday,
to provide me with an update on developments relating to Project Sparrow
(POL00102433). In this update, she refers to her letter of 27 July 2015 and
states that she has written to Second Sight “advising that as their work had
concluded, they should return all documentation to us in accordance with the
terms of the confidentiality undertakings contained in their Engagement letter”
(at page 3 of (POL00102433)).
1203. In her update, I can see that Jane informed me that, following receipt of that
letter (at page 3 of (POL00102433)):
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“Second Sight (in breach of their confidentiality undertakings) ensured that
Andrew Bridgend [sic] was immediately aware of our instruction to
return/destroy materials, and he then complained to the Minister that we
were destroying materials. As a result, I wrote to the Minister on
Wednesday and have given her an undertaking that any materials returned
to us by SS would be held by Bond Dickinson. This undertaking was (mis)-
reported in the Sunday Telegraph today...”
1204. The replies to Jane's update email from Al Cameron and Mark Davies (on 3
August 2015) indicate that thought was given to how to handle these issues,
including by counter-briefing the press (at pages 1 to 3 of (POL00102433)). In
my reply of 3 August, I asked the team to explore the pros and cons of all
options ready for consideration on my return (at page 1 of (POL00102433)). At
this time, as ever, managing press reporting and the expectations of MPs was
a critical (and difficult) task. It would certainly be a source of concern if Second
Sight had released confidential information in breach of their confidentiality
undertakings.
1205. In my reply to Jane, I explained that I had a number of questions/requests
which I would send in due course. I believe I set these out in the email I sent
later that day at 15:26 to Jane, Mark Davies, Al Cameron, Tom Wechsler,
Avene O'Farrell, and Alwen Lyons (POL00065478). As I said there, these were
not all new questions and we had answered many of them before. However, I
was seeking a full briefing on all relevant issues, set out in clear terms, which I
could use at my meeting with Baroness Neville-Rolfe due to take place that
Thursday. We were dealing with sensitive and difficult issues, so it was
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important to me that ExCo was challenged in its thinking as well as supported.
I can see that I wanted to be sure that the Board was fully behind the content
of the ministerial briefing, as I say that if we decided to change anything ‘we
would need to go back to the Board’ and I wanted to know that the interim
Chairman Neil McCausland was in the loop.
1206. In relation to preserving material (and the suggestion that POL might seek to
destroy material) I can see that I asked (at page 2 of (POL00065478)):
“Why did they think we would be destroying data? Clearly we wouldn't; so
what is so sensitive that they thought we might/or wanted to be sure data
was protected. (And if the data destruction point is just a red herring, then
it comes back to 2)...”
1207. Point 2 (as referred to in this question) asks why Second Sight believed POL
should pay compensation and why they were supporting the JFSA.
1208. At 19:52 on 3 August 2015, Mark Underwood emailed Jane MacLeod and
Rodric Williams (cc’ing Mark Davies and Melanie Corfield) explaining that he
had made a start on compiling the material and information I had requested (at
page 1 of (POL00065478)). I believe the attached document referred to is a
draft Q&A document which addressed, amongst other things, the letter of 27
July. In this draft, Mark Underwood explained that POL made a request for
securing confidential documents, described as “standard practice” at the end
of engagement. As POL would retain all documents provided by Second Sight
and Second Sight would only destroy duplicates, his understanding is that no
information would be lost as a result of Second Sight complying with this
request (at page 2 of (POL00119489)).
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1209. There is no additional explanation within this material of why Jane sent her
letter of 4 August 2015 and I have no independent recollection which would
shed further light on this. The only explanations I appear to have received are
set out in her email update of 2 August 2015 and in the letter itself. From these,
Jane wrote to seek an explanation from Second Sight of their actions, which
appeared to be in breach of the duty of confidentiality they owed under the
terms of their engagement.
1210. If the actions allegedly undertaken by Second Sight were true (and, as GC, I
am sure Jane would have checked her facts before sending a letter such as
this), this behaviour would have been seen as unacceptable and
unprofessional.
124, Please consider FUJ00083379 (presentation on the Branch Outreach Issue
dated 10 December 2015).
1211. The Inquiry has asked me to consider (FUJ00083379) which is a printed
presentation prepared by Fujitsu on 10 December 2015 “for Post Office’s
internal purposes” describing their initial findings in respect of the Dalmellington
/ Branch Outreach bug.
124.1 When did you first become aware of the Dalmellington/Branch Outreach
bug? Did you review this presentation?
1212. On 1 July 2016, I sent an email to Al Cameron and Rob Houghton, cc’ing Tom
Wechsler and Jane MacLeod with the subject line “The Dalmellington Error in
Horizon”. I opened the email saying “(t)his needs looking into please” and
included a link to the Wordpress blog ProblemsWithPol and a particular article
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with the name which I included as my email subject (POL00029971). This was
a blog maintained by Tim McCormack.
1213. Regarding the online article, I asked that “a report takes the points in order and
explains them”. I wanted to understand what was being alleged by Mr
McCormack and understand how we and Fujitsu had “rectified all the issues
raised, if they happened as Tim explains” since I was concerned that “we/our
suppliers appear to be very lax at handling £24k”. I regarded the issue as
potentially very important; I told my colleagues that we “must take him seriously
and professionally” and I made no assumptions about whether or not the
allegations were accurate or, if they were, where the blame lay. I genuinely
wanted to understand what had happened and, perhaps just as importantly,
whether steps had been taken to make sure it did not happen again.
1214. I believe that was the first time I became aware of the Dalmellington Outreach
Bug.
1215. Rob wrote to Sharon Gilkes and Katie Mulligan (cc’ing Angela) that afternoon
asking for “an urgent review and mini <taskforce> on this one” and Angela
responded asking to see Mr McCormack’s email (POL00026913). Then, within
the hour, Rob emailed those same people saying “Can you stand down on this
please? Jane has just talked to me and its very sensitive and in control! Any
specific actions and I will revert. My apologies” (POL00029980). Sharon replied
“will do Rob”.
1216. Putting this together with another email chain, I can see that Jane emailed Al
and Rob at 12:30 on 1 July 2016 saying (POL00030012), in an email to which
I was copied:
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“We are on top of this. Mr McCormack regularly writes to us in unpleasant
terms and unfortunately he also posts very unpleasant blogs. All the
matters of which he complains are the subject of review by the CCRC.”
1217. I presume that this is the reason that Rob told his team to stand down.
124.2 Please consider “Audit found 112 occurrences of Duplicate Pouch IDs
over the past 5 years... 108 items corrected at the time... 4 items still to be
confirmed.” Please explain your reaction to the disclosure that Fujitsu identified
a bug with the potential to cause discrepancies in branch accounts that had
been live for five years concern you. Did it cause you to consider POL’s
approach to SPMs’ complaints about Horizon?
1218. Rodric Williams then sent the Fujitsu presentation to Rob Houghton on 7 July
2016. I was not copied into this. Rodric asked whether Fujitsu had implemented
a fix. Rob asked Gavin Bell, at Fujitsu. Gavin provided a summary of Fujitsu’s
measures taken regarding this bug on 11 July. This summary covered the
history of the matter, the “problem identification” and the “problem correction”.
Gavin noted “since the fix has been live no further incidents have been seen
and the active monitoring for this has now been stopped”.
1219. Gavin described that Fujitsu had identified 112 instances of this error occurring
in previous transaction logs, but all had previously either been corrected by the
SPM or with the help of the support desk. This "772" statistic was the same
figure which was quoted in the Fujitsu presentation at page 3, with the extra
information that they had occurred over five years. That presentation stated
more specifically that 108 items had been corrected at the time, but four still
required confirmation because there were no correction records.
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1220. On 9 August 2016, Rodric emailed Rob to say that I had received another email
from Mr McCormack which described that the Dalmellington Error had just
happened again at another branch. Rob asked Sharon Gilkes to “pick this up
please” and sought some time with her to discuss it. This is a reference to Mr
McCormack’s email on 9 August 2016 (at page 2 of (POL00119584)).
1221. Avene Regan had sought the advice of Rod, less than 25 minutes after Mr
McCormack’s email arrived, as to how (or if) POL should respond. Rodric was
“not inclined to reply” but the following week reflected and said he would ‘like
to go back to Mr McCormack with a short response, for no other reason than
to ensure he can’t allege that we don’t respond when issues with Horizon are
flagged to us”. Avene approved the draft response and agreed that Rodric
should send it.
1222. I have very little recollection of the Dalmellington bug and I do not know if I
knew it by name at the time. I recall a conversation with Rob Houghton about
this issue although I cannot say when this occurred. However, it must have
been after I sent the email about Tim McCormack. Rob came to see me and
had a document with him. I think this may have been the Fujitsu presentation
but cannot be certain. Looking at it today, it triggers a memory that Rob referred
to an issue with the "stack", which I see is a word used on the second page of
the presentation. I do not now remember anything further about the
conversation, except that I have a vague memory of asking for a copy of the
document which Rob had in hard copy. I cannot recall if I asked Rob directly or
if I asked Avene to obtain a copy.
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1223. After speaking to Rob and obtaining a copy of the document from which he was
speaking, I would have had an understanding of the issues raised in Mr
McCormack’s email.
1224. The Inquiry has asked whether my knowledge of the Dalmellington bug caused
me to consider POL's approach to SPMs' complaints. While I do not recall
receiving it, Jane MacLeod's email to me and others on 1 July 2016
(POL00029976) stated that "we are on top of this" and that the matters which
Mr McCormack had complained about were the subject of the review by the
CCRC. I believe I was reassured by this that the legal team were alive to all
legal issues arising from the bug and were dealing with them appropriately.
125. Please consider POL00117722 (letter from Tim Parker to Baroness Neville
Rolfe dated 30 September 2015), POL00024913 (email from Jane McLeod to you
and others on 1 October 2015), POL00027126 (email from Tom Wechsler to you
on 27 January 2016), POL00103110 (letter from Tim Parker to Baroness Neville-
Rolfe dated 4 March 2016), POL00103111 (Annex A), POL00027128 (email from
Jane MacLeod to you dated 22 January 2016) and POL00006355 (the Swift
review).
125.1 Please explain the background to Mr Parker’s review of Sparrow and
Horizon.
1225. My understanding is that the origin of Tim Parker's review of Sparrow and
Horizon (‘the Parker Review’ or “Jonathan Swift QC’s report”) can be traced
to a ShEx / BIS meeting on 4 August 2015 attended by Baroness Neville-Rolfe
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and various Government advisers and civil servants. A note which I have seen
of that meeting states as an action (UKGI00005297):
“Baroness Neville-Rolfe to speak with incoming Post Office Limited
Chairman Tim Parker, to encourage him to take a fresh look at these issues
and engage with those who are still raising concerns.”
1226. Later that week I met with Baroness Neville-Rolfe, with Jane MacLeod and
Mark Davies, on 6 August 2015 (UKGI00000035). This is a meeting which was
arranged at Baroness Neville-Rolfe's instigation, and which Jane had told me
about a few days before (POL00065471).
1227. The purpose of the meeting on 6 August was recorded, in an internal briefing
note for Baroness Neville-Rolfe which I have seen as part of the Inquiry’s
disclosure (UKGI00005297), as:
. “Post Office will want to set out the steps they have taken to ensure
the mediation scheme is open, fair and independently assured.
. “Post Office may also want to discuss Second Sight and the reports
(in Sunday’s Telegraph) that they have written to Ministers claiming
that Horizon is flawed
° “You may like to ask Post Office what more they can do to help the
mediation scheme continue, and how they can increase their
engagement with individuals
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° “You may like to ask Post Office about their wider strategy for
communicating their messages about this issue and how they can
make it more effective”
1228. This briefing note for Baroness Neville-Rolfe included “Explain that you are
speaking to Tim Parker shortly and will emphasise the importance Government
places on him taking ownership of this issue.”
1229. On 6 August 2015, Alwen Lyons and Richard Callard exchanged emails (which
I was copied into). Alwen said “Paula and I are consider[ing] how and when it
is best to brief Tim on Panorama” and said that we would prefer to do it “after”
Baroness Neville-Rolfe had spoken to him (at page 2 of (UKGI00005323)). Tim
Parker had not yet joined POL and Neil McCausland was Acting Chair at this
time. He was in the loop on Panorama. Richard said that Baroness Neville-
Rolfe and Tim were due to speak that day at 14:45. Richard also indicated that
Tim, as the new Chair, was happy for Baroness Neville-Rolfe to tell
Parliamentary colleagues that “the new chair will of course take a critical and
independent look at the issue” of Sparrow.
1230. On 10 September 2015, Baroness Neville-Rolfe wrote to Tim (POL00102551)
“ahead of your taking up the role of Post Office Limited Chairman to confirm
our conversation last month regarding Post Office Horizon system”. I shall
quote from it in detail:
“The Government takes seriously the concems raised by individuals and
MPs regarding the Post Office Horizon system and the suggestion that
there may have been miscarriages of justice as a result of issues with
Horizon. The Government also recognises the commitment that Post Office
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1231.
1232.
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Limited have demonstrated to resolving those issues, including through
creating a mediation scheme and appointing independent investigators to
scrutinise the system.
“As you will be aware, there have been some three years of scrutiny of
Horizon and the Criminal Cases Review Commission is considering a
number of cases which have been brought to it by individuals, and the
Government cannot intervene in that independent process.
“As the sole shareholder of Post Office Limited, the Government wants to
make sure that the Post Office network is successful and sustainable
across the country. We recognise that the Post Office is a commercial
business and we allow it to operate as such, but of course, we expect it to
behave fairly and responsibly in doing so. I am therefore requesting that,
on assuming your role as Chair, you give this matter your earliest attention
and, if you determine that any further action is necessary, will take steps to
ensure that happens.”
Baroness Neville-Rolfe told Tim that she was copying the letter to me. I do not
recall receiving the letter but I do not doubt that I did.
The next day, Baroness Neville-Rolfe received a briefing note from her ShEx
team (UKGI00000058). This was in advance of a meeting arranged for 17
September 2015 with Lord Arbuthnot. Baroness Neville-Rolfe was briefed that
she should tell Lord Arbuthnot that she had written to Tim who would “/ook at
this with a fresh pair of eyes’.
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1233. On 11 August 2015, Alwen Lyons sent an email to Tim Parker (POL00174396)
attaching a note from me entitled "note for Tim Parker re Panorama". I have
been unable to find a final version of this note, however I have been shown a
draft document at (POL00319092) which looks like it is probably an earlier draft
of the note which went to Tim Parker. It would appear from (POL00168301)
that this had been prepared for me by Mark Davies who had had input from
Jane MacLeod, Alwen and Andrew Parsons from Bond Dickinson.
1234. On 14 September 2015, Baroness Neville-Rolfe's letter of 10 September 2015
was provided to Tim by Jane.
1235. A Board meeting took place on 22 September 2015 (POL00021538). Tim was
not yet in post, and so Neil McCausland attended as the interim Chairman. I
presented my report and the minutes record that I said:
“... the Minister had asked the new Chairman for his independent review of
Sparrow. The Minister had also met Lord Arbuthnot who informed the
Minister that he would use Sparrow as the focus of his maiden speech in
the House of Lords.”
1236. Tim wrote to Baroness Neville-Rolfe on 30 September 2015 (POL00117722).
He had been “considering how to fulfil the commitment [he] gave [the Minister]
to take a fresh look at the Post Office’s handling of the complaints raised with
it in connection with its Horizon electronic point of sale and accounting system”.
Tim had decided:
“To this end, and to promote the independence of the exercise, I proposed
to instruct a QC to advise me as to the appropriate scope of my
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investigation, how I might best conduct the necessary enquiries, and to
assist me in considering both how to present and, as necessary, act on my
findings.”
1237. Tim said that he would share a timetable for the Parker Review with Baroness
Neville-Rolfe shortly after 12 October 2015.
1238. On 1 October 2015, Jane shared with me an email that she had sent to Tim,
providing the CVs of “two leading QCs” who “would in [her] opinion be suitable
to advise you having regard to the nature of the issues raised by Project
Sparrow” (POL00027126).
1239. Other emails, which I was not copied into at the time, make it clear that
Jonathan Swift QC was advising Tim directly, taking instructions from Tim and
reporting to Tim. For example, Jane emailed Tim on 22 October 2015 saying
“I trust you found the meeting with Jonathan useful and believe that he will be
able to support you appropriately?” (POL00102619).
1240. On 9 October 2015, I had a pre-arranged telephone call with Baroness Neville-
Rolfe which was proposed by POL (UKGI00006142). Tom Wechsler gave me
a list of “key handling points” by email on 8 October 2015 (POL00117511):
« “Whilst we do not believe there is a case for BNR to meet SS/SAH (at
all) we need to respect her decision in principle
° “So we should not ask her to change her decision and tell JA etc that
she won't meet them
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. “What we are asking for is time ie leave the decision open for now.
Two reasons:
fe) “Having asked Tim Parker to review our approach, he has
appointed a QC to assist him and is very likely to meet SS/SAH.
He is aiming to have completed this by Christmas. For BNR to
meet them at the same time risks undermining Tim’s work before
it has begun.
o © “To roughly the same timescale we will have completed the
majority of the mediations.
e “We believe that an earlier meeting would be used by JFSA as
evidence of an impending Government intervention and a catalyst for
applicants to withdraw from mediation — entirely to their detriment.
e “If BNR still wishes to meet them at a later date then so be it, but she
would be better off having had the benefit of Tim’s review, and
applicants would be better off for having gone to mediation.”
1241. I was also sent a one-page aide memoire. I thanked Tom and said that the note
should be sent to Tim before my call. Later that day, Jane told me by email that
Tim had had a conference with Jonathan Swift QC that afternoon, who had
“agreed that the Chairman would need to meet both [Second Sight and Sir
Anthony]’ (POL00117506).
1242. I was not copied into the correspondence instructing Jonathan Swift QC, nor
consulted on the terms of the instructions. Neither should I have been — it was
Tim, and not me, taking advice. I have now seen the instructions to leading
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1244.
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counsel as part of the Inquiry’s disclosure. I am aware that Christopher Knight,
a junior barrister, was also instructed. I have not seen, even as part of the
Inquiry’s disclosure, the instructions which were sent to him at the beginning of
his involvement in the matter.
At some time when the Parker Review was being set up, although I do not
recall precisely when, I spoke with Jane who told me that I would intentionally
be out of the loop to ensure that Tim’s review was independent. That was
appropriate. I occasionally asked Jane and others about the progress of the
Parker Review and was reassured that it was progressing well.
In respect of Horizon, ShEx made the following note of the “main points” of
discussion after the call (which I did not see at the time):
. “POL wanted to flag their concerns around the Minister meeting
Second Sight. They felt that doing so would risk undermining her
independence and distance from the situation, and were also
concerned that if news of the meeting were to leak to the media, it
could risk individuals withdrawing from the mediation process (after
considerable efforts by POL to get these in the diary). Paula was also
concerned that the Minister's meeting might conflict with any meeting
Tim Parker decided to have with SS.
e “BNR noted Paula’s views but felt it important to make the offer of a
meeting to Second Sight and inform Mr Arbuthnot that she was doing
so. She suggested that the offer should be of a private meeting, and
should happen quite soon, so that it would take place before Tim
Parker invites them to meet. It would be a short meeting.
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° “After the call, we agreed that we would need to update Oliver Letwin’s
office on the process, before offering a meeting and replying to Mr
Arbuthnot. The Minister also felt she should write to Mr Bridgen,
possibly after she had met Second Sight.
. “The Minister agreed that the meeting with Sir Anthony Hooper was
less important, and that it would be best to wait until Tim Parker had
met Sir Anthony and then decide whether she should meet him.”
1245. I had a one-to-one meeting with Tim on 12 October 2015. A briefing note was
prepared for me by Tom Wechsler (POL00027115) noting that this was my first
“1-2-1 with Tim since he officially began at Post Office”. In respect of the Parker
Review, the briefing note stated that “Jane and team have met with the QC
supporting TP to provide information and answer questions. I am sure it is all
in hand, but you may wish to encourage TP to raise any concerns about eg
information / support with you at any points that he has them.”
1246. I am now aware that on 19 October 2015, Baroness Neville-Rolfe met with
Second Sight. I have seen a briefing note prepared for her for that meeting
(UKGI00000044). It is noted there that Baroness Neville-Rolfe has “asked Tim
Parker, who started as Chair this month, to look at the matter with a fresh pair
of eyes, and he will take a serious and thorough look at this.”
1247. I have seen a document (POL00027129) headed “Project Sparrow — 05
January 2016” which was sent to me by Tom Wechsler (POL00110344). I do
not recall it from the time. I am not sure if it was written for me, or if I saw it at
the time. It states that Tim was to meet the barristers “to finalise the report,
likely in the second half of this month” (POL00027129). Tom told me the same
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day that “the QC’s review is due to complete in the next week or so for Tim’s
consideration” (POL00110344).
1248. I had a further meeting with Tim on 12 January 2016. My briefing document is
(POL00027124). That briefing note states:
“Yesterday, Tim Parker received the draft report into the adequacy of the
Scheme’s processes from Jonathan Swift QC. Though we have not had
sight of the report, Jane MacLeod has a meeting with Tim this afternoon at
4pm, during which I would expect it to be discussed.”
1249. On 22 January, Tim and Jane had a call with Jonathan Swift QC and discussed
his recommendations. I was aware of this call at the time, and the email
summarising the recommendations was forwarded to me by Jane
(POL00103110). The document attached to that email is (POL00103111). This
is a table summarising the eight recommendations which Jonathan Swift QC
and Christopher Knight made, with “POL’s proposals for addressing” them.
1250. I met with Jane on 27 January 2016. Tom suggested that I might want to
discuss Sparrow, and informed me that ‘the plan is to work with Jonathan Swift
to complete the final report” (POL00027128).
1251. I see now that the final review written by Jonathan Swift QC and Christopher
Knight is dated 8 February 2016 (POL00006355). I did not see it at the time.
125.2 Please set out whether you read Jonathan Swift QC’s (as he then was)
report. If so, please describe your views on the same and the actions you took
as a result of it.
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1252. I had no involvement with the Parker Review written by Jonathan Swift QC,
and I have no recollection of seeing it at the time. Nor have I been able to
identify any documents disclosed by the Inquiry which show that I saw, or had,
a copy of the report. I do not think other members of the POL Board had a copy
either.
1253. The POL Board, and I, did see the eight recommendations which Mr Swift QC
gave at the end of his report. We saw those in a different format, transferred
into a table (POL00103111).
1254. In respect of the eight recommendations, nothing caused me particular alarm,
I was realistic that work needed to be done and I was open to this happening.
I believed that POL should deal with the recommendations professionally and
respond to each of them.
1255. I am aware that actions which were taken by POL as a result of those
recommendations were taken by a team which reported directly to Tim. I was
not part of that process. I believe the POL Board was updated but have no
detailed recollection other than of the Senior Independent Director asking
questions.
125.3 Please describe any meetings you had with Mr Parker, Mr Swift QC or
anyone else at POL, UKGI or BEIS concerning (a) the Swift Review and / or (b)
its recommendations.
1256. In addition to the matters described above, I am able to recall or identify
documentary evidence of the following meetings in which I was involved,
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concerning the Parker Review. I cannot be sure that this is a comprehensive
list, but rather it is everything which I can currently recall.
a. In response to matters I raised by email, Jane MacLeod wrote to me
on 23 May 2016 describing that Deloitte were working to address
certain recommendations made in the Parker Review
(POL00103200).
b. On 26 January 2016, Tom Wechsler emailed me a note from Patrick
Bourke which followed a telephone call between the Chairman and
the Minister in which both ‘agreed the issue was losing potency and
dying away’ but that in respect of the report itself ‘it would be
impossible to please everyone, no matter what was done.’ They
anticipated accusations of whitewash and lack of independence,
etc, which would need to be ridden out by both POL and BIS
(POL00027116)
c. Tom emailed me on 29 April 2016 providing a file note of a meeting
between the Chairman and the Minister. The Chairman updated
Baroness Neville-Rolfe in respect of the recommendations from his
report (POL00103171).
d. I met with Jane on 13 June 2016, following an email on 10 June
2016 (POL00110440). Jane briefed me on Anthony de Garr
Robinson QC’s advice that work underway on the Parker Review
should stop. As I recall, it was subsumed into the litigation work.
1257. I did not meet with Jonathan Swift QC, or his junior Christopher Knight.
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126. Please consider POL00110406 (email from Tom Wechsler to you dated 10
April 2016). Was there a culture within senior management at Post Office to
prevent further investigation of complaints concerning Horizon at this time?
1258. I am asked whether there was a culture within senior management at POL to
prevent further investigation of complaints in relation to Horizon in April 2016.
I do not believe that this was the case. In fact, to the contrary, the senior
management of POL and I felt that we had done everything reasonable to
investigate cases of complaints in respect of Horizon.
1259. The note from Tom Wechsler states "beyond the CCRC and any legal action,
we have done as much as we can... [T]there must be an end to this. Ultimately,
if there is a case the protagonists must make it in Court". The issue at this stage
was not that there was a culture to prevent further investigations, but that the
scheme had reached an end point. POL had finished its reviews; a majority of
applicants left the scheme in autumn 2015 (at page 2 of (POL00065471)); a
number of SPMs had lodged Data Subject Access Requests which Jane
assumed linked to a possible class action. Further the Chairman was
conducting his own review assisted by a QC. I genuinely do not believe that
there was a culture within senior management at POL to prevent investigation
of complaints in relation to Horizon. Rather, it was felt that we had done
everything reasonable to investigate complaints. In fact, as can be seen from
the section above regarding the Dalmellington bug, where issues were brought
to my attention, I made sure that the right members of the team were asked to
investigate them.
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1260. So far as I was concerned, we had taken complaints seriously, putting
significant sums of money into the Second Sight investigation, the Mediation
Scheme, carried out internal investigations and instructed external legal
professionals in respect of the same, invited complainants to approach us with
their concerns and funded independent advisers for them.
1261. At the time, we considered that we had exhausted all avenues of investigation.
I am aware of, and very sorry for, how short-sighted and empty that now sounds.
Remote Access
1262. I am aware that Fraser J made a number of findings about remote access in
his Horizon Issues judgment in the Group Litigation:
a. Over the lifetime of the system, Fujitsu used at least three forms of
privileged access to Horizon.
b. These were Database Administration rights, Privileged User rights, and a
powerful form of access permission known as APPSUP.
c. Each of these rights enabled Fujitsu to change transactions and branch
accounts without the knowledge of the relevant SPM. In particular, the
APPSUP privilege enabled Fujitsu to do whatever it wanted on the Horizon
system.
d. In addition, there was a function built into Horizon, known as a Balancing
Transaction, which enabled Fujitsu to insert or inject additional transactions
into branch accounts.
e. For many years, all the members of Fujitsu’s staff working at the Software
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Support Centre in Bracknell had APPSUP privileges, even though internal
Fujitsu documents recorded they were not supposed to have that role.
f. The controls around the use of these privileges and functions were
inadequate to record the changes that Fujitsu made on the system. Fraser
J found that Fujitsu only maintained user access logs from 2009. From
2009 to July 2015, the logs recorded only when a user had logged on and
logged off and failed to record any actions taken by the user. From 2015
onwards, Fujitsu kept more detailed logs, but their content was still
inadequate.
1263. I accept these findings. In this section of my witness statement, I set out my
understanding of Fujitsu’s remote access privileges at four points in time:
a. First, during my time as Network Director and Managing Director (2007-
2012):
b. Second (in response to question 62.3.2) at the time of my discussion with
Lord Arbuthnot on 23 May 2013;
c. Third (in response to question 67.4) at the time of my meeting with Lord
Arbuthnot on 3 July 2013;
d. Fourth, at the time that I gave evidence to the House of Commons BIS
Select Committee on 3 February 2015.
1264. Before doing so, I wish to outline my general understanding of what I
understood “remote access” to mean at these times.
1265. I did not have a personal technical understanding of how the Horizon system
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functioned and relied upon POL’s IT department to escalate and explain any
IT matters that were relevant to my roles. I knew in broad terms that branch
accounts sometimes required correction — in the vast majority of cases due to
human error — and believed this was done via the Transaction Correction
process. I understood that if POL identified discrepancies in a branch’s
accounts, it would send the SPM a Transaction Correction. If the SPM agreed
with the Transaction Correction, they would accept it via Horizon, and it would
then amend the branch records. If the SPM disagreed, there was a process to
challenge the Transaction Correction, which would lead to an investigation and
decision by POL.
1266. I first became familiar with the term “remote access” because of claims made
in 2012-2013 by a former SPM, Michael Rudkin, that he had observed a POL
employee changing branch data remotely at a Fujitsu facility in Bracknell in
2008. When I first engaged with the issue of “remote access” in 2012-2013,
POL’s focus was very much on the specific claims of Michael Rudkin. However,
I came to understand the “remote access” issue to mean — more broadly —
whether there was an ability to make changes to a branch’s data without the
SPM’s knowledge. I cannot recall discussing or being briefed about this issue
in terms of Fujitsu’s remote access “privileges” until the start of the GLO
Proceedings.
My understanding of Remote Access 2007-2012
1267. During my time as Network Director and Managing Director (2007-2012), I had
no understanding that I can recall that branch data could be changed in any
way other than by using the Transaction Correction process.
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1268. However, I can see from the documents disclosed by the Inquiry that some
individuals within POL knew in the period 2007-2012 that Fujitsu had some
remote access capabilities:
a. (POL00029710; POL00030001): This document is an email exchange on
15 and 23 October 2008 — while I was Network Director — between Andrew
Winn (P&BA) and Alan Lusher (Network Support) about Graham Ward, a
suspended SPM. Alan Lusher reported to Andrew Winn that Mr Ward had
claimed during an interview that figures had been entered into the cheque
line of his branch accounts “electronically without his knowledge or
consent’. Mr Winn replied:
“The only way POL can impact branch accounts remotely is via the
transaction correction process. These have to be accepted by the
branch in the same way that in/out remittances are i [sic] guess. If
we were able to do this, the integrity of the system would be flawed.
Fujitsu have the ability to impact branch records via the message
store but have extremely rigorous procedures in place to prevent
adjustments being made without prior authorisation — within POL and
Fujitsu. These controls form the core of our court defence if we get to
that stage. He makes a casual accusation that is extremely serious to
the business. As usual he should either produce the evidence for this
or withdraw the accusation”.
b. (POL00028838) is a paper concerning the Receipts & Payments Mismatch
bug dated 29 September 2010, which was shortly before I became
Managing Director of POL on 18 October 2010. In summary:
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i. I understand from the document and from evidence given to the
Inquiry that the paper was prepared in connection with a meeting
between Fujitsu and POL to discuss how to remove the effects of the
bug from the accounts of the affected branches.
ii. The POL staff identified in the paper as attending the meeting include
Alan Simpson (Security); Julia Marwood (Network); lan Trundell (IT),
and Andrew Winn (P&BA).
iii. The paper set out three solutions for correcting the discrepancies
caused by the bug, the first of which was to “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.” The paper
stated that the risks of this solution were that: “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.”
c. (POL00088956) is a thread containing emails dating between 17
November 2010 and 5 December 2010:
i. In the first email in the thread, on 17 November 2010, Mike Granville
(POL Head of Regulation Strategy) asked Rod Ismay (POL P&BA)
and Lynn Hobbs (Network) to comment on a “response note” which
he had prepared to follow up on a meeting with Mike Whitehead at
BIS about the JFSA.
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ii. On 3 December 2010, Ms Hobbs forwarded Mr Granville’s email and
her original response to Mr Granville to John Breedon (POL National
Contract Manager North). Her response to Mr Granville said:
“I ...have just one observation. I found out this week that Fujitsu
can actually put an entry into a branch account remotely. It came
up when we were exploring solutions around a problem
generated by the system following migration to HNGX. This
issue was quickly identified and a fix put in place but it impacted
around 60 branches and meant a loss/gain incurred in a
particular week in effect disappeared from the system. One
solution, quickly discounted because of the implications around
integrity was for Fujitsu to remotely enter a value into a branch
account to reintroduce the missing loss/gain. So POL can’t do
this by Fujitsu can.”
iii. Ms Hobbs added in her email to Mr Breeden:
“This is the last email exchange I had with Mike Graville about
the BIS meeting. The attached documents were what Mike was
proposing to send to BIS and I commented as below, I haven't
seen anything further but I did have a conversation with Mike
about the whole ‘remote access to Horizon’ issue. This was
being looked into by Andy McLean and Mark Burley. The view
being expressed was that whilst this may be possible it’s not
something we have asked Fujitsu to provide. I don’t know what
the final outcome was.”
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iv. On 5 December 2010, Mr Breeden forwarded the thread to Angela
Van Den Bogerd, who at that time was a manager within Network.
d. I can also see from (POL00002151) that, on 27 November 2012, Gareth
Jenkins of Fujitsu gave a witness statement in support of POL’s
prosecution of a SPM called Kim Wylie. On page 3, Mr Jenkins responded
to a comment in Ms Wylie’s defence statement that it was possible to
access the Horizon system remotely. He stated:
“It is true that such access is possible; however in an analysis
of data audited by the system, it is possible to identify any data
that has not been input directly by the staff in the Branch. Any
such change to data is very rare and would be authorised by
Post Office Ltd. As I have not had an opportunity to examine
data related to this Branch, I cannot categorically say that this
has not happened in this case, but would suggest it is highly
unlikely.”
e. I have been shown some of the emails generated during the production of
Mr Jenkins’s witness statement. I can see from these emails that the
contents of the statement were known to Jarnail Singh of POL in-house
legal, and a number of lawyers at Cartwright King solicitors (Rachael
Panter, Martin Smith, Andy Cash, Andrew Bolc): see (POL00097215).
1269. I do not recall the information in these documents being given to me when I
was Network Director or MD. As I have already stated, issues in specialist
areas of the business such as IT usually came to my attention when they were
escalated by the head of the relevant department or function. I have no memory
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of being told during my time as Network Director and MD that POL or Fujitsu
could change branch data without the knowledge of the SPM. Nor can I recall
being told of any concern that Fujitsu may have this ability.
1270. I have been shown (POL00120561), which is an email dated 26 November
2010 from Mike Granville to me, Mike Moores, Mike Young, Susan Crichton,
Kevin Gilliand, Sue Huggins, and Rod Ismay. In his email, Mike Granville
referred to the allegations that the JFSA had been making about the integrity
of Horizon and the associated processes that POL had used in terminating
contracts: POL’s approach throughout had been to robustly defend the integrity
of the Horizon system.
1271. Mike Granville stated that, as a result of a succession of MPs writing to the BIS
Minister referencing the JFSA’s allegations, the minister, Ed Davey MP had
met the JFSA. Subsequently, Mike Whitehead (a senior ShEx manager with
responsibility for POL) had met Rod Ismay, Lynn Hobbs and Mike Granville to
discuss some of the points raised by the JFSA. Mike attached to the email a
briefing document for BIS to follow up on that meeting. My lawyers believe this
may be the same document which Lynn commented on in the email chain at
(POL00088956). On page 9 of (POL00120561) there is a comment in
response to what seems to have been an assertion by the JFSA that “POL can
access the system remotely and make changes to it’. It states:
“The system is based on a user log in, and all actions have to be endorsed
by the user. POL cannot remotely control a branches system. Any technical
changes by Fujitsu that impact the system have to go through the
clearance processes which would prevent any amendment to existing data.
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The independent audit file is in place and can show all the system activity
in a particular branch.”
1272. I do not recall this document from the time. I can see what it says about remote
access. According to my understanding from the time, it was not possible to
make changes to SPMs’ accounts without their knowledge.
1273. I have addressed the Inquiry’s questions about EY’s 2010 and 2011 audits of
the control environment at Fujitsu (in my answers to Question 38). As I have
set out, in 2011, EY reported that it had been difficult to obtain information from
Fujitsu, identified control weaknesses, and made recommendations for
improvements. Following the 2011 audit, Lesley Sewell (who was then POL
Head of IT with a reporting line to Mike Young) led a steering group to consider
and implement the recommendations set out in EY’s management letter.
1274. Since POL was a subsidiary of RMG at the time of the 2010 and 2011 audits,
EY’s findings were presented to the RMG Audit and Risk Committee. Lesley
and three individuals from EY attended the meeting of the Committee on 8
December 2011 to discuss the audit: see the minutes at (RMG00000003).
Although the minutes do not identify who made these comments, they record
that:
“Overall EY was Satisfied that the control systems were reliable but they
had to perform additional audit work to make this conclusion, and they
made certain recommendations in the management letter following the
audit for improvements which have been implemented. The IT control
issues identified during the audit did not relate to the integrity of accounting
data in the system. Rather, EY made recommendations about the
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documentation and authorisation of changes to systems and about
opportunities for streamlined assurance”.
1275. I did not attend this meeting, but the comment set out above reflected my own
understanding at the time that the control weaknesses identified by Fujitsu did
not call into question the accuracy of the accounting information held in the
system. This was important because, to a large extent, POL’s accounts were
the aggregation of the accounts of the individual branches in the Network.
1276. EY’s management letter for the 2011 audit (POL00030217) stated that they
had reviewed privileged access to IT functions and that there were
inappropriate system privileges assigned to the APPSUP role and
SYSTEM_MANAGER role at the Oracle database level on the Branch
Database server supporting Horizon Online. The risk identified by EY was that
unrestricted access to privileged IT functions increased the risk of
unauthorised/inappropriate access which could lead to the processing of
unauthorised or erroneous transactions. In their management letter for the
2012 audit (POL00029485), EY stated that while Fujitsu had undertaken
actions to investigate some of the inappropriate privileged access identified
from the 2011 audit, there remained inappropriate system privileges assigned
to APPSUP and the SYSTEM_MANAGER roles.
1277. Any recommendation by the auditor must be taken seriously. My view at the
time was that POL was responding to EY’s recommendations effectively. In
2013, EY reported that focused management action, led by Lesley Sewell, had
addressed many of the issues raised in previous years’ audits, and that
management was continuing to take steps to address challenges in the IT
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environment. However, as stated above, I understood that the control
weaknesses did not undermine the reliability of the accounting information held
in the Horizon system. I cannot recall any conversation or briefing in which I
was told that the APPSUP role enabled or could enable Fujitsu to alter
transactions or branch data.
My understanding of Remote Access as of 23 May 2013
1278. One of the former SPM cases investigated by Second Sight in 2012-2013 was
the case of Michael Rudkin. Mr. Rudkin told Second Sight that, in August 2008,
he had visited a POL facility in Bracknell and been shown a basement room
containing Horizon terminals just like those used in branches. He claimed that,
in the basement, a POL employee showed him that he could use the equipment
to make changes to branch accounts without the knowledge of the relevant
SPM.
1279. My understanding was that POL had investigated Mr. Rudkin’s account of his
visit to Bracknell. I discuss the briefing I was given about his claims in July 2013
below. However, I must have been told about Mr. Rudkin’s claims by March
2013, since on 11 March 2013, Alwen Lyons emailed me a note on the
progress of Second Sight’s review (POL00097587; POL00097589) which
listed the “POL team at Bracknell’ as one of the thematic issues that Second
Sight were investigating. On 19 March 2013, I received an email from Susan
Crichton (POL00097719) which also contained a list of the thematic issues,
including “POL team at Bracknell (Michael Rudkin evidence)’.
1280. I do not recall who briefed me about Mr. Rudkin’s claims, or what exactly I was
told at this stage. I recall a general view at POL that his claims seemed odd. It
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was painted as a suggestion that we were carrying out covert operations from
a basement. I also remember the word “bunker” being used. It was difficult to
understand why POL would do such a thing. There was also some doubt at
this stage about whether Mr. Rudkin had ever visited the facility in Bracknell,
which I understood was a Fujitsu facility, although individuals from POL also
worked there. Overall, it would be fair to say that his claims wre viewed within
POL with scepticism.
1281. On 16 May 2013, Alwen sent me an email containing speaking notes for a call
I was having that day with Alice Perkins (POL00029587). I have discussed the
context of Alwen’s email in my answer to Question 60. The main issue in the
email was the discovery of bugs in Horizon, but there is also a line in the email
that: “Lesley is meeting Fujitsu tomorrow morning to go through the technical
assurance that the subpostmaster’s trading statement cannot be changed
without their knowledge.” I do not remember any conversations about this
aspect of the email. Reading it now, I think I would have viewed it as being
consistent with my belief at that time that it was not possible to make changes
to branch accounts without the SPM’s knowledge.
1282. I would have read it as meaning that Fujitsu were going to talk Lesley Sewell
through the detailed technical reasons why Mr. Rudkin’s claims about remote
access were not correct.
1283. The Inquiry has asked me in Question 62.3.2 to describe my conversation with
Lord Arbuthnot about remote access during our call on 23 May 2013 and my
understanding of Fujitsu’s remote access privileges at that time.
1284. My understanding at the time was that it was not possible for POL or Fujitsu to
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change branch accounts without the SPM’s knowledge. I knew that corrections
did sometimes need to be made to branch accounts, but that the amendments
were made via the Transaction Correction process. One of the reasons why I
was sceptical about Mr. Rudkin’s claims was that I could not see any reason
why POL or Fujitsu would need to make any changes to branch accounts in
secret. His account just seemed implausible.
I have set out the context of my discussion with Lord Arbuthnot on 23 May 2013
in my main answer to Question 62. Alwen Lyons took bullet point notes of the
discussion which appear at (POL00098377). The discussion about remote
access is recorded at the very end of Alwen’s notes:
. "JFSA raised a concern with James that the Post Office is continuing
with prosecutions despite the review taking place, predicated on the
view that ‘there is nothing wrong with Horizon’. JA does not think we
should be prosecuting on that basis (I think because SS have made
noises about finding something)
° PV promised she would go back to James on this point.
. JA said we should not go ahead until we can prove there is no remote
access to the system or branch terminal which can change the spms
account ( He did not say so but I think SS have suggested this)
e« JA said again we have to avoid access to the spm accounts
« PVexplained the E&Y audit at year end which gave the IT controls a
good report.
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° JA agreed that we needed to stop cases coming in and that future
ones could go through the CoSec route"
1286. I do not recall any details of the conversation about remote access beyond
what is recorded in Alwen’s notes. I can see that prosecutions and the remote
access / Michael Rudkin issue were not in my written agenda for the
discussion, which focussed on the need to bring Second Sight’s investigation
to a timely and cost-effective conclusion: (POL00098317). It appears from
Alwen’s notes, and I have a recollection, that Lord Arbuthnot raised remote
access at the end of our main discussion about the future of Second Sight’s
investigation. I have no recollection of giving Lord Arbuthnot any detailed
response to his comments about remote access, and it is unlikely that I did so,
since I had not been briefed to discuss this topic.
1287. I am not entirely sure what prompted me to mention the recent EY audit to Lord
Arbuthnot. On 21 May 2013, two days before I spoke to Lord Arbuthnot, I
attended a POL Board meeting at which the POL Board received the Annual
Report and Financial Statements for the 2012-2013 financial year
(POL00021513). The minutes record that Alasdair Marnoch (a non-executive
director who chaired the ARC Committee) reported to the POL Board the “very
positive feedback from the auditors who were complimentary about the controls
in place and management capability’.
1288. Although I have no clear recollection, I believe that I mentioned the audit as a
general point of reassurance for Lord Arbuthnot, rather than in direct response
to his comments about remote access. At the time of our discussion, I believed
that POL or Fujitsu could not make changes to branch accounts without the
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knowledge of SPMs. I had no understanding, because no-one had told me, that
there was any connection between the controls around Horizon and the issues
raised in the Michael Rudkin case.
1289. On 24 May 2013 (POL00029589), I received an email from Alwen Lyons with
an update on the Second Sight investigation. Alwen mentioned that: “One of
these [spot reviews] will be dealing with the issue of remote access to a
subpostmasters account, which James specifically raised. I have just spoken
to Lesley who has engaged Fujitsu today and is confident that within a week
they will provide evidence about access and audit trails etc Lesley and I will
meet Fuj on the 3 to go through this, and then if we are comfortable go through
with SS and Fuj on the 6", so let the technical people can discuss the detail.”
1290. I can then see from (POL00029590) that, on 4 June 2013 at 18:31, Martin
Edwards emailed Alwen Lyons stating that “... as you know, Paula is seeing
Alice tomorrow. She asked if you could provide an update on the latest state of
play with James Arbuthnot et al. I'll be sending her a list of issues/background
points tomorrow morning at around 9, so if you were able to give me something
by then that would be appreciated.” Alwen responded to Martin at 18:47 in the
same URN. She stated in relation to the remote access issue: “Les/ey and I
had a meeting with Fujitsu this week and they are providing for us an audit trail
of adjustments which can be made centrally which they say happens very
rarely, so we are waiting to see that and the controls in place. However they
suggest that what Rudkin heard was the testers for HNGX referring to test data
and not the live environment. This would be good if we can prove it.”
1291. My lawyers have been unable to find any email or briefing to me from Martin
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Edwards which appears to relate to his email exchange with Alwen Lyons on 4
June 2013. I have no recollection either way whether Martin Edwards gave me
an update about remote access around 4 June 2013. However, I cannot recall
any change at this time in my understanding of remote access.
My understanding of Remote Access as of 3 July 2013
1292. The Inquiry has asked me in Question 67.4 to describe my understanding of
Fujitsu’s remote access privileges as at 3 July 2013, the date on which Alice
Perkins and I met Lord Arbuthnot to discuss Second Sight’s Interim Report,
which was due to be finalised and presented to MPs on 8 July 2013.
1293. As far as I can remember, my understanding of remote access had not
changed by 3 July 2013: I believed that it was not possible to alter branch data
without the knowledge of the SPM. I can recall being told by Lesley Sewell, the
POL CIO, that all transactions on the Horizon system were recorded in the data
and these records could not be changed. As a result, it was impossible for
anyone to make any changes to transactions without creating an audit trail.
Lesley told me on several occasions (from at least June 2012 prior to our
meeting with Lord Arbuthnot and Oliver Letwin) that all transactions on Horizon
were digitally sealed and were impossible to change without leaving an audit
trail. I understood that this meant that it would be visible in the data if someone
had used remote access to make changes to branch transactions. The only
development in my understanding by early July 2013 was that I was told that
POL had investigated Mr. Rudkin’s claims and concluded that he was
mistaken. On the morning of 3 July 2013, Martin Edwards emailed me a briefing
note on the Interim Report (POL00113369). Second Sight had selected Mr.
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Rudkin’s case as one of the “Spot Reviews” attached to the Interim Report. My
briefing note contained a summary on POL’s response under the heading
“Case 2 - Spot Review 5 - Access to Live Horizon data”.
1294. In summary, it stated that POL and Fujitsu had been unable to establish that
he had visited the Bracknell facility in August 2008. Fujitsu had attempted to
retrieve the visitor logs to the Bracknell facility for 19 August 2008, but that the
records from 2008 were not available. Fujitsu had also interrogated emails,
documents, and archived information but had been unable to verify his visit. A
further review into POL work logs indicated that there were three POL test
managers at Bracknell on 19 August 2008, but none of them had calendar
records relating to a visit by Mr. Rudkin.
1295. The briefing also addressed the substance of Mr. Rudkin’s claims that he saw
a POL employee amending live Horizon data:
“It has however been determined that in August 2008 the basement of
Fujitsu’s building contained a test environment that would look very similar
to a live Horizon environment. This environment was not physically or
technologically connected to the live Horizon environment. It was therefore
impossible for anyone in this room to have adjusted any live transaction
records, though Mr Rudkin may have witnessed some form of adjustment
to the test environment.
The separation of test and live environments is designed to guarantee the
integrity of Horizon data.”
1296. On 7 July 2013, after POL had received the final version of the Interim Report,
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Alwen Lyons sent an email to me and other senior managers stating that there
were only two areas where POL did not agree with Second Sight’s conclusions:
(POL00099088). One of these was the Michael Rudkin case:
“We and Fujitsu had provided evidence to SS that there was only Testing
systems in the basement in 2008. The equipment (hardware) and the
testing system were located in the basement. This has been a constant
challenge with SS as they contest that Rudkin has signed an affidavit and
therefore there is a conflict of evidence. There appears to be a lack of
willingness to accept the detail we have provided. We have also had the
tester who Rudkin believes took him to the basement complete a witness
statement. He has confirmed that there was only a testing system in the
basement. This has been a constant challenge and Im [sic] not sure how
this will get resolved.”
1297. My understanding, therefore, was that POL had investigated the set-up in the
basement of the Bracknell facility and was confident that Mr. Rudkin’s claims
were not correct. I remember that Lesley Sewell was very firmly of the view that
his allegation was wrong and that he had — at best — misunderstood or
misremembered a test demonstration.
1298. I recall two other interactions in relation to Michael Rudkin. The first is that, at
some point, George Thomson, the General Secretary of the NFSP, told POL
that he thought that Mr. Rudkin was unreliable. I cannot recall whether he told
me this or whether this was information that came to me second hand.
1299. The second is that I raised the remote access issue with Duncan Tait, the CEO
for Fujitsu Europe. I remember that Duncan was dismissive of Mr. Rudkin’s
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claim that there was live access to the system in the basement at Bracknell. I
recall him saying something along the lines that if Mr. Rudkin had seen the live
environment, he had remembered it “upside down”, because the system was
managed by a team working on the sixth floor at Bracknell. I asked Duncan
(and I remember feeling slightly embarrassed at my implied lack of trust) if a
Fujitsu colleague could alter branch accounts remotely without a SPM knowing.
I said I had been told by Lesley Sewell and others that it was not possible and
besides, there was no understandable reason why anyone would try to. (The
view of the POL team at the time was that the idea of an Fujitsu employee
hacking into a SPM account was too fanciful to be true. ‘Why would they?’ was
the phrase used.) Duncan’s response was no and we concurred it was an
implausible scenario. Why would a Fujitsu colleague try to hack into a branch’s
accounts? We couldn't find any suitable explanation - there was no way they
could benefit financially from such an action. The only possible reason would
be a malicious act by a disgruntled employee. Duncan described the core of
Horizon like a black box, ie., similar to an aircraft flight recorder; he said that
even if someone wanted to, it was not possible to alter or break it. I had heard
the black box description before. He described how secure the system was -
that even if someone had the motivation, it just wasn’t possible - Horizon was
like Fort Knox.! found it reassuring that the CEO of Fujitsu confirmed that there
was no cause for concern and that the system could not be tampered with.
My understanding of Remote Access in February 2015
1300. The next occasion on which the remote access issue came onto my agenda
was in early 2015, when I was preparing to give evidence to the House of
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Commons BIS Select Committee, which was scheduled for 3 February 2015.
The issue of remote access had been raised by an MP during a debate on the
Mediation Scheme in December 2015 and I wanted to be prepared to answer
any questions about remote access during the evidence session.
1301. At 07:29 on 30 January 2015, I sent an email to Lesley Sewell and Mark Davies
stating as follows (POL00029812):
"Dear both, your help please in answers and in phrasing those answers, in
prep for the SC:
1) ‘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 xxx and that we know this because we
have the system assured.
2) “You have said this is such a vital system to the Post Office, what testing
do you do and how often? When was the last time?
Lesley, I need the facts on these — I know we have discussed before but I
haven't got the answer front of my mind — too many facts to hold in my
head! But this is an important one and I want to be sure I do have it. And
then Mark, to phrase the facts into answers, plus a line to take the
conversation up a level ie., to one of our narrative boxes / rocks."
1302. I can see from this email that I had spoken to Lesley about remote access
before but that I did not feel comfortable that I could deal with any questions
without additional assistance: I cannot recall that I had had any briefing on
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remote access since the publication of the Interim Report. In this email, I was
therefore asking Lesley and Mark for the correct answer if a member of the
Select Committee asked me about remote access.
I can see from the email chain at (POL00029812) that my question was
referred to a number of individuals working at POL and Fujitsu. At 17:50 on 30
January 2015, Kevin Lenihan (POL Senior Information Services Manager)
emailed Mark Underwood and Melanie Corfield suggesting that I should be
briefed as suggested by James Davidson of Fujitsu:
“Having looked again at the request from Paula, it appears that the
fundamentals around this question (remote access) are not understood. I
suggest that Paula is briefed along the lines of the following.
1) No transaction data is held locally in any branch. Transactions are
completed and stored in a central database and copies of all data is sent
to a secure audit database.
2) Sub-postmasters directly manage user access and password setting
locally so system access (to create transactions) are limited to approved
local personnel only who are responsible for setting their own passwords.
Users are only created following an approval process which requires
authorisation by the sub-postmaster. All subsequent transactions are
recorded against the id used to log on to the system.
3) Once a transaction has been completed, there is no functionality (by
design) for transactions to be edited or amended. Each transaction is given
a unique number and ‘wrapped’ in a digital encryption seal to protect its
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integrity. All transactions are then posted to a secure and segregated audit
server.
4) On approval, there is the functionality to add additional transactions
which will be visible and have a unique identifier in the audit trail. This is
extremely rare and only been used once since go live of the system in 2010
(March 2010)
5) Support staff have the ability to review event logs and monitor, in real
time, the availability of the system infrastructure as part of standard service
management processes.
6) Overall system access is tightly controlled via industry standard ‘role
based access’ protocols and assured independently in annual audits for
!SO 27001, Ernst and Young for IAS 3402 and as part of PC! audits.”
1304. I do not recall seeing the emails in the chain at (POL00029812) before I left
POL in 2019, and I do not recall any oral briefing about remote access prior to
my appearance at the Select Committee in 2015.
1305. (POL00117097) is an addendum to my briefing pack for the Select Committee
hearing, which was emailed to me on 2 February 2015 by Jane Hill
(POL00117096). I have no memory of seeing this document at the time, but I
can see that it includes a section on “remote tampering”. It states:
e "Transaction data in branch accounts can’t be changed remotely
. No evidence of malicious tampering
° No functionality in Horizon for PO or Fujitsu to edit, manipulate or
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remove transaction data once it had been recorded in a branch's
accounts
. There is also no evidence at all of any malicious remote tampering
If pushed:
. Stress again that there is no remote access that enables branch
transaction data to be edited, changed or manipulated.
. As you would expect, support staff can review and monitor the system
— part of standard service contract — but, as above, transaction data
cannot be manipulated.
e As part of day to day, business as usual process, Post Office can post
correcting transactions to a branch’s account — these are Transaction
Corrections and Transaction Acknowledgements, visible to the
postmaster, which enable accounts to be brought into balance. These
have to be accepted by a user logged into the branch Horizon
terminal before they are recorded in the branch accounts, so they are
fully visible to the branch.
If injection of new transaction in a branch’s account is raised:
. There is functionality to add transactions — this is the Balancing
Transaction Process and would only be used in the event of an error
that cannot be corrected by a TA or TC.
. It is good industry practice to have this functionality but the use of the
process is so rare it would only take place after a full discussion with
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the postmaster involved.
. These will be visible and also have a unique identifier in the audit trail.
It has only been used once since March 2010 (Horizon Online go-
live).
. The overall system access is tightly controlled via industry standard
protocols and it is assured independently in annual audits for ISO
27001, Ernst and Young for IAS 3402 and as part of PCI audits. There
are numerous tests and checks — including daily checks."
I had a huge amount of reading to digest for the Select Committee hearing and
I cannot now recall how closely I read this document or how well I understood
it. Certainly, I do not recall any change to my belief that it was not possible to
change branch accounts without the SPM’s consent. This document, reading
it now, would have reinforced that belief.
Reading the document now, I do not understand why POL should have been
so defensive about the existence of Balancing Transactions. I had no role in
creating this document and I do not know what the rationale was for how it
suggested I deal with the remote access issue. I do not know whether at the
time I would have thought the suggested approach was wrong: I trusted my
team and I knew that they put a great deal of thought into how POL should
communicate messages and information. In the event, I was not asked about
remote access at the Select Committee session. If I had been asked, I would
have wanted to give as full and accurate an explanation as possible.
127. Please consider POL00025511 (letter of claim dated 28 April 2016).
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127.1. Please set out your account of when you first became aware of the GLO
proceedings, what your initial views were on POL’s strategy in relation to the
same and the conversations you had with others about handling it.
1308. I understand that the Claimants issued the Claim Form for the GLO
proceedings on 11 April 2016 (POL00025510). On 13 April 2016, Mark
Underwood informed Laura Thompson at UKGI that POL had been notified by
the Claimants’ solicitors, Freeths, in a letter dated 12 April 2016, that
proceedings had been started (UKGI00006646). Jane MacLeod informed Tim
Parker by email on 15 April 2016. On the same day, she forwarded that email
to Patrick Bourke, Rodric Williams, and Mark Underwood (POL00103162).
1309. I do not remember exactly when or how I first became aware of the GLO
proceedings. I know I was aware by 24 April 2016, when I was copied into an
email from Jane to Tim, which mentioned that a claim had been issued against
POL in the High Court (POL00103165). Although this email appears to be the
earliest written communication to me that refers to the GLO proceedings, I am
confident, given the importance of the claim, that I would have been informed
about it shortly after POL became aware that the claim was issued.
1310. The first legal strategy papers in respect of the GLO (at least that I have seen
in the documents) were two briefing papers entitled “Postmaster Litigation”
prepared by Jane and Rodric Williams for a GE meeting on 16 May 2016
(POL00117704) and a POL Board meeting on 17 May 2016 (POL00006805).
The only difference between the two papers is that the paper for the GE
contained an additional section on the management and governance of the
litigation, which I discuss below.
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1311. The first section of both papers set out the context. On 11 April 2016, 91 mostly
former SPMs issued a High Court claim against POL. The Claimants had until
11 August 2016 to formally serve the Claim Form. This step would trigger
POL’s obligation to respond to the Claim through the Court. On 28 April 2016,
the Claimants’ solicitors had sent POL a 53-page “letter before claim” setting
out the Claimants’ allegations in more detail. Court Protocol required POL to
respond to the letter before the case was passed to the Court for formal case
management. The claim potentially posed significant legal, financial,
operational, and reputational risks to POL.
1312. The two papers summarised the Claimants’ allegations under the heading
“What are the Claimants alleging?”. In summary:
a. Jane and Rodric felt that there was nothing new or surprising in the letter
before claim, which did not set out how much the Claimants were claiming
or how they propose to calculate their claim.
b. Much of the letter focused on technical points of law. The Claimants’ main
focus was the relationship between POL and SPMs. The Claimants were
seeking to place greater responsibility on POL for branch accounting
difficulties.
c. Apart from some generalised statements, there was no allegation that
there was a systemic failure in the Horizon software. Rather, the letter
before claim asserted that, because Horizon had the potential to cause
discrepancies in the branch accounts, POL should not have relied on it so
heavily and should have done more to investigate the possibility that
Horizon was the cause of branch shortfalls.
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d. Other familiar allegations included poor training and support, the ability of
Fujitsu. to alter branch transactions remotely, improper criminal
prosecutions, and putting undue pressure on SPMs to make up shortfalls.
