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Witness Name: Mr Philip Cowan
Statement No: WITNO245_01
Exhibits: None
Dated: 14 January 2022
THE POST OFFICE HORIZON IT INQUIRY
FIRST WITNESS STATEMENT OF MR PHILIP COWAN
1, MR PHILIP COWAN WILL STATE as follows:
INTRODUCTION
Ay I am grateful to the Chair to be invited to provide a “human impact” statement,
concerning the physical, psychological, emotional, reputational and financial
consequences to me and my family of being held responsible for shortfalls shown by
the Horizon IT system and Post Office Limited’s actions toward me and my family.
The initial paragraphs below provide a brief summary of my background, and provide
context to the detail of the human impact of the Horizon scandal on me and my
family. This statement does not reflect a full account of my experiences or those of
my family and if necessary or required I will provide further witness statement
evidence.
BACKGROUND
2. I was the subpostmaster of Jock’s Lodge post office in Edinburgh from February 2001
to June 2007. I rana retail business from the premises.
3. My partner Fiona McGowan ran the post office with her friend Norma Weir as her
assistant. Norma had 15 years of experience working in a Post Office and was highly
recommended by them.
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4, Both Fiona and Norma were in post at the time of the final audit when the shortfall
was found and when I was suspended.
5. My branch was part of my business portfolio. I operated three petrol stations and
prior to 2007. I had a 14-year business relationship with Shell UK, and I was training
new managers in both my own sites and for Company managed sites. I considered
our business relationship to be strong. I was franchising multiple sites, including one
of the biggest sites in central Scotland.
TRAINING AND SUPPORT
6. I undertook only a week of training prior to my appointment as subpostmaster. This
was a quick and brief run-through of how to run a post office.
7. During the training, the trainer would stand behind me and look over my shoulder
whilst I carried out basic transactions. I only remember doing one balance during the
entire training.
8. Training on the Horizon system only made up a very small part of this training. In my
opinion, it was minimalist and woefully inadequate.
9. Whilst doing the training, the trainer put a lot of emphasis on calling the helpline if
there were ever any problems.
10. The trainer did come to the branch occasionally to assist and provide further ad-hoc
training. I was under the impression that I was not the only one needing in branch
training, and that the trainer was rushing to other branches.
411. The training did not cover any troubleshooting techniques or what to do if the
system showed discrepancies or shortfalls.
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12. I have had a very successful business career, working for some other large
organisations and have had the need to attend several training courses. None have
been as poorly orchestrated as the Post Office training. Particularly given the
complexity of the Horizon system and the consequences and personal liability should
anything go wrong. Other companies would require months of training in order to be
left alone to deal with the system of this complexity.
13, I was forced to use the Operations Manual to teach me how to use the Horizon
system, as I was so unhappy with the training. I studied this manual religiously until I
felt I had some grasp of how to use the system.
HELPLINE
14, I contacted the helpline less than once per month. I would have contacted he
helpline more if it had of been any use.
15. In my experience the helpline was very difficult to get through to. Then when I was
able to speak to someone, the help given was generic and often just referred to the
training manual. I was left with the impression that those operating the helpline
knew little of the workings of the Horizon system.
16. When shortfalls arose and I contacted the helpline, their advice was unprofessional
and rarely helpful.
17. The advice given on the helpline would initially be to make good the alleged
shortfall, and wait and see if the system resolved itself the following week. This
seemed to be the stock answer, and I was given the impression that they were
trained to say this, almost reading from a script.
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18. I would only contact the helpline to discuss the shortages, in which case the above
stock answer was given, to make good the shortfall. I very quickly realised that the
helpline was unhelpful and could not be relied upon.
SHORTFALLS
19. In this section, I set out in very brief detail my experience of shortfalls arising from
deficiencies in the Horizon IT System, and Post Office Limited’s actions as a result.
This is only a brief introduction to those matters, in order to provide necessary
context for the explanation of the human impact which follows.
20. In the initial period when I took over the post office there were discrepancies, but
these were generally reversed in the following weeks. I reported these instances to
my area manager, Brain McGill, but he just dismissed this as some sort of cross over
problem.
21, Up until the final seven weeks of my appointment, there had been instances of
shortages ranging from a few hundred pounds up to around two thousand pounds.
