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WITNESS: NICHOLA ARCH
STATEMENT NUMBER: WITNO122_01
EXHIBITS: 4
DATED: 15 March 2022
POST OFFICE HORIZON IT INQUIRY
FIRST WITNESS STATEMENT OF NICHOLA ARCH
I, Mrs Nichola Arch, will say as follows:
INTRODUCTION
1. I make this statement to address the Chair of the Inquiry on the personal impact
the failings of the Horizon IT system have had on me. I previously attended a
remote meeting with the Chair on 25 February 2021, before the Inquiry became a
Statutory Public Inquiry, and a transcript of that meeting is attached as exhibit 1. I
also provided a brief human impact statement, which is attached as exhibit 2.
BACKGROUND
2. In 1993 I found a job advert for a counter clerk at Brimscombe Post Office which I
was really interested in. I'd moved to that area after getting engaged, so I thought
that would be a good starting point. I'd trained as a teacher but I wanted to get
out of that, so I went for the job and got it. We never had problems at that post
office with the old-fashioned system, all on paper.
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3. In 1997 the postmaster, a lady, sold the business which was her home as well,
and a family moved in. I was no longer needed as it was going to be a family
business, and so I decided I would do relief work. Nobody can go on holiday
without relief people, and I thought that could be a good little business for me to
start. I really enjoyed the work, and worked all over Stroud in most of the offices. I
had a good reputation and was busy 24/7.
4. In 1998 I was working as relief at Chalford Hill Post Office covering for the
subpostmistress, who had been diagnosed then with terminal cancer. I became
really good friends with the subpostmistress. She and her husband had lived in
the village all their lives and had been married for 48 years. The family owned
several businesses in Chalford Hill including the post office, and they rented out a
flat above that as well. The subpostmistress had always wanted the post office to
stay in the village, and so when she passed away, her husband automatically
applied to take over as subpostmaster, although he'd never stepped foot in the
post office and had no intention of doing so. The Post Office allowed him to keep
the post office within the business, so he offered it to me on a salary basis. We
also agreed that I would rent the shop from him and run that as my own business.
5. My fiancé and I bought a shared-ownership property in Stroud about 10 minutes
drive away from the post office. We paid the subpostmaster £15,000 for the
stock, which was all we had saved up, to start the business. We thought it was
going to be a pretty sound bet as it had been there for a long, long time and had
a good reputation. We re-kitted the shop out, put new shelves up, and put in new
flooring. I got lots of different deals from different card merchants with sale or
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return offers, and with all the stock the shop looked really appealing. We sold all
sorts of stationary, sweets, parcel packaging and things like that, and things were
ticking along nicely.
HORIZON INSTALLATION AND TRAINING
6. During the summer of 2000 the Post Office contacted me to say that our office
would be one of the first to go on the rollout scheme of the new Horizon system. I
was really chuffed about this, because at that time we were doing everything
manually and balancing on a Wednesday evening took us ages. Having
modernised the shop I was looking forward to a modern computer system.
7. In autumn 2000 an engineer came to the branch and installed the equipment in
the morning. A gentleman came with him, who showed me how to use the
system while the business was open. I had customers coming in and out of the
shop and the post office, and I was learning how to use Horizon at the same time.
At lunch time the gentleman left me with a manual, a massive manual in all
fairness, very comprehensive. He told me that everything I needed to know was
in the manual but I should ring the helpline if I got stuck and they would be able
help me. And then he went, and that was that. I’d done no balancing whatsoever,
because this was only during a morning on a normal day. I wasn't frightened of
the equipment in anyway, so I wasn't too concerned about that. I thought, no,
we'll give it a go.
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8. By then I'd employed a part time member of staff as well. I had to show her what I
had been shown, hoping that I was showing her the right things, obviously,
because I had only had a couple of hours myself.
