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Witness Name: Rt Hon. Kelly Tolhurst MP
Statement No.: WITN10930100
Dated: 19 June 2024
POST OFFICE HORIZON IT INQUIRY
FIRST WITNESS STATEMENT OF RT HON. KELLY TOLHURST MP
I, Kelly Tolhurst, formerly Parliamentary Under-Secretary at the Department for
Business, Energy and Industrial Strategy will say as follows.
INTRODUCTION
I have served as the Member of Parliament for Rochester and Strood since 7 May
2015. At the time of writing this statement I am standing for re-election at the
general election on 4 July 2024, as the Prospective Parliamentary Candidate for
the Conservatives.
I was born and have lived in the constituency of Rochester and Strood all my life.
After leaving school, I worked for large food producers in London before
establishing and running a marine business for 17 years. During this time, I trained
as a Marine Surveyor.
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I was elected to Medway Council in 2011, representing the Rochester West Ward.
I was elected as an MP in May 2015.
I served as the Assistant Whip to HM Treasury from 9 January 2018 to 19 July
2018. I then served as Parliamentary Under-Secretary for the Department for
Business, Energy, and Industrial Strategy (“BEIS” or “the Department’) from 19
July 2018 to 13 February 2020 responsible for Small Businesses, Consumers and
Corporate Responsibility. It was during this time that I became involved with the
issues this Inquiry is concerned with. My appointment to BEIS as Parliamentary
Under-Secretary was my first Ministerial appointment.
After my time in BEIS, I was then briefly appointed to the Department for Transport
as the Parliamentary Under-Secretary. I went on to serve as Parliamentary Under-
Secretary (Housing, Communities and Local Government) at the Ministry of
Housing, Communities and Local Government between 8 September 2020 to 16
January 2021. From 1 July 2022 to 7 September 2022, I was the Deputy Chief
Whip in the House of Commons. From 7 September 2022 to 27 October 2022, I
served as the Minister of State at the Department for Education. I have been
serving from the backbenches since the end of October 2022.
I make this statement in response to the Inquiry's request for evidence dated 9
May 2024 (‘the Rule 9 request”). I have prepared it with the support of the
Government Legal Department and counsel. I have been dependent on others
putting documents before me to assist with the chronology of events I set out in
this statement, but any views expressed are my own. I would be very happy to
clarify or expand upon the evidence set out in this statement should it assist the
Inquiry.
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The Horizon scandal and the impact on the sub-postmasters and sub-
postmistresses (“SPMs”) affected and their families has been life changing with
severe and horrific consequences for those individuals. No words can make up for
the personal suffering of the SPMs and their families. I am personally appalled
that the suffering of those individuals was at the hands of a Government-owned
company over a long period of time, which still remains unresolved for many today.
It is now clear, particularly in hindsight with the information which is now available
in the public domain, that the structure in which the Post Office operated as a
private company owned by Government was not right. It is of great personal
sadness to me that my determination during my time as a Junior Minister to get to
the facts and the details of what the Post Office were doing, the challenge I gave
and questions which I asked were not enough to expose the miscarriage of justice
which we now know has taken place at the expense of innocent people.
I have structured this statement in two sections. The first section contains a
detailed chronological account based on the documents I have had sight of and
my own recollections and observations. In the second section, I respond to the
specific questions set out in the Rule 9 request in sequential order, adopting the
same numbering, to the extent I have not already provided a response in the first
section. At the end of that second section I set out some reflections about what
went wrong and some suggested lessons to be learned.
SECTION 1: CHRONOLOGICAL ACCOUNT
As the Junior Minister accountable for Small Businesses, Consumers and
Corporate Responsibility, I had a broad policy portfolio. I was responsible for
labour markets, the retail sector, retail energy markets, product safety, Companies
House, the Insolvency Service, Postal Services, Competition and Markets
Authority, HM Land Registry and Ordnance Survey. I recall that particularly time-
consuming areas of my work included a big product recall of the Whirlpool washing
machine, work in tackling late payments for small to medium sized businesses,
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11.
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work on the Corporate Governance Code, and dealing with national minimum
wage enforcement and reported abuses within the fast fashion sector. I recall that
after I moved on from BEIS, the portfolio was split up with Lord Callanan taking
over responsibility for corporate governance and the CMA and Paul Scully MP
taking the smaller brief including Postal Services. I recall being sent home on the
first weekend after my appointment with probably 50-odd submissions on the
various policy areas to get on top of. It was a very busy portfolio.
As is typical for Ministers, I had a private office in the Department and was assisted
a small number of private secretaries who were civil servants. They would arrange
my diary, prepare paperwork for my Ministerial box, and would coordinate the
management of correspondence. I would receive a large volume of
correspondence and I trusted my private secretaries to deal with that
correspondence as appropriate; sometimes they would direct it straight to me,
sometimes they would deal with it on my behalf, and other times they would refer
it to officials for analysis and advice. Often correspondence would be provided
along with a draft response from officials for me to consider.
As well as private secretaries, the Department was assisted by a number of
Officials, also civil servants, who were subject matter experts in particular policy
areas. Those officials would draft submissions ahead of meetings, debates,
Parliamentary Questions and so forth. In respect of the Postal Services part of my
portfolio those individuals worked within UKGI. It was UKGI officials that prepared
the relevant advice as experts on postal affairs. I was also assisted by the BEIS
Post Office policy team which was established in August 2018. Officials within that
team provided advice, separately from UKGI, in respect of issues arising on postal
matters.
The breadth of a Minister's portfolio is such that they have to, to a greater or lesser
extent, rely on the advice of officials and make decisions on the basis of it.
Ministers expect the advice given to be competent, accurate and reliable, honestly
given and on the basis that objectivity has been applied in the analysis of the facts.
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When I arrived in post as Parliamentary Under-Secretary at BEIS I was briefed on
my entire policy portfolio. I was provided a briefing on postal affairs soon after I
started and would have received something akin to a Day One Briefing Pack for
each policy area, although I do not have copies of those documents now. I
remember that the key policy areas within the postal affairs brief were POL’s
financial performance, efforts to increase and diversify the retail offer of post
offices, and major upgrades to its other IT systems (not Horizon), the cash
management system (POLSAP), and digital ID verification. As part of that briefing,
I was provided with some outline information regarding the Horizon IT system
issues.
I understood at that time that a civil claim was being brought by a number of SPMs
in relation to accounting losses suffered in branch as a result of the Horizon IT
system. I understood that SPMs were alleging that there were widespread
problems with the system and that POL denied this. I knew that several SPMs had
been convicted for accounting losses.
I do not remember the Horizon IT system being raised by my officials as an issue
to consider in any detail until 16 August 2018, when I was provided with a number
of briefing documents in relation to the Post Office Horizon group litigation’. The
documents were drafted for the attention of the Permanent Secretary, Alex
Chisholm, and sent to him on 10 August 2018. That email was forwarded to my
private office on 16 August, and I can see that Annex 1 to 5 were apparently sent
under cover of that email.
UKGI00018266 is a document provided to me by the Inquiry. It is a submission
drafted by Mark Russell of UKGI entitled “Horizon Litigation Update” and dated 10
1 UKGI00008342
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18.
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August 2018. The submission explains the contents of Annexes 1 to 5 which were
attached to the 10 August email sent to Alex Chisholm.
At paragraph 8 of that submission, it is recorded that “following the agreement of
the Protocol, POL’s Legal Counsel provided an initial background briefing on the
litigation (Annex 3), including their QC’s view on the merits of the case”. I did not
receive this Annex 3 at the time and have not seen it since.
The document goes on to say that POL’s Legal Counsel “has since provided a
further update (Annex 4) following discussion of the case at POL’s last board
meeting on 31 July. For ease of reference in Annex 4 UKGI has highlighted in
yellow any information that is new and worthy of note. These briefings do not yet
address contingency planning, but Tom Cooper has asked POL’s Legal Counsel
to focus on this in the run-up to the November 2019 hearing, particularly the
question of how POL would handle the business implications of losing, and to
provide you with a paper addressing these issues in advance of the 10 September
briefing session”.
I understand that Annex 4 is document UKGI00008345. That document addresses
procedural issues and the timetable for the Commons Issues and Horizon Issues
trials. I can see that the document contained some of POL’s thoughts on
settlement options and contingency planning?. I do not recall considering those
points at the time and, re-reading them now, I can see that there were no
developed plans in place.
2 UKGI00008345 at paragraphs 5 and 6.
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21.
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As to the other annexes, Annex 1 was the Information Sharing Protocol? and
Annex 2 was the On-Boarding Protocol‘. I do recall receiving those documents at
the time, but I do not remember reflecting on them. The Inquiry has provided me
with document UKGI00008347 entitled “Proposed Agenda and Attendees”. This
may be Annex 5, created in anticipation of a meeting on 10 September 2018.
It is recorded at paragraph 11 of the 10 August 2018 submission to Alex Chisholm®
that an “Oral briefing from POL’s Legal Counsel” was scheduled for 10 September.
It was recorded that at that meeting, “POL’s Legal Counsel, Jane MacLeod, Chair
Tim Parker, and CEO Paula Vennells... will brief you on the key issues at stake,
as well as on the financial, reputational and operational implications (which could
be considerable) of an adverse ruling at November's “Common Issues Trial”
and/or at the “Horizon Trial” in March 2019 and POL’s contingency plans for
dealing with these risks. This will be an excellent opportunity for you and the
Minister to exercise Shareholder scrutiny and seek reassurance on any issues of
concern”.
To the best of my knowledge, the meeting did not go ahead on 10 September
2018, but was instead re-scheduled for 17 October 2018. My private office
arranged my diary and things were often subject to change at the last minute. I did
not always know the reason why.
3 BEIS0000079
4 UKGI00008348
5 UKGI00018266
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23.
24.
25.
26.
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The only background information I derived from the documents provided to me on
16 August was that “the independent investigations by Second Sight [that] found
no evidence of flaws in the Horizon IT system’”®.
I do not recall any advice being given at that time regarding the risks of the
litigation. I was not given the impression that POL were anxious about the
litigation, or that there was any particular risk involved with the litigation over and
above the inherent risk associated with any legal dispute. I was not asked to
consider strategy or options for resolving these issues. I understood POL and the
SPMs were coming towards the end of a long process which had started well
before I came into the Ministerial role, and I was not asked to provide input on that
process.
It was obvious, however, from this point in time that the litigation would be an
important part of the postal affairs brief and I did not feel that the information
provided to me in August 2018 gave me with the information necessary to provide
effective leadership from within BEIS in respect of the litigation. I was just
beginning to be briefed and I did not know at the time what information to ask POL
for. I wanted to be in a position where I understood the detail and could make
informed and considered judgments on these matters when required.
I would say that this is typical of my working practices. I would describe myself as
someone who is interested in the detail and concerned to have all of the relevant
information, as far as possible, before taking a decision.
® UKGI00018266 at paragraph 12.
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27.
28.
29.
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For that reason, I requested further information, and I was provided with the short
further document entitled “Briefing for Kelly Tolhurst MP, Postmaster Litigation”’.
The document itself is undated. I do not recall exactly when I received it, but I am
sure it was provided after 16 August 2018 and before the meeting with POL took
place on 17 October 2018. It is a top-level summary document drafted by UKGI. I
return to it below.
On 3 September 2018, I met Paula Vennells, POL’s CEO. I was provided with a
briefing for that meeting by UKGI on 31 August 20188. It was very much an
introductory meeting. I can see that the briefing noted that UKGI were concerned
that POL had not “done enough to prepare for the potential business, reputational
and financial implications of losing’®. I note that only 5 minutes had been allocated
for discussion of the litigation, whereas 20 minutes was for discussion of POL’s
financial performance, business transformation and growth. I do not recall any
discussion of contingency plans at that meeting.
The Inquiry has provided me with a note of that meeting as authored by Nick
Parker of UKGI'°. I do not believe I saw this document at the time, and I cannot
now confirm the accuracy of the text in bold, which says I “did not specifically
request sight of POL’s contingency plan in advance of the 17 October meeting as
briefed’. I note Mr Aldred recorded that Ms Vennells had passed on the advice of
POL’s leading counsel that, in summary, “POL will likely lose on some contract
clauses but not on the highest impact ones’. Whilst I do not now recall the detail
of the point made, that fits with my understanding at the time. I remember having
7 POL00111100
® UKGI00008369; UKGI00008370
® UKGI00008370
19 UKGI00021355
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30.
31.
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the general impression that the POL had confidence in its overall defence to the
claim.
I do agree with Mr Aldred’s note that I “emphasised the need to provide plenty of
detail and [Paula Vennells] said POL would be in a much better position to do so
after further briefings from their QCs and hopefully more information on the
claims""'. This fits with my memory of dealings with POL during my time at BEIS.
POL always seemed willing to answer questions when asked, but I did find that
they were sometimes difficult about what information they would volunteer. There
was never a refusal to provide information if it was requested, but I did feel that
details were not always forthcoming in a proactive way. This troubled me, because
I did not necessarily know the right questions to ask at every stage and felt very
reliant on POL to bring potential problems to my attention. This was a theme that
arose on many occasions and culminated in an updated new Sharing Protocol
being established in July 2019, which I turn to below.
I note also what Nick Parker writes in the first paragraph, “Paula frequently
confirmed that challenge from HMG is good, but also asked that HMG ensures the
positive developments in Post Office are made clear and that HMG continues to
stress the important role that Post Office plays in communities up and down the
country”. Reading this comment now, I do feel that POL was more interested in
the Department challenging POL for the ‘appearance’ of challenge rather than
sincerely listening and changing course in response. I got the impression that POL
expected the Department to be positive about POL regardless of the scrutiny that
the Minister or Department wished to apply.
11 UKGI00021355
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32. The further briefing I received from BEIS officials for this meeting, mentioned
above, '? sets out at the first bullet point that the “litigation follows a number of
years during which Post Office sought to understand the concerns of postmasters
and address their issues. While many of the claims alleged faults with the Horizon
computer system, to date no evidence of systemic problems have emerged, rather
there is a pattern of operational errors in branch, as well as, in specific cases,
where Post Office could have done more to support postmasters”. In the second
bullet point it is recorded that “litigation was commenced in early 2017 and
involved claims by 561 postmasters. The specific details of their claims have not
been provided, and we do not have any details as to the possible quantum of
damages that they may seek’. The document set out that “we are developing
contingency plans to address these risks and will discuss these in more detail at
the meeting on 17 October’.
33. My general impression at this point in time was that POL did not consider there
was serious problem with the Horizon system, albeit there may have been
occasional bugs or errors in the system affecting individual SPMs. I understood
POL thought there was a possibility that the court may find against them on various
contractual points or in respect of those occasional bugs or errors, but did not think
they would lose on anything significant.