These occurred on approximately six or seven occasions over a period of three years.
We paid these shortages out of our own pocket.
22. Between 2001 and 2003 most of these amounts were reversed automatically, as
being time lags, and on virtually all those occasions the shortages righted
themselves.
23. For most of those transactions it was the following week but certainly, on more than
one case that I can recall, it was several weeks later.
24, During the final seven weeks before the closure of the post office, amounts of
between £3,000 and £5,000 disappeared over consecutive weeks.
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25.
26.
27.
28.
29.
30.
31,
32.
33.
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My partner, Fiona and her assistant Norma began noticing larger than usual
shortfalls.
On a weekly basis there was differences of approximately, £3000 to £4000. They
were both waiting for this amount to return to the system as it normally did.
However, the shortfalls kept on appearing and it was not until it reached the amount
of £30,000, that they told me. I immediately contacted Post Office Ltd, and an audit
was carried out.
For seven weeks I repeatedly contacted the Post Office to request they come to
audit us as I was increasingly concerned at the growing discrepancy and the system
not correcting itself as it had done previously.
We were eventually audited on the 11 February 2004 and at the time of the audit
the system had not righted itself.
A forensic accountant was asked to carry out the audit, and a discrepancy of
£30,483.35 was discovered. I made multiple offers to settle this amount. I asked if I
could be given time in order to do this.
I eventually repaid this amount in full through a deduction in my redundancy
payment in June 2007.
I was convinced that this amount must be a result of a system glitch, despite being
told that I was the only subpostmaster in the country experiencing such an issue
with the Horizon system.
I repeatedly requested data and access to the audit trail to investigate the reasons
behind the shortfall arising, but was never given access to the transactional data
showing the journey a transaction would take from the Horizon system at the point
of sale.
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AUDIT AND INVESTIGATION
34, I was audited on 3 occasions without any issues. This was on the 30 June 2001, 24
October 2001 and 29 September 2002. No shortfalls were discovered, and
everything was working as it should.
35. On 11 February 2004 the branch was again audited at my request when I realised
that the shortfall had reached over £30, 000.
36. The audit was carried out by Stevie Adamson. I was present for the audit. It was at
this audit that a shortfall of £30,483.35 was discovered.
37. Once the audit had been completed and the shortfall confirmed, the auditor called in
the forensic accountancy team who arrived the same day and reconfirmed the
shortfall.
38. The post office was immediately closed, and all the cash, stock and safe keys were
removed.
39, I was immediately asked when I would be repaying the debt. As already mentioned,
I was given no paperwork or any indication how the shortfall had occurred.
40. I was interviewed in the Post Office headquarters in Edinburgh by a team of four
Post Office Limited investigators. My partner, Fiona and assistant Norma Weir were
also interviewed.
41. These interviews were aggressive and threatening. The three of us were cautioned
and told that we should expect to be charged with a criminal offence.
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42.
43.
44,
45.
46.
47.
48.
49,
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Brian McGill, my area manager and his superior, Lindsey Anderson, both specifically
told me I was the only subpostmaster who had issues with shortfalls and
discrepancies in their post office.
Mr McGill and Mr Anderson made it clear that this was being treated as suspected
theft. This seemed to be the party line, and their telling me this seemed scripted. I
was expressly told that if I was experiencing problems with the Horizon system then I
was ‘the only one on the planet’ having such issues.
During my interview with the Investigation team, I was basically interrogated and
told that in 90% of cases where theft or fraud are suspected, the spouse is usually
the guilty party.
This was endorsed by Mr McGill and Mr Anderson. Again, this line of questioning
seemed like they were quoting from a script.
I later discovered that Fiona was questioned in the same manner. Mr McGill and Mr
Anderson suggesed to her that her assistant, Norma was the one responsible.
I firmly believe that Mr McGill and Mr Anderson were trying to turn us against each
other, and to create suspicions amongst us. The possibility that it would have been
the Horizon system at fault was not even considered. In the minds of Mr McGill and
Mr Anderson it had to be theft.
I repeatedly told the investigators that I had a sophisticated CCTV system installed in
my branch, and that Post Office Ltd could have access to the footage. Post Office
investigators were not interested in viewing the footage.