1313. The next section of both papers was entitled “What process will the Claim follow
and over what time frame?”. In this section, Jane and Rodric highlighted two
issues arising out of the letter before claim:
a. The Claimants’ solicitors had invited POL to agree in principle to a Group
Litigation Order. Jane and Rodric’s advice was that POL was entitled to
know more about the claim before making any decision. There were
practical and tactical implications for agreeing a GLO. For example,
Freeths might not be able to fund the litigation if POL could show that the
individual claims were insufficiently similar to justify a GLO. Equally, an
early favourable ruling for POL on issues such as the effect of a criminal
conviction or limitation periods could reduce the number of claimants and
therefore the economic viability of the claim.
b. Freeths had asked whether POL was willing to mediate the claims. Jane
and Rodric’s view was that it was not possible to form a view at this stage
whether mediation would be viable in some or all of the cases. They would
keep under constant review whether options to mediate or settle would
provide a better outcome for POL.
1314. The sections in the papers entitled “What are Post Office’s objectives?” stated
that the claim challenged a critical part of POL’s business, namely, how it
engaged with SPMs and the allocation of risk and responsibility for
transactions, cash, and stock. Although most of the Claimants were former
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SPMs, the claim raised issues in respect of current and former business as
usual activities (e.g. branch accounting, SPM contract management, and debt
recovery) because it concerned the core branch accounting principles and
systems, including Horizon, currently in use. In that context, Jane and Rodric
identified two main objectives in responding to the claim:
a. To proportionately manage POL’s legal defence; and
b. To protect the Network going forward so that POL and current SPMs would
have confidence in POL’s systems.
1315. Other sections of the papers gave indications of the timetable for the progress
of the claim through the Court, and the costs of the litigation. The section in the
POL Board paper (POL00006805) entitled “Stakeholders” noted that the claim
would have a wide impact on POL, affecting Network, Finance and the FSC,
IT (including the relationship with Fujitsu), HR, Legal, and Communications, all
of which would help inform POL’s defence. Although other stakeholders, such
as BIS and the NFSP, would be interested in the claim, their involvement
should be limited to appropriate updates provided under an agreed
communications plan: this was necessary to maintain legal privilege and
confidentiality in the legal advice POL received and the strategy and tactics it
adopted in its defence of the claim.
1316. The paper for the GE (POL00117704) contained a section called “Stakeholders
and Managing the Claim’. This section, which was not included in the POL
Board paper, contained an overview of how Jane and Rodric proposed that the
litigation be managed. In summary:
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The claim impacted upon a variety of functions across POL including from
Network (Contract Advisor teams, NBSC, Branch Support Programme),
the HR Advice Centre, Finance and the FSC, and IT (including POL’s
relationship with Fujitsu).
Management of the claim would require support from, among others,
Legal, Communications, and Finance.
The litigation would be treated as a new project, distinct from legal business
as usual and the previous Mediation Scheme activity.
A sponsor would be appointed from within the business to provide
leadership to the project. Because of the issues raised by the claim, Jane
and Rodric believed this person should be a Senior Leadership Team
member from the Network.
The day-to-day management of the claim would be handled by POL Legal
with support from Bond Dickinson as external solicitors.
A Steering Group would be formed from representatives of the each of the
business functions set out above. The proposed structure and mandate of
the Steering Group was as follows:
One person would have overall responsibility for decision making.
The Steering Group would support and instruct the legal team in its
management of the claim.
The Steering Group would inform the communications plan to be
managed by the Communications Team.
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iv. The Steering Group would report to the GE and other senior
management as required.
v. The Steering Group would monitor and control expenditure.
1317. The GE was asked at the end of the paper to endorse the proposals for the
management of the claim. The POL Board on the other hand was asked only
to note the contents of the POL Board paper.
1318. Although the briefing papers state that they were prepared for the GE on 16
May and the POL Board meeting on 17 May 2016, the documents indicate that
the GE paper was discussed at a GE meeting on 13 May 2016: in an email to
Mark Davies on 21 May 2018, Jane MacLeod stated that the GE paper was
“walked in to [sic] the end of the GE meeting on 13/5” (POL00103199). The
May meeting of the POL Board was held on 24 May 2016. The minutes of the
meeting record that Jane MacLeod introduced the report on the Postmaster
Litigation and gave a verbal (i.e. oral) update on the High Court claim as
described in the Noting Paper (POL00021542; POL00027219). As far as I can
see from the documents, these were the first occasions on which the GE and
POL Board discussed the litigation.
1319. I do not recall the discussions at the GE or the POL Board meetings about the
initial strategy set out in the two briefing papers. The main strategic issue which
Jane and Rodric had identified in the papers was whether POL should agree
to the Claimants’ proposal of a GLO. The essence of their advice was that the
point could potentially be argued both ways, but that no decision should be
made until POL had seen the full details of the claim. A secondary strategic
issue was whether POL should agree to the Claimants’ proposal of mediation.
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Jane and Rodric’s view on mediation was, again, that POL would not be able
to take a view until it had seen details of the all the claims. However, they would
keep the possibility of settlement discussions under review. From my reading
of the papers, the GE and the POL Board were not asked to make any decision
on strategy. I was in no position to agree or disagree with how the lawyers
were proposing to deal with these strategic issues.
1320. I do have a clear recollection that I told Jane MacLeod, not necessarily at the
GE or POL Board meetings but certainly at an early stage after I became aware
of the litigation, that I was unhappy that POL was now in legal proceedings with
former SPMs. This did not seem right, and I felt that there should be a different
way of handling matters. I knew, however, that while POL would not have
wanted the litigation, it now had no choice but to engage and follow the court
process. We had at least two conversations on this topic, two of which I
remember reasonably clearly. I remember Jane telling me the first time, that
there could be options to settle out of court but that we would need to wait for
the details of claim. The second time, she was less sure that settling was an
option and, with regret, she thought that the litigation was the only way of
getting answers to the questions raised in the claim.
1321. I can see from (POL00103200) that, on 21 May 2016, I emailed Jane and
others a list of questions arising from my reading of the paper for the Board
and the discussion at the GE meeting. The email at the top of (POL00103200)
sets out both my questions and Jane’s answers. I discuss this email chain
further in my answers to Questions 128 to 131, but it is worth noting at this
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stage the questions I asked about the management and governance of the
litigation:
a. Iasked who we had engaged as our primary legal advisors alongside Bond
Dickinson, and whether they were experienced and streetwise enough. I
mentioned that Linklaters may have been mentioned as another possibility.
Jane responded that Bond Dickinson had been instructed on the basis that
their assistance on Project Sparrow meant that they had a deep
understanding of the history, the individual cases, and the political
sensitivity of Sparrow. POL had also now engaged Anthony de Garr
Robinson QC, a leading commercial barrister, who had extensive
experience of group litigation. Anthony de Garr Robinson QC would be key
to developing and implementing a litigation strategy. While Linklaters had
given some advice in the past, they did not have an in depth understanding
of the issues, and the engagement of a magic circle city firm would
reinforce the impression that POL was taking a heavy-handed approach.
b. I asked who and what was our internal resource and governance for the
litigation. Jane answered that the POL legal team — consisting of Jane and
Rodric Williams — would work with Bond Dickinson. It had been discussed
and agreed at the GE meeting on 13 May 2016 that Tom Moran would be
the internal ‘client’ for these purposes, and his role would be to ensure that
the overall strategy of the litigation process protected POL, its Network,
and the attractiveness to future agents and SPMs. Mr Moran would be
supported by a Steering Group comprising senior representatives from
across the business. It was proposed at the GE meeting that the members
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of the Steering Group would be Tom Wechsler (representing me), Angela
Van Den Bogerd, Mark Davies, Patrick Bourke, a representative from
Finance to be discussed, and in addition Rodric Williams, Jane,
representatives from Bond Dickson and, when necessary, Anthony de Garr
Robinson QC.
1322.I have a number of reflections on this part of the email:
a. I have some recollection of the discussion at the GE meeting about who
should sit on the Steering Group. Tom Moran, who was the General
Manager of the Network with responsibility for Network Operations. I
regarded him as an impressive person who had a good general knowledge
of the business. His appointment was a sign that POL was taking this
seriously. I remember the Group HR Director, Neil Hayward, saying at the
meeting that POL needed to put its best people on the Steering Group.
From recollection, these comments arose because there was some initial
reluctance on the part of the functions affected by the litigation to allow their
best managers, all of whom were very busy, to work on the Steering Group.
b. The reason why I did not sit on the Steering Group was that the decisions
that the Steering Group would be tasked to make would require detailed
knowledge of both the litigation and the workings of each of the functions
affected by the claims. For this reason, the membership of the Steering
Group was to include senior managers from each of these functions. I
would not have been able to immerse myself in the necessary detail
alongside my other duties as CEO. Instead, Tom Wechsler sat on the
Steering Group as my representative. Tom’s attendance meant that there
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was a channel of communication between me and the Steering Group
outside any formal reporting by the Steering Group to the GE or the POL
Board. I did not put in place any system or guidelines for Tom to update
me on the activities of the Steering Group. I trusted him to use his judgment
about whether any discussions or decisions by the Steering Group should
be brought to my attention.
Additionally, and importantly, Jane updated me about the GLO
proceedings at regular one-to-one meetings and during ad hoc
conversations as and when Jane wished to raise an issue with me. Within
a short period of time, these became Jane's preferred line of reporting to
me as she tightened up governance around legal privilege. Tom gave me
occasional updates but Jane became the main channel of communication
between me, the GE and the Steering Group.
From my perspective, the individuals identified in Jane’s email were the
right group of people to manage the litigation. I thought they were an
impressive and dedicated team, who would ensure that POL’s internal
expertise in the functions affected by the claim would be used to inform the
decisions of the Steering Group.
Jane’s reply to my question about governance states that Tom Moran’s
role was to ensure that the overall strategy of the litigation process
protected POL, its Network, and the attractiveness to future agents and
SPMs. The reason why this was included in Mr Moran’s role was that the
funding agreement with the UK government for the Network
Transformation Programme and the Network more widely contained
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targets for the size and geographical accessibility of the Network. POL was
obliged to make regular reports on the Network to Parliament. It was seen
as important that the litigation strategy should take account of any impact
it may have on POL’s core duty to provide the public with essential
services.
127.2. Please explain your experience of overseeing a company facing
significant litigation such as the GLO. In your view, what level of oversight over
the litigation by you and the Board was appropriate?
1323. I had no experience of dealing with significant litigation such as the GLO
Proceedings. I cannot claim that I became familiar with the process of litigation
during the GLO Proceedings: I did not have time to do so alongside my other
duties.
1324. Based on my sole experience of large-scale litigation, I believe there are a
number of aspects to good governance. A key consideration, which I raised at
the very outset of the litigation (see my answer to question 127.1) was that the
business should be represented by appropriately skilled and experienced
lawyers. A second consideration, which I also raised at the outset, was that
there should be a formal system of internal governance for the litigation.
Another aspect of governance was that the business should ask questions and
not avoid difficult topics. I was keen to do what I could to challenge and check
POL’s lawyers’ rigour and governance.
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1325. Substantial litigation such as the GLO Proceedings, poses a particular
challenge for a business. I understood that the issues in the GLO Proceedings
were complex on three levels: the law, the facts, and (for the Horizon Issues
Trial) the technical IT issues, for which expert evidence was necessary.
1326. The legal team was heavily engaged on the details of the case for — literally —
years. It was not possible for me or the POL Board to understand the case in
anything approaching the level at which it was understood by the lawyers. The
oversight challenge for the business arising from this was that the POL Board
would not necessarily know what it needed to know in order to exercise
oversight. In other words, the POL Board would not always know what
information it should be looking at or the questions it should ask. A further
challenge is that it is difficult for a board composed of non-lawyers to disagree
with legal advice from respected lawyers, particularly if the advice appears to
be well-rationalised.
1327. Consequently, we relied on the lawyers, not only to run the case competently
and professionally, but also to ensure that matters which I or the POL Board
needed to be aware of were escalated. The main mitigation to this challenge
was the selection of skilled and experienced lawyers who could be expected to
do this. However, the nature of litigation means that the business will operate,
almost as a default position, on the basis that the lawyers and their legal advice
can be relied upon.
127.3 Please set out your involvement with the GLO Proceedings. In particular,
please address your involvement with POL's litigation strategy, explaining the
reasons for the decisions you made. The following request below should not
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limit your response to this paragraph.
1328. In line with the Inquiry's request, I have set out my involvement with the GLO
Proceedings within the appropriate sections of my statement.
128. Please consider POL00025507 (email from Rodric Williams to PM Litigation
Steering Group on 6 June 2016), POL00025508 (agenda for steering group
meeting on 7 June 2016), POL00025507 (draft terms of reference), POL00025510
(Claim Form) and POL00025511 (Letter from Freeths to Rodric Williams on 28
April 2016).
128.1. Please describe where the Postmaster Litigation Steering Group sat in
the management structure of POL. Please explain your involvement with or
oversight of the group.
1329. The decision to establish the Steering Group was taken by the GE at its
meeting on 13 May 2016: see the email from Jane MacLeod to me on 23 May
2016 (POL00103200).
1330. On 23 May 2016, Rodric Williams sent an email to the members of the Steering
Group (POL00110433). These included Tom Moran, Angela Van Den Bogerd,
Patrick Bourke, Mark Davies, Rob Houghton, Tom Wechsler and Nick
Sambridge (POL00110433). Andrew Parsons would attend meetings as
necessary depending on the issues being discussed.
1331. Rodric Williams stated in his email that:
“The Claim potentially poses significant legal, financial, operational and
reputational risk to Post Office. Our response to it must therefore be
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informed by more than purely legal considerations. To do this the GE has
decided to establish a Steering Group headed by Tom Moran and
comprising senior members from affected parts of the business. The
Steering Group will then support and instruct the Legal team in its day-to-
day management of the Claim.
“The Steering Group’s work will develop and change as the litigation
progresses. To begin with, the Steering Group will meet once every two
weeks for an hour to work through a standard agenda (see attached).”
1332. (POL00025508) is the agenda for what appears to have been the initial
meeting of the Steering Group on 7 June 2016. I note that one of the first items
on the agenda was the Steering Group’s terms of reference. The Inquiry has
referred me to (POL00025507) as being the draft terms of reference, but that
is the URN for an email from Rodric Williams to the members of the Steering
Group on 6 June 2016, to which he attached a draft of the terms of reference
and other documents. I assume that the Inquiry intended to refer me to
(POL00025509), which is a draft term of reference for the Steering Group dated
June 2016. The draft set out the Steering Group’s objectives and
responsibilities as follows:
a. The objectives of the Steering Group were to ensure that POL’s defence of
Group Litigation protected the Network, was proportionately managed, did
not place unplanned constraints or resource burdens on POL, and was
consistent with business as usual practices, processes and procedures.
b. To achieve these objectives, the GE had agreed that the Steering Group
would undertake the following responsibilities:
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i. To provide a forum for cross-business discussion of claim-related
business as usual issues so that all relevant matters were considered
when making a decision.
ii. To provide instructions to POL’s legal team on business as
usual/commercial matters.
iii. To maintain and progress an Action Plan for claim-related activity,
and monitor the resources required to deliver against that plan.
iv. To sign off key claim-related documents.
v. To monitor and approve claim-related expenditure.
vi. To review, challenge and sign off any communications plans
developed as a consequence of the claim.
vii. To report matters to the GE as appropriate.
1333. The Inquiry has asked me where the Steering Group sat in the management
structure of POL. As stated in the documents mentioned above, the Steering
Group was given its responsibilities by the GE and had a reporting line to the
GE. The members of the Steering Group were all senior managers within their
functions and included two members of the GE (Rob Houghton and Jane
MacLeod) and two regular attendees of the GE (Tom Wechsler and Mark
Davies).
1334. I had very little direct involvement that I can recall in the Steering Group after
the GE agreed to establish it in May 2016. I do not know if I saw the Steering
Group’s terms of reference. It is likely that Jane MacLeod discussed them with
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me at a one-to-one and at a GE. As I was not a member, I did not receive the
papers prepared for the Steering Group by POL’s internal and external lawyers.
There were regular GLO updates by Jane to the weekly GE meeting.
Additionally, Jane would provide updates to Al Cameron and me and other GE
Directors on important decisions or discussions of the Steering Group, often
before some of these matters came to the Board: see for example
(POL00024292; POL00024308; POL00024199; POL00024700).
1335. On 13 June 2016, Tom Wechsler sent me an email in advance of a one-to-one
meeting between Jane MacLeod and me in which he set out an agenda and
commentary from Jane (POL00110441 ). Tom informed me that what he called
the “Sparrow litigation group”, i.e. the Steering Group, had now met and agreed
ways of working. He told me that Jane would update me on those ways of
working and on the Parker Review: “Going forward, this is the regular way I
which we [sic.] will keep you informed as there is a need to keep written material
to a minimum and to protect what there is with legal privilege. I will of course
let you know of any significant developments as they happen.” It is not clear
whether “/” in this part of the email is Tom or Jane but, as I have already
indicated, both Jane and Tom were channels of communication between me
and the Steering Group.
128.2. Whose responsibility was it for co-ordinating the business to ensure that
POL’s corporate knowledge was available to the Steering Group?
1336. Tom Moran, as Chairman, was responsible for ensuring that relevant corporate
knowledge was available to the Steering Group. I regarded Tom as an
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impressive and dedicated manager who would ask the right questions and get
things done.
1337. The members of the Steering Group were chosen because they were senior
managers in their own functions. For example, Rob Houghton as ClO was
POL’s most senior IT manager. Angela Van Den Bogerd was a senior Network
manager and was heavily involved in Sparrow and the Mediation Scheme.
Rodric Williams had been involved in the legal issues arising from Sparrow,
including prosecutions. My belief at the time was that these individuals would
either know the relevant information themselves or know how to source the
information from within their functions.
128.3. In_your view, should the steering group’s terms of reference have
included words to the following effect “ensure the claims are handled fairly”.
1338. I am not certain that I saw the Steering Group's terms of reference, but I would
not have objected to the inclusion of words to the effect that the claims should
be handled fairly. I should not speculate on why this language was not included
by those who drafted the terms of reference. From my perspective, it went
without saying that POL would approach the GLO with fairness. The colleagues
I worked with on the POL Board and GE were individuals with great integrity. It
would not have occurred to me that the point needed to be said. I had worked
with the members of the Steering Group for many years and trusted them to
manage the litigation with integrity and fairness towards the Claimants.
128.4. What do you understand the following objective to mean: “protects the
Network”?
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1339. My understanding of the Steering Group’s objective of protecting the Network
was that POL was obliged as part of the government's funding of the Network
Transformation Programme, and of POL more generally, to maintain a stable
Post Office network in accordance with targets set by the government for the
size of the Network and the geographical accessibility of Post Offices to the UK
population. I believe this objective was intended to direct the Steering Group to
take into account the impact of the litigation on the confidence of serving SPMs
and future recruits. This went to the heart of POL's purpose of serving the
public. This was an obligation POL took very seriously.
129. Please consider POL00103171 (email from Tom Wechsler to you on 29 April
2016) and UKGI00006685 (email from you to Board members on 2 May 2016).
129.1. Please set out to what extent you briefed (a) Tim Parker (b) the POL Board
(c) representatives from ShEx/UKGI and (d) BEIS or the relevant department on
POL’s strategy and conduct of the GLO Proceedings, throughout the relevant
period. For each Board or committee meeting below, please set out to what
extent, if_at_all, Board members or other POL employees were involved in
decision making in relation to or otherwise asked questions or made challenges
in respect of (a) the merits of POL’s defence to the GLO Proceedings and its
litigation strategy and (b) POL’s ongoing actions in respect of convicted SPMs.
1340. The Inquiry has asked me to set out the extent to which I briefed (a) Tim Parker;
(b) the POL Board; (c) ShEx / UKGI; and (d) BEIS on POL’s strategy and
conduct of the GLO Proceedings. I will deal with Mr Parker and the Board
together and the UK Government bodies together.
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1341. It is my recollection, and the documents in disclosure indicate, that I very rarely
briefed any colleagues at POL on POL’s strategy and conduct of the GLO
Proceedings. Briefings to the POL Board on the GLO Litigation (and not only
on strategy but procedural and logistical matters) were primarily the
responsibility of Jane MacLeod as GC. On occasion, POL’s external lawyers,
Bond Dickinson and / or its lead counsel, Anthony De Garr Robinson QC and
David Cavender QC, would attend Board meetings to give advice directly to
the Board.
1342. I have not been shown any documents to indicate that I briefed Tim Parker on
the GLO Proceedings outside the setting of POL Board meetings or
communications with the POL Board. I can see from an email on 13 May 2016
to Tim from Jane MacLeod (POL00103194) that Jane was to give Tim
fortnightly updates on the GLO Proceedings and the Parker Review. Moreover,
Tim was a member and the Chairman of the Board Postmaster Litigation Sub-
Committee from its establishment in March 2018 and received additional
updates on the GLO Proceedings in that capacity. I should mention that Tim
and I had weekly one-to-one conversations. I cannot recall any specific
examples or topics, but I am sure that we discussed the GLO Proceedings from
time to time. I tended to defer to Jane’s knowledge of the case when it came to
POL’s strategy and conduct. If I thought Tim needed to be updated in relation
to a legal issue or issue of strategy I would either ask Jane to brief Tim or ask
her to join us when Tim and I were meeting. Additionally, as GC and Company
Secretary, Jane also met with Tim on a frequent one-on-one basis.
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1343. I have identified a number of communications with the POL Board in which I
gave information or expressed an opinion about POL’s strategy and conduct of
the GLO Proceedings. I believe that a number of documents relevant to this
question have been uploaded to the Inquiry's Relativity site this week. I have
not yet had a chance to review them.
a. In an email to the POL Board on 2 May 2016 (UKGI00006685) I informed
the POL Board about POL’s approach to media enquiries about the GLO
Proceedings. I address this email further in my answer to Question 129.2.
b. My CEO report for the POL Board meeting on 26 September 2016
(POL00103259) contained an update on the GLO Proceedings on page 6.
The update was largely concerned with timetabling and procedure, but it
mentioned that the GLO Proceedings should determine the amount of
detail that the Claimants must give about their individual cases, on which I
commented: “more is better for Post Office; less for the Claimants”.
c. My CEO report for the POL Board meeting on 31 January 2017 contained
an update on the Claimants’ application for a Group Litigation Order, to
which POL would be consenting (POL00104103). Since the Claimants
were likely to present any outcome as a victory, my report stated that POL
proposed to respond positively along the lines that it welcomed the Court’s
decision as this offered the best opportunity for the matters in dispute to be
heard and resolved.
d. On 19 October 2019, I emailed the POL Board with my view that POL
needed to make changes to how it presented its case following Fraser J’s
criticisms of POL’s conduct and attitude in his judgment dismissing an
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application by POL to strike out parts of the Claimants’ evidence
(UKGI00008549).
1344. As CEO I was involved in briefing the Postal Affairs minister and officials about
the GLO Proceedings. I had meetings about the litigation with Kelly Tolhurst
MP (the Parliamentary Under-Secretary for BEIS) on 3 September 2018 and
with Alex Chisolm (the Permanent Secretary for BEIS) on 17 October 2018. I
address these meetings and refer to the relevant documents in my answer to
Question 168.
129.2. Please explain the communications policy POL adopted in respect of the
GLO and why you considered it to be appropriate.
1345. I have approached Question 129.2 on the basis that it asks about POL’s policy
in relation to three forms of communications: (a) external communications; (b)
internal communications; and (c) communications with stakeholders. In
accordance with what I understand to be the purpose of Question 129.2, I
confine my answers to evidence of the policy or approach that POL adopted in
these areas, as opposed to decisions about individual communications.
1346. I have no real recollection of POL’s communications policies during the GLO
Proceedings. My evidence is therefore very much drawn from the documents
disclosed by the Inquiry.
External communications
1347. On Monday 2 May 2016 at 14:22, I emailed the POL Board about recent media
coverage of the GLO Proceedings and shared with the POL Board an update
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from Jane MacLeod on her first reaction to the contents of the Claimants’ letter
before claim (UKGI00006685).
1348. I wrote that, as the articles in The Sunday Times and the Mail over the
weekend made clear, the Claimants were already involving the press. I
informed the POL Board that POL would take a different approach based on
legal advice. Now that the matter was the subject of Court proceedings, the
Court was the proper place for discussion of the issues. Therefore, POL’s
response to enquiries would be limited to acknowledging that it had received
the claim and that it would respond through the legal process. I stated that we
would review the communications strategy in parallel with the development of
a litigation strategy, and that the POL Board would be updated on both. I had
asked for a briefing paper to be prepared for the POL Board’s May 2016
meeting.
1349. The terms of reference for the Steering Group stated, in paragraph 2.2 (f), that
the responsibilities of the Steering Group included reviewing, challenging and
signing off any communications plans developed as a consequence of the
claim (POL00025509). Mark Davies, POL’s Communications Director, sat on
the Steering Group.
1350. (POL00006440) is a decision paper by Bond Dickinson for a meeting of the
Steering Group on 12 July 2017. The question to be decided was whether POL
should change its communication strategy. The first section of the paper,
entitled “Background” indicates that as of July 2017, POL’s external
communications strategy remained that it would issue short and neutral
statements to the effect that POL would not comment on live litigation.
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1351. There were two reasons why a change in approach was being considered at
this time. First, it was considered likely that POL’s Defence (which was due to
be served on 18 July 2017) would leak to the press. Second, 26 July 2017 was
the deadline for any potential claimant to join the GLO Proceedings. It was
likely to be announced that around 400 to 500 (mostly former) SPMs had joined
the GLO, leading potentially to adverse publicity.
1352. As an alternative to its current approach to external communications, POL
could adopt a more partisan messaging strategy, based on the strength of its
Defence and the weaknesses in the Claimants’ claims. Bond Dickinson’s
recommendation was that POL should not change its external communications
policy at this stage. In their view, it should maintain its current reactive and
neutral communications strategy unless there was a significant increase in
media reporting. The disadvantage of adopting a more aggressive strategy was
that it could create media interest where there was currently none. In any case,
the media tended to side with SPMs regardless of POL’s messaging.
1353. On 29 July 2017 at 10:49, Alwen Lyons sent the POL Board an update on the
litigation from Jane (UKGI00006959). She reported that POL’s
communications approach would continue to be that the SPMs had sought to
resolve this matter through the Courts and that was the appropriate forum
through which the issues should be resolved. Therefore, POL did not plan to
make any external comment beyond that POL was aware of a claim and was
defending its position through the legal process. To do otherwise would only
serve to provoke further coverage.
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1354.
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However, on the same day that Alwen sent Jane’s update to the POL Board,
Jane suggested to the members of the Steering Group that POL should have
an additional response line that could be used if the remote access issue came
up (POL00024967). Jane’s suggested wording was: “We are aware of a claim
and we are defending our position through the legal processes. We welcome
the opportunity for these allegations to be considered and resolved through the
Court process.”
Jane’s wording appears to form the basis for a new standard response to media
inquiries, though with the addition of points about the number of Horizon users
and the number of transactions processed through the system:
a. On 31 July 2017 at 20:46, Alwen Lyons forwarded to the POL Board a
message from Mark, which I note he had prepared at my request
(POL00110697). Mark had been approached by The Financial Times,
which had requested information and comment about the GLO
Proceedings. In his email, Mark summarised his response to The Financial
Times: POL had confirmed to the newspaper that it was defending the
proceedings and welcomed the opportunity to do so in Court. It had also
highlighted the number of Horizon users since the system was introduced
and the number of transactions it handled. However, POL would not
comment further.
b. On 2 August 2017 at 17:42, Mark Davies emailed a group, which included
me, about a press release by the JFSA (POL00110699). Mark stated that
POL had a “standard line” that it was defending GLO Proceedings, that it
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welcomed the opportunity to do so in Court and highlighting the number of
Horizon users since its introduction.
c. Similarly, in an email on 20 October 2017 at 9:47, Mark Davies reacted to
concerns expressed by me about media interest in the Case Management
Conference, stating “our lines are standard ones and we will hold on
them...”
1356. POL adopted a different communications plan in the lead up to and during the
Common Issues Trial and the Horizon Issues Trial. I have not seen a finalised
plan for the trial period, but a number of documents disclosed by the Inquiry
set out POL’s approach in similar terms. (POL00111196) appears to be a
briefing paper by Mark Davies on POL’s media activities during the trial period.
It states on page 3 that POL’s strategy was:
a. Develop a clear set of reactive lines to take for media. It was not
recommended that POL should take a proactive approach, although POL
would be prepared for rapid rebuttal where necessary and would
proactively ensure that our position was reflected in external coverage of
the trial.
b. Engage with stakeholders and partners in advance of the trial to raise
awareness and set out our approach.
c. During the trial monitor and assess coverage across all media channels.
d. Provide regular updates on media penetration and sentiment to internal
stakeholders.
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e. Plan other communications carefully to avoid unhelpful clashes.
f. Deploy external expertise through an agency with substantial experience
of handling disputes such as this.
1357. Paragraph 1356(f) above, is likely to be a reference to Portland
Communications, an external public relations agency, which assisted POL in
its handling of the media.
1358. Page 4 of Mark's paper stated that POL’s tactics would be not to comment
beyond a standard headline statement, other than to intervene when media
coverage was factually inaccurate. A proactive approach would risk both
irritating Fraser J and fanning the flames of the coverage, with the unintended
consequence of increasing interest in the trial among external audiences.
1359. The briefing set out on page 11 is the suggested POL standard response to
media enquiries:
“We're defending this case vigorously and welcomed the Group Litigation
Order issued by the Court as offering the best opportunity for matters in
dispute to be heard and resolved. We will not comment on specific details
outside of public hearings while the litigation is continuing.
We have confidence in the Horizon system, which is robust, reliable and
used across 11,500 branches by postmasters, agents and their many
thousands of staff, to process millions of transactions successfully every
day, including on behalf of the UK’s high street banks.”
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1360. My email to a group of POL managers on 21 February 2019 at 13.21
(POL00111699), shows that I was aware of this approach. At the bottom of the
email chain, Tom Cooper asked whether the Court could protect POL from
journalists overstating the evidence about Horizon.
1361. I replied to Tom that we should defend robustly but avoid adding extra
coverage. As before we should hold our ground: “the system is robust. And not
comment any further during the trial. So ‘aggressive’ no, robust — absolutely no
question.” Further down in my email I referred to the objective of POL’s
approach and strategy to communications during the trial. This was “to
minimise coverage in the mainstream media. Therefore we don’t engage in any
public debates, we have strong lines but we add no oxygen by commenting or
engaging. This is not news despite how the claimants will present it as that; our
approach is to curtail interest as much as possible”. I cautioned against
considering using legal tools such as injunctions and demands for apologies.
Mark agreed with me in an email at 14:19 on 21 February 2019. He stated that
our external communications strategy was to minimise negative comment by
holding the robust line we had deployed throughout, while also taking steps to
challenge and rebut inaccurate representations and brief journalists about the
nature of the claims against POL. I believe that POL's external communications
policies were appropriate. This was for two reasons. First, POL believed that it
would be inappropriate for POL to discuss the dispute with the SPMs in the
media. The litigation involved many personal details about the SPMs and we
believed that the only proper place to discuss the case was in court. Second,
we felt there was a risk that detailed reporting of the GLO Proceedings could
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lead to misunderstandings or sensationalised stories which could undermine
the confidence of the network.
Internal communications
1362. POL’s approach to internal communications about the GLO Proceedings was
not so much a policy as the implementation of legal advice from Jane MacLeod.
Jane was risk averse as a lawyer. I remember that one of Jane’s overriding
concerns during the litigation was that POL should not inadvertently lose
privilege in legal advice. On 21 May 2016 at 15:35, Jane sent an email to a
group of senior POL managers, which included me, setting out how we should
handle internal communications about the GLO Proceedings (POL00117702).
1363. Jane advised that board papers, minutes, emails and other correspondence
relating to Sparrow and the GLO Proceedings could become disclosable.
Therefore, all correspondence in any form relating to the GLO Proceedings
must be addressed to either Rodric Williams or Jane, any other individuals
must be cc’d only (and these must be kept to a minimum), and any emails
about the litigation must contain the words “Request for advice” in the subject
line. Further, such emails should not be forwarded to any third person, whether
inside or outside POL.
1364. Rodric sent a similar communications protocol to the members of the Steering
Group on 22 June 2016 at (POL00021700). All documents, including emails,
should be marked “Confidential and Subject to Legal Privilege”, documents
connected to the claim should not be forwarded or circulated beyond their initial
distribution list, care should be taken when creating new documents which
concerned the litigation, documents that may be relevant should not be
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destroyed, and the members should consult the legal team if they were in any
doubt about a document. I had no reason to question the appropriateness of
this legal advice.
Communications with stakeholders
1365. Again, I would not necessarily term it a policy as such, but I can see from the
documents that POL was aware that it needed to communicate its position in
the GLO Proceedings to stakeholders, including the UK Government. I
mentioned this in my email to a group of POL managers on 23 May 2016 at
(POL00103201), where I stated that we needed to keep ministers and MPs
briefed and calm in the run up to the next general election, and to manage to
CWU and NFSP. In particular, I considered that one of POL’s objectives with
ministers was to avoid them making public statements of opinion at this stage,
which could potentially inflame matters, especially in relation to Lord Arbuthnot,
who was a prominent critic of POL and who was also in communication with
Alan Bates and the JFSA.
1366. In her reply to my comment in the same URN, Jane MacLeod stated that while
managing stakeholders was important, POL needed to understand the risks to
both them and POL in such briefings. I address this aspect further in my answer
to Question 129.3.
129.3. Did you and / or senior management at POL aim only to give the least
amount of information necessary on POL’s conduct and strategy in the GLO
Proceedings to third parties?
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1367. I do not believe I had this aim, and I was not aware of others having this aim.
As mentioned above, Jane MacLeod was extremely cautious about the loss of
privilege. I had a broad understanding that POL was entitled not to share with
third parties any legal advice, including about conduct of the litigation and
strategy. I recall from the time that the need to protect privilege was a major
overriding concern of Jane’s.
1368. From my perspective and recollection, POL’s approach to communications with
third parties was determined by the need to protect POL’s legal position and
not by any general reluctance to provide information. It seemed to me entirely
sensible that a party to high value litigation would not want to share its legal
strategy any more than necessary. This is encapsulated in the GE paper about
the GLO Proceedings at (POL00117704). It stated that communications about
the litigation with stakeholders such as the government and the NFSP should
be limited to appropriate updates as part of an agreed communications plan,
so as to maintain confidentiality in the legal advice received and the strategy
and tactics POL adopted in its defence of the claim.
1369. I have seen some documents which show individuals within POL expressing
reluctance or caution about sharing information with the government:
a. In her email to Tim Parker on 15 April 2016 (POL00103161) Jane referred
to his upcoming meeting with the minister, Baroness Neville-Rolfe. Jane
said that it was likely that her House of Lords colleague, Lord Arbuthnot,
had been briefed by the JFSA and that POL needed to be careful about
what the minister said to Lord Arbuthnot.
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b. (POL00103171) is an email from Tom Wechsler to me on 29 April 2016
with feedback on a meeting between Tim Parker and the minister Baroness
Neville-Rolfe. It records in paragraph 4 that Tim gave the minister some
limited details about the claim but stated that he was unable to tell her much
more until POL had received Particulars of Claim. In an email on 17 June
2016 at (POL00041246), Rodric Williams raised the possibility that
Baroness Neville-Rolfe might share a letter from Jane MacLeod containing
privileged information with Lord Arbuthnot.
1370. I do not know whether Rodric’s concerns were justified or not. I do remember
from the time a concern that the government might inadvertently share with
Lord Arbuthnot information about the GLO Proceedings it had received from
POL. These emails appear to reflect those concerns.
130 Please consider POL00027221 (minutes of Group Executive meeting on 13
May 2016). Please describe what discussion the group had on the GLO
Proceedings.
1371. The GE met at Finsbury Dials on 13 May 2016 in the morning (POL00027221).
The Inquiry has asked that I explain what discussion the group had on the GLO
Proceedings in that meeting.
1372. Under AOB in that meeting, it states:
“Sparrow. JM gave a verbal update on the Sparrow litigation” .
1373. The minutes should have been clearer that, in addition to the verbal update
which Jane MacLeod gave, she also produced a draft document which she
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walked into the meeting. By “walked in”, I mean that she brought copies to
distribute, and collected those copies back at the end of the meeting.
I know this not because of my memory but because of other documents I have
seen in preparing this witness statement. For example, Jane sent an email to
Mark Davies on 21 May 2015 attaching “Board Paper re Bates v. POL
(17.05.16).docx" (emphasis added) (POL00103199):
“Mark
“Apologies — I hadn’t realised you weren't sighted on this.
“The GE paper was walked in to the end of the GE meeting on 13/5.
Thinking about it, you had had to leave a bit earlier I think — and if I have
correctly remembered it, then that would explain your dilemma — for which
! apologise. The main purpose of that paper was to explain the
litigation timetable (assuming that the matter went all the way through — 1
didn’t want people to think that this would be all over anytime soon) and to
lay out the path for (a) getting agreement on who the internal ‘client’ would
be (agreed as Tom Moran representing network) and (b) getting agreement
for the establishing of the steering committee — on which Comms would be
represented (although it hasn’t met yet). The Board paper (attached) is a
slightly cut down version of that paper and Paula’s questions arise from the
Board paper.
“I hope once you have had a chance to look at the two papers, things will
be clearer and hopefully you will be more comfortable, but please let’s chat
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1375.
1376.
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on Monday. I won't reply to Paula’s email from earlier today until we have
had a chance to speak.
“Sorry...
“Jane”
Although this is clearly a later version of the paper, being dated 24 May 2016,
I believe this is the paper at (POL00006805). I think that because Jane refers
to the GE paper, on 21 May 2015, as the “Board paper’. Jane does not suggest
there is anything new in the Board paper, as compared to the GE paper, but
rather some things have been removed.
Reading that Board paper with Jane’s email above, the discussion at the GE
appears to have covered:
a. Asummary of the Claimants’ allegations;
b. The anticipated timeline of the litigation;
c. The costs of the litigation;
d. POL’s objectives in the litigation, its main objectives being defined
by Jane as:
i. Proportionately manage Post Office’s legal defence; and
ii. Protect the Network going forward so that Post Office and current
agents have confidence in our systems;
e. Adiscussion of the stakeholders;
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f. A discussion of who the internal client should be, with the conclusion
that it should be Tom Moran; and
g. Getting agreement for the establishment of a Steering Group.
1377. This email jogs my memory of some discussion in the meeting. I do recall that
I urged my colleagues to release their best team members to enable them to
work on this project. This was how Tom Moran came to be involved. He was,
in my view, the best person from the network to work on this and a really good,
really talented manager. Angela Van Den Bogerd was also a valuable member
of this team on account of her significant memory of the detail of Project
Sparrow. Patrick Bourke was a senior manager in legal who was well
respected.
1378. I sent an email on 21 May 2016 raising “[a] couple of questions (some building
on the GE discussion so I have the answers documented”. By context, that
must be a reference to the 13 May 2016 GE meeting. The questions I asked
were:
“1) who have we engaged as our primary legal advisers alongside BD? If
BD alone, are they equipped - experienced enough and street wise
enough? And do they have specialism/experience in point 3 below? (You
may have mentioned Linklaters in this context?)
2) who/what is our internal resource/governance?
3) I won't describe this correctly but you will follow my point (it relates to Sir
Tony Hooper's concern and one of the issues at the heart of the
Hillsborough case): can we (Al, Neil, Kevin and myself) have a deep dive
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on the issues related to the (im)balance of power of the institution vs the
individual. We need to understand this irrespective of Sparrow.
4) the paper is well written, balanced and reassures me we will handle it
well. Thank you. Notwithstanding ... could you/Mark put on your blackest
hats and think through the worst outcomes: I would like a downside horizon
scan. Eg., are there any judicial review or (mis)use of public funds angles
at all - costs expended to date, failure of our own mediation scheme.
5) Horizon expert - the board note doesn't cover this: we need to brief the
new NEDs and remind the others - could you/Tom give me a speaking note.
6) Stakeholders section: paras 22 and 23 - needs to include more on
political, Government and IR stakeholders. Eg .. keeping ministers and MPs
briefed and calm in the run up to the next GE; managing the CWU/NFSP;
specific journalists and media interest; etc. Could Mark/Tom provide a
speaking note.”
1379. My email ended by saying, “Thanks for a good and clear paper’, that being
further confirmation that we considered Jane’s paper at the GE.
131, Please consider POL00117702 and POL00103201 (your email chain with
Jane MacLeod and others on 21/23 May 2016).
131.1. Please set out in full your concerns regarding briefing the Board on
Horizon and the GLO Proceedings.
1380. This question refers to my email to Jane MacLeod and others on 21 May 2016
with a list of questions arising from the POL Board “Postmaster Litigation”
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paper (which is at (POL00006805)) and the discussion at the GE meeting on
13 May 2016, together with Jane’s reply to me with her answers on 23 May
2016 (POL00103201).
1381. I do not recall being concerned to brief the POL Board in the sense of being
reluctant to brief the POL Board. I had a concern when the litigation began,
which is reflected in the questions I asked Jane, that neither I nor the other
POL Board members had experience of dealing with litigation, certainly of this
size and importance. I wanted to ensure that the business was supported with
appropriate legal advice (my first question to Jane in my email) and that there
would be governance for the management of the litigation (my second question
to Jane).
1382. I was also concerned that the POL Board should be equipped to scrutinise the
litigation and consider the risks. I asked Jane in my fourth question in my email
if she and Mark could put on their “b/ackest hats” and think through the worst
outcomes and produce what I called a “downside Horizon scan”, for example
whether there were risks arising from judicial review or allegations of the
misuse of public funds. This kind of risk analysis is an essential part of running
any business, the idea being to have solutions or mitigating actions ready if the
risks materialise.
1383. In the final point in my email, point 7, I stated that I wanted to ensure that we
shared all angles with the NEDs, so that they were aware of how noisy and
difficult it could become. Some of the non-executive directors were new to the
Board and may not have been aware of the level of media scrutiny and
reporting that the litigation would attract. Another reason why I wanted the non-
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executive directors to be fully informed was that their independence from the
executive management and experience of other businesses meant that they
were a good source of internal scrutiny.
131.2. Did the risk of papers to the Board and / or minutes of meetings being
disclosable documents affect (a) what was recorded in papers or (b) what was
minuted in meetings?
1384. Before Jane sent her response to my questions, she sent me an email on 21
May 2016 with advice on privilege (POL00117702). Jane stated that all POL
Board papers, minutes, emails and other correspondence were now potentially
disclosable and subject to Freedom of Information Act ("FOIA") disclosure.
Therefore, any correspondence in any form relating to Sparrow and the matters
subject to litigation must be addressed either to Rodric Williams or Jane herself,
other recipients should only be copied and kept to a minimum, and emails must
contain wording in the subject line that it is a request for legal advice.
1385. This email was typical of Jane’s way of working. I thought that Jane was a good
lawyer who always wanted to do the right thing as GC. One of Jane’s
characteristics was that she was extremely risk averse. As I have said, it was
one of her ongoing concerns during the litigation that POL should not
inadvertently lose privilege in its legal advice.
1386. Minutes of the GE and POL Board meetings often mention that the GE or the
Board was given a verbal or oral update on Sparrow or the litigation. There
may have been different reasons for this on different occasions. The minutes
of the GE meeting on 13 May 2016, for example, refer to a verbal update on
the litigation, with no mention of the “Postmaster Litigation” paper for the
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meeting (POL00027221). What appears to have happened is that the paper
for the GE was not ready for the meeting and, in Jane’s words in her email to
Mark Davies on 21 May 2018 at (POL00103199), it was “walked in” at the end
of the meeting. I also remember Jane informing me that if privileged information
was put or embedded in a non-privileged document it may lose its privilege. I
do not recall if this was the reason why minutes often recorded only that the
GE or the POL Board was given a verbal or oral update.
131.3. What did you mean when requesting “a deep dive on the issues related
to the (im)balance of power of the institution vs the individual. We need to
understand this irrespective of Sparrow”.
1387. I cannot go much further than what I wrote in the email. I wanted POL to
examine its relationship with SPMs to see whether there was any force in the
Claimants’ case that the relationship was unfairly biased towards POL. If the
balance was not right, we would want to correct that regardless of how the
litigation progressed.
1388. Jane advised me in her reply that one of the themes underlying the claims
turned on the nature of the contract between POL and SPMs and whether POL
had breached duties of good faith. The legal team was going to develop its
response to the letter before claim over the next two months with a view to
determining whether there were weaknesses in POL’s position. Any
weaknesses would be identified with a view to addressing them through
business as usual, as well as determining the right strategy to address them in
the litigation. Tom Moran and the Steering Group would be critical to this
analysis so that POL would achieve the right balance. Commercially, POL must
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ensure that the outcome of the litigation was to validate that the balance of
power was and is fair. The output of the review of POL’s position and any
recommendations would be discussed by the GE. I accepted Jane’s advice
and explanation as a sensible way of examining the balance of power issue.
131.4. Please consider “Both QCs that we interviewed recommended that we
address the ‘Rudkin’ allegation — that is whether it is possible for PO/Fujitsu to
remotely alter branch transactions without this being visible to the
Postmaster”. Please set out what your knowledge of Fujitsu’s remote access
privileges was at this point.
1389. At this stage, in May 2016, I remained of the belief that neither POL nor Fujitsu
could change transactions or branch data remotely, without the knowledge of
the relevant SPM.
132. Please consider POL00027219 (minutes of the POL Board meeting on 24
May 2016) and POL00027218 (the agenda). Was there any discussion of the GLO
Proceedings?
1390. The minutes of the POL Board meeting on 24 May 2016 record that Jane
MacLeod introduced the report on the Postmaster Litigation and gave a verbal
update on the High Court claim, as described in the noting paper. Jane
proposed that POL should continue to instruct Bond Dickinson, who had
detailed knowledge and experience of the claims, and that Anthony de Garr
Robinson QC had been interviewed and instructed to act for POL. I believe that
the report mentioned in the minute is the POL Board paper entitled “Postmaster
Litigation” at (POL00006805). This was almost certainly the first occasion on
which the POL Board as a whole had discussed the litigation. I cannot
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remember what Jane told the POL Board in her oral briefing or any discussion
among the directors.
133. Please consider POL00110441 (emails from Tom Wechsler and Jane
MacLeod to you dated 10/13 June 2016).
133.1 Please describe all discussions you _had_regarding stopping the
Chairman’s review (or acting on recommendations drawn up by Jonathan Swift)
because of the GLO proceedings. Did you consider it appropriate to pause the
review or actioning recommendations which were intended to remedy issues
within POL and Horizon?
1391. In Tom Wechsler's email to me of 13 June 2016, he describes that updates on
the Parker Review would be given to me by Jane and that “there is a need to
keep written material to a minimum and to protect what there is with legal
privilege” (POLO0110441).
1392. I am aware that Anthony de Garr Robinson QC had given “strong advice” that
“the work being undertaken under the aegis of [the Parker Review] should not
continue in light of the litigation” but that “the subject matter of that work should
continue provided it is re-scoped and re-instructed for the purposes of the
litigation” (POL00110442) in June 2016. Jane MacLeod made me aware of this
and briefed me on the consequences. Jane did not invite me to make a decision
- it was not my review to stop.
1393. Bond Dickinson wrote to POL on 21 June 2016 “to confirm the advice given by
Tony Robinson QC at a conference held on 9 June 2016” (POL00006601).
This amounted to the proposition that “Mr Parker’s review should cease
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immediately’ but that the fourth, fifth, sixth and eighth recommendations of
Jonathan Swift QC should continue to be implemented.
1394. I did not see that advice. Jane sent it to Tim (POL00022764).
1395. I cannot recall any other discussions in which I was involved regarding stopping
the Parker Review.
1396. I am asked by the Inquiry whether I considered it appropriate to pause the
review or actioning recommendations which were intended to remedy issues
within POL and Horizon. As I have said, this is something which Jane briefed
me on in June 2016. But I did not understand that the Parker Review had
stopped: rather, I understood that the same recommendations continued to be
pursued appropriately, but that this was under the “aegis” of a response to the
litigation rather than as part of a standalone piece of work. Given that this was
as a result of advice from our QC, I was content that it should be done in this
way.
133.2 To what extent, if at all, did the GLO Proceedings influence POL’s action
in respect of past convictions of SPMs based on Horizon data. If it had any
influence, please explain the justification for the same.
1397. On 24 May 2016, Rodric Williams emailed Jonathan Swift QC (copying
Christopher Knight) and asked (POL00103207):
“Now that POL has been sued, is it reasonable for POL to address any
further steps it might reasonably take in respect of the SPMR cases
through the proceedings, rather than in response to your report and
recommendations?”
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1398. As I have set out above in answer to the Inquiry’s questions concerning the
Parker Review at paragraph 1256.d, I was aware that there was a rationale for
stopping the response to Jonathan Swift QC’s recommendations being a
standalone task, and making it part of POL’s response to the litigation.
However, aside from this, I did not think that the litigation changed POL’s
approach to past convictions. For example, I thought that POL was continuing
to comply with its disclosure obligations and continuing to engage with the
CCRC.
134, Please consider POL00103220 (email from Tom Wechsler to you dated 4
July 2016), Please explain the background to this correspondence on the
review of Seema Misra’s conviction.
1399. On 4 July 2016, Tom Wechsler wrote to me by email with “details from Rod on
the Misra case” (POL00103220). The Inquiry directs my attention to this
correspondence and asks me to explain the background to it.
1400. I see that Tom says in his email that this is “further to my last message”. I have
not been able to identify an earlier message from Tom on this topic and so I
am unable to explain what this refers to. It also looks, from the formatting of the
email, as though the information about Seema Misra has been copied and
pasted from somewhere else, but I have not yet identified the source within the
Inquiry’s disclosure.
1401. It seems likely that the purpose of Tom’s email was responding to emails
concerning Tim McCormack.
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a. Tim McCormack emailed Piero D’Agostino on 1 July 2016, copying
me and Tim Parker, specifically concerning Seema Misra
(POL00119584).
b. I sent it on to Al Cameron and Rob Houghton, with Tom in copy, on
1 July 2016 regarding the Dalmellington Error. This arose from Tim
McCormack’s blog (POL00029971).
c. Angela asked for ‘the actual email from Tim McCormack” to be
forwarded to her (POL00026913).
135. Please consider POL00041258 (emails from Jane MacLeod on 25 July 2016)
POL00030007 (emails chain with Jane MacLeod, you and others on 27 July
2016), POL00022663 (email from Jane MacLeod to you and another on 28 July
2016), POL00022663 (attachment to the prior email), POL00022666 (attachment
to the prior email) and POL00103232 (Alwen Lyons email to the Board on 29 July
2016).
135.1. Please explain your involvement in POL’s decision making in how to
respond to the letter of claim in the GLO proceedings.
1402. As I describe above at paragraph 1347, on 2 May 2016 I shared with the Board
an update from Jane in respect of her first reaction to the Claimants’ letter
before claim. I noted at that point that the letter had been passed to our legal
advisers and a discussion between them and the business would take place
next week as to litigation strategy (UKGI00006685).
1403. The way that the letter of response would be approved was described in a note
from Bond Dickinson (updated on 8 July 2016): among other dates, it states
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that on 28 June a draft would be provided to POL Legal for comment; on 14
July the Steering Group would meet to decide key tactical points in the letter;
on 20 July, the Steering Group would approve the letter (POL00006599).
1404. The agenda for that steering group meeting lists the “tactical decisions” which
fell to be made (POL00022641):
“a. Do we address in detail the “bugs” in Horizon identified by Second Sight
or will this cause more difficulties?
b. Do we attack Second Sight’s credibility/ expertise in order to undermine
their reports?
c. Do we release Second Sight from their confidentiality obligations and
allow them to speak to Freeths?
d. Do we lodge counterclaims against the Claimants who have outstanding
debts?
e. Do we agree not to assert any Official Secrets Act obligations against the
Claimants?
f. Do we engage in further mediation?
g. Do we explain whether part of Post Office’s motivation for bringing
prosecutions is a desire to recover money?”
1405. A series of “one page’ papers for each of the tactical decisions” was provided
by Andrew Parsons on 13 July (POL00022638).
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1406. I have not seen any disclosure which relates to a Steering Group meeting on
20 July 2016, as envisaged by Bond Dickinson. I have also not been able to
identify any minutes from the 14 July 2016 Steering Group in documents
disclosed by the Inquiry to date.
1407. Jane MacLeod wrote to me on 24 July 2016 stating that POL's letter of
response was to be sent by Friday 29 July, and that I would be briefed on the
response on Tuesday 26 July “to take you through the approach to that letter”
(POL00041258). In this email Jane provided some detail as to the matters
which she would explain on 26 July, including a risk of further adverse publicity
following the reply, and that the letter would flag “that there are a limited number
of individuals in Fujitsu with super-user rights which can only be used in very
limited and controlled circumstances”.
1408. Jane sent an email on 26 July 2016 confirming that she had briefed the GE that
morning on the progress of the litigation. She records in her email considerable
concern on the part of the GE as to the change of message on remote access,
and that they had suggested rephrasing that section of the letter
(POL00030006).
1409. Jane sent a further email to Andrew Parsons and others on 26 July 2016, which
from context is likely to be after I met with her for the briefing on the letter of
response. Jane recorded that I had “suggested that (I) speak to the UK CEO
of Fujitsu (Duncan Tait)” on a number of matters, including alerting him to the
fact and timing of the response letter (at page 2 of (POL00030006)). I do not
remember speaking to Duncan Tait at that point.
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1410. On 28 July 2016, Jane emailed me and Al Cameron providing some specific
information as to what the letter of response would say about remote access
(POL00022663). Our approval was not sought, but rather we were being
informed. The inference I draw from this is that the words had been checked
by the appropriate person and confirmed to be accurate.
135.2. When did you first become aware that “within Fujitsu there are a limited
number of individuals who have super-user rights which can only be used in
very limited and controlled circumstances”? What did you understand this to
mean?
1411. I believe I first became aware that there were individuals within Fujitsu with
super-user rights from the email that Jane MacLeod sent to me on 24 July 2016
at 20:44 (POL00041258). Jane’s email stated that I should be aware that there
might be negative publicity arising from POL’s reply to the Claimants’ letter
before claim, which was due to be sent on 29 July 2016. Jane went on to
explain that, as a result of the Deloitte work, POL would be flagging that “within
Fujitsu there are a limited number of individuals who have super-user rights
which can only be used in very limited and controlled circumstances”. This was
a different positioning from the public statements POL had previously made,
and therefore POL should be prepared for adverse comments from the usual
commentators.
1412. I replied at 07:19 on 25 July 2016 in the same URN: “This is clear — my inly
(sic) query is we (sic) FJ super-users. What did we say previously?” Where I
said "we", I meant "re". This was a typo.
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1413. Jane replied to me the same day, now copying other senior POL managers
and Andrew Parsons. Jane wrote that POL hadn’t previously addressed super-
users and that the phrasing of some previous statements as to who could
access branch data was quite narrow. POL was now collating previous
statements, and looking at those which Fujitsu had previously provided, to
assess the extent of the communications gap.
1414. On 26 July 2016, Jane MacLeod informed Andrew Parsons that she had
briefed the GE that morning on the progress of the litigation (POL00030006).
In particular, she had commented to the GE on the remote access issue in
POL’s response to the Claimants’ letter before claim. Later in the email, Jane
stated that I had suggested that I should speak to Duncan Tait. Jane suggested
that I should raise a number of issues connected to the remote access issue,
including that if the Deloitte work uncovered a different position from that which
Fujitsu and POL had stated publicly for years, we would need to consider
carefully how to manage the impact.
1415. Although I have no distinct recollection, I believe that I understood that the
issues raised by the new information about Fujitsu super-users related to
remote access and to the extent of Fujitsu’s ability to access and edit branch
data.
135.3. Were you satisfied that POL’s response to the letter of claim was
accurate? If so, how did you satisfy yourself that it was accurate?
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1416. As is clear from the wealth of documentation generated in discussion of the
letter of response, the internal legal team was responsible for checking the
accuracy of what was said in the letter of response. This was done with the
assistance of the Postmaster Litigation Steering Group, the counsel team and
Fujitsu. I believed that I was entitled to rely upon their collective investigations
rather than having to check the facts in the letter myself.
135.4. Who was responsible for the “more assertive” tone of the POL’s
response to the letter of claim? Was this based on legal advice?
1417. I believe that Anthony de Garr Robinson QC advised that this was the
appropriate tone for the letter. I say this because of an email which says that
the letter of response “has been reviewed by our QC Tony Robinson” and “the
tone of our response is more assertive than we have used previously”
(POL00024967). If he was not responsible for the tone, Anthony de Garr
Robinson QC at least does not appear to have challenged it as inappropriate.
1418. I do recall, when reading the letter, considering that it was too legalistic and
that it was not the tone that I would have used in correspondence, but I also
recognised that legal writing serves a specific purpose and was outside my
expertise.
135.5. On reflection, do you consider that POL's response to the letter of claim
was appropriate?
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1419. Given the findings of Fraser J in the GLO proceedings, I do not consider that
the letter of response was appropriate. I considered it appropriate at the time
because I believed that POL had carried out proper investigations into the claim
and because the letter had been reviewed by the Steering Group and by
experienced solicitors and counsel.
136. Please consider POL00021543 (minutes of POL Board meeting on 25 July
2016), POL00021544 (minutes of POL Board meeting on 29 September 2016)
and POL00021545 (minutes of POL Board meeting on 25 October 2016). Did the
Board discuss the GLO Proceedings in these meetings? If not, why not?
1420. I have read the minutes of the POL Board meetings on 25 July, 29 September
2016, and 25 October 2016 and I can see that they do not mention any
discussion about the GLO Proceedings. I do not recall these meetings, but I do
not believe that the GLO Proceedings were discussed. I have a clear memory
of Tim Parker saying that litigation usually took a long time to work through the
initial stages. It could be a year or so. He did not want Board time taken up with
procedural process and planning work and background issues. That was for
the legal team and advisers to be getting on with. As I have explained above, I
had no experience of leading an organisation through litigation and I respected
the Chairman’s steer.
1421. POL had put in place a structure for the management of the litigation. As I have
stated in my answer to Question 128, the Steering Group was created and
given its responsibilities by the GE in May 2016. Its membership was selected
to ensure that the Group had the requisite knowledge and expertise across the
areas of POL’s operations, which were involved in and affected by the claim.
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Given the seniority and expertise of the managers who served on the Steering
Group, and the support they were receiving from internal and external lawyers,
matters were not escalated from the Group to the GE or the POL Board unless
Jane MacLeod considered that it was necessary to do so.
137. Please consider POL00027185 (minutes of POL Board meeting on 24
November 2016). Please describe the update you provided to the Board.
1422. The minutes of the POL Board meeting on 24 November 2016 (POL00027185)
record under the heading “Any Other Business” that I updated the POL Board
on two legal cases. One of these was “Sparrow”, which I told the POL Board
“was expected in January’. I am sure that “Sparrow” was a reference to the
GLO Proceedings and that I explained to the POL Board that an application by
the Claimants to permit the group litigation would be heard in January 2017.
Otherwise, I cannot recall my update to the POL Board. I have not seen any
briefing to me from the legal department for the meeting and my CEO report in
the Board pack for the meeting (POL00103892) does not mention Sparrow or
Horizon.