34. I do remember at this early stage being concerned that POL were perhaps over-
confident. I do not pretend that I had any particular foresight into what would
happen in the group litigation. I am not a lawyer and I have no experience of legal
claims. Rather I saw this as a David and Goliath situation. My instinct was that the
court, faced with a case which could be seen as the ‘little guy’ going up against a
large corporate institution, would be sympathetic towards the ‘little guy’. This was
just a gut feeling rather than being based on any specific concern about POL’s
case. I recall mentioning this in the 17 October 2018 meeting. It is, I think, recorded
12 POL00111100
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35.
36.
37.
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in the note of the meeting where it states I said something along the lines of, “odds
against us being a case of big against [small]’'’.
On 11 October 2018 I received a briefing authored by POL for the 17 October
meeting'*. The briefing was extensive, although section 2 setting out the
background to the litigation was relatively short. I did not understand this to be a
meeting about litigation strategy or the merits of the claim. It was really just a
meeting about what was happening in the litigation.
I do remember in particular what was written at paragraph 2.3 of the briefing:
“Post Office appointed independent forensic accountants Second Sight to
perform a ‘top down’ examination of Horizon. Second Sight issued a report
in July 2013 which concluded there was no evidence of system-wide
(systemic) problems with the Horizon software but identified some areas
where Post Office could have done more to support individual postmasters’.
Brief details of the Complaint Review and Mediation Scheme were also
provided. I remember being reassured by this. I understood ‘no evidence of
system-wide (systemic) problems’ to mean that there were no fundamental
flaws in the system that could affect SPMs more widely, although there may
have been one-off issues arising from user error or occasional bugs.
POL’s contingency plans were set out in the briefing document*®. I was in no
position to scrutinise the substance of those plans. I was concerned about POL’s
potential liability arising from an adverse judgment or settlement of the claim. I
18 UKGI00008554
"4 POL00022976; POL00111218
15 POL00022976 at paragraph 5 and Appendices C to E D
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38.
39.
40.
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wanted to know if POL would be able to satisfy a judgment or pay out the claim’®.
It was imperative that BEIS were fully informed of these matters as they directly
impacted on the taxpayer, due to the subsidy given by Government to POL.
My overwhelming concern at that time was that a judgment against POL or
settlement of the claim would not cause POL a financial crisis. I was very focussed
on keeping Post Office going as a valued service. This is why it was so important
to me that I was provided with information on POL’s financial position so that
proper planning could take place.
Frustratingly, POL were not willing or perhaps not able to provide any concrete
advice on their liability at the meeting. I was informed by way of a post-meeting
note that that “for any settlement up to around £50m the cost could be borne by
the company. Above that they would need to consider whether it could be funded
by POL or request additional support form HMG"'’. I wanted more information
about the arrangements that would be put in place for POL’s financial liability, and
this is something that I followed up the following month. My understanding was
that POL were not giving me an estimate of its potential liability because then it
would become a known liability disclosable to POL’s auditors which may expose
it to a risk of trading when potentially insolvent. Whilst I understood that, I would
expect POL to be able to give me some clear information even if it was not an
official figure.
POL’s thoughts in respect of settlement of the claims were also set out in the
briefing documents*®. I recall those matters being discussed at the meeting. The
16 UKGI00008554
17 UKGI00008597
18 POL00022976 at paragraph 7
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strong impression I received was that POL was eager for the court to hand down
a judgment which established the facts in order to bring an end to the matter.
POL’s concern, as I understood it, was that if it settled the group claim without
some form of judgment on the core facts and issues then there was a risk of more
claims being brought in the future and challenges to the accuracy of Horizon would
continue.
41. Indeed, this is what is reflected in the briefing document"?:
“(ii) A settlement is only binding on the parties to the action. While it is usual
that the terms of a settlement are confidential, the fact of a settlement is unlikely
to remain confidential. This is likely to be construed by the media and followers
as a capitulation by Post Office, and is therefore likely to give rise to further
claims by other former or current agents who believe they have been wrongly
treated. (iii) Settlement will not resolve the questions posed by the claimants as
to the correct interpretation of Post Office’s obligations under the contract or
the robustness of Horizon. This would mean that agents will continued to
challenge the veracity of data from Horizon which is relied on by Post Office in
recovering losses, and will at least perpetuate the current issues Post Office
faces whereby branch losses are increasing significantly. It is unlikely that,
absent litigation funding, any single agent would be able to afford the necessary
legal costs to have the Horizon issues fully determined; whereas the current
group litigation structure and funding allows those issues to be addressed’.
19 POL00022976 at paragraph 7.2(ii) and (iii)
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42. I was keen for the legal team at BEIS to consider the issue of settlement and for
a Departmental view to be formed. I asked for access at the meeting to POL’s
legal advice so that work could be done (and the meeting note records that my
Permanent Secretary made the request)?° and on 31 October 2018 my private
office chased POL for access to that advice". I think that this is perhaps another
example of POL being willing to provide information when specifically asked but
not being completely transparent and forthcoming with documentation on a
voluntary basis.
43. There was certainly some appetite within BEIS to push for settlement of the claims.
I think if the Department had become involved 12 to 18 months before these
events then perhaps it would have been early enough in the process to have
affected the legal strategy to the claims more, because there was more interest in
exploring settlement within BEIS than, it seemed, within POL. However, there was
no serious discussion at the 17 October meeting about settling the claim, primarily
for the reasons given in the briefing document.
44. Aside from this, I was presented with strong assurances at the meeting that POL
had received good legal advice and that POL were overall confident in their
defence of the claim. I would not be expected to provide input into matters of legal
strategy without relying on legal advice and that advice would only be sought by
BEIS it there was a matter that needed adjudicating, a red flag so to speak. As
matters stood there were no red flags. The legal strategy was not in any way called
into question. Whilst I had my own concerns about the merits of the SPM’s claims,
mentioned above, these had no legal basis, but were simply based on a hunch
20 UKGI00008554
21 UKGI00008598
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45.
46.
47.
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that the court might have sympathy for the SPMs, and so were not something I
could push POL harder on.
The Department's view was still that the claims should be resolved as soon as
possible. My impression at the time was that POL did not have an attitude of “win
at all costs” and were not being overly aggressive in respect of the claims. That
was certainly not how I recall the litigation strategy being conveyed to me and my
officials. For example, POL were readily accepting that there would probably be
some losses in the litigation, but that they would succeed on the big points. I think
that if anyone had told BEIS, whether by way of POL’s legal advice or someone
from the Board approaching us, that POL were at serious risk in the litigation then
the Department would have pushed to settle the matter as soon as possible.
My private office was informed on 2 November 2018 that POL had finally shared
its legal advice with UKGI?2. Tom Cooper of UKGI passed on comments from
Richard Watson of UKGI’s legal team that advice on settlement options would be
provided. My impression remained that POL, and UKGI, felt positively about the
litigation as recorded by Mr Watson, “we were pleased with how the meeting went
and POL were also glad to have had the opportunity to provide their perspectives
of the litigation”. I do not know if that advice was ever received by BEIS officials or
if UKGI’s legal team did provide options on settlement.
On 16 November 2018, I was informed by my private secretary that Paula Vennells
was stepping down as CEO. In a WhatsApp conversation with me, my secretary
commented, “/’m wondering if this means she has realised that the litigation is
going to end badly and is getting out first’. I responded to this, “Oh interesting
22 UKGI00008608
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48.
49.
50.
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news! Yes I would agree”. I think I must have had a conversation at some point
with my private secretary about the group litigation and shared my thoughts on the
merits of the SPMs claim as set out above. I was disappointed that at such a
crucial point for the organisation it would need to go through a recruitment process.
I do not remember ever seeing Paula Vennells again.
I met with Tosin Adegun and Tom Cooper of UKGI on 19 November 201874. We
discussed my suspicions regarding the timing of Ms Vennells’ exit from the
company. They were the same suspicions I raised in the WhatsApp conversation
detailed above. I was told by Tom Cooper of ShEx that the recruitment process
for a new CEO “is POL led but will be done with shareholder consent’. Alisdair
Cameron (the Chief Financial Officer) stepped in as interim CEO. I met with the
shortlisted candidates for the CEO role and Nick Read was later appointed. He
was my choice. He was an external candidate and I felt, at the time the recruitment
process was happening through to September 2019, that POL needed someone
with commercial retail expertise to provide fresh leadership.
We discussed the concerns I had raised in the 17 October 2018 meeting
regarding, “POL’s potential liabilities over the court case”. I said that I was “keen
to be properly briefed as the litigation case progresses and would welcome both
verbal and written updates on a bi-weekly basis”.
I did then start to receive frequent updates. Often those updates would be purely
procedural and/or related to media coverage? and other times they were more
23 WITN10930101 page 49.
4 UKGI00008656; UKGI00008701
2° UKGI00008701; UKGI00008873; UKGI00008703; UKGI00008704
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51.
52.
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substantive?®. I would not say now that the updates provided any rigorous legal
analysis although POL’s update for the Board dated 13 December 2018 did
include some analysis. The conclusion reached in that document was that, “Post
Office’s counsel therefore continues to believe that Post Office has the better of
the arguments, with the main risk to Post Office being the extent to which the
Judge gives weight to individual claimants’ experience over orthodox legal
principles” 2’.
I was keen to get more detail so that I was in the best possible position to make
informed and considered decisions. That said, I was not asked at this time or in
fact at any time about my views on the merits of the litigation or settlement. I was
not being advised by BEIS officials as to whether or not POL should continue to
defend the claim and I do not recall anyone suggesting that I ask that question.
There were no obvious red flags which would have caused me to ask that question
or seek advice on that issue. Indeed, I was presented with quite a lot of assurances
that the Common Issues trial was going favourably to POL.
Looking back now, it remains my view that at that time of the Common Issues trial
there was no basis upon which I could have instructed POL to settle the litigation,
against the advice of their legal advisors. I have no doubt it would have been seen
as a significant interference with POL operational matters, and I do not consider
that I would have had any support from within the civil service to take that step.
Although POL was a public corporation rather than a department, it would have
been akin to making a Ministerial Direction,?® which are very rare and almost never
done by a Junior Minister. There was simply nothing presented to me at that time
26 UKGI00019168
27 POL00103373 at paragraph 1.6.
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which I could have used to push back on POL’s strategy and start a conversation
about bringing the matter to a conclusion before the judgment was handed down.
53. On 20 February 2019, my private office wrote to UKGI asking for a meeting with
Paula Vennells before her departure. I had communicated to my private secretary
that I felt that “there are a lot of risks around POL activity’9. By this I was referring
to the awaited Commons Issues Judgment, my concerns about POL’s liability, and
my suspicions about the timing of Ms Vennells’ departure. I do not believe that this
meeting with Paula Vennells took place.
54. On 26 February 2019, I met BEIS and UKGI officials, including Tom Cooper. I was
briefed in advance of that meeting®°. I remained concerned that POL’s liability was
unknown, and I wanted to ensure that I was being kept updated with all of the
developments. Among the action points rising from that meeting were that I would
be briefed on the possible outcomes of the ruling on the Common Issues trial and
be provided with next steps in respect of the Horizon Issues trial®". I believe it was
at this meeting that I asked whether the Department could receive advanced
notice of the Commons Issue judgment.°?
55. On 1 March 2019, UKGI provided advice to the Secretary of State and to me
regarding the judgment in the Common Issues trial being sent to the parties the
week commencing 4 March 2019 under embargo before being formally handed
29 UKGI00008996
30 UKGI00018334
31 UKGI00022263
$2 UKGI00009042
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56.
57.
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WITN10930100
down the week commending 11 March 2019°°. I recall asking why BEIS were not
given sight of the judgment at the same time as POL and querying whether BEIS
could have access to it®*. To the best of my recollection, the 1 March 2019
submission was in response to that request. The advice was to not seek that
permission® and I accepted that advice.
I asked the question because, as I have said previously, I wanted to have all of
the relevant information available to me as much as possible. I assumed that as
the sole shareholder, the Government would be provided with the same
information as POL. As the Government might be ultimately responsible for the
financial implications of the judgment, I wanted to be prepared. Before receiving
the advice in March 2019 I was not aware of the legal and procedural framework
governing this matter. As soon as I received the advice, I understood the position
and, as I said, accepted the advice.
On 8 March 2019, I received a further submission from UKGI regarding the issues
in dispute in relation to the Horizon Issues trial and the next stages of that part of
the litigation.°* It was probably at this time that I was first told of the core issues in
the Horizon Issues trial; namely, the reliability of Horizon and the reason for
33 BEIS0000063. Attached were draft Urgent Questions and rebuttal and draft answers to initial
and follow up questions BEIS0000064; BEIS0000065,
4 UKGI00009075; UKGI00009042
35 BEIS0000063 at paragraphs 13-16. Advice was also provided by UKGI to the Secretary of State
copied to me on 4 March 2019 on the same issue. It similarly recommended that permission was
not sought. BEIS0000488 at paragraph 5. On 5 March 2019, Alex Chisolm (the Permanent
Secretary) provided similar advice. UKGI00009137.
36 BEISO000066
Page 20 of 105
58.
59.
60.
WITN10930100
WITN10930100
accounting shortfalls, whether remote access to branch accounts and the capacity
to edit or delete transactions, correcting transaction, and the information available
to POL and to SPMs to deal with shortfalls. On 12 March 2019, UKGI sent my
private office POL’s summary of Day 1 of the Horizon Issues trial5’.
I was made aware by my private office on 14 March 2019 that judgment in the
Common Issues trial would be handed down on 15 March*®. My private secretary
notified me of the outcome the following day®®. She said that “the judge ruled in
favour of the postmasters and suggested some substantive changes to the post
office most importantly to the liability and termination clauses within their
contracts... the Judgement found strongly in favour of postmasters, principle
finding is that the contract between POL and postmasters places a number of
obligations on POL which will require them to change the way they work with
postmasters. Judgement is also highly critical of POL behaviours, and uses strong
language accusing POL of being heavy handed and lacking transparency’.
My immediate reaction was one of embarrassment. I was appalled that the Judge
had found POL to have behaved so reprehensibly and I felt utter shame on behalf
of POL in respect of what the SPMs had been through.
I had an initial call with UKGI on 15 March 2019 about the Judgment. My
overwhelming initial concern was well reflected in a post-meeting note:4° “the
potential liability and what our next steps were”.
37 UKGI00009163
38 WITN10930101 , page 162-163.
3® WITN10930101, page 163
4° UKGI00009212
Page 21 of 105
61.
62.
WITN10930100
WITN10930100
I then had a call with Tim Parker (POL’s Chair), Alisdair Cameron (POL’s Interim
CEO) and Jane MacLeod (POL’s General Counsel”). The broad content of that
call was set out in the “speaking points’. Those speaking points accurately reflect
my immediate concerns at that time; namely, that
a.