The CCTV system (six cameras, operating constantly) included two covert cameras
surrounding the office safe and had stored footage of the last four weeks of trading.
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50.
51,
52.
53.
54.
5D
56.
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My partner, Fiona looked through all the CCTV footage from the security camera
overlooking the post office counter, which gave a clear view of all use of the safe and
till.
Fiona could not believe that Norma Weir was responsible for the shortfall. No
evidence of any wrongdoing was found on the cameras. The investigators declined
however, to view the footage.
I also made my financial records available for the Post Office investigators to review
and those of my partner, Fiona. The Post Office investigators were not interested.
As this was being treated as theft by the Post Office, I approached the police and
asked if there could be an official police investigation opened.
The police agreed and approached the Post Office who told them they would not co-
operate with the investigation because they were looking into the matter internally,
and they had their own powers to investigate and prosecute.
This has been subsequently denied by Post Office Ltd, but I have letters from the
police confirming this. I am willing to provide these as evidence.
During the investigation, I repeatedly asked for the data showing the shortfall. I
asked for information on what happened to the transactions once they left my
Horizon terminal, and if the Post Office could track the transaction once the function
left my office, in order to establish whether there could be any fault or malfunction
with the system; for example, with GIRO transactions, if there could be a fault with
the banks receiver.
The Post Office led me to believe throughout the investigation that they would be
able to obtain this data and that there was a method of doing so.
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58. It eventually transpired that this did not happen.
59, I do not believe that the Post Office ever investigated the Horizon system and
potential flaws. It was easier for them to purely allege theft than admit to any error
on the part of Post Office Ltd.
60. When I again suggested to the Post Office that it could be the Horizon system that
was at fault, not myself or my colleagues, I was laughed at and told this was
impossible, and that I was the only person in the country who had had this problem.
61. Throughout the investigation, it seemed clear, both through Mr McGill and Mr
Anderson, that to the Post Office there was a large debt; and no matter what was
found during an investigation, either me, Fiona or Norma would be responsible for it.
SUSPENSION AND TERMINATION
62. I was suspended on 11 February 2004 and the branch closed. All the equipment was
removed on the same day I reported the shortage, but the paperwork remained in
branch.
63. Even after I was absolved from any blame or wrongdoing, and I requested to reopen
the post office with new staff, having told the Post Office that Fiona and Norma
would not be returning, I was not allowed to reopen. This was first confirm by the
Post Office investigation team and then by the Post Office management.
64, I was told that I had been negligent in being absent from the branch on occasion and
allowed Norma to run the post office. This was even though Norma had extensive
experience and came recommended by Post Office Ltd itself.
65. I spent three years going back and forth with Post Office Ltd trying to get my branch
re-opened in order to support the retail side of the business.
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66.
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Despite being sure that I was not responsible for the shortfall, I made multiple offers
to settle the alleged shortfall, including at the time of the audit, in order to re-open
the branch under my control with new staff, but the Post Office refused to allow this,
and my suspension remained in place.
I do not know why my offers were not accepted by Posy Office Ltd.
I was eventually made redundant by Post Office Ltd in 2007. I had lost three years’
salary and revenue from the retail business. I was being unjustly punished for a fault
I had no part in.
I also lost my future remuneration.
I also lost the value of my post office business and the profits from my retail shop.
CIVIL AND CRIMINAL PROCEEDINGS
71s
72.
73.
74.
The Post Office did not pursue civil proceedings against me for the recovery of the
shortfalls.
I was interviewed under caution and threaten with prosecution. The Post Office
pursued criminal proceedings against my partner, Fiona.
My partner Fiona and assistant Norma were charged with fraud. This was never
pursued further. However, Fiona never got any confirmation that this charge was
dropped.
I did attempt on several occasions to contact the investigation team on Fiona’s
behalf for an update on whether chargers were to be brought in order to put Fiona’s
mind at rest.
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73
76.
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The Post Office investigation team were impossible to contact via telephone, email
or otherwise; and so Fiona had no knowledge of whether the prosecution was going
ahead.
It was only as a result of a freedom of information request, many years later, I
discovered that the case had been closed with no criminal case to answer.
My partner, Fiona died without knowing whether this charge would be pursued.
LOSSES
78.
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83.