SHORTFALLS
9. Problems began in the first week of using Horizon.
10.When people came in to collect pensions they would come in with a pension
docket in a pension book. The pension docket would tell us the amount to give
them. Under the old-fashioned system we would stamp it, tear it out and keep it.
And that would account for the money paid out. Under the new system we
barcoded the docket. Each day we had to send the dockets off to Ireland, so they
would be out of the building. The only record we had left in the office was on the
computer system in front of us, which gave a total of daily allowances. Before I
sent the dockets off I checked to make sure what the computer said was what I
had got, and it was, so I thought ‘lovely.’
11.1 did this each day as I thought it wouldn't hurt to do a bit of manual work
alongside Horizon, just to make sure that I was doing it right and that I had not
missed something out. Each day before I sent the dockets off to Ireland I would
add them up on my calculator and compare my total with what it said on Horizon.
I used a printer calculator, which I kept in the office and then put just put the date
on the top so that I would have my paper trail.
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12. During the first week all the daily totals were right, the cash was right, and the
customers had the right money, but at the end of the week Horizon showed I was
£1,000 short. I could not correct the weekly total without changing the daily totals,
which I knew were right, and the dockets had left the building. So I rang the
helpline and explained the problem. I was simply told to wait for a correction
notice. I said I'd rather not wait because I could see what the problem was. The
woman on the helpline then told me that my attitude was all wrong, that I was
‘anti-computer,’ and that I should leave it for the computer to correct.
13.We carried on checking the daily totals manually for another week, but the
following week the shortfall doubled exactly to £2,000. The daily totals were all
correct, all the customers had had their money, and the cash on my manual side
was correct, but the weekly total was now £2,000 short.
14.I rang the helpline again. I was concerned that I would not get a correction notice
because the daily totals were correct, and I was sending the dockets off with the
correct daily type-out. I was told not to be silly, that the system would rectify itself,
that there would be teething problems on the roll-out and I should be patient.
Every week the shortfall doubled. I rang the helpline every single week to say
what was happening and that I could see it happening. I carried on doing the
manual work because I could see the problem happening.
AUDIT AND INVESTIGATION
15. By week six the shortfall had doubled again to £32,000. I rang the helpline and
asked for something to be done, as I had not received any error notices. Two
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days later I arrived at work and there were three people at the door. I recognised
the auditor. I had been in the business for eight years by then and had had a few
audits in the past in different offices, and it wasn’t a problem. I did not recognise
the other two people, but they said they were also auditors. To be honest, I was
chuffed to bits. I thought great, we're going to get to the bottom of this. I told them
straight away that I had had a problem with the new computer system from day
one and had been calling the helpline.
16. One of the gentlemen went into the post office and did the audit. There was no
room for me to go in or the lady who was with him. We just stood out in the
stockroom, had a chat, drinking coffee, and then at about 10:30 he came out and
he said yes you’re £32,000 short. I said yes that’s exactly what I’ve told the
helpline. I also said I had put it to nil each Thursday in order to reboot the system
and run a fresh week, as the helpline had told me to do. I told them I had all the
written paper copies as well, but they said they did not want them as they could
see what was happening.
17. The auditor then told me they needed to ask me more questions and that it would
be better if they could do so at the Stroud Crown Office, 6 miles away, because
there was more room there. They insisted that I go with them in their car rather
than driving myself, saying that parking in Stroud was difficult. I was 29 years old
and I thought, oh well, that that makes sense. On the way there the lady, who sat
in the back with me, made comments about what a lovely area Chalford was, and
how expensive it must be to live there. I said my partner and I could only afford a
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small shared ownership properly as houses were so expensive, but we wanted to
settle as he was born in the area.