“whilst these are operational matters, as the Minister responsible I need to
ensure the findings in terms of both the contracts with postmasters, and also
the criticism of POL’s culture and practices, are addressed. What action are
POL taking as a result of the judgment and how will you keep me informed
of process to provide assurance this action is effective? Who will lead this
work now Paula has stepped back and how will you (Tim) ensure strong
leadership is shown on this?”
“Concerned that the legal advice POL received appears to have been wide
of the mark on the likely outcome of this trial, are you considering any
changes to your strategy for the remaining trials? As you discussed with
Alex Chisholm recently, we have learned from previous experience that it’s
very important to have independent legal advice in relation to strategy from
now on to guard against the existing legal team being wedded to the existing
approach”.
“lunderstand POL will consult BEIS on any intention to appeal prior to doing
so”.
Sub-paragraph (b) really captured my thinking at the time. BEIS were given
repeated assurance about POL’s legal advice, and on the basis of that expected
there might be some criticism and that POL were unlikely to succeed on some
relatively minor points. The judgment was completely unexpected, in that it was
such a damning indictment of POL. The legal advice received was utterly incorrect.
Page 22 of 105
63.
64.
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WITN10930100
I just did not get the impression at any time that POL thought they could be found
to be wrong on the key issues, indeed I was constantly being reassured. I do not
know where I would have gone at the time to get the right information and to have
seen some of this coming. However, from that time my concern was what was
going to change in how this litigation was approached. The handing down of the
Common Issues judgment was a light bulb moment for me.
The Secretary of State and I met with UKGI on 16 March 2019. We were briefed
on the judgment. I made clear that “the judgment was close to the worst-case
scenario”“'. I believe this was the first time that an appeal was mentioned, UKGI
indicated that POL would probably appeal the judgment as this “may be helpful in
reaching a settlement’.
The note of the meeting records that the Secretary of State “made clear his
primary objective is to see justice done. Where postmasters and mistresses have
been treated improperly they should be treated justly"**. Secretary of State is
recorded as having “asked that the Department put out a statement making the
point that we are aligned with the interests of the postmasters but that we are still
going through the legal process”. I could not have agreed more with what the
Secretary of State (then Greg Clark) said. I absolutely wanted to see that justice
was done and I arranged for the letter to MPs regarding the judgment which I turn
to below to be drafted in those terms. The Secretary of State noted that “where
POL can fix problems internally before the conclusion of the legal process it should
so do. He agreed with Tom Cooper’s assertion that caution would be required to
ensure that justice is done for legitimate claimants, but that restitution may not be
appropriate in all circumstances”. It was decided that a “Dear Colleagues” letter
be written addressing the House in those terms.
41 UKG100009213
42 UKGI00009213
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65.
66.
67.
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WITN10930100
The “Dear Colleagues” letter was to be drafted by my private secretary and UKGI
officials. The letter went through a number of drafts and the final draft was sent on
18 March 2019%°. In respect of an earlier draft and on 16 March 2019, my private
secretary told me that “UKGI/ has advised that the below wording isn’t correct and
that we must avoid treading into areas which are for the court namely whether
POL have breached any legal duties they owed to any of the claimants and if so
whether those claimants are entitled to compensation. They advised that those
decisions are for later trials in this group litigation”.
The original wording that I had recommended which UKGI had taken issue with
was that the judgment “represents a significant step forward, delivering justice for
those postmasters who have been wronged’. This wording reflected my
sentiments at the time. My private secretary went on to say that “UKG/ have said
it would be more factually correct to say “... The Post Office and I are fully
supportive of this legal case being brought. This first judgment, which deals with
the contractual relationship between the Post Office and postmasters, represents
a significant step towards delivering justice..."*4. My private secretary was happy
with that revised wording and I approved it. No.10 approved the wording as did
the legal team at BEIS.
The following day, my private secretary informed me that POL had “raised some
comments on the letter as they are nervous about prejudging the outcome of future
trials” and that the wording had been reworked to get “the balance between
reflecting nuance of the case as required by POL but also making sure it reflects
43 POL00103458
44 WITN10930101 page 166.
Page 24 of 105
68.
69.
70.
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WITN10930100
yours and Greg’s (Secretary of State) steer about justice for those who have a
valid claim”.
The amendment had the effect of removing the text approved my me, BEIS’ legal
team and No.10*°. I said to my private secretary that “the letter has changed
significantly’. It seemed to me that POL had watered down the sentiment held by
me and the Secretary of State. My impression, as I said in that exchange with my
private secretary, was that the reason for this was “probably about the POL not
really accepting the judgement is so bad”*°. I reluctantly accepted the revised
wording on the basis of the advice given. I did not want to risk prejudicing the
future litigation and it was imperative that the Department communicate with the
House on the issue quickly.
Looking back now this is probably one of the areas where I should have pushed
back and insisted on the original wording. The civil service team in BEIS were very
good and I trusted them, but I feel that I should have been more insistent on the
wording of this letter. Now I know that only a day later POL would be attempting
to get the Judge to recuse himself. This must have been in their minds when they
were considering my draft, but I knew nothing of it at that time.
On 19 March 2019, my private office was emailed by UKGI regarding POL’s
possible grounds for appeal, one of which being, in summary, that the judge had
made findings of fact in relation to issues upon which he had not heard evidence
and allowed those findings to influence his ruling on the terms of the contract
between POL and SPMs. The result, said UKGI, was that this would prejudice
45 WITN10930101 page 167; POL00103458
48 WITN10930101 page 167
Page 25 of 105
71.
72.
73.
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WITN10930100
POL and it would not be fair for the Judge to continue to hear the remaining trials‘’.
I was told that POL had taken new and independent legal advice which had
recommended, in consequence of those matters, that an application be made for
the judge to recuse himself.
I had informal conversations in the Department about this application. My view,
and my officials’ view, was that this application should not be made. I had very
grave concerns about it.** I believe that the Permanent Secretary, Alex Chisholm
took this forward and tried to discourage POL from making the application. At no
time was anyone at POL given reassurance that Government would be happy with
POL making this application; quite the contrary.
I took my concerns to the Secretary of State, and I arranged for a call with Tim
Parker and Alisdair Cameron to get them to explain the thinking behind the
application#®.
It was apparently not, however, within the Department's gift to stop POL from
making the application. Indeed, I was told in terms that “the advice from BEIS
Legal and UKGI Legal is that BEIS officials/Minister and the shareholder NED
should not be involved in POL’s formal decision-making on the recusal application,
although they may participate in discussions and hear the advice from POL’s legal
47 UKGI00009344
48 UKGI00009346
49 UKGI00009344
Page 26 of 105
74.
75.
76.
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WITN10930100
team”®°, In a later email the same day, Tom Aldred of UKGI said that “the strong
legal advice is that the minister should not be involved in this decision”>".
On 21 March 2019, UKGI provided a submission for the attention of me and the
Secretary of State’? regarding the recusal application. It set out that Lord
Neuberger and Lord Grabiner QC “gave strong advice in favour of seeking recusal
which he described as the only option available to the Company to seek redress
for the unfairness in the first trial and prevent further unfairness in the second trial.
He was clear in his opinion that Post Office isn’t receiving a fair trial even if they
might (or might not) eventually be found to be at fault’®.
On 20 March 2019 I was told® that the Board had approved seeking the recusal
which was submitted on 21 March 2019.
Whilst it is clear POL were being advised by top legal minds, my strong view
remained that whatever its legal merits the application was misguided and the
reputational risks for POL were massive. My feeling was that POL were trying to
frustrate the process and delay the next trial. I recall being quite cross about the
Board's decision such that I told my private secretary that I would not be going
ahead with any calls with anyone from POL on the evening of 20 March®°.
50 UKGI00009344
51 UKGI00009344
52 BEIS0000070
53 Those points were also made to me the day before via email UKGI00009346
4 UKGI00009346
55 UKGI00009346
Page 27 of 105
77.
78.
79.
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WITN10930100
The feedback of Tom Cooper of UKGI on the proposed application was that “the
board are not enthusiastic about making this application but feel there is no option
given the additional legal advice received®®”. In my view these are rather weasel
words. UKGI knew of the Department's position on the application. As the
shareholder's representative on the Board, Tom Cooper (the UKGI NED
representative) should have voted against the application being made rather than
“taking no part in the decision-making”*’. I am disappointed that in abstaining he
neither represented the Department's view nor acted in the best interests of POL.
The arms-length model in which I was working did not allow me simply to take
over this decision and direct POL to act differently. That was my clear
understanding and that was the advice that I was being given. Whilst Government
had some powers in relation to the Board, I did not feel that I had enough
ammunition at the time to push forcibly for drastic action such as removing POL’s
Chair or changing the Board. I had in mind the long history of this dispute and the
very senior legal advice that POL said it had taken. I had a gut instinct. This did
not feel enough for me as a first time Junior Minister to go against the advice. In
my mind also was that in taking that sort of action I could be exposing the
Government to significant costs, throwing POL into uncertainty and in doing so
perhaps risking the livelihoods of many other SPMs.
Looking ahead I was also hoping that someone like Nick Read would be appointed
as the new CEO; an external candidate with significant commercial retail
experience to challenge the institutionalised thinking and to take POL leadership
in a better direction.
56 UKGI00009344
57 BEIS0000070
Page 28 of 105
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80. On 26 March 2019, I met Gill Furniss MP regarding the POL litigation. I was
provided with a briefing in advance of that meeting which, in essence, was that
the conversation should stay within the parameters of the “Dear Colleagues” letter
to avoid prejudicing the ongoing litigation including the possible appeal and
recusal application. It was emphasised throughout the briefing that “this dispute
remains a matter for the courts, it is not appropriate for Government to comment
further’ and that the application “is a legal decision for POL, taken by the POL
Board following additional, independent legal advice. It is inappropriate for me to
comment further’®®. I did accept that advice, but this did not mean that I could not
challenge POL’s strategy internally or seek to put in place mechanisms to ensure
Government's involvement and influence in POL’s decision-making.
81. On 27 March 2019, I received a submission from UKGI in advance of my meeting
with Tim Parker on 3 April®®. The action points arising from the meeting were
recorded in an email from my private secretary®. This was my first in-person
meeting with Mr Parker. We discussed a range of issues including the CEO
recruitment process. I was keen to formalise a regular meeting with Mr Parker and
Alisdair Cameron (POL’s Interim CEO). I was also keen to set up a regular meeting
58 UKGI00009336. Ms Furniss MP also wrote to my office on 24 June 2019. I do not have a copy
of that letter, but the Inquiry has provided me with a draft copy of my response. UKGI00010381. I
believe I have a copy of the final draft sent on 12 July 2019 WITN10930103. In that reply I
provided a factual update on the litigation as well as other matters concerning Post Office.
I said I was not able to comment on the litigation, but said that I hoped that the court
process would assist in resolving the issues and that PSMS could obtain a remedy where
the courts find the claims are valid.
58 UKGI00009392. I do not believe I have a copy of the submission.
6° UKGI00009445
Page 29 of 105
82.
83.
84.
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WITN10930100
with CWU, POL and Ministers where MPs could attend. I wanted to do what I could
to ensure open and transparent information flow between POL, BEIS and key
stakeholders, including MPs.
The Inquiry has provided me with document UKGI00009455 which is an email
from Tom Aldred at UKGI to his colleagues in which he provides a note of my
meeting with Tim Parker on 3 April. I of course did not see that document at the
time. In this email Mr Aldred records that “Kelly complained that she wasn’t seeing
enough information flow about the trial. We discussed as officials afterwards and
it seems the block is somewhere between her private office and her. Regardless,
we should make sure that we are providing updates to her as soon as they are
relevant”.
I do not believe this was correct. In my experience, my private office was very
effective and efficient in passing through information so I would have been
surprised if the block was there. I could not help but feel that POL were not passing
across all the information that I should have had. At the same time, I do not know
what I was hoping to see. I requested those regular meetings with Mr Parker and
Mr Cameron, and those meetings with CWU, POL and interested MPs to facilitate
information sharing.
On or around 3 April 2019 I was provided with an update on the litigation,
specifically that the recusal hearing that had begun that day. I was told that “if
Justice Fraser does not recuse himself, the hearing will move to the Court of
Appeal (date to be determined)’®'. I cannot remember exactly, but from the
documents it seems that this is the first time that POL/UKGI were anticipating there
might be an appeal of the recusal application.
1 UKGI00016315
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85.
86.
87.
88.
WITN10930100
WITN10930100
On 12 April 2019, UKGI sent a submission for the attention of me and the
Secretary of State®’. The submission records that POL had lost the recusal
application. Judgment was handed down on 9 April and I probably made aware of
the outcome before receipt of the 12 April submission. The submission did not go
into any detail about the possible appeal of the Judge’s decision on the recusal
application.
The submission states that on 3 April, “POL announced its intention to submit an
appeal against the Common Issues Judgment’. The grounds of appeal were being
discussed with POL’s legal team. I was told in this submission that “POL has
decided to boost the legal team and has provisionally appointed Herbert Smith
Freehills to oversee the litigation... Given the unexpected outcome of the
Common Issues trial we have been pressing POL to ensure that their litigation
strategy is considered with a fresh set of eyes, so this is a good outcome and we
expect it to have a significant bearing on the way the litigation is conducted”.
I considered the instruction of Herbert Smith Freehills (“HSF”) to be a good thing.
One of my immediate concerns following handing down of the Common Issues
judgment was that the legal advice had been wildly off beam, and I was a vocal
proponent of POL reviewing their legal strategy.
On 30 April 2019, I was informed by my private office that Tom Cooper wanted to
meet me to update me on the litigation®. I said that “! would rather these updates
are formalised. I have concerns about the Post Office and board and want to get
this on a formal sitting. Think we need to get a wider meeting with officials on how
®2 BEISO000071
3 WITN10930101 page 192.
Page 31 of 105
89.
90.
91.
WITN10930100
WITN10930100
we deal with the post office. I would rather we didn’t just plug things into the diary
without speaking first’. I went on to say that, “well I can have a call but I’m just
saying that I don’t want to have random communication with them anymore. I want
it formalised. It was only by chance I noticed it in the diary’ ™.
I suspected by this time that Tom Cooper had gone native. My feeling was that he
had lost his independence from POL and was not providing effective challenge or
scrutiny. I think this really began with the Board’s decisions on the recusal
application. Mr Cooper would often request informal chats where he would update
me on the litigation. I felt that the updates were not really for my benefit but were
rather so that he could say that he had updated me. I now wanted all of these
updates on the record with a proper paper trail for decisions. I wanted to be told
of meetings in advance so that I could prepare my thoughts and my questions.