138. Please consider POL00110564 (email from Jane MacLeod to you dated 28
November 2016), POL00110565 (attachment to the prior email), POL00091418
(Jane MacLeod’s email chain on 28 November 2016), POL00091419 (Tom
Wechsler and your email in response), POL00041377 (further email chain
between Rodric Williams and Andrew Parsons) and POL00091420 (email chain
between yourself, Al Cameron and Mark Davies on 29 November 2016).
1423. On 2 November 2016, Jane MacLeod sent me and Al Cameron a section of a
longer letter to Freeths and asked for our comments (POL00110564).
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(POL00110565) is the attachment to Jane’s email. The purpose of the draft
section of the letter was to notify the Claimants that POL had recently
discovered that it was theoretically possible for Fujitsu administrators to access
Horizon databases in a way which could change the branch account and to set
out POL’s position on remote access in light of that information.
1424. I can see from the documents in disclosure, which I did not see at the time, that
the draft had been the subject of numerous discussions and revisions before it
was sent to me on 29 November 2016. Since the Inquiry has asked me about
the removal from the letter of expressions of POL’s regrets, it may assist the
Inquiry if I summarise the history of the drafting, as recorded in the documents,
before I turn to my own involvement in finalising the wording of the remote
access section of the letter:
a. POL’s letter dated 28 July 2016 in response to the Claimants’ letter before
action contained a section on POL’s current understanding of Fujitsu's
privileged administration access to Horizon (see paragraph 5.16.4 of
POL00030211):
“Administrator access to databases: Database and server access
and edit permission is provided, within strict controls (including
logging user access), to a small, controlled number of specialist
Fujitsu (not Post Office) administrators. As far as we are currently
aware, privileged administrator access has not been used to alter
branch transaction data. We are seeking further assurance from
Fujitsu on this point.”
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On 27 October 2016, Freeths responded to this comment in paragraphs
119 to 122 of their letter in response to POL’s letter of 28 July 2016
(POL00041392). Freeths asserted that, in light of the information contained
in POL’s letter, previous statements by POL about remote access were
“untruthful’.
An update on Freeths’ response was on the agenda for the Steering Group
meeting on 1 November 2016 (POL00024984) but I have not seen any
minutes from the meeting.
On 18 November 2016 at 19:25, Andrew Parsons sent Jane MacLeod and
Rodric Williams some draft wording on the remote access issue “as
discussed in the con with Tony” (POL00023426). This appears to be a
reference to the conference with Anthony de Garr Robinson QC discussed
in the email chain at (POL00029103).
The attachment to Andrew Parsons’ email on 18 November 2016 would
appear to be the document at (POL00023431). This version of the draft
made a number of points in relation to Freeths’ allegation that prior
statements by POL about remote access were untrue:
Paragraph 1.12 of the draft stated that POL had relied on Fujitsu
when dealing with Second Sight, responding to cases within the
Mediation Scheme, and making public statements. It went on: “In light
of what Post Office now knows about administrator access...it
accepts that certain statements it has made historically might not
have been correct. It is regrettable that this has happened and that it
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has only now come to light, but Post Office does not accept that this
has caused any harm to any Claimant.”
Paragraph 1.13 of the draft set out the context of POL’s prior
statements, which POL asserted must be viewed alongside the
questions that it had been asked at the time the statements were
made.
In paragraph 1.14, POL denied that it had committed fraud or
deliberately concealed any relevant matter. On analysis, POL’s prior
statements were either true, or were made in good faith and were
believed to be true when they were made.
Mark Underwood replied to Andrew Parsons at 21:15 on 18 November
2016, attaching a revised version with his amendments shown in tracked
changes (POL00023435). My lawyers have been unable to find a copy of
the attachment in the Inquiry’s disclosure.
Andrew Parsons replied to Mark Underwood at 13:17 on 20 November
2016 (POL00023435). Andrew Parsons had updated the draft and
attached a further revised version: “Where I agreed with your suggested
amendments, I’ve included them and deleted the respective comment. In
relation to your other questions, I’ve added my answers to the attached.”
My lawyers have been unable to find the attachment to this email.
Mark Underwood replied to Andrew Parsons on 20 November 2016 at
14:34 (POL00041324). Mark Underwood's greatest concern with the
drafting was that it did not include a qualification that the logistical
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challenges to Fujitsu using administrator access to delete or change data
were so huge that it was not a credible line of enquiry. Mark Underwood
believed it was necessary for POL’s letter to include details of the logistical
challenges. Otherwise, if the letter was leaked to the media or the Network,
it could be quite damaging as it would provide soundbites that would give
credibility to an allegation that lacked any merit. Mark Underwood believed
there was sufficient time before POL sent the reply to Freeths to put
“suitable pressure” on Deloitte to provide information about the logistical
challenges.
In the same email chain, Jane MacLeod replied to Rodric Williams and
Mark Underwood at 09:03 on 21 November 2016, asking them to make
sure that “Rob H” (I believe Rob Houghton) was happy with the wording,
and that there was a discussion with him about how to approach Fujitsu.
Mark Underwood forwarded Jane’s email to Andrew Parsons at 09:12 on
21 November 2016 and asked if they could pick it up prior to the Steering
Group meeting that afternoon.
In a separate email thread at (POL00023433), on 21 November 2016 at
08:47, Jane MacLeod sent Andrew Parsons her “minor comments” on the
current version of the remote access drafting. Jane set out in her email her
“more substantive” comments on how POL presented the argument about
Fujitsu’s administrator access. In her view, the sequence of statements
should be as follows:
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° “The question of access has come up many times starting with the
Rudkin allegations, and including many specific questions raised by
Ss.
e In relation to such specific questions, PO reverted to FJ to clarify the
technical details in order to respond appropriately to the specific
questions asked.
e PO has recently commissioned further work and this is wider in scope
than the specific questions asked.
. In summary:
o PO does not have access or the ability to change transaction
data
o There are a small number of staff within FJ who currently and
historically have had administrator access. This means....
° FJ have advised us that there are controls in place to ensure
that this administrator access is not used
inappropriately....[tbc].”
At 17:20 on 24 November 2016, Andrew Parsons sent Rodric Williams a
“rough draft’ of the letter to Freeths, which he asked Rodric not to circulate
as it was still an early draft (POL00041373). Andrew Parsons made two
comments in relation to the remote access section of the letter:
i. Anthony de Garr Robinson QC was not happy with paragraph 9.10 of
the draft, and the list of controls in Horizon which prevented the
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editing of data. Although Jane felt strongly about this, Mr Robinson
QC thought this was a hostage to fortune.
The story that “POL relied on FJ’s statements” in paragraph 9:11 of
the draft had been “watered down”. Andrew Parsons explained that
having reviewed all the back material, there was a concern that the
issue of database access had been flagged in the POL Board
Briefing. Although Andrew Parsons’ view was that it was still fair to
say that POL had relied on Fujitsu, this was not clear cut and POL
needed to be careful in its language.
Andrew Parsons suggested a conference call as soon as possible to
discuss the remote access section of the letter. Andrew Parsons suggested
that the participants in the call should be counsel, Andrew Parsons, Jane
MacLeod, “Tom M” (presumably Tom Moran), “Rob” (presumably Rob
Houghton), and “Mark” (presumably Mark Davies). Andrew Parsons stated
that he did not think that the draft letter needed to go to the full Steering
Committee, as it was mainly a legal letter rather than factual statements
about POL, but he would welcome Rodric’s thoughts.
. On 27 November 2016 at 09:39, Andrew Parsons emailed a further version
of the full letter to Freeths, which incorporated comments from “Tony and
Rod” (presumably Anthony de Garr Robinson QC and Rodric Williams)
(POL00024869). The version of the email disclosed by the Inquiry does not
identify the recipients: however, the email chain above Andrew Parsons’
email contains what appear to be replies to Andrew Parsons from Jane
MacLeod and Tom Moran. In his email, Andrew Parsons asked “Rob” (who
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I assume was Rob Houghton) to review the section on remote access.
Andrew Parsons commented in relation to remote access:
“Following feedback from Deloitte, we cannot definitely say that POL
(as distinct from FJ) never had the ability to change Horizon data
because Deloitte and the current staff at FJ just don’t have enough
knowledge of Old Horizon to confirm this. This was a point made in
an early draft but it has now been removed.
“We have (I hope) now found a formulation of words that avoids
having to overtly throw FJ to the wolves and avoids any risk of waiving
privilege in any documents, but still gives us a fair story to tell. We
have also toned down the admissions of making incorrect statements,
though they are still there. I hope this might make it easier to get this
letter cleared through GE and FJ.
“We have a call scheduled for 5pm tomorrow with Tony which we can
use to run through any comments. Comments by email before then
are also welcomed.”
On 27 November 2016 at 11:06, in the same chain, Tom Moran asked Jane
MacLeod what she thought they should do to brief and obtain sign-off from
the GE (or a sub-set of the GE).
Jane replied to Tom Moran on 27 November 2016 at 13:06. She proposed
to mention the letter to the GE the following morning, and then circulate the
remote access section to me, Mark Davies, and Rob Houghton for any final
comments.
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Jane provided comments on the latest draft of the letter to Freeths in an
email to Andrew Parsons at 22:04 on 27 November 2016 (POL00025050).
One of Jane’s comments was to ask whether “it is possible to tone down
the ‘regrets language’ eg in 9.3.5, 9.5 and 9.6” to something along the lines
of:
“.with the benefit of hindsight it is now possible to construe those
statements as deficient in that they did not address the question of
administrator access. In each case PO was seeking to address the
questions that had been raised. PO did not intend to make any
misleading statements nor was it wilfully reckless in doing so. The
Post Office personnel responsible for those statements believed
when they were made in the context in which they were made. What
was Said reflected what they understood the position to be after
making relevant inquiries. [Uatortunately_they-did-net piek-up-enthe
issue—of-Fujitsu-administrater-access—as—Post-Office-would-h
tikedj” (strike out as in Jane’s original email).
On 28 November 2016 at 07:42, Jane MacLeod asked Andrew Parsons “in
light of the comments received overnight’ to send “just’ the remote access
section, stating that she would “prefer not to circulate the wording from
yesterday's draft more widely (Paula, Al, Mark D, Angela etc)”
(POL00024874).
In the same URN, Andrew Parsons sent Jane updated remote access
wording at 12:41 on 28 November 2016. He commented that “The general
direction of your comments was to be less apologetic in tone and less
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repetitive, both of which we’ve tried to accommodate in the attached.”
Andrew Parsons stated that the key issue was how far POL wanted to go
in accepting that incorrect statements had been made in the past. He
suggested to Jane that they should discuss the point at 17:00 that day with
Anthony de Garr Robinson QC.
My lawyers have found documents in the Inquiry’s disclosure which may
be associated with the emails between Andrew Parsons and Jane
MacLeod on 27 and 28 November 2016.
(POL00024806) is a version of the remote access drafting to which the
Inquiry has given a date of 27 November 2016. It contains three statements
in relation to POL’s regrets:
Paragraph 1.3.5. states that POL identified the issue of potential
access to Horizon databases when it was preparing its Letter of
Response. “Post Office regrets that it did not previously identify the
possibility that Fujitsu staff with certain administrator access rights
could potentially do this; however noting that it would be very difficult
and potentially detectable.”
Paragraph 1.5 states that: “At each stage an issue arose, Post Office
did its honest best to ascertain the position to respond to the question
it believed it was being asked and to reveal what it had found. In doing
so, Post Office may have regrettably made some _ incorrect
statements, but refutes any suggestion that it ever did so deliberately
or did so to mislead or deceive.” This wording is followed by an
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unattributed comment: “(not sure about this sentence — I don’t believe
you've answered inappropriately in the past)”.
Paragraph 1.6 states that the POL personnel responsible for making
those statements “believed the statements when they were made.
What was said reflected what they understood the position to be after
making relevant enquiries. Unfortunately, they did not pick up on the
issue of Fujitsu administrator access as Post Office would have liked.
This is a matter of great regret, but it does not mean that Post Office
exhibited wilful blindness to reckless indifference to the truth of those
statements.”
This wording is followed by the unattributed comment “(/ think this is
too much). Can we not say’. Below the comment, someone has
inserted alternative wording for paragraph 1.6:
“The Post Office responded appropriately to the question of
whether transactions could be altered by Post Office without the
postmasters knowledge — the answer to this question is
consistently the same — it is not possible. Expanding on this — it
is possible for FJ to access the system through administrator
access, which they have confirmed. This is not unusual and is
in common with any other organisation. You would need to
discuss with them their ability to modify transactions; our expert
assessment would say that this is extremely difficult but
theoretically possible.”
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(POL00024991) has been dated 28 November 2016 on the Inquiry’s
disclosure website. It contains the same expressions of POL’s regret as
(POL00024806) and contains the same unattributed comments.
On 28 November 2016 at 12:09, Andrew Parsons sent Jane MacLeod and
others what he called an updated version of the remote access section for
approval (POL00024874). (POL00024875) (dated 28 November 2016 by
the Inquiry) is likely to be the version of the drafting attached to this email.
While there were three expressions of regret in the previous drafts dated
27 and 28 November 2016, there is only one in this draft:
Paragraph 1.3.5. stated that: “When preparing our Letter of
Response, we identified the theoretical potential for Fujitsu
administrators to access Horizon databases in a way which could
change branch accounts. This is discussed in more detail below. Post
Office regrets that it did not previously identify this possibility even
though it is unreal to suggest that this is a true factor behind the
shortfalls suffered by any postmaster’.
The previous drafts had contained language of regret in relation to
POL’s previous statements about remote access. However,
paragraph 1.4 of this draft stated:
“At each stage, Post Office ascertained the position to respond
to the questions it believed it was being asked. With the benefit
of hindsight, some of Post Office’s statements may have been
incorrect in light of what has since been identified in relation to
Fujitsu’s administrator access rights (see below). But Post
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Office refutes any suggestion that it ever made false statements
deliberately or did so to mislead, deceive or conceal. The Post
Office personnel responsible for those statements made them
in good faith: what was said reflected what they understood the
position to be after they had made relevant enquiries at the
time.”
1425. The version of the draft that Jane MacLeod emailed to me and Al Cameron
on 28 November 2016 at 13:49 (POL00110564; POL00110565) appears to
be identical to the version that Andrew Parsons emailed to Jane on 28
November 2016 at 12:09 (POL00024874; POL00024875).
1426. In her covering email for (POL00110565) on 28 November 2016, Jane stated
that the intention was to send the longer letter to Freeths (of which the remote
access drafting was one part) on 29 November and that there was to be a call
at 17:00 on 28 November to review the wording with POL’s QC (which must
refer to Mr Robinson QC). That call was to be attended by the POL team,
including Mark Davies. Jane also set out the wording from POL’s letter to
Freeths in July 2016, which Freeths had picked up on and which the new
wording was designed to address. This was the statement in POL’s letter:
“Administrator access to databases. Database and server access
permission is provided, within strict controls (including logging user
access) to a small, controlled number of specialist Fujitsu (not Post
Office) administrators. As far as we are currently aware, privileged
administrator access has not been used to alter branch transaction
data. We are seeking further assurance from Fujitsu on this point.”
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1427.
1428.
1429.
WITN01020100
Al Cameron responded to Jane at 15:04 on 28 November 2016
(POL00091418). He wrote that he had paused and sucked his teeth on
paragraph 1.4 of the drafting:
“For the avoidance of doubt, I am sure it is true, it just reads
defensively and as a conspiracy theorist’s wet dream? Happy to leave
it to your best judgment but rather than making value statements
about honesty, may have been incorrect, I did wonder if we would be
better off simply saying...’We now understand the question more fully
and would answers questions X and Y as follows: Fujitsu can do X
but there are rigorous controls of Y etc.
Jane replied to Al at 15:22 on 28 November 2016. Jane said that this was a
difficult issue and that the statements had already been watered down. POL
would be speaking to its QC at 17:00 to understand his concerns, as the QC
was arguing for stronger wording (POL00091418).
At 15:41 on 28 November 2016, I sent Jane and Rodric (cc’d to others,
including Tom Moran and Rob Houghton) (POL00091419), which was an
amended version of paragraph 1.4 of (POL00110565). For ease of reference,
I have marked up in red below the changes that I proposed:
“At each stage Post Office did—ts-honest-bestte ascertained the
position so to respond transparently to the question it believed it was
being asked. With the benefit of hindsight, some of Post Office’s
statements may have been incorrect in light of what has now been
identified in relation to Fujitsu’s administrator access (see below).
Hewever-Post Office refutes any suggestion that it ever made false
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statements deliberately or did so to mislead or deceive. The Post
Office personnel responsible for those statements believed--the
statements-whentheywere made them in good faith: what was said
reflected what they understood the position to be after they had made
matiag-relevant enquiries at the time.”
1430. These were the only changes to the draft that I suggested in my email. I wrote
in my email that, as Al had said, I was not a lawyer either but “/ prefer this as it
is both simple and the truth. Any reason why it needs to be different?”
1431. Tom Moran replied at 16:03 on 28 November 2016, stating that he and Rob
Houghton had edited the draft along the lines I had suggested. They agreed
that we should keep things as simple as possible and not be apologetic given
that POL had acted in good faith throughout. The next section of Tom Moran’s
email was addressed specifically to Jane MacLeod:
“Jane - as you now have consistent feedback from Al, Paula, me as
SteerCo chair and Rob can we take the below as the default in our call at
5? If there is a critical reason why you/BD/our QC thinks we have to keep
the original text or something similar we'll need to understand what it is and
weigh it up against the reputational/comms impact on the network and
wider business.
As discussed, the thing remaining for me is for this to have the Comms
review and the reactive comms management approach in place prior to
sending.”
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1432. I can see from (POL00041377), that Rodric Williams and Andrew Parsons had
an email exchange between themselves about my amendments to the draft. In
an email on 28 November 2016 at 16:41 Rodric said that he liked the look of
my statement, but proposed some amended wording if Anthony de Garr
Robinson QC was adamant that the letter should contain some contrition.
Rodric’s proposed wording included a sentence that: “/t is regrettable that Post
Office did not anticipate the potential for Fujitsu administrator [[malfeasance]]
in its previous statements, for which it is sorry, Post Office refutes any
suggestion that it ever made false statements deliberately or did so to mislead
or deceive”. Andrew Parsons replied to Rodric at 16:55 that he quite liked my
wording, but they should speak to Anthony de Garr Robinson QC and see what
he said.
1433. At 23:35 on 28 November 2016, Jane MacLeod sent me a revised version of
the paragraph of the remote access drafting that I had commented on earlier
that day (POL00091420). Jane wrote that, following discussions with the QC
and Bond Dickinson that afternoon, the recommended language to be included
in the letter to Freeths was as follows:
“At each stage, Post Office ascertained the position to respond
transparently to the questions it believed it was being asked. With the
benefit of hindsight, some of Post Office’s statements may have been
incorrect in light of what has since been identified in relation to Fujitsu’s
administrator access rights (see below). But Post Office refutes any
suggestion that it ever made false statements deliberately or did so to
mislead, deceive or conceal. The Post Office personnel responsible for
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those statements made them in good faith: what was said reflected what
they understood the position to be after they had made relevant enquiries
at the time.”
1434. Jane commented that the challenge had been to balance the risk of adverse
publicity ahead of the court process (which was POL’s concern) with the need
to be open and transparent with the court in admitting that certain of the
information we provided previously on this issue could be construed as
“wrong”.
1435. Jane also mentioned that she would be taking Mark Davies through this
wording on 30 November 2016. When I replied to Jane, at 07:37 on 29
November 2016, I said that it was “important Mark scans for any other areas,
which could be sensitive to media scrutiny.” Mark, who was copied into the
chain, replied that he would do that.
1436. Although I cannot recall whether I saw the full letter to Freeths, I can see from
page 121 of (POL00110586) that the wording that Jane sent me on 23:35 on
28 November 2016 in (POL00091420) was included in the final version of the
letter.
138.1. Please explain if you believed the content of the draft response to be
accurate and, if so, what steps you took to satisfy yourself that it was.
1437. I believed that the draft was accurate. I relied upon the fact that the drafting
was produced and reviewed by the team who had been tasked by POL with
investigating the Claimants’ allegations and preparing POL’s response. I can
see from the emails I was sent at the time that the draft had been prepared by
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Bond Dickinson, and reviewed by Jane MacLeod, Rodric Williams, Tom Moran
(the chair of the Steering Group), Rob Houghton (POL’s ClO), and Anthony de
Garr Robinson QC. These people were either senior POL managers or well-
regarded external lawyers. I trusted that they would not send a letter to the
Claimants’ solicitors if they thought that it was inaccurate.
1438. In addition to the emails, I had conversations with Jane about the letter to
Freeths. I remember Jane telling me that POL intended to validate the factual
position in the remote access section with Fujitsu and Deloitte.
1439. I can see from an email from Andrew Parsons to Rodric and Jane on 29
November 2016 at 16:15 (POL00041383) that the draft was reviewed and
approved by Deloitte subject to one minor change. However, Fujitsu did not
respond to POL’s enquiries before the letter had to be sent. In the same URN,
Jane accepted Andrew Parsons’ suggestion (which he had discussed with
Rodric Williams) that the letter could be sent to Freeths without Fujitsu’s prior
approval so long as Deloitte gave POL the all-clear (which minimised the risk
of factual errors in the letter). That would leave a residual risk that Fujitsu might
complain or disagree, but in Andrew Parsons’ view, it was an acceptably small
risk.
138.2. Why did you prefer your suggested wording? Why did you seek to
remove expression of contrition? Did you engage with POL’s external legal
advisers on this issue?
1440. I was not conscious when I proposed my amendments to the draft that Jane
MacLeod had sent to me on 28 November 2016 (POL00110564) that I was
seeking to remove any expressions of contrition by POL.
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1441. As far I can recall, the first version of the draft that I saw was the version that I
received from Jane on 28 November 2016. As I have set out above, earlier
versions of the draft (POL00024806; POL00024991) contained three
expressions of regret. By the time Jane sent the draft wording to me, two of
those expressions of regret had been removed. I did not suggest removing the
one that remained in the draft sent to me by Jane (in paragraph 1.3.5 of
POL00110565).
1442. I preferred the wording I suggested in my email on 28 November 2016 at
(POL00091419) because I thought it was simpler and more straightforward. I
thought that the original language to the effect that POL had done its honest
best to ascertain the facts about remote access looked defensive and a little
mealy-mouthed. If POL had acted properly, as I understood it had, I thought
the letter should say that.
1443. I did not personally engage with POL’s external legal advisors on the drafting.
I understood from Jane’s email to me on 28 November 2016 at 23:35
(POL00091420) that what Jane described as the “recommended” version of
the draft remote access wording had been reviewed and approved by Anthony
de Garr Robinson QC.
138.3. To what extent did concerns about adverse publicity affect the way POL
presented its case in the GLO Proceedings?
1444. I did not give any direction that the way in which POL presented its case in the
GLO Proceedings should be influenced by concerns about adverse publicity,
and I did not perceive that others were being influenced by concerns about how
the case would be reported in the media.
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1445. Any business will keep an eye on potential publicity, to identify what the effect
might be, and to prepare for that. This is why I wanted Mark Davies to review
the letter to Freeths. However, my perception was that the media review of
POL’s statements in the litigation was a separate exercise to deciding how POL
should present its case.
138.4. Please explain what steps, if any, POL took in relation to its new
understanding of Fujitsu’s access rights. In particular, did you take steps to
ensure that past convictions of SPMs were appropriately reviewed?
1446. I do not know what steps were taken and I did not give a direction that the
business should consider the impact of the new information on past
convictions. My assumption at the time was that if any material came to light
that was relevant to past prosecutions, that material would be reviewed and, if
necessary, disclosed by POL’s legal team in accordance with POL’s
obligations. I would have expected to be told if POL had given any additional
disclosure to convicted SPMs. (POL00110565), an early version of the
response to Freeths on remote access, stated at paragraph 1.8.1 that: "Post
Office is fully aware of its ongoing prosecution disclosure duties and will make
such disclosures (if any) where appropriate." I believe I saw this, as in
(POL00091420), Jane MacLeod referred to the wider drafting around remote
access "which I circulated to you earlier today".
138.5. To what extent did you discuss this matter with the Board, UKGI or
BEIS?
1447. This was an important matter for the Board to be briefed on, but I do not recall
today how that briefing took place. Jane MacLeod, Al Cameron and I were in
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frequent contact with the Chairman and with the UKGI NED and the POL Board
generally. In addition, the POL Board received oral updates on an ongoing
basis on a number of matters. However, I have not yet seen any documents in
the Inquiry disclosure to confirm that they were briefed on this issue.
139. Please consider _UKGI00007544 (minutes _of POL Audit, Risk and
Compliance Committee on 30 January 2017). Please describe the discussion of
the GLO proceedings in that meeting.
1448. I attended the meeting of ARC on 30 January 2017. The minutes of the meeting
(UKGI00007544) record on page 6 under the heading “Legal” that the GC,
Jane MacLeod, gave an update on Sparrow:
“The Group Litigation Order has been heard by the Court. The initial
hearing went as well could be expected, with the court requiring a high
level of information from the claimants. The next procedural hearing
would be in October but it was not expected that any substantive matters
would be heard before next year.”
1449. Although I do not recall what was discussed at the meeting, I have reviewed
documents in the Inquiry's disclosure which provide context to Jane’s report to
the POL Board:
a. (POL00006404) is a Bond Dickinson decision paper for a Steering Group
meeting on 21 November 2016. The section entitled “Background” stated
that the hearing for a GLO had been listed for 26 January 2017.
b. (POL00025060) is a draft communication paper in relation to the application
for a GLO. A copy of this document was emailed by Melanie Corfield to
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Andrew Parsons, Rodric Williams, and others on 20 January 2017
(POL00025021). The first section of the document appears to be a draft
section on the litigation for my CEO Report (presumably for the January
2017 POL Board meeting). It stated that POL would consent to the litigation
being heard under the GLO procedure, although there were a number of
aspects of the procedure that needed to be agreed. It was anticipated that
the SPMs would present any outcome as a victory for them. It indicated that
the Board would be updated on the outcome of the hearing on 26 January
2017 by email, with a verbal update to follow at the January 2017 POL
Board meeting.
c. On 25 January 2017, Jane emailed the POL Board an update on the
application for a GLO, which was to be heard the next day (POL00103302).
Jane informed the Board that this was a preliminary hearing to decide how
the case should be managed. A hearing on the substance of the claims was
not expected before 2018. POL expected the Court to make a GLO and
POL agreed that this was the best way for the litigation to proceed. POL
expected the SPMs to brief the media that the making of a GLO was a
victory for them. POL intended to welcome the Court's decision as providing
the best opportunity for matters to be heard and resolved but would not
make any other comment. POL internal communications were prepared to
deal with any adverse publicity. A verbal briefing on the outcome of the
hearing and the way forward would be provided at the January 2017 POL
Board meeting.
140. Please consider POL00021546 (minutes of POL Board meeting on 31
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January 2017). Please describe the update provided to the Board.
1450. The minutes of the POL Board meeting on 31 January 2017 (POL00021546)
record on page 3 under the heading “CEO Report’ that I introduced my CEO
Report to the POL Board. My January 2017 CEO Report, to which the minutes
refer, contains a section on the litigation on page 5 under the heading “Project
Sparrow” (POL00027200). The contents of this section are almost identical to
Jane MacLeod’s email to the POL Board on 25 January 2017 (POL00103302).
The minutes record that I informed the POL Board that the GLO had come to
Court on 26 January 2017 and that detailed information would need to be
provided for each claimant. The claim was likely to return to Court in the
Autumn of 2017 for further procedural directions. I cannot recall any discussion
at the meeting beyond what is set out in these documents.
141. Please consider POL00025375 (email from Tom Wechsler on 13 February
2017) and POL00025376 (Bond Dickinson note for Steering Group on 14
February 2017). Please explain to what extent you were involved with POL’s
decision making in respect of its strategy to the GLO Proceedings.
1451. So far as I can recall, I was not involved in any discussions or decisions about
POL'’s strategy for the GLO Proceedings. Bond Dickinson’s decision paper on
POL’s strategy (POL00025376) was prepared for a Steering Group meeting on
14 February 2017. It was not sent to me in the email chain on 13 February
2017 (POL00025375) and I have no recollection of seeing the strategy decision
paper or being briefed on its contents.
1452. I have a memory of being informed by Jane MacLeod in a one-to-one
discussion that POL would need go through a process of identifying lead
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Claimants, but I cannot recall any details of this discussion or whether it
happened in February 2017 or later.
142. Please consider POL00021547 (minutes of the POL Board meeting on 28
March 2017) and POL00021438 (minutes of POL Audit, Risk and compliance
Committee_on 18 May 2017). Please describe the discussion of the GLO
proceedings in these meetings.
1453. I do not recall the discussion at the POL Board meeting on 28 March 2017. The
signed minutes of the meeting (POL00021547) contain a record of a “verbal
update” on the litigation given by Jane MacLeod (on page 9 under the heading
“Sparrow Update”). In summary:
a. The application for a GLO was heard in January 2017 and the order for a
GLO had been signed in the week commencing 20 March 2017. Freeths
were continuing to advertise the GLO Proceedings to potential claimants,
and the cut-off date for new claimants to apply to join was the end of June
2017. The business expected more adverse publicity during this period.
b. The Claimants’ General Particulars of Claim were expected imminently.
These would set out in more formal terms the legal basis of the SPMs’
claims. Once that document had been received, POL would have until the
end of June 2017 to prepare and file its Defence. This would be followed
by a Case Management Conference, expected in October 2017, at which
the Court would determine how the claim should proceed.
c. Jane noted that the Claimants had not quantified their claims.
1454. The draft unsigned version of the minutes of the meeting at (POL00027188)
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contain, on page 10, a more detailed summary of Jane’s update than the
signed minutes:
a. The draft minutes contain details of the potential size of the litigation
group. A total of 187 individuals had replied to date. POL was in the
process of retrieving files for the 81 confirmed members of the litigation
group.
b. It was expected that cases would be tested on particular themes and that
claims would be grouped together if they were sufficiently similar. Many
of the claims concerned the nature of the contracts between POL and
SPMs.
c. Although the claims had yet to be quantified, POL understood that SPMs
had been told that if the Claimants succeeded against POL in Court, the
first £21 million of any award would be used to pay their legal costs and
other expenses. The draft minutes recorded the observation that: “This
large expectation of claims value was highly inflated and what was legally
enforceable would be much lower.”
d. Jane confirmed that she was pleased with the current progress of the
litigation and welcomed the Court process. She confirmed that a QC and
junior were working on the matter and looking at risk. The Claimants’
arguments based on implied contracts and a duty of good faith were not
expected to succeed.
1455. As noted in the minutes at (POL00021438), I did not attend the ARC meeting
on 18 May 2017. The only record of any discussion of the litigation at the
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meeting is on page 5, which stated that the ARC discussed the litigation and
Jane was asked to circulate a note to update the ARC on the funding of the
litigation.
1456. On 22 May 2017, Alwen Lyons forwarded to the members of the ARC an email
from Jane about the Claimants’ litigation funding, noting that this was an action
from the last meeting: (POL00103307). In summary:
a. The claim was funded by Therium Litigation Funding IC.
b. The Claimants had entered into individual Conditional Fee Agreements
with Freeths. The details of these arrangements were confidential and
had not been shared with POL.
c. The Claimants had the benefit of Legal Expenses Insurance (underwritten
by QBE, CBL Insurance, and Sompo Canopius). POL had received
redacted copies of the policy documents and was taking advice on
whether they were adequate to provide security for POL’s costs if POL
was successful in its defence of the claim.
143. Please consider POL00021548 (minutes of the POL Board meeting on 25
May 2017). Did the Board discuss the GLO Proceedings at this meeting?
1457. I do not recall whether the POL Board discussed the GLO Proceedings at its
meeting on 25 May 2017. There is no record of a discussion in the minutes
(POL00021548). I would be surprised if there was no discussion of the
Claimants’ litigation funding and its implications for the quantification of the
claim. I can recall an ongoing concern, both at the ARC and at the POL Board,
about the potential contingent liabilities arising from the claim. Since the ARC
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had requested and received details of the Claimants’ funding arrangements
only a few days before the POL Board meeting, I believe there would have
been some discussion about this issue, but I cannot recall it and I have not
been shown any documents which could help refresh my memory.
144. Please consider _POL00027182 (minutes of the General Executive
Committee meeting on 13 July 2017).
144.1. Please describe the discussion in respect of the GLO Proceedings at
this meeting.
1458. I have little independent recollection of the GE meeting on 13 July 2017. The
minutes (POL00027182) recorded as Agenda Item 10 that Andrew Parsons
from Bond Dickinson had joined the meeting and briefed the GE on POL’s
Defence and subsequent procedural steps. In summary, the minutes recorded
that Andrew Parsons made the following points in his briefing:
a. He described the role of the Defence document in the proceedings and
noted that it would be signed by Jane MacLeod on POL’s behalf.
b. The accuracy of the factual statements in the Defence had been reviewed
internally by the POL staff with knowledge of the relevant facts.
c. He summarised the key themes in the litigation and the approach to those
issues in the Defence.
d. The window for additional claimants to join the GLO Proceedings would
close on 26 July 2017. Present indications suggested that there would be
400-500 claimants in the group.
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e. The Claimants would have an opportunity to respond to the Defence in a
formal document called a Reply. This was due to be filed with the Court
on 20 September 2017. While it was not mandatory for the Claimants to
file a Reply, it was likely they would do so given the complexity of the
case.
f. A Court hearing, called a Case Management Conference, would take
place on 19 October 2017. The hearing would be an opportunity for POL
and the Claimants to agree further steps leading up to trial, including the
selection of individual SPMs' cases which the parties wished to put
forward as Lead Cases, disclosure of documents, witness evidence, and
expert evidence.
g. TheLead Cases would be examined in greater detail by the Court at mini-
trials with the aim of using those cases to determine points of principle or
fact that applied broadly to many cases. This would require the parties to
set out their positions on the Lead Cases in further, case-specific
Particulars of Claim, Defences, and Replies.
1459. (POL00110666) is a "Question and Answer" document that Bond Dickinson
prepared for the GE meeting on 13 July 2017. I do not know whether GE
members were given copies of this document. Agenda Item 15 of the minutes
contained the GE’s feedback on the agenda items and the effectiveness of the
sessions. There is an unattributed comment in this section: “Sparrow too long”.
I cannot remember who made this comment or whether it referred to Andrew
Parsons’ oral update or to a document.
1460. Paragraphs 2 to 4 of (POL00110666) contain an overview of POL’s Defence
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and how the legal team proposed to deal with two themes of the case in the
Defence: (1) remote access and the integrity of Horizon (paragraph 3) and (2)
the Claimants’ attacks on the fairness of the contract between POL and SPMs,
which took the form of attempts to imply additional terms into the contracts and
allegations that the contracts contained unenforceable unfair terms (paragraph
4). Paragraph 2 made a general point that the generic structure of the claim
made it difficult to ascertain the claims and the risks to POL, but provided some
high-level observations on the merits:
a. Bond Dickinson advised that the Claimants faced an uphill battle to have
POL’s standard terms overturned and replaced with new terms.
b. They were more confident about the robust nature of Horizon and the
accuracy of the data it held, following further work by Deloitte and Fujitsu.
c. The greatest area of concern was the operation of POL’s suspense
accounts. The Claimants asserted that branch losses may have been
caused by the incorrect operation of such accounts. Preliminary work by
Deloitte had highlighted that there were many accounts that could be
operated as suspense accounts and the controls around these accounts
were weak. Further work was underway but would not be completed by the
time the Defence was due to be filed.
1461. Given that (POL00110666) appears to have been produced for the GE meeting
on 13 July 2017, I believe it is fair to assume that Andrew Parsons’ oral
explanation of the Defence, as recorded in the minutes, was based on this
document.
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1462. The minutes recorded that the outcome of the Sparrow briefing was that the
GE requested that the GE and the POL Board should be given a further update
after the Case Management Conference. This update should include an
assessment of the potential impact on POL of the range of possible litigation
outcomes on POL and POL's business operations, based on the issues in the
Lead Cases.
144.2. What was your understanding at that point on the purpose and meaning
of POL’s Defence?
1463.My understanding of the purpose of POL’s Defence was that it was the formal
Court document in which POL set out its factual and legal case in response to
the claims.
1464.My understanding at this point of the meaning of POL’s Defence was derived
from Andrew Parsons’ update to the GE at the meeting on 13 July 2017, which
I believe was very likely to have been based on the "Question and Answer"
document that Bond Dickinson prepared for that meeting (POL00110666).
144.3. Please set out the steps you took to satisfy yourself that POL’s General
Counsel would be in a position to certify the Defence as true on behalf of the
company.
1465. One point made by Andrew Parsons at the GE meeting on 13 July 2017 that I
do remember was that the Defence would be signed by Jane MacLeod, as
POL’s GC, to verify that it was true. I knew of course that neither Jane nor any
other single individual at POL had direct knowledge of all the factual matters
covered in the Defence: that is why, as I have said, the membership of the
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Steering Group was drawn from the various functions within POL which were
affected by the claim. I would have been reassured at the time by Andrew
Parsons’ briefing that the accuracy of the factual statements in the Defence
would be reviewed by POL staff with knowledge of the relevant facts. I recall
as a further challenge and support to Jane, that I emphasised this point to the
GE. I asked GE directors to check with senior colleagues from their teams who
sat on the Litigation Steering Group, that those individuals were comfortable
with the accuracy of the factual statements.
145, Please consider POL00003340 (letter from Bond Dickinson to Freeths
dated 18 July 2017 enclosing POL’s Generic Defence and Counterclaim).
145.1. Did you review the Generic Defence and Counterclaim before it was
served on the claimants? If not, when did you first review it?
1466. have described the receipt by POL of the Claim Form and Particulars of Claim,
and the Amended Generic Particulars of Claim. The Inquiry has asked a series
of questions about the Generic Defence and Counterclaim. I do not recall if I
read the Generic Defence and Counterclaim (POL00003340) before it was
served on the Claimants. I know that I had been briefed on the counterclaim,
as Jane MacLeod had to explain to me what a counterclaim was (she did the
same for the GE and Board I believe — although currently I cannot see any
documentation on the latter) and POL had received advice that it should lodge
a counterclaim.
1467.1 do recall reading the Generic Defence and Counterclaim for a meeting with
Anthony de Garr Robinson QC, but this was after the document had been
signed and served on the Claimants. The document was served on 18 July
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2017. I see that I was sent a copy of the "Final Version Defence" by Jane
MacLeod on 19 July 2017 (POL00249979). I do not recall if I read the Defence
that day but I do remember reading it in preparation for a meeting with Anthony
de Garr Robinson QC, which took place on 29 September 2017.
1468.1 am confident in my memory for a variety of reasons. First, I remember meeting
Anthony de Garr Robinson QC quite well, and I remember that I had a number
of questions on legal terminology that I wanted him to help me understand.
Second, I note from documents I have seen that this meeting was in
September, not earlier: (POL00028055) is an email from Andrew Parsons to
Jane MacLeod on 28 September 2017 which arranges the meeting for the
following day and says, indicating that Anthony de Garr Robinson QC and I
had not met before, that Andrew Parsons has “prepped Tony on Paula and Al’s
respective styles’. Jane attended the meeting in case any issues arose which
needed to be followed up, but she did not think the purpose of the meeting was
to generate “actions” (POL00024459).
1469.1 knew that the Generic Defence and Counterclaim were the product of a
considerable amount of work undertaken by POL's legal team in conjunction
with an experienced solicitor and counsel team. The Steering Group was
overseeing the verification of the details.
1470. The Inquiry has asked me five specific questions as to particular paragraphs of
the Generic Defence and Counterclaim, in each case asking me the basis on
which POL pleaded that matter. Given that I did not read or approve the
Generic Defence and Counterclaim before it was signed, I do not expect that
the Inquiry wants me to speculate as to the reasons that certain matters were
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pleaded. I therefore have not answered each of Questions 145.2 — 145.6.
145.2. Please consider paragraphs 43(1) to (3). Please explain the basis on
which POL pleaded that “The blocked value is not (and is not treated as) a debt
due to Post Office”.
145.3. Please consider paragraph 48(3)(b). Please explain the basis on which
POL denied that Fujitsu “edited or deleted specific items of transaction data”.
145.4. Please consider paragraph 48(3)(c). Please explain the basis on which
POL pleaded that Fujitsu had not implemented fixes that_had affected the
reliability of accounting balances, statements or reports.
145.5. Please consider paragraph 48(4). Please explain the basis on which POL
pleaded that “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”.
145.6, Please consider paragraph 57(4). Please explain the basis on which POL
pleaded that “To have abused those rights so as to alter branch transaction
data and conceal that this has happened would be an extraordinarily difficult
thing to do, involving complex steps...which would reqgire months of planning
and_an_ exceptional level of technical expertise. Post Office has never
consented to the use of privileged user rights to alter branch data and, to the
best of its information and belief, these rights have never been used for this
purpose”.
145.7. Did you believe the contents of the Generic Defence and Counterclaim
to be true? How did you and POL satisfy yourself that it was?
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1471. The Generic Defence and Counterclaim was the product of the delegated
function of the Steering Group (at which Tom Wechsler was effectively my
proxy) and its experts and external advice from Bond Dickinson and leading
and junior counsel. I know also that input from Deloitte and Fujitsu was
obtained where it was required (see (POL00024489)). The minutes of the
Group Executive Meeting on 13 July 2017 record that Andrew Parsons joined
the meeting and confirmed that the accuracy of the factual statements included
in the document had been reviewed internally by those POL staff with
knowledge of the relevant facts (POL00027182).
145.8, Please explain the reasons for POL making a counterclaim.
1472.The Counterclaim was set out page 73 of the Generic Defence and
Counterclaim. This was a claim in respect of any Claimants who were liable for
a shortfall and / or a loss of cash and / or stock which POL had not at that time
recovered in full. The Inquiry has asked the reasons for making this
counterclaim.
1473.1 note that the advantages and disadvantages of this approach were set out in
advice from Bond Dickinson, in the form of a “decision” document
(POL00006360). There is no date on the face of this document and on the
Inquiry’s Relativity system it is marked as being dated 8 July 2016, which
cannot be right. However, from the context I understand that it was probably
written in May 2017. I have seen an email dated 17 May 2017 from Andrew
Parsons to Mark Underwood and Rodric Williams attaching a draft decision
paper regarding whether POL should be advancing counterclaims.
1474. Decision 4 in the document is headed “Does Post Office lodge counterclaims
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against Claimants who have outstanding debts?” The document then sets out
a summary:
“There are 29 claimants who owe outstanding debts to Post Office,
with total cumulative debt at just under £1m. Approximately £300k has
been “written off’ by Post Office already so the total outstanding debt
on Post Office’s books is just under £700k’.
1475.Bond Dickinson recommended that the counterclaim should be pursued,
having weighed up the merits and demerits of the position. I understand that
the purpose of this was so that it could be decided by the Steering Group.
1476.1 did not have any involvement in the Steering Group discussions and
decisions. However, as I say above, I do recall a one-to-one conversation with
Jane MacLeod in which we discussed this. The conversation probably took
place before the Generic Defence and Counterclaim was signed, but I cannot
remember this for sure.
1477.1 recall Jane telling me the pros and cons of making a counterclaim and telling
me that the legal advice which POL had received was that a counterclaim
should be included. Although this was presented primarily as a legal and
strategic question by Bond Dickinson, it was also a question of people-
management and, as recognised by Bond Dickinson, had the potential to show
that POL was “acting oppressively”.
1478.Jane probably anticipated, quite rightly, that I would have been instinctively
uncomfortable with the idea of POL making claims against its SPMs. Therefore,
I expect that the reason that Jane would have told me about the decision of the
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Steering Group was so that I could have the opportunity to comment.
1479.The reason I think that this is likely to have been before the Generic Defence
and Counterclaim was signed is because Jane would have wanted to give me
the chance to object, rather than telling me after the fact.
1480. Although I cannot remember the discussion in any detail, I believe that Jane is
likely to have told me that the Steering Group had made a decision. Obviously
if I had firmly objected then I could, and would, have said so. However, like the
Steering Group, I gave proper consideration to strong advice where it was
given.
146. Please consider POL00021549 (minutes of POL Board meeting on 25 July
2017).
146.1. Did the Board discuss the GLO Proceedings at this meeting?
1481.There is nothing in the minutes which I have seen to indicate that the POL
Board discussed the GLO proceedings. In light of the fact that the Generic
Defence and Counterclaim had been considered by the GE on 13 July there is
little else which would have fallen to be discussed (or, indeed, decided) by the
POL Board on 25 July 2017. It is possible that Jane MacLeod had already
agreed with Tim Parker, whom she met regularly, that a full discussion would
take place around the time of the CMC.
146.2. Please explain the background and reasoning for the decision “not to
prosecute agents if they could use the Horizon system as a defence”. Why was
this to be reconsidered once Deloitte had completed its work?
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1482. The Inquiry has asked me to comment on part of paragraph 17/56 (e) in the 25
July 2017 minutes (POL00021549). The whole paragraph reads:
“The CEO explained that the decision not to prosecute agents if they
could use the Horizon system as a defence would be reconsidered once
Deloitte had completed their work on Horizon and could be used in court
as an expert witness.”
1483. The reason that this was to be reconsidered once Deloitte had completed their
work was simply because, at the time, POL could not prosecute SPMRs where
no expert witness evidence was available. Without an expert to vouch for
Horizon, prosecutions were a non-starter. POL had paused most prosecutions
in cases where there was an issue with the Horizon system. Deloitte was part
of that process in terms of validating and answering any questions in respect
of the system.
1484.Once Deloitte had completed its review and, if appropriate, confirmed the
integrity of Horizon, then POL would come back to the question of whether to
prosecute SPMs and consider what expert evidence might be relied upon.
1485.1 think there may be a typo in the minutes. I think that the last sentence perhaps
should read “... once Deloitte had completed their work on Horizon and could
be used in court by an expert witness” (emphasis added for clarity). I do not
recall it being the proposal that Deloitte would act as an expert witness, but
rather that another expert witness might give evidence relying upon the report.
An earlier email from Andrew Parsons, in June 2016, states:
“Deloitte will remain directly engaged by POL as an expert investigator.
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We've confirmed to Mark that we do not intend at this stage to engage
Deloitte as an expert witness in Court. This apparently makes things
much easier on his side when it comes to “risk management”. I have
however said that Deloitte’s work may be passed to another expert
witness at some stage so that they could re-use the factual
investigations conducted by Deloitte.” (at page 2 of (POL00041238))
1486.POL would not want to prosecute somebody if it could not rely on Horizon data.
We believed that Horizon data was reliable, but to have assurance on this the
Deloitte work was necessary.
147 Please consider POL00006380 (Bond Dickinson note on general strategy
for Steering Group meeting on 11 September 2017), POL00006503 (Bond
Dickinson note on legal strategy options), POL00041485 (email from Jane
McLeod to you and others on 21 September 2017), POL00041486 (attachment
to the prior email), POL00021550 (minutes of the POL Board meeting on 26
September 2017), POL00006384 (Amy Prime’s email to Andrew Parson’s on 28
September 2017) and POL00006499 (Andrew Parsons email to Jane MacLeod
on 28 September 2017).
147.1 To what extent were you involved in POL’s decision making on strategy
in the GLO at this point?
1487.1 was involved in the decision-making strategy to the extent that the POL Board
and I signed off the strategy that was set at the PSLG meeting on 11
September 2017 for the Case Management Conference (see Bond Dickinson's
note of that date (POL00006380)).
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1488.A summary of the advice given to POL in the PSLG by Bond Dickinson was
provided in table form. I know that I saw that document, because a version with
my handwritten notes has been disclosed by the Inquiry (POL00107163). The
note describes Bond Dickinson’s advices to POL on five strategic options for
the future management of the GLO, together with its recommendations in each
regard. I made those notes in a meeting with Anthony de Gaar Robinson QC.
I discuss the meeting, which took place on 27 September 2017, at paragraphs
1494 and 1495. I had also seen a slightly amended version, which had been
discussed at the POL Board the day before.
1489.On 16 September 2017, I spoke with Al Cameron, Kevin Gilliland and others,
following which it was agreed that a briefing paper would be prepared for the
POL Board (including advice from Andrew Parsons) on litigation options. I know
the date of the meeting from (POL00024660). I know the purpose and content
of the meeting from (POL00024700):
1. “Following the Steering Group last Monday, we briefed Paula, Al
and Kevin on the legal advice for the proposed strategy for the CMC
in particular the advice we should proactively address the contractual
issues. As a result of that briefing, and to support the advice, Tom M
and I were asked to:
e developed some options that we could consider to address the
risks should the postmasters be successful in arguing that
some or all of the additional duties should be implied into the
contract, and
e brief the Board on the legal risks at the Board meeting on
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Tuesday.”
1490. Jane MacLeod prepared a first draft of this briefing document and circulated it
to Thomas Moran and Andrew Parsons. Andrew Parsons provided comments,
as did Thomas Moran (POL00024660). Discussion between Jane, Andrew and
Tom continued for a few days (POL00024690).
1491. I received the briefing paper — as did Al Cameron and Kevin Gilliland — at 18:04
on 21 September 2017 (POL00041485). The cover email described that the
paper had a:
2. “summary of options which we discussed on Monday (Appendix
1), as well as a summary of the duties which Freeths seek to imply,
and the possible actions that Post Office could take as a result of an
adverse decision (Appendix 2).
3. I would then propose to use the paper as speaking notes at the
Board on Tuesday to explain the rationale for the decision.”
1492. I note from the language which Jane used in that email (“to explain the rationale
for the decision”) that the purpose of the briefing paper was to explain the
Steering Group's decision to us, including a detailed explanation of their
rationale.
1493. The paper is (POL00041486). Consistent with the wording of Jane’s email, the
“input sought’ in the paper from the POL Board was:
4. “The Board is asked to endorse the recommended strategy and
the risks inherent in it.”
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1494.The POL Board meeting took place on 26 September 2017 as planned. The
minutes at 17/68 record this under “Litigation Update”:
(a) "The Board received a verbal update on the Postmaster Litigation
from the General Counsel, noting that the Case Management
Conference would be held on 19 October, and the outcome of the
CMC would be directions given by the Court as to the conduct of
the case over the next 12-18 months. There were key strategic
issues to be decided as to Post Office’s preference for the
sequence in which the legal arguments were to be address, and
Post Office had receive (sic) legal advice as to the preferred
sequence.
The Board discussed the advice and its implications, and
approved the proposed strategy.”
1495. I had wanted to speak to Anthony de Garr Robinson QC before the POL Board
meeting on Tuesday 26 September 2017 to ensure that I understood
everything as the litigation progressed. However, he was not available to meet
me until 29 September 2017. Although this meeting was after the POL Board
meeting, it was still before the Case Management Conference, so it would have
been possible to revisit the decision of the POL Board, if appropriate.
147.2 Please consider “Our target audience is therefore Freeths, the funder
and the insurers who will adopt a cold, logical assessment of whether they will
get a pay-out, rather than the Claimants who may wish to fight on principle
regardless of merit”. Did this summarise POL’s approach to the GLO
Proceedings? If so, please explain why that was an appropriate approach in
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circumstances where the claimants included SPMs who had been convicted
on the basis of data generated by Horizon, which they claimed lacked integrity.
1496.1 am asked whether POL’s approach to the GLO proceedings can be
summarised as “our target audience is therefore Freeths, the funders and the
insurers who will adopt a cold, logical assessment of whether they will get a
pay-out, rather than the Claimants who may wish to fight on principle
regardless of merit.”
1497. These words are taken from a note prepared by Bond Dickinson for Steering
Group for their meeting on 11 September 2017 (POL00006380). These words
were not included in the summary table of options which I was provided with,
nor in Jane MacLeod’s note to the POL Board, in advance of the 26 September
2017 meeting.
1498. In full context, the quotation is this:
“4.2 This leads us to the view that, in the fullness of time, Post Office
may need to address each of the 522 claims individually given the
diversity of their circumstances. Taking every case to a full conclusion
through the litigation process is unattractive as it would take years and
the costs would be extremely high.
4.3 We believe the better solution is to try to force the Claimants into a
collective position where they will either abandon the claims or seek a
reasonable settlement. It should be remembered that the claims are
financially supported by Freeths (whose fees are at least partially
conditional on winning), a third party funder and insurers. Without this
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support these proceedings would not have been possible. All three
entities will likely have the power to pull their support if the merits of the
case drop below a certain level. Our target audience Is therefore
Freeths, the funder and the insurers who will adopt a cold, logical
assessment of whether they will get a pay-out, rather than the Claimants
who may wish to fight on principle regardless of merit.”
1499. The summary table of options (POL00107163) had this similarity: in respect of
“Option 3”, which was recommended by Bond Dickinson in conjunction with
“Option 2”, it said “some early victories might shake the confidence of the
Claimants and their litigation funder”. However, this was one of four
advantages identified for Option 3, with three further advantages being
identified for Option 2.
1500.1 therefore do not think that it is accurate to say that the short quotation
identified by the Inquiry represents POL’s approach to the GLO Proceedings.
First, I was not involved in the Steering Group discussion in September 2017
at which this featured in a longer advice document provided to them by external
lawyers and so I do not know the extent to which it featured in its decision
making.
1501.However, POL did intend to take steps to resolve the GLO quickly. This had
the dual effect of reducing costs and the draw on staff time (and the impact on
on-going business more generally), and also seeking to avoid this being drawn
out which would be unfair and unhelpful for the SPMs. There was also a
particular consideration that this came at a time when POL wished to recruit
more SPMRs to run new post office branches, but with ongoing litigation this
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prospect was unattractive for new recruits. To the extent that the words quoted
by the Inquiry in Question 147.2 indicate that POL wished to seek a quick
resolution of the GLO Proceedings, I would agree that this was the strategy
followed by the business.
1502. My understanding of POL’s strategy was what was set out in the summary table
of options (POL00107163) and Jane’s briefing note for the POL Board
(POL00041486). This is borne out in the POL Board minutes of 26 September
2017 which approved this description of the strategy.
147.3 What were your views on Bond Dickinson’s suggestion that POL would
be in a “very difficult commercial position” if the SPMs’ arguments on the terms
of the relevant contract were upheld? In particular,
1503.Bond Dickinson described at 4.8.3 of its 11 September 2017 note (which was
prepared for the Steering Group and not the POL Board) (POL00006380):
“Moreover, the Claimants’ arguments on the postmaster contracts are
not without merit. There is a chance that they might be successful, in
which case Post Office would be left in a very difficult commercial
position (see our previous advice on possible worst case outcomes).”
1504.The Inquiry asks whether I agreed with this. I do not recall seeing this
document, as I say above. However, both (POL00107163) and
(POL00041486) include similar wording. At page 1 of (POL00107163), which
says:
“The Claimants’ arguments on the postmaster contracts are not without
merit. There is a chance that they might be successful, in which case
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Post Office would be left in a very difficult commercial position (see our
previous advice on possible worst case outcomes and the possibility of
an existential crisis for Post Office).”
1505. (POL00041486), at page 5, says:
“The Claimants’ arguments on the postmaster contracts are not
without merit. There is a chance that they might be successful, in
which case Post Office would be left in a very difficult commercial
position.”
1506.The POL Board and I approved this strategy. I agreed that this part of Jane’s
paper was an accurate observation.
147.3.1 Please address the perceived issues arising from the alleged term that
sought “to reverse the burden of proof so as to make Post Office responsible
for investigating shortfalls”.
147.3.2 Please set out the basis on which it was considered fair for SPMs to
investigate shortfalls in circumstances where they alleged that the Horizon IT
System caused the discrepancy.
1507. The Inquiry asks me to consider part of paragraph 9 in Jane MacLeod's paper
(POL00041486) and to consider the fairness of SPMs investigating shortfalls.
The full paragraph reads:
“We believe that the most damaging group of terms sought to be implied
are those that seek to reverse the burden of proof so as to make Post
Office responsible for investigating shortfalls. Post Office’s contention is
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that only the Postmaster can know what happens in branch, such that
the Postmaster is best placed to deal with a shortfall. This is particularly
the case where postmasters actively seek to conceal losses.”
1508. Knowing now that the Horizon system was not reliable, I accept entirely that it
was not fair on SPMs to require them to prove that Horizon (and therefore POL)
was responsible for shortfalls. However, as I understood matters at the time,
there was a process in place for SPMs to raise disputes with the figures
displayed and produced by Horizon, and I understood that SPMs had access
to all of the information they needed about their business (for example, by
cashing up properly each day through receipts kept in branches, viewing
transaction log data and reports produced by Horizon) to allow them to identify
where any shortfalls arose and the reasons for those shortfalls.
1509.1 also understood that POL had the data necessary to investigate the cases
where issues were raised by SPMs through agreed processes. If I had
personally looked at that data it would not have made any sense to me and I
would not have known whether I had all the required data or not, because I did
not have that technical expertise. Moreover, it was not my personal job to
investigate shortfalls. I would not have had the time to, even if I did have the
training.
147.4 Please consider your talking point: “Would the court consider the impact
of the doomsday decision in particular, the impact on public funds and POL
business, when making a decision”. Did you consider that POL’s business
model was more important than the merits of the SPMs claims?
1510.On 28 September 2017, Andrew Parsons sent a short email (written by Jane
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MacLeod) of my ‘talking points... for tomorrow’s meeting” to junior counsel.
These included “would the court consider the impact of the doomsday decision
in particular, the impact on public funds and POL business, when making a
decision” (POL00028063).
1511.1 have been shown a further email between Andrew and Jane that evening
which sets out from Anthony de Garr Robinson QC “what he plans to cover
tomorrow with Paula/ Al” (POL00006499).
1512. Following on from the “doomsday” note, Mr. de Garr Robinson QC intended to
address:
“3. Mood music
5. “a. We need to weave into the story that losing on the “burden of
proof’ issue would be disastrous for POL, but this needs to be done
with great care and not over-exaggerated.”
1513. The Inquiry has asked whether POL considered that its business model was
more important than the merits of the SPMs' claims.
1514.My question about “doomsday” was a question as a non-lawyer to Leading
Counsel, asking an open question so that I could understand the process. I
wanted to know what the Court could and could not (and would / would not)
take into account. I asked the question because I did not know the scope of the
decision which the Court would make. I wanted a lawyer to explain this to me
so that I could then form a more informed view on how the facts could be used
in that framework.
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1515.1 was aware that there was a strong public interest in the survival of Post Offices
because of their value to communities throughout the country. I could also see
that POL could be in a very difficult commercial situation as a result of the
litigation. I knew the amount of cash which POL had in the community in
branches: if the Court held that the contract with SPMs was not enforceable in
respect of an SPM's liability, I was concerned as to the viability of the business,
the network of Post Offices and the provision of cash into communities. Taking
those matters together, I wanted to understand how the Court would respond.
147.5 What were your views on settling with the SPMs at this stage?
1516.1 am asked about my views on settling with SPMs at this stage: I relied on legal
advice as to what was best for the business; this advice informed my views
heavily. Notwithstanding my view as to what was best for the business, and
therefore what view I ought to hold as CEO of the organisation, I did personally
find it uncomfortable for the business to be involved in litigation of this nature
with individual SPMs. This was a view I expressed to Jane on at least two
occasions. However, ultimately, that was just one factor which I (and the
advisers to POL) had to weigh in the balance.