18.When we arrived at Stroud Crown office I was taken through a side door to a little
room with a key code on the door and recording equipment on the desk. I walked
in and the door locked after me, and they were in the room with me. I was told
that the interview would be recorded. When I asked why, the man said ‘I don’t
actually think you realise the sort of trouble you are actually in.’ I said ‘well I
haven't done anything.’ He told me to stop messing around, saying he was ex-
CID, that he had met people like me before, that I should stop lying and stop
wasting his time. He said he knew I had stolen the money and all I needed to do
was to tell him what I had done with it. I said I hadn’t taken a penny and offered
both mine and my partner's bank statements, and also tried to tell him that I knew
what was causing the problem. He said ‘no, you dont’. This went on continually,
and I kept repeating myself. I then said that I thought I needed somebody there
with me. I was told that I would only need someone if I was worried, or if I was
hiding something. I did not want them to think I was guilty so I agreed not to have
anyone with me.
19. The interview continued until quarter past four in the afternoon. I was locked in
the room throughout, with nothing to eat or drink. Eventually they said they would
drive me back as they were not getting anywhere. They said they knew I had
taken the money, they would get to the bottom of it, and they would ensure that I
never ever step foot in that building again. And so, they dropped me off outside
my post office and took the keys. I couldn't get into the shop or the post office at
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all. I had no access to my paperwork, my till, all my stock - everything was locked
in.
20.So I drove home, absolutely hysterical. I was terrified and did not know what to
do. As soon as I got home I rang my partner and my Mum and told them what
had happened. They arrived within minutes, and told me to calm down, saying of
course I hadn’t stolen any money and it would sort itself out. But I was frantic
about what we were going to live on. Steve, my partner was a self-employed tree
surgeon at the time and his work was sort of hit or miss without the shop and my
post office salary.
SUSPENSION AND TERMINATION
21.1 then received a call from the subpostmaster, who told me that the Post Office
investigators had been to his house and had told him to suspend me, or they
would go after him instead. He could not cope with that, as he was a 74 year old
man who lost his wife of 48 years just four and a half months previously. I thought
it was an awful position to put him in, but I understood that he had to suspend
me. He also told me that the shop had to stay shut until the Post Office contacted
him - I was not allowed to go in and get my stock.
22. About two weeks later he told me that the Post Office had been in touch and told
him that he had to sack me. When I asked why he said he did not know. He told
me that the Post Office had also said I had to empty the shop, although I was not
allowed in the building myself. So I arranged for my partner and a friend to go up
on the Saturday morning and empty the shop completely. I had nowhere to store
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the stock and had to dump a lot of it in the end. A friend also managed to sell
some of the stock at a car boot sale so we would have some money to live on.
23.1 wasn't allowed in the post office. I wasn't allowed to take any paperwork
whatsoever — including my hand-written records. That all had to remain. The cash
register and everything we purchased had to stay, even though we bought all the
shop fittings, the brand new flooring, all gone. So that was the end. That day
everything ended.
HUMAN IMPACT
24.1 found out from my partner's grandmother that an article had been published in
the local paper saying I had been stealing money from pensioners. We hadn't
told her about what had happened as we knew it would upset her. My photograph
was also published. I told her I hadn’t been charged with anything, but the whole
town heard about it. On one occasion as I was leaving Tesco’s two women spat
in my hair. When I walked into shops it felt that the whole place would go silent
and so I landed up not going anywhere. I just stayed in. I didn't leave the house at
all. Eventually my husband spoke to my doctor and told her what was going on.
She put me on antidepressants straight away.
25.On my doctor’s advice I decided to get a solicitor. We applied to the Post Office
to get all my written paperwork back, and for access to my branch. The Post
Office completely refused to supply anything. We then requested a copy of the
recorded interview record. They refused to give me that as well. Later, when I
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joined the JFSA, I applied for the interview record again but was told that it had
been destroyed.
26.1 was stuck in a place where everybody knew I was innocent but we had nothing
to prove that. That was my element of hope as well, as there was nothing to
prove I was guilty either, so I felt I could not give up.
27.About 12 months later I received a letter from the Post Office charging me with
theft and fraud. In the end they had charged me with theft of £24,000 as they had
found £8,000 of the shortfall.