“Drop in” informal meetings were not helping me at all to make use of UKGI as a
vehicle to scrutinise POL.
Alan Bates wrote to me on 30 April 2019 regarding the Common Issues
judgment®. Mr Bates invited me, or the Department, to seek independent legal
and IT expert advice and invited me to meet with him to discuss the judgment.
My private secretary forwarded that letter to UKGI for advice® and the letter was
replied to on 28 June 2019 upon advice from UKGI®. It included assurances that
®4 WITN10930101 page 193.
65 UKGI00009730. Mr Bates also wrote to the Prime Minister enclosing his letter to me.
UKGI00009731.
6 WITN10930104
87 UKGI00018426
Page 32 of 105
92.
93.
94.
WITN10930100
WITN10930100
POL was taking the judgment seriously and would take action to address the
criticisms: that is what I had been told by UKGI and POL and at that time I had no
concrete basis for disbelieving them. I declined Mr Bates’ invitation to seek
independent advice on the basis that, “while this dispute rests with the courts it is
clearly not appropriate for Government to comment further on these legal
proceedings or to intervene in any way in these proceedings”. Whilst I have great
sympathy and admiration for Mr Bates, even looking back now it would not have
been advisable for me to meet with him at that time given the ongoing litigation.
However, with hindsight I wish I had not allowed the response letter to include the
assurances about POL taking action to address the criticisms in the judgment;
even at the time the fact that POL had pursued the recusal application and were
about to pursue an appeal should have alerted me that they may not have been
as chastened by the judgment as I was advised they had been.
On 10 May 2019, UKGI provided me and the Permanent Secretary with a
submission on “POL’s Appeal Strategy’®®. It set out that POL would be applying
for permission to appeal the Common Issues judgment on 16 May following advice
from HSF.
At that time POL was awaiting the decision of the Court of Appeal as to whether
permission would be granted to appeal Mr Justice Fraser’s judgment on the
recusal.
On 11 May 2019 my private secretary sent me a link to coverage on the Post
Office trial regarding the Court of Appeal’s judgment (Lord Justice Coulson) on the
appeal of Mr Justice Fraser's recusal decision®.
8WITN10930105; BEIS0000073; POL00025974
68 WITN10930101 page 204; WITN10930126
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95.
96.
97.
WITN10930100
WITN10930100
The article said that “the Post Offices’ application to have his judgment overturned
was ‘without substance’, ‘misconceived’, ‘fatally flawed’, ‘untenable’ and absurd”.
I responded to my private secretary saying, “This is really bad”. I said that I should
meet with the Secretary of State on the issue and my private secretary was to
arrange a meeting. I cannot recall whether I met with the Secretary of State before
I went on to meet with POL on this issue on 15 May.
In any event and on 14 May 2019, I asked my private secretary to provide me with
information about POL’s Board and its governance”. I had asked for the
information to be “gathered sensitively, without the input of UKGI at this stage”. I
wanted to know specifically what powers the Government had to replace the Board
because I was now considering that a “nuclear” option needed to be taken.
UKGI provided me with a briefing in advance of a meeting with Tim Parker and
Alisdair Cameron on 15 May’'. The meeting concerned a number of topics
including the litigation. The briefing set out the position in respect of the various
appeals and suggested a number of topics for discussion including preparations
for the possibility of settlement, the estimated costs of the trial, the “operational
implications of the judgment and the criticism over POL’s conduct of the case and
its dealings with the claimant postmasters”, as well as the improvements that had
been made in the relationship between POL and the SPMs following judgment.
7° POLO00025974
7 UKGI00017600
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98. I do not have a read out of that meeting, but I note an email from Tom Cooper to
my private office on 16 May’? recording a number of matters raised by me after
the meeting; namely, what happened at the Board meeting in relation to the legal
advice on how to proceed following the Common Issues judgment and that I was
concerned about the leadership of POL.
99. Mr Cooper set out that his “concerns about how it was being handled go back to
last summer. I wasn’t happy with the meeting the company had with you and Alex
last October”. He went on to say that “this was followed up by a very critical ruling
from the judge a few months later following which I spoke to Tim [Parker] and
Paula [Vennells] to say that I felt there needed to be a major change of approach”.
Mr Cooper says that “things came to a head after the common issues judgment
when it became totally clear’.
100. Mr Cooper goes on to say that with HSF coming on board and Jane MacLeod
leaving, he was “glad the changed have been made... we are seeing a change of
approach as a result. I only wish it happened several months ago — before the
Common Issues trial”.
101. Before this time, I did not get the impression that Mr Cooper had any concerns as
to how the Board was handling the litigation strategy or that a “major change of
approach” was needed. If Mr Cooper or any member of the Board had come to
me and expressed concerns regarding POL's litigation strategy, or requested my
intervention, then I would have acted upon them. The most I think he ever said to
me was that the Board were not “enthusiastic” about the recusal application.
72 UKGI00009767
Page 35 of 105
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WITN10930100
102. POL’s Board had a litigation sub-committee to oversee its litigation strategy. That
sub-committee was chaired by Tim Parker (POL’s Chair) and attended by the
shareholder NED which was Mr Cooper. If Mr Cooper had these concerns, it was
his job to voice them at Board meetings and at meetings of the litigation sub-
committee. If what Mr Cooper says in this email is truthful then I would have
expected him to have pushed harder in the Board and committee meetings, or
alerted the Permanent Secretary to his concerns earlier. I had already by this time
started to lose confidence in Mr Cooper.
103. I believe a further, fuller, copy of that update from Tom Cooper was sent to my
private office the following day, 17 May’. Much of the content was repeated but
Mr Cooper noted that Alisdair Cameron had been in touch to ask how POL could
provide me with better support and information. As I have touched upon several
times in this statement, information flow was an ongoing issue in respect of which
I never saw much progress.
104. On 23 May 2019 I was informed by my private secretary that POL’s application for
permission to appeal the judgment in the Commons Issues trial had been refused
and the next step was for POL to appeal the decision in the Court of Appeal”. I
replied, “Oh my goodness. I’m not surprised at all. Ok well we might have to have
a phone call tomorrow on this. We can’t let them continue to keep digging a hole
it's embarrassing. Can you make sure that the (Secretary of State’s) office is
aware”’5,
73 UKGI00017605
74 WITN10930101 page 219.
75 WITN10930101 page 220.
Page 36 of 105
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105. I said to my private secretary later in the day, “my belief is firmly that we need to
change the board around of POL and we should be looking to put someone in...
Based on this I think we need to get the chairman in on his own. So I can tell him
that we are unhappy and he needs to consider his position"’®.
106. Tim Parker was the Chairman. He was ultimately responsible for the organisation.
Mr Parker had made a fatal error in the conduct of this litigation which was bringing
the Post Office into disrepute. It was my view that he needed to step down or else
be removed.
107. A call was planned with Carl Creswell, a BEIS official, regarding changes to the
Board. I did not at that time want UKGI on the call, as I had not yet received an
official update on the outcome of the appeal’’.
108. I spoke to Mr Creswell later that day regarding making changes to POL’s board
and I requested a call the Permanent Secretary to discuss my thoughts on this”®.
At a further meeting with BEIS officials I came to the view that I wanted to explore
putting another member of UKGI on POL’s board, one with legal experience, to
have an oversight role on the litigation. I think I was talked down from the more
drastic action of replacing the entire Board or removing the Chair, which was
initially what I was contemplating.
76 WITN10930101 page 220.
77 WITN10930101 page 221.
78 WITN10930108
Page 37 of 105
109.
110.
111.
112.
113.
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WITN10930100
I planned to write to Tim Parker and Alisdair Cameron to ask for information they
had promised previously on the impact assessment, risk management and costs
of the litigation.
I also wanted input from the NED who chaired the BEIS Audit and Risk Committee,
Nigel Boardman, for his views on how the litigation should be handled”°.
My officials took these steps forward. I was due to discuss the appointment of a
second UKGI Board member with POL at my next meeting, and the BEIS
Governance Team were going to reach out to Nigel Boardman in respect of his
views from the Audit and Risk Committee®.
I thereafter received®' more information regarding POL’s Board and governance®.
With that information in hand, I wrote to Tim Parker®.
I said to Mr Parker that the litigation “poses significant long-term risks to Post
Office Limited, financial as well as reputational, and it is imperative that we are
prepared for the potential outcomes and consequences”. I asked for information
on the changes to litigation strategy, settlement windows within the trial timetable,
assessment of the costs of the litigation, and confirmation of POL’s ability to fund
a settlement without further taxpayer support. I noted that “given the recent
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difficulties that the litigation has presented, I would welcome your assessment in
your role as Chair of how effectively the Post Office Limited Board is operating at
present’. This was akin to my asking Mr Parker to “consider his position”. I was
happy with how this letter was drafted and it did reflect my views®.
114. Tim Parker replied to my letter on 3 June 2019®. Mr Parker informed me that “we
decided to introduce a new team because our existing advisors did not believe
that our strategy and approach should change in the light of this criticism”, referring
to the “consistent and highly critical’ findings of the Judge.
115. I was told the new legal strategy including separating the other grounds of appeal
in the Common Issues trial from the recusal application and that the Common
Issues appeal would focus more narrowly on the contractual points. Finally, that a
“different tone as well as scope” would be adopted, and a different QC was leading
the appeal.
116. I was told that settlement discussions were planned for after the Horizon Trial had
concluded in late Summer/early Autumn. It was not thought possible to settle the
case before the final appeal in the Common Issues trial was determined. Mr Parker
said that “it is important to note that settling this case will not comprise our only
expected cost: any settlement may create new historical claims and we are also
in the process of changing the way our current operations work in the light of the
Common Issues judgement as well as the costs of the litigation itself’.
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117. Mr Parker went on to say that “we are progressively introducing higher
remuneration, simplifying the way Postmasters work, introducing changes to
reduce accounting differences and creating more transparent and helpful
practices to manage any differences that do arise. Fundamentally, for us to trade
as we do today, we must be able to recover taxpayer's money that is used as cash
in branches. There are elements of the Common Issues judgment that make this
harder and even more dependent on Postmaster goodwill. Hence the appeal’.
118. I did not think that Tim Park’s letter disclosed any fundamental change in strategy.
POL were still pressing on with all of these appeals, further digging the hole. I
could see no radical change, nor could I sense a real commitment to planning for
settlement. Worse of all, I could not see that POL were facing up to the facts. Mr
Parker seemed to be telling me that POL needed to win this litigation to maintain
the status quo with SPMs. This was precisely the wrong attitude in my view. POL
needed a total cultural shift in its leadership and to put its relationship with SPMs
on a new footing.
119. As to POL’s ability to fund a settlement, I was told that “we are using £100m as a
number with our auditors in determining our ability to trade as a going concern”.
Mr Parker could not give me any more precise figures as to the costs of settlement
and the further costs of the case.
120. He said he would discuss his own perspectives of the operations of the Board at
our next meeting. In fact, Mr Parker promised to deliver a lot of the detail verbally.
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121. On 6 June 2019, my private office informed me® that judgment had been handed
down in respect of the 23 May 2019 hearing and the issue of the Claimant's costs
of the Common Issues trial. The judgment was that the Claimant’s costs would not
be determined later, but that they should be paid by POL with an initial payment
of £5.5m until the final amount had been assessed.
122. I was told that the Judge had criticised POL for advancing “wholly unrealistic’
arguments which could result in the litigation becoming a war of attrition in which
the party with the deepest pocket wins”, by which I understand he meant POL.
The Judge was concerned at the level of costs incurred to date.
123. In response I said “what a complete nightmare”. My private secretary replied
saying “/ know it is, and to think they will be attempting to lodge another appeal’.
I responded saying, “it’s just ridiculous!”
124. On 11 June 2019, the Secretary of State and I were provided with a submission®”
from the BEIS Post Office Policy team (rather than UKGI) regarding the POL
litigation which attached a schedule of the advantages and disadvantages of a
range of options Ministers could take to address concerns over the management
of the litigation®®. I was trying to get advice from a more independent source
86 WITN10930101 page 229. I was informed of the Claimants’ success on the issue of costs
before this time. WITN10930113. The Inquiry has provided me with document POL00023728
which is the Claimant's letter setting out their position on the costs of the recusal application. I do
not recall seeing this letter at the time, although I know that POL settled these costs without them
having to be determined by the Court.
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internally, who would be looking at options from a different perspective. This was
a very detailed submission and I have just picked out the key elements that jump
out to me on reviewing it again for the purposes of this statement.
125. The submission noted that I had talked to the BEIS Post Office Policy team and
was “keen that POL management takes active steps to address Ministers
concerns”. The recommendations in that submission included:
a. Challenging the POL Chair and Board to review their litigation strategy and
consider opportunities for early settlement and set out a plan to do that.
b. Commissioning POL to carry out a project on how to structure and operate
a settlement, including a fund which would assess claims, consider effect,
and award compensation according to pre-agreed criteria.
c. BEIS Ministers “to state publicly that they want to see justice resulting from
litigation for claimants with valid claims’.
d. Challenge POL to announces that it is “taking on board some of the
legitimate criticism in the judgments to date and is taking action to address
them”.
e. Putting UKGI lead legal counsel or another legal adviser on the POL
litigation subcommittee as director or observer.
f. Invite Nigel Boardman, chair of the BEIS Audit and Risk Committee, to carry
out independent due diligence on POL’s litigation strategy.
g. Put in place clear information-sharing arrangements via the proposed
Framework Agreement with POL.
126. The submission set out that POL’s auditors had raised concerns previously that
no figures were included in the accounts on POL’s potential liability. Providing
those figures to BEIS would mean that BEIS would need to disclose those figures
to the auditors and in POL’s accounts. This may have the consequence of setting
a floor in any settlement negotiation. Further, doing so would raise a ‘going
concern’ issue and may lead to the auditors looking to BEIS to provide a letter of
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comfort that it will fund any settlement. I was reminded that POL had previously
advised that they could fund compensation of between £30m and £50m and
anything above this they are likely to need support from BEIS.
127. The options set out in the schedule (Annex A to the submission)® ranged from
challenging the existing POL Board to changing the litigation strategy through to
replacing the POL Board or BEIS assuming control of the litigation. The
submission set out that “forcing further changes to the leadership team will risk
disrupting the progress POL have been making in other areas of the operation of
the business”.
128. I had been thinking about the issue since 23 May when I first considered radical
changes to the leadership of the Board. I had concluded that the steps set out at
sub-paragraphs (a) to (g) above were the more prudent and in the best interests
of POL and SPMs. I agreed that changes to the leadership of POL beyond those
measures risked significant disruption and uncertainty in the company.