147.6 Please set out the discussion on the various litigation options at the
Board meeting on 26 September 2017.
1517.1 do not recall the discussion on 26 September 2017 and so I am led by the
documents. I can speculate as to what is likely to have happened, but I am not
able to say so conclusively.
1518.1 have seen that Jane’s briefing paper was not included in the POL Board pack
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and agenda, and it does not say in the minutes that the POL Board considered
Jane’s paper and / or that the paper was noted. I have also seen that I saw the
paper on 21 September 2017, but it was not sent to the whole POL Board on
that date (POL00041485). The format of the paper is precisely what would be
expected for a POL Board meeting and is consistent with training which POL
staff (including, I think, Jane) had undertaken on how POL Board papers should
be structured and presented. This makes it likely that Jane gave copies to the
POL Board, either by turning up with copies or by providing copies through the
reading room. Finally, I note that Jane said in her email to me on 21 September
2017 that she would use the paper as “speaking notes” in the POL Board
meeting.
1519. Taking those matters together, I think it is likely that Jane brought copies of the
briefing paper (POL00041486) to the POL Board meeting and talked the POL
Board through it. As the POL Board had not received a copy beforehand, it
would not have had the time to consider it, hence the item is described as a
verbal update.
1520.1 am not able to recall the nature of the discussion beyond what is in the
minutes.
147.7 Please identify any legal advice you or the Board relied on when
considering this decision.
1521.The POL Board received legal advice through the paper which Jane had
prepared. Seeing the paper trail in preparing this witness statement, I know (as
I understood at the time, although without the specific detail) that this itself was
prepared by reference to legal advice from Bond Dickinson and counsel
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instructed in the litigation.
1522.As set out above, I met Mr. de Garr Robinson QC shortly after the POL Board
meeting but before the Case Management Conference. If I had been told
anything in that meeting or had changed my view on any matters approved by
the POL Board, I would have had no reason not to re-open the discussion; it
would not have been too late.
148. Please consider POL00028070 (Deloitte’s ‘Bramble’ — Draft Report dated
3 October 2017).
148.1. When did you read this report?
1523. I knew that Deloitte had been commissioned to carry out a piece of work on
Horizon as a result of the Parker Review, and the recommendations of the
barristers which Jane MacLeod had emailed to me on 22 January 2016
(POL00103110).
1524. I can see from the documents, that I was given a broad understanding of what
Deloitte's work entailed. In her email to me on 23 May 2016 (POL00103200),
Jane MacLeod stated that Deloitte were currently undertaking work to address
the recommendations and that one of the workstreams that was already
underway was whether it was possible for POL or Fujitsu to remotely alter
branch transactions without this being visible to the SPM. On 24 July 2016,
Jane emailed me to give forewarning that there might be adverse publicity
arising from POL’s response to the Claimants’ letter before claim, which POL
was scheduled to send on 29 July 2016 (POL00041258). Jane stated that as
a result of the work carried out by Deloitte, POL would flag that there was a
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limited number of individuals at Fujitsu who had super-user rights to Horizon,
which could only be used in limited circumstances. I can also see from the
minutes of the POL Board meeting on 25 July 2017 (at page 4 of
(POL00021549)) that I explained at the meeting that “the decision not to
prosecute agents if they could use the Horizon system as a defence would be
reconsidered once Deloitte had completed their work on Horizon and could be
used in court as an expert witness."
1525. I do not believe that I saw any version of Deloitte’s Project Bramble report until
after I had left POL. I have not seen any documents in the disclosure to date to
suggest that I was sent the version referred by the Inquiry, nor any version of
the Project Bramble report, while I was at POL.
148.2. Please explain your views on the report when you read it, in particular
paragraphs 1.4.2.5 — 1.4.2.11, 1.4.3.3, 1.6.1 — 1.6.2. 148.3. With whom did you
share / discuss the findings of this report?
1526. Please see my answer to Question 148.1.
148.3. With whom did you share / discuss the findings of this report?
1527.Please see my answer to Question 148.1.
148.4. Please set out what further action POL took as a consequence of the
findings of this draft report.
1528.1 do not know what action POL took as a consequence of the findings of the
draft report.
149. Please consider POL00021551 (minutes of POL Board meeting on 31
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October 2017).
149.1. Please describe what update was given to the Board on the GLO
proceedings.
1529.The minutes of the POL Board meeting on 31 October 2017 (POL00021551)
do not contain any discussion of the GLO Proceedings. My CEO Report for the
meeting (starting at page 20 of (POL00103898)) contained an update (on page
26) about the Case Management Conference and the resulting workstreams
(which focussed on disclosure, identifying the Lead Claimants, and planning
and preparatory work for trial). The report also stated that a verbal update
would be provided to the POL Board at its 31 October 2017 meeting. I cannot
recall if an update was in fact given.
149.2. Did the Board discuss the draft Project Bramble report by Deloitte? If
not, why not?
1530.1 have no memory of the POL Board discussing the draft Project Bramble report
on 31 October 2017. I am very doubtful that the report was discussed, as there
is no briefing on the report in the meeting pack at (POL00103898).
150. Please consider _POL00024317 (email from Mark Underwood on 1
November 2017), POL00024318 (agenda), POL00024323 (Bond Dickinson
noting paper on Deloitte reports) and POL00024322 (Bond Dickinson noting
Paper on future work). Please set out your involvement with the decisions in
respect of litigation strategy following the CMC.
1531. As I have already mentioned, the management of the litigation, including
strategic decision-making, was delegated by the GE to the Steering Group. The
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usual position was that I did not become involved in matters within the mandate
of the Steering Group, unless either Jane MacLeod or Tom Moran decided to
escalate an issue to me, or to the GE or the POL Board. Further, documents
prepared for the Steering Group were not generally shared outside the Steering
Group. Mark Davies’ email on 1 November 2017 (POL00024317) (to which
POL00024318; POL00024323; and POL00024322 were attachments) was an
email to the Steering Group and its secretariat to circulate the documents for a
meeting on 3 November 2017. These documents were not sent to me, and I
would not have expected them to be sent to me.
1532. An issue which did come to me after the Case Management Conference was
how POL should manage the risk that Mr. de Garr Robinson QC, might not be
available for the first trial in the GLO Proceedings (the Common Issues Trial).
1533. The background is that, at the Case Management Conference on 19 October
2017, Fraser J had made an order that the Common Issues Trial would take
place over 20 days starting on 5 November 2018. Mr. de Garr Robinson QC
had a pre-existing diary commitment for another trial for another client. This
might have ruled him out from representing POL at the Common Issues Trial.
I understand that, on 19 October and 25 October 2017, Fraser J heard an
application by POL to delay the Common Issues Trial to accommodate Mr. de
Garr Robinson QC's availability. The Judge refused to move the trial for the
reasons he set out in his judgment dated 10 November 2017, in Alan Bates &
Others v Post Office Limited [2017] EWHC 2844 (QB) (POL00004167).
1534. Mr. de Garr Robinson QC'S availability was initially considered at Steering
Group level. One of the documents circulated by Mark Davies to the Steering
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Group on 1 November 2017 in his email at (POL00024317) was a decision
paper by Bond Dickinson on “How should Post Office address Counsel’s
availability for trial?” (POL00006435). Bond Dickinson outlined four options and
recommended that POL should bring onboard a new senior junior, Jamie
Goldsmith. This would ensure that POL would have a senior counsel available
until trial, whether or not Mr. de Garr Robinson QC could act for POL at the
trial.
1535. The Bond Dickinson paper on counsel's availability was discussed in the email
thread at (POL00024311). On 2 November 2017 at 18:16, Tom Moran emailed
Jane MacLeod, Mark Underwood, Rodric Williams, and Andrew Parsons with
his comments, as he was unable to attend the Steering Group meeting on 3
November 2017. He agreed with Bond Dickinson’s recommendation to engage
Jamie Goldsmith, but added:
“_..from now on in this case I think we should have a Steering Group rule
which means that, whenever we choose an option which is not the most
conservative we should formally notify Paula and note to GE. This is to get
buy-in and avoid any future challenge that we have made short-term ‘false
economies’. In this instance I do not [sic] this recommendation is such.”
1536. Jane replied to Tom Moran on 3 November 2017 at 09:14 in the same URN:
"Just to be clear — Paula was briefed on the outcome of the CMC
including the risk to Tony's availability, immediately after the CMC,
however I have not had the chance to update her with the results of the
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2nd application last week (which confirmed that the hearing would go
ahead in November irrespective of Tony's availability and that the judge
would have made that decision in any event), nor was the CMC
discussed at the Board on Tuesday (although Paula's CEO's report
suggested it would be).
I have a call with Paula this afternoon and will take her through the
updated position, however I think we need to make a recommendation,
and having been briefed on this previously, I recommend appointing a
senior junior now (Jamie Goldsmith) and that we wait until the outcome
of Tony's trial in May before making a decision on replacing him, noting
that we have Daniel Toledano on standby.”
1537. At 16:05 on 3 November 2017, Jane MacLeod emailed Andrew Parsons,
Rodric Williams, and Mark Underwood to update them on a conversation she
had just had with me (POL00024346). Jane reported that I was very nervous
about taking any risk on Mr. de Garr Robinson QC not being available and that
I wanted to know why we would not just change QC immediately. Jane went
on:
“I have said that there is a lot to do over the next few months and changing
to anew counsel at this point would be problematic; timing is slightly quieter
in May (when we would find out) and we believe there is sufficient time to
get Daniel embedded then (although clearly there is risk with him
continuing to be available).
Paula would like a further briefing — I suggest that we do a ‘pros and cons’
based on the WBD paper we looked at this morning. She is concerned that
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we will need to explain this at the November board and wants to make sure
we have the right answers.”
1538. I do not remember any details of the conversations with me that Jane
summarised in her emails, but I have no doubt that Jane’s emails were
accurate. I recall being concerned that POL should have clarity on the barrister
who would represent it at the Common Issues Trial, and that whoever that
person was should be fully engaged and fully prepared.
1539. Returning to the email thread at (POL00024346), Andrew Parsons replied to
Jane at 16:16 on 3 November 2017 saying that Bond Dickinson would prepare
a “pros and cons” paper. Rodric Williams replied at 17:33. In his view, one of
the big pros for keeping Mr. de Garr Robinson QC was that he had settled the
pleadings and set out POL’s strategy for trial. Any new QC would have their
own views on how the case should be shaped.
1540. Andrew Parsons replied on 5 November 2017 in the same URN. Andrew
Parsons wrote that bringing in new counsel would inevitably shift the emphasis
of POL’s defence in ways which would be difficult to predict. Although the Court
would be able to manage, and would understand a shift in approach following
a change of counsel, Andrew Parsons’ greater concern was that any change
might be misunderstood within POL: “There are lots of ways to present a case
and a change of direction now may be misunderstood as meaning that the
previous way was incorrect. I could see this causing quite a few headaches”.
Andrew Parsons felt, on balance, that the potential benefits of a consistent
approach with Mr. de Garr Robinson QC outweighed the benefits of bringing in
Daniel Toledano QC.
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1541. The document at (POL00024268) appears to be a draft of the “pros and cons”
document that Bond Dickinson had agreed to provide in Andrew Parsons’ email
at 16:16 on 3 November 2017 in (POL00024346). The document was emailed
to Jane MacLeod and others on 8 November 2017 by Andrew Parsons, who
described it as “the first draft of the briefing for Paula”: (POL00024267). It set
out four options, with comments on the upsides and downsides of each. I have
not seen a final version of (POL00024268), or any version of the document
being sent to me.
1542. This issue was discussed again in the email chain at (POL00024340). At 20:26
on 12 November 2017, Rodric Williams emailed Jane MacLeod, Tom Moran,
and Mark Underwood (cc. Andrew Parsons) with an update on counsel
availability. Jamie Goldsmith, the senior junior barrister POL had lined up, was
now unable to take on the case. In Rodric’s view, Jamie Goldsmith’s
unavailability, combined with Fraser J’s ruling that the timetable would not be
affected by counsel's availability, pointed in favour of engaging Daniel
Toledano QC as a second QC on the case. Andrew Parsons replied on 12
November 2017 in the same URN. Andrew Parsons also now slightly favoured
engaging a second QC instead of a senior junior barrister.
1543. Jane MacLeod replied at 08:12 on 13 November 2017 in the same URN. I can
see from Jane’s email that there was to be a GE meeting that morning. Jane
set out in her email how the counsel availability issue should be presented to
the GE. Jane felt that it was unconvincing to say that only Mr. de Garr Robinson
QC understood POL’s case. That position was also inconsistent with an
argument that Daniel Toledano QC would be able to read into the case during
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May 2018. Jane thought that a better argument would be that Mr. de Garr
Robinson QC had developed a rapport with the Judge. Jane suggested
presenting the issue to the GE in the following way:
a. The Judge had said that court dates would be scheduled irrespective of
counsel availability.
b. There was a moderate chance that Mr. de Garr Robinson QC would not be
available for the Common Issues Trial in November 2018.
c. There was a further hearing scheduled for February 2019. It was almost
certain that POL would need two teams working in parallel to prepare for
both trials.
d. POL needed a contingency plan because it had proposed to engage a
senior junior to cover hearings over the next few months. However, he was
no longer available. POL was now considering engaging a second QC,
both as a contingency, and to ensure continuity. This was a more
expensive option, and the additional costs could be over £1 million over 15
months.
1544. I do not recall the GE meeting on 13 November 2017, and I have not seen any
minutes or notes from that meeting. However, the minutes of the POL Board
meeting on 23 November 2017 (POL00021552), which I attended, recorded on
page 6 under the heading “Group Litigation Update (Verbal)” that Jane
provided an update on the outcome of the Case Management Conference and
outlined the dates for future hearings. Jane noted that Fraser J had indicated
that Court dates would not be set by reference to counsel's availability. This
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posed a potential issue for POL in relation to the hearings starting in November
2018 (i.e. the Common Issues Trial) as our Lead Counsel might not be
available. Contingency plans (as noted above) were being developed.
1545. Although no discussion is recorded in the minutes, and I have no recollection
of any discussion, I am confident that Jane’s update to the POL Board would
have prompted a discussion about counsel availability, as it was such an
important issue.
1546. This issue was ultimately resolved by instructing a second QC, David Cavender
QC. I can see from a letter dated 14 December 2017 from Bond Dickinson to
Freeths that David Cavender QC was engaged by that point: see footnote 1 on
page 3 of (POL00024423). I have not seen any documents which record the
decision to engage a second QC, but I have a recollection that it was a decision
of the POL Board.
151. Please consider POL00004167, the judgment of Fraser J in Bates & Others
v. Post Office Limited [2017] EWHC 2844 (QB).
151.1. Did you, the Board or senior management at POL consider this
judgment? What, if any, discussion arose from the judge’s comment that “A
fundamental change of attitude by the legal advisers involved in this group
litigation is required. A failure to heed this warning will result_in draconian
costs orders”.
1547. The judgment was circulated to the senior managers who sat on the Steering
Group. This was appropriate, because they were collectively responsible for
the management of the GLO Proceedings on behalf of POL. On 9 November
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2017 at 9:47, Rodric Williams sent a draft of the judgment to Jane MacLeod,
Melanie Corfield, Mark Davies and Tom Moran (cc. Andrew Parsons and Amy
Prime) (POL00041527). Rodric drew their attention to Fraser J’s comments in
paragraph 20:
“_..the litigation needs to be progressed in a more timely, cost-effective
and proportionate manner than it has to date, and that this will require
greater cooperation between the parties. He considers the failure of the
parties to do so to date lies ‘more or less equally on both sides.”
1548. Rodric Williams wrote under the heading “Main Message” that the tight
timetable set for the November 2018 trial would not be departed from and the
parties would need to cooperate through their legal advisors to achieve this.
Failure to do so would result in “draconian costs orders’, (i.e. the Court will
order payment of substantial costs to the other side). The final section of the
email set out the longer-term implications of the judgment: POL must ensure
not only that it cooperated with Freeths to promote the expeditious resolution
of the case (which POL had already been trying to do) but that it was seen to
be doing so. Doing otherwise would irritate and alienate Fraser J, who would
be presiding over the trials in the case. This must be kept firmly in mind as POL
planned and resourced the next 12 months of the case.
1549. I have not seen any minutes from the 20 November 2017 Steering Group
meeting which took place after the judgment was received (POL00024446).
However, given the Steering Group’s responsibilities, I would be surprised if
the Judge's comments were not discussed.
1550. I did not read the judgment at the time. It is apparent from the minutes at
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(POL00021552) that Jane MacLeod briefed the POL Board that the Judge had
made clear that Court hearings would not be scheduled around counsel
availability. I cannot recall whether she addressed Fraser J’s comments, but I
would be surprised if she did not do so.
1551. I recall Jane telling me during a one-on-one meeting between us that the Judge
had been critical of both sides’ legal advisors. When I asked for clarification, I
recall Jane explaining that the Judge had given the parties a “shot across the
bows” (or words to that effect). Although I cannot recall the conversation in any
detail, I am sure Jane told me that Fraser J had stated that the parties needed
to improve in terms of timing, preparation, and courtesy of response to each
other.
151.2. Did you, the Board or senior management at POL consider changing
litigation strategy following this judgment? If not, why not?
1552. As far as I can recall, Jane did not present the Judge’s comments as calling
into question POL’s litigation strategy. They were presented to me as criticisms
of the parties’ legal advisors, which needed to be taken on board going
forwards. That was also essentially the message in the email from Rodric
Williams to Jane and others on 9 November 2017 at 09:47 attaching the draft
of the judgment (POL00041527). I do not recall having any further concerns
about POL’s approach until I was made aware, in October 2018, that Fraser J
had criticised POL’s conduct and attitude in his judgment dismissing POL’s
application to strike out parts of the Claimants’ evidence (this is the judgment
referred to in Question 173).
1553. (POL00090630) suggests that POL did take on board the Judge’s comment
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when it was preparing for a disclosure hearing on 2 February 2018. The
document is a noting paper on POL’s strategy for that hearing, which Bond
Dickinson prepared for a Steering Group meeting on 2 February 2018.
Paragraph 5.1 of the paper states that, in preparing for the hearing, POL had
been conscious of the Judge’s criticisms at the last hearing and had taken a
different approach. Rather than taking the traditional position of a defendant of
“counter-punching” the Claimants’ proposals, POL had proactively engaged
with Freeths. The skeleton arguments of both parties for hearing on 2 February
2018 highlighted the high level of cooperation between the parties. POL hoped
that this approach had mitigated the risk of further judicial criticism.
1554. Although I cannot recall it, it is possible that I was informed about POL’s
approach to the disclosure hearing on 2 February 2018. On 31 January 2018
at 18:21, Rodric Williams emailed a summary of the parties’ skeleton
arguments to Jane MacLeod and others, including Tom Moran
(POL00041650). One of his headline points was that both parties’ skeleton
arguments acknowledged the constructive and cooperative approach taken
since the Case Management Conference, which had resulted in substantial
agreement between the parties. Within the same URN, Tom Moran suggested
that Rodric’s email should be shared with me and Al Cameron. Jane responded
that she would share with me, but that she had already had a long discussion
with me about the hearing over the weekend.
152. Please consider POL00021552 (minutes of the POL Board meeting on 23
November 2017). Please describe the update given to the Board on the GLO
proceedings.
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1555. I have set out my evidence about the update at the POL Board meeting on 23
November 2017 above.
153. Please consider POL00024292 (email chain with Jane MacLeod and others
on 5 December 2017). Please describe any discussions you had concerning
settling the discrete groups of claims mentioned in the email.
1556. On 5 December 2017 at 07:54, Jane MacLeod sent an email to me and Al
Cameron to inform us that the Steering Group would consider two issues at its
meeting on 6 December 2017 (POL00024292). The first of these issues was
a proposal to initiate settlement discussions with Freeths in relation to two
groups of Claimants:
a. Serving SPMs, of which there were 45 in the group, and whose claims were
less than £5,000 in value.
b. Claimants who had previously signed settlement agreements with POL, of
whom there were around 120. POL had counter-claimed against these
Claimants for the return of any settlement monies paid to them, on the basis
that the settlement agreements were expressed to be final and binding.
POL argued that the Claimants should not retain the benefit of the
settlement payments if they wished to re-open matters via the GLO
Proceedings. Generally, the amounts of the settlement payment exceeded
the amounts claimed by these Claimants in the GLO Proceedings.
1557. Jane believed there was both financial and tactical value in attempting to settle
these claims. Because of the specific facts of these cases, any settlements
would not impact the wider issues. It would also help to demonstrate to the
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Court that POL was seeking to resolve issues, rather than being obstructive.
1558. It appears that Jane’s email on 5 December 2017 was prompted by emails
between members of the Steering Group in the chain at (POL00024326). On
4 December 2017 at 22:27, Mark Underwood emailed to the Steering Group a
decision paper on settlement (POL00022880) and a draft letter in advance of
a call on 6 December 2017.
1559.Tom Moran replied at 23:35 on 4 December 2017. He was supportive of the
approach set out in the settlement paper, “but this feels like a very big decision
and one that could be seen as a significant change of direction. The paper is
very good and I would like us to share it with PV and AC (could Jane do this?).
! don’t feel it would be right for them, or the Board, to hear of this decision after
the fact.” At 09:29 on 5 December 2017, Tom Wechsler agreed with Tom
Moran that “this needs socialising with PV and AC”.
1560.1 replied to Jane’s email (in the same URN) at 08:05 on 5 December 2017. I
said that the proposal seemed sensible, but I would appreciate the chance to
speak to her. Al Cameron replied at 08:52 to ask whether any settlement with
existing SPMs could create an incentive for a separate class action by any
other SPM who had ever paid a loss to POL.
1561.At 09:11 on 5 December 2017 (again in the same URN) Jane forwarded the
email chain I have summarised above to Andrew Parsons and Rodric Williams.
She assumed that the answer to Al’s question was technically “yes”, but that it
must be considered unlikely and would be subject to the outcome of the GLO
Proceedings.
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1562.1 do not recall any discussion with Jane following our emails on 5 December
2017. My attitude at the time was that I was supportive of settlement
discussions with the Claimants: as I stated in my email to Jane, the proposals
set out in her email seemed sensible. However, as Jane had indicated in her
initial email, the proposal was a matter for the Steering Group to decide. I do
not recall receiving any further updates about this proposal.
154. Please consider POL00024182 (Jane MacLeod’s email to you on 28
January 2018).
154.1, Please set out the extent of your involvement in how POL approached
its disclosure obligation in the GLO Proceedings.
1563. (POL00024182) is an email exchange between Jane MacLeod, me, Alisdair
Cameron and others on 28 January 2018 in advance of a POL Board meeting
on 29 January 2018. The first email in the chain is from Jane at 12:24 on 28
January 2018, in which she set out her speaking notes for the POL Board
meeting the following day.
1564. One of the topics Jane was to cover with the POL Board was a hearing
scheduled for 2 February 2018 to decide the scope and the timing of POL’s
disclosure. In her email, Jane summarised the position:
a. POL had offered to provide "some c.175,000 documents relating to Post
Office policies and processes, technical and operational aspects of Horizon
(80,000), the 12 Lead Claimants, and the 27,000 documents reviewed by
Second Sight which have already been provided."
b. However, Freeths were asking POL to disclose everything immediately,
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including documents which went beyond the scope of the November 2018
Common Issues Trial. Jane described their approach, which potentially
required the disclosure of millions of documents, as a fishing trip.
c. POL’s position reflected new Court protocols for disclosure, which were
designed to avoid the problems presented by the Claimants’ wide-ranging
requests.
1565.As far as I can recall, I was not involved in making any decisions about POL’s
disclosure. At the time, I regarded disclosure as a procedural matter for the
lawyers to handle. My understanding was that disclosure was an obligation and
that identifying the material that POL was required to disclose was a task for
lawyers. I also understood that POL was taking its disclosure duties seriously.
1566. I was given updates and information about disclosure. Jane’s email on 28
January 2018 is an example of this. I have a recollection of the Claimants’
approach to disclosure being described as “fishing”, but I cannot say whether
that memory derives from Jane’s email or a conversation about disclosure.
Other examples include:
a. Jane emailed me on 20 October 2017, the day after the Case Management
Conference, with an update on the hearing. She informed me that the Court
had made orders for disclosure, stating that while the Claimants had asked
for wide-ranging disclosure, the orders made by the Court required more
limited disclosure: (POL00103314).
b. My CEO Report for the POL Board meeting on 31 October 2017 (starting
at page 20 of (POL00103898)) stated on page 7 that POL’s work, following
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the Case Management Conference, would focus on a number of issues,
including disclosure. This information would have come from POL's legal
team.
. In her email to me and Al Cameron on 5 December 2017 at
(POL00024292), Jane mentioned that the Steering Group would discuss
proposals for the extent of POL’s e-disclosure at its meeting on 6 December
2017. Jane stated that this was a procedural step but would set in train
significant work to recover the relevant files that POL would need to
disclose in the GLO Proceedings. In my reply to Jane, I asked to speak to
her and asked: “How much are we are [sic.] likely to need to consider?” This
was the same email chain in which Jane described the potential settlement
proposals discussed in Question 153. I do not know whether I wished to
speak to Jane about settlement and disclosure, or only about the settlement
aspect. I also cannot remember whether my question to Jane related to the
extent of disclosure or to potential settlement figures.
. Inan email to Tom Moran and others on 31 January 2018 (POL00041650)
Jane stated that she had held a long discussion with me about the
disclosure hearing on 2 February 2018 over the preceding weekend.
. On 4 February 2018, Jane sent an update to me and others on the outcome
of the disclosure hearing on 2 February 2018 (POL00006520;
POL00103333). She reported that Fraser J had made the orders for
disclosure in the terms sought by POL and made clear to the Claimants
that, while they may seek further disclosure, any such request must be a
properly focussed request, and not a “fishing expedition”.
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154.2. Why did POL not seek a preliminary advice on the merits of the claim
prior to the close of pleadings?
1567.In her email to me and Al Cameron on 28 January 2018 (POL00024182), Jane
also mentioned that POL would obtain an Opinion on the merits of POL’s case
once pleadings for the Common Issue Trial closed in April 2018 (the Opinion).
She explained that the close of pleadings meant that the parties had completed
their Particulars of Claim, Defences, and Replies. The Opinion would be
reviewed once witness statements had been exchanged in September 2018.
The outcome of these reviews would inform whether POL should consider
settlement discussions — either across all or only some of the issues.
1568. This section of the email was followed by a note addressed to Al that POL now
had two QCs working on the case — Anthony de Garr Robinson QC and David
Cavender QC. As part of Mr. Cavender QC’s on-boarding, POL had asked him
to consider how he would approach the case if he were advising the Claimants.
This had given POL additional perspective into the way it should approach the
case. Based on the information available to him, Mr. Cavender QC had flagged
Horizon, training, the agent appointment process and the suspense accounts
as the areas he would probe most if he were advising the Claimants. I cannot
say for certain, but it seems likely that this part of the email was addressed to
Al alone because I was already aware of this information.
1569. I cannot say for certain why POL did not obtain a merits advice from the
barristers before the close of pleadings. I was not involved in (or aware of) any
decision within POL to wait until that stage before seeking a merits advice.
1570.When I asked in May 2016 for an analysis of the balance of power between
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POL and SPMs, the answer that came back from Jane was that this issue was
best examined through an analysis of the legal case advanced by the
Claimants in their letter before claim (see the email chain at (POL00103200)).
I knew that the purpose of pleadings was for each party to set out its legal and
factual case. It is possible that the legal team took the view that it would have
been premature to ask the barristers to give an opinion on the merits until both
sides had set out their case in full in their pleadings.
155. Please consider POL00021440 (minutes of POL’s Audit, Risk and
Compliance Committee’s meeting on 29 January 2018).
155.1. Please describe the discussion on the GLO Proceedings at this meeting.
In particular, what was said regarding STIP and LTIPs?
1571. I can see from the minutes at (POL00021440) that I attended the latter parts of
meeting of the ARC on 29 January 2018. The version of the minutes disclosed
by the Inquiry is heavily redacted. There are two sections of the minutes which
record discussions about the GLO Proceedings.
1572. The first is on page 3 under the heading “Classification of Group Litigation
Costs”. The comment immediately underneath this section (“PV, TP and JH
joined the meeting”) shows that I was not present for this part of the meeting.
1573. The minutes record that, at the POL Board’s request, EY was reviewing the
accounting classification of the expenditure associated with the GLO
Proceedings. To date, litigation costs had been accounted for as an operating
cost and charged to EBITDA. However, it was the view of the POL Board that
litigation was not a cost of trading. The Chairman of the ARC (Carla Stent)
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noted that POL’s Remuneration Committee would need to consider the impact
of any decision in this area on both short and long term incentive plans.
1574. The other section of the minutes which deals with the GLO Proceedings is on
page 8 under the heading “Litigation”. This part of the minutes appears to be a
record of an update by Al Cameron and comments by Ken McCall (the senior
independent NED) and Carla Stent. Al seemed to have reported that, as a
result of the GLO Proceedings, the recovery of agent losses and prosecutions
had become significantly more challenging, thereby increasing the risk that
their deterrent effect would be diminished. However, he advised that more
targeted audits had resulted in issues being identified earlier. In response to a
query by Ken McCall as to where agent losses figures should be reported, Al
Cameron advised that they were covered by detail in the Conduct Report which
would be presented at the March 2018 Board meeting. Carla Stent stated that
she was happy for the figures to be reported wherever thought appropriate, so
long as they were reported.
1575. As stated above, I was not present for the part of the meeting when STIPs and
LTIPs were discussed. Nevertheless, I have a broad understanding of the
issue. The budget update for the GE meeting on 16 January 2018 states (at
page 34 of (POL00027267)) that the POL Board had asked the GE to explore
accounting and target options to exclude the costs of the GLO Proceedings
from trading EBITDAS. POL had reached an agreement in principle with its
auditors to treat the £9 million of litigation and project support in 2018/2019 as
an exceptional item.
1576. POL’s incentive plans were based on profit and EBITDAS targets. If the cost of
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the GLO Proceedings were removed from the profit and loss account and
treated as an exceptional item, the targets would need adjusting. Based only
on what is said in the minutes, I believe that the point that Carla Stent was
making about STIPs and LTIPs was that the Remuneration Committee should
take into consideration the accounting effect of removing litigation costs from
the profit and loss accounts. This was to ensure that the targets were adjusted.
155.2. Please explain why the recovery of “agent losses and prosecutions”
was perceived to be more challenging because of the GLO Proceedings.
1577. I do not now recall this part of the meeting. Paragraphs 29-30 of the Annual
Risk Review Report for 2017 to the ARC Committee (POL00104316) contain
a fuller explanation of the effect of the GLO Proceedings on the recovery of
shortfalls. It states that the issue arose whenever a SPM relied on allegations
in the GLO Proceedings to dispute a debt (e.g., that the loss was caused by
the Horizon system). Any formal action against an SPM in these cases would
most likely be stayed pending the outcome of the GLO Proceedings. In terms
of numbers, this issue affected 318 cases with a combined value of £1.14
million. One SPM, who had improperly processed £400,000 of Parcelforce
transactions had now frustrated the investigation into those transactions (and
any consequential criminal or civil legal activity) by joining the GLO
Proceedings as a Claimant. The outcome of the Common Issues Trial starting
in November 2018 might enable POL to take a more proactive position on the
recovery of branch losses.
155.3. Please describe the discussion on the “more targeted audits” that had
been trialled. Did this provide any reassurance that POL’s business did not
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face existential crisis if it was unsuccessful on some of the terms sought by
the claimants?
1578. I do not recall this part of the meeting. However, I do recall concerns that had
been expressed in a previous meeting that if POL was unsuccessful on some
of the terms of the contract it might become difficult to recover shortfalls from
SPMs. I do have some recollection that more targeted audits on the basis of
data analytics had been introduced in order to give early warning of problems
in branches. I do not recall any mention in this meeting of an "existential crisis"
or a connection with targeted audits.
156. Please consider POL00021553 (minutes of the POL Board meeting on 29
January 2018), POL00117892 (note titled Postmaster Litigation Advisory
Subcommittee) and POL00117894 (Womble Bond Dickinson briefing note
dated 22 March 2018).
156.1. Please describe the update provided to the board _on the GLO
Proceedings.
1579. The minutes of the POL Board meeting on 29 January 2018 (POL00021553)
record on page 10 under the heading “Postmaster Litigation Update” that Jane
MacLeod gave a verbal update on the GLO Proceedings. She noted that there
was a procedural hearing on 2 February 2018 to determine to scope of POL’s
disclosure for the trial starting in November 2018, i.e. the Common Issues Trial.
1580. The POL Board noted the update and resolved to establish a sub-committee
for the purpose of monitoring the development in and strategy for the litigation.
The members of the sub-committee would be Tim Parker, Ken McCall, and
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Tom Cooper (once he was appointed as a director). Jane MacLeod was asked
to provide the members with the key dates in the litigation timetable so that
they could be briefed at the appropriate time.
1581. I do not recall the discussion at the meeting beyond what is set out in the
minutes. I note, however, that Jane MacLeod’s email to me and Al Cameron
on 28 January 2018 (POL00024182) contained what Jane described as her
speaking notes for the POL Board meeting on 29 January 2018.
156.2. Why did the Board establish a formal sub-committee to monitor “the
development in and strategy for the litigation”? Why had it not done so before?
1582. I had suggested to Tim Parker some time prior to this that we establish a formal
Board Sub-Committee to oversee the litigation because I did not have the
expertise to challenge and scrutinise the litigation process and preparation
myself. As the GLO Proceedings progressed towards trial, it was occupying
increasing amounts of time at the ARC and at POL Board meetings. My
recollection is that Tim considered that it would now be useful to establish a
dedicated Sub-Committee.
1583. The terms of reference for the Sub-Committee (POL00117892) stated at
paragraph 1.2 that the purpose of the Sub-Committee was to receive legal
advice on POL’s Defence in the GLO Proceedings as it proceeded to final
resolution. Paragraph 3.1 stated that the Sub-Committee should meet as often
as required, and paragraph 3.4 stated that meetings could be convened by the
Secretary, the Chairman, or by any member at any time. Other POL employees
and relevant external consultants and lawyers could attend meetings at the
Chairman’s invitation.
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156.3. Please explain the reasoning behind the choice of persons appointed to
the subcommittee.
1584. The members of the Sub-Committee were chosen following consultations
between me, Tim Parker, and Jane MacLeod.
1585. Tim was appointed Chairman as he was keen to oversee the sub-committee
personally.
1586. Ken McCall was the senior independent NED. He was extremely well-
respected within the business and had IT experience.
1587. Tom Cooper was the UKGI NED designate at the time the Sub-Committee was
formed. He was appointed because it was seen as critical to keep the
government's representative informed. I note that in the minutes of the first
meeting of the Sub-Committee on 26 March 2018, Tom Cooper was recorded
as being in attendance rather than as a member (POL00117899). I suspect
this was because he was not appointed a Director until the POL Board meeting
on 27 March 2018 (see the minutes of that meeting at (UKGI00018134)).
1588. Al Cameron was appointed because the finance function was involved in the
GLO Proceedings in various ways. Its processes and operations were part of
the subject matter of the GLO Proceedings, it was involved in the funding of
POL’s legal costs, and it would be impacted in the event of an adverse
judgment.
157. Please consider _POL00117899 (minutes of the Postmaster Litigation
Subcommittee on 26 March 2018).
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157.1. Please set out your recollection of the meeting of the subcommittee. To
what extent did the subcommittee challenge those in the executive and / or the
legal advice received on the approach to the GLO Proceedings?
1589. The agenda for the Sub-Committee meeting on 26 March 2018 is at
(POL00006765). It shows that I was present along with Tim Parker, Tom
Cooper, Ken McCall, Al Cameron, and that Jane MacLeod, Veronica Branton
(as the minute secretary), Rodric Williams, and Mark Underwood also
attended. It does not appear that any papers were provided in advance of the
meeting other than the terms of reference and a timetable for the GLO
Proceedings and future meetings of the Sub-Committee (copies of which were
attached to the agenda).
1590. The minutes of the meeting at (POL00117899) record, firstly, that the terms of
reference were noted and approved for recommendation to the POL Board at
the next meeting. Further, it was explained that day-to-day decisions on the
litigation would be taken by the executive, but that the POL Board would be
consulted in advance of any significant decisions being taken. I believe this
refers to the delegation of the management of the GLO Proceedings by the GE
to the Steering Group.
1591. Second, the Sub-Committee noted the litigation timetable and suggested dates
for future meetings, which had been scheduled around key dates in the
litigation, as well as being close to Board meetings. The remainder of the
minutes contained updates on a number of topics since the January 2018 POL
Board meeting: scope of disclosure, the scope of the Horizon Issues Trial; the
appointment of an IT expert; POL’s application for security for costs; the
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protocol for the sharing of information about the GLO Proceedings between
POL and UKGI; contingency planning; and the CCRC.
1592. I do not recall the discussion at the meeting, and I do not recall the Sub-
Committee challenging the executive or the legal advice. However, the
members of the Sub-Committee were all prepared to ask questions and
challenge the business when they thought it appropriate.
157.2. Please expand on “Nevertheless, Post Office considered it unlikely that
a decision would be made public before the conclusion of the Horizon trial”.
What was the basis for this?
1593. The update in the minute on the CCRC records that 33 former SPMs had
applied to the CCRC to review their convictions. Rodric Williams noted that
POL was cooperating fully with the CCRC and believed they were nearing the
end of their investigations. Nonetheless, POL considered it unlikely that a
decision would be made public before the conclusion of the Horizon trial. I do
not know for certain what the basis was for POL’s belief that the CCRC would
not make any decision public until after the Horizon trial.
1594. Although I do not recall whether Rodric gave a fuller explanation at the meeting,
I suspect that it was thought that, since the issue of the safety of convictions
and the issues to be decided in the GLO Proceedings were related, the CCRC
might decide to await Fraser J’s judgment before making any decision. This
seems to be the point made by POL in paragraph 5 of a briefing note to the
BEIS Permanent Secretary dated 10 May 2018 (POL00006524).
158. Please consider POL00021445 (minutes of the POL Audit, Risk and
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Compliance Committee on 27 March 2018). Please describe the discussion of
the GLO Proceedings at this meeting.
1595.The ARC met on 27 March 2018 (POL00021445), the day after a meeting of
the Postmaster Litigation Sub-Committee, which I address directly in this
witness statement. This ARC meeting was on the same day as the POL Board
meeting which I discuss in response to the next question in this witness
statement.
1596. The POL Board meeting took place at 11:00am (POL00027257). That was two
hours after the ARC meeting.
1597.1 cannot locate the papers for the ARC meeting amongst the documents which
have been disclosed by the Inquiry. It may well be that these documents are in
batches which are still to be disclosed. I do not specifically remember that
morning's ARC meeting. I therefore can only go on what is in the ARC minutes
in describing the discussion of the GLO proceedings.
1598.The version of the ARC meeting minutes disclosed by the Inquiry is heavily
redacted. The only substantive passage not redacted is part of the section
under the heading “External Audit Update”. There is therefore little in the
minutes for me to use to refresh my memory of the meeting more generally.
1599. Peter Mclver from EY provided an update to the ARC regarding the audit work
relating to the GLO. Peter Mclver made the ARC aware that the Claimants in
the GLO had not yet valued their claim and stated the amount of damages that
they were seeking.
159. Please consider UKGI00018134 (minutes of the POL Board meeting on 27
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March 2018). Please describe the discussion on the GLO Proceeding at this
meeting. To what extent did the full Board discuss the GLO Proceedings
following the establishment of the formal Postmaster Litigation
Subcommittee?
1600. Of the nine Board members who were present for the 11:00 am meeting, eight
of us had attended the ARC that morning. The only member of the POL Board
who did not attend that morning’s ARC was Virginia Holmes, a NED.
1601. I also note that the whole Board would receive ARC minutes when they were
prepared, as a matter of course.
1602. At Item 12, it is briefly stated that the Board (emphasis in the original) “NOTED
that the Subcommittee established at the previous meeting had met the
previous day and had been updated on the case” and that “[tJhe Board
RESOLVED to APPROVE the terms of reference for the Postmaster Litigation
Subcommittee”. That Sub-Committee meeting by context must be the one on
26 March 2018 which I have addressed above.
1603. The “heavy lifting” in terms of keeping key Directors updated on the GLO
Proceedings was done in the Postmaster Litigation Sub-Committee and the
ARC. The Board set up the Postmaster Litigation Sub-Committee so that
appropriate attention and time could be devoted to its oversight of the litigation.
Despite the relatively brief mention in these minutes, I am confident that the
POL Board was actually up to date in March 2018, as I have described above:
the litigation was significant and was treated as such.
160. Please consider POL00025892 (opinion on common issues dated 10 May
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2018). Did you read this advice? If so, please state when you did, what your
views were of it and whether you took it into account when considering POL’s
approach to the GLO Proceedings.
1604. I am asked by the Inquiry to consider (POL00025892) which is a legal Opinion
jointly written by four counsel for POL, dated 10 May 2018: Anthony de Garr
Robinson QC, David Cavender QC, Owain Draper and Gideon Cohen. Before
addressing that advice, I wish to highlight some matters which took place
between the meetings on 27 March 2018 and this Opinion being sent to POL.
1605. On 25 and 26 April 2018, Tim Parker and Diane Blanchard (his Executive
Assistant) exchanged emails about possibly rescheduling the Postmaster
Litigation Sub-Committee meeting scheduled for 15 May 2018 so that it did not
clash with commitments which Tim had with other Chairman roles. Diane said
that ‘the difficulty is that we have timed this meeting because of the merits
opinion being issued on the 30' April and needing the Sub Committee and
briefing for UKGI before Board on the 24th May”. I understand that “merits
opinion” is a reference to the Opinion I describe in the previous paragraph
(albeit it is dated later than anticipated). The meeting was not moved and Tim
said “if plane arrives on time, I can dial in, no problem” (POL00110906).
1606. On 8 May 2018, Rodric Williams emailed Andrew Parsons, Jane MacLeod and
Veronica Branton stating that the meeting on 15 May 2018 was likely to be
“dominated by the Merit’s Opinion” and that he and Andrew would “review an
advanced working draft as soon as it is available, and prepare a precise of what
is sure to be a long document” (POL00041771). That precis would aim to:
. “summarise the Opinion for you and your communications to your
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GE colleagues;
° act as the QC’s speaking note at the meeting (which we will ask
David Cavender to lead);
e possibly be provided to UKGI as an update, but only once the
information sharing protocol is agreed.”
1607. Further to this proposal from Rodric that he and Andrew Parsons would prepare
a summary, Bond Dickinson prepared a “Summary of Counsels’ Opinion on
the Common Issues” (12 May 2018) (POL00023972). This summary was four
pages long. The summary described itself as “a useful aid to the key points but
it is not a substitute for a careful reading of the Opinion which explains the full
complexity and nuances of the Common Issues”.
1608. The full Opinion and the shorter summary were sent by Andrew Parsons to
Rodric, Jane and Mark Underwood on 12 May 2018 (POL00024257). This was
a Saturday. Andrew Parsons described his summary as a “useful crib sheet”
but “strongly” suggested that it should not be circulated outside this original
email group.
1609. The Steering Group had a call at 9.00am on the Tuesday morning (15 May
2018). Top of the agenda was a “general impression” of the Opinion
(POL00024196).
1610. There was also a Postmaster Litigation Sub-Committee meeting arranged for
15 May (POL00041773) for which there were no papers, but there was an
agenda. That meeting was to be attended by the Leading Counsel who had
prepared the Opinion. The agenda was circulated by Diane on 14 May 2018
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(POL00110935) to a list of recipients including me.
1611. I have now seen, but did not see at the time, counsel's speaking note for the
Postmaster Litigation Sub-Committee meeting (POL00006382). The document
is not signed, but is written in a different format from that which was typically
used for POL or Bond Dickinson documents, and so I infer it was written by
counsel.
1612. While my memory is not detailed, I recall that I read the advice document and
attended a meeting with counsel at which the Opinion was discussed. I think it
is likely to have been the meeting of the Postmaster Litigation Sub-Committee
on 15 May 2018. I remember that the barrister asked whether the attendees of
the meeting had read the document. I said that I had but there were some
dense passages of case law and there were some areas on which I had
questions. I have a memory about the Maitland and necessary cooperation
points, but I cannot recall precisely what I asked or what the answers were. I
have re-read the advice document recently. There are sections which look
familiar, and on which I would have wanted more detail, and indeed on some,
taken comfort: paragraphs 7, 9, 12, 13, 27-41 and 59b).
161. Please consider POL00006754 (minutes of the Postmaster Litigation
Subcommittee meeting on 15 May 2018).
161.1. Please describe your recollection of what was said at this meeting
1613. I do not recall what was said at the meeting beyond what is in the minutes. The
minutes record that David Cavender QC “explained his thoughts on the interim
opinion on the Merits Case” by which I understand that he explained the advice
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which he and the other three counsel had given in the Opinion. Comparing the
minutes with the speaking note (POL00006382), it appears that David
Cavender QC followed the speaking note when he set out his advice in the
meeting.
1614. From page three of the minutes, I see that POL Board members asked
questions and these were answered by counsel.
1615. Tim Parker said "from our perspective there are no decisions we are being
asked to take now? Will come back to us before the trial". By this I understand
that the purpose of the meeting was not to get the Sub-Committee to make
decisions on the litigation, but rather for the Opinion of counsel to be explained
and for there to be an opportunity for questions.
161.2. What did you consider POL’s prospects of success were in following this
meeting?
1616. The minutes record that David Cavender QC said in respect of prospects of
success: “Overall view is that the PO has the better of args in most 23 args.” I
understand “args” to mean “arguments”. This is reflective of the speaking note,
which says (POL00006382):
6. “- Outcome of litigation of this type is notoriously difficult to
predict. In particular, need to keep in mind that the way they are
putting the case now — is likely to be refined and reformulated after we
exchange evidence and start preparations for trial.
7. - But our view is that PO has the better of the argument on many
of the 23 issues — but it is also likely to lose on a number of them.”
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1617. The speaking note continued:
8. “- But given the uncertain state of the law — we think that there is
material here — should be Judge be so minded, to imply a duty of good
faith. Risk that he might. If he did so we would advise that an appeal
be brought. Represents an important and novel point which is likely to
radically effect the approach to the construction and operation of the
express terms of the contracts. Indeed, whichever side loses this point
is likely to see to appeal.”
1618. This last part is not minuted, but I recall the use of the word "novel" which was
new to me in the legal context. I have no reason to think it was not said.
1619. I formed a view of the merits consistent with this advice: I was generally positive
about POL’s chances of success, although I entirely recognised that there were
some issues.
1620. I note that at the next Postmaster Litigation Sub-Committee meeting, the merits
advice was summarised in this way: “the QCs had presented their opinion on
the merits of the case at the last meeting, and had concluded that, based on
the information available to them at the time, on balance Post Office had the
better arguments” (POL00006763).
162. Please consider POL00021555 (minutes of the POL Board meeting on 24
May 2018). Please set out your recollection of the update provided to the Board
at this meeting.
1621. A POL Board meeting took place on 24 May 2018. Item 12 on the agenda was
the GLO Proceedings (POL00103335). It was included in my CEO Report that
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a verbal update would be provided on the litigation (at page 23 of
(POL00103335)).
1622. The minutes (POL00021555) show that Jane MacLeod provided an update on
the GLO, and an update on the Postmaster Litigation Sub-Committee held on
15 May 2018. The minutes are brief. No decision was requested from, or made
by, the POL Board.
1623. I do not have any other independent recollection of this meeting.
163. Please consider BEIS0000079 (UKGI/Post Office Limited Information
Sharing Protocol).
163.1 Please explain the background of this protocol and your involvement in
agreeing the same.
1624. UKGI and POL entered into an Information Sharing Protocol on 11 June 2018
(BEIS0000079). The protocol was itself said to be subject to legal professional
privilege and set out how “information about the Postmaster Complaints will be
shared with the Secretary of State and UKGI so as to promote their common
interest and preserve privilege and confidentiality’.
1625. I had no involvement in agreeing that protocol, except that I was asked two, or
maybe three times, by Tom Cooper and possibly Tom Aldred about why the
process of agreeing the protocol was taking so long on the POL side. I think
that the reason for the delay was that Jane MacLeod took her responsibilities
in respect of confidentiality and privilege very seriously, and wanted to make
sure the protocol was entirely suitable. However, I was aware it took rather a
long time for agreement to be reached.
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1626. I was not involved in the substantive matters of the protocol.
163.2 What was the purpose of the distinction between transmitting
information to the shareholder representative and reporting matters to the
Secretary of State/UKGI pursuant to paragraphs 5 — 9?
1627.1 read the protocol but cannot recall today how I understood the distinctions
that the POL and BEIS legal advisers were attempting to describe. I do recall
that these distinctions concerned not breaching the Shareholder
Representative’s obligations regarding confidentiality and legal privilege as a
Director of the POL Board, whilst wanting to ensure that the legal
representatives of the Secretary of State in BEIS were kept informed and
allowed to feed back any questions or concerns.
164. Please consider POL00021446 (minutes of the POL Audit, Risk and
Compliance Committee on 28 June 2018). Please describe the discussion on
the GLO Proceedings at this meeting. On what basis did POL consider that the
disclosure of the estimated aggregate claim value in the claimants’ skeleton
argument did not represent a “reliable and fair reflection” of the value of the
claim?
1628. By the time of the 28 June 2018 ARC meeting, as recorded in the minutes,
“disclosure had become a substantive issue” (POL00021446). In order to give
context to this sentence in the minutes, and to answer the Inquiry’s question in
this regard, I will start earlier in the narrative.
1629. On 1 June 2018, Jane MacLeod sent an email to the POL Board, under the
subject “Postmaster Litigation — Confidential and subject to Legal Privilege —
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Do not Forward”, an update on the litigation (POL00103336). It began by
stating that a further Case Management Conference was listed for the
afternoon of 5 June 2018. Jane continued:
9. “The purpose of the hearing is to make orders in relation to
disclosure of documents relating to the March 2019 hearing on the
Horizon issues, and cost management. In accordance with normal
procedure, Skeleton Arguments have now been filed with the Court
by both sides. The purpose of this note is to flag that Freeths have
made reference in their skeleton argument to the potential value of
the claims as being £80-£90 million. The relevant statement is:
10. ‘The likely aggregate value of the case is estimated to be
of the order of £80 to £90 million (or in excess therefore, subject
to further quantum analysis and formulation). The Claimants have
not been directed to produce detailed schedules of loss, though
the Schedules of Information contain detailed information on
relevant heads of loss. The range give here derives from the
Claimant's solicitors’ analysis of the information contained in the
Schedules of Information. By its nature, it is an estimate based
upon present information. There are inherent difficulties to setting
out the quantum of these claims at this stage and the figures
should be relied upon solely as a suitable guide for the purposes
of proportionality considerations on costs budgeting.’
11. It is possible that this figure will be picked up by the press, and
therefore we wanted you to be aware. Should there be any press
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commentary, our response will be:
12. ‘We note the claimants’ solicitors have provided an
estimated value of claims of £80-£90 million in a hearing
regarding potential costs. That estimate recognised that no
detailed schedules of loss have been produced to date by the
claimants and that the number is therefore speculative. Post
Office continues to vigorously defend the claims, and welcomes
the opportunity to have these issues finally addressed through the
Court process'
13. I will shortly send a similar briefing to the UKGI lawyers in
accordance with the draft Information Sharing Protocol.. [sic] I will also
flag the above statement to EY. Given the qualifications around the
statement, we continue to believe that no provision should be
required, and as the statement is speculative, we do not believe that
any reference to this should be included in the disclosure in the draft
accounts.”
1630. Jane sent a further email on 25 June 2018 to Andrew Parsons, Mark
Underwood, Rodric Williams and Mark Davies flagging that the question of
disclosure would be considered by the ARC that week, and that the ARC
should also receive any appropriate advice on “the legal and reputational risks
of including” a statement in respect of this in the draft accounts. The individuals
on the email chain proceeded to discuss the wording of such a statement in
the draft accounts, if this were to be chosen as the appropriate course of action
(POL00024156). The conversation continued (POL00024230). I was not
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involved.
1631. The ARC meeting then took place on 28 June 2018. In considering the value
of the claim, and discussing why the claimants had valued the claim at £80 -
£90 million, the ARC noted:
a. “That the claimants’ estimate did not itself profess to be a formal
valuation of damages, but was an estimate prior to the production of
schedules of loss;"
b. "That the claimants had noted that ‘there are inherent difficulties to
setting out the quantum of these claims at this stage and the figures
should be relied upon solely as a suitable guide for the purposes of
proportionality considerations in costs budgeting", and
c. That the figures were "within a reasonably appropriate range, and
indeed potential damages once quantified could be materially larger
or smaller”
1632. After the ARC meeting, Jane sent an email (POL00041840) to Andrew
Parsons, Rodric, Mark Underwood, Mark Davies, Patrick Bourke and Melanie
Corfield saying that:
“There was a lively debate at the ARC today about the extent of
disclosure required, and the pros and cons of the various options. In
particular:
e [twas recognised that ‘quoting’ the number, gave it a credence
that it wouldn't otherwise have
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e The risk of over-stating the quantum was as great as the risk
of understating it
e tis relevant that no ‘statement of claim’ has yet been received
setting out the quantum of damages, and it was recognised that
this may not be received before the end of the financial year.
e It was important that some context be provided to protect the
directors so that it is clear that they are not ignoring the
potential impact.”
1633. Attached to Jane’s email were two alternative draft wordings for the 2018
annual report, depending on whether or not it was decided to disclose the figure
for quantum (POL00041841). Both versions of the wording included the form
of words “[wJhile the Directors recognise that an adverse outcome [in the
litigation] could be material” to describe the nature of the risk, and neither form
of words put a figure on POL’s quantification of likely damages.
1634. I was not involved in this email chain. However, I had been on an email chain
earlier that day in which Jane and others discussed whether disclosure ought
to be made (POL00041836).
1635. Jane said on 3 July 2018 that she would circulate the draft wording for the draft
accounts to me and Al Cameron (POL00041849). That happened the same
day (POL00041865). The draft wording was also sent to various UKGI
individuals, on a chain to which I was copied on 4 July 2018 (UKGI00008203).
Discussion continued the following day. Bond Dickinson were then asked on 4
July 2018 to confirm to EY whether POL’s Directors’ current assessment of the
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liabilities in the GLO proceedings was reasonable (POL00041871).
1636. EY sent a detailed email to Al, Jane and Michael Passmore on 12 July 2018,
saying that they wanted to understand the merits of the claim in more granular
detail, posing various specific questions to this effect (POL00041884). Jane
responded with a paper on 17 July 2018 (POL00041885). By 20 July 2018 a
second paper had been produced, and both sent to EY (POL00111017). EY
wished to speak to POL and Bond Dickinson, and a conversation was arranged
by Diane Blanchard. It took place on 27 July, after which Jane reported to
Andrew, Rodric, Mark Underwood, Mark Davies, and Melanie (POL00041896)
saying that “it appears to have been successful!” and that EY “decided not to
include an emphasis of matter statement in their Audit report, however they
have asked if we could strengthen the contingent liability statement” with
proposed wording being included in the email.
1637. There followed EY’s Audit Results Update Report to the ARC dated 27 July
2018 (EY00000001). The GLO Proceedings were considered at (at page 8 of
(EY00000001)). EY stated in summary:
a. That EY had reviewed POL’s paper which gave a detailed
assessment of the claim, including its strength and merits;
b. External counsel for POL considered it reasonable that POL could
not currently estimate the amounts of the ultimate liabilities that may
be incurred; and
c. EY had consulted internally on these matters.
1638. They concluded:
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“Based on the above we concur with management's conclusion that
the claim constitutes a contingent liability. Further we consider the
disclosures to be adequate and that no Emphasis of matter is required
in the auditor's report.”
165. Please consider POL00006763 (minutes of the Postmaster Litigation
Subcommittee meeting on 10 July 2018). To what extent, if at all, did the
subcommittee discuss POL’s approach to the preparation of its witness
evidence?
1639.The discussion at the Sub-Committee meeting on 10 July 2018 in respect of
witness evidence and disclosure was minuted in this way (POL00006763):
“Witness statements in relation to the Common Issues trial were due
to be exchanged during September and once received, the Claimants’
statements would be carefully reviewed. There had been ongoing
discussion with the Claimants’ lawyers as to the scope and extent of
disclosure, however, the Post Office view was that we had complied
with the narrower approach mandated by the Court.
Information continued to be exchanged in relation to the Horizon trial
and we were responding to a significant number of technical
questions, although a number of these questions appeared to be
either out of scope or would require identification and disclosure of an
unmanageable large or wide ranging number of documents.
All technical documents were being reviewed and the IT experts were
working with assistance from Fujitsu.”
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1640. I know that the minutes are not comprehensive because I have, in preparing
this witness statement, seen Jane MacLeod’s email to herself of 9 July 2018
(which she sent to Angela Van Den Bogerd the following day, before the
Postmaster Litigation Sub-Committee meeting) with her speaking note for the
Postmaster Litigation Sub-Committee (POL00090608). Andrew Parsons also
prepared a speaking note for the Postmaster Litigation Sub-Committee, and
sent it to Jane (POL00024176; POL00024177).
1641. Jane sent a risk assessment table to the Postmaster Litigation Sub-Committee
in advance (POL00024166; POL00024167).
1642. I do not have any recollection of this meeting which goes beyond these minutes
and notes, which refer to the timetable for filing the witness statements.
1643. A week earlier, Bond Dickinson had written to Angela, Nick Beal and Mark
Underwood, giving “an indication of the timings for the phases of witness
statements below” (POL00041866). This rough timeline had the work of
witness statements commencing in the week beginning 9 July 2018, with final
drafts being signed in the week commencing 30 July 2018.
1644. A note from WBD, dated 9 July 2018, sets out the proposed list of generic
issues witnesses and the matters on which each might comment
(POL00121166).
166. Please describe any involvement you had in the preparation of witness
statements for the GLO Proceedings, including discussing the strategy,
approach or content of evidence with any witnesses.
1645. I knew that it would have been wholly inappropriate for the business to seek to
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influence the witnesses who would give evidence in any way; those witnesses
were to make their own statements and should respond as they saw fit, telling
the truth.
1646. I have some recollection of saying to Jane MacLeod at some point that I wanted
to thank the witnesses for the work they were putting into their witness
statements, and being told by Jane that I should not speak to them about their
evidence, even in that way. So it was not until after the Common Issues trial
that I met with them, I think separately in two groups, and thanked everyone
for their hard work.
1647. I note that the Board on 31 July 2018 received an update on witness
statements, it being minuted in these terms (at page 7 of (POL00021556)):
“e witness statements were being gathered and were due to be
exchanged during early August
¢ Following receipt and review of the witness statements our QCs
would be able to update the Merits Opinion.”
1648. I did not have any involvement in preparing the witness statements. My only
involvement in strategy in this regard was in meetings such as the 10 July 2018
Postmaster Litigation Sub-Committee, and then only with a very light touch and
at a level of generality. I note for completeness that I also received emails sent
to multiple recipients with general updates in respect of witness evidence (such
as, for example, (POL00111281)).