28. By then we'd started not to pay our bills, not to pay the mortgage, and we were
getting into debt. We decided to sell the house before the Post Office could take it
and so we sold it at a loss to get a quick sale. The forensic accountant worked
out it was something like £68,000 cheaper than the going rate for that house at
the time. However, we sold up within a fortnight, paid off as much as we could,
and moved into my Mum’s. At that point we had lost everything — the house, the
business, the future as we knew it had gone.
29.Steve then said he thought we should get married anyway. I felt that I couldn’t
face getting married, but he said he wanted me to know that he was going to
stand by me no matter what because he knew I was innocent. And so we paid
£27, went to the registry office and got married with no party, no honeymoon, no
dress, no photographs, no nothing. I could not pretend that everything with the
Post Office wasn't going on, but I felt that Steve deserved acknowledgement for
choosing not to walk away when he could have done.
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30. Steve came with me to my last solicitor appointment before we went to Stroud
Magistrates Court and I had to put in my plea. I pleaded not guilty. My solicitor
asked to meet us as he was going to have to refer my case to a barrister, as the
case was then transferred to Gloucester Crown Court. We had a meeting on a
Thursday night, it was tipping down with rain, 20 years ago. And my solicitor said
‘look, you've got no evidence whatsoever, I think you will go to prison. You're
looking at up to seven years in prison, and you need to acknowledge it and
realise that.’ While we were walking home Steve asked me what I wanted to do.
He said we could just end it now, both of us together, take the pills that the doctor
had given us, go somewhere nice and I would never have to go through this. And
I told him that, well, that sounded quite good. I liked that idea.
31. Then I thought, that would mean leaving everybody. My Dad was in hospital at
the time, and my Mum wasn’t coping well. I’ve got two sisters and a brother, and
my brother’s two year old was poorly. I knew they would not be able to deal with
this on top of everything else. So I told Steve I thought we would have to wait
until my Dad was alright. And so we didn’t do it.
32. The following April I received notification that my case had been transferred from
Gloucester Crown Court to Bristol Crown Court. My solicitor had found a barrister
who said he would see me on the day of the trial and he would discuss things
with me when I got there.
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33.1 remember the trial like it was yesterday — even the music that was playing on
the radio in the car on the way there. The Post Office had arranged for two
witnesses to give evidence against me — the subpostmaster and my part time
employee. They hadn’t been allowed to speak to me at all once they'd been told
that they were now Post Office witnesses, which really upset me because they
used to be my friends. But as it happened, they might as well have been my
witnesses because they were so lovely, and said they knew I hadn’t done
anything wrong. Meanwhile, nearly a year before I was charged I had given the
Post Office every bank statement of mine for the last four years, and Steve’s
even though he was nothing to do with it, so they had all that information and
could see exactly how I paid for what, and how I paid bills and everything else.
The Post Office also called two elderly customers as witnesses, who simply
confirmed that they collected their pensions from the Post Office.
34. My turn came on the afternoon of day two. I had to sit separately from everyone
else with two prison wardens next to me. When I got into the witness box the
Post Office’s barrister went absolutely berserk. He chucked a bundle of Pension
dockets at me because he was getting so annoyed. My barrister had told me to
go in, to say what I knew and nothing more, and not to try to solve problems with
the Post Office’s case for them. And so every time the Post Office’s barrister
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asked what I had done with the money, I told them that I did not have the money.
He said ‘well, you must have had the money. We all know you've had the money.
You've gone on holiday for a week. The Post Office paid for that. So why don't
you just tell us you've had the money.’ I said ‘I've not had any money.’ He said,
‘do you know what this is?’ It was a docket in a plastic clear bag. I said ‘yes that’s
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a pension docket.’ He said ‘you duplicated those yourself so you could take the
money. You've made them pay out to people, but you didn't pay it out. You
popped it in your purse.’ I said ‘no I didn't.’ I told him that the daily totals were
right and I had evidence to show that, but I couldn’t access it. And he replied that
he was not interested in what I said as the computer was the most high-tech
equipment you could wish for, and no one else had had any problems with it. He
insisted that I should just say what I had done with the money so they could all go
home.