129. I met Tim Parker and Alisdair Cameron on 24 June 2019. I was briefed®° in
advance of this meeting in terms that reflected the 11 June submission®'. The
Inquiry has also provided me with document UKGI00010350 entitled “Post Office
Limited (POL): Group Litigation Briefing’. I believe that the document is dated 24
June 2019 and so it may have been sent to my private office for the purposes of
the 24 June meeting. I cannot be sure, and I do not specifically recall this
document.
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130. This document sets out the background and history of the litigation and included
some of POL’s thoughts on settlement, including that “should POL settle the
existing cases, additional Claimants may come forward so there may be a further
and ongoing liability. In addition some of the Claimants may not have valid
claims... Therefore, in considering options, including settlement, to resolve the
litigation POL will need to consider a process to determine which cases are
genuine. With so many claimants, and the strong personal feelings aroused by the
cases, it may prove difficult in practice to settle all aspects at acceptable cost
without wasting public money on rewarding bad behaviours. Financial payments
would have to satisfy Managing Public Money criteria. Any payment over £50m
would require ministerial approval. The CCRC process may have additional costs
implications’.
131. I felt that there was a certain amount of hand wringing going on at POL about how
to embark upon the project of planning for and managing a settlement. It was
difficult and there were complicated issues to work through, not least how to deal
with the claimants with convictions and the concern about future claims. I hoped
the steps that I proposed (the involvement of Nigel Boardman and the influence of
a second UKGI representative) would both assist in providing a check and balance
to the evolving litigation strategy and settlement plans, but also galvanise POL into
action.
132. A note of the actions agreed at the meeting were set out in an email from my
private secretary®*. POL agreed to present me with details of the litigation strategy
including settlement and potential costs. POL were open to another UKGI official
joining the litigation sub-committee and Richard Watson was suggested. POL
agreed to meet with Nigel Boardman to discuss the litigation strategy.
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133. I recall in that meeting that I had asked what the legal costs were to date of the
group litigation. Disappointingly Mr Parker and Mr Cameron could not provide me
with an answer immediately. POL relayed this information the next day®. Legal
costs totalled £20,063,3019 of which £5,858,230 were the costs owed to the
Claimants.
134. On 28 June 2019, Alisdair Cameron wrote to me following the 24 June meeting to
confirm that a UKGI or BEIS official would be appointed to the Board's litigation
sub-committee and that Mr Cameron would meet with Nigel Boardman”.
135. On 2 July 2019 my private office was updated regarding progress of the litigation®.
The Horizon trial had finished with judgment expected in the autumn. The third
trial had been rescheduled from November to March 2020. I requested further
details of the closing argument of both sides and a summary of the proceedings
on the final day of the trial, which were provided to me.
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136. On 3 July 2019, I was provided” with a submission from BEIS Post Office Policy
Team concerning Government's Long-Term Vision for POL®®. The submission set
out that:
“...the BEIS Post Office Policy team intends to undertake a project to refresh
the Government's vision for the future of Post Office Limited (POL). The
Government has been clear and consistent in its long-term support for POL,
alongside challenging the business on key issues. There has not been a
Government statement on its vision for the Post Office since 2010. We believe
that underpinning Government's overall approach to POL with a clear long-term
strategy, looking ahead to ~2030, would enable us to: better influence and
address key questions about POL’s future; ensure a consistent, principled
approach to emerging policy issues; demonstrate thought leadership; and
provide a foundation for strong, cross-Government support. With your initial
steers, the BEIS policy team will undertake work to develop the vision over the
summer’.
The submission also noted that I had:
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“promoted the key role that BEIS has to play as POL’s champion across
Government, including at last week’s BEIS Select Committee. At the same
time, you have raised some concerns about POL’s governance and handling of
key strategic issues, such as the ongoing litigation’.
137. The thinking of the Policy Team, which I agreed with, was that with the
appointment of a new CEO and a likely spending review taking swift action at this
point in time would put the Government in a better position to influence the longer-
term strategic planning. The Policy Team had recently been expanded to ensure
clear policy leadership within BEIS and this was the right time to take action and
ensure consistent and proactive governance of POL. This sort of strategy was, I
thought, exactly what was needed to see a cultural shift in POL’s leadership and
a new approach to POL’s relationship with SPMs. I was fully supportive of this
work and regarded it as crucial to addressing the criticisms of POL made in the
Common Issues judgment.
138. On 4 July 2019, Tom Cooper emailed®? the Permanent Secretary and my private
office with an update on the action points arising from the 24 June meeting and
discussed in the correspondence between myself and Alisdair Cameron.
139. UKGI had decided internally that Richard Watson would sit as observer on the
litigation sub-committee board, which I was supportive of. He reported that a
Settlement Working Group between BEIS, UKGI and HMT was being established
to manage and plan for the settlement process. The Working Group would be
reviewing advice from POL on settlement, considering costs, and making
recommendations to Ministers on the settlement. The aim was to “provide the right
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level of governance needed to get an eventual settlement through the internal
approvals required at BEIS and HMT”’. I do not know who had the idea to set up
the Settlement Working Group, and it may have been Tom Cooper. I was
supportive of the Group. It provided another mechanism in providing oversight and
scrutiny of POL as well as galvanising POL into action.
140. A meeting was being set up so that UKGI could brief Nigel Boardman, and UKGI
was having a meeting with POL and HSF on 18 July to progress the litigation and
settlement strategy.
141. On 17 July 2019, UKGI provided my private office with a submission for its
“improved information-sharing arrangements” between POL and BEIS‘°°. These
documents were provided at my request to firm up the information-sharing
arrangements after I expressed my concerns on a number of occasions regarding
information flow from POL to BEIS. Key in this submission was that “the onus on
POL to proactively share information on key strategic or policy issues with
the Shareholder (paragraph 14.1). We have inserted this into the Framework
Document following your request to strengthen information-sharing”. I regarded
this as a step in the right direction and I hoped it would lead to a more open and
transparent flow of information.
142. I replied to Alisdair Cameron's 28 June letter on 12 July 20191". In that letter I
wrote that I was pleased that POL had agreed to have a BEIS representative on
the Board of the sub-committee and that POL would meet with Mr Boardman. I
said that “/ welcome your openness to consider new approaches as part of a
refreshed strategy”. This was very much my hope; that the steps the Department
1° UKG100010399; BEIS0000078; BEIS0000079; BEISO000080.
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and UKGI had taken would see a move to a new approach which would bring
these matters to their conclusion whilst ensuring that Government had more
visibility of the process.
143. On 29 July 2019, UKGI updated me and the Permanent secretary on the
litigation’°*. I was told that following my meeting with POL on 24 June, Alisdair
Cameron and POL’s legal team met HSF to discuss the litigation strategy and
settlement.
144.1 was told, in summary, that an initial mediation would take place in
September/October with substantive discussions taking place in April/May 2020.
I was told that the Claimants were not minded to enter in to negotiations until the
Horizon Issues judgment was received and the result of POL’s application to
appeal the Common Issues judgment was known. I was told that various work
streams were ongoing in respect of quantification of the settlement figure and how
to deal with particular categories of claimants e.g. those with criminal convictions,
those who had entered into settlement agreements, and those whose civil claims
were time barred. I was told that UKGI were going to brief Nigel Boardman on 14
August, and he would meet with POL shortly after this. Annexed to that submission
was a document authored by HSF in advance of the 18 July meeting in which they
set out their comments on settlement’. The content of that document was
summarised by UKGI in their submission".
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145. On 14 August 2019, the BEIS Post Office Policy team provided my private office
with an update'> following Nigel Boardman’s meeting with the Settlement
Working Group (BEIS; UKGI; HMT) to understand and the background issues and
to brief HMT on possible outcomes. I was told that the Settlement Working Group
would continue to meet into August in order to develop the business case for
supporting the funding of any settlement. I was beginning to feel that there was
finally a plan forming on how to manage a settlement.
146. On 10 September 2019, UKGI updated my private office’® on the litigation. I was
told that the judgment in the Horizon Issues trial was expected in September or
October and that the Court of Appeal would hold a hearing on the question of
permission to appeal the Common Issues judgment between 12 and 14
November. I was told that mediation was unlikely to start before December.
147. On 3 October 2019, the Permanent Secretary and my private office were
emailed’ by Richard Watson of UKGI. He said that “Post Office have just advised
us that they have discovered that they failed to disclose potentially relevant
documents in the GLO proceedings, specifically in respect of the Horizon Trial
which concluded in July’. The disclosure related to Fujitsu’s “Known Error Logs’.
I was told that POL had informed the claimants and the Court of the matter and
that the Board and POL were urgently seeking copies of the documents to
disclose. This was yet another shock, but I think by this time nothing was really
surprising to me given what had happened previously, and I remained hopeful that
with Nick Read coming into the CEO role we would start to see a different direction
and behaviour at POL.
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148. On 8 November 2019 UKGI provided a submission’? to the Secretary of State
(by then Andrea Leadsom), to the Permanent Secretary, and to me to update on
POL’s preparations for mediation. By that time the Settlement Working Group had
met and discussed POL’s initial strategy paper. Mediation was scheduled for
27/28 November, although it was considered that no meaningful negotiations
would take place before judgment in the Horizon Issues trial was delivered.
149. POL were seeking approval from Ministers of the settlement strategy, specifically
a starting position and a ceiling. The briefing set out that whilst no precise figure
had been put forward, indications were that the Claimants would be starting at a
level “very substantially higher than the level that POL’s advisers believe could be
achieved if the litigation runs its full course”. POL’s objective was to understand
for those two days in November the full extent of the claims and the Claimants’
negotiating position in order to “reduce the Claimants’ expectations to a more
realistic level’. I was told that POL were to produce a business case for the
settlement range soon and “will work with HMT and BEIS colleagues to enable
POL to take an amount to kick-off discussions with the Claimants in good faith”. I
was informed that POL could fund the settlement entirely up to £100m.
150. There followed on 15 November 2019 a further submission'® regarding the
settlement strategy. This was sent in advance of a meeting with UKGI on 18
November"’®. I was informed by way of the submission that the Settlement
Working Group had met on 14 November and agreed to support the POL Board’s
proposal for settlement at a figure up to £65m. Any settlement above £48m would
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require POL, BEIS and HMT approval. It was confirmed '"’ that POL would be able
to fund settlement up to £65m through expected annual profit. There would be
opportunity costs associated with that outlay, but those costs were not thought to
affect POL’s ability to fund the current investment programme that was agreed as
part of the existing Funding Agreement.
151. The submission attached'!? and summarised HSF’s advice that POL were likely
to be unsuccessful in their defence of most of the 555 claims brought as part of
the litigation and that settlement in the range of between £40m and £65m would
“be a good result for POL”. The basis of the claims was set out as well as the work
of HSF in quantifying those claims. The Claimants had quantified their claims to a
total of £205.6m. I was told that “this figure is likely to be understated because the
claimants have not quantified all their losses and have expressly reserved the right
to amend the values claimed”.
152. As I understood it, the gulf between POL and the Claimants in terms of the
settlement ranges was the period over which the Claimants would be permitted to
recover losses; namely the losses incurred for the period after the termination of
contracts. The advice given to POL was that it was likely to be considerably shorter
than the period advanced by the Claimants, and on POL’s analysis this would
indicate a figure of between £30 and £38m. Including the costs and interest this
would bring the figure to between £37m and £48m.
153. I was told that if the convictions of the 61 convicted claimants were overturned
then their total claim would range from £10.4m to £51m but may be as much as
£133.7m taking into account the 7 claimants who received custodial sentences.
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154. The advice was that if POL continued to defend the claims and lose then POL’s
liability may in the order of between £253.8m and £309.4m. If POL continued to
defend the claims and lose, but the post-termination losses were limited to 2 years,
then POL’s liability would be in the order of between £104.7m and £124.5m.
155. HSF provided advice in respect of the group of convicted claimants''’. Their
advice, broadly, was to offer a global figure and allow the claimants to decide how
to divide that sum. If mediation were not successful, HSF advised making
individual offers to each non-convicted claimant.
156. HSF advised that there were significant risks in ordering settlement sums to
convicted claimants. Those claimants were, however, factually in exactly the same
position as non-convicted claimants aside from their convictions. HSF advised that
this approach was unlikely to be acceptable for the convicted claimants and would
reduce the chances of the settlement strategy succeeding. UKGI had therefore
asked HSF to re-consider the matter.
157. Following discussion of the submission and HSF’s advice on 18 November I
agreed with the advice and recommendations"*.
158. I was not involved in the negotiations or analysis of the proposed settlement in any
way. It was not for me as Minister to set any sort of cap on the settlement. POL
had a cap of £65m, these being the funds it had access to. A settlement above
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this sum would have meant the Government would have needed to provide
funding and this was not being sought at this stage.
159. On 6 December 2019, UKGI briefed me, the Secretary of State and the Permanent
Secretary on the mediation ''®. We were informed that mediation began as planned
on 27 November and had reached its sixth day. We were informed that agreement
was expected by the end of the week or early the following week and before
judgment in the Horizon Issues trial was handed down on 16 December 2019.
160. We were informed of a number of terms of the settlement and POL’s potential
continuing exposure. The first concerned the group of convicted claimants. It was
confirmed that POL would not make any payments to or for the benefit of convicted
claimants. It was to be a proposed term of the settlement that POL would
undertake to obtain advice from a leading criminal barrister and as a minimum
would act upon and follow the legal advice it received in respect of what position
it should take if a convicted claimant obtained permission to appeal. If a conviction
was overturned, then POL would issue an apology. The submission noted again
POL’s potential liability if those convictions were overturned. POL also noted
potential claims from other SPMs who were not party to the group litigation and
advised that these claims might require a POL budget of £9m to settle as they
arose. A “worst-case scenario” of £60m was suggested.
161. I was not asked to consider the issue of the fairness of how convicted claimants
were treated. I understood that this and the practicalities of dealing with financial
compensation for claimants with a conviction were legal matters upon which
specialist legal advice would need to be sought. I accepted this, although it was of
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course my hope and expectation that every claimant would be properly
compensated.
162. On 11 December 2019, I was informed by my private office that settlement had
been agreed the night before in the sum of £57.7m‘'®. My reply was “well that’s
great news actually’. This assessment was on the basis of the information I had
been briefed about; the settlement was within the parameters POL and UKGI had
been considering. I did not know at this time about how much of this sum would
be taken up by the claimants’ costs.
163. Judgment was handed down in the Horizon Issues trial on 16 December and UKGI
provided my private office of a summary and some next steps‘"”. It was relayed
to me that the Judge found that Legacy Horizon was “not robust’ and that the
robustness of the successor to that system, HNG-X was “questionable, and did
not justify the confidence placed in it by Post Office’. I asked for draft urgent
questions and answers to be provided as well as “robust lines on the litigation to
used in the chamber’. I asked that one-to-one meetings with new CEO Nick Read
be put back into my diary.