1649. I am reminded by (POL00154359) that I was approached by the POL legal
team to help in connection with a Fujitsu employee who had been asked, but
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was reluctant, to give evidence in the GLO. I do not now remember what that
witness was going to give evidence about and I do not think that I ended up
having to speak with Fujitsu. I did not speak to the witness at any point.
167.Please consider POL00021556 (minutes of POL Board meeting on 31
July 2018) and UKGI00008345 (update to UKGI on 8 August 2018).
167.1. Please describe the update to the Board on 31 July 2018 concerning the
GLO Proceedings. In_ particular, please address whether the claimants’
criticism of the adequacy of POL’s disclosure was raised.
1650. On 15 June 2018, Freeths wrote to Andrew Parsons “generally in respect of
disclosure provided on behalf of your client, in relation to which there are a
number of areas of concern” (POL00003348). This is not a letter I ever recall
seeing.
1651. Bond Dickinson replied on 22 June 2018 (POL00041859). I do not recall seeing
that letter either.
1652. The Inquiry directs my attention to the POL Board minutes for 31 July 2018
(POL00021556) and asks me whether the Claimants’ criticism of the adequacy
of POL’s disclosure was raised in that meeting. The Inquiry asks the question,
I understand, because in the minutes at item 11 (“POSTMASTER
LITIGATION’) there is no mention of disclosure criticisms.
1653. I do not recall what was said in that meeting that is not in the minutes.
1654. That discussion at item 11 was based on an update paper prepared by Jane
MacLeod (POL00090612). That paper began by confirming that no decisions
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were required from the POL Board, but rather Jane would provide verbal
updates on four matters: the status of the Court's process; disclosure in the
accounts; contingency planning; and review of settlement options. The only
topic which might realistically have included discussion of criticisms of
disclosure is the first: the status of the Court’s process. There is nothing in that
update paper to indicate one way or the other whether Jane discussed
disclosure.
1655. I believe, from the documents disclosed by the Inquiry, however that the topic
was discussed at the Sub-Committee on 10 July 2018. The speaking note for
Bond Dickinson for that meeting states at paragraph 1.1.3 (POL00024177):
“The Claimants have begun attacking Post Office’s disclosure on the
Common Issues, saying that insufficient disclosure has been given.
WBD feel confident that we have satisfactory responses to their
complaints, especially given that Post Office has now disclosed over
200,000 documents (whereas the Claimants have disclosed less than
5,000).”
167.2. Please explain what steps you, the Postmaster Litigation Subcommittee
and / or the Board took to investigate the concerns raised by the claimants as
to the adequacy of POL’s disclosure.
1656. I do not recall what steps the PLSG and/or the Board and/or I took to
investigate the concerns raised by the claimants as to the adequacy of
POL's disclosure. I do not recall what steps the PLSG and/or Board
and/or I took to investigate the concerns raised by the claimants as to the
adequacy of POL's disclosure. Both before, and during, the GLO, the
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legal team briefed the Board and the Subcommittee on matters of
disclosure when they needed to, for example when it related to the Sift
Review, the Second Sight Interim report, the expert witness issues and
the GLO. Whilst I have a lay person’s understanding of what disclosure
means, I was not a legal expert and could not investigate these concerns
myself. The legal team assured us that they were complying with POL’s
duties of disclosure at all times. I took confidence from the fact that the
work that they were doing was subject to external scrutiny from
Cartwright King, Brian Altman QC, Bond Dickinson and other
experienced QCs.
168. Please consider UKGI00008372 (email between Tom Aldred and you on 31
August 2018) and POL00111095 (your briefing for meeting with Kelly Tolhurst
MP on 3 September 2018). Please describe your conversation with the Minister
on 3 September 2018 and 17 October 2018.
1657. It was arranged that I would meet the new Minister, Kelly Tolhurst MP, on 3
September 2018. In advance of this, I spoke with Patrick Bourke and Alice
Cookson on 24 August 2019 for them to brief me. I asked that Jane MacLeod
also be invited to give her thoughts on what I should say to the Minister
(POL00024179). Jane sent a detailed email to Alice with her comments,
copying it to Patrick, Andrew Parsons, Mark Underwood and Rodric Williams.
My team dissuaded me from doing anything other than noting the fact of the
ongoing litigation, and advised that I should not talk about it in any detail without
lawyers attending.
1658. On 31 August 2018, the Minister received a_ briefing document
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(UKGI00008369). I of course did not see this at the time. This document
(UKGI00008370) recognised that this was “an introductory meeting” and the
Minister was advised to be ‘largely in listening mode”. The “most important
thing to impress upon Paula’, said the briefing document, “is the need for POL
to submit in writing their contingency plans for handling the Horizon litigation in
advance of briefing you and the Permanent Secretary orally on 17 October’.
1659. That same point which Kelly Tolhurst MP was advised to “impress upon” me
was the subject of a standalone email from Tom Aldred, Executive Director in
UKGI, to me on the day that the briefing note was sent to the Minister
(UKGI00008372). I was told it would be “helpful if I could “share your material
in advance so we can make the most of the relatively short time that we have
in the meeting itself’ before meeting the Permanent Secretary and the Minister
on 17 October 2018. I was also told by Tom Aldred that I should not expect the
Minister to raise the litigation “in any detail’ on 3 September. I responded to
Tom Aldred, asking him to pick this up with Jane.
1660. My briefing document for 3 September was detailed, but reminded me that I
“should avoid any detailed conversation on” the litigation and save it for 17
October in a specific meeting arranged for that purpose (POL00111095). One
reason for this was to maintain privilege.
1661. In the meeting on 3 September 2018, I ran through the briefing note which my
colleagues had prepared for me. We spoke particularly about the
transformation of the Post Office and how POL had managed to keep post
offices open and continued to serve communities across the UK, whilst
improving service for customers. The Minister was, in general, very pleased
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with that outcome and had a number of questions on other business matters.
It was a good meeting.
1662. I included a brief note on my meeting with Kelly Tolhurst MP in my CEO Report
for the 25 September 2018 (at page 15 of (POL00103345)). I said that the
Minister “was engaged and showed interest in championing our interests in
Government and beyona”.
1663. I shall now move on to discuss the preparation for the meeting on 17 October
2018. Jane emailed Al Cameron and me on 27 September 2018 to say
(POL00105467):
“I have a somewhat unsatisfactory conversation with Tom Aldred
yesterday regarding the PO attendees at the meeting on 17 October.
Tom explained that the ‘direction’ that there should be only 2-3 POL
attendees came from Alex Chisholm and therefore will be difficult to
change, although a representation directly from Paula may work to
increase the representation to 4.”
1664. Jane then discussed whether Tim Parker should attend. He had been intending
to do so but was willing to stand down.
1665. On 11 October 2018, Jane sent briefing notes to me, Al, Mark Davies, Rodric
and Tom Cooper concerning each of the lead claimants and their cases
(UKGI00008494).
1666. A briefing paper was prepared for the meeting (POL00111218). This briefing
note was detailed and should be read in full in conjunction with this section of
my witness statement to show precisely what I was told immediately before the
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meeting.
1667. On 15 October 2018, Fraser J handed down judgment on POL’s application for
strike out. The Court refused the application. A chain of emails followed
(POL00042063) between POL’s internal and external advisors in which Rodric
observed on 16 October 2018:
“We designed our Information Sharing Protocol with UKGI so that
there would be “no surprises”. They should therefore hear about the
judgment from us rather than any source, and as soon as possible
given how quickly word of the judgment could travel.
! would therefore like to get a briefing over to UKGI’s lawyers
tomorrow, whether by phone, email or combination of both.
I would be happy to email the judgment to UKG/ with a summary of
the good and bad points as outlined [in Andrew Parsons’ email
above], preceding it with a phone call given that they are likely to see
this as bad news, but I am conscious that the meeting between Paula,
Al, Jane and Mark D and our Minister and other government
representatives is on Wednesday, and I don’t want to do anything that
gets in front of that.”
1668. A BEIS document which seems to have been prepared in advance of the
meeting confirms the attendees on 17 October 2018 (UKGI00008519): Jane,
Al, Mark and I attended for POL. Government attendees were the Minister, the
Permanent Secretary, Gavin Lambert (Post Office Policy Champion, BEIS),
Gareth Evans (Deputy Director, BEIS Legal Advisers), Tom Cooper (Director,
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UKGI) and Richard Watson (GC, UKGI).
1669. A draft read out of the meeting, prepared by UKGI, describes in detail who said
what (UKGI00008554).
1670. I recall the meeting as being challenging. I got the impression that the UKGI
staff wanted to show the Minister that they were serious about challenging
POL. In light of that, it is important to note that in an internal Government email
on 2 November 2018, UKGI General Counsel Richard Watson wrote that the
Minister should be updated that “we were pleased with how the meeting went
and POL were also glad to have had the opportunity to provide their
perspective of the litigation” (at page 1 of (UKGI00008606)).
169. Please consider POL00006757 (minutes of the Postmaster Litigation
Subcommittee meeting on 24 September 2018). Please describe the update
given at this meeting, in particular whether there was any discussion on
disclosure.
1671. The Inquiry asks me to consider the minutes of the Postmaster Litigation Sub-
Committee on 24 September 2018 (POL00006757) and asks me to describe
the update given at this meeting in respect of the litigation, in particular whether
there was any discussion on disclosure. I recognise that there is no mention of
disclosure in those minutes.
1672. I do not specifically recall any discussion on disclosure. I recall being aware
generally at the time that POL was responding to directions for disclosure, but
that it was taking a lot of time to respond to directions because of the volume
of documents which POL held.
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170, Please consider POL00021557 (minutes of the POL Board meeting on 25
September 2018). Please describe the update that was given on the GLO
Proceedings and the status of prosecutions whilst the litigation remained
unresolved.
1673. I do not specifically recall the POL Board meeting on 25 September 2018. The
minutes, at item 4(b), state (POL00021557):
“The position on former agents’ losses was discussed. It was noted
that we were not bringing prosecutions currently where these related
to the Horizon system because of the ongoing litigation. The increase
in cash in branches further increased the risks. We had improved our
ability to identify branches with potential fraud issues and target them
for audits. Prosecutions could potentially start against after the
Horizon Trial (assuming a positive outcome), however as matters go
“stale” after c6 months, it is unlikely that we would be able to prosecute
retrospective cases.”
171. Please consider POL00024170 (email chain on 1-4 October 2018). Please
describe any conference you had and the advice you received in the lead up
to the Common Issues trial.
1674. I have very little independent recollection of any legal conferences I attended
or any advice I received in the lead up to the Common Issuestrial. This includes
the email chain on 1-4 October 2018 at (POL00024170), and a litigation
contingency planning meeting on 5 October 2018 which relates to the chain.
1675. However, to assist the Inquiry, I have set out below the documents which
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record the advice I received between 25 September 2018 and the start of the
Common Issues trial , or which appear to be relevant to the email chain on 1-
4 October 2018:
a. Jane MacLeod attended the POL Board meeting on 25 September 2018 to
give an update on the litigation. The minutes of the meeting
(POL00103345) record that:
i. Witness statements for the Common Issues trial were being gathered
and were due to be exchanged in early August. Once witness
statements had been received and reviewed, the QCs would update
their merits advice, to be expected in September 2018. The IT experts
continued to review documents relating to the Horizon trial. POL
expected the scope of the Horizon trial to be agreed in the next month.
ii. Jane informed the Board that POL was developing a contingency
planning paper. This would allocate to each identified risk four
potential responses: (i) contractual changes; (ii) communications; (iii)
operational changes (e.g., training) and (iv) system changes (i.e.,
Horizon). The paper would identify those responses that could and
should be implemented ahead of the judgment and those responses
that would only be implemented if the judgment was adverse to POL.
b. (POL00111095) is a briefing note for me to use at a meeting with Kelly
Tolhurst MP (the newly appointed Postal Affairs Minister) on 3 September
2018. There is a section on the litigation at page 6 of the note, in which the
key risks are said to be:
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The Court's decision on one or more of the Common Issues has a
material adverse impact on POL’s operations and/or these
operational issues create cash flow concerns.
The Court determines that there are systemic issues with the Horizon
system, such that transactions between SPMs and POL are not seen
to be reliable.
Public opinion goes against POL as a result of any Court decision
such that POL loses both the trust of the public and its key
government and commercial stakeholders.
(POL00042037) is an email thread containing an email from Rodric
Williams to Jane and others on 18 September 2018. In his email, Rodric
sets out a briefing for management on the issues to be decided at a Case
Management Conference on 19 September 2018, which were (a) POL’s
application for security for costs and (b) the timetable for the Common
Issues Trial. Jane replied to Rodric that she would send the email to me. I
am reminded by reading the document today that the issues it covers were
known to me, whether in such detail I cannot recall. I have not yet seen any
email in which I was sent the briefing, and I cannot remember receiving it.
(POL00022943) is a Bond Dickinson note dated 20 September 2018
entitled “Post Office Group Litigation: Mitigations’. The note provided
advice to POL on three issues: (a) the general effect of a court judgment;
(b) potential changes to the SPM contracts to “harden” POL’s rights to
recover shortfalls, in the event of an adverse judgment; and (c) potential
legal routes to make contractual changes to the SPM contracts. I do not
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recall this document, but I understand that Angela Van Den Bogerd
emailed me a copy on 27 September 2018, in advance of a litigation
contingency planning meeting on 28 September 2018 (POL00024157). I
can see from Angela’s email that Andrew Parsons of Bond Dickinson was
to join the meeting to discuss the contractual issues.
(POL00006757) are the minutes of the meeting of the Litigation Sub-
Committee on 24 September 2018. I attended the meeting but have no
independent recollection of what was discussed. The minutes record that
the Sub-Committee was given the following updates:
Jane gave a report on the Common Issues trial. She reported (i) that
POL had asked for inadmissible evidence to be struck out; (ii) that
POL had succeeded in its application for costs, and (iii) that POL had
been told that time had been set aside for the trial in November 2018.
There was an update on the Horizon Issues trial, which I assume was
given by Jane. The trial would start in March 2019 and last 20 days.
The themes for the trial had been agreed. They included the
robustness of the system, remote access, and the facilities available
to SPMs. Fraser J would answer 15 questions about the Horizon
system. The outcome would be on a spectrum rather than a single
determination on whether the system was robust. The Judge would
take a view on how the system operated in the past, and his
conclusions would be of fact and not law. POL faced the challenge of
explaining the system in plain English and the Judge would need to
choose between the views of the two experts. The experts would be
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in constant dialogue in advance of the trial, and their primary duty was
to the Judge. POL’s expert’s view was that Horizon was a robust
system which had some “bugs”, but these did not have a material
impact on the operation of the system.
Mark Davies told the Postmaster Litigation Sub-Committee that a
team would be monitoring press and communications in advance of
trial and were preparing for different scenarios. POL was working with
external consultants, Portland, to assess POL’s approach from an
external perspective. Portland would be available throughout the trial
and understood the issues.
(POL00111165) is a draft update for the Litigation Sub-Committee meeting
on 24 September 2018. Although I recall it was around this time that I heard
about the top line view of POL's Horizon expert (who was referred to in
paragraphs 2.9 and 2.10 of the draft update), I have no memory of this
document, and I do not know whether it was provided to the Postmaster
Litigation Sub-Committee: the minutes of the meeting at (POL00006757)
do not mention the document, and they record that the updates from Jane
and Mark were given “verbally”.
On 25 September 2018, Jane sent an email to the members of the Sub-
Committee with details of the timetable for the Common Issues trial
(POL00117991). This had been requested by the Postmaster Litigation
Sub-Committee at its meeting on 24 September 2018.
(POL00022669) is an update dated 28 September 2018 to the barristers’
Opinion on the Common Issues. The authors of the update are listed as
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being “Anthony de Garr Robinson QC, David Cavender QC, Owain Draper,
and Gideon Cohen”. While I do not recall the document today, I do believe
I read it as there are passages about the Judge’s approach to the request
to strike out evidence and counsel's view that he was "inconsistent", which
having re-read them, seem familiar. The barristers stated in the
introduction that they saw no reason substantially to change the views set
out in their Opinion on the Common Issues. Their overall view on the merits
was unchanged, and the risks they identified in their Opinion remained
present. The remainder of the update addressed three main issues: (i)
POL’s application to strike out inadmissible evidence submitted by the
Claimants; (ii) the burden of proof; and (iii) implied terms of the SPM
contract.
Paragraphs 4 to 9 of the update deal with POL’s application to strike out
parts of the Claimants’ evidence for the Common Issues trial on grounds
of admissibility. The barristers summarised how the Judge had dealt with
the application to date and advised that: “our view is that the Managing
Judge is likely to decide the Strike Out Application largely in Post Office’s
favour’. They also advised:
“We consider that the Strike Out Application, however precisely it is
determined, will achieve the objective of bringing the issue of
admissibility to the fore and enabling the court to tackle it head-on,
rather than it becoming a distraction at trial. We do not consider that
there was or is now any sensible approach for Post Office to take
given the Lead Claimants’ approach and the Managing Judge’s
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understandable desire not to be seen to ‘shut out’ their wish to ‘tell
their story’ (the language he used at the hearing on 11 September).
Ultimately, we expect the Managing Judge to realise that the
November trial could become unworkable unless he provides a
strong and clear ruling on admissibility, and we are confident that he
will then do so. There is always scope for argument about the status
of particular passages of evidence, but we remain of the view that it
is likely that the Managing Judge will agree with Post Office’s
submissions as to the principles by which admissibility is to be
determined in this case and will thus accept the basic thrust of the
application.”
On the burden of proof issue, they advised that it would be prudent
for POL to accept that a Horizon-generated loss would not qualify as
a ‘loss” which was recoverable from the SPM under the SPM
contract. In most cases, the fact that there was a shortfall would
ordinarily be sufficient to establish a genuine “loss”, without the need
for POL to identify and prove directly the actual cause of the loss.
However, the inference of a “loss” from a shortfall would be
undermined where there was some reason to believe that the loss
may have been generated by Horizon. In their view, this would
depend on the factual circumstances, including the likelihood of the
alleged Horizon error having generated the shortfall, and evidence
indicating that other causes for the shortfall were comparatively more
likely. The effect of this may be to shift the evidential burden to POL
where the SPM can provide reasonable evidence that the shortfall
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was caused by Horizon. It was unclear precisely what threshold
would have to be crossed before the burden shifted to POL: the
barristers believed that the "possibility" (their emphasis) of a Horizon
error did not come close to the required level of evidence.
On implied terms, the barristers advised that the Managing Judge
may look for some points on which to give the Claimants a small
victory, especially if (as the barristers anticipated) he decided most of
the construction and implication issues in POL’s favour. In that
context, they recommended that POL should not push back against
a case that SPMs should have a meaningful opportunity to seek
repayment of remuneration after a period of suspension. They also
recommended that POL conceded (or at least did not strongly argue
against) the Claimants’ case that there was an implied term of the
SPM contract that POL’s discretion as to the remuneration paid to
suspended SPMs would not be exercised dishonestly or in an
arbitrary, capricious, or irrational manner.
On 1 October 2018, Jane wrote to Andrew Parsons, Rodric, Avene Regan,
and me, suggesting that David Cavender QC should attend the litigation
contingency planning meeting on 5 October 2018 (POL00024170). Jane
suggested that he would provide an update on his view of the merits, which
would provide helpful context for our contingency planning discussion.
On 2 October 2018, Jane sent Rodric, Andrew Parsons and Angela a list
of the topics that David Cavender QC could address (POL00024170).
These were:
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i. His overall view of POL’s prospects of success on the Common
Issues and a high-level view of POL’s strengths and weaknesses.
ii. A more detailed view on the “shortfalls/burden of proof’ issue,
given that this was the area which would have the greatest
operational impact in the event of an adverse ruling.
iii. Any areas POL should think about appealing.
iv. Any other material risk areas in the conduct of the case.
On 4 October 2018, Rodric sent Jane, Angela and Andrew Parsons a
summary of a discussion with David Cavender QC on what Rodric called
“the all-important ‘burden of proof’ issue” (POL00024170). In summary,
both versions of the SPM contract required a “loss” before the SPM could
be liable. POL’s position that a “loss” was established when a SPM
submitted an account containing a shortfall was a reasonable position to
take, given (i) the SPM’s control over branch activity; and (ii) Horizon’s
general reliability. This position could be challenged by the SPM in an
individual case on cogent evidence.
The contingency planning meeting took place on 5 October 2018
(POL00024158). I attended the meeting, but I have no memory of what
was discussed, or of David Cavender QC’s contribution to the meeting.
. (POL00111214) is a POL briefing paper for a meeting on 17 October 2018
with the Postal Affairs Minister, Kelly Tolhurst MP, and Alex Chisholm, the
Permanent Secretary for BEIS. I attended the meeting together with Jane
and Al. The paper provided an overview of the litigation and contained a
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summary of the barristers’ advice on the Common Issues at paragraph 1.4.
In short, the barristers believed that POL had the better of the arguments
on most of the Common Issues, but was unlikely to be successful on each
and every issue. The areas that were most problematic for POL related to
the clauses of the SPM contract dealing with suspensions and terminations
of SPMs, withholding remuneration during periods of suspension and
imposing liability for branch losses. The issue between POL and the
Claimants in relation to liability for shortfalls was set out in paragraph 3.3
of the briefing. The Claimants argued that POL was required to show that
an SPM's actions had caused POL to suffer a net economic detriment.
POL’s position was that, if a shortfall was shown in the branch accounts,
the SPM was liable absent any cogent evidence to the contrary, as they
were responsible for conducting the transactions recorded in the accounts.
(UKGI00008554) is a note of the meeting. I can see from the note that Jane
addressed most of the legal issues, and that I addressed POL’s general
approach to the litigation and business contingency planning. It was agreed
towards the end of the meeting that POL would share its legal advice on
the litigation with the government.
(POL00111257) is a briefing note on the litigation ahead of a POL Board
meeting on 30 October 2018. It provided an overview of the status of the
litigation at that point and recorded that David Cavender QC and Andrew
Parsons of Bond Dickinson would attend the Board meeting to provide an
update on the Common Issues trial, which was scheduled to begin on 5
November 2018. This may have been a briefing note prepared for Jane
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who was due to update the POL Board. I do not recall the document.
p. On 29 October 2018 Veronica Branton sent the POL Board a message on
my behalf (POL00103360). I noted in my message that Jane had flown to
Australia because her father had died the week before. In Jane’s absence,
I had invited David Cavender QC and Andrew Parsons to come to the POL
Board and brief us on the following matters: (a) POL’s application to strike
out parts of the Claimants’ evidence; (b) the Judge’s challenge on POL’s
tone of voice during the strike out application; (c) the Claimant's draft
opening submissions; and, if time allowed, (d) Horizon Trial preparation.
q. On 31 October 2018, Rodric Williams sent UKGI a summary of the
discussion about the litigation at the POL Board meeting on 30 October
2018 (POL00042106). In relation to the Common Issues trial, it stated that
the strike out judgment had not changed the substance of POL’s legal case
but had demonstrated the unpredictable nature of the Judge; that the
Claimants’ opening submission had not added clarity to their case or raised
new issues; and that the Judge’s comments about POL’s “tone” had been
taken on board.
r. (POL00042122) is an email dated 6 November 2018 from Andrew Parsons
to Rodric containing a draft note to me on what the parties may say in their
oral opening submissions. I have no reason to doubt that Rodric offered to
send the note, but I do not recall it now. My lawyers have been unable to
establish whether the note was finalised and sent to me.
172. Please consider POL00006388 (Bond Dickinson note on the admission of
further implied terms for a meeting on 12 October 2018). To what extent were
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you involved in the decision on whether to admit further implied terms?
1676.
1677.
(POL00006388) is a paper prepared by Bond Dickinson for the Steering Group
meeting on 12 October 2018. The purpose of the paper was to explain to the
Steering Group a recommendation from the barristers and Bond Dickinson that
POL should accept two of the implied terms proposed by the Claimants. These
were:
a. A term (called the “Suspension Term”) which limited POL’s right to
suspend SPMs to cases where there was a reasonable basis or grounds
for the suspension on one or more of the grounds for suspension set out
in the SPM contracts.
b. A term (called the “Back-pay Term”) providing that POL’s contractual
power to withhold or not to pay remuneration during a period of
suspension must not be exercised dishonestly or in an arbitrary, capricious
or irrational manner.
The basis of the recommendation was that the barristers had advised that there
was a medium to high risk that the implied terms would be approved by the
Court: there was therefore a tactical advantage in accepting them, rather than
fighting them and losing at trial. Bond Dickinson had investigated whether the
implied terms, if accepted, would have an adverse impact on the business. The
feedback they had received was that their effect would be minimal, because
the business was in practice already complying with them. The barristers had
also advised that by conceding the two implied terms, POL would appear more
reasonable and not lose credibility with Fraser J. They felt they would be ina
better position to defend the other more onerous implied terms, both in relation
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to suspensions, and more generally. The concession would also assist Fraser
J to find some points on which to give the Claimants a small victory.
1678. I recall it was suggested by counsel that POL should accept some implied
terms, which were likely to be imposed. This was described as a concession,
i.e. being seen to "give" something. I remember taking the advice and not
having any issue with what was suggested. I have read the paper when
preparing my witness statement, but it triggers no recollection of my being
involved in any debate or decision as to whether POL should concede any
implied terms.
173. Please consider POL00023117, the judgment of Fraser J in Bates & Others
v. Post Office Limited [2018] EWHC 2698 (QB), POL00103355 (emails between
Jane MacLeod and Tim Parker 0n18 October 2018), POL00103356 (email from
Jane MacLeod on 18 October 2018) and UKGI00008549 (your email of 19
October 2018).
173.1 Please describe any discussions you had concerning this judgment.
What, if any, discussion arose from paragraphs 13 and 56 — 57 of the judgment.
1679. Jane MacLeod emailed a copy of Fraser J’s judgment dismissing POL’s strike
out application to Tim Parker, Diane Blanchard, and me at 12:52 on 18 October
2018 (POL00103355; POL00103349; POL00103351).
1680. In her covering email (which Jane addressed to Tim) Jane mentioned that she
understood that Tom Cooper had recommended that Tim should read the
judgment, and provided an explanation of Fraser J’s decision:
a. Jane explained that POL’s application was decided on case management
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grounds, which gave Fraser J a considerable discretion. Applying those
grounds, Fraser J had set a very high standard to strike out the Claimants’
evidence. He had decided that POL had not established that the parts of
the Claimants’ evidence that POL was seeking to strike out could never be
relevant to the case, given the number of Common Issues. However, he
confirmed that the law on the admissibility of evidence would be applied at
the Common Issues Trial. He also confirmed that, at the Common Issues
Trial, he would not rule on any matters relating to Horizon or whether POL
had breached its duties to SPMs: Jane noted that most of the disputed
evidence went to these two issues.
Jane stated that the Judge’s ruling on the application was consistent with
his approach of allowing the Claimants their day in Court, while applying
orthodox legal principles. That said, POL had lost the application and
should expect the Claimants to be awarded their costs, which were
estimated at £120,000.
Jane stated that: “However in deciding the application, the Managing
Judge was very critical of our conduct of the case, intimating that we were
not acting cooperatively and constructively in trying to resolve this litigation
(which criticism was levelled equally between the parties); and that we had
impugned the court and its processes by making the application for
improper purposes. This response is extremely disappointing as this has
not been our intention, and his challenge as to the purpose for which we
had applied for strike out is at odds with comments he had made during
various procedural hearings over the past year.”
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d. Finally, the judgment had been the subject of an article in the Law Gazette.
In light of Fraser J’s remarks, Jane was now engaging with Portland and
POL’s internal communications function to refine POL’s preparation for
trial, including a reactive communications plan.
1681.Tim replied to all on the same day at 14:53 (in the same URN) stating
that he had read the judgment. He went on:
“...the judge does seem to somewhat negative about our efforts to take
out elements of the evidence, even if he does acknowledge that both
sides have been uncooperative with each other in the management of
the case. My worry is that some of his points at the end betray what
looks like an inherent dislike of our "aggressive" approach to the
individual claimants as well as an "aggressive" approach to litigation, as
well as a rap over the knuckles regarding what the judges sees as using
negative PR as part of our argument. Interesting to know if this initial
response from him suggests any change of tack on our part.”
1682. Jane responded to Tim in a reply to all email at 18:31 on the same day. She
stated, in response to Tim’s concerns:
“Paula and I have discussed this at length this afternoon. The
commentary in the judgement is unfortunate. There is obviously a fine
balance between doing everything that we can to achieve a legal victory,
and maintaining the right public image - not helped when the judge is
linking activity from 15 years ago, and assuming by extrapolation that
this must underpin our behaviour today. We will work with Portland and
the Comms team to manage the lines going forward, and will discuss
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with our external advisors how best to position the language so that we
do not inadvertently influence the Judge adversely. Fortunately the
decision in the Common Issues trial should be made on the basis of
legal analysis-which is less subjective, and also appealable if we believe
the judge arrives at the wrong decision.”
1683. At 18:41 on 18 October 2018, Jane sent the text of her initial email to me, Tim,
and Diane as an update to the POL Board (POL00103356).
1684. In her email to Tim at 18:31 on 18 October 2018, Jane mentioned that she had
spoken to me about the judgment at length earlier that day. I have some
recollection of the meeting and I can see from (UKGI00008549;
POL00103357) that I emailed the POL Board on 19 October 2018 with a list of
the action points that Jane and I had discussed and agreed during the meeting.
1685. Although I cannot recall reading the judgment at the time, I believe that I did
so, because I stated in my email to the POL Board on 19 October 2018 that
Jane and I had gone through the judgment and Fraser J’s challenge on POL’s
tone of voice. I have re-read paragraphs 13 and 56-57 while preparing my
witness statement. They contain serious criticisms of what the Fraser J
described as an aggressive approach to litigation tactics and what he called
POL’s “tenor” or “tone”. At the end of paragraph 57, Fraser J was clearly
sending a message to POL when he said: “/ wish to make one point entirely
clear, so that this cannot be misunderstood. An aggressive and dismissive
approach to such major Group Litigation (or indeed any litigation) is entirely
misplaced.”
1686. The severity of Fraser J’s criticisms came as a shock to POL’s management.
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Our belief at the time was that POL had taken on board what Fraser J had said
previously, and we had not picked up that there was anything aggressive to
POL’s tactics and approach.
1687. I wanted to sit down with Jane to go through what had gone wrong and what
we could do to put things right. It was not an easy conversation. It was serious
and concerning that POL had greatly annoyed the Judge who was dealing with
the whole of the Group Litigation. I had to make this clear to Jane. However, I
also wanted to reassure her that I was there to listen and would support her in
taking steps to respond to the Judge’s criticisms.
1688. I remember that Jane was extremely upset because it had not been her
intention to be aggressive. I recall her telling me that some of the lawyers
involved (I remember Jane mentioning Andrew Parsons and Rodric) felt bad
about how they had handled some of the documents for the application. I also
recall her being frustrated about aspects of Fraser J’s approach. He had read
and made negative comments about some of the correspondence between
POL and the Claimants from the time they were dismissed as SPMs — in some
cases more than a decade ago. Jane’s concern was that the Judge appeared
to be conflating or reading across POL’s conduct many years ago with its
conduct in the present. She was also frustrated that, at one point, he appeared
to have accepted that he should make a definitive ruling on the evidence before
the start of the trial but had changed his mind.
1689. I understood Jane’s perspective and that it can be difficult to get the tone right
where one of the parties is a large organisation and the other is a group of
individuals who, no matter that they were bringing the litigation were people
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whose lives had been so seriously affected, as we have heard many times in
this Inquiry. It was clear that we needed to take steps to correct what the Judge
regarded as POL’s inappropriate tone towards the litigation, the Claimants, and
their case. I left the conversation satisfied that Jane understood that the
situation was serious and that we needed to implement a plan to avoid a
repetition of the kind of approach that had irritated the Judge.
1690. In my email to the POL Board on 19 October 2019 (UKGI00008549;
POL00103357) I set out what I described as “remedies” to Fraser J’s criticisms.
Although, as I mentioned in my email, Jane was understandably frustrated, the
onus was on POL to change tack. Jane and I had therefore agreed that she
would implement five steps as soon as possible:
a. She would speak to the entire team working on the litigation to emphasise
that they should take a step back and consider not only what they did, but
how they did it.
b. Jane had already spoken to Rodric who had reviewed POL’s written
submission but had not spotted a section which had drawn criticism from
the Judge.
c. Future submissions would have a second legal check and POL in-house
communications would review them for their tone. Jane would also read all
future submissions.
d. Jane would meet Mr Parsons, the solicitor at Bond Dickinson who had
drafted the evidence for POL which had been criticised by the Judge. Jane
was to ensure that he understood the issue we were concerned about.
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e. Jane would meet POL’s two QCs to agree how they would redress POL’s
tone.
1691. I informed the POL Board that I would support Jane and follow up on each of
these actions with her next week. I would then call one of the managing
partners at Bond Dickinson (who I knew well) to obtain some personal
reassurance. This was a reference to Simon Richardson, who was Andrew
Parsons’ boss. I have a recollection of speaking to him and him telling me that
Andrew Parsons felt bad about the comments he had put in his statement
which the Judge had criticised.
1692.Ken McCall replied to me and the rest of the POL Board on 19 October 2018
(UKGI00008549; POL00103358) stating that he fully agreed with my views and
approach.
1693.1 can see from the email from Veronica Branton to the POL Board on 29
October 2018 (POL00103360) and the agenda for the POL Board meeting on
30 October 2018 (POL00026936) that David Cavender QC and Andrew
Parsons attended part of the meeting to discuss the litigation and that one of
the items on the agenda was the “tone of voice” challenge from Fraser J.
1694.1 cannot recall what was discussed at the meeting, but I can see from a
summary of the discussion that Rodric emailed to UKGI on 31 October 2018
(POL00042106) that the Judge’s comments in the strike out judgment about
POL’s tone had been taken on board. I assume the statement about taking the
Judge’s comments on board had come from David Cavender QC and Andrew
Parsons.
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173.2. Please explain why POL continued to adopta litigation strategy that was
criticised by Fraser J for a second time. Who was responsible for this?
1695. I do not wish to conflate what I have read when preparing this witness
statement with my recollection from the time. As I have said above, although I
do not recall clearly, I think I may have read the barristers' update to their
Opinion on the Common Issues at (POL00022669), in which they
characterised the strike out application as a sensible application for POL to
bring and which was likely to mainly succeed. However, I do not recall any
suggestion or perception that the strike out application was an aggressive step
in the litigation. As I have mentioned above, Fraser J’s criticisms of the
application came as a surprise to POL management.
173.3. Did you, the Board or senior management at POL consider changing
litigation strategy following this judgment? If not, why not?
1696.As I have mentioned above, it was clear from the Fraser J’s criticisms that POL
needed to take active steps to change its tone. However, the POL Board and
senior management did not consider a general change in litigation strategy.
The approach of the POL Board was that strategy was a matter for Jane
MacLeod (who had been tasked with the management of the litigation), the two
QCs, and the senior lawyers at Bond Dickinson. I think there was an
assumption that the specialist litigation lawyers would know how to respond
effectively to the Judge’s concerns. There was a reluctance to create any
tension or lack of trust between management and the lawyers so close to the
start of the Common Issues trial.
173.4 Why did you not copy Al Cameron or Jane MacLeod into UKGI00008549
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1697.1 did not copy Jane MacLeod into my email to the Board on 19 October 2018
(UKGI00008549) because she and I had just had a very difficult conversation
about Fraser J’s judgment. I knew from that conversation that Jane was upset,
and I did not want to embarrass or demoralise her. That is also why I did not
copy her colleague Al Cameron. However, I am as sure as I can be that I spoke
to him about it: Al and I sat together and worked as a very close partnership.
He was my de facto deputy and I kept him closely in the loop, especially on
POL Board matters.
173.5. Please describe the steps you took to address the criticisms made by
Fraser J.
1698.1 have described above the steps I took to address the criticisms made by
Fraser J. I spoke to Jane MacLeod and agreed with her a plan of action to
ensure that POL’s presentation of its case did not alienate the Judge. I spoke
to a senior lawyer at Bond Dickinson to gain direct reassurance. I invited David
Cavender QC and Andrew Parsons to the POL Board meeting on 30 October
2018 to discuss the tone in which POL argued its case.
174. Please consider POL00103360 (email from _on your behalf to the POL
Board on 29 October 2018) and POL00021558 (minutes of the POL Board
meeting on 30 October 2018).
174.1. Please describe the update that was given on the GLO proceedings, in
particular the briefing that “The claimants’ IT expert had found that Horizon
was not a robust system but this assessment was founded on identifying a
large number of small problems with the system which our expert was
confident could be rebuffed”.
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1699. As I have mentioned above, at my request, David Cavender QC and Andrew
Parsons attended the Board meeting on 30 October 2018. I stated in my email
to the POL Board on 29 October 2018 (POL00103360) that I had asked them
to brief the POL Board on (a) POL’s application to strike out inadmissible
evidence; (b) Fraser J’s challenge to POL about its tone of voice; (c) the
Claimant's opening submissions for the Common Issues trial; and if time
allowed, (d) preparation for the Horizon Issues trial. I can see from an email
from Angela Van Den Bogerd to me and others on 1 November 2018
(POL00111283) that I spoke to David Cavender QC on 29 October 2018, but I
cannot recall what we discussed.
1700. (POL00111257) is a briefing note prepared ahead of the POL Board meeting
on 30 October 2018. It set out a suggested agenda for the discussion with
David Cavender QC and Andrew Parsons, comprising (1) the trial timetable
(allocated to Andrew Parsons); (2) preparations for the Common Issues trial
(David Cavender KC); (3) communications and media handling (Mark Davies);
and, if time allowed, (4) an update on the Horizon Issues trial (Andrew
Parsons). The briefing set out at paragraph 4 is a summary of what the current
position was in relation to the Horizon Issues trial:
a. "The legal team is also preparing for the Horizon Issues Trial, which will
begin in March 2019. The majority of the issues to be determined at this
trial will be determined via expert opinion evidence but some require
factual evidence.
b. The claimant's expert (Jason Coyne of IT Group) has now submitted his
expert report. Absent finding a ‘smoking gun’ he has listed out anumber
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of bugs, without analysis of their effect or extent, before concluding ‘it
was highly likely for bugs/errors/defects to have the potential to’ cause
shortfalls and undermine the reliability of Horizon.
c. Post Office’s expert (Dr Robert Worden of Charteris) has until 30
November 2018 to submit his report, supported by Fujitsu, the legal
team and Post Office more generally.
d. Witness evidence has also been exchanged. The claimants submitted
9 statements — 3 from witnesses who have previously criticised Horizon
(Richard Roll — an ex Fujitsu employee who appeared on Panorama;
Charles McLachlan — defence expert in the Misra prosecution; and lan
Henderson — Second Sight) and 6 statements from former postmasters.
e. Post Office has until 13 November to provide its response to these
statements."
1701. The appendices to the briefing gave further detail on the issues which had been
discussed during a contingency planning meeting on Friday 26 October 2018.
I do not recall the meeting, but I can see from (POL00024158) that I am listed
as an attendee.
1702. The first issue was contingency planning. Three areas of the Common Issues
had been identified as being greatest concern in terms of business impact.
These were shortfalls, liability for losses, and POL as agent. While POL
believed that it had the stronger of the arguments in these areas, the business
impact of an adverse finding would be material. Mitigating actions were in place
or being considered to address these concerns:
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a. A variation to the contracts, which would be made only if the judgment went
against POL.
b. An end-to-end investigation process had been designed, beginning with an
issue or discrepancy being identified to the findings of POL’s investigation
being produced and shared with the SPM.
c. It was considered unlikely that the Common Issues trial would change the
basic principle that SPMs have to make good any losses they cause.
However, an adverse judgment may require POL to do much more than it
currently did to demonstrate that the SPM (and not something outside the
SPM’s control, such as a bug in Horizon) caused the loss before they were
asked to make it good. There was therefore a risk that an adverse judgment
may lead SPMs to change their behaviour. Most SPMs made good their
losses immediately and accepted liability for any shortfall recorded in their
branch accounts. If the judgment on the Common Issues was adverse,
these SPMs might begin to demand that POL show positively what caused
the loss and/or discount any other possible causes for it, irrespective of
value or the SPMs’ knowledge of what caused the loss. This would require
POL to review the branch accounts and Horizon reports thoroughly to
confirm that only the SPM could be liable for the loss. This would be a
significant exercise. Scenario planning was underway to model the impact
of such behavioural changes.
d. Owing to cost and complexity, CCTV would only be installed in all Post
Offices if the judgment went against POL.
1703. Another topic covered in the briefing was mediation of the Group Litigation.
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POL’s current thinking was that a mediation prior to a judgment on the Horizon
Issues trial was unlikely to resolve the dispute or even narrow the issues. At
the most recent hearing on 10 October 2018, the Judge himself had said that
any mediation was highly likely to fail.
The final topic in the briefing note was settlement. The possibility of settlement
had been regularly considered both by the legal team and by the Postmaster
Litigation Sub-Committee at each of its meetings. However, to date,
management and the POL Board had taken the view that settlement would not
satisfactorily address the issues at stake as there was a series of issues which
made settlement problematic:
a. As the Claimants’ legal costs were being met by a litigation funder (which
would normally expect to recover at least three times the costs under any
settlement or award) and the Claimants had not yet been required to
articulate their claim for damages, POL had no clear view of the amount
that might be acceptable through a settlement.
b. It was unlikely that the terms of any settlement would remain confidential.
A settlement was likely to be construed in the media as a capitulation and
was therefore likely to give rise to further claims. In that context, any
settlement would only be binding on the parties to the action.
c. Settlement would not resolve the issues raised by the Claimants about the
correct interpretation of the SPM contract and the robustness of Horizon.
Therefore, SPMs would continue to challenge the veracity of the data from
Horizon on which POL relies to recover losses and will perpetuate the
current issues POL faces whereby branch losses are increasing
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significantly. It was unlikely that any single SPM would be able to afford the
costs to have the Horizon issues fully determined, whereas the Group
Litigation and the funding structure allowed those issues to be addressed.
d. POL currently enjoyed the confidence of both customers and the clients to
whom it provided services. An outcome which did not address the robust
operation and resilience of Horizon risked undermining that public and
commercial confidence in POL.
1705. The minutes of the POL Board meeting on 30 October 2018 (POL00021558)
record that David Cavender QC gave an update on the Common Issues trial:
“We had lost our application to limit the evidence being presented at the trial to
the common issues. This judgment was discussed at it was noted that during
the trial we would politely but persistently challenge the claimants’ case where
there were inaccuracies or contradictions.” Andrew Parsons provided an
update on the second trial on the Horizon system: “The claimants’ IT expert
had found that Horizon was not a robust system but this assessment was
founded on identifying a large number of small problems with the system which
our expert was confident could be rebuffed.”
1706. On 31 October 2018, Rodric Williams emailed a fuller summary of the
discussion at the Board meeting to UKGI (POL00042106):
a. In relation to the Common Issues trial, the lawyers advised that:
i. Fraser J’s judgment on the strike out application had not changed the
substance of POL’s case. Although it demonstrated the unpredictable
nature of the Judge, he continued to assert that he would follow the
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law in deciding the Common Issues.
ii. The Claimants’ written opening submissions for the Common Issues
trial had not added much clarity to their case and did not raise any
new arguments.
iii. Fraser J’s comments in the strike out judgment about POL’s “tone”
had been taken on board. POL may need to press home with the
Claimants’ witnesses certain points that were necessary to POL’s
case.
b. The advice received by the POL Board in relation to the Horizon issues
was that:
- "The Claimants’ IT expert Jason Coyne had produced his first formal
report on the Horizon system.
- Mr Coyne had not identified any ‘smoking gun’ to show Horizon has
a fundamental defect. He has instead listed all the bugs he has found
in the Horizon technical documents to then draw the conclusion that
“it was highly likely for bugs/error/defects to have the potential to”
cause shortfalls and undermine the reliability of Horizon.
- Mr Coyne does not however seek to explain the effect or extent of the
identified bugs/errors/defects, without which there is an analytical gap
linking the listed bugs etc to Mr Coyne’s conclusion.
- This point will be addressed as part of Post Office’s expert report,
which is due to be filed on 30 November 2018.”
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1707. I do not recall any details of the briefing to the POL Board for its meeting on 30
October 2018, beyond what is set out in the documents I mention above.
174.2. Please set out when you first were aware of the claimants’ expert’s
position. What, if any, steps did POL take to investigate the concerns raised
by the claimants’ expert outside the litigation. In particular, what, if any, steps
did POL take to determine whether the bugs, individually or cumulatively,
affected the safety of any past conviction?
1708.1 understand from (FUJ00160138) that the Claimants’ solicitors sent POL’s
solicitors a copy of Jason Coyne’s report on 16 October 2018. On 18 October
2018, Jonathan Gribben, a solicitor at Bond Dickinson, sent a copy of the report
to a group including Rob Houghton and Jane MacLeod (POL00111231).
Jonathan Gribben gave four headline points about the report:
“1. itis 225 pages of professionally presented work;
2. Coyne has not discovered any smoking gun then [sic.] shows that
Horizon has a fundamental defect. Indeed, you could read parts of his
report as saying that Horizon is fairly robust.
3. his general approach is to list out all the bugs he has found in the Horizon
technical documents and then draw the conclusion that “it was highly likely
for bugs/errors/defects to have the potential to” cause shortfalls and
undermine the reliability of Horizon.
4. Robert Worden’s initial view is that there is a lack of analysis of the bugs
identified by Coyne — Coyne does not seek to explain their effect or extent.
Without this analysis, Robert believes it is a leap to say that a simple list of
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bugs justifies Coyne’s conclusions."
1709. I have seen a copy of Jason Coyne’s report during the preparation of this
witness statement, but I do not remember being given or reading the report at
the time. I do not remember when I first became aware of Jason Coyne’s views.
The minutes of the Postmaster Litigation Sub-Committee meeting on 24
September 2018 (POL00006757) record that the Postmaster Litigation Sub-
Committee received an oral briefing on the Horizon issues. The minutes do not
mention Jason Coyne’s report, but state that “Our expert's view was that
Horizon was a robust system which had some ‘bugs’ but which did not have a
material impact on the operation of the system”. It is possible, but I do not
remember, that Jason Coyne’s view was mentioned at the meeting. Based on
the documents I refer to in my answer to Question 174.1, I was made aware of
Jason Coyne’s views in broad terms by the time of the POL Board meeting on
30 October 2018.
1710. I do not recall any discussion at the POL Board nor any advice being given by
the lawyers that POL should investigate Jason Coyne’s concerns outside the
litigation, including in relation to past prosecutions. The position at that time
was that POL’s expert, Dr Robert Worden, was in the process of preparing his
response to Jason Coyne’s report. The Board was told that Dr Worden was
confident that Horizon was a robust system and that Jason Coyne’s views
could be rebuffed. As a non-IT expert, I was not in a position to challenge the
views expressed by either expert, but I think the POL Board took comfort that
Horizon was now being looked at by an independent expert, and who was of
the opinion that Horizon was robust.
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175, Please consider POL00111281 (email from Angela Van Den Bogerd to you
and others on 1 November 2018), POL00117998 (email exchange between you
and Rodric Williams on 7/8 November 2018), POL00118001 (email from Mark
Underwood to you on 9 November 2018), POL00026954 (email from Rodric
Williams to you and others on 13 November 2018), POL00111405 (email from
Rodric Williams to you and others on 20 November 2018), POL00042151 (email
from Rodric Williams to you and others on 21 November 2018), POL00111475
(email from Rodric Williams to you and others on 5 December 2018) and
POL00107162 (email chain between you and Rodric Williams on 4-6
December).
175.1. Please set out what involvement or oversight you had over POL’s
conduct of the Common Issues trial.
1711. I had limited involvement in the Common Issues trial. The steps I took in terms
of what I would consider to be involvement were:
a. I spoke to Jane MacLeod, Bond Dickinson, and David Cavender QC about
taking steps to correct POL’s “tone” in advance of the Common Issues trial.
b. I invited David Cavender QC and Andrew Parsons to attend the POL Board
meeting on 30 October 2018 to brief the Board on the litigation. I also had
a call with David Cavender QC on 29 October 2018. The relationship and
communications with the external lawyers were usually managed by Jane
MacLeod. However, as I mentioned in my email to the Board on 29 October
2018 (POL00103360) Jane’s father had died the previous week and she
had flown to Australia. I was therefore stepping in for Jane at this meeting.
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c. There were regular contingency planning meetings and Group Litigation
update meetings in the lead up to the Common Issues trial. I cannot recall
these meetings, but I can see from (POL00024158) that I was listed to
attend contingency planning meetings on 5 October 2018, 12 October
2018, 19 October 2018, 26 October 2018 and 2 November 2018, and
Group Litigation update meetings on 7 November 2018, 9 November 2018,
16 November 2018, 23 November 2018, and 30 November 2018.
d. On 17 November 2018, I attended a meeting with Kelly Tolhurst MP (the
BIS Minister with responsibility for postal affairs) and Alex Chisolm (the BIS
Permanent Secretary) to brief them on the Group Litigation. An annotated
copy of the briefing paper for the meeting is at (POL00111208) and a note
of the meeting is at (UKGI00008554).
1712. I can see from an email dated 1 November 2018 from Angela Van Den Bogerd
(POL00111281) that a planning meeting I was to attend on 2 November 2018
was cancelled as there had been no material updates since the POL Board
meeting on 30 October 2018. Angela reported that POL had now completed its
preparations for the Common Issues trial, and that it was now over to the legal
team, and principally David Cavender QC, to ensure that he was fully prepared
ahead of opening submissions on 7 November 2018. Aside from a call
scheduled with David Cavender QC for 2 November 2018, POL’s attention
would focus on making sure that POL’s 14 witnesses for the Common Issues
trial were fully supported and had everything they needed ahead of giving
evidence.
1713. I was not involved in the Common Issues trial once it started on 5 November
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2018, and I had no role in overseeing the Common Issues trial. It did not occur
to me that I should have any involvement or any oversight role. The trial
process was in the hands of experienced and highly regarded lawyers, who
were, as I understood it, well prepared and on top of the detail.
I was kept informed of the progress of the trial, as shown by the documents to
which the Inquiry has referred in Question 175:
a. (POL00117998) is an email chain about the opening submissions at the
Common Issues trial on 6 and 7 November 2018. On 6 and 7 November
2018, Rodric Williams sent a group of senior managers, including me,
bullet point summaries of the Claimants’ and POLs opening submissions.
On the evening of 7 November 2018, I sent an email to Rodric asking what
would happen if we thought that Fraser J had misunderstood or
misinterpreted or not read POL’s submissions properly. My question may
have been triggered by an observation in Rodric’s email in the chain at
23:09 on 7 November 2018 that there had been some confusion between
David Cavender QC and the Judge about how the clauses of the SPM
contracts which made SPMs liable for branch losses applied. Rodric
replied to me on 8 November 2018, stating that POL would have
opportunities to revisit the point during trial and could look to appeal if we
believed the Judge had got the issue wrong.
b. (POL00118001) is an email to me from Mark Underwood on 9 November
2018 containing a note that I could share with the POL Board which
summarised the events of the first week of the Common Issues Trial.
c. The Inquiry has referred to (POL00026954). This is not, as described in
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Question 175, an email from Rodric to me and others on 13 November
2018 but a POL GE agenda for a meeting on 12 November 2018. It is
possible that the Inquiry intended to refer to (POL00118002), which is an
update email from Rodric to me and others on 13 November 2018 in which
he summarised the evidence given by two of the lead Claimants, Pamela
Stubbs and Mohammad Sabir.
(POL00111405) is an email dated 20 November 2018 from Rodric to me
and others with a summary of Patrick Green QC’s cross-examination of
Angela.
(POL00042151) is another update email from Rodric to me and others,
dated 21 November 2018. It summarised the final day of Angela's evidence
and the evidence of the next three witnesses, Tim Dance, Helen Dickinson,
and Michael Shields.
(POL00107162) is an email chain on 4 and 5 December 2018, beginning
with an update from Rodric to myself and others with a summary of Patrick
Green QC’s closing submissions. Rodric reported that Patrick Green QC
had spent very little time on the main issues being tried, namely the terms
of the SPM contracts, and instead focussed on his overarching narrative
that POL’s relationship with SPMs was deeply unfair and biased towards
POL. The main risk, therefore, was that the Judge would ‘fill in the gaps”
in the Claimants’ analysis: David Cavender QC would look to address this
in his closing submissions. I replied on 5 December 2018 stating that this
was helpful and “more reassuring than of late”. I then asked Rodric what
he would write in addition to what Patrick Green QC had said in his closing
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submissions if he were the lawyer for the Claimants. Rodric responded
later that day with his thoughts:
“... if lwas the claimants’ lawyer, the points I would make following Patrick
Green QC’s closing would be:
We (i.e. the Claimant's) were able to air in court all of our concerns about
Post Office and how it behaved towards us;
- We also raised enough law to give creditability to our case;
Even if not a ‘slam dunk’, we have done enough to convince the Judge
that he should find a way through the law to come down on our side.
From that same perspective, the points I would make from the first day of
David Cavender QC’s closing could be:
Post Office is very sensitive about evidence which casts it in a bad light,
and is trying to tie the Judge's hands from using that evidence;
The Judge likes the "relational contract" concept, so may want to use that
to imply good faith concepts into the postmaster contracts; and
Post Office wants to make postmasters strictly liable for branch losses,
when the contracts’ words (or at least the pre-NT version) require proof of
fault, and they know that losses can be caused by things outside the
postmaster's control, e.g. bugs in Horizon or inaccurate Transaction
Corrections.
I hope that’s helpful, but please let me know if you would like me to expand
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on any points.”
g. (POL00111475) is an email on 5 December 2018 from Rodric to me and
others with an update on the first day of David Cavender QC’s closing
submissions. Rodric reported that David Cavender QC believed that the
Judge had understood POL’s case on the terms of the SPM contracts
which held SPMs liable for losses.
175.2. Please consider your email stating that Mr Williams’ email of 4 December
2018 was “more reassuring than of late”. To what were you comparing Mr
Williams’ email?
1715. I have read the email chain at (POL00107162) and the other documents the
Inquiry has referred to in Question 175 to attempt to refresh my memory. I
cannot recall now exactly what I had in mind when I wrote to Rodric Williams
on 5 December 2018 that his email on 4 December 2018, in relation to Patrick
Green QC’s closing submissions, was more reassuring than of late. However,
having re-read some of his earlier emails sent as summaries during the
Common Issues trial, I expect I found it more reassuring than, for example
(POL00042151), where Rodric explained why it could be thought that “our
witnesses have not been helpful" or "characterised as our witnesses being
defensive."
176. Please consider POL00021559 (minutes of POL Board meeting on 27
November 2018).
176.1. Please describe the update on the GLO Proceedings and the Common
Issues trial.
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1716. I attended the POL Board meeting on 27 November 2018. Section 7 of the
minutes (POL00021559) records an update by Jane MacLeod on the Group
Litigation, including the Common Issues trial and preparation for the Horizon
Issues trial. The Common Issues trial had not concluded at the time of the POL
Board meeting, as the barristers were due to give their closing submissions the
following week.
1717.1 do not recall what Jane said during the meeting, but I can see from the minutes
that the tone of Jane’s update is in some respects more pessimistic than the
feedback POL had received before the start of the Common Issues trial. The
minutes contain a number of references to POL making an appeal from Fraser
J’s judgment on the Common Issues, and that Jane anticipated that Fraser J
would criticise some of POL’s behaviour in his judgment, leading to adverse
publicity. I cannot recall any details of the criticisms that Jane anticipated
Fraser J would make in his judgment.
1718.1 should add that it is possible that I was given additional feedback on the
Common Issues trial at the Group Litigation update meetings scheduled for; 9
November 2018, 16 November 2018, 23 November 2018, and 30 November
2018 (see (POL00024158)). I cannot recall any of these meetings, and I have
not seen any notes of these meetings.
176.2. Did you have, or were you aware of, any concerns as to whether Fraser
J_was, or appeared to be, biased against POL in his handling of the GLO
Proceedings at this stage or earlier. If so, was this discussed at the Board?
1719. My information and knowledge about how Fraser J handled the trial, and the
earlier stages of the Group Litigation came to me in reports from and
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discussions with the legal team. I do not recall any concern that Fraser J was
biased against POL being communicated to me or to the POL Board, until after
POL received a draft copy of his judgment on the Common Issues in March
2019.
177. Please consider POL00006471 (Bond Dickinson note for Steering Group
Meeting on 28 November 2018).
177.1. Please explain to what extent, if at_all, you were involved in the
preparation and / or strategy for the deployment of expert evidence in the GLO
Proceedings.
1720. I was not involved in the preparation of, nor any strategy for, the deployment of
the expert IT evidence in the GLO Proceedings. At the time, I would not have
thought it possible for POL to have had a strategy in relation to the expert
evidence. I regarded Dr Robert Worden as being the specialist authority on the
IT issues, and I understood that he owed a duty to assist the Court.
1721. I was kept informed of the developing views of the two experts as they went
through the process of investigating Horizon and preparing their reports prior
to the Horizon Issues trial:
a. I attended the meeting of the Postmaster Litigation Sub-Committee on 24
September 2018. The minutes (POL00006757) record in section 4 that
POL’s expert’s view was that Horizon was a robust system which had some
“bugs”, but which did not have a material impact on the operation of the
system.
b. I attended the meeting of the POL Board on 25 September 2018. The
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minutes (POL00021557) record an update from Jane MacLeod that two
experts (one for each party) had been appointed to provide their view of
the Horizon system and had a series of questions to answer from the
Judge. In effect the Judge's decision would reflect the expert he believed.
I attended the meeting of the POL Board on 30 October 2018. The minutes
(POL00021558) record a briefing on the litigation from David Cavender QC
and Andrew Parsons from Bond Dickinson. Andrew Parsons gave an
update on the Horizon Issues trial. He reported that the Claimants’ IT
expert had found that Horizon was not a robust system, but this
assessment was based on identifying a large number of small problems
with the system, which POL’s expert, Dr Robert Worden, was confident
could be rebuffed.
I attended the meeting of the Postmaster Litigation Sub-Committee on 28
January 2019. The minutes (POL00006756) summarise the views of the
two experts on page 1. Jason Coyne was of the view that Horizon had
bugs, that there could have been more bugs, and that these bugs could
have caused the errors / losses in the Claimants’ branches. Dr Robert
Worden’s view, however, was that while there were bugs in the Horizon
system (as was the case with any IT system) it seemed improbable, given
the volume of transactions processed through the system, that these could
have caused the errors or losses in the branches.
I attended the meeting of the Postmaster Litigation Sub-Committee on 21
February 2019. The minutes (POL00006753) record on page 1 an update
from Anthony de Garr Robinson QC, who summarised the views of the
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experts as follows:
i. The Horizon Issues trial would focus on 15 questions covering three
core issues: whether Horizon was robust, the cause of shortfalls in
branches (including remote access) and miscellaneous issues.
ii. The key issue was robustness and “our view’ (I am not certain
whether this refers to POL or the legal team) was that it was critically
robust. The Claimants’ expert had identified system errors, but his
report lacked balance.
iii. POL was not seeking to prove that the system could not have been
improved. No-one had found a fundamental flaw in the system.