35.When the judge came to sum up after 3 days he told the jury to study the
evidence that had been put before them and decide what crime they could
actually see had been committed. And I felt that he had believed me. The jury
went off for about an hour and came back with a unanimous verdict that I was
innocent. And the judge told me I could go.
36.1 left the court and fell to my knees in the corridor. This was 2 and a half years
after everything. I didn’t know what to do, so I was absolutely howling. And then
everyone came out of the court room, we hugged and then I rang my Mum,
because she was at the hospital with Dad, and told her they had believed me and
I was coming home. My Dad was allowed to come home from hospital for the
evening and it was special. It was special for all the wrong reasons. But it was
special. So that was then the time to start rebuilding.
37.Steve got a new job which he's still at now,20 years on, which gives him a steady
wage each week. I got a job with social services arranging care packages for
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people to live in the community safely, and I did that for 15 years. Meanwhile, two
years after the verdict, I had a baby.
38.After the pregnancy it was discovered that everything was diseased inside, so I
had to have a radical hysterectomy. I could have no more children after that, so I
was going through the menopause, at 36 years old.
39.1 also developed fibromyalgia. I was still on the antidepressants from day one and
on them today. I got arthritis in all my joints, osteoporosis in my joints. I then lost
the joint in my left foot in my big toe, which had to be fixed back on my feet with
steel bolts. Two weeks after my son was born, my Dad died. So he's never seen
the accomplishments through the courts or anything like that. Although he knew I
was innocent. So that's the most important thing.
40. Health wise, by the time I was 48 I had to retire from work because I was falling
41.
over all the time. I've got no feeling in my left foot at all because the main nerve
going into the foot was damaged when the joint was replaced. I broke my ankle
recently, and the two ligaments in my foot recently, falling over again. So I'm at
home now. My husband still works hard, because I have never been able to get
back to work fully due to my health problems. In the end I took ill health
retirement at 48 years old.
Meanwhile, in 2014 I contacted JFSA and heard about hundreds of other people.
The Post Office was proven wrong in 2002, the court said I hadn’t stolen any
money, and yet no one stopped and thought they should see what had actually
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happened. They just carried on prosecuting everybody and sent people to prison.
I was proved innocent but the Post Office just walked away. I never was
compensated for anything. I paid a couple of thousand pounds to my solicitor and
was entitled to Legal Aid when my case went to the Crown Court, and the Post
Office just walked away. I was found not guilty. They carried on and learned
nothing from it. I find that ridiculous, that they didn't even stop and think well
actually, if it wasn't her, then who was it? So I decided to join the JFSA to fight
this.
42.When I watched Judge Fraser's final judgment on Horizon I turned to Nick Wallis
straight away and said ‘the Post Office has won.’ As far as I was concerned, paying
£57 million meant that they had won, because they owe billions for what they have
done and the thousands of people they have done it to. And then I was told after
that, by the time we paid the legal fees and investors £45 million had to come from
it, but the investors wouldn't give us any more money. We had run out of money,
which to me was the Post Office’s plan from the start. And so we, you know, our
steering committee of two people had to settle for what they offered, which was
£57 million.
43.1 was told that I could bring a malicious prosecution claim (please see exhibit 3),
but that is not the point. There are so many people out there who were not
prosecuted. One lady I know gave them £92,000. She sold her house, they did
not prosecute her, and so she's got absolutely nothing. But she was in the JFSA.