164. On 4 January 2020, Alan Bates wrote to me''®. Mr Bates said to me that “the
claimant group were left with little choice but to accept the miserly £57.75m
offered” and that “the greater majority of the £57.75m went to pay the costs to the
claimant group of bringing the litigation”. Mr Bates invited the Department to repay
the costs incurred by the claimant group.
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165.
166.
167.
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I was initially quite surprised to receive Mr Bates’ letter. I had understood from
media coverage that JFSA were pleased with the settlement and that he looked
forward to a better relationship with POL. I had the impression that, overall, it was
a positive outcome and that the SPMs had agreed what was required. I did not get
the impression from my briefings that POL that the Claimants had no option but to
accept what they thought was a very bad offer.
I referred the letter to officials for advice which was received on 14 January
2020''°. I accepted the advice given that BEIS could not repay those costs; the
settlement reached between the Claimants and POL included costs and other fees
and I replied to Mr Bates in those terms. '2°I did not feel that I was in a position to
challenge the advice I was given by my officials, as I did not at my level within
Government have the authority to agree to this kind of expenditure, even though
more work by the Department would take place on how to move forward with the
SPMs and their financial losses.
On 22 January 2020 I had a meeting with Nick Read, POL’s new CEO. It followed
my initial meeting with him on 17 October after his appointment in the September.
I was briefed in advance of this meeting'2'. A key part of that meeting concerned
Mr Read's progress on POL’s Purpose, Strategy and Growth review, which was
something he was developing as the new CEO, along with POL’s next steps of its
Five-Year-Plan which was expected to dove-tail with BEIS’s long term vision work.
As set out in the briefing, my emphasis to Mr Read was indeed the need to
progress POL’s work on its culture in leadership and its relationship with SPMs. I
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wanted to know what lessons POL had learnt from the litigation and how they were
progressing their commitments form the settlement agreement. I wanted to know
how Mr Read was engaging SPMs around culture and in respect of the litigation
settlement agreement.
168. BEIS officials provided a read out of that meeting'??. It recorded that Mr Read
“emphasised that he is particularly focussed on workplace culture and the
relationship between POL and postmasters. He said these issues were central to
the litigation and whilst it has been settled there is still a long way to go to reset
the relationship”. Mr Read explained to me that there had been changes to the
senior leadership including a new HR Director and a Communications lead. I was
pleased that external resource had been brought in.
169. On 28 January 2020 David Jones MP sent a letter to me in respect of my
correspondence with Mr Bates earlier in that month'?*. Mr Jones requested to
meet with me and Mr Bates. I am afraid I do not recall this letter nor do I remember
there being a meeting with Mr Jones, as I left my Ministerial role two weeks’ later.
170. On 10 February 2020, UKGI sent'?4 to the Permanent Secretary, copying my
private office, a submission'®® setting out Government's priorities for POL for
2020/21 which were enclosed in draft letter to Tim Parker. This was in advance of
the debate on in the House of Lords on 25 February. There were 8 priorities for
Government: the Spending Review bid and the further steps taken and to be taken
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123 YKGI00016181
124 WITN10930125
125 BEISO000089
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in relation to the litigation, specifically implementing the settlement agreement,
changing POL’s culture and improving its relationship with postmasters. UKGI
were seeking my approval of the letter to Mr Parker. I do not have a copy of the
letter, but I believe these were Government's priorities at the time.
171. My appointment at BEIS ended three days later and before the debate in the
House of Lords. That debate was tabled by Lord Berkeley and taken on behalf of
BEIS by Lord Callanan’®.
SECTION 2: RULE 9 QUESTIONS
172. In this section, I address specific questions in the Rule 9 request where they have
not been answered in Section 1 above.
Background
[3] Please set out a brief professional background.
[4] Please describe your role in Her Majesty’s Government at the time when you
became involved in overseeing the Subpostmaster Group Litigation concerning
the Horizon IT System.
173. I have set out my background and tried to address my role in Section 1 above.
126 WITN10930119
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174. During my time as Minister, POL was a public corporation, as had been the
position for some time. The policy of successive Governments for many years had
been that the Post Office should operate at arms-length from Government, with
day-to-day operations conducted by its executive management team and
overseen by its Board. The idea was that this allowed the Post Office to have
commercial freedom and for it to be run by those with the required expertise and
experience in business.
175. The Government's role was as sole shareholder, responsible for setting the overall
strategy, policy or objectives. As shareholder the Government would only get more
involved if the strategic aims or objectives looked as if they might not be met, such
as if a key milestone had not been achieved.
176. In practice I understood my role as Minister to be about accountability for postal
affairs in Parliament, such as answering questions, speaking in debates, or
dealing with correspondence from MPs and their constituents. I could also
challenge POL’s Board about whether it was achieving the strategic objectives
which Government had set for it.
177. The shareholder function was exercised on behalf of the Government by UKGI.
They were represented on POL’s Board. UKGI was not based within BEIS; I
understood that it performed the shareholder function for Government in relation
to several public corporations and other organisations, on behalf of various
Government departments, and were formally part of HM Treasury. UKGI officials
were the main advisers on postal affairs for me as Minister and the primary source
of information flow between BEIS and POL, although I did also have my own
(recently created) Postal Office policy team within BEIS and I increasingly turned
to them for advice as my trust in UKGI decreased.
178. I was repeatedly advised, and accepted, that the litigation fell within the scope of
operational matters for POL in the that it was not Government's role, as
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shareholder, to take conduct of the litigation on behalf of the company or make
specific decisions in respect of the litigation. Government did not have that sort of
directing power within the corporate structure that we were working in.
Government's role was to understand, scrutinise and challenge POL’s conduct of
the litigation, but not to take carriage of it.
Subpostmaster Group Litigation
In answering the questions which follow, you may be assisted by the following
documents: UKGI00008342; UKGI000018266; UKGI00008345; UKGI00008347;
UKG1I00008348; POL111100; BEIS0000079; UKGI00021355; UKGI00008369;
UKG100008370; POL00022976; UKGI00008554; UKGI00008597; UKGI00008598;
UKGI0008608; UKGI00008701; UKGI00019168; UKGI00008703; UKGI00008704;
UKG100008873; POL00103373.
[5] Please describe your knowledge and understanding of:
[5.1] the background to the Subpostmaster Group Litigation (“group
litigation”) brought by SPMs against the Post Office;
[5.2] the nature of the claims made by SPMs about the accounting integrity
of Horizon; and
[5.3] the action taken by the Post Office to investigate and resolve these
claims prior to the commencement of legal proceedings.
[6] What was your initial perception of the risks faced by the Post Office in
relation to the group litigation?
[7] Please describe the initial steps which you took to exercise oversight /
scrutiny of the Post Office’s conduct of the group litigation. Please address, in
particular:
[7.1] Your meeting with POL’s CEO on 3 September 2018; and
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[7.2] Your meeting with POL’s CEO and Legal Counsel on 17 October 2018.
[8] What was your perception of the adequacy of the contingency plans which
the Post Office was making in the event it were to lose the group litigation?
[9] Were you in favour of the Post Office seeking to reach a settlement with the
claimants at this stage? Please provide reasons for your answer.
[10] Did you consider that you were receiving sufficient and timely information to
enable you to make an assessment of the merits and risks of the group litigation?
Please provide reasons for your answers.
Responding to the Common Issues Judgment
In answering the questions which follow, you may be assisted by the
following documents: UKGI00008996; BEIS0000488; UKGI00009075;
BEIS0000063; BEIS0000064; BEISO000065 BEIS0000063; UKGI00009137;
UKGI00009213; UKGI00009212; POL00103458; UKGI00009344; BEIS0000070;
UKGI00009336; UKGI00010381; UKGI00009392; UKGI00009445; UKGI00009455;
UKGI00016315; BEIS0000071; BEIS0000073; UKGI00009834; UKGI00009730;
UKGI00009731; UKGI00018426
[11] Please explain why you requested advance notice of the Common Issues
Judgment.
[12] Did you agree with the stance taken by UKGI/ BEIS that the conduct of the
group litigation was purely an operational matter for the Post Office? Please
provide reasons for your answer.
[13] Please describe your reaction to the findings made in the Common Issues
judgment.
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[14] Did you consider that the criticisms of the Post Office which were made in
the Common Issues judgment were legitimate? Please provide reasons for your
answer.
[15] What was your perception of the quality of the legal advice which the Post
Office had been receiving?
[16] Did you agree with the Secretary of State that the primary objective was to
see justice done? If so, what did you understand that to mean?
[17] What (if any) concerns did you have about the decision of the Post Office
Board: (a) to seek recusal of the trial judge; and (b) to appeal the Common
Issues judgment?
[18] Please describe the steps which you took to obtain assurance from the Post
Office concerning its continued handling of the group litigation.
[19] Please describe the action which you took to keep your colleagues in
Parliament informed of developments in the group litigation.
179. I have tried to cover all of these issues as fully as possible in Section 1 above.
The Horizon Issues Trial and Post Office Litigation Strategy
In answering the questions which follow, you may be assisted by the following
documents: BEIS0000066; UKGI00009163; BEIS0000070; UKGI00009455;
UKGI00016315; BEIS0000071; POL00023739; POL00023728; UKGI00018319;
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BEISO00076; UKGI00010295; UKGI00010212; UKGI00019350; UKGI00018354;
UKGI00010369; UKGI00018380; UKGI00018433; BEIS0000081; BEIS0000082;
UKGI00018497; UKGI00018484; UKGI00018482.
[20] Please describe your knowledge and understanding of the matters at stake
in the Horizon Issues trial.
[21] How did you respond when you were advised that the cross-examination of
the Post Office’s witnesses had demonstrated that “the Post Office’s reliance
on Horizon was overstated and blinkered, leading to an improper presumption
of postmaster fault and liability for branch losses” (BEIS0000070, p4.)
180. I have covered some of this above in Section 1. The quotation refers to the 21
March 2019 briefing providing an update on the litigation following the handing
down of the judgment in the Common Issues trial. Specifically, it is taken from an
update provided on 20 March 2019 in respect of cross-examination of various POL
witnesses by Claimant's counsel. The update says that “the cross-examination
was aimed to, and was largely successful at demonstrating... Post Office’s
reliance on Horizon is overstated and blinkered, leading to an improper
presumption of postmaster fault and liability for branch losses”.
181. I do not think I can helpfully comment on the evidence given by the witnesses at
the trial. I did not read the pleadings and witness statements and I do not know
even now the full background to the questions put and the answers given.
182. Reading the update, however, this was another example of how wrong POL’s case
analysis had been and how wildly off the mark its legal advice was. As I have said
above, I received nothing but reassurance as to the confidence POL had in its
defence before the Common Issues trial started. At the time I received this update
I was already in the process of exerting pressure on POL to change its litigation
strategy.
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[22] Please explain why you felt concerned about the adequacy of the
information you were receiving about the progress of the group litigation?
[23] What (if any) steps did you take to address those concerns?
[24] Please describe your perception of the Post Office’s litigation strategy.
[25] Did you consider that the Post Office were acknowledging and addressing
the criticisms made in the Common Issues judgment? Please provide reasons
for your answer.
183.
184.
I have tried to address how and when my concerns arose in the chronology above
in Section 1. My overall sense was that POL were saying the right things, but this
was not being matched with their actions. It was clear to me after the Common
Issues judgment was handed down that the culture of POL’s leadership needed
to change more widely, and I expected the Chair and POL’s Board to take the lead
on this. From that point on it also increasingly became my view that the leadership
decisions in respect of the litigation, and in particular the recusal application, were
tone-deaf and misguided. Various steps were taken to change the legal team, and
I was talked down from replacing the Chair and Board, but my focus was on getting
POL to engage seriously with settlement, which I was pleased they did by the end
of 2019.
I still considered that the overall leadership culture needed serious change. I
thought that bringing in new perspectives from someone with comprehensive
commercial retail experience, Nick Read, would help accelerate changes in
leadership. I was pleased that he had launched the Purpose, Strategy and Growth
review and I think that this work was bolstered by Government's own work on its
Long-Term Vision for POL along with the Five-Year-Plan. When I left office in
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February 2020 there was still considerable work to do to affect these cultural
changes and to put POL’s relationship with SPMs on a different footing, but I did
think that things seemed to be on a better trajectory.
[26] What (if any) advice or direction did you give the Post Office concerning its
litigation strategy?
[27] Please describe how (if at all) your attitude to settlement changed as the
group litigation progressed in 2019.
185. The Department was always keen to resolve the litigation and if the legal advice
at any time before 2019 had been that there was serious risk of losing the claim,
or that settlement should have been pursued more proactively, then this would
certainly have been an action BEIS would have supported. The advice in 2018
was that the litigation should continue and as explained in Section 1 I did not ever
feel I could interfere with that or challenge it more strongly at that time. As the
litigation progressed, and especially after the Common Issues judgment, it
became clear that POL should do everything in their power to bring the matter to
an end as soon as possible. The nature of the advice changed, and the
Department established mechanisms to oversee and assist in managing the
settlement.
Governance of the Post Office
In answering the questions which follow, you may be assisted by the following
documents: UKGI00008656; UKGI00018334; UKGI00022263; UKGI00009042;
UKGI00019116; UKGI00017600; UKGI00009767; UKGI00017605; UKGI00018414;
POL00023739; UKGI00018319; BEIS0000076; UKGI00010295; UKGI00018354;
UKGI00010369; BEIS0000080; BEIS0000078; BEIS0000079; BEIS0000074;
UKGI00018497; BEIS0000085; BEIS0000083; BEIS0000084; UKGI00012013
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[28] Please describe the nature of your concerns about the leadership of the
Post Office?
[29] What (if any) concerns did you have about the composition of POL’s Board.
[30] Did you consider that UKGI was providing sufficient scrutiny / challenge in
relation to the Post Office’s handling of the group litigation? Please provide
reasons for your answer.
[31] Did you consider that the level of oversight exercised by BEIS in relation to
the Post Office was appropriate? Please provide reasons for your answer.
[32] What (if any) action did you take to address your concerns about the
governance of the Post Office.
[33] Please describe your attitude to the payment of discretionary bonuses to
the executive leadership of the Post Office during their management of the
group litigation.
186. I spoke with officials within BEIS as well as the Permanent Secretary about the
issue. The payment of bonuses to the executive leadership in 2018/2019 was,
quite frankly, absurd and the Department did not agree with it. I gave a strong
steer that no one should get a bonus. Not only was a decision to pay bonuses
insensitive to political concerns, but as a basic question of merit the executive
team did not deserve a bonus.