Where there were system issues, the systems and processes to
address these had worked well in practice. Several of the bugs
identified by the Claimants’ expert were not in fact system bugs and
several would not have affected branch accounts. Several bugs had
been triggered by an unusual combination of events. For the vast
majority of the time, Horizon was a reliable system.
iv. Jason Coyne argued that there could be thousands of undetected
bugs in Horizon.
v. Dr Robert Worden argued that there could not be a sufficient volume
of bugs to have generated the losses alleged by the Claimants. The
error rate was low when assessed against the number of users and
50 million transactions per week.
177.2, What were your views when you learnt of the content of Mr Worden’s
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report? Please set out any steps you or POL took to disclose the fact that Mr
Worden considered that there had been “672 bugs in Horizon over the last 18
years” to SPMs convicted on the basis of evidence generated by the Horizon
IT System.
1722. The Inquiry has referred me to (POL00006471), which is a Bond Dickinson
noting paper on Dr Robert Worden’s expert report for a Steering Group meeting
on 28 November 2018. Paragraph 3.1 of the document sets out what they
describe as Dr Worden’s “central conclusion’, namely, that Horizon was
reliable and extremely unlikely to be the cause of the Claimants’ shortfalls. He
had taken a quantitative or statistical approach to the existence of bugs, on the
basis that the question of the extent that Horizon contained bugs was a form of
risk analysis. The figure of 672 bugs appears in section 5 of the document:
through a statistical analysis, Dr Robert Worden had calculated that at the
absolute worst there had been 672 bugs in Horizon over the last 18 years. This
was based on a “worst case assumption” methodology. In Dr Robert Worden’s
view, this was not a large number. He had calculated that Horizon would have
needed to contain around 64,000 bugs before the Claimants could show that
their losses had been caused by the system.
1723. The document was prepared for the Steering Group. I do not recall the
document and have found no indication in disclosure that it was sent to me. An
email from Rob Houghton to Rodric Williams on 14 February 2019
(POL00107155) appears to contain a reference to a request by me for a copy
of Jason Coyne’s supplemental expert report dated 1 February 2019, which
dealt with Dr Robert Worden’s report at length. I cannot remember this request
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or whether I read Jason Coyne’s supplemental report.
1724. I understood, however, from the information I have set out above that it was
common ground between the experts that the Horizon system contained bugs.
The debate between the experts focussed on the extent of the bugs (including
potentially undetected bugs) and whether these could have caused the losses
in the Claimants’ branches.
1725. I have a recollection of being aware of a suggestion that Horizon contained
hundreds of bugs, but also of Dr Robert Worden’s view that there would have
needed to have been around 64,000 bugs to have caused the Claimants’
losses. I spoke to Rob Houghton because I wanted to understand the
argument. Rob’s view was that Dr Robert Worden’s analysis was a valid way
of approaching the issue and proved a high reliability threshold for Horizon. He
added that the key issue would be whether the Horizon system “self-reported”
the bugs. I understood this to mean that it was important that bugs were
identified by the Horizon system’s own processes.
1726. I do not recall receiving any legal advice that POL should consider whether Dr
Robert Worden’s views on the existence of bugs in Horizon should be disclosed
to convicted SPMs. If I had been given such advice, I would have ensured that
POL acted upon it.
178. Please consider POL00103372 (email from Jane MacLeod to the Board on
21 December 2018) and POL00103373 (attachment to prior email). Were there
any concerns regarding Fraser J’s impartiality at this stage?
1727. I do not recall any concerns about Fraser J’s impartiality, in the sense of bias
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against POL, until POL received the draft of his judgment in the Common
Issues trial in March 2019.
Personal circumstances at the time
1728. My husband was taken seriously ill over Christmas 2018 I stepped back from
my duties at POL from mid-January 2019 to be with him and then assist with
his care. I had handed Tim Parker my resignation in November 2018 (see
Question 184) and by the time I stepped back in January, he had identified Al
Cameron as my likely successor. Tim wanted to appoint him as Acting CEO
and was trying to get Al's appointment ratified by BEIS. Al was my de facto
deputy in any event. I continued to be involved at POL when I could but when
I was unavailable due to my husband's illness, Al took over my role and
responsibilities.
179 Please consider POL00006756 (minutes of the Postmaster Litigation
Subcommittee on 28 January 2019).
179.1 Please describe the discussion on the preparation for the Horizon Issues
trial.
1729. I am asked to look at the minutes of the Postmaster Litigation Sub-Committee
on 28 January 2019 (POL00006756). This is a meeting I attended. It lasted for
one hour. The minutes record discussion of:
a. The date on which the trial would start;
b. The importance of expert evidence;
c. The Claimants’ expert evidence, and that some “counter evidence”
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would be required from Fujitsu; and
d. Further advice would be sought from Leading Counsel.
1730. The proposed agenda for the meeting is at (POL00042244), sent by Jane
MacLeod on 18 January 2019. In relation to the Horizon Issues Trial,
Jane wrote:
“— at present we don’t have another scheduled Litigation Committee
meeting before the commencement of the Horizon trial on 11 March.
We believe it would make sense to schedule an additional committee
meeting for the second half of February by which time the final
experts’ reports will have been filed, and therefore our QC — Tony de
Garr Robinson, would be able to discuss the trial, the reports of each
expert and provide an assessment of the issues (which will be
predominantly fact based and therefore there will be more emphasis
at the trial on the credibility of the expert witnesses and the findings in
their reports).”
1731. There was a POL Board meeting on 23 January 2019 which I did not attend
(POL00021560). From the minutes, I understand that there was no discussion
of the Horizon Issues Trial. That was an additional meeting, rather than a
regular POL Board meeting, convened specifically to discuss back-office
transformation.
1732. Jane emailed the POL Board on 25 January 2019 saying that there was not yet
any indication of when the embargoed judgment would be received
(POL00118020).
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1733. In parallel to preparation for the Horizon Issues Trial, there was internal
discussion about mediation with the Claimants, which the Claimants wanted to
defer until after that trial (POL00042253).
1734. I have not identified, in the documents disclosed by the Inquiry, any internal
emails regarding evidence, or other related issues, in the lead up to this
Postmaster Litigation Sub-Committee meeting. I do not know whether the
emails exist and have not yet been disclosed, or whether there were none.
1735. I have no independent recollection of the meeting other than from the
minutes and the documents I describe above.
179.2 Were you aware of witness evidence provided by Fujitsu employees on
the issue of remote access? What were you views on the same?
1736. Following the POL Board meeting on 28 January 2019, at which it was
discussed that some of the Claimants’ expert evidence might necessitate
responsive evidence from Fujitsu, I was included in a small number of emails
which related to this evidence. I did not read the witness evidence, as I have
described elsewhere in this statement.
1737. The first was on 14 February 2019, where Jane set out the witness timetable
for the trial, including “Richard Roll (formerly of Fujitsu and the source of the
remote access allegations)” (POL00118022). A reply to that email from Rodric
mentioned two witness statements from “Fujitsu’s Torstein Godseth; 2x from
Fujitsu’s Steve Parker’ (POL00118023).
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1738. I was aware that some new evidence had emerged from the claimants, as I
replied saying "You flagged on Monday ... the supplementary statement from
Coyne contained ‘new news”. Although I had stepped back because of my
husband's illness and because I was due shortly to leave the business, I
continued to support and challenge as much as possible. The email exchange
at (POL00111672) added to a discussion regarding the claimants’ evidence.
1739. Looking back at those email chains, I see that I was made aware that Richard
Roll, Torstein Godseth and Steve Parker were giving evidence, but there is
nothing there to suggest I was aware of the detail of the evidence they would
give.
1740. Another email chain begins with Rob asking Rodric for a copy of his comments
on Jason Coyne’s Supplemental Report, saying that Al and I wanted copies of
it (POL00107155). This was also on 14 February 2019. I have not been able
to find an email to show that these comments were sent to me.
1741. On 20 February 2019, I received an email from Jane which had an attachment
called “DRAFT HIT Risk Assessment table 20-9-2019.docx”. This is said to be
a draft risk assessment prepared by the external legal team “of the likelihood /
impact of the different outcomes on the questions being posed through the
Horizon Issues Trial which we can discuss at the Board sub-Committee call
tomorrow” (POL00028045). Given the title and date of the document, I believe
this attachment was the version of the Bond Dickinson Risk Assessment Table
dated 18 February 2019 (POL00028071). This contained some analysis of the
expert evidence which would be heard at trial. Page 4 of that document
analyses the evidence on the Remote Access issue.
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1742. I do not recall whether I read this attachment at the time, nor what my views
were if I did.
179.3 Had you reviewed or been briefed on the evidence by the Claimants?
1743. I was aware of some of the evidence, but I do not now recall being briefed on
it or recall reviewing any of it.
179.4 To what extent, if at all, did POL investigate and / or consider disclosing
any new issues raised within the evidence it had received to SPMs convicted
on the basis of data generated by Horizon?
1744. I did not know the detail of the extent to which POL was investigating and / or
considering disclosure of any new issues raised within the evidence it had
received, to SPMs who had been convicted on the basis of data generated by
Horizon. I would have assumed that something of that nature would have been
handled by POL’s GC, Jane MacLeod, with the assistance of Rodric Williams.
In any event, at this time, matters of that nature were on a day-to-day basis
under the leadership of Tim Parker and Al Cameron, and I had taken a step
back. As above, I contributed with questions when I could, but it would have
been inappropriate to take a lead at this stage.
180 Please consider POL00006756 (minutes of the POL Board meeting on 29
January 2019). Please describe the update on the GLO Proceedings.
1745. (POL00006756) are the minutes of a meeting of the Postmaster Litigation Sub-
Committee on 28 January 2019 (not of the full POL Board meeting, which was
on 29 January). At item 2 it is noted that Jane MacLeod had reported that the
Common Issues trial judgment had not yet been received and that it was not
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known when it would be published. An update was given in relation to the
Horizon trial, as follows:
"The Horizon trial would start on 11 March 2019. The trial would be largely
decided on expert evidence. The claimants’ side have posted some witness
evidence. We had some issues with the evidence submitted by the claimants’
expert witness and would like Fujitsu to be able to submit some counter
evidence but would need permission to serve an additional witness statement.
The main reports of the expert witnesses had already been filed and
supplementary reports were due to be filed at the end of the week. The pre-
trial review would be held on 22"4 February 2019.
A further briefing from the QCs on their view of the evidence and a further
briefing for BEIS/UKGI was requested.
The claimants’ position was that the Horizon system had bugs, that there could
have been more bugs and these bugs could have caused the errors/osses in
the claimants’ branches.
Our expert witness was saying that there were bugs in the Horizon system as
would always be the case in IT systems, but given the volume of the
transactions through the system it did not seem probable that these could have
caused the errors/losses in these branches."
An update was also given on the breach trial and the mediation.
1746. The minutes of the full POL Board meeting on 29 January 2019 are at pages 3
to 14 of (POL00026934).
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1747. Item 12 of the minutes is headed "Postmaster Litigation (Verbal). Jane would
have given an oral update to the Board of the matters discussed at the previous
day's Postmaster Litigation Sub-Committee meeting. This is noted as follows:
“Jane MacLeod reported that the judgement on the common issues
trial had not yet been issued. A Case Conference would be taking on
31st January 2019 but it was difficult to progress matters further in
advance of the judgement. Our communications had been prepared.
“Conversations had been taking place about mediation, which was a
standard request by the court, and we were considering our “red line”
issues.”
1748. There was also mention of the litigation in respect of POL’s financial position
(see footnote 1 on page 4 of the minutes).
1749. I have not seen my CEO Report for this meeting in documents disclosed by the
Inquiry and so have not been able to consider this document.
1750. The minutes are followed by an email which Jane sent on 31 January 2019,
which said “As flagged at the Board on Tuesday, we had a Case Management
Conference this morning. At the end of the hearing, the Judge advised that the
formal judgement in the Common Issues trial will not be handed down before
the end of February” (POL00103381).
1751. I have no recollection of the meeting on 29 January 2019 which goes beyond
what is in these documents.
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181 Please consider POL00111672 (your email chain with Jane MacLeod on 14
February 2019).
181.1 Please explain why Rob Houghton was being brought into the
preparation for Horizon Issues.
1752. On 19 November 2018, Jane MacLeod emailed Rob Houghton, POL’s Chief
Information Officer (who came to the role in 2016). This followed the draft
evidence of POL’s expert witness being prepared, and WBD requesting that
somebody from the POL IT team review it. Jane approached Rob on the basis
that it would likely be “you and Catherine” to conduct that review. Rob replied
“Yep definitely and FJ??” which I understand to be confirmation that he and
Catherine would conduct the review, and that he was questioning whether
Fujitsu should also see the draft document. Jane replied (POL00042147):
“FJ will be asked to review relevant sections of the report — the legal team
are in the process of doing this at the moment. FJ have filed witness
statements already, but probably can’t comment on the matters that we are
concerned about. At this stage, I wanted to give you a heads up on the
challenge. The legal team will be in touch about solutions.”
1753. Jane went on to discuss how POL might provide evidence of the commercial
context from the relevant time, given that most of the team currently in roles
with responsibility for commercial contracts had not been in post for more than
two and a half years.
1754. Jane then forwarded the discussion to Andrew Parsons, Mark Underwood and
Rodric Williams. Rodric said he would speak to Andrew in the morning. I was
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not involved in this discussion.
1755. A month later, Rodric sent the reports of Jason Coyne and Dr Robert Worden
to Rob. The date of Dr Robert Worden’s report, finalised after the 19 November
2018 correspondence with Rob, was 7 December 2018 (POL00119590).
1756. Rob continued to assist Rodric in February 2019, providing notes on Fujitsu's
commentary on Jason Coyne’s supplementary report (POL00107155).
1757. On 14 February 2019, Jane sent an update on the litigation to Al Cameron and
me (copied to a number of colleagues, including Rob) (POL00111672).
Amongst other things, the update included a rough timetable for the Horizon
Issues trial, the Judge’s view that lan Henderson’s cross-examination should
not last more than one hour, and a summary of the position on expert evidence.
Jane said that “Rob has also commented on the issues raised, and will be
meeting with the Counsel team on Monday to assist with strategic positioning”.
1758. I replied on 14 February 2019, thanking Jane “for expediting Rob’s meeting
with the QC”. From the email, it is apparent that I had spoken to Rob earlier
that week. I wrote that I had said to him that whilst he could not (and must not)
steer legal strategy, he should understand and be comfortable with the
approach being taken and feel that he has had the opportunity to feed in any
other thoughts or challenges, whether or not that is “welcome news to our legal
advisers” because “it’s important in two respects: managing internal board
confidence and secondly, because he knows what he’s talking about”. I was
encouraging Rob to be robust and honest with our legal team because I trusted
his knowledge and judgment, and knew that the legal team would only benefit
from such input.
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1759. Rob was CIO. He was well qualified, being a computer scientist. He also had
the confidence of the POL Board and therefore his involvement gave
reassurance to the POL Board that POL was preparing to do as well as it might
in the litigation. Additionally, he was familiar with the GLO as he was one of the
GE members of the Steering Group.
181.2 In relation to your comment “can we talk about how we are preparing our
witnesses”, please explain what type of preparation you envisaged or
expected.
1760. I am asked specifically about my fourth numbered paragraph in my email of 14
February 2019: “can we talk about how we are preparing our witnesses”
(POL00111672).
1761. This is not a discussion I remember. I do not think that I was referring to the
content of the evidence that the witnesses would give; the statements had
already been prepared and exchanged with the Claimants. As was the case
throughout the litigation, I had had very limited involvement in the detail of our
evidence, because I was not an expert in those matters. I also knew that we
were not to influence witnesses in any way. I believe I was talking about the
welfare of the witnesses.
181.3 Please describe any conversation you had with Ms McLeod on these
issues.
1762. In response to my email, which raised a number of questions, Jane replied
(before going on to give an answer ‘on a couple of points’) “It would probably
be better to discuss this face to face as there are a number of nuances”. She
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asked if I had any time tomorrow (i.e. 15 February 2019).
1763. I do not have any recollection of meeting Jane on that day and cannot see a
reply to the email. That is perhaps no surprise, since Jane sent her email to me
at 10:30pm. It is likely that I did speak with her. I cannot be more specific,
except to say that we are likely to have discussed the issues raised in each of
our emails of 14 February 2019.
182 Please consider POL00006753 (minutes of the meeting of the Group
Litigation Subcommittee _on 21 February 2019) and POL00111694 (emails
between Tom Cooper and you on 21 February 2019).
182.1 Please describe the content of the discussion on 21 February 2019
concerning the GLO Proceedings and any legal advice received.
1764. On 20 February 2019, in advance of the meeting, Jane sent an email with a
“draft risk assessment prepared by our external legal team of the
likelihood/impact of the different outcomes on the questions being posed
through the Horizon Issues Trial which we can discuss at the Board sub-
Committee call tomorrow’ (POL00028045).
1765. That attachment was prepared by Bond Dickinson. The Inquiry has disclosed
a draft version dated two days earlier, which I have assumed did not change
substantively in the final version. It “summarises our views on the strength of
the evidence for the Horizon issues so that Post Office may make decisions
about how to mitigate any related risks. By its very nature it is a simplistic
assessment of over 1,200 pages of expert reports and witness statements”
(POL00028071). The advice went on to note:
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“_..this trial turns heavily on the performance of witnesses in giving
evidence. Given that witnesses are being asked to comment on
intricate points within a complex topic, sometimes going back more
than a decade and sometimes being asked to speculate on unusual
scenarios, there is a real risk that any one of either party’s witnesses
may not come up to proof. The risk assessment will therefore need to
be kept under review as the trial progresses.”
1766. A second Bond Dickinson document prepared for the meeting is headed
“Speaking note” (POL00006496). It is a detailed twelve-page document. From
a note on the last page, addressed to “Tony’, it appears that Bond Dickinson
prepared this note for Anthony de Garr Robinson QC to use when addressing
the Postmaster Litigation Sub-Committee.
1767. The minutes of the meeting on 21 February 2019 (POL00006753) state that
Anthony de Garr Robinson QC “briefed the Sub-Committee on the Horizon
Trial”. The minutes broadly follow the shape of the twelve page speaking note,
but of course, the minutes are less detailed. I therefore think it likely that, at the
very least, Anthony de Garr Robinson QC said everything which is in the
speaking note.
1768. I do not believe that we had a copy of the speaking note. I do not remember
this meeting and defer to the documents I identify above as to what was said
and what legal advice was given.
1769. After the meeting, I exchanged emails with Tom Cooper, who asked about
POL’s press strategy for managing press reporting where journalists were
“overstating the evidence re Horizon”. Tom wanted to know what POL could do
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proactively to balance what he saw/anticipated as difficult coverage for POL
and Post Offices generally. I replied to Tom saying that we should not be
aggressive but we should be robust, doing our best ‘to minimise coverage” by
not engaging in public debates unless ‘circumstances dictate”
(POL00111694). I brought Mark Davies into the conversation in case he had a
different view or anything to add.
182.2 What were your views on the various issues raised, in particular (a) the
system issues on which Mr Coyne had opined (b) the alleged disclosure failings
by POL and (c) the issue of remote access?
1770. I trusted the advice of Dr Robert Worden as the IT Expert and Anthony de Garr
Robinson QC and was led by that. I do not recall disagreeing with this advice.
182.3 Were there any concerns regarding Fraser J’s partiality at this stage?
1771. At 4:21pm on 11 February 2019, Andrew Parsons emailed Rodric Williams
commenting on a message received from Fraser J that morning, that the
Claimants had asked that the CMC on 12 February 2019 start two hours late,
at 12:00pm instead of 10:00am. Fraser J delayed the hearing by one hour. The
request had been made by Leading Counsel for the Claimants, Patrick Green
QC. Andrew drew conclusions from the fact that Fraser J delayed the hearing
by one hour, but not two as requested: “This does give me a little more
confidence in Fraser. He clearly must have recognised at the last hearing that
Green was playing games. This plays into the theory that Fraser does see what
is going on but is going to give the Cs maximum leniency.” Rod replied that this
had “crossed my mind too”.
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1772. I am not sure that this email between Rod and Andrew reaches the threshold
of a discussion of Fraser J’s “partiality”. In any event, I am not aware of anything
from any POL Board directors or GE members discussing Fraser J’s
impartiality at this stage.
183. Please consider POL00103409 (email from Jane MacLeod to you on 8
March 2019) and POL00103416 (email from Jane MacLeod on 11 March 2019).
183.1. What were your views of the Common Issues judgment and POL’s
handling of the litigation?
1773. I did not read the Common Issues judgment at the time. I was provided with
David Cavender QC’s note summarising the judgment and giving advice on
next steps, by email from Jane MacLeod on 11 March 2019 (POL00103416). I
do not recall exactly when I read that summary, but it is most likely that I did so
before joining the call on the morning of 12 March 2019. It would be very
unusual for me to join a meeting without at least familiarising myself with the
key papers.
1774. I see from looking at emails disclosed by the Inquiry that we received the
judgment under embargo on the morning of 8 March 2019, following which
Jane sent round a very short bullet point summary of the decision with the
caveat that she has “not yet read it completely or fully understood all the
arguments”. Tim Parker noted that it was “very disappointing: we now need to
look at the detail’ (POL00103411). I received that chain of emails.
1775. I have not seen any emails disclosed by the Inquiry by which I was sent a copy
of the judgment, and nor do I recall one.
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1776. I was largely not present in the business at this time because of my husband’s
health, hand in hand with the fact that Al Cameron was very soon to be formally
appointed as Acting CEO (and was already doing a very capable job as
unofficial interim CEO, as he was my deputy). Al was deputising for me whilst
I was absent. For example, when a press statement was being prepared in
respect of the litigation, Tim and Al agreed that it should be in Tim’s name
because “Paula is off the set” (POL00103426).
1777. On the afternoon of 10 March 2019, Jane emailed Andrew Parsons saying that
she thought the POL Board should have a second opinion on the merits of any
appeal, suggesting that other counsel should be instructed (POL00023817).
1778. That day, David Cavender QC wrote a note on the prospects of success in an
appeal (POL00023878).
1779. Also, that evening, Andrew Parsons sent an “Initial summary of the judgment”
by email to Jane, Mark Underwood, and Rodric Williams (POL00022685).
1780. The next day, 11 March 2019, Jane sent an email to the POL Board, which I
received. David Cavender QC’s note dated 10 March 2019 was attached.
These were in preparation for a call at 10:30am on 12 March 2019.
1781. I joined that call, but I was late. I recall not wanting to express a view on matters
discussed on the call because I knew I was not sufficiently up to speed on the
issues.
183.2. Please explain the legal advice you received on how to respond to the
Common Issues judgment.
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1782. I personally received very limited legal advice in respect of the Common Issues
judgment because I was not properly involved in POL’s response. For example,
I have no recollection of seeing the “Observations” of Lord Neuberger, dated
14 March 2019 (POL00006398) which concerned a possible recusal
application.
1783. Jane MacLeod prepared a paper for the Board, dated 18 March 2019, which
was marked as being subject to legal privilege (POL00006700). It called for the
Board to consider four matters:
Should we appeal the Common Issues Judgment?
Why would we consider an application for the Judge to recuse
himself?
What are the risks & benefits of such a proposal?
Should we consider changing our legal advisers?”
1784. The paper represents the legal team’s early view, and it is said that a “more
considered view will be discussed at the Board meeting on Monday 25 March”
as to the merits of appealing.
1785. I do not recall seeing this document at the time either.
1786. I was on the call on 12 March 2019 with David Cavender QC and the POL
Board, but my involvement was limited.
184. Please state when you notified POL of your intention to resign. Please
explain to what extent you were involved in matters relevant to the Inquiry’s
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terms of reference following the hand down of the Common Issues judgment.
1787. I resigned by way of a handwritten letter dated 6 November 2018.
1788. Tim Parker and I had had a conversation early in 2018 about what my thoughts
were regarding future plans. I had been approached about new jobs for many
months, and had had various conversations with other organisations. I
resigned when I had secured roles which I wanted: non-executive Chair at
Imperial College Healthcare Trust, and NED at the Cabinet Office.
1789. The Common Issues judgment was handed down on 15 March 2019. I am
asked by the Inquiry what involvement I had in matters relevant to the Inquiry’s
terms of reference after that date. I had very limited involvement in such
matters. For example, I received an email from Jane MacLeod in respect of the
recusal application on 3 April 2019, after the argument had been heard that
day (POL00103484), confirming that the Judge had reserved his decision. I did
not attend the next POL Board meeting on 30 April 2019 (POL00104219).
1790. Al Cameron became interim CEO on 5 April 2019. He had already been
deputising for me, and the Chairman had treated Al as interim CEO for some
time, when it was obvious that I was not going to be reliably or regularly around.
This situation could only be formally announced once Tim had received
clearance from the Secretary of State.
185. Please set out whether you consider POL’s approach to (a) reviewing past
convictions and / or disclosing information regarding the integrity of Horizon
and (b) the GLO Proceedings was appropriate. Please provide reasons for your
answers.
Page 767 of 861
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1791. I do not know whether POL’s approach to reviewing past convictions and
disclosing information regarding the integrity of Horizon and its approach to the
GLO Proceedings was appropriate. It seems to me that this issue engages
questions of law and the professional judgment of the firms and individual
lawyers who acted for POL. There will be others who are far better qualified
and informed than I am to answer these questions.
186. In so far as you relied on legal advice, do you consider the advice you
received to have been appropriate. If not, please identify (a) the specific parts
of the advice you consider to be inappropriate and (b) why you believe it to be
inappropriate.
1792. My view at the time was that it was appropriate for POL to rely on the advice it
received from its lawyers. I understood that Brian Altman QC and Cartwright
King were overseeing issues arising from past prosecutions, and that POL was
cooperating with the CCRC. POL took advice from Linklaters, by reputation
one of the best law firms in London, on the terms of the SPM contract. We
instructed Bond Dickinson and two highly respected QCs to act for POL in the
Group Litigation. As I have mentioned above, one of the key roles of the
management of a business engaged in high value litigation is to engage
suitability competent and qualified legal advisors. That is what I believed POL
had done.
1793. However, I do not feel I have the expertise to say whether the legal advice POL
relied upon was inappropriate.
187. Insofar as it is not already addressed in response to earlier questions
within this request, please set out in detail discussions that you had with
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Fujitsu regarding (a) BEDs in the Horizon IT system (b) a lack of integrity in the
same or (c) complaints addressing BEDs or concerns with integrity. You
should identify which individuals you spoke to and your views as to the level
of information that you were being provided with.
1794. I set out below the documents which contain, or may refer to, discussions I had
with Fujitsu about potential faults in the system and SPM complaints. From
recollection, the only individuals from Fujitsu that I spoke to, certainly with any
regularity, were Duncan Tait (the CEO of Fujitsu Europe) and Simon Blagden
(the Chairman of Fujitsu Europe). Our discussions were, generally, high-level
discussions about the commercial relationship between POL and Fujitsu, and
operational issues that had been escalated to me within POL. As the
documents I summarise below record, one of the issues we discussed was the
Second Sight investigation, including the allegations made by SPMs that
Horizon was at fault:
a. (FUJ00168538) is an email from Stephen Long of Fujitsu to Duncan Tait
on 22 October 2012 which contains a speaking note for Duncan Tait for a
call with Sue Barton. One of the bullet points mentions the ongoing review
by Second Sight “as part of Paula’s attempt to quash (once and for all) the
class action taken being taken by about 70 sub-postmasters. We have
been impacted by various media reports quoting sub-postmasters, some
of whom are blaming Horizon for their financial irregularities”. This email
contains Stephen Long’s summary of my objectives in engaging Second
Sight and I very much doubt that the word “quash” came from me. I did not
meet Stephen Long and "quash" is not a word I would have used in this
Page 769 of 861
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context. I hoped, by carrying out the Second Sight review, that SPMs would
be reassured, including those who had made allegations about Horizon.
On 10 December 2012, Simon Blagden, the Chairman of Fujitsu Europe,
informed two Fujitsu employees that he was meeting me for a festive drink
and asked whether there were any key issues and anything that he should
raise with me: (FUJ00174556). He received a reply from James Davidson
in the same URN that “one other key thing to note is that we are supporting
Post Office with their forensic’ audit through a company called second
Sight. This is all related to allegations of systems issues relating to the old
horizon [sic] system and fraud prosecutions. It is important to note that no
issues have been identified and previous allegations have been tested in
court and not substantiated”.
(FUJ00174662) is a Fujitsu briefing note for a meeting between me and
Duncan Tait on 10 June 2013. It states at point (6) that the Second Sight
forensic due diligence was an issue that might arise. The note stated that
a number of queries had been raised, all of which had been answered and
no irregularities identified. One allegation that was proving more
challenging related to a suggestion that alterations could be made from
Fujitsu premises to the branch databases holding sub-postmaster
balances. I note that this seems to have been a reference to the claims
made to Second Sight by Michael Rudkin about what he had seen at
Fujitsu’s facility in Bracknell. The note went on that Fujitsu had been asked
to provide further details relating to system controls and access and audit
records for balance corrections. (FUJ00168649) is a Fujitsu readout from
Page 770 of 861
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the meeting. It does not mention the Second Sight review.
(FUJ00174708) is a Fujitsu readout of a meeting between me and Duncan
Tait on 4 July 2013. The purpose of this meeting was to discuss the role of
Horizon in POL’s future strategy. The note records that Duncan shared the
contents of his brief with me, including that Horizon was an invested and
stable platform and that “Second sight had shown it to be safe, secure”.
The note records that there was quite a lot of discussion, and that I had
said “that all sounds good by [sic] why do my team tell me that working new
reference data through the system takes a long time and the platform is
not agile”. I remember this conversation. My comment was not to do with
BEDs or lack of integrity, but with the cumbersome way in which price
changes had to be fed into the system.
On 26 July 2016, Jane MacLeod emailed a number of senior POL
managers following a briefing to the GE about the progress of the litigation:
(POL00030006). During the briefing she had commented in particular on
the remote access issue. I had suggested that I speak to Duncan Tait, and
Jane set out in her email her suggestions for what I would say:
I should alert him to the fact and timing of POL’s letter in response to
Freeths, which would address remote access.
I should note that the question of remote access was still a live issue
and a major concern to the Claimants.
I should note the work being undertaken by Deloitte to review access
rights and controls.
Page 771 of 861
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iv. I should express the desire that Fujitsu worked constructively with
Deloitte.
v. Finally, I should flag that if the Deloitte work uncovers a different
position from that which POL and Fujitsu had stated publicly for years,
we would need to consider how to manage the impact, since the
outcome of the work would become public.
f. I have no recollection of whether I in fact spoke to Duncan Tait about these
issues. I can see from (PVEN00000418) that I had a meeting with Simon
Blagden on 17 October 2016, but I am very doubtful that we discussed the
remote access issue: this was an issue that I would have raised with the
CEO.
g. (FUJ00083833) is an internal Fujitsu email chain on 17 December 2018.
Matthew Lenton asked Christopher Jay to forward copies of the Fujitsu
witness statements from the GLO Proceedings to Graham Goulden (a
Fujitsu Public Relations Manager). Matthew Lenton stated that this action
appeared to result from a recent meeting between me and Duncan Tait. I
have no recollection of this discussion or its connection to Fujitsu’s witness
statements. It is possible that the email relates to a discussion referred to
in an email from Ben Foat to the Board on 3 October 2019 (POL00006740).
Ben Foat stated that I had flagged to Duncan Tait a serious concern about
the fragility of Fujitsu’s witness statements, which had either been
disproved or had changed.
Page 772 of 861
WITN01020100
1795. The Inquiry has asked me to provide my views on the information I was given.
Whilst I raised the SPMs’ allegations about the Horizon system with Duncan
Tait and Simon Blagden, as these were serious concerns, I did not engage at
a detailed level because I knew that technical conversations were taking place
from 2012 onwards — following the engagement of Second Sight — between the
POL IT staff and the Fujitsu IT specialists who operated Horizon. The detailed
workings of the Horizon system were not within my knowledge or expertise,
and I do not believe I could have had a useful discussion with Fujitsu on
technical matters.
1796. The emails set out above accord with my recollection that both Simon Blagden
and Duncan Tait assured me that the Horizon system was safe and secure and
not at fault. In this context, I also refer to the conversation I had with Duncan
Tait about remote access during which he assured me that the system was like
“Fort Knox” (see paragraph 1299 Error! Reference source not found.above).
1797. Neither Simon Blagden nor Duncan Tait told me that Fujitsu knew that Horizon
contained a large number of bugs. Duncan told me during a conversation on
13 April 2021 that Horizon had contained lots of bugs in 1995, although this
was no different to any computer system, and the number of bugs reduced over
time: see my note of the conversation at (PVEN00000386). That conversation
took place after I had left POL, and after Duncan had left Fujitsu.
1798. Clearly, reassurances by Fujitsu that the Horizon system was safe were wrong,
although I cannot say any more than that.
188. To what extent, if any, do you consider Fujitsu to be responsible for the
matters that led to the issues which have resulted in the establishment of this
Page 773 of 861
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statutory Inquiry?
1799. I understand why this question arises. Ultimately, Fujitsu designed and
operated the Horizon system, which has been found to have been at fault.
However, I would need to know a great deal more than I do about the technical
details of the system, Fujitsu’s management of the system, and the information
about the system that Fujitsu provided to POL, together with the impact of any
failings by Fujitsu before I could make any useful observation about the
responsibility of Fujitsu for the issues which led to this Inquiry.
GENERAL
1800. I have been asked to reflect on my time at POL and to set out whether there is
anything I would have handled differently, with hindsight. I have also been
asked if there is anything further relevant to the Inquiry's terms of reference of
which I think the Chair should be aware. I am keen to answer these questions
in as fulla manner as possible in order to assist the Inquiry.
1801. As a result of my commitment to this statement and to the work of the Inquiry,
which has been my priority, I have had much to consider. With the benefit of
hindsight, there are many things I and the Post Office should have done
differently. I am now reflecting with care on these matters and I will expand
upon them and answer them as fully as possible when I give my evidence to
the Inquiry in May. Those reflections will demonstrate my deep remorse. They
will set out the lessons I have since learnt.
1802. My intention was always to do my best and to try to get to the bottom of the
issues that were raised with me. I am genuinely sorry I was not able to do so.
Page 774 of 861
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I finish this statement by repeating my apologies to the subpostmasters and
their families and to all who have suffered so much from this terrible
miscarriage of justice. Their lives were torn apart by being wrongly accused
and wrongly prosecuted as a result of the Horizon system. I am truly sorry and
will so for the rest of my life.
Statement of Truth
I believe the content of this statement to be true.
08 March 2024
Dated:
Page 775 of 861
Index to Witness Statement of Paula Vennells
POL00043805
Post Office Organogram
Presentation
POL-0065551
FUJ00157278
High Level Blueprint - Cheque
Acceptance and Cheque issue
- End-To-End Operational
Review V2.0.
POINQ0163472F
WITNO9010100
First Witness Statement of Lynn
Hobbs) - WITNO901 -
WITNO09010100
WITNO9010100
POL00105417
Note re Post Office Ltd 2008/2009
Objectives and supporting
papers re compliance,
conformance, losses and debt
POL-0104525
POL00006123
Letter template from Lynn P Hobbs
to Subpostmaster RE: The
Post Office branch standards
booklet
viso0007191
POL00021422
Risk and Compliance Committee
Minutes of 26/03/2008
POL-0018052
POLO0005580
Letter from Lynn P Hobbs to
colleague re Post Office
Branch Standards booklet
VIS00006648
POL00005872
Email from CN Marianne Burges to
Branch Standards re:
Branch standards
VIS00006940
POL00021496
Meeting Minutes: minutes of the
Board meeting held on 21st
January 2008
POL0000029
10.
POL00021497
Meeting minutes: Board meeting
minutes held on 20th October
2008
POL0000030
11.
POL00021498
Meeting minutes: minutes for Board
meeting held on 19th January
2009
POLO0000031
12.
RMG00000074
Royal Mail Holdings ple - Audit &
Risk Committee
VIS00009933
13.
POL00031322
PO Risk & Compliance Committee
Report
POL-0028224
Page 776 of 861
WITN01020100
14.
POL00000168
Terms of Reference of the Post
Office Risk & Compliance
Committee (Approved July
2016)
VIS00001142
15.
POL00026973
Collection of documents in relation
to Post Office audit, risk and
compliance sub-committee
POL-0023614
16.
POL00095532
Operations functional report -
POLB(09)04 dated
01/01/2009.
POL-0095115
17.
RMG00000029
Minutes: Royal Mail Holdings plc
Minutes of Board of Directors
meeting of 06/02/2007
VIS00007437
18.
POL00090428
Annex to Second Supplement
Agreement
POL-0087397
19.
FUJ00118186
POCL and ICL Pathway 'Third
Supplemental Agreement
POINQ0124350F
20.
POL00041564
Bankruptcy, prosecution and
disrupted livelihoods -
Postmasters tell their story;
reported by Rebecca Thomson
- Article
POL-0038046
21.
POL00021486
POL Board Minutes
POL0000019
22.
POL00021421
Risk and Compliance Committee
Minutes of 06/09/2006
POL-0018051
23.
WITN08390100
First Witness Statement of John
Scott
WITN08390100
24.
POLO0030800
RMG Policy - Prosecution (S3)
Version 3.0
POL-0027282
25.
POLO0030580
Post Office Ltd - Security Policy:
Fraud Investigation and
Prosecution Policy v2
POL-0027062
26.
POL00030578
$02 Royal Mail Group Criminal
Investigation and Prosecution
Policy December 2007
POL-0027060
27.
POL00114930
Email from Michele Graves to
Valerie Stanley Re: Letter from
BERR Re challenge to horizon
integrity
POL-0113918
Page 777 of 861
WITN01020100
28.
POL00027890
Letter from Robert Porteous to Alan
Cook (POL) RE: Instructions
from Pat McFadden to look into
Rebecca Thomson's Horizon
investigation (Reporter-
Computer Weekly)
POL-0024531
29.
POL00112816
PO Group Litigation: Judgment No.
6 "Horizon issues" before Mr
Justice Fraser.
POL-0110233
30.
POL00030241
Email from Brian Trotter to Sandra
MacKay re Callendar Square
FAD 160868
POL-0026723
31.
WITN04650100
WITN04650100 - Gary David
Blackburn
WITN04650100
32.
WITN04640100
WITN04640100 - Shaun Turner
WITN04640100
33.
FUJ00121071
Email chain from lan Oakley to
Gareth Jenkins, Ray Jackon
and others re: Fw: 130
Release - Impact on Stock
Rems
POINQ0127263F
34.
POL00039463
Network Functional Report
POL-0035945
35.
POL00028838
Responsive Notes
(Receipts/Payments Mismatch
issue)
POL-0025320
36.
POL00001573
ET Action Log
VIS00002587
37.
POL00033200
Horizon Next Generation Release 1:
End Programme Report (V.0.1
- draft)
POL-0030135
38.
POLO0021500
Meeting minutes: minutes of Board
meeting held on 4th July 2011
POL0000033
39.
POL00117863
Fujitsu Appendix 1 & 2 to C's
Responsive Note Re: receipts
and payments mismatch issue
notes & Correcting Account for
"lost" discrepancies
POL-0118393
40.
POL00030217
Ernst & Young Management letter to
POL for year ended 27 March
2011
POL-0026699
41.
FUJ00086923
Email from Don M Burgess to Bill
Membery and Mark Arnold,
RE: Summary of Audit 2010
POINQ0093094F
Page 778 of 861
WITN01020100
42.
FUJ00086922
Briefing note on Audit findings for
Post Office and Fujitsu Senior
Management.
POINQ0093093F
43.
RMGo0000005
Minutes: Royal Mail plc Audit and
Risk Committee Minutes of
20/05/11
V1IS00007413
44,
POL00095550
Post office limited board status
report for 2011
POL-0095133
45.
POL00030365
Post Office Limited Board of
Directors Meeting Minutes of
22/09/2011
POL-0026847
46.
POL00021502
Meeting minutes: minutes of Board
meeting held at 10th
November 2011
POL0000035
47.
POL00021431
Post Office Limited Audit, Risk and
Compliance Committee
Minutes of 23/05/2012
POL-0018061
48.
POL00030261
Audit Results Report by Ernst and
Young for year ended 28
March 2010
POL-0026743
49.
FUJ00086924
Email chain between Bill Membery
(Fujitsu), Andy J Jones (Post
Office), Don M Burgess, and
others Re: Management Letter
response.
POINQO0093095F
50.
POL00021499
Meeting minutes: minutes of Board
meeting held on 27th May
2011
POL0000032
51.
POL00029438
Post Office LTD Board, POL IT Audit
Update
POL-0025920
52.
FUJ00086948
Post Office Presentation on Audit
Steering Group.
POINQ0093119F
53.
RMG00000003
Minutes: Royal Mail Holdings plc
Audit and Risk Committee
Minutes of 08/12/11
visoo007411
54.
POL00109892
Email from Avene O'Farrell to
Belinda Crowe and Alisdair
Cameron, cc Chris Aujard and
Gavin Lambert re Second
Sight meeting with finance
team to discuss suspense
accounts
POL-0111104
Page 779 of 861
WITN01020100
55.
POL00109933
Email chain with Paula Vennells and
Alisdair Cameron, with
forwarding emails from Paula
Vennells and Ron W at Second
Sight RE: Mediation Scheme
POL-0111120
56.
POL00117080
Email from Mark R Davis to Melanie
Corfield, Rodric Williams, Jane
Hill and others RE: update -
briefing for Paula Vennells for
appearance before BIS
Parliamentary Select
Committee
POL-0117913
57.
POL00117096
Email from Jane Hill to Paula
Vennells, Avene O'Farrell,
Mark R Davies and others re:
Addendum and key facts
POL-0117929
58.
POL00117097
Addendum to Q&A re Post Office's
position on claims, suspense
accounts, SS __ information
requests and remote access
POL-0117930
59.
POL00063428
Susan Rudkin case study: File Note
of meeting between POL and
Second Sight 4/3/2015 at 1pm
POL-0059907
60.
POL00102388
Email from Alisdair Cameron to
Mark Davies Re: Sparrow
POL-0101971
61.
POLO0107689
Karen Wilson/Julian Wilson Case
Study - Letter from Shoosmiths
to The Post Office re: Our
Client: Julian Wilson.
POL-0105981
62.
POLO0107695
NOTE OF CONFERENCE WITH
RICHARD MORGAN
QC MAITLAND
CHAMBERS IN THE MATTER
OF POTENTIAL CLAIMS BY
SCOTT DARLINGTON &
OTHERS AGAINST POST
OFFICE LIMITED
POL-0105986
63.
POL00021503
Meeting minutes: minutes of Board
meeting held on 21st January
2012
POL0000036
64.
UKGI00016088
Post Office Ltd Board of Directors
Meeting Minutes of 15/03/2012
UKGI026881-001
Page 780 of 861
WITN01020100
65.
POL00096033
Post Office Limited Matters - Dispute
Resolution: Claims over £500K
or those of a sensitive nature -
references Horizon claims.
POL-0095616
66.
POLO0058211
Briefing note re: The current status
of claims involving horizon
POL-0054690
67.
POL00120458
Email chain from Mike Granville to
David Simpson Re: Inside Out
Programme
POL-0126158
68.
POL00027270
Post Office Minutes of the meeting
of the Board of Directors held
on 13th December 2011
POL-0023911
69.
POLO0095595
Post Office LTD Board - Significant
Litigation Report.
POL-0095178
70.
POL00001976
Letter from Paula Vennells (CEO,
Post Office Ltd) to Mike Weir
MP re: a_ response to
parliamentary questions
Vviso0002990
71.
POLO0120490
Email from Martin Humphreys to
Theresa Iles cc Mike Granville
- Re: Mike Weir MP - PQs on
Horizon response for sign off
with letter from Paula Vennells
to Mark Weir attached
POL-0126156
72.
POL00027579
Post Office Ltd Minutes: Meeting of
Board of Directors held on 9th
February 2012
POL-0024220
73.
POL00095835
Post Office Limited Litigation
Matters - Commercial
Litigation - Claims in Excess of
£5000K and/or Claims with
wider significance for business
POL-0095418
74.
POL00073165
Email chain between Sabrina
Jethwa, Chis Darvill, Alison
Bolsover & Emily Springford -
case recommendations
POL-0069728
75.
POL00085749
Claims against subpostmasters
(spmr’s) who have raised
Horizon issues in the past - key
benefits and risks
POL-0082807
Page 781 of 861
WITN01020100
76.
RMG00000084
Royal Mail Holdings ple audit and
Risk Committee - Fines,
Compensation and Material
Litigation Report - half year
update. ARC(11)XX.
VIS00009943
77.
POL00094288
Susan Rudkin case study: Letter
from Alan Cook to Mr M Rudkin
RE: Suspension and_ legal
proceedings - Ibstock Post
Office - Fad 223 217 0
POL-0093234
78.
POLO0090575
Horizon Integrity - Dave Smith
POL-0090096
79.
POL00094820
Letter from Alan Cook to Rt Hon
Jacqui Smith MP re: Mr Julian
Wilson and concerns around
Horizon computer system
POL-0093766
80.
UKG100013994
House of Commons Parliamentary
Question: 2010/25945
Question from: Nicholas Brown
Minister answering: Edward
Davey re: assessment of
performance of the Horizon
computer programme
UKGI024787-001
81.
RLITO000040
Letter from Paula Vennells, POL's
Managing Director, to Nicholas
Brown MP re Parliamentary
Question 26688
RLITO000040
82.
UKG1I00014000
House of Commons Parliamentary
Question: 2010/7392-95
Question from: Michael Weir
Minister answering: Edward
Davey re: prosecutions and
investigations of postmasters
instigated by Post Office Ltd
UKGI024793-001
83.
POL00114516
Letter from Mike Weir MP to Paula
Vennells re: Horizon System
POL-0113632
84.
UKG100018222
Post Office Ltd - Shareholder
Executive: POL - Summary
UKGI028229-001
85.
POL00029485
IT component of management letter
for the year ended 25 March
2012
POL-0025967
Page 782 of 861
WITN01020100
86.
POL00095973
Email chain from Alice Perkins to
Susan Crichton re: James
Arbuthnot MP:
Subpostmasters and the Post
Office
POL-0095556
87.
POL00107702
Email from Paula Vennells to Alice
Perkins and Alwen Lyons, re to
James Arbuthnot.
POL-0110803
88.
UKGI00000050
POL Board of Directors Meeting
Minutes
visoo001011
89.
POL00105597
Email from Paula Vennells to Susan
Crichton and Alwen Lyons, RE:
telephone call with Oliver
Letwin MP expressing
concerns regarding Horizon.
POL-0104597
90.
POL00107710
Letter from Paula Vennells to The Rt
Hon Oliver Letwin MP re
robustness of Horizon and
invite to head office to witness
how Horizon system works.
POL-0110808
91.
POL00112984
Josephine Hamilton Criminal case
study. Post Office Information
Pack for James Arbuthnot and
Oliver Letwin — scheduled
meeting
POL-0110379
92.
POLO00021507
Meeting minutes: minutes of Board
meeting held on 23rd May
2012
POL0000040
93.
POLO0096640
Post Office Pack for meeting with
James Arbuthnot and other
MPs Meeting scheduled for
18th June 2012, 6pm,
Portcullis House.
POL-0096223
94.
POLOO096660
Email from Paula Vennells to Alice
Perkins, Alwen Lyons, Angela
Van-den-Bogerd and others,
re: Tonight's meeting.
POL-0096243
95.
POLO0096052
Email from Alice Perkins to Paula
Vennells, Susan Crichton,
Alwen Lyons and others re:
James Arbuthnot
POL-0095635
Page 783 of 861
WITN01020100
96.
POLO0105481
Notes of the Meeting with James
Arbuthnot, Alice Perkins and
Alwen Lyons
POL-0104661
97.
POL00021505
Meeting minutes: minutes for Board
meeting held on 15th March
2012.
POL0000038
98.
POL00105591
Email from Alwen Lyons to Susan
Crichton, Kevin Gilliland, Mike
Granville, Lesley J Sewell -
James Arbuthnot concerns
about Horizon
POL-0104608
99.
POL00107707
Emails from Paula Vennells to
Theresa lles_ re: James
Arbuthnot discussion
POL-0110807
100.
POL00057623
Briefing Note
POL-0054102
101.
POLO0002000
Deloitte Project Spire - Planning
forward
VIS00003014
102.
POL00028066
Deloitte Project Spire
Supplementary Information
May 2012
POL-0023069
103.
POLO0057656
James Arbuthnot MP and Oliver
Letwin MP Meeting Action
Points of 03/05/2012 for
meeting on 17/05/2021
POL-0054135
104,
POLO0090574
Horizon - Response to Challenges
Regarding Systems Integrity
POL-0090095
105.
POL00088935
Report from Rod Ismay, Head of
Product & Branch Accounting
to Dave Smith, Mike Moores
and Mike Young regarding
Horizon - Response to
Challenges Regarding
Systems Integrity.
POL-0085993
106.
POL00114518
Email from Mia Porter to Theresa
lles RE: FW: Mr Letwin
POL-0113552
107.
POL00105494
Email from Glenda C Hansen to
Theresa Iles, Alwen Lyons and
Lee Summers re: Rt Hon
Oliver Lewin MP and Post
Office Ltd's Horizon System
POL-0104674
Page 784 of 861
WITN01020100
108.
POLO0057711
Preparation for Post Office meeting
with James Arbuthnot & Oliver
Lewtin
POL-0054190
109.
POL00105601
Email correspondence between
Susan Crichton, Alwen Lyons
and Alice Perkins re: meeting
to discuss response to issues.
POL-0104599
110.
POL00033825
Meeting Pack for James Arbuthnot
and Oliver Letwin for 17th May
2012
POL-0030760
111.
POL00107719
Email from Paula Vennells to
Theresa lles re Briefing in
advance of Wednesday’
James Arbuthnot Meeting -
Backgound information of
James Arbuthnot and Oliver
Letwin
POL-0110814
112.
POL00096748
Notes of the Post Office
Communications Action Group
meeting on the 29 May 2012
POL-0096331
113.
POL00105491
Email from Alwen Lyons to Paula
Vennells and Susan Crichton
re James A and Oliver L.
POL-0104671
114,
POLO0096545
Email from Angela Van-Den-Bogerd
to Mia Porter re: James
Arbuthnot - Meeting with MP's
POL-0096128
115.
POLO0096544
Email from Mia Porter on behalf of
Paula Vennells, Glenda C
Hansen re: Conference call re:
James Arbuthnot - Meeting
with MP's brief/timing with
Susan C, Angela VDB, Lesley
and Alwen
POL-0096127
116.
POLO0096557
Email from Angela Van-Den-Bogerd
to Simon’ Baker, Paula
Vennells, Susan Crichton and
others re: Actions from JA/PMs
preparation meeting
POL-0096140
117.
POLO0096558
Email from Simon Baker to Angela
Van-Den-Bogerd, Paula
Vennells, Alwen Lyons and
others re: Actions from JA/PMs
preparation meeting
POL-0096141
Page 785 of 861
WITN01020100
118.
POLO0096574
Email from Susan Crichton to Alice
Perkins, Paula Vennells,
Simon Baker and others re:
Horizon- Terms of
reference.doc; 2nd Sight -
Horizon Matters - Proposal.ppt
POL-0096157
119.
POL00096575
Draft - Post Office Limited, Terms of
Reference from Susan
Crichton to Alice Perkins and
Paula Vennells
POL-0096158
120.
POLO0096576
Post Office Limited: Proposal to
carry out an _ Independent
Review of Past Fraud and
Theft Cases
POL-0096159
121.
POL00113792
Email from Alice Perkins to Susan
Critchton and Paula Vennells
re: Horizon investigation
POL-0112900
122.
POLO0096604
Email from Paula Vennells to Susan
Crichton and Alwen Lyons re:
2nd Sight TOR
POL-0096187
123.
POLOO096606
Email from Paula Vennells to Alwen
Lyons re: 2nd Sight TOR
POL-0096189
124,
POL00105487
Letter from The Rt. Hon James
Arbuthnot to Paula Vennells
regarding Second Sight
meeting.
POL-0104667
125.
POL00097030
Email from Paula Vennells to
Theresa lles RE: Fwd: Read
out of James Arbuthnot / JFSA
meeting.
POL-0096613
126.
POL00097115
Email from Simon Baker to Paul
Vennells, Susan Crichton,
Lesley J Sewell and others re
Update on the Horizon Case
review following your meeting
with JFSA and James
Arbuthnot
POL-0096698
127.
POL00097116
Raising Concerns With Horizon
Report
POL-0096699
Page 786 of 861
WITN01020100
128.
POL00097309
Email from Jorja Preston to Alwen
Lyons, Paula Vennells, Simon
Baker and others Re: 19
December 2012 Update on
James Arbuthnot Horizon
work.
POL-0096892
129.
POL00097310
JA update brief / MP Cases Review
of Horizon
POL-0096893
130.
POL00105477
Email from Theresa Iles on behalf of
Paula Vennells to Susan
Crichton re 2nd _ Sight
Consultants
POL-0104657
131.
POL00021508
Meeting minutes: Board meeting
minutes for meeting held on
4th July 2012
POL0000041
132.
POL00096810
Email from Alwen Lyons to Simon
Baker in re to printed
subpostmasters and 2nd sight
dated 16/07/2012. Chain
includes email from James
Arbuthnot.
POL-0096393
133.
POLO0096811
Email from Mia Porter to James
Arbuthnot, Alwen Lyona,
Susan Crichton, Theresa lles
in re to printed subpostmasters
and 2nd sight dated
16/07/2012
POL-0096394
134.
POL00096823
Email from Alwen Lyons to Susan
Crichton re PRINTED
SubPostmasters and 2nd
Sight. Includes Paula Vennells
agreeing to Alan Bates’
involvement.
POL-0096406
135.
POL00107750
Email from Paula Vennells to James
Arbuthnot, Alwen Lyons,
Susan Crichton and another
RE: SPM and second sight,
and MP's request for POL
funding forensic accountant to
review SS findings
POL-0110833
136.
POL00029815
Draft Proposal from Susan Crichton
to Alice Perkins, Paula
Vennells re: Independent
Review of Past Cases
POL-0026297
Page 787 of 861
WITN01020100
137.
POL00105472
Email from Susan Crichton to Alice
Perkins and Paula Vennells re
Horizon Version 2 & Draft
Terms of Reference attached.
POL-0104652
138.
POLO0096603
Email from Paula Vennells to Alice
Perkins, cc'd Susan Crichton
and Alwen Lyons re: 2nd Sight
TOR
POL-0096186
139.
POLOO096608
Email from Alwen Lyons to Paula
Vennells; re: Forensic
Accountant reviews - James
Arbuthnot
POL-0096191
140.
POLO0096615
Draft, Post Office Limited, Terms of
Reference: Proposal for an
independent review of the
company's systems relating to
the occurrence of apparent
shortfalls in individual PO
branch accounts
POL-0096198
141,
POL00027713
Email from Alwen Lyons to Angela
Van-Den-Bogerd, Simon
Baker, Mike Granville and cc
others re Horizon TOR Version
3
POL-0024354
142.
POL00117119
Email from Alwen Lyons to Angela-
Van-Bogerd, Simon Baker,
Mike Granville and others re
Horizon TOR
POL-0117951
143.
POL00006484
Summary of Conference with
Counsel at Maitland Chambers
about Horizon
POL-0017789
144.
POLO0096622
Email from Paula Vennells to James
Arbuthnot; re: Message from
James Arbuthnot to Alice
Perkins and Paul
POL-0096205
145.
POL00096642
Email from Paula Vennells to Neil
McCausland to re: Update
POL-0096225
146.
POLO0096638
Email from Neil McCausland to
Paula Vennells re: Update
POL-0096221
147.
POLO0096937
Email chain from Angela Van-Den
Bogerd to Simon Baker re:
Post Office Cases.
POL-0096520
Page 788 of 861
WITN01020100
148.
POLOO096665
Email from Alana Renner to Susan
Crichton, Alwen Lyons, Paula
Vennells and others, re:
Message from James
Arbuthnot to Tadge Channer at
Shoosmiths - Post Office/
Horizon
POL-0096248
149.
POL00026752
Letter to Paula Vennells from James
Arbuthnot Re:Post office and
second sight. Encloses letter
from Alan Bates.
POL-0023393
150.
POLOO096965
Email from Alwen Lyons to Paula
Vennells, re JA Brief (MP
Cases review of Horizon)
POL-0096548
151.
POL00027553
Post Office Minutes: Board Meeting
held on 21st November 2012
POL-0024194
152.
POL00021510
Meeting minutes: Board meeting
minutes of meeting held on
23rd January 2013
POL0000043
153.
POLO0097589
MP Cases Review of Horizon
Update March 2013
POL-0097172
154.
POL00107889
Email from Theresa Iles to Valerie
Fisher re James Arbuthnot
letter.
POL-0110853
155.
POL00097884
Email chain from Martin Edwards to
Paula Vennells RE: Second
Sight note from meeting 25
March.
POL-0097467
156.
POL00097588
Letter from The Rt. Hon. James
Arbuthnot, M.P. to Alice
Perkins re Meeting with
Second Sight
POL-0097171
157.
POL00097587
Email Chain from Alwen Lyons to
Paula Vennells re James
Arbuthnot Letter
POL-0097170
158.
POL00097592
Email from Alwen Lyons to Paula
Vennells, re James Arbuthnot
letter
POL-0097175
159.
POLO0097704
Email from Alwen Lyons to Alice
Perkins and other, Re: James
Arbuthnot and 2nd Sight.
POL-0097287
Page 789 of 861
WITN01020100
160.
POL00097705
Email chain involving Alice Perkins,
Alwen Lyons and = Paula
Vennells. Re: "James
Arbuthnot and 2nd Sight".
POL-0097288
161.
POL00097719
Email from Susan Crichton to Paula
Vennells, Legally Priviledged
and Confiedntial
POL-0097302
162.
POL00097732
Email from Paula Vennells to Susan
Barton re: Network Update
POL-0097315
163.
POL00097781
Email from Martin Edwards to Alice
Perkins, Paula Vennells and
others re: Draft letter for James
Arbuthnot
POL-0097364
164.
POL00097879
Email from Paula Vennells to Alwen
Lyons and Martin Edwards,
RE: Second sight note from
meeting 25 March.
POL-0097462
165.
POL00097883
Email chain from Martin Edwards to
Paula Vennells, Alwen Lyons,
Susan Crichton, and others re:
Second Sight note from
meeting 25 March.
POL-0097466
166.
POL00098158
Email from Alice Perkins to Paula
Vennels, JA meeting
POL-0097741
167.
POLO0097887
Email chain from Alwen Lyons to
Alice Perkins; Paula Vennells;
James Arbuthnot; Susan
Crichton, re: Second Sight
note from meeting 25 March.
POL-0097470
168.
POL00097952
Email chain involving Janet Walker,
Alwen Lyons and Susan
Crichton. Re: "MP meeting".
POL-0097535
169.
POL00122393
Second Sight Horizon Investigation
Discussion Paper April 2013
POL-0127557
170.