There are hundreds like that who have sold everything to give back these
shortages. To me that is daylight robbery because the Post Office has never
given that money back. They put the money from these ghost shortages into
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their suspense accounts, they then go to the government annually and declare
their profits, and then the government spend the money. To me, the government
has spent stolen money from victims. They cannot say they had nothing to do
with it because they had two people on the board every single year. Paula
Vennells has also said that she put everything she decided to do she put to the
board, and there were eight other people there who had to agree it. There were
legal people, the head of Post Office’s security team, and two members of the
government. I think it is awful that Paula Vennells is getting blamed solely for
what happened because hundreds of people were involved in this.
44.I received £9,500 from the settlement agreement, which does not cover anything.
I was furious so I decided to get legal representation and bring a malicious
prosecution claim. I then found out that the Post Office had insisted on a clause
in the settlement agreement which prevents anyone who was not convicted,
including me, from bringing a malicious prosecution claim. Their attitude was that
victims like me have already been dealt with, while those who were convicted had
not. Our compensation was within the £57 million (please see exhibit 4). And yet,
people who have been convicted also had a share of the £57 million.
45. That was the end of the road for me officially, but I genuinely believe that a
malicious prosecution claim is a malicious prosecution claim, not a malicious
conviction claim. I do not understand why the Post Office has had the right to
bend the judicial system again and say they will not bother with the victims who
have not got a conviction. It feels to me that they purposely excluded those who
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were found innocent. If I had gone to prison I would have a claim. Because I
fought them, I am getting penalised.
CONCLUSION
46.What would I like the Post Office to do now? How will I be able to get closure? I'm
one of the odd ones, and I think it is because I was not found guilty, but I find it
pointless to go after the people who created this nightmare because there are
hundreds involved. And I genuinely believe that. The judges who sat back and
watched people go to prison? The evidence was not there. All the barristers that
represented these people, what were they playing at? We are talking two
prosecutions every week for 13 years. Not one person stopped and said, why?
Why did this happen? To me, they are all responsible. The people who sat on the
board. They were reaping rewards out of money that they never, ever should
have had. MPs, wives, husbands. They are all responsible. If the victims wait and
want to see every single one of them prosecuted we will still be here in 20 years
time because too many people are responsible. This cannot be nailed on one
person because they all colluded in it together — and we know that by Fujitsu
saying what they knew. They were changing the figures. So we know, Fujitsu
knew, we know the Security Team knew because of the Clarke advice and
suggestion that they shred every bit of evidence complaining about the Horizon
system, and all the CEOs that have ever been since 2000. The list goes on and it
will not be possible to prosecute all of them.
47.Thank God for the likes of Alan Bates, Nick Wallis, Judge Fraser. Now I think the
only thing we can wish for is laws to prevent in-house prosecutions happening
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again. We have got a sound police force, we have got good barristers out there.
We have got a good judicial system out there, a system that we like to think we
could believe in again. So why can't we leave it to the professionals? And if the
Post Office suspect anybody of a crime, they should go to the right people who
are qualified to investigate a crime properly, so that each case can be assessed
on merit. If the law is changed because of this, then what a great thing to achieve
for the victims.
48.I also think we want to be properly compensated. Everybody, without great big
divisions between people. It should not be down to the Post Office to dictate the
compensation scheme — they are the guilty ones.
49.The people who are responsible for this have to live with it. If they can live with it,
then no punishment is going to work for them. Now they need to live with what
they have done, and let us live our lives. I’m 52 now. I was 29 when this
happened. If I don't get on with it now my whole life will be Post Office. My 16
year old’s mum has always been ‘Post Office woman’ - he's never known any
different. I've been fighting the Post Office since before he was even born, and
now he's at college himself and we're still fighting the Post Office.
50.So I want the day to come when I am never going to mention the word Post
Office again. I'm going to enjoy my life, sit back and relax and have some fun. I
still believe that day will come, when, I don't know. But that is what I'm hoping.
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Statement of Truth
I believe that the facts stated in this witness statement are true.
Signed i
Print full name: NICHOLA ARCH
Dated: ...... 15 March 2022
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