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187. The Permanent Secretary sent a letter to Tim Parker on 29 July 201912” which
reflected my views (and said so in terms); namely, that the Department did not
recommend that the Chair support the bonus proposal due to, among other
matters, that POL’s first priority was to consider the points raised in the Common
Issues judgment. The Permanent Secretary wrote that “while POL is determined
to improve the culture and practices of the business, the Judge’s comments
suggest that further improvements are still very much needed”. The Permanent
Secretary requested that Mr Parker discuss “meaningful reductions” in the bonus
payment with the Remuneration Committee.
188. To that end, the Permanent Secretary was briefed on those reductions on 1
August 2019178 and I was briefed on 12 August 2019179. I understand that a
reduction of 20% was proposed. That this was not acceptable to the Department
(which wanted a much greater reduction) and the matter was referred to the
Remuneration Committee ultimately for determination.
189. It should be noted that Government was not legally required to approve bonuses
to POL executives. Responsibility for payment of bonuses lay with the Board and
management of POL. The Department was providing its views on the issue as part
of its oversight responsibilities. We were clear that bonuses should not be paid at
the usual level, but POL in the end did not follow our steer.
[34] Please describe the nature of your interactions with the National Federation
of Subpostmasters (NFSP) during your tenure as Minister with responsibility for
Postal Affairs.
127 BEISO000085
128 BEIS0000083
129 BEISO000084
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[35] Did you consider that the NFSP was effective in holding the Post Office to
account for its handling of the group litigation? Please provide reasons for your
answer.
190. On 13 March 2019 I asked my private secretary to establish a quarterly Working
Group with POL and NFSP‘°°. The purpose of the group was to ensure that the
business continued to build on its financial successes and manage its long term
strategy. The Working Group was open to a range of stakeholders to ensure
comprehensive and transparent discussion of the issues. This became especially
important in the light of the Horizon Issues judgment where the relationship
between NFSP and POL was criticised. A proposal‘! for the Working Group was
drafted by BEIS officials and the group started to meet in June 20191°?,
191. The read-out of the first meeting set out the actions and key points raised'®>.
These related to SPM remuneration and POL’s pay review including the increases
to the banking framework transactions, Government services including POca and
Verify (the digital identity system) and future opportunities for Government
services at Post Office branches including opportunities in the banking space.
130 WITN10930120
131 WITN10930121
182 UKG100023357
188 YUKG100012013
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192. The Working Group met again on 4 November 2019**4. Key issues for discussion
were the Agent Pay Review which was launched in June 2019, rural branches,
and the BEIS Post Office Policy team’s long-term vision.
193. I do not recall discussing the litigation with NFSP. I was not involved in any of the
matters concerning NFSP’s handling of the group litigation.
Settlement of the Group Litigation
In answering the questions which follow, you may be assisted by the following
documents: BEIS0000493, BEIS0000492, BEIS0000489; UKGI00010707;
POL00026346; UKGI00010732; BEIS0000494; UKGI00010976; BEIS0000087;
BEIS0000088; UKGI00016307; UKGI00018727; UKGI00011117; UKGI00016181;
BEIS0000089.
[36] Please describe the nature and extent of your involvement in the settlement
of the group litigation.
[37] Did you consider that the terms on which settlement was reached
represented a fair outcome? Please provide reasons for your answer.
[38] Did you consider that the Post Office’s handling of convicted claimants was
appropriate. Please provide reasons for your answer.
134 WITN10930128; WITN10930127
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[39] Please explain the reason(s) why you refused to meet the claimants’
litigation costs.
[40] Please describe the steps which you took to ensure that the Post Office
delivered on the commitments which it made in the settlement agreement.
General
[41] Please reflect on your time as Post Office Minister and set out whether there
is anything you would have handled differently with hindsight in relation to the
Horizon IT System and its associated issues. Please address the following
issues, in particular:
194.
195.
[a] whether you were provided with sufficient information by the Post
Office and government officials to understand the risks and issues at
stake in the group litigation;
[b] whether the government was right to adopt and to maintain an arms-
length approach to the post Office’s handling of the group litigation;
[c] whether you/or your officials exercised effective scrutiny of the Post
Office’s handling of the group litigation.
Looking back now, I know that I was not provided with the right information to
properly oversee and challenge the litigation strategy. The true position on the
problems with Horizon was never disclosed and I never had any cause to think
that I was being misled. If POL had acknowledged the real concerns there were
about Horizon’s reliability then the Department's approach to the litigation would
of course have been different.
At the time, however, the advice coming from POL, POL’s legal team and UKGI
officials was reassuring as to POL’s confidence in its defence. After the judgment
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in the Common Issues trial and the following costs decisions and refusals of
permission of the recusal application, I took steps to improve Government's
oversight of the litigation and challenge POL’s strategy.
196. I think this was successful to at least some extent. I did not in the end take the
“nuclear” option of replacing the whole Board, asking Tim Parker to step down, or
removing him as Chair. As set out above, I seriously considered it and discussed
it with officials. I decided that this was not the correct course of action. I do not
know what the result would have been if I had done that. I do not know if it would
have harmed the livelihoods of SPMs and the strength of the Post Office network
in the long term.
197. I am, to a certain extent, reassured that my course of action was correct in that
POL and the Claimants did achieve settlement a few months after the changes
were made. However, I was deeply saddened to then hear that the SPMs were
not satisfied with the settlement agreement. I did not play a part in those
negotiations or assess the fairness or merits of the settlement for either side. In
terms of steps which I took to ensure that POL delivered on the commitments
which it made in the settlement agreement, I do not remember much other than
obtaining assurances that this would be resolved quickly as not to cause any more
upset to the individuals affected; I left my Ministerial role just over two months after
the settlement was agreed.
198. The events around Horizon and the impact on SPMs shows that the governance
structure of POL does not work. It is not, in fact, an arms-length body (“ALB”). A
true ALB would have a sponsor government department with directing powers
even though the company would have a Chief Executive and Board who would
generally be in charge of day-to-day operations and setting and implementing
overall strategy. The Post Office was not a non-departmental public body, it was
a public corporation which has a completely different legal framework with a
shareholder ownership structure. I understand the reasons why Post Office was
taken in this direction; it would have more commercial freedom to adapt, raise
investments, bring in investment and make use of new technology.
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199. There can be no confusion though; there is no sponsor department with any
directing power over the company. I was unhappy with that structure at the time
and my view has not changed. Establishing the Post Office as a true ALB would
have been my preference. Ministers would then have responsibility for the
decision making of the company. As a public corporation, the Government had no
such role. Government's role was to understand and challenge but it could not
compel decision making and ultimately had very little powers of influence other
than on the overall strategic aims or to take the ‘nuclear option’ of replacing the
Board and CEO.
200. I do not think that the shareholder representative on POL’s Board can adequately
fulfil the governance function that they were intended to. I think that they are set
up to fail; that representative must act in what they perceive to be in the best in
interests of the company, but they are also there to represent the Government's
views. Those things may not always be aligned. In this case, the Government's
views on the litigation and in particular the recusal application and appeal was not
aligned with what the Board considered were in POL’s best interests. This led to,
quite simply, inaction by the Shareholder NED. The Government's views were not
represented at all. This cannot be right.
201. I also wonder whether POL'’s executive team and Board became complacent
because they felt they could operate with the autonomy of a private company (but
with the fallback of Government subsidy when required) rather than of an ALB
which ultimately is sponsored by and dependent upon Government backing. I was
astonished, for example, that the Board were going along with all of the appeals
and applications. I do not understand why they did not hold the executive to
account more or take steps far earlier to change the strategy. I feel that if more
awareness of the need for Government backing had been there throughout
different decisions would have been made.
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202. Whilst the ideas behind establishing the Post Office as a private limited company
were right, it seems it just does not work in practice. The taxpayer ends up footing
the bill for a company run in the wrong way. Whilst I cannot answer this question
with any certainty, it is worth asking whether the financial benefit of making the
Post Office a public corporation has been wiped out by the matters arising from
this scandal.
203. I have noted the comments from the BEIS Select Committee which called for
stronger Government mechanisms for holding the Post Office to account. I do not
think that is truly possible in the current governance structure. The model does not
allow the sort of responsibility for decision making that comes with a true ALB.
[42] Is there anything further relevant to the Inquiry’s terms of reference which
you would like to draw to the attention of the Chair of the Inquiry?
204. I believe I have set out all of the relevant matters in this statement. I am very happy
to clarify or expand on any of the evidence set out herein. I welcome this
opportunity to assist the Inquiry with this statement and in my oral evidence to
come.
Statement of truth
I believe the contents of this statement to be true.
Signed:
Dated: 19 June 2024
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Index to First Witness Statement of Kelly Tolhurst
WITN10930100
WITN10930100
Document
number .
URNs
Document
Description
Control Number
UKGI00008342
Email from Stephen
Clarke to MPST
Tolhurst cc: Permanent
Secretary, Tom Aldred
and others re: Official
Sensitive & Subject to
Legal Privilege: POL
Litigation Update
Submission
UKGI019154-001
UKGI00018266
Post Office Ltd -
Horizon Litigation
Update Report
(Contains Legally
Privileged Material
Relating to POL)
VIS00011665
UKGI00008345
PO Group Litigation:
Litigation Update for
UKGI following POL
UKGI019157-001
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WITN10930100
Board Meeting on 31
July 2018
UKG100008347
Proposed Agenda and
Attendees - key issues at
stake in the November
Trial etc.
UKGI019159-001
BEIS0000079
Protocol between POL,
BSEI and UKGI for the
POL Litigation
BEIS0000059
UKGI00008348
Project Sparrow - Pre-
Onboarding Protocol
UKGI019160-001
POL00111100
Briefing for Kelly
Tolhurst MP,
postmaster litigation,
subject to legal
privilege
POL-0108706
UKGI00008369
Email from Stephen
Clarke to MPST
Tolhurst, UKGI POL
Team, Sam White and
others re Briefing:
Paula Vennells
meeting on Monday
UKGI019181-001
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WITN10930100
WITN10930100
UKGI00008370
Meeting with Paula
Vennells - 03
September; BEIS
UKGI019182-001
10
UKGI00021355
Email chain from
Stephen Clarke to
Oluwatosin Adegun
and Alex Cole re
Points from Ministerial
meeting today
between Paula and the
Minister.
UKGI030250-001
1
UKGI00008554
Draft read out note of
POL meeting in HoC
on 17th October 4-
4:45pm
UKGI019362-001
12
POL0002297
Post Office Briefing
Paper Meeting on 17
October 2018 with
Kelly Tolhurst MP,
Parliamentary Under-
Secretary for the
Department for
Business, Energy and
POL-0019455
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Industrial Strategy
(BEIS) AND Alex
Chisolm Permanent
Secretary for the
Department for
Business, Energy and
Industrial Strategy
(BEIS)
13 POL00111218 Briefing Paper dated
POL-0108821
17 October 2018
14 POL00022976 Post Office Briefing POL-0019455
Paper Meeting on 17
October 2018 with Kelly
Tolhurst MP,
Parliamentary Under-
Secretary for the
Department for
Business, Energy and
Industrial Strategy
(BEIS) AND Alex
Chisolm Permanent
Secretary for the
Department for
Business, Energy and
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Industrial Strategy
(BEIS)
15
UKGI00008597
Notes of meeting in
which the Minister and
Permanent Secretary
were briefed on the
Postmaster Litigation
UKGI019405-001
16
UKGI00008598
Email from Tom Aldred
to Richard Watson,
Joshua Fox, Tom
Cooper and others re:
Post Office Litigation
Meeting readout (17
October).
UKGI019406-001
17
UKGI00008608
Email chain from Tom
Aldred to MPST
Tolhurst, Permanent
Secretary, MPST Clark
Spad and others re:
Post Office Litigation
Meeting Readout (17
October)
UKGI019416-001
18
WITN10930101
(WhatsApp) page 49
WITN10930101
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19
UKGI00008656
Email chain from Tom
Cooper (UKGI) to
Oluwatosin Adegun
(UKGI) and UKGI POL
Team re: Official
Sensitive: Meeting with
Kelly Tolhurst this
Morning
UKGI019464-001
20
UKGI00008701
Email chain from
Stephen Clarke to
Mpst Tolhurst, Tom
Cooper and others Re
Official Sensitive &
subject to legal
privilege: POL
Litigation Update
UKGI019509-001
21
UKGI00008873
Email thread from
Stephen Clarke (UKGI)
to Minister Kelly
Tolhurst, Permanent
Sect. cc Tom Cooper
and others: RE: POL
Litigation update
UKGI019681-001
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22
UKGI00008703
Media Coverage of the
Post Office Trial Note
UKGI019511-001
23
UKGI00008704
Private Eye
Newspaper > "Post
Office Flaw Covering".
UKGI019512-001
24
UKGI00019168
Email thread from
Richard Watson to
Rodric Williams,
Joshua Fox cc'ing
Jane MacLeod RE:
Post Office Group
Litigation updates.
VIS00012567
25
POL00103373
Report for Post Office
Limited Board as at 13
December 2018
concerning the Post
Office Group Litigation
(Common Issues
Trial).
POL-0102956
26
WITN10930102
Ministerial Directions,
1 October 2000
WITN10930102
27
UKGI00008996
Email from Tom Aldred
to Tom Cooper,
UKGI019804-001
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WITN10930100
Stephen Clarke,
Oluwatosin Adegun Re
Meeting with Paula
Vennells
28
UKGI00018334
Official Sensitive and
Subject to Legal
Privilege Post Office
Limited (POL): Update
VIS00011733
29
UKGI00022263
Email from UKGI POL
Team, Gavin Lambert,
Cecilia Vandini and
other re meeting with
the minister.
UKGI031158-001
30
UKGI00009042
Email from Tom
Cooper to MPST
Tolhurst, Gavin
Lambert cc Tom Aldred
re: URGENT -
Commission for KT -
Minister's queries prior
to SoS meeting
UKGI019850-001
31
BEIS0000063
BEIS briefing note Re:
Judgment in Post
BEIS0000043
Page 82 of 105
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Office Common Issues
Trial
32
BEIS0000064
Briefing for BEIS
Speaker Re: POL
Judgment statement
BEIS0000044
33
BEISO000065
Draft speaking note
(undated) Re: POL
Judgment statement
BEIS0000045
34
UKGI00009075
Email from Tom Aldred
to Tolhurst Mpst, Clark
MPST, Clark SpAd
MPST and others RE:
Post Office litigation:
legal advice and UQs
UKGI019883-001
35
BEIS0000488
Office Sensitive - Post
Office Limited (POL):
Quarterly Update UK
Government
Investments, BEIS
BEIS0000468
36
UKGI00009137
Email from Alex
Chisholm to Greg
Clark CC Kelly Tolhurst
UKGI019945-001
Page 83 of 105
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Department for
Business, Energy &
Industrial Strategy Re
Post Office litigation
trial and leadership
succession.