I was offered a redundancy payment under the network transformation programme
of £88,000. £30,000 was deducted from this payment to repay the alleged shortfall
debt.
I was a party to the group litigation against Post Office Ltd, as such I am excluded
from the Historic Shortfall Scheme.
In 2004, I had to close the retail store, which was part of the post office, altogether. I
originally purchased the post office for £125,000 and paid £2,000 for the stock. I sold
the shop for £65,000.
I lost considerable value due to the actions of Post Office Ltd. When the post office
was closed after my suspension, it was not possible to sustain the shop without the
footfall it brought in.
The Post Office refused to allow me to reopen my branch despite no action being
taken against me, therefore, I had no choice but to close the shop.
I had intended to continue as a subpostmaster until the time of my retirement with
my partner, Fiona running the business and the post office. I believed that having the
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post office in the store would increase footfall and we would have a stable, secure,
profitable business.
84. My average annual salary was £40,208 and I was suspended for 3 years so I estimate
that my losses during suspension were around £120,624.
85. I also lost the future remuneration I would have received if I had been permitted to
continue to operate my post office.
86. The local press had reported that I had been suspended as subpostmaster and was
under investigation for suspected dishonest activity.
87. During this period, I had a conversation with a Shell UK employee about the renewal
of my contract with Shell in 2011. I was told informally not to bother trying to
renew. The contract was subsequently not renewed in 2011.
88. The stigma surrounding the closure of the post office as well as the breakdown of my
relationship with Shell UK prevented me from approaching any other petrol
companies. I felt that I was effectively blacklisted.
89, I lost outside business interests as a direct result of damage to my reputation and a
question mark over my honesty.
90. My income from the petrol stations was around £70,000 per annum.
HUMAN IMPACT
91. The closure of the post office and my suspension and the investigation were
reported in the local press. This caused significant damage to my reputation, and
that of my partner and our standing in the local community.
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92.
93.
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Fiona especially, was the victim of abuse from the local community as a result of the
issues, She was even spat at when Post Office Ltd came to remove equipment from
the shop. This was in front her two young sons and this caused significant emotional
distress to Fiona.
The local community were very hostile towards us. Incidents were too numerous to
mention. They included regular damage to the property, verbal abuse and even
being spat, at as mentioned.
There was also a degree of suspicion amongst some family members, friends and
work colleagues. Some family members severed contact with us, and we lost quite a
few friends.
I too suffered an endless stress as a result of the actions of the Post Office, but Fiona
suffered terribly, and it had a detrimental effect on her health.
Fiona had experienced mental health issues since childhood and suffered with
depression. The circumstances with the Post Office, as well as the threat of a
criminal prosecution, exacerbated Fiona’s illness.
What made matters worse is that, with a criminal charge hanging over her she was
not able to resurrect her formal career as a teaching assistant or find alternate
employment of any sort. Her self-esteem was shattered.
It also led to the loss of her longstanding friendship with Norma Weir. Their
relationship disintegrated because of the accusations that one of them was
dishonest, and responsible for the losses. This also had a lasting impact on Fiona. It
also made it virtually impossible for her to find other employment, as she was too
honest not to mention a possible court case.
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99. Sadly, Fiona passed away in 2009 as a result of an accidental overdose. I am in no
doubt that the pressures caused by the Post Office contributed to Fiona’s death.
100. Fiona was only 47 when she died.
101. I cannot begin to put into words what I feel towards those responsible and what they
put us through. I lost my partner and after her death, I also lost the loving
relationship I had with my two stepsons who we had raised together for ten years
since they were aged 2 and 4.
102. Post Office Ltd have shown themselves to be a ruthless, heartless organisation.
What I have stated in this statement is only an indication of what I have suffered as a
direct consequence of their actions.
CONCLUSION
103. Ultimately, as well as the financial, material and reputational damage the worst loss
by far was the decline in my partner, Fiona’s mental health, as a direct result of the
worry and stress leading to her sad and premature passing at the age of only 47.
104. My life has been completely devastated. Due to the actions of Post Office Ltd. A
previously healthy, happy and comfortable lifestyle that my partner, myself, and her
2 sons enjoyed was totally destroyed.
105. I would like Post Office Ltd held publicly accountable for their actions and for them
to acknowledge the misery they have put people through.
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STATEMENT OF TRUTH
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