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Witness Name: Richard Watson
Statement Number: WITN11140100
Dated: 22 November 2024
POST OFFICE HORIZON IT INQUIRY
FIRST WITNESS STATEMENT OF RICHARD GRAEME WATSON
I, RICHARD GRAEME WATSON, will say as follows:
1. Between July 2018 and December 2020, I was seconded from the Government
Legal Department (“GLD”) to UK Government Investments (“UKGI”) as General
Counsel. In December 2020, I left the Civil Service to take up an appointment
as a full-time District Judge.
2. This statement is made in response to a Rule 9 Request made by the Inquiry
dated 2 October 2024. I have sought to address all of the questions posed by
the Inquiry in a format that I hope will aid understanding of my involvement.
This statement is made to the best of my knowledge and belief. If I have
referred to a fact that is beyond my own personal knowledge, I believe it to be
true. Where I refer to my knowledge being derived from others, I have sought
to identify the source and to include this in my statement. Where relevant, I
have also referred to contemporaneous documentation in support of my
response and I have exhibited those documents as requested. In my making
this statement, I have been assisted by instructed Counsel and Eversheds
Sutherland (International) LLP, the recognised legal representative for UKGI, a
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Core Participant (as defined in paragraph 5(a) of the Inquiry’s Protocol on
Witness Statements) in the Inquiry.
3. Before responding to the Inquiry’s questions, I would like to acknowledge the
intense suffering that I am aware many postmasters and sub-postmasters
(collectively, “SPMs”) and others have endured as a result of this scandal. I
have followed the Inquiry with interest and the hearings that I have watched
and the evidence that I have read, including some of the human impact
hearings at the start of the Inquiry, have affected me deeply. I am horrified at
the injustice SPMs have suffered. I hope that this statement will assist the
Inquiry to fulfil its vital work.
Background / Work History
4. I was admitted to the Roll of solicitors on 15 October 1992 and I remained in
private practice at the firm I trained with, Arnold Fooks Chadwick, specialising
in civil/commercial litigation and some non-contentious company/commercial
work, until October 2000 when I joined the Legal Advisers team at the
Department of Trade and Industry (“DTI”) (DTI became the Department for
Business, Innovation and Skills, then the Department of Business, Energy and
Industrial Strategy (“BEIS”) and is now known as the Department of Business
and Trade (“DBT”), hereafter referred to collectively as the “Department’). For
my first six years I advised its Companies Investigation Branch. After that I
moved to a number of different teams within DTI Legal Advisers. In August 2010
I was appointed as a Deputy District Judge and combined my sitting obligations
(30 days per year) with my full-time role at DT! Legal Advisers.
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5. I first started working with Shareholder Executive (“ShEx”) colleagues in May
2010, when it was a Directorate of the Department. I supported ShEx
colleagues in the drafting and passage of the Postal Services Act 2011 (relating
to the privatisation of Royal Mail) and its subsequent implementation. I also
worked with ShEx on the establishment of the Green Investment Bank. When
working on the Postal Services Act 2011, ShEx colleagues I worked with
included Richard Callard, Will Gibson, Peter Batten, Laura Thompson, and
Mike Whitehead. In May 2013, I was promoted to the Senior Civil Service and
joined what was then called the Treasury Solicitors Department (now the GLD)
as a Deputy Director, leading the Housing Legal Team which advised the
Department for Communities and Local Government. In July 2018, I moved
from that role on secondment from the GLD to UKGI as their General Counsel.
My secondment followed a recruitment exercise by UKGI within the GLD. At
UKGI, in addition to being General Counsel, I was also UKGI’s Compliance
Officer and a member of the UKGI Executive Committee (“ExCo”), which is
UKGI'’s senior management team.
Knowledge of Relevant Issues
6. Although I had spent time working at the Department and had interacted with
ShEx staff members on a range of issues prior to my appointment as General
Counsel of UKGI (the successor of ShEx), including the privatisation of Royal
Mail and the establishment of the Green Investment Bank, I had not worked on
matters relating to Post Office Limited (“POL”) other than the provisions in the
Postal Services Act 2011 and had no prior knowledge of the issues surrounding
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the Horizon IT system or the complaints of SPMs. I am now aware that some
of these issues had been raised publicly before I was seconded to UKGI,
including in a BBC Panorama broadcast, although to my recollection I did not
watch the programme at the time nor do I recall hearing about it either.
. It was not therefore until my appointment as UKGI’s General Counsel in July
2018 and as part of my induction to the role, that I first became aware of the
issues relating to Horizon. A few days before I formally started in my role, I met
the UKGI Legal team as part of my induction. My predecessor, Elizabeth
O'Neill, provided me with a copy of the Project Sparrow Pre-Onboarding
Information Sharing Protocol [UKG100010421] (“Information Sharing Protocol”)
to sign, which was designed to enable the sharing of legally privileged material
in relation to the Group Litigation brought by SPMs against POL (“GLO”) from
POL to UKGI and the Department. Ms O'Neill also handed me a file of papers
that included a copy of the merits opinion from David Cavender QC relating to
the Common Issues element of the GLO. She also explained in detail the
lessons that had been identified following the Magnox litigation in relation to the
handling of litigation from a shareholder perspective and how these were being
applied in relation to the ongoing POL litigation. Those lessons arose during
the Inquiry into the award of the Magnox decommissioning contract by Nuclear
Decommissioning Authority, another ALB which UKGI provided a shareholder
role for on behalf of BEIS. She provided me with a copy of the UKGI internal
report, which included the lessons learnt. In particular she explained that, in
implementing those lessons, UKGI had established an information sharing
protocol, had requested and obtained a copy of the merits opinion (with the
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Shareholder Non Executive Director (“Shareholder NED”), Tom Cooper,
hearing from POL’s lawyers first hand when that opinion was presented to the
POL Board) and Mr Cooper was also part of a POL Board litigation sub-
committee (the “Sub-Committee”)) that had oversight over the litigation. Ms
O'Neill told me that the litigation was something that I should keep an eye on
and I recall spending the remainder of the