37
BEIS0000066
BEIS briefing note Re:
POL Horizon Trial
BEISO000046
38
UKGI00009163
Email from Stephen
Clarke to MPST
Tolhurst, Permanent
Secretary, cc: Tom
Cooper and others -
Re: Post Office Update
on Horizon Trial Day 1
UKGI01997 1-001
39
UKGI00009212
Email chain from Tom
Cooper to Craig
Watson, cc'ing MPST
Tolhurst, Stephen
Clarke and others re:
Official Sensitive: POL
Litigation Judgement
Master Thread
UKGI020020-001
Page 84 of 105
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40
UKGI00009213
Email from Gavin
Lambert to MPST
Clark, MPSST
Tolhurst, Tom Cooper
and others Re: POL
Discussion with SOS
and Kelly Tolhurst
UKGI020021-001
41
POL00103458
Letter to (Colleague)
Member of the House
of Commons from
Kelly Tolhurst, MP re.
Post Office Ltd
Litigation
POL-0103041
42
UKGI00009344
Email from Gavin
Lambert to Tom
Cooper UKGI, Tolhurst
MPST, Tom Aldred
UKGI and others - Re:
Official Sensitive: Post
Office Litigation
Update
UKGI020152-001
43
UKGI00009346
Email from Kelly
Tolhurst to Stephen
Clarke and Tom
UKGI020154-001
Page 85 of 105
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Cooper — RE: Official
Sensitive: Post Office
Litigation Update
44
BEIS0000070
Update on POL
Litigation
BEIS briefing note Re:
BEIS0000050
45
UKGI00009336
Department for
Business, Energy and
Industrial Strategy.
Meeting with Gill
Furness MP on PO
Litigation.
UKGI020144-001
46
UKGI00010381
Letter from Kelly
Tolhurst MP to Gill
Furness MP re group
litigation
UKGI021189-001
a7
WITN10930103
Letter to Gill Furniss
from Kelly Tolhurst
dated 12 July 2019
WITN10930103
48
UKGI00009392
Email chain from
Stephen Clarke to
MPST Tolhurst and
Cecilia Vandini CCing
UKGI020200-001
Page 86 of 105
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Craig Watson and
others re: Meeting with
Tim Parker Deadline:
10am Wednesday 27
March
49
UKGI00009445
Email thread from
MPST Tolhurst to
Stephen Clarke,
Cecilia Vandini cc
Craig Watson and
others Re: Official
Sensitive: Meeting with
Tim Parker Deadline -
summary of actions
from meeting
UKGI020253-001
50
UKGI00016315
Post Office update for
Minister Kelly Tolhurst,
3 April 2019.
UKGI027108-001
51
BEIS0000071
BEIS briefing note Re:
Developments since
recusal application
BEISO000051
52
UKGI00009730
Letter from Alan Bates
JFSA to Kelly Tolhurst
UKGI020538-001
Page 87 of 105
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MP re: Alan Bates &
Others and Post Office
Limited, Judgement (3)
“Common Issues"
53
UKGI00009731
Letter from Alan Bates,
JFSA to Rt Hon
Theresa May MP re:
Letter to Kelly Tolhurst
MP re common issues
trial judgment
UKGI020539-001
54
WITN10930104
Email from Kelly
Tolhurst to Cooper,
Tom - UKGI, Creswell,
Carl (Better Regulation
Executive), Watson,
Craig (Advanced
Manufacturing and
Services), Aldred, Tom
- UKGI, Permanent
Secretary- Official
Sensitive: Letter from
Alan Bates on the Post
Office Litigation
Judgment
WITN10930104
Page 88 of 105
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55
UKGI00018426
Letter from Kelly
Tolhurst MP to Alan
Bates re Alan Bates v
Post Office Limited
VIS00011825
56
WITN10930105
Email from Kelly
Tolhurst- Post Office
Litigation Appeal
Briefing
WITN10930105
57
BEIS0000073
BEIS briefing note Re:
POL's appeal strategy
BEIS0000053
58
POL00025974
The Post Office Group
Litigation board
Litigation Sub-
Committee dated 9
May 2019
POL-0022453
59
WITN10930126
Fraser J is going
nowhere 11 May 2019
WITN10930126
60
UKGI00017600
Meeting with Tim
Parker and Al
Cameron (Post Office
Limited) re: Meetings
with POL senior
leadership, which have
UKGI027607-001
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been arranged
because of POL’s
rising profile and to
improve the flow of
information from POL
to BEIS.
61
UKGI00009767
Email from Tom
Cooper to MPST
Tolhurst (Kelly) RE:
POL Litigation - legal
advice and concerns
about leadership at the
company.
UKGI020575-001
62
UKGI00017605
Email from Tom
Cooper (UKGI) to Mpst
Tolhurst (BEIS) CC:
Tom Aldred and Carl
Creswell (Better
Regulation Executive)
re: Post Office -
litigation and other
follow-ups
UKGI027612-001
63
WITN10930108
Email from Kelly
Tolhurt to Creswell,
WITN10930108
Page 90 of 105
Carl (Better Regulation
Executive), Beal,
Eleanor (Advanced
Manufacturing and
Services), Permanent
Secretary- RE: Official
Sensitive: Information
on POL Board and
governance
64
WITN10930109
Email to Beal Eleanor
from Kelly Tolhurst RE:
FAO Kelly: information
on POL Board and
governance
WITN10930109
65
WITN10930110
Email to Beal Eleanor
from Carl Creswell to
Kelly Tolhurt and
Eleanor Beal RE: FAO:
Kelly information on
POL Board and
governance
WITN10930110
66
WITN10930112
Email to Kelly Tolhurst-
Note on POL Board
and Governance
WITN10930112
Page 91 of 105
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67
WITN10930111
Background on POL
Board and
Governance
WITN10930111
68
POL00023739
Letter from Kelly
Tollhurst MP to Tim
Parker RE: post office
Group Litigation
POL-0020218
69
UKGI00019116
Email from MPST
Tolhurst (BEIS) to Tom
Cooper, Eleanor Beal,
CCing Carl Cresswell
and Others RE: Final
draft letter to POL
regarding POL's Board
and Governance and
SpAds
VIS00012515
70
WITN10930129
Letter to Kelly Tolhurst
from Tim Parker dated
3 June 2019
WITN10930129
71
WITN10930113
Post Office Group
Litigation High Level
Summary
WITN10930113
Page 92 of 105
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72
POL00023728
Letter from James
Hartley to Andrew
Parsons RE: Post
Office Group Litigation
- Claimants’ Costs of
Post Office Recusal
Application
POL-0020207
73
UKGI00018319
BEIS - Post Office
Limited Litigation
VIS00011718
74
BEISO00076
Annex A to
BEIS0000075 Re:
Options for Minister to
consider
BEISO000056
75
UKGI00010212
Meeting with Tim
Parker and Alisdair
Cameron (Post Office
Limited) - Monday 24
June 2019.
UKGI021020-001
76
UKGI00018319
BEIS - Post Office
Limited Litigation
VIS00011718
77
UKGI00010295
Email chain from Tom
Cooper to Richard
Watson, MPST
UKGI021103-001
Page 93 of 105
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Tolhurst , Eleanor Beal
and others Re: Briefing
for meeting with Al
Cameron and Tim
Parker Monday 24
June re POL
78
UKGI00018354
Letter from Al
Cameron to Kelly
Tolhurst MP Re:
performance at select
committee and GLO.
VIS00011753
79
UKGI00018380
Email chain from Mpst
Tolhurst to Tom Aldred
cc Mpst Clark, Tom
Cooper and other re:
POL litigation: End of
Horizon trial.
VIS00011779
80
UKGI00018433
Email thread from Tom
Aldred to MPST
Tolhurst CC Carl
Creswell, Richard
Watson and others RE:
Fwd: PO Group
VIS00011832
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Litigation - Update on
Horizon Issues Trial
81
WITN10930114
Email from Kelly
Tolhurt to Cecilia
Vandini RE: For
Review- Sub on POL
Long-Term Vision
WITN10930114
82
BEIS0000074
BEIS briefing note Re:
Government's long-
term vision for POL
BEIS0000054
83
UKGI00018414
Email chain from
MPST Tolhurst to Tom
Cooper. Re: POL
Litigation
VIS00011813
84
UKGI00010399
Email to Tolhurst, Mpst
(BEIS), Aldred, Tom -
UKGI, Beal, Eleanor
(Advanced
Manufacturing and
Services), Creswell,
Carl (Better Regulation
Executive), Clark, Mpst
(BEIS) from Stephen
UKGI021207-001
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Clarke- OFF SEN
COMMERCIAL: Post
Office Information-
sharing and
Framework Document
85
BEIS0000078
Annex to another
document - unclear
which one? Re: Draft
information sharing
provisions for
Framework document
BEIS0000058
86
BEIS0000079
Protocol between POL,
BSEI and UKGI for the
POL Litigation
BEIS0000059
87
BEIS0000080
BEIS briefing note Re:
Post Office Framework
Document
BEISO000060
88
WITN10930116
Letter to Al Cameron
from Kelly Tolhurst
dated 12 July 2019
WITN10930116
89
UKGI00010369
Letter from Kelly
Tolhurst MP to Al
Cameron - Re: PoL
UKGI021177-001
Page 96 of 105
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Litigation and
engagement with
DWP.
90
BEIS0000081
BEIS briefing note:
POL Litigation update
BEIS0000061
91
BEIS0000082
HSF - comments on
settlement for
mediation
BEIS0000062
92
UKGI00018497
Email chain from
Tolhurst to Beth White,
Permanent Secretary
cc Carl Creswell and
others re: RE: Nigel
Boardman to continue
to Project Sparrow
OFFICIAL SENSITIVE
VIS00011896
93
UKGI00018484
Email from Tom Aldred
to Tolhurst cc Carl
Creswell, Alex Cole
and others re Post
Office Litigation:
Appeal Update
VIS00011883
Page 97 of 105
94
UKGI00018482
Email from Richard
Watson to Mark
Russell, cc: Tom
Cooper and Tom
Aldred re: Post Office
Litigation
VIS00011881
95
BEIS0000493
UK Government
Investments - Update
on Approach to
Mediation in POL
Litigation - Andrea
Leadsom, Kelly
Tolhurst, Special
Advisors, Permanent
Secretary and Tom
Taylor to
Note/Comment
BEIS0000473
96
BEIS0000492
BEIS: UK Government
Investments RE:
Approval for
Settlement offer in
Post Office Ltd. (POL)
Litigation
BEIS0000472
Page 98 of 105
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97
WITN10930117
Email from Kelly
Tolhurst [OFF:SEN -
LEGAL] Advice -
Approval For
Settlement Offer in
Post Office Ltd. (POL)
Litigation
WITN10930117
98
POL00026346
Letter from Alisdair
Cameron to Alex
Chisolm, Permanent
Under-Secretary of
State for BEIS,
concerning funding for
settlement/litigation.
RE: Alan Bates etc v
Post Office - Group
Litigation
POL-0022825
99
BEIS0000489
Bates and ANR v Post
Office Group
Litigation/Advice on
Settlement, Executive
summary
BEIS0000469
100
UKGI00010707
Post Office Group
litigation - criminal
UKG1I021515-001
Page 99 of 105
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cases - Summary by
Herbert Smith Freehills
101
UKGI00010732
Email from Tom
Cooper to Tom Aldred,
Richard Watson,
Joshua Scott re:
Advice - Approval for
Settlement Offer in
Post Office Ltd
Litigation - Call with
Minister Tolhurst
readout
UKGI021540-001
102
WITN10930118
Email from Kelly
Tolhurst - UPDATE ON
MEDIATION IN POST
OFFICE LTD (POL)
LITIGATION
WITN10930118
103
BEIS0000494
Department for
Business, Energy &
Industrial Strategy.
Recipient: Andrea
Leadsom, Kelly
Tolhurst and
Permanent Secretary.
BEIS0000474
Page 100 of 105
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Update on Mediation in
Post Office Ltd
Litigation.
104
UKGI00010976
Email from Cecilia
Vandini to Tom Cooper,
Joshua Scott, Tom
Aldred and others re:
Post Office Litigation
Trial - Horizon Issue
Judgment
UKGI021784-001
105
BEIS0000087
Letter From: Alan
Bates To: Kelly
Tolhurst Re: Litigation
BEIS0000067
106
BEIS0000088
BEIS Legal advice on
response to Alan
Bates' letter
BEIS0000068
107
UKGI00011117
Letter from Kelly
Tolhurst MP to Alan
Bates re Post Office
Group Litigation
UKGI021925-001
108
UKGI00016307
BEIS meeting Agenda
- meeting with Nick
Read, CEO of POL to
UKGI027100-001
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discuss
purpose/strategy and
spending review.
109
UKGI00018727
BEIS meeting Agenda
- meeting with Nick
Read, CEO of POL to
discuss
purpose/strategy and
spending review.
UKGI027100-001
110
UKGI00016181
Letter from David Jones
MP to Kelly
Tolhurst MP RE: Mr Alan
Bates -
GLO
UKGI026974-001
111
WITN10930125
Email to Permanent
Secretary from Alex
Cole- OFFSEN: POL
Chair Letter
WITN10930125
112
BEIS0000089
BEIS Legal advice re:
POL new strategy
BEISO000069
113
WITN10930119
Hansard Post Office:
Horizon Accounting
System
WITN10930119
Page 102 of 105
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Dated 25 February
2020
114
BEIS0000085
Letter re: payment of
bonuses From: Alex
Chisholm To: Tom
Cooper
BEISO000065
115
BEIS0000083
BEIS Legal Advice Re:
POL Bonuses
BEIS0000063
116
BEISO000084
BEIS Legal Advice Re:
POL Bonuses
BEIS0000064
117
WITN10930120
Email from Kelly
Tolhurt to Cecilia
Vandini RE:
Commission: POL
Next Steps Materials
WITN10930120
118
WITN10930121
Proposal for a Working
Group Between Post
Office Limited, BEIS
and Other
Stakeholders.
WITN10930121
119
UKGI00023357
Email from Cecilia
Vandini to Kelly
Tolhurst - Re:
UKGI032252-001
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Commission:
NFSP/POL Working
Group Deadline: 12pm
Sth June
120
UKGI00012013
Annex A
HMG/NFSP/POL
Working Group
Minutes 13/06/2019:
Read Out
UKG1022812-001
121
WITN10930128
Email from Cecilia
Vandini to Kelly
Tolhurst -
COMMISSION:
POL/NFSP
Government Working
Group Deadline: 12pm
Wednesday 23rd
October
WITN10930128
122
WITN10930127
National Federation of
Sub-Postmasters
(NFSP), Post Office
Limited (POL) and
Government Working
WITN10930127
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Group Meeting,
Monday 4 November
Page 105 of 105