POL00098379
Note of Telephone Conversation
between Paula Vennells and
James Arbuthnot
POL-0097962
171.
POL00100200
Letter from David Oliver to Paula
Vennells, RE: Second Sight.
POL-0099783
172.
POLO0115881
Briefing for Paula / James Arbuthnot
call with objectives
POL-0116883
Page 790 of 861
WITN01020100
173.
FUJ00083375
Note authored by Gareth Jenkins
titled ‘Local Suspense
Problem’ v0.5
POINQO0089546F
174.
POL00097564
Email from Laura Darby to Anne
Chambers, re: Automatic reply:
FW: Suspense Data in 14
Branches
POL-0097147
175.
POL00098151
Email chain from Andrew Winn to
Anne Chambers, re: Local
suspense POL 328-
explanation.
POL-0097734
176.
POL00002188
Draft letter from Andy Winn to The
Manger of Lower Regent
Street Post Office re: Branch
Discrepancies
VIS00003202
177.
POL00002217
Letter from Andy Winn on behalf of
Product & Branch Accounting
to Merthyr Dyfan Post Office re
Branch Discrepancies
VIS00003231
178.
POL00002226
letter from Andy Winn to Stewart
Waldron re: Branch
Discrepancies at Wardles
Lane Post Office
VIS00003240
179.
POL00002242
Letter from Andy Winn to David
Cheape re Branch
Discrepancies at Dundas Post
Office
VIS00003256
180.
POL00002260
Letter from Andy Winn to Mr A Brook
re: Re Branch Discrepancies-
Rosyth Terminus
VIS00003274
181.
POL00002265
Letter relating to local branch
discrepancies and explaining
POL's action in response to
Horizon error regarding these
problems. Letter sent from
Andy Winn to Mr D Moore re :
Branch Discrepancies
VIS00003279
182.
POL00002275
Letter from Andy Winn to Zubeir
Patel regarding branch
discrepancies at Bowness
Road.
VIS00003289
Page 791 of 861
WITN01020100
183.
POL00098186
Email from Andrew Winn to Simon
Baker and Gareth Jenkins,
Local suspense POL 238.
POL-0097769
184.
POL00098185
Email from Andrew Winn to Simon
Baker re: Local suspense
POL-0097768
185.
FUJ00084744
Local Suspense Problem Report for
2013
POINQ0090915F
186.
POL00029610
Post Office and Fujitsu Report on
HNG-X System Receipts and
Payments Mismatch
POL-0026092
187.
POL00098283
Email from Gareth Jenkins to Simon
Baker re: Balancing Issues in
2010
POL-0097866
188.
POL00098176
Email from Paula Vennells to Alwen
Lyons, Meeting with James
POL-0097759
189.
POL00098179
Email from Alwen Lyons to Simon
Baker, Meetings with James
POL-0097762
190.
POL00098180
Email from Alwen Lyons to Simon
Baker, re Meeting with James
Arbuthnot
POL-0097763
191.
POL00098276
Email chain from Alwen Lyons to
Paula Vennells. Re: "JA".
POL-0097859
192.
POL00098278
Email from Alice Perkins to Paula
Vennells, re: Updates
POL-0097861
193.
POL00029587
Email from Alwen Lyons to Alwen
Lyons Re: In __ strictest
confidence Horizon
POL-0026069
194,
POL00098777
Email from Martin Edwards to Paula
Vennells re JA?
POL-0098360
195.
POL00115923
Email from Mark R Davies to Louise
Chatfield re: Fwd: JA Meeting
brief
POL-0116925
196.
POLO0099516
Post Office Limited Extract from
minutes of a Board meeting on
1st July 2013
POL-0099099
197.
POL00098321
Email from Paula Vennells to
Theresa lles re Board papers
briefing notes
POL-0097904
198.
POL00021513
Meeting minutes: minutes of Board
meeting held on 21st May
2013
POL0000046
Page 792 of 861
WITN01020100
199.
POL00098816
Email from Paula Vennells to Alice
Perkins, Alwen Lyons, Martin
Edwards and others re Board
Call and SS
POL-0098399
200.
POL00098789
Email from Paula Vennells to Alice
Perkins, Alwen Lyons and
Martin Edwards re next steps
on Horizon issues - update
POL-0098372
201.
POL00029618
Email from Lesley J Sewell to Simon
Baker and Alwen Lyons and
others, re: Two System
Defects.
POL-0026100
202.
POL00098774
Email from Paula Vennells to Susan
Crichton re Second Sight
Investigation - Update
POL-0098357
203.
POL00006798
Legal advice on the use of expert
evidence
POL-0017590
204.
POL00098192
Email chain from Ron Warmington
to Simon Baker re:FW: Letter
from James re Alan Bates'
letter
POL-0097775
205.
FUJ00086811
Horizon data, Lepton SPSO 191320,
Draft Report by Helen Rose
POINQ0092982F
206.
POL00113369
Second Sight review into Horizon -
briefing note on interim report
POL-0110747
207.
POL00108163
Email from Rodric Williams to Martin
Edwards re CEO's report text
on criminal cases review
POL-0110958
208.
POL00147248
POL Executive Committee - Expert
witness proposal
POL-BSFF-
0006371
209.
POL00030160
Initial Complaint Review and
Mediation Scheme Briefing
Report - Part Two prepared by
Second Sight
POL-0026642
210.
POL00098316
Email chain from Martin Edwards to
Paula Vennells and Alwen
Lyons, re "Briefing for Paula JA
meeting 23rd May 2013"
POL-0097899
211.
POL00098317
Briefing for Paula Vennells /James
Arbuthnot Meeting
POL-0097900
Page 793 of 861
WITN01020100
212.
POL00115880
Email chain from Alwen Lyons to
Paula Vennells cc Martin
Edwards, Mark R Davies 'and
other’ re: Speaking notes for
James Arbuthnot meeting
tomorrow
POL-0116882
213.
POL00105632
Email from Alwen Lyons to Paula
Vennells re James brief - Bugs
POL-0104602
214,
POL00098378
Email from Alwen Lyons to Paula
Vennells and others re James
Arbuthnot Phone Call
POL-0097961
215.
POL00098373
Email from Paula Vennells to Alwen
Lyons and others re James
Arbuthnot call
POL-0097956
216.
POL00029589
Email from Paula Vennells to Alwen
Lyons re: Thanks - update
POL-0026071
217.
POL00098459
Email from Alwen Lyons to Janet
Walker re: Post Office update.
Email chain includes analysis
and proposal by James
Arbuthnot re interim report and
feedback to MPs.
POL-0098042
218.
POL00098534
Email from Susan Crichton to Alwen
Lyons re: Update from James
Arbuthnot MP
POL-0098117
219.
POLO00098655
Email from Alwen Lyons to Paula
Vennells and Lesley Sewell
regarding second sight update
POL-0098238
220.
POL00029625
Draft Post Office Internal Briefing
Note to Paula Vennells:
Second Sight review into
Horizon - Implications of
Interim Report
POL-0026107
221.
POL00098878
Notes for Board update on Second
Sight Investigation, 1 July
2013.
POL-0098461
222.
POL00021515
Post Office Limited Board Minutes of
01/07/2013
POL0000048
223.
POL00021745
Email chain between lan
Henderson, Simon Baker,
Rodric Williams and others, re:
Second Sight Draft Report.
POL-0018224
Page 794 of 861
WITN01020100
224.
POL00021746
Interim Report into alleged problems
with the Horizon system V24
POL-0018225
225.
POL00021822
Email — within POL — seeking
awareness of answers given in
relation to Second Sight
Review. Email from Rodric
Williams to Andre Parsons re:
Second Sight Review (MP's
inquiry)
POL-0018301
226.
POL00098797
Email from Paula Vennells to Martin
Edwards re next steps on
Horizon issues - update
POL-0098380
227.
POL00190016
Email from Lesley Sewell to Simon
Baker RE: FW: Local
suspense incident
POL-BSFF-
0028079
228.
POL00098877
Email from Mrtin Edwards to Alice
Perkins re: Discussion notes
for Board on Second Sight
POL-0098460
229.
POL00029626
Email from Alwen Lyons to Rodric
Williams and Susan Crichton,
re: Horizon / Second Sight -
draft Briefing Note re Interim
Report
POL-0026108
230.
POL00098887
Email from Alice Perkins to Paula
Vennells re: Latest on SS
POL-0098470
231.
POL00027852
Email chain from Martin Edwards to
Alice Perkins, Paula Vennells,
cc'ing Susan Crichton, Alwen
Lyons, and others re: JA
Meeting Brief - Second Sight
Interim Report
POL-0024493
232.
POL00144918
Email chain from Ron Warmington
(2nd Sight) to Simon Baker
(POL); CC Lesley J Sewell
(POL) Alwen Lyons & others
Re: Bug disclosures
POL-BSFF-
0004045
233.
POL00167937
Email chain from Lesley J Sewell
(POL) to Paula Vennells
(POL); CC Susan Crichton
(POL), Alwen Lyons& Others
Re: Draft Report
POL-0163234
Page 795 of 861
WITN01020100
234.
POLOO099096
Email from Rodric Williams to Paula
Vennells, Mark Davies and
others re: Draft statement -
Strictly Private & Confidential -
Subject to Legal Privilege
POL-0098679
235,
POL00115924
Briefing for meeting with James
Arbuthnot, 3 July 2013
POL-0116926
236.
POL00098916
Email from Paula Vennells to Alice
Perkins and Alwen Lyons; re:
JA meeting brief
POL-0098499
237.
POL00029649
Letter from Paula Vennells to James
Arbuthnot, MP re key points
discussed in the meeting on 3
July 2013 with Paula Vennells,
James Arbuthnot and Alice.
POL-0026131
238.
POL00107985
Email from Angela Van-Den-Bogerd
to Theresa lles. Re:
Conference Call this morning
with Paula
POL-0110884
239.
POL00098912
Email from Rodric Williams to Paula
Vennells re: JA meeting brief
and concerns with Horizon
document
POL-0098495
240.
POL00098915
Email from Martin Edwards to Paula
Vennells, Alwen Lyons and
others re: JA meeting brief
POL-0098498
241.
POL00098973
Email from Paula Vennells to Lesley
J Sewell Re: Hi.
POL-0098556
242.
POLO0098986
Email from Alice Perkins to Paula
Vennells, cc'd Alwen Lyons
and Martin Edwards re: SS:
The Future after Monday
POL-0098569
243.
POLO0098911
Email from Mark Davies to Alwen
Lyons, Paula Vennells and
Martin Edwards re: JA meeting
brief
POL-0098494
244,
POL00098921
Email from Alice Perkins to Paula
Vennells RE. Briefing for
meeting with James Arbuthnot.
Email chain includes detailed
speaking notes.
POL-0098504
Page 796 of 861
WITN01020100
245.
POL00098940
Email from Martin Edwards to Lesley
J Swell and Paula Vennells, re
Paula briefing - Duncan Tait
04-07-2013.doc
POL-0098523
246,
POLO0099021
Email from Martin Edwards to Paula
Vennells, Susan Crichton,
Mark Davies and others, re
Second Sight update 4/7/13
POL-0098604
247.
POLO0099003
Email from Martin Edwards to Paula
Vennells re Board email.
POL-0098586
248.
POL00098928
Speaking note for call with Jo
Swinson on SS investigation, 3
July
POL-0098511
249.
POLO0098923
Email from Paula Vennells to Martin
Edwards RE: Briefing for
meeting with James Arbuthnot
POL-0098506
250.
POLO0115961
Email from Paula Vennells to Alice
Perkins, Neil McCausland and
others RE: SS 5 July update
POL-0116963
251.
POLO0099063
Signed Interim Report into alleged
problems with the Horizon
system
POL-0098646
252.
POLO0098991
Email from Alwen Lyons to Mark
Davies, Lesley Sewell, Susan
Crichton and others, re Press
for Monday.
POL-0098574
253.
POLO0098990
Email from Alice Perkins to Paula
Vennells, re SS: The Future
after Monday.
POL-0098573
254,
POLO0099012
Email from Mark Davies to Paula
Vennells, re Monday Meeting.
POL-0098595
255.
POLO0099011
Email chain from Paula Vennells to
Martin Edwards re: Monday
Meeting.
POL-0098594
256.
POLO0099005
Email from Mark Davies to Paula
Vennells, Alwen Lyons, Susan
Crichton and others, re
Statement. Email has text of
statement embedded within it.
POL-0098588
257.
POL00099016
Email chain from Paula Vennells to
Alice Perkins re Second Sight
update 4/7/13.
POL-0098599
Page 797 of 861
WITN01020100
258.
POL00099026
Email from Paula Vennells to Susan
Barton, Nicholas Kennett,
Martin Moran and others, re
SS 5 July update.
POL-0098609
259.
POL00099027
Email from Paula Vennells to Alice
Perkins, Neil McCausland,
Virginia Holmes and others, re
SS 5 July update.
POL-0098610
260.
POLO0099029
Email from Paula Vennells to Martin
Edwards, Mark Davies, Lesley
Sewell and others, re
Proposed way forward.
POL-0098612
261.
POL00099043
Email from Mark R Davies to Paula
Vennells, re: Proposed way
forward
POL-0098626
262.
POLO0099050
Email from Martin Edwards to Mark
Davies, Alwen Lyons and
others re: Proposed way
forward
POL-0098633
263.
POLO0099051
Email from Paula Vennells to Martin
Edwards, Mark Davies, Alwen
Lyons re: Proposed way
forward
POL-0098634
264.
POLO0099053
Email chain from Martin Edwards to
Paula Vennells re: Proposed
way forward
POL-0098636
265.
POLOO0099055
Email from Paula Vennells to Mark
Davies and Martin Edwards re:
Proposed way forward
POL-0098638
266.
POL00099054
Email chain between Mark Davies,
Paula Vennells, Martin
Edwards and others re:
Proposed way forward
POL-0098637
267.
POLOO0099056
Email from Lesley Sewell to Paula
Vennells, Mark Davies and
others; re: Proposed way
forward
POL-0098639
268.
POLO0099062
Email from Simon Baker to Paula
Vennells, Mark Davies and
others re: Second Sight Interim
Report
POL-0098645
269.
POL00099102
Email from Mark Davies to Paula
Vennells RE: Draft statement
POL-0098685
Page 798 of 861
WITN01020100
270.
POL00099103
Email from Lesley Sewell to Paula
Vennells, Martin Edwards and
others re: Draft statement.
Includes email from Alan Bates
to Paula Vennells.
POL-0098686
271.
POL00099104
Email from Susan Crichton to Paula
Vennells, Martin Edwards and
others re: Draft statement
POL-0098687
272.
POL00099126
Email from Sarah Paddison to Paula
Vennells, Alice Perkins, Neil
McCausland and others re
Update on SS review - 7 July
POL-0098709
273.
POL00099121
Email from Sarah Paddison to Paula
Vennells, Alice Perkins, Neil
McCausland and others re
Update on SS review - 7 July
POL-0098704
274.
POL00099215
Email from Alwen Lyons to Alice
Perkins, Neil McCausland,
Virginia Holmes and others re
Board papers
POL-0098798
275.
POL00099129
Email from Post Office
Communications Team to Post
Office Communications Team
re In the Loop - Horizon Report
statement - 8 July 2013
POL-0098712
276.
POLO0116114
Email chain from Alice Perkins to
Martin Edwards, Alwen Lyons
and Alasdair Marnoch re:
Board note on Horizon
POL-0117114
277.
POL00099153
Email from Lesley Sewell to Paula
Vennells, Martin Edwards,
Hugh Flemington and others re
Actions
POL-0098736
278.
POLO0006546
POL Board Paper: Update following
the publication of the interim
report on Horizon
POL-0017641
279.
POL00045457
Memo from Andy Winn regarding
clarification of the Settle
Centrally process
POL-0041936
280.
POLO0039089
Operating Level Agreement on
Product and Branch Network
Accounting, Network and
Service Delivery v1.0
POL-0035571
Page 799 of 861
WITN01020100
281.
POL00105529
Legally privileged initial complaint
and mediation scheme review
by Chris Aujard
POL-0105096
282.
POL00021516
Meeting Minutes: minutes of Board
meeting held on 16th July 2013
POL0000049
283.
POL00099210
Post Office Ltd Board Meeting
Minutes of 16/07/2013
POL-0098793
284,
POL00027315
POL Draft Agenda for Board
Meeting on 25 March 2015 - v9
POL-0023956
285,
UKGI00002414
Post Office Board Forward Agenda
UKGI013228-001
286.
POL00040001
Email from Susan Crichton to
Andrew Parsons, FW: Horizon
Issues- draft Board Update
POL-0036483
287.
POL00040002
Update to Post Office Limited Board-
RE; Horizon Legal Issues.
Relates to review of
prosecutions.
POL-0036484
288.
POL00099349
Email from Alice Perkins to Paula
Vennells, Alwen Lyons, and
Jorja Preston. Re: Update after
Tuesday's Board Meeting
POL-0098932
289.
POL00099331
Email from Alasdair Marnoch to
Paula Vennells Re: "Insurance
reply".
POL-0098914
290.
POLO0108049
Email from Chris M Day to Paula
Vennells, Theresa Iles and cc
Lesley J Sewell re Simon
Blagden - Chairman Fujitsu UK
POL-0110923
291.
POL00039994
Letter from Sally Berlin to Paula
Vennells, RE: Horizon
Computer System
POL-0036476
292.
POLO0039995
Draft Paragraphs for Insertion into
Reply to CCRC
POL-0036477
293.
POL00099346
Draft Letter from Paula Vennells to
Sally Berlin. Re: "Horizon
Computer System".
POL-0098929
294.
POL00116111
Email from Amanda Brown to Sally
Berlin re: Horizon Computer
System.
POL-0117111
Page 800 of 861
WITN01020100
295.
POLO0116112
Letter from Susan Crichton (Post
Office) to Mrs S Berlin (CCRC)
re Horizon Computer System
POL-0117112
296.
POLOO006590
Update on the work programme
arising from the Horizon report
POL-0017671
297.
POL00039997
Email from Amanda Brown to Susan
Crichton, RE: CCRC Letter
POL-0036479
298.
POL00040012
Letter from Susan Crichton to Mrs S
Berlin, Re: Horizon Computer
System
POL-0036494
299.
POL00006799
Advice on Disclosure and the Duty
to Record and Retain Material
POL-0017591
300.
POLO0006583
Interim Review of CK Processes by
Brian Altman QC
POL-0017668
301.
POL00027667
Email from Susan Crichton to Paula
Vennells cc: Angela Van-Den-
Bogerd, Andy Holt and Alwen
Lyons re: Update
POL-0024308
302.
POL00027907
Post Office Board Meeting Agenda
of 25/09/2013 - Costs Report,
Performance Management,
Horizon System
POL-0024548
303.
POL00040029
Email from Susan Crichton to
Andrew Parsons, RE: Fwd
ToR
POL-0036511
304.
POL00040032
Post Office- Lessons Learned
Review of handling of alleged
issues/concerns about
Horizon: Terms of Reference
POL-0036514
305.
POL00116123
Email chain from Paula Vennells to
Alice Perkins re Briefing
Alasdair.
POL-0117122
306.
POL00099133
Email from Paula Vennells to Alwen
Lyons, Mark R Davies, Martin
Edwards and others re Thank
you - SS/JFSA/JA coverage
POL-0098716
307.
POL00108019
Email from Susan Crichton to Paula
Vennells re call.
POL-0110901
308.
POL00108064
Email from Paula Vennells to
Theresa Iles re: Fwd: IN
CONFIDENCE: FOLLOW UP
TO OUR MEETING
POL-0110928
Page 801 of 861
WITN01020100
309.
POL00027792
Email from Alwen Lyons to Alice
Perkins, Neil McCausland,
Virginia Holmes and others
RE: Board note from Paula as
promised
POL-0024433
310.
POL00108113
Email from Paula Vennells to
Theresa lles re Lessons
learned ToR
POL-0110938
311,
POL00021518
Meeting minutes: minutes for board
meeting held on 25th
September 2013
POL0000051
312.
POL00027472
POL Board Status Report organised
by reference No, ‘action’ and
‘whom’ re: including but not
limited to Crown branches by
Alwen Lyons
POL-0024113
313.
POL00021521
Meeting Minutes: minutes of Board
meeting held on 21st January
2014
POL0000054
314.
POLO0006564
Board Minutes of POL: 24 March
2014
POL-0017658
315.
POL00100592
Post Office Limited Board - Lessons
Learned Report by Belinda
Crowe
POL-0100175
316.
POLO0021426
Audit Risk and Compliance Sub-
Committee Minutes of
15/05/2014
POL-0018056
317.
POL00099510
Email from Alice Perkins to Paula
Vennells Re: SS and costs.
POL-0099093
318.
POLO0116131
Email from Martin Edwards to Paula
Vennells, cc Susan Crichton,
Alwen Lyons and others re
Hooper brief for meeting
POL-0117130
319.
POL00116132
Brief for Paula Vennell's meeting
with Sir Anthony Hooper, 24
September to discuss the
launch of the mediation
scheme
POL-0117131
320.
POL00116136
Note of meeting with Sir Anthony
Hooper on 24 September and
next steps
POL-0117135
Page 802 of 861
WITN01020100
321.
POLO0098592
Email chain from Alwen Lyons to
Sarah Paddison re: Update
from James Arbuthnot MP
POL-0098175
322.
POL00099013
Emails from Paula Vennells to Mark
Davies and Martin Edwards, re
Monday Meeting.
POL-0098596
323.
POL00115958
Email from Paula Vennells to Alwen
Lyons, Paula Vennells, Susan
Crichton and others re Notes of
the meeting with JA Sth July
POL-0116960
324.
POL00090219
Post Office statement on findings of
interim report into Horizon
computer system
POL-0087188
325.
POL00099146
Email from Paula Vennells to Susan
Crichton, Mark R_ Davies,
Alwen Lyons and others re
Thoughts
POL-0098729
326.
POLO0116076
Email chain from Nina Arnott to Mark
R Davies and Alana Renner re:
Horizon
POL-0117076
327.
POL00117036
Email from Simon Baker to Paula
Vennells, Martin Edwards,
Mark R Davies and others re
Horizon Investigation / JA
meeting - notes from today's
4.30 meeting, includes actions
and items to discuss with JA.
Case review process diagram
attached.
POL-0117870
328.
POL00099341
Email from Paula Vennells to Susan
Crichton and Chris Day cc
Alwen Lyons and others. Re:
"SS costs".
POL-0098924
329.
POL00099342
Email chain involving Susan
Crichton, Paula Vennells,
Chris Day and others. Re: "SS
costs".
POL-0098925
330.
POL00108037
Email from Paula Vennells to Susan
Crichton, Simon Baker, Alwen
Lyons and others re JFSA,
Second Sight.
POL-0110917
Page 803 of 861
WITN01020100
331.
POL00099354
Email from Alwen Lyons to Ron
Warmington, lan Henderson,
Susan Crichton and others,
Re: Notes of the meeting on
the 22nd July
POL-0098937
332.
POLO00118496
Email from Paula Vennells to
Theresa Iles CC Alice Perkins
Re: File Note - SC
POL-0119613
333.
POL00116113
Email from Susan Crichton to Paula
Vennells re: Workshop -
Update
POL-0117113
334.
POLO0099504
Email from Mike Granville to
Whitehead Mike, Peter Batten
and others Re: Horizon
Information.
POL-0099087
335.
POL00095442
Email from Janet Walker to Susan
Crichton and Alwen Lyons re:
Follow-up to today's meeting
POL-0095025
336.
POL00116218
Email from Paula Vennells to Martin
Edwards re: Draft note for the
Board.
POL-0117212
337.
POL00026641
Initial Complaint Review and
Mediation Scheme - Working
Group - Minutes - 30 January
2014
POL-0023282
338.
POL00099513
Email from Alice Perkins to Chris M
Day, Paula Vennells and
Susan Crichton Re: SS and
Costs.
POL-0099096
339.
POL00108087
Email from Susan Crichton to Paula
Vennells, cc Theresa Iles and
Martin Edwards re Update for
Paula on Complaint
Review/Mediation scheme
POL-0110934
340.
POL00066817
Seema Misra Case Study. Email
chain from Martin Smith to
Susan Crichton RE: Note of
meeting with Sir Anthony
Hooper.
POL-0063296
341.
POLO0116166
Email from Paula Vennells to Martin
Edwards Re: Example
Applications
POL-0117165
Page 804 of 861
WITN01020100
342.
POLOO099695
Email from Mark Davies to Paula
Vennells, Martin Edwards and
Belinda Crowe re: Example
Applications P&C
POL-0099278
343.
POLO0099702
Email from Theresa Iles to Alwen
Lyons, Chris M Day, Fay
Healey and others RE: FW:
Example Applications
POL-0099285
344,
POLO0099711
Email from Paula Vennells to Alice
Perkins Re. Example
Applications
POL-0099294
345.
POLO0116181
Email from Martin Edwards to Paula
Vennells. RE: HPBB Legal
options
POL-0117180
346.
POL00116133
Email from Mark Davies to Paula
Vennells, Susan Crichton,
Angela Van-Den-Bogerd and
others re: Martin Griffiths.
POL-0117132
347.
POL00027757
Email from Kevin Gilliland to Paula
Vennells, Mark R_ Davies,
Alwen Lyons and others RE:
Mr Griffiths
POL-0024398
348.
POL00108132
Email chain from Paula Vennells to
Theresa Iles re: Fwd: Martin
Griffiths/Sparrow
POL-0110948
349.
POL00116188
Email to Paula Vennells, Kevin
Gilliland, Alwen Lyons and
others from Rodric Williams
Re: Strictly Private &
Confidential - Overview of
Coroner Inquests.
POL-0114590
350.
POLO0006581
Review of PO prosecutions by Brian
Altman QC.
POL-0017666
351.
POL00027150
PO Executive Committee Agenda
POL-0023791
352.
POL00027134
Post Office Ltd Board, update on
Project Sparrow and progress
on list of actions
POL-0023775
353.
POL00027136
POL Board - Chief Executive’s
Report
POL-0023777
354.
POL00021519
Meeting minutes: minutes of Board
meeting held on 31st October
2013
POL0000052
Page 805 of 861
WITN01020100
355.
POL00114194
Email chain from Andy Holt to Paula
Vennells Re Weekly Update
POL-0113119
356.
POL00027138
Post Office Limited Audit, Risk and
Compliance Board Sub-
Committee Briefing Book.
POL-0023779
357.
POLO00006801
Brian Altman QC's interim review
POL-0017618
358.
POL00006803
Brian Altman QC's general review of
prosecutions
POL-0017620
359.
POLO0108161
Email from Sarah Paddison to
Theresa Iles re Sparrow -
briefing for Paula for Board
POL-0110956
360.
POLO0066789
Email from Rodric Williams to Martin
Smith, Simon Clarke, Hugh
Flemington and others. Re:
The report of Helen Rose
POL-0063268
361.
POL00006776
Email re Full Review R v Prince
POL-0017609
362.
POL00040061
Post office- initial complaint review
and mediation scheme-
criminal risk management
POL-0036543
363.
POL00116189
Email from Andy Holt to Susan
Crichton, Angela Van Den
Bogerd, Alwen Lyons and
others re Sparrow Steering
Meeting.
POL-0117187
364.
POL00116190
Weekly Steering Group
Presentation slides
POL-0117188
365.
POL00027677
Email from Andy Holt to Paula
Vennells, Angela Van-Den-
Bogerd, Alwen Lyons and
others RE: Weekly Update
POL-0024318
366.
POL00038678
Minutes of the ARC Sub-Committee
on 19 Nov 13
POL-0027989
367.
POL00021520
Meeting Minutes: Board meeting
minutes for meeting held on
27th November 2013
POL0000053
368.
POLO0026626
Post Office Ltd Board - Agenda for
27 November 2013 and
corresponding papers &
Various Meeting Minutes from
2013
POL-0023267
Page 806 of 861
WITN01020100
369.
POL00099976
Email from Alwen Lyons to Alice
Perkins, Neil McCausland,
Virginia Holmes re: Follow - up
after the Board meeting
POL-0099559
370.
POLO00099977
Minutes for meeting on 27
November re: Costs, Second
Sight
POL-0099560
371.
POL00100193
Post Office Audit - Risk and
Compliance Committee -
Prosecutions Policy
POL-0099776
372.
POL00030900
Meeting Agenda for the Audit, Risk
and Compliance Sub-
Committee, including paper on
the Post Office's Prosecuting
Policy
POL-0027382
373.
POL00027692
Email chain from Alwen Lyons to
Paula Vennells and Chris
Aujard re: ARC
Teleconference
POL-0024333
374.
POL00100223
Email from Theresa Iles (on behalf
of Paula Vennells) to Alasdair
Marnoc, RE: ARC
Prosecutions Paper
POL-0099806
375.
POL00021424
Post Office Limited Audit, Risk and
Compliance Sub Committee
Minutes of 11/02/2014
POL-0018054
376.
POL00116285
Email from Chris Aujard to Paula
Vennells, Chris M Day, Martin
Edwards and others re Board
papers - Questions
POL-0117278
377.
POLOO099991
Strictly Confidential, POST OFFICE
LIMITED BOARD, _ Status
Report at 4 December 2013,
Alwen Lyons
POL-0099574
378.
POL00040194
Observations and analysis of the
Cartwright King Prosecution
Review Process
POL-0036676
379.
POL00100032
Initial Complaints Review & Case
Mediation scheme Steering
Group
POL-0099615
Page 807 of 861
WITN01020100
380.
POLO0116241
Briefing Note from Belinda Crowe to
Paula Vennells cc Chris
Aujard, Hugh Flemington ‘and
others' re: Briefing for your 1-2-
1 with Alice
POL-0117235
381.
POL00100084
Post Office Limited Board Meeting
held at 10am on 21st January
2014
POL-0099667
382.
POLO0093696
Briefing Email from Belinda Crowe
to Chairman and Chief
Executive of Post Office re :
Briefing for meeting with RT
Hon James Arbuthnot MP
POL-0093818
383.
POL00100124
Letter from Belinda Crowe to
Chairman and Chief Executive,
Post Office Limited cc: Chris
Aujard RE: Briefing for Meeting
with RT Hon James Arbuthnot
MP
POL-0099707
384.
POLO0090358
Complaint Review and Mediation
Scheme (Chronology and
Supporting Documents) File 2
of 5 from April 2013 to October
2015
POL-0087327
385.
POL00027760
Email from Chris M Day to Alwen
Lyons, Chris Aujard, Fay
Healey and others’ re
Prosecution Policy Paper
POL-0024401
386.
POL00100192
Email from Alwen Lyons to Chris
Aujard, Chris M Day, Fay
Healey, RE: FW: Prosecution
Policy Paper
POL-0099775
387.
POL00027688
Email from Paula Vennells to Chris
Aujard RE: 11/02/14 ARC
telephone conference and
discussion of future
prosecutions.
POL-0024329
388.
POL00027687
Email from Susannah Hooper to
Alice Perkins, cc'ing Larissa
Wilson, Tim Franklin, Alasdair
Marnoch and others, re: ARC.
Teleconference
POL-0024328
Page 808 of 861
WITN01020100
389.
POLO0116262
Email from Mark R Davies to Paula
Vennells, cc Chris Aujard,
Belinda Crowe and others re
comms on the prosecutions
policy
POL-0117255
390.
POL00027478
Post Office Limited: Executive
Committee Agenda for
meeting to be held on 13
February 2014
POL-0024119
397.
POL00116281
Email from Paula Vennells to Angela
Van-Den-Bogerd, Belinda
Crowe, Chris Aujard and
others Re: Board Papers -
questions
POL-0117274
392.
POL00021522
Meeting Minutes: meeting minutes
for Board meeting on 26th
February 2014
POL0000055
393.
POL00116209
Email from Paula Vennells to Martin
Edwards re Fwd: Follow on
from 1:1
POL-0117203
394.
POL00298004
Update on the work programme
arising from the Horizon
Report
POL-BSFF-
0136054
395.
POLO0099806
POL Board Meeting and reports
POL-0099389
396.
POLO0026629
Post Office Ltd Board Meeting on
26/02/2014 - Chris Aujard,
Angela Van Den Bogerd,
Belinda Crowe and Others
present.
POL-0023270
397.
POL00105068
Advice Report on Papers for Post
Office Ltd Board
POL-0080700
398.
POL00040271
Board pack of the Post Office Board
Meeting of 25/09/2014
POL-0036753
399.
POL00027210
Post Office Board Decision Paper by
Jane Macleod RE: publishing
new prosecutions policy
POL-0023851
400.
POLO0099929
Email from Paula Vennells to Chris
Aujard RE. Brief for Alice
POL-0099512
401.
POL00027506
Post Office Agenda: Executive
Committee meeting held on
19th November 2013 and
associated documents
POL-0024147
Page 809 of 861
WITN01020100
402.
POL00116284
Email from Belinda Crowe to Paula
Vennells, Chris Aujard, Chris
M Day and others RE: Board
papers- questions
POL-0117277
403.
POLO0100321
Email chain from Blinda Crowe to
Paula Vennells; David Oliver;
Chris Aujard; Martin Edwards,
re: Papers for tomorrow - our
pre- meeting, and meeting with
Second Sight and Tony
Hooper.
POL-0099904
404.
POL00100322
Memorandum from Belinda Crowe
to Paula Vennells, and others,
re: Briefing for the meetings
with Second Sight and Sir
Anthony Hooper on Monday 24
February.
POL-0099905
405.
POL00100323
Annotated Agenda, Meeting with
Second Sight on 24 February
2014.
POL-0099906
406.
POL00116305
Email from Paula Vennells to
Belinda Crowe, David Oliver,
Chris Aujard and others re.
Papers for tomorrow - our pre-
meeting, and meetings with
Second Sight and Tony
Hooper.
POL-0117298
407.
POL00100337
File Notes for a meeting with Second
Sight on Monday 24th
February at 1:00pm.
POL-0099920
408.
POL00116312
Email chain from Paula Vennells to
Belinda Crowe re: Speaking
note for the Board
POL-0117305
409.
POL00116313
Board meeting 26 February -
Speaking note for Paula.
POL-0117306
410.
POL00027337
POL Board Meeting Minutes of 26
February 2014
POL-0023978
411.
POLO0100121
Email from Amarnoch to Alwen
Lyons cc: Alasdair Marnoch,
Alice Perkins, Alwen Lyons,
Amanda A Brown, Belinda
Crowe re: Re: Follow - Up after
Board Meeting of 21.01.2014
POL-0099704
Page 810 of 861
WITN01020100
412.
POL00100338
File Note for a meeting with Tony
Hooper, Monday 24th
February ta 2:30pm.
POL-0099921
413.
POL00116321
Email chain from Paula Vennells to
Chris Aujard re PRINTED
Sparrow.
POL-0117314
414,
POL00027696
Email from David Oliver to Paula
Vennells RE: Scope for
Linklaters work
POL-0024337
415.
POL00092172
Post Office Executive Committee -
Meeting of 13 March 2014 -
Agenda & Update Papers
POL-0091750
416.
POL00116348
Email from Neil Hayward to Belinda
Crowe, cc Paula Vennells,
Chris Aujard and others re
Post Office Ltd Board -
Mediation Scheme Update
March 2014 v3__ following
advice from Linklaters
POL-0117341
417.
POL00022012
Email from Chris Aujard to Jonathan
Swil re: Draft Report
POL-0018491
418.
POL00021523
Meeting Minutes: minutes for Board
meeting held on 26th March
2014
POLO000056
419.
POL00022093
Outline of points produced by
Linklaters to explain Horizon
and form a basis for a report to
respond to public criticism and
individual complaints by SPMs.
POL-0018572
420.
POL00027800
Email from Chris Aujard to Paula
Vennells with others CC'd RE:
Sparrow Update
POL-0024441
421.
POL00108396
Email from Belinda Crowe to Chris
Aujard, cc'd Belinda Crowe re:
Fwd: Strictly Private &
Confidential - Subject to Legal
Privilege
POL-0106501
422.
POL00108399
Email chain from Belinda Crowe to
Gareth James and Rodric
Williams Re: Strictly Private &
Confidential- Subject to Legal
Privilege
POL-0106504
Page 811 of 861
WITN01020100
423.
POL00108404
Email from Belinda Crowe to Gareth
James Re: Strictly Private &
Confidential - Subject to Legal
Privilege
POL-0106509
424,
POL00108405
Email chain from Gareth James to
Belinda Crowe Re: Strictly
Private & Confidential - Subject
to Legal Privilege
POL-0106510
425.
POL00108408
Letter from Deloitte LLP to Chris
Aujard re: Draft Letter of
Engagement
POL-0106513
426.
POL00108412
Draft Letter (v6) from Deloitte LLP to
Post Office Ltd re Terms of
Business and Arrangements
for Assisting Post Office in
Responding to Allegations
regarding Horizon
POL-0106515
427.
POLO0117611
Letter from Deloitte to Mr Chris
Aujard RE: Summary of
assurance work undertaken on
Horizon HNG-X system to
assist POL - signed
POL-0115228
428.
POLOO006565
Project Sparrow Sub-Committee
Minutes
POL-0017844
429.
POL00116439
Post Office Project Sparrow Sub
Committee Meeting ToR and
Initial Complaint Review and
Mediation Scheme document
POL-0117423
430.
POLOO006566
Project Sparrow Sub-committee
Minutes 30 April 2014
POL-0017845
431.
POL00100513
Email chain from Julie George to
Gina Gould re. FW: Gareth
James / Gareth Jenkins / Julie
George / Mark Westbrook -
Meeting.
POL-0100096
432.
POL00108440
Email from Chris Aujard to Sarah
Paddison, Amanda Brown and
Theresa lles re: Sparrow
Subcommittee meeting
POL-0110987
433.
POL00021524
Meeting Minutes: minutes for Board
meeting held on 30th April
2014
POL0000057
Page 812 of 861
WITN01020100
434.
POL00105635
Project Zebra - Phase 1 Report -
HNG-X: Review of Assurance
Sources
POL-0104595
435.
POL00022123
Post Office Ltd Board Sub
Committee- Initial complaints
review and mediation scheme
dissemination of Linklaters
advice and Deloitte assurance
report
POL-0018602
436.
POL00031388
RDW Proposed Draft re : Deloitte
instructions as at 9.5.2014 - to
support Post Office's legal
position.
POL-0028290
437.
POL00117612
Letter from Mr Gareth James to Mr
Chris Aujard re: Change Order
to the Contract between
Deloitte LLP and Post Office
Ltd
POL-0115229
438.
POL00027400
POL Board Minutes on 21/05/2014 -
Alice Perkins, Neil
McCausland, Tim Franklin and
Others present.
POL-0024041
439.
POL00028062
Report: Horizon Desktop Review of
Assurance Sources and Key
Control Features - draft for
discussion, Deloitte
POL-0023065
440.
POLOO0006556
Email from Rodric —_ Williams
attaching Deloitte's (draft)
Board Update and a Factfile
POL-0017650
441.
POL00031400
Email from Chris Aujard to Paula
Vennells, Martin Edwards,
Alwen Lyons and others re
FW: Project Zebra
POL-0028302
442.
POLO0116581
Email from Chris Aujard to Paula
Vennells cc Martin Edwards,
Belinda Crowe and others re
meeting with Mark Russell
POL-0117506
443.
POL00030159
Draft Deloitte Board Briefing Report
POL-0026641
Page 813 of 861
WITN01020100
444.
POL00029733
Email from Alwen Lyons to Rodric
Willams Re: FWD -Deloitte
Briefing - Message from Chris
Aujard and Lesley Sewell -
Strictly Private & Confidential -
Subject to Legal Privilege
POL-0026215
445.
POL00027797
Email from Alwen Lyons to Paula
Vennells, Chris Aujard, CCing
Lesley J Sewell and others RE:
Deloitte Briefing- Message
from Chris Aujard and Lesley J
Sewell
POL-0024438
446.
POL00027153
Post Office Ltd Board - Initial
Complaints Review — and
Mediation Scheme: Sub
Committee Recommendation,
prepared by Chris Aujard and
Mark Davies
POL-0023794
447.
UKG100002392
Post Office Ltd Board - Initial
Complaints Review — and
Mediation Scheme: Update
Paper
UKGI013206-001
448.
POLO0006571
Project Sparrow Sub-Committee
Minutes 6 June 2014
POL-0017847
449,
POL00027054
Zebra Action Summary for Post
Office (Internal) v3
POL-0023695
450.
POL00031410
Report: Horizon review by Deloitte
POL-0028312
451.
POL00109004
Post Office Ltd Risk and Compliance
Committee Meeting Agenda
POL-0111015
452.
UKG100002213
Email chain from Richard Callard to
Peter Batten re: Project
Sparrow: Linklaters scoping
paper for Board comment
UKGI013027-001
453.
POL00107317
Legally privileged report prepared by
Linklaters on behalf of Post
Office into initial complaint
review and mediation scheme
legal issues
POL-0105625
Page 814 of 861
WITN01020100
454.
POL00117519
Email from Rodric Williams to
Gareth James, Copying in
Belinda Crowe, Chris Aujard
and others. Re: Strictly Private
& Confidential - Subject to
Legal Privilege
POL-0115136
455.
POL00028069
Deloitte Draft Board Briefing
document further to report on
Horizon desktop review of
assurance sources and key
control features
POL-0023072
456.
POLO0105552
Email from Alice Perkins to Paula
Vennells, Re: Sparrow
POL-0105119
457.
POL00027369
Post Office Ltd Board Sub
Committee - Initial Complaints
Review and Mediation
Scheme: The way forward
POL-0024010
458.
UKG100002358
Email chain from Richard Callard to
Mark Davies re: Board
Sparrow Sub Committee
Papers
UKGI013172-001
459.
UKG100002359
Email from Mark R Davies to
Richard Callard re. Board
Sparrow Sub Committee
Papers.
UKGI013173-001
460.
POLO0116416
Email from David Oliver to Paula
Vennells, Martin Edwards,
Belinda Crowe and others RE:
Partial draft thematic report
POL-0117400
461.
POLO0116417
DRAFT - Thematic Issues Report
POL-0117401
462.
POL00004439
Initial Complaint Review and
Mediation Scheme - Briefing
Report - Part One - Prepared
by Second Sight
VIS00005507
463.
POL00002415
Post Office, Initial Complaint Review
and Mediation Scheme, PO
Reply to Second Sight's
Briefing Report —-Part Two
VIS00003429
464.
POL00117035
Mediation Proposal
POL-0117869
Page 815 of 861
WITN01020100
465.
POL00026638
"Working Group for the Initial
Complaint Review and Case
Mediation Scheme" Amended
Minutes of 03/01/2014
POL-0023279
466.
POL00026640
Meeting Minutes for Working Group
for the Initial Complaint Review
and Case Mediation Scheme
POL-0023281
467.
POL00100132
Email chain between lan
Henderson, Janet Walker and
Ron Warmington re: Thanks
and One Request
POL-0099715
468.
POL00026636
"Working Group for the Initial
Complaint Review and Case
Mediation Scheme Standing
Agenda" for 20/02/2014
POL-0023277
469.
POL00116320
Email to Belinda Crowe from Paula
Vennells Re: Working Group
Meeting Tomorrow
POL-0117313
470.
POLO0026656
Face to face meeting of the working
group - Initial complaint review
and mediation scheme- 7
March 2014
POL-0023297
471.
POL00100387
Email from Belinda Crowe to Peter
Batten, RE: Second sight
report
POL-0099970
472.
POL00026642
Working Group for the Initial
Complaint Review and Case
Mediation Scheme Standing
Agenda
POL-0023283
473.
POL00026644
Working Group for the Initial
Complaint Review and Case
Mediation Scheme - Minutes
for 27/03/2014.
POL-0023285
474.
POL00108346
Letter from David Oliver to Paula
Vennells RE Note for call with
James Arbuthnot - 18 March
POL-0110973
475.
POL00105634
‘Meeting with MPs - Mediation
Scheme and Branch
Improvement Programme’
Minutes, undated.
POL-0104622
Page 816 of 861
WITN01020100
476.
POL00116388
Email from Mark R Davies to Chris
Aujard, Paula Vennells, Martin
Edwards and others re
Confidential MP Meeting -
Note and overview of meeting
POL-0117381
477.
POL00100474
Letter from James Arbuthnot to
Paula Vennells re: meeting
follow up
POL-0100057
478.
POLO0006552
Email from Andy Parsons re Draft
SS Thematic Report
POL-0017646
479.
POL00100491
Email Crowe to Sophie Bialaszewski
and other re. Fwd: Update from
Post Office meeting, 24 March
2014
POL-0100074
480.
POL00026633
Initial Complaint and Mediation
Scheme Working Group
Minutes of 01/04/2014.
POL-0023274
481.
POLO0100671
Letter from Paula Vennells to RT
Hon James Arbuthnot MP,
Final report on the Mediation
Scheme.
POL-0100254
482.
POL00006554
Email from Andrew Parsons re SS
Report
POL-0017648
483.
POL00105466
Letter from the Rt. Hon. James
Arbuthnot MP to Paula
Vennells dated 01/05/2014.
POL-0104646
484,
POL00043627
Initial Complaint Review and
Mediation Scheme Working
Group - Minute of meeting
dated 6 May 2014.
POL-0040130
485.
POLO0026659
Minute of Initial Complaint Review
and Mediation Scheme -
Working Group 20 May 2014
POL-0023300
486.
POL00075178
Initial Complaint Review and
Mediation Scheme Briefing
Report Part One
POL-0071741
487.
POL00026665
Working Group for the Initial
Complaint Review and Case
Mediation Scheme - Minute of
Working Group Call 26 June
2014
POL-0023306
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WITN01020100
488.
POL00026672
Minute - Working Group for the Initial
Complaint Review and Case
Mediation Scheme - 10th July
2014
POL-0023313
489.
POL00022149
Email from Belinda Crowe to
Andrew Parsons, Angela Van
Dan Bogerd and others
regarding Second sight part
two report
POL-0018628
490.
POL00021814
Email from Andrew Parsons to
Belinda Crowe, Chris Aujard
and Angela Van-Den-Bogerd
CC Matthew Fielden, Re
Project Sparrow
POL-0018293
491.
POL00305575
Email from Belinda Crowe toChris M
Day, Martin Edwards CC ing
Belinda Crowe
POL-BSFF-
0143625
492.
POLO0101176
Email chain from Gavin Lambert to
Paula Vennells re: revised
Board update with more on
Sparrow.
POL-0100759
493.
UKG100002436
Email from Alwen Lyons to Alice
Perkins, Neil McCausland,
Alasdair Marnoch and others
re: A note from Paula - Period
4 Financial Results Update
UKGI013250-001
494.
POL00022215
Email from Belinda Crowe to
Jonathan Swil and Rodric
Williams regarding Second
sight's draft part two report
POL-0018694
495.
POL00022212
Email from David Oliver to Jonathan
Swil and Belinda Crowe
regarding the draft letter to
second sight re part 2
preliminary comments
12082014
POL-0018691
496.
POL00022213
Letter from Chris Aujard to Ron
Warrington and lan Harrington
regarding Second sight's part
two mediation briefing report
POL-0018692
Page 818 of 861
WITN01020100
497.
POL00022186
Email from Andrew Parsons to
Belinda Crowe, Chris Aujard
and others regarding Project
sparrow [BD -
4A.FID20472253]
POL-0018665
498.
POL00101174
Email from Paula Vennells to
Belinda Crowe re: Second
Sight part 2 report.
POL-0100757
499.
POLO0021800
Email from Belinda Crowe to David
Oliver, Melanie Corfield and
Andrew Parsons RE: Fwd:
Second Sight's Draft Part Two
Report
POL-0018279
500.
POL00040226
Letter from Chris Aujard (POL
Counsel) to Sir Anthony
Hooper, RE: Initial Complaint
Review and Mediation
Scheme, draft second sight
part 2 report (the draft report)
POL-0036708
501.
POL00040230
Email from Rodric Williams to Tony
Hooper, RE: Part 2 Report
POL-0036712
502.
POL00305792
Email from Rodric Williams to
AnthonyHooper cc ing
Belinda Crowe, Chris Aujard.
RE: Second Sight "Part Two
Report"
POL-BSFF-
0143842
503.
POL00022237
Email from Belinda Crowe to Chris
Aujard sofy copy of second
sight letter regarding quality of
work
POL-0018716
504.
POLO0116697
Email chain from Alwen Lyons to
Larissa Wilson. RE: Sparrow
update from Chris Aujard
POL-0117570
505.
POL00101301
Email from Paula Vennells to Mark
R Davies, Alasdair Marnoch,
Alice Perkins, and others re:
Re: Sparrow update
POL-0100884
506.
POL00101325
Email from Paula Vennells to Neil
McCausland, Mark R Davies
and Chris Aujard re: Re:
Sparrow update
POL-0100908
507.
POL00101365
Email from Paula Vennells to Mark
Davies re: Sparrow update
POL-0100948
Page 819 of 861
WITN01020100
508.
POL00026680
Minutes - Working Group for the
Initial Complaint Review and
Mediation Scheme - 11
September 2014
POL-0023321
509.
POL00029944
Fujitsu's comments on Second Sight
Briefing Report - Part Two
POL-0026426
510.
POL00027363
Strictly Confidential Post Office Ltd
Board Initial © Complaints
Review and Mediation
Scheme: Update Paper by
Chris Aujard and Belinda
Crowe.
POL-0024004
511.
POL00101364
Lead Team update for Paula's CEO
Report to the Board
POL-0100947
512.
POL00021853
Email from Andrew Pheasent to
Dave Hulbert re: Second Sight
Part Two
POL-0018332
513.
POL00021773
Email chain between Paul Inwood,
Belinda Crowe, Dave Hulbert
and others re: Second Sight
Part Two.
POL-0018252
514.
POL00040246
Email from Andrew Pheasant to
Andy Garner, RE: FW: Second
Sight Part Two
POL-0036728
515.
POL00021883
Email from Belinda Crowe to Dave
Hulbert re: Second Sight Part
Two
POL-0018362
516.
POL00101244
Email from Alwen Lyons to Paula
Vennells re: Brief
POL-0100827
517.
POLO0006561
Template Letter: PO Initial
Complaint Review and
Mediation Scheme- SS's Part 2
Report
POL-0017655
518.
POL00101390
Email from Alwen Lyons to Alice
Perkins, Neil McCausland,
Virgina Holmes and others re:
Sparrow - Board Note
POL-0100973
519.
POL00021528
Minute meetings: minutes for Board
meeting held on 25th
September 2014
POL0000061
Page 820 of 861
WITN01020100
520.
UKG100002397
Initial Complaints Review and
Mediation Scheme: July
Update Paper
UKGI013211-001
521.
POL00100335
File Notes for a meeting with Tony
Hooper, Monday 24th
February ta 2:30pm. Paula
Vennells and Chris Aujard also
in attendance.
POL-0099918
522.
POL00021526
Post Office Ltd Board Minutes of
10/06/2014
POLO0000059
523.
POL00099223
Email from Paula Vennells to Alice
Perkins re The case for
independence in the Post
Office appeals system
POL-0098806
524.
POL00118494
Email from Alwen Lyons to Paula
Vennells - Re: Susan
POL-0119611
525.
POL00108058
Email from Paula Vennells to
Theresa Illes re SS costs and
update from Susan
POL-0110925
526.
POL00116124
Email chain from Paula Vennells to
Alasdair Marnoch cc Alice
Perkins CB re: Follow up
POL-0117123
527.
POL00104258
Collection of documents re:
Employee
departure/termination of
employment for Susan
Crichton (24 September 2013 -
30 November 2013)
POL-0103841
528.
LCAS0001071
Letter from Greg Knight MP to Paula
Vennells regarding decision by
PO not to mediate Lee
Castleton's case despite
Second Sight
recommendation.
Vvisoo011311
529.
POL00119548
Letter from Greg Knight to Paula
Vennells re: Lee Castleton -
Appealing Case for Mediation
Scheme Letter
correspondence attached
POL-0119860
530.
POLO0101581
Email from Gavin Lambert to Paula
Vennells, re: Draft reply to
Gavin
POL-0101164
Page 821 of 861
WITN01020100
531.
POL00116840
DRAFT RESPONSE FROM PAULA
VENNELLS TO SIR GREG
KNIGHT MP re: _ Initial
Complaint Review and
Mediation Scheme
POL-0114613
532.
POL00109724
Letter from Paula Vennells to The Rt
Hon Sir Greg Knight MP
POL-0111080
533.
LCAS0000979
Lee Castleton case study: Letter
from Angela Van Den Bogerd
to The Rt Hon Sir Greg Knight
MP re: Mr Lee Castleton in the
Initial Complaint Review and
Mediation Scheme
VIS00011219
534.
POLO0077426
Draft Closure Letter in relation to
case M001 - Lee Castleton -
Mediation declined
POL-0073989
535,
POL00077425
Email from Patrick Bourke to
Andrew Parsons, Angela Van-
Den-Bogerd, Rodric Williams
and others: RE: For
comments/clearance please:
Letters to Applicants where we
are refusing to mediate,
contrary to WG
recommendation.
POL-0073988
536.
POL00101477
Email from Avene O'Farrell to
Belinda Crowe, Tom Wechsler,
Chris Aujard re: FW: Post
Office mediation process
POL-0101060
537.
POL00101484
Briefing for Chief Executive (In
confidence); PV Conversation
with JA; QA
POL-0101067
538.
POL00117030
Note of call between Paula Vennells
and James Arbuthnot MP -
15:30, 28 October 2014
POL-0117865
539.
POL00022610
Instructions to lead counsel to
advise in conference re In the
Matter of the Post Office
Limited Complaints and
Mediation Scheme
POL-0019089
540.
POL00022611
Post office complaints and
mediation scheme dated
24/11/14.
POL-0019090
Page 822 of 861
WITN01020100
541.
POL00101578
Email from Mark Davies to Paula
Vennells, re: Sparrow sub-ctte
POL-0101161
542.
POL00101586
Email from Ron Warmington to
Mediation re: Post Office cases
- update
POL-0101169
543.
POL00026741
Letter from The Rt. Hon. James
Arbuthnot M.P. to Paula
Vennells re: Request for
answers to questions from
letter dated 8/12/2014 about
Second Sight
POL-0023382
544,
POL00101596
Letter from Paula Vennells to James
Arbuthnot MP re Complaint
and Mediation Scheme.
Disagrees with Oliver Letwin's
suggestion re general
presumption that all cases will
be mediated.
POL-0101179
545.
POL00101738
Email from Paula Vennells to Mark
R Davies re: RC/JS briefing?
POL-0101321
546.
POL00101700
Letter from The Rt Hon James
Arbuthnot to Paula Vennells re:
Compliants and Mediation
Scheme.
POL-0101283
547.
POL00101690
Post Office Press Release from the
office of The Rt Hon James
Arbuthnot, MP re: MPs lose
faith in Post Office mediation
scheme
POL-0101273
548.
POLO0116824
Speaking Note for Paula re Update
for Board/Alice _ following
meeting with MPs
POL-0117685
549.
POL00021530
Meeting Minutes: minutes of Board
meeting held on 26th
November 2014.
POLO0000063
550.
POL00109487
Letter from Paula Vennells to Jo
Swinson MP Re: Media
attention relating to the
Mediation Scheme.
POL-0111055
551.
POL00105464
Letters between James Arbuthnot
and Paula Vennels, RE:
request to meet MPs _ to
discuss mediation process.
POL-0104644
Page 823 of 861
WITN01020100
552.
POL00116734
Email from Belinda Crowe to Avene
O'Farrell, Tom Wechsler, Chris
Aujard and others RE: Post
Office mediation process
POL-0117604
553.
POL00116815
Email chain from Gavin Lambert to
Mark Davies cc Tom Wechsler
and Patrick Bourke re: lines on
the Sparrow position for Alice
1:1 and Board.
POL-0117676
554,
POL00116816
Note from Paula Vennells: Update
for Board/Alice
POL-0117677
555.
POL00116823
Email from Gavin Lambert to Mark R
Davies, Tom Wechsler and
Patrick Bourke re: RE: lines on
the Sparrow position for Alice
1:1 and Board
POL-0117684
556.
POL00158173
November Board — CEO Report
notes
POL-0146492
557.
POL00158172
Email from Gavin Lambert to Paula
Vennells re: board note and
CFO cribsheet
POL-0146491
558.
POL00022609
Email from Mark Underwood to
Patrick Bourke, Rodric
Williams, Jane MacLeod and
others, RE Project Sparrow
POL-0019088
559.
POL00101587
Email from Melanie Corfield to Gavin
Lambert, Patrick Bourke and
others; re: URGENT -
SPARROW - ADVICE TO
CEO
POL-0101170
560.
POL00101589
Email from Patrick Bourke to Paula
Vennells, Mark Davies and
others re: Sparrow - Revised
Letter - Urgent
POL-0101172
561.
POL00116833
Email from Patrick Bourke to Paula
Vennells, Gavin Lambert,
Avene O'Farrell and others re
Draft letter to James Arbuthnot
POL-0117694
562.
POL00109684
Email from Avene O'Farrell to
Patrick Bourke, Gavin Lambert
and Mark Davies re: CEO -
James Arbuthnot MP - 281114
POL-0111071
Page 824 of 861
WITN01020100
563.
POL00101604
Email from Alice Perkins to Paula
Vennells, Belinda Crowe and
others re: JA
POL-0101187
564.
POL00101796
Email from Mark R Davies to Paula
Vennells and Gavin Lambert
Re: Second Sight - Horizon
Errors - Media Coverage.
POL-0101379
565.
POL00101801
Email from Paula Vennells to Mark
R Davies and Gavin Lambert;
Re: Second Sight - Horizon
Errors - Media Coverage.
POL-0101384
566.
POL00101852
Email Chain from Gavin Lambert to
Paula Vennells re Second
Sight - Horizon Errors - Media
Coverage. Chain discusses
conversation with Tim
McCormack about bugs and
errors.
POL-0101435
567.
POL00022612
Instructions to Leading Counsel to
Advise in Consultation
POL-0019091
568.
POL00102064
Email from Patrick Bourke to Paula
Vennells; Re: options.
Mediation Scheme and BBC
POL-0101647
569.
POL00102065
January Options v.4_ Mediation
Scheme and BBC.
POL-0101648
570.
POL00117054
Email from Mark R Davies to Patrick
Bourke Re: Options -
Comments
POL-0117888
571.
POL00102069
Meeting with Sir Anthony Hooper re:
complaint review and
mediation scheme
POL-0101652
572.
POL00021531
Meeting minutes: minutes of Board
meeting held on 28th January
2015
POL0000064
573.
POL00117072
Email thread from Mark R Davies to
Tom Wechsler re: Board
POL-0117906
574.
POL00006575
Sparrow Sub-Committee Minutes 12
Jan 2015
POL-0017849
575.
POL00117046
Email chain from Tom Wechsler to
Gavin Lambert re: My Sparrow
Board brief
POL-0117880
Page 825 of 861
WITN01020100
576.
POL00101715
Letter from CMS Cameron McKenna
LLP to BBC Programme Legal
Advice, re: The One Show -
Post Office Limited.
POL-0101298
S77.
POL00040911
Post Office Ltd - Project Sparrow
Sub Committee Update and
options
POL-0037393
578.
POL00102167
Email from Tom Wechsler to
Alasdair Marnoch, Alice
Perkins re 2015 02 18 Sparrow
papers
POL-0101750
579.
POL00102168
Criminal Cases Review Commission
(CCRC)
POL-0101751
580.
POLO0102169
Project Sparrow - Options
Assumptions and Constants
Report
POL-0101752
581.
POLO0006574
Sparrow Sub-Committee Minutes 18
Feb 2015
POL-0017848
582.
POLO0102152
Project Sparrow Sub-committee
Update and Options report v4
POL-0101735
583.
POLO0006366
Advice on Theft and False
Accounting by Brian Altman
ac
POL-0017634
584,
UKG100003789
Letter from Paula Vennells to Jo
Swinson MP re Second Sight
Mediation Scheme
UKGI014603-001
585.
UKG1I00003615
Email from Alwen Lyons to Alice
Perkins, Neil Wilkinson,
Richard Callard and others re
Sparrow email to the Board -
Bringing the Working Group to
a close
UKGI014429-001
586.
UKGI00003467
Email from Alisdair Cameron to
Alwen Lyons, Neil
McCausland, Virginia Holmes
others re: Sparrow Paper for
the Board - Action Required.
UKGI014281-001
587.
UKGI00003501
Email chain from Alasdair Marnoch
to Richard Callard, Tim
Franklin, Alwen Lyons Re
Sparrow paper for the board -
Action required
UKGI014315-001
Page 826 of 861
WITN01020100
588.
POLO0117187
Email from Belinda Crowe to Jane
MacLeod, Mark R_ Davies,
Belinda Crowe and others re
Fwd: JS letter
POL-0114632
589.
POL00119795
Letter from Paula Vennells to Jo
Swinson MP regarding the
Complaint Review and
Mediation Scheme
POL-0119777
590.
POL00000219
Initial Complaint Review & Mediation
Scheme: Work Plan
VIS00001193
591.
POL00027279
Post Office Limited - Minutes of
board meeting from
25/03/2015
POL-0023920
592.
POL00102397
Email from Roger W Gale to Paul
Vennells, Mark R Davies, Jane
MacLeod and others. Re:
Sparrow
POL-0101980
593.
POL00041076
Initial Complaint Review and
Mediation Scheme BRIEFING
REPORT - PART TWO
POL-0037558
594.
POL00040957
Complaint Review and Mediation
Scheme Reply of Post Office
Limited to Second Sight's
Briefing Report — Part Two (
Draft )
POL-0037439
595.
POL00043630
Meeting Minutes - Working Group
for the Initial Complaint Review
and Case Mediation Scheme -
14 November 2014
POL-0040133
596.
POL00040498
Email from Andrew Parsons to
Belinda Crowe, Mark
Underwood, Re: Second Sight
Questions for POL
POL-0036980
597.
POL00040499
Draft letter from Christ Aujard to
Second Sight re: _ Initial
Complaint Review and
Mediation Scheme,Questions
in relation to Second Sight's
Briefing Report — Part Two
POL-0036981
598.
POL00043633
Meeting Minutes - Working Group
for the Initial Complaint Review
and Case Mediation Scheme -
14 January 2015
POL-0040136
Page 827 of 861
WITN01020100
599.
POL00117052
Email chain from Mark R Davies to
Tom Wechsler re: Re: My
Sparrow Board brief
POL-0117886
600.
POL00027313
Post Office Group Executive
Agenda for the meeting to be
held on 12th February 2015
POL-0023954
601.
POL00117283
Speaking Notes for POL Board re
new approach to the Complaint
Review and Mediation Scheme
(aka Project Sparrow)
POL-0118100
602.
POL00027308
Post Office Ltd Agenda for Board
Meeting held on 25th March
2015 and associated
documents from meeting
POL-0023949
603.
POL00117056
Email from Patrick Bourke to Tom
Wechsler and Mark R Davies
with email from Paula Vennels
forwarded. Relates to
response to Second Sight
Report and possibility of
closing the scheme.
POL-0117890
604.
POLO0102401
Email from Alwen Lyons to Alice
Perkins, Neil McCausland,
Virginia Holmes and others.
Re: Sparrow
POL-0101984
605.
POLO0103765
Email from Tom Wechsler to Laura
Thompson, Re: Letter from
Vince Cable to BIS Select
Committee
POL-0103348
606.
CWU00000007
Statement: Post Office Statement on
Post Office Complaint Review
and Mediation Scheme from
19.04/15
viso0007681
607.
POL00091399
Email chain between Mark
Underwood, Patrick Bourke,
Angela Van-Den-Bogerd and
others RE: Statement
POL-0090421
608.
POL00027751
Email from Mark R Davies to Kevin
Gilliland, Paula Vennells, Jane
Macleod and others RE: FWD:
Note to network
POL-0024392
Page 828 of 861
WITN01020100
609.
POL00027309
Memorandum for the Board of Post
Office Limited from Alisdair
Cameron - Fujitsu Extension
Option by Al Cameron
POL-0023950
610.
POL00027310
Post Office Ltd. Minutes of an
Extraordinary Board Meeting
held on 2/7/2015
POL-0023951
611.
POL00021532
Meeting minutes: minutes for Board
meeting held on 21st May
2015
POLO0000065
612.
POL00102438
Email from Paula Vennells to Jane
MacLeod, Mark R Davies and
Alisdair Cameron re: Sparrow
POL-0102021
613.
POL00021683
Letter from Jane MacLeod (General
Counsel, POL) to Second
Sight regarding breach of
confidence
POL-0018162
614.
POL00113697
Letter from Miss Jane Macleod to
Second Sight Support
Services Ltd re: Complaint
Review and Mediation Scheme
and access to personal data.
POL-0112805
615.
POL00102433
Email from Paula Vennells to Mark
R Davies, Alisdair Cameron
and Jane MacLeod re: Re:
Sparrow
POL-0102016
616.
POL00065478
Email chain from Mark Underwood
to Jane MacLeod, Rodric
Williams Re Sparrow
POL-0061957
617.
POL00119489
PO Q&A Report Re: What have
Second Sight said to the
minister re ‘their views have
been misrepresented’
POL-0119408
618.
FUJ00083379
Fujitsu. presentation on Branch
Outreach Issue (Initial
Findings)
POINQO089550F
619.
POL00029971
Email from Paula Vennells to
Alisdair Cameron and Rob
Houghton re: The
Dalmellington Error in Horizon
POL-0026453
620.
POL00026913
Email from Rob Houghton to Angela
Van Den Bogerd, RE: The
Dalmellington Error in Horizon
POL-0023554
Page 829 of 861
WITN01020100
621.
POL00029980
Email from Sharon Gilkes to Rob
Houghton and Katie Mulligan
re the Dalmellington Error in
Horizon /problemswithpol
POL-0026462
622.
POLO0030012
Email from Rodric Williams to Rob
Houghton and others RE: The
Dalmellington Error in Horizon
/ problemswithpol
POL-0026494
623.
POL00119584
Email from Avene Regan to Rodric
Williams and ECT, RE:
Criminal Investigation Opened.
POL-0119896
624.
POL00029976
Email from Jane Macleod to Alisdair
Cameron, Rob Houghton and
Paula Vennells re: The
Dalmellington Error in Horizon
/ problemswithpol
POL-0026458
625.
POLO0117722
Letter from Tim Parker to Baroness
Neville-Rolfe DBE CMG re:
proposal to instruct QC to
advise as to the appropriate
scope of investigation in regard
to Post Office's handling of
complaints regarding Horizon
POL-0118354
626.
POL00024913
Letter sent from Tim Parker to
Baroness Neville - Rolfe re
:Post Office Handling of
complaints made by Sub -
Postmasters review
POL-0021392
627.
POL00027126
Email from Jane Macleod to Paula
Vennells RE FW _ Project
sparrow
POL-0023767
628.
POL00103110
Email from Jane MacLeod to Paula
Vennells, Mark Underwood,
Rodric Williams and others re:
FW: Chairman's review - with
attachment
POL-0102693
629.
POLO0103111
Annex A: POLs proposals for
addressing the Report's
recommendations, as agreed
with Jonathan Swift QC.
POL-0102694
630.
POL00027128
Email from Tom Wechsler to Paula
Vennells cc Avene Regan RE:
121 with Jane
POL-0023769
Page 830 of 861
WITN01020100
631.
POLO0006355
Review on behalf of the Chairman of
Post Office Ltd concerning the
steps taken in response to
various complaints made by
sub-postmasters
POL-0017623
632.
UKGI00005297
Post Office Meeting Notes of
04/08/2015 - Issues with
Horizon IT System - Second
Sight Mediation Scheme
UKGI016111-001
633.
UKGI00000035
Baroness Neville Rolfe meeting with
Post Office: Thursday 6 August
Agenda
ViIS00000996
634,
POL00065471
Email chain from Jane MacLeod to
Avene O'Farrell, Mark R
Davies, Alisdair Cameron Re
Sparrow
POL-0061950
635.
UKG100005323
Email from Richard Callard to Alwen
Lyons and Laura Thompson
re: Panorama.
UKGI016137-001
636.
POLO0102551
Letter from Baroness Neville-Rolfe
to Mr Tim Parker re:
Unresolved Issues relating to
Post Office Horizon System
and Further Actions to be
Taken
POL-0102134
637.
UKG/I00000058
Briefing from Laura Thompson ShEx
to Baroness Neville-Rolfe
ahead of meeting with James
Arbuthnot
ViSo00001019
638.
POL00174396
Email from Alwen Lyons to Tim
Parker CC'd Jane MacLeod,
Mark R Davies, Paula Vennells
RE; Panorama programme
17th of August 2015
POL-0168393
639.
POL00319092
Project Sparrow - Note for Tim
Parker with Track changes
Date taken from Metadata
POL-BSFF-
0157142
640.
POL00168301
Email from Mark R Davies (POL); to
Paula Vennells (POL); Alwen
Lyons (POL) and Jane
MacLeod (POL) Re: Note for
Tim Parker on BBC Panorama
Documentary
POL-0163598
Page 831 of 861
WITN01020100
641.
POL00021538
Meeting Minutes: minutes of Board
meeting held on 22nd
September 2015
POL0000071
642.
POL00102619
Email from Jane MacLeod to Tim
Parker re: Post Office -
meeting with Jonathan Swift
Qc. Includes summary of
meeting in text of email chain.
POL-0102202
643.
UKG100006142
Email from Baroness Neville Rolfe to
Laura Thompson, cc Richard
Callard RE: Submission to
Baroness Neville-Rolfe on
Post Office Horizon
UKGI016956-001
644.
POLO0117511
Email from Tom Wechsler to Paula
Vennells re telephone call with
BNR.
POL-0118287
645.
POL00117506
Email from Mark R Davies to Paula
Vennells, Tom Wechsler, Jane
MacLeod and others re: Re:
Speaking notes for BNR re
Lyca & text of email to
Chairman
POL-0118282
646.
POL00027115
Briefing for 121 with Tim Parker
POL-0023756
647.
UKGI00000044
Briefing/Update for Baroness
Neville-Rolfe ahead of meeting
with Second Sight
ViIS00001005
648.
POL00027129
Project Sparrow - Chairman's review
POL-0023770
649.
POL00110344
Email from Paula Vennells to Tom
Wechsler cc Avene Regan re
Sparrow - latest stats
POL-0111280
650.
POL00027124
Briefing for 1-2-1 with Tim Parker
POL-0023765
651.
POLO0103200
Email from Jane MacLeod to Paula
Vennells, RE: Sparrow Board
paper- Request for advice
subject to legal professional
privilege
POL-0102783
652.
POL00027116
Email from Tom Wechsler to Paula
Vennells re TP/BNR - Phone
call with BIS which included
discussion about Sparrow
POL-0023757
Page 832 of 861
WITN01020100
653.
POL00103171
Email from Tom Wechsler to Paula
Vennells. Re: Feedback from
Tim/ BNR meeting
POL-0102754
654.
POL00110440
Email from Jane MacLeod to Paula
Vennells re: 1:1 on Monday
POL-0111334
655.
POLO0110406
Email chain from Tom Wechsler to
Paula Vennells Re: Corporate
services budget savings
POL-0111316
656.
POL00029710
Email from Andrew Winn to Alan
Lusher re: Rivenhall
POL-0026192
657.
POLO0030001
Email from Andrew to Alan Lusher,
Re: Rivenhall
POL-0026483
658.
POLO0088956
Email thread between John
Breeden, Angela Van-Den-
Bogerd and others, re: Follow
up to BIS meeting on JFSA
POL-0080917
659.
POL00002151
Gareth Jenkins Witness Statement
VIS00003165
660.
POL00097215
Email from Jenkins Gareth Gl to
Rachael Panter, Jarail A
Singh, Andy Cash and others.
RE: Fujitsu expert report -
URGENT
POL-0096798
661.
POLO0120561
Email from Mike Granville to Paula
Vennells, Mike Moores, Mike
Young and others re: Update
on JFSA and Horizon issues
and urgent respinse needed
for BIS and Report on JFSA
response to issues for BIS
POL-0126174
662.
POL00098377
Note of Phone Call between Paula
Vennells and James Arbuthnot
dated May 2013
POL-0097960
663.
POL00029590
Email from Martin Edwards to Alwen
Lyons, re: Paula 1:1 with Alice
- update on 2nd sight.
POL-0026072
664.
POL00099088
Email from Lesley Sewell to Susan
Crichton, Paula Vennells and
others re: Draft statement
POL-0098671
665.
POL00029812
Email from Paula Vennells to Mark
R Davies, Lesley J Sewell re:
Accessing Horizon
POL-0026294
Page 833 of 861
WITN01020100
666.
POL00025511
Letter from Freeths to Rodric
Williams (POL Solicitor) re:
Bates & Others v Post Office
Limited Group Action Letter
pursuant to the practice
direction on pre-action conduct
POL-0021990
667.
POL00025510
Bates & Others v POL Claim Form,
Claim no HQ16X01238
POL-0021989
668.
UKGI00006646
Email from Mark Underwood to
Laura Thompson, cc'ing Tom
Wechsler re: Letter from
Freeths - Proceedings Issued
for GLO
UKGI017460-001
669.
POL00103162
Email from Jane MacLeod to Patrick
Bourke, Rodric Williams and
Mark Underwood re: Post
Office - Chairman's enquiry
and related matters
POL-0102745
670.
POLO0103165
Email from Jane MacLeod to Tim
Parker, re Post Office -
Meeting with Baroness Neville-
Rolfe Wednesday 27 April
2016, 3:30pm
POL-0102748
671.
POLO0117704
PO Group Executive - Postmaster
Litigation - Executive Summary
(Jane MacLeod / Rodric
Williams).
POL-0118337
672.
POLO0006805
PO Board: Postmaster litigation
executive summary
POL-0018041
673.
POL00103199
Email from Jane MacLeod to Mark R
Davies, RE: Sparrow- Advice
subject to Legal Professional
Privilege
POL-0102782
674.
POL00021542
Meeting Minutes: minutes — for
meeting held on 24th May
2016
POL0000075
675.
POL00027219
Post Office Limited minutes of a
board meeting held
POL-0023860
676.
POL00025507
Email from Rodric Williams to POL
employees re Postmaster
Litigation Steering Group
Meeting on 7 June 2016
POL-0021986
Page 834 of 861
WITN01020100
677.
POL00025508
Agenda for Postmaster Litigation
Steering Group Meeting on 7
June 2016
POL-0021987
678.
POL00110433
Email from Amanda Brown to
Thomas Moran, Rodric
Williams, Mark Davies and
others re: FW: Postmaster
Litigation Steering Group -
SUBJECT TO LEGAL
PROFESSIONAL PRIVILAGE
- DO NOT FORWARD.
POL-0111332
679.
POLO0025509
Draft Postmaster Litigation Steering
Group Meeting Terms of
Reference and Membership
POL-0021988
680.
POL00024292
Email chain from Jane MacLeod to
Andrew Parsons and Rodric
Williams, Re: Postmaster
Litigation.
POL-0020771
681.
POL00024308
Email chain between Jane
MacLeod, Thomas P Moran,
Andrew Parsons and others,
Re: PLSG - Decision Paper.
POL-0020787
682.
POL00024199
Email chain between Thomas P
Moran, Jane MacLeod, Mark
Underwood and others Re:
Postmaster Litigation SteerCo
Call: Security for Costs.
POL-0020678
683.
POL00024700
Email from Jane MacLeod to Mark
Ellis, Mark Davies and others
re: URGENT - Postmaster
litigation -strategic options for
CMC
POL-0021179
684.
POLO0110441
Email from Tom Weschler to Paula
Vennells re: 1:1 with Jane
POL-0111335
685.
UKGI00006685
Email from Richard Callard to UKGI
POL Team and Claire French
(Communications) re Sparrow
update/media coverage
UKGI017499-001
Page 835 of 861
WITN01020100
686.
POL00103194
Email from Jane MacLeod to Rodric
Williams, Patrick Bourke and
Mark Underwood, RE: FW:
Post Office- I Chairman's
Review Confidential and
legally privileged
POL-0102777
687.
POL00103259
Email from Jane MacLeod to Tim
Parker, Carla Stent, Richard
Callard and others, RE: PO
Ltd- Supply Chain Litigation-
Confidential and subject to
legal privilege- do not forward
POL-0102842
688.
POL00104103
GLO Updates to POL Board (April
2016 - March 2016)
POL-0103686
689.
UKGI00008549
Email from Ken McCall to Paula
Vennells, Carla Stent and
others, CC Tim Parker re
Postmaster Litigation
UKGI019357-001
690.
POLO00006440
Decision Paper - Communication
Strategy
POL-0017745
691.
UKGI00006959
Email from Richard Callard and
Laura Thompson CC Claire
French re Postmaster
Litigation - Update to Board
UKGI017773-001
692.
POL00024967
Email from Andrew Parsons to
Thomas P Morgan and Jane
MacLeod, CCing Melanie
Corfield, Rodric Williams,
Patrick Bourke and others RE:
Postmaster Litigation Briefing
Plan
POL-0021446
693.
POLO0110697
Email from Alwen Lyons to Tim
Parker, Ken Mccall, Tim
Franklin and Others Re Note
for the Board Possible FT
Article
POL-0111373
694.
POLO00110699
Email chain from Mark R Davis to
Jane MacLeod Re JFSA
Release
POL-0111374
695.
POLO00111196
Note re: GLO communications -
proposed approach
POL-0111466
Page 836 of 861
WITN01020100
696.
POL00111699
Email from Paula Vennells to Mark
R Davies re. Board GLO Sub
Committee.
POL-0109272
697.
POL00117702
Email chain from Jane Macleod to
Paula Vennells, Mark R
Davies, tom Wechsler and
others re: Sparrow Board
paper
POL-0118335
698.
POL00021700
Email from Rodric Williams to
Thomas P Moran and others,
RE Postmaster Litigation
Steering Group
POL-0018179
699.
POL00103201
Email from Paula Vennells to Avene
Regan, RE: Fwd: Sparrow
Board Paper- Request for
advice subject to legal
professional privilege
POL-0102784
700.
POL00103161
Email from Jane MacLeod to Tim
Parker re: Post Office -
Chairman's enquiry and
related matters
POL-0102744
701,
POL00041246
Email from Jane MacLeod to Rodric
Williams re. Con with TRQC /
JSQC Recommendations
POL-0037728
702.
POL00027221
Group Executive Agenda at
Finsbury Dials
POL-0023862
703.
POL00027218
Post Office Board Agenda
POL-0023859
704,
POL00110442
Email from Diane Blanchard to Jane
MacLeod re: Chair's review
(LP)
POL-0111336
705.
POLO0006601
Letter to PO from Bond Dickinson re
group litigation
POL-0017859
706.
POL00022764
Email chain between Jane
MacLeod. Patrick Bourke,
Mark Underwood and others
RE: FW: Letter to Minister
regarding the Litigation
POL-0019243
707.
POL00103207
Email from Patrick Bourke to Jane
MacLeod, RE: FW: Post Office
Ltd- Update and Request for
Further Advice
POL-0102790
Page 837 of 861
WITN01020100
708.
POL00103220
Email from Tom Wechsler to Paula
Vennells, RE: Confidential and
Subject to Privilege
POL-0102803
709.
POL00041258
Email from Jane MacLeod to Paula
Vennells re. Postmaster
Litigation - Confidential and
Subject to Legal Privilege
POL-0037740
710.
POL00030007
Email from Jane Macleod to Alisdair
Cameron and Rob Houghton
re Sparrow Update
POL-0026489
711.
POL00022663
Email from Jane MacLeod to Paula
Vennells, Alisdair Cameron,
cc'ing Avene Regan and others
re: Postmaster — Litigation-
CONFIDENTIAL AND
SUBJECT TO LITIGATION
PRIVILEGE
POL-0019142
712,
POLO0022666
Extracts from Bond Dickinson to
Freeths re: Defects in Horizon
POL-0019145
713.
POL00103232
Email from Alwen Lyons to Tim
Parker, Ken Mccall, Carla etc,
RE: Postmaster _Litigation-
Update to Board
POL-0102815
714,
POLO0006599
Post Office Group Action- Bond
Dickinson Workplan
POL-0017857
715.
POL00022641
Postmaster Litigation - Bates & 90
Others v. Post Office Limited -
Agenda for Steering Group
meeting
POL-0019120
716.
POL00022638
Email chain between Andrew
Parsons, Rodric Williams,
Thomas P Moran and others
re: Postmaster Litigation
Steering Group
POL-0019117
717.
POL00030006
Email from Rob Houghton to Jane
Macleod, Andrew Parsons,
Rodric Williams, Patrick
Bourke, Thomas P Moran,
Tom Wechsler, Mark R Davies,
Melanie Corfield, Angela Van-
Den-Bogerd RE: Strictly
private and confidential -
subject to litigation privilege
POL-0026488
Page 838 of 861
WITN01020100
718.
POL00021543
Meeting Minutes: minutes of a Board
meeting held on 25th July 2016
POL0000076
719,
POL00021544
Meeting minutes: minutes for Board
meeting held on 29th
September 2016
POL0000077
720.
POL00021545
Meeting minutes: minutes of Board
meeting held on 25th October
2016
POL0000078
721,
POL00027185
Minutes of POL Board Meeting held
on 24 November 2016
POL-0023826
722.
POL00103892
Post Office Board Agenda
(24/11/2016)
POL-0103475
723.
POLO00110564
Email from Jane MacLeod to Paula
Vennells; Alisdair Cameron;
others CC'd. RE: Postmaster
Litigation - Remote Access
(Extract from draft letter to
Freeths).
POL-0108284
724,
POLO0110565
Remote access to Horizon data
(from Bond Dickinson LLP)
POL-0108285
725,
POL00091418
Email from Jane MacLeod to Alisdair
Cameron, RE: Postmaster
Litigation- Remote Access-
extract from draft letter to
Freeths
POL-0090440
726.
POL00091419
Email from Thomas Moran to Paula
Vennells, Rodric Williams,
Jane MacLeod and others, RE:
Postmaster Litigation - Remote
Access: extract from draft letter
to Freeths
POL-0090441
727.
POL00041377
Email from Andrew Parsons to
Rodric Williams re. Postmaster
Litigation - Remote Access:
extract from draft Letter to
Freeths - Legally Privileged -
Do Not Forward
POL-0037859
728.
POL00091420
Email from Mark R Davies to Paula
Vennells RE: Postmaster
Litigation- Subject to legal
privilege
POL-0090442
Page 839 of 861
WITN01020100
729.
POL00030211
Response by Bond Dickinson on
behalf of Post Office to Letter
of Claim dated 28 April 2016
POL-0026693
730.
POL00041392
Letter from Freeths LLP to Bond
Dickinson LLP re. Letter further
to Letter of Claim dated 28
April 2016
POL-0037874
731,
POL00024984
Postmaster Litigation - Agenda for
Steering Group meeting on 01
November 2016.
POL-0021463
732.
POL00023426
Email chain between Andrew
Parsons, Jane MacLeod, Mark
Underwood and others re:
Remote Access Wording
POL-0019905
733.
POL00029103
Email from Mark Underwood (Post
Office) to Andrew Parsons
(WBD) re: Deloitte Report -
Subject to Litigation Privilege.
POL-0025585
734.
POL00023431
Bond Dickinson Remote Access
Rider - Access to Horizon Data
POL-0019910
735.
POL00023435
Email chain between Andrew
Parsons, Mark Underwood,
Jane MacLeod and Rodric
Williams re: Remote Access
Wording
POL-0019914
736.
POL00041324
Email from Mark Underwood to
Andrew Parsons; re: Remote
Access Wording
POL-0037806
737.
POL00023433
Email from Jane Macleod to Andrew
Parsons and others re:
Remote Access wording
POL-0019912
738.
POL00041373
Email from Andrew Parsons to
Rodric Williams, re Draft Letter
to Freeths
POL-0037855
739,
POL00024869
Email trail from Thomas P Moran to
Jane MacLeod cc: Andrew
Parsons re: Letter to Freeths -
legally privilege [BD-
4A.FID26896945]
POL-0021348
Page 840 of 861
WITN01020100
740.
POL00025050
Email chain between Andrew
Parsons, Rodric Williams,
Mark Underwood and others,
re: Letter to Freeths - legally
privilege [BD-
4A.FID26896945].
POL-0021529
741,
POL00024874
Email from Andrew Parsons to Jane
MacLeod cc: Rodric Williams,
Mark Underwood, Rob
Houghton and others re: Letter
to Freeths - legally privileged
[BD-4A.F1D26896945]
POL-0021353
742.
POL00024806
Remote access to Horizon data
POL-0021285
743.
POL00024991
Remote access to Horizon Data
POL-0021470
744,
POL00024875
Remote access to Horizon data
(from Bond Dickinson LLP
POL-0021354
745.
POL00110586
Letter chain from Bond Dickinson to
James Hartley Freeths LLP Re
Bates & Others v Post Office
Limited
POL-0108302
746,
POL00041383
Email from Rodric Williams to
Andrew Parsons re. FJ
approval of letter
POL-0037865
747.
UKGI00007544
Post Office Ltd Audit, Risk and
Compliance Committee
Minutes of 30/01/2017
UKGI018358-001
748.
POL00006404
Steering Group Decision Paper -
GLO Advertisement
POL-0017709
749.
POL00025060
Draft Communications: Application
for Group Litigation Order
- January 26
POL-0021539
750.
POL00025021
Email trail from Melanie Corfield to
Andrew Parsons, cc: Rodric
Williams re: Sparrow
communications for GLO [BD-
4A.FID26896945] with
attachment
POL-0021500
Page 841 of 861
WITN01020100
751.
POL00103302
Email from Jane MacLeod to Tim
Parker, Ken McCall, Carla
Stent et, RE: Subject to
privilege- Postmaster litigation:
GLO Application
POL-0102885
752.
POL00021546
Meeting minutes: meeting minutes
for meeting held on 31st
January 2017
POL0000079
753.
POL00027200
CEO's Report for Post Office Board
meeting on 31 January 2017
POL-0023841
754,
POL00025375
Email from Tom Wechsler to Mark
Underwood, Jane MacLeod,
Angela Van-Der-Bogerd and
others cc: Mark R Davies,
Thomas P Moran, and Mark
Ellis re: RE: PLSG meeting on
Tuesday @10:30am in
Islington (0.04).
POL-0021854
755.
POL00025376
Bond Dickinson PO Group Litigation
Steering Group Meeting RE:
DECISION: Does Post Office
agree with the recommended
strategy set out in this paper?
POL-0021855
756.
POL00021547
Meeting Minutes: Minutes of Board
meeting held on 28th March
2017
POL0000080
757.
POL00021438
Post Office Limited Audit, Risk and
Compliance Committee
Minutes of 18/05/2017
POL-0018068
758.
POL00027188
Post Office Minutes: Meeting of the
Board held at 12:30pm on
28/3/2017
POL-0023829
759.
POL00103307
Email from Alwen Lyons to Carla
Stent; Kenmccall1; Tim
Franklin; Richard Callard, re:
ARC Action - Postmaster
Litigation funding.
POL-0102890
760.
POL00021548
Meeting minutes: meeting minutes
for Board meeting held on 25th
May 2017.
POL0000081
Page 842 of 861
WITN01020100
761.
POL00027182
Meeting Minutes: Post Office Ltd -
Group Executive Meeting 13th
July 2017
POL-0023823
762.
POLO0110666
Q8A for GE Meeting on 13 July
2017 - Bond Dickinson
POL-0108371
763.
POL00003340
Letter from Andrew Parsons to
James Hartley, re: Bates &
Others -v- Post Office Llmited -
Generic Defence and
Counterclaim
VIS00004354
764.
POL00249979
Email from Jane MacLeod to Paula
Vennells RE: Postmasters
litigation
POL-BSFF-
0088042
765.
POLO0028055
Email: Email from Andrew Parsons
(WBD) to Jane MacLeod (PO)
re-Group Litigation and points
to be raised with Paula
Vennells by Counsel
POL-0023058
766.
POL00024459
Email from Amy Prime to Jane
MacLeod and others, re: Tony
tomorrow
POL-0020938
767.
POL00024489
Email from Thomas P Moran to
Andrew Parsons, Amy Prime
and Rodric Williams re PLSG
meeting on Wednesday 24
May 2017 @12 in Tonbridge
(1.11)
POL-0020968
768.
POLO0006360
Bond Dickinson's recommendations
on issues in the Postmaster
Group Action (undated)
POL-0017628
769.
POL00021549
Meeting minutes: meeting minutes
of Board meeting held on 25th
July 2017
POL0000082
770.
POL00041238
Email from Mark Underwood to
Patrick Bourke re. Deloitte
(attachment in email subject to
legal privilege)
POL-0037720
771.
POL00006380
Post Office Group Litigation,
Steering Group Meeting -
strategy to disclosure for POL
POL-0017685
772.
POL00006503
Litigation Strategy Options
POL-0017808
Page 843 of 861
WITN01020100
773.
POL00041485
Email from Jane MacLeod to Paula
Vennells and others re.
Postmaster Litigation - Update
tomorrow morning
CONFIDENTIAL AND
SUBJECT TO LEGAL
PRIVILEGE DO NOT
FORWARD. Attached paper
explains priority for
construction of SPM contract.
POL-0037967
774,
POL00041486
Post Office Board - Postmaster
Litigation: Confidential and
Subject to Legal Professional
Privilege
POL-0037968
775.
POL00021550
Meeting minutes: minutes of Board
meeting held on 26th
September 2017.
POL0000083
776.
POL00006384
Email from Andrew Parsons (Bond
Dickson) to Tony (OEC Law) re
talking points for Paula
POL-0017689
777.
POL00006499
Email from Andrew Parsons:
Subject 'Tony tomorrow’
POL-0017804
778.
POL00107163
Post Office Group Litigation
Litigation Strategy Options with
handwritten notes
POL-0105471
779.
POLO0024660
Email from Thomas P Moran to
Andrew Parsons, re: Litigation
Options Paper attaching Board
briefing on Horizon v0.3
POL-0021139
780.
POL00024690
Email chain discussing responses to
common issues trial and
judgment, including burden of
proof. Email from Jane
MacLeod to Thomas P Moran,
Andrew Parsons and Rodric
Williams re: Board briefing re
Postmaster Litigation CMC
Options
POL-0021169
781.
POL00028063
Email from Andrew Parsons (WBD)
to Tony Robinson (OECLaw)
forwarding Paula Vennell's
questions on litigation
POL-0023066
782.
POL00028070
Deloitte's 'Bramble’ Draft Report
POL-0023073
Page 844 of 861
WITN01020100
783.
POLO00021551
Meeting minutes: minutes of Board
meeting held on 31st October
2017.
POL0000084
784.
POL00103898
Post Office Board Agenda
POL-0103481
785.
POL00024317
Email from Mark Underwood to Jane
MacLeod, Angela Van-Den-
Bogerd, Mark R Davies and
others Re: PLSG meeting on
Friday.
POL-0020796
786.
POL00024318
Agenda for Steering Group meeting
on 3/11/2017.
POL-0020797
787.
POL00024323
Post Office Group Litigation Steering
Group Meeting - Noting Paper:
Deloitte Reports
POL-0020802
788.
POL00024322
Noting paper: Update on CMC and
Future Work Streams
POL-0020801
789.
POL00004167
Alan Bates etc v Post Office,
Approved Judgment
Viso0005181
790.
POL00006435
Steering Group Meeting: Availability
of Counsel
POL-0017740
791,
POL00024311
Email chain from Thomas Moran to
Jane MacLeod, Mark
Underwood, Rodric Williams
and others Re: PLSG meeting.
POL-0020790
792.
POL00024346
Email from Andrew Parsons to
Rodric Williams, Jane
MacLeod, and Mark
Underwood, re: Counsel
POL-0020825
793.
POL00024268
Womble Bond Dickinson: Briefing on
selecting Counsel for trial in
November 2018.
POL-0020747
794.
POL00024267
Email from Andrew P Parsons to
Jane MacLeod, Mark
Underwood, Rodric Williams
and others Re: Counsel
briefing.
POL-0020746
795.
POL00024340
Email from Jane MacLeod to
Andrew Parsons, Rodric
Williams and others re: Group
Litigation - Update on Counsel
- Subject to Legal Privilege -
Do Not Forward
POL-0020819
Page 845 of 861
WITN01020100
796.
POL00021552
Meeting Minutes: minutes of Board
meeting held on 23rd
November 2017
POL0000085
797.
POL00024423
Letter from Andrew Parsons to
James Hartley re: The Post
Office Group Litigation -
Disclosure and future case
management
POL-0020902
798.
POL00041527
Email from Rodric Williams to Jane
MacLeod and others re. Bates
trial date Nov 17
POL-0038009
799.
POL00024446
Postmaster Litigation - Bates & 509
Others v. Post Office Limited -
Agenda for Steering Group
meeting on 20 November 2017
POL-0020925
800.
POL00090630
Steering Group Meeting Re: Noting
paper: Update on strategy for
the Court hearing on
02/02/2018.
POL-0090151
801.
POL00041650
Email chain from Jane MacLeod to
Thomas P Moran and others
re. Disclosure CMC Skeleton
Arguments - Subject to Legal
Privilege
POL-0038132
802.
POL00024326
Email from Rodric Williams to
Patrick Bourke, Mark R Davies
and others re: OLSG Call on
Wednesday 6 December
@14:00 (0.15 Walton Street is
booked if people are in FD and
wish to attend in person)
POL-0020805
803.
POL00022880
Womble Bond Dickinson Post Office
Group Litigation, Steering
Group Meeting, Decision:
Should Post Office put forward
the settlement proposals set
out below?
POL-0019359
804.
POL00024182
Email chain between Jane
MacLeod, Alisdair Cameron,
Paula Vennells and others Re:
Postmaster Litigation - Briefing
notes for the Board.
POL-0020661
Page 846 of 861
WITN01020100
805.
POL00103314
Email from Jane MacLeod to Paula
Vennells, Alisdair Cameron;
Tim Parker, and others, re:
Postmaster Litigation - Update
from CMC.
POL-0102897
806.
POLO00006520
Email from Jane Macleod:
Postmaster Group Litigation
POL-0017825
807.
POL00103333
Email from Jane MacLeod to Tim
Parker, Ken McCall, Carla
Stent and others, re:
Postmaster Group Litigation -
Subject to legal privilege - do
not forward.
POL-0102916
808.
POL00021440
Post Office Limited Audit, Risk and
Compliance Committee
Minutes of 29.01.2018
POL-0018070
809.
POL00027267
Group Executive Agenda January
2018
POL-0023908
810.
POL00104316
Post Office Ltd ARC Report on
Annual Legal Risk Review:
2017
POL-0103899
811.
POL00021553
Meeting minutes: minutes of board
meeting held on 29th January
2018
POL0000086
812.
POLO0117892
Postmaster Litigation Advisory
Board Subcommittee
POL-0115392
813.
POL00117894
Womble Bond Dickinson Briefing
Note RE PO Group Litigation
POL-0115394
814.
POL00117899
Minutes of a meeting of the
Postmaster Litigation
subcommittee of Post Office
Limited on Monday 26 March
2018 at 20 Finsbury Street
EC2Y 9AQ
POL-0115399
815.
UKGI00018134
Minutes of a Meeting of the Board of
Directors of Post Office Limited
UKGI028141-001
816.
POL00006765
Agenda and Papers for the 26
March 2018 Postmaster
Litigation Subcommittee
Meeting
POL-0018023
817.
POLO0006524
Horizon litigation: facts of the case
for BEIS Permanent Secretary
POL-0017829
Page 847 of 861
WITN01020100
818.
POL00021445
Audit, Risk and Compliance
Committee meeting Minutes of
27/03/2018
POL-0018075
819.
POL00027257
Post Office Board Agenda
27/3/2018 and associated
documents - Tim Parker,
Richard Callard, Tom Cooper
and Others in Attendance
POL-0023898
820.
POL00025892
Alan Bates & Others and Post Office
Limited Opinion on the
common issues
POL-0022371
821.
POL00110906
Email chain between Diane
Blanchard and Tim Parker, RE:
attendance of Board Group
Litigation Order Sub
Committee meeting 15th May
POL-0111449
822.
POL00041771
Email from Rodric Williams to Mark
Underwood re SPM Litigation
Committee Minutes
POL-0038253
823.
POL00023972
Womble Bond Dickinson Summary
of Counsel's Opinion on the
Common Issues.
POL-0020451
824.
POLO00024257
Email from Andrew Parsons to
Rodric Williams, Mark
Underwood and Jane
MacLeod Re: Counsel's
Opinion.
POL-0020736
825.
POL00024196
Email from Mark Underwood to Jane
MacLeod, Angela Van-Den-
Bogerd, Mark R Davies and
others Re: Postmaster
Litigation Steering Group Call.
POL-0020675
826.
POL00041773
Email from Mark Underwood to
Veronica Branton re SPM
Litigation Committee Minutes
POL-0038255
827.
POL00110935
Email from Diane Blanchard to Tim
Parker, Thomas Cooper, Paula
Vennells and others RE:Board
GLO subcommittee 15 May
2018 - agenda and draft
minutes
POL-0111461
Page 848 of 861
WITN01020100
828.
POL00006382
Speaking Note for Post Office
Litigation Sub-Committee
Meeting on 15 May 2018
POL-0017687
829.
POL00006754
Meeting Minutes of the Postmaster
Litigation Subcommittee of
POL
POL-0018012
830.
POL00006763
Meeting Minutes of the Postmaster
Litigation Subcommittee of
POL
POL-0018021
831.
POL00021555
Meeting Minutes: minutes of
meeting held on 24th May
2018
POL0000088
832.
POL00103335
Post Office Board Agenda.
POL-0102918
833.
BEIS0000079
Protocol between POL, BSEI and
UKGI for the POL Litigation
BEIS0000059
834.
POL00021446
Post Office Limited Audit, Risk and
Compliance Committee
Minutes of 28/06/2018
POL-0018076
835.
POL00103336
Email from Jane MacLeod to Tim
Parker; Ken McCall; Carla
Stent; Tim Franklin, re:
Postmaster Litigation -
Confidential and subject to
Legal Privilege - Do not
Forward.
POL-0102919
836.
POL00024156
Email chain between Rodric
Williams, Jane MacLeod, Mark
Underwood and others re:
Postmaster Litigation -
Disclosure in the 2017-18
ARA.
POL-0020635
837.
POL00024230
Email chain between Mark R
Davies, Jane MacLeod, Mark
Underwood and others Re:
Postmaster Litigation.
POL-0020709
838.
POL00041840
Email from Jane MacLeod to
Andrew Parsons and others re
PO Group Litigation Draft
wording
POL-0038322
839.
POL00041841
Draft Wording for Annual Report and
Accounts for 2021
POL-0038323
Page 849 of 861
WITN01020100
840.
POL00041836
Email chain from Tom Cooper to Tim
Franklin and others re
Contingent Liability wording in
PO Group Litigation
POL-0038318
841,
POL00041849
Email from Patrick Bourke to Mark
Davies and others re Draft
wording for the ARA
POL-0038331
842.
POL00041865
Email from Mark Underwood to Jane
MacLeod and others re PO
Group Litigation
POL-0038347
843.
UKGI00008203
Email from Elizabeth O'Neill to Tom
Cooper, Helen Lambert and
others; Re: PO - Draft wording
for the contingent liability
disclosure
UKGI019015-001
844,
POL00041871
Email from Rodric Williams to Gavin
Matthews re PO Group
Litigation
POL-0038353
845.
POL00041884
Email chain between Jane
MacLeod, Alisdair Cameron,
Michael Passmore and others
RE: POL Contingent Liability
Issue and Outstanding Items -
Confidential and subject to
legal privilege
POL-0038366
846.
POL00041885
POL Annual Report Contingent
Liabilities Disclosure Part II
POL-0038367
847.
POLO0111017
Email chain from Dianne Blanchard
to C Johnson cc Peter Mclver,
Sana M Gangat and others re:
POL Contingent Liability Issue
and Outstanding Items -
meeting with Womble Bond
Dickinson.
POL-0111465
848.
POL00041896
Email from Mark Davies to Jane
MacLeod and others re PO
Group Litigation
POL-0038378
849.
Eyo0000001
EY Audit Results Update Report to
the Audit, Risk and
Compliance Committee for the
52 week period ended 25
March 2018.
Vviso0009749
Page 850 of 861
WITN01020100
850.
POLO0090608
Email from Jane MacLeod to Tim
Parker, Ken McCall and Tom
Cooper and others Re Board
Litigation Subcommittee
POL-0090129
851.
POL00024176
Email chain between Angela Van-
Den-Bogerd, Andrew Parsons,
Jane MacLeod and others Re:
Speaking Note for Board
Subcommittee.
POL-0020655
852.
POL00024177
Speaking Note for Board Sub-
committee on 10 July 2018.
POL-0020656
853.
POL00024166
Email from Jane MacLeod to Tim
Parker, Ken McCall, Tom
Cooper and others Re: Board
Litigation Subcommittee.
POL-0020645
854.
POL00024167
Draft Contingency Planning: Risk
Assessment Table.
POL-0020646
855.
POL00041866
Email from Victoria Brooks to Angela
Van Den Bogerd and others re
Witness Statements in PO
Group Litigation - re witness
availability
POL-0038348
856.
POLO0121166
POST OFFICE GROUP ACTION
FOR DISCUSSION :
PROPOSED LIST OF
GENERIC ISSUES
WITNESSES CAN COMMENT
ON
POL-0126830
857.
POL00021556
Meeting minutes: minutes of Board
meeting held on 31st Ju;y 2018
POL0000089
858.
POL00111281
Email from Angela Van-Den-Bogerd
to Paula Vennells, Alisdair
Cameron, Mark R Davies and
others re: Private &
Confidential - subject to
litigation priviegdge -
tomorrows GLO update and
planning call is cancelled
POL-0111472
859.
POL00154359
Email from Rodric Williams to
Andrew Parsons and Jonathan
Gribben, RE: Fujitsu Witness
Evidence - issue resolved
POL-BSFF-
0013458
Page 851 of 861
WITN01020100
UKG100008345
igation
Update for UKGI following POL
Board Meeting on 31 July 2018
UKGI019157-001
861.
POL00003348
Letter from James Hartley to Andrew
Parsons re: Post Office Group
Litigation - General Comments
on Post Office Disclosure
VIS00004362
862.
POL00041859
Letter from Womble Bond Dickinson
LLP to Freeths LLP re PO
Group Litigation Disclosure.
Extensive comments on
various categories of
documents, as well as three
page schedule on different
documents with additional
comments.
POL-0038341
863.
POLO00090612
Postmaster Litigation Update report
(Executive Summary)
POL-0090133
864.
UKG100008372
Email chain from Paula Vennells to
Tom Aldred cc Jane MacLeod,
Tom Cooper ‘and others’ RE:
Rescheduled litigation briefing
with Perm Sec and minister.
UKGI019184-001
865.
POL00111095
Briefing for Paula Vennells meeting
with Post Affairs Minister, Kelly
Tolurst MP
POL-0108701
866.
POL00024179
Email chain between Andrew
Parsons, Jane MacLeod,
Patrick Bourke and others Re:
Litigation.
POL-0020658
867.
UKG100008369
Email from Stephen Clarke to MPST
Tolhurst, UKGI POL Team,
Sam White and others re
Briefing: Paula Vennells
meeting on Monday
UKGI019181-001
868.
UKG100008370
Meeting with Paula Vennells - 03
September; BEIS
UKGI019182-001
869.
POL00103345
Post Office Ltd Board Agenda of
25/09/18
POL-0102928
Page 852 of 861
WITN01020100
870.
POL00105467
Email from Jane Macleod to Paula
Vennells and Alisdair Cameron
re: Postmater Litigation -
Meeting with Perm Sec &
Minister on 17 October
POL-0104647
871.
UKGI00008494
Email from Jane MacLeod to
Richard Watson, Joshua Fox
and others RE: Postmaster
Litigation: BEIS and UKGI
Briefing 17th October 2018
UKGI019305-001
872.
POLO0111218
Post Office Briefing Paper for
meeting with Kelly Tolhurst MP
and Alex Chisolm Permanent
Secretary, BEIS, on 17
October 2018
POL-0108821
873.
POL00042063
Email from Rodric Williams to Jane
MacLeod and others; re Strike
out application
POL-0038545
874.
UKG100008519
BEIS Agenda: ‘Post Office: Horizon
Trial Contingency Planning’
UKGI019330-001
875.
UKGI00008554
Draft read out note of POL meeting
in HoC on 17th October 4-
4:45pm
UKGI019362-001
876.
UKG1I00008606
Email from Tom Aldred (UKGI) to
Tom Cooper (UKGI) and
Richard Watson (UKGI) CCing
Stephen Clarke and others re:
Post Office Litigation Meeting
readout (17 October)
UKGI019414-001
877.
POLO0006757
Meeting Minutes of the Postmaster
Litigation Subcommittee of
POL
POL-0018015
878.
POL00021557
Meeting minutes: minutes for Board
meeting held on 25th
September 2018
POLO0000090
879.
POL00024170
Email chain between Rodric
Williams, Jane MacLeod,
Andrew Parsons and others
Re: Contingency Planning.
POL-0020649
Page 853 of 861
WITN01020100
880.
POL00042037
Email chain setting out briefing on
GLO CMC on 19 Sep 2018,
focussing on security for costs
and trial timetable. Email from
Jane MacLeod to Rodric
Willams and others re PO
Group Litigation
POL-0038519
881.
POL00022943
Draft Womble Bond Dickinson: Post
Office Group Litigation:
Mitigations Report
POL-0019422
882.
POLO0024157
Email from Angela Van-Den-Bogerd
to Paula Vennells, Jane
MacLeod, Alisdair Cameron
and others Re: GLO Call 0815
28 Sept, Postmaster Group
Litigation. Contingency
Planning
POL-0020636
883.
POLO0111165
Post Office Group Litigation, draft
update for Board Sub-
Committee
POL-0108771
884.
POL00117991
Email from Jane MacLeod to Tim
Parker, Ken McCall and others
RE: Postmaster Litigation-
timetable - CONFIDENTIAL
AND SUBJECT TO LEGAL
PRIVILIGE DO NOT
FORWARD
POL-0114700
885.
POL00022669
Post Office Group Litigation
between Alan Bates & Others -
and- Post Office Limited -
Update to the opinion on the
common issues
POL-0019148
886.
POL00024158
Contingency Planning Internal
Governance meetings 27
Sept-30 Nov.
POL-0020637
887.
POLO0111214
Post Office Briefing Paper for
Meeting on 17 October 2018
with Kelly Tolhurst MP and
Alex Chisolm on" Common
Issues" trial in Group Litigation.
POL-0108817
888.
POLO0111257
Postmaster Group Litigation -
Briefing Note ahead of Board
Meeting on Tuesday 30th
October 2018
POL-0108858
Page 854 of 861
WITN01020100
889.
POL00103360
Email from Veronica Branton to Tim
Parker, Ken McCall, Thomas
Cooper and others re:
Board/ARC briefing
POL-0102943
890.
POL00042106
Email chain from Rodric Williams to
Patrick Bourke, Mark
Underwood and = Andrew
Parsons, re FW: Post Office
Group Litigation
POL-0038588
891.
POL00042122
Email from Rodric Williams to
Andrew Parsons, seeking AP's
comments on text summary of
opening submissions prepared
for Paula Vennells.
POL-0038604
892.
POLO0006388
Steering Group Meeting Paper:
Should POL accept implied
terms?
POL-0017693
893.
POL00023117
Judgement (no.2) of the High Court
of Justice in Alan Bates and
Others v Post Office limited
[2018] 2698(QB).
POL-0019596
894.
POLO00103355
Email from Jane MacLeod to Tim
Parker, Paula Vennells and
Mark R= Davies re: RE:
Postmaster Litigation
POL-0102938
895.
POL00103356
Email from Jane MacLeod to Ken
McCall, Carla Stent, Tim
Franklin and others re:
Postmaster Litigation
POL-0102939
896.
POL00103349
Email from Jane MacLeod to Tim
Parker, Diane Blanchard and
Paula Vennells re: Postmaster
Litigation
POL-0102932
897.
POL00103351
Email from Tim Parker to Jane
MacLeod, Diane Blanchard
and Paula Vennells re: Re:
Postmaster Litigation
POL-0102934
898.
POL00103357
Email from Paula Vennells to Ken
McCall, Carla Stent, Tim
Franklin and others re: Re:
Postmaster Litigation
POL-0102940
Page 855 of 861
WITN01020100
899.
POL00103358
Email from Ken McCall to Paula
Vennells, Carla Stent, Tim
Franklin and others re: Re:
Postmaster Litigation
POL-0102941
900.
POL00026936
Post Office Board Agenda
POL-0023577
901.
POL00021558
Post Office Ltd Board Minutes dated
30/10/2018
POLO000091
902.
POL00111283
Email from Dianne Blanchard to
Avene Regan, Angela Van-
Den-Bogerd, Paula Vennells
and others re: Tomorrow's
GLO update and planning call
is cancelled
POL-0111474
903.
FUJ00160138
Letter from Freeths to Andrew
Parsons - Re: Alan Bates &
Others v Post Office Limited -
Horizon Issues Trial - sending
Claimant's Expert Report
POINQ0166316F
904.
POLO0111231
Email from Jonathan Gribben to
Catherine Hamilton, Rob
Houghton, Rodric Williams and
others re: Jason Coyne's
report [WBDUk-
AC.FID27032497]
POL-0108832
905.
POL00117998
Email from Rodric Williams to Paul
Vennells, Jane Macleod, Mark
Davies and others. RE: PO
Group litigation - update
POL-0114706
906.
POLO0118001
Email from Mark Underwood to
Paula Vennells Re Post Office
Group Litigation Update -
Subject to legal professional
privilege - Draft Email for the
Board.
POL-0114709
907.
POL00026954
Group Executive Agenda for
Meeting on 12th November
2018
POL-0023595
Page 856 of 861
WITN01020100
908.
POLO0111405
Email from Rodric Williams to Paula
Vennellls, Jane MacLeod,
Mark R Davies and others re
Post Office Group Litigation
Update - SUBJECT TO LEGAL
PRIVILEGE - DO NOT
FORWARD
POL-0108994
909.
POL00042151
Email providing update on latest day
in court in group litigation trial.
Email from Rodric Williams to
Andrew Parsons re: FW: Post
Office Group Litigation Update
- SUBJECT TO LEGAL
PRIVILEGE - DO NOT
FORWARD
POL-0038633
910.
POLO0111475
Email from Rodric Williams to Paula
Vennells, Jane MacLeod, Mark
R Davies and others re Post
Office Group Litigation Update
- Post Office closing
submissions
POL-0109061
911.
POL00107162
Email chain between Paula
Vennells, Rodric Williams,
Jane MacLeod and Mark
Davies (fwd to Avene Regan)
Re: Post Office Group
Litigation Update
POL-0105470
912.
POL00111208
Post Office briefing paper with
annotations for meeting with
Kelly Tollhurst MP and Alex
Chisolm
POL-0108811
913.
POLO0118002
Email from Rodric Williams to Paula
Vennells, Jane MacLeod, Mark
R Davies and others RE: Post
Office Group Litigation Update
- summary of evidence from
Pamela Stubbs and
Mohammad Sabir.
POL-0114710
914,
POL00021559
Meeting minutes: minutes of Board
meeting held on 27th
November 2018
POL0000092
915.
POLO00006471
Steering Group Noting Paper -
Expert Report of Dr Robert
Worden
POL-0017776
Page 857 of 861
WITN01020100
916.
POLO0006756
Meeting Minutes of the Postmaster
Litigation Subcommittee of
POL
POL-0018014
917.
POL00006753
Meeting Minutes of the Group
Litigation Subcommittee of
POL
POL-0018011
918.
POL00107155
Email from Rob Houghton to Rodric
Williams and Angela Van-Den-
Bogerd re: If you get the
chance..., attaching marked up
supplemental expert report of
Jason Coyne 01 February
2019 and scanned comments
of Rodric Williams
POL-0105463
919.
POL00103372
Email from Jane MacLeod to Tim
Parker, Ken McCall, Carla
Stent and others, Re: Board
Report - Final.
POL-0102955
920.
POL00103373
Report for Post Office Limited Board
as at 13 December 2018
concerning the Post Office
Group Litigation (Common
Issues Trial).
POL-0102956
921.
POL00042244
Email chain from Rodric Williams to
Andrew Parsons re: FW:
Postmaster Litigation -
proposed agenda for the
Committee meeting on 28
January. CONFIDENMTIAL
AND SUBJECT TO LEGAL
PRIVILEGE - DO NOT
FORWARD
POL-0038726
922.
POLO0021560
Meeting Minutes: minutes of Board
meeting on 23rd January 2019
POL0000093
923.
POL00118020
Email from Jane Macleod to Tim
Parker, Ken McCall, Carla
Stent and others re Post Office
Postmaster Litigation -
Judgment timeframes
POL-0118400
924,
POL00042253
Email chain from Rodric Williams to
Andrew Parsons CCing Amy
Prime re: Post Office Group
Litigation - Update on
Mediation / Potential Mediators
POL-0038735
Page 858 of 861
WITN01020100
925.
POL00118022
Email from Jane MacLeod to Paula
Vennells, Alisdair Cameron,
Rob Houghton and Others RE:
Postmaster Litigation-
Confidential and subject to
legal privilege- do not forward
POL-0118401
926.
POL00118023
Email thread from Rodric Williams to
Jane MacLeod, Paula Vennells
and Alasdair Cameron RE:
Postmaster litigation.
POL-0118402
927.
POLO0111672
Email from Jane MacLeod to Paula
Vennells and Rob Houghton
re, Postmaster Litigation -
Confidential and Subject to
Legal Privilege - Do Not
Forward.
POL-0109249
928.
POL00028045
Email from Jane McLeod (PO) to
other PO and UKGI employees
on risks of the Horizon Issues
Trial
POL-0023048
929.
POL00028071
Note: Horizon Issues Trial Draft Risk
Assessment Table prepared
for POL by WBD
POL-0023074
930.
POL00026934
Post Office Limited Board - 25.03.19
- Bundle of documents re. the
25.03.19 Board Meeting.
POL-0023575
931.
POL00103381
Email from Jane MacLeod to Tim
Parker, Ken McCall, Carla
Stent etc, RE: Postmaster
Litigation
POL-0102964
932.
POL00042147
Email chain from Rodric Williams to
Jane Macleod and Mark
Underwood re: Litigation
POL-0038629
933.
POLO0119590
Email chain from Melanie Corfield to
Laura Tarling Re: FW: Group
Litigation - Experts' Reports on
the Horizon Issues
POL-0119898
934.
POLO0111694
Email from Paula Vennells to Tom
Cooper, Alisdair Cameron, Tim
Parker and others re. Board
GLO Sub-Committee.
POL-0109267
935.
POL00006496
Speaking Note for Board meeting on
21 Feb 2019
POL-0017801
Page 859 of 861
WITN01020100
936.
POL00103409
Email from Jane MacLeod to Tim
Parker, Ken McCall, Carla
Stent and Others re
Postmaster Litigation -
Confidential and Subject to
Legal Privilege - Do Not
Forward
POL-0102992
937.
POL00103416
Email from Jane MacLeod to Tim
Parker, Ken McCall, Carla
Stent and Others re GLO
Board Call at 10.30 am
Tuesday 12 March
CONFIDENTIAL AND
SUBJECT TO LEGAL
PRIVILEGE. DO NOT
FORWARD
POL-0102999
938.
POL00103411
Email Chain from Tim Parker to Tom
Cooper, Jane MacLeod, Ken
McCall and Others re
Postmaster Litigation -
Confidential and Subject to
Legal Privilege - Do Not
Forward
POL-0102994
939.
POL00103426
Email Chain from Tim Parker to
Alisdair Cameron re:
Statement
POL-0103009
940.
POL00023817
Email from Jane MacLeod to
Andrew Parsons and cc Rodric
Williams and Mark
Underwood, RE: Appeal
POL-0020296
941.
POL00023878
Note by David Cavender QC re
Basis of Appeal in Bates &
Others v PO
POL-0020357
942.
POL00022685
Email Chain between Andrew
Parsons, Mark Underwood,
Jane MacLeod, Rodric
Williams, Mark R_ Davies,
Melanie Corfield, Julie Thomas
and Zoe Brauer re: Common
Issues Judgment, Instructions
Table + Subsequent Actions
POL-0019164
943.
POL00006398
Advice by Lord Neuberger on the
recusal application
POL-0017703
Page 860 of 861
WITN01020100
944,
POLO0006700
POL Group Litigation: Executive
Summary
POL-0017958
945.
POL00103484
Email from Jane MacLeod to Tim
Parker, Ken McCall, Carla
Stent and others re. Post
Office Group Litigation -
Update on Recusal Application
POL-0103067
946.
POL00104219
Post Office Board Agenda of
Tuesday 30th April 2019
POL-0103802
947.
FUJ00168538
Email chain from Duncan Tait to
Stephen Long cc'ing Paul
Patterson, Gavin Bell and
another Re: Brief - Post Office
POINQ0174719F
948.
FUJ00174556
Email chain from Helen Lamb and
James Davidson re: Post
Office - No Issues on service to
raise, peak service running
well and no significant outages
of late.
POINQ0180737F
949.
FUJ00174662
Briefing Notes - Duncan Tait, Paula
Vennels Meeting
POINQ0180843F
950.
FUJ00168649
Email from Haydn Jones to Paul
Patterson, Helen Lamb, Mark
Phillips and others RE:
Readout from DT / PV meeting
POINQ0174830F
951.
FUJ00174708
Email from Amit Apte to Mark
Phillips cc Gavin Bell, James
Davidson, Manu Sharma RE:
Paula Vennells meeting with
DT this morning
POINQ0180889F
952.
PVEN00000418
Text messages between Paula
Vennells and Simon Blagden
CBE.
PVENO0117157
953.
FUJ00083833
Email chain between Matthew
Lenton and Chris Jay - RE:
Witness Statements to PR
manager
POINQ0090004F
954.
POL00006740
Email from Ben Foat re Disclosure
Incident
POL-0017998
955.
PVEN00000386
Text messages between Paula
Vennells and Duncan Tait.
PVEN00113340
Page 861 of 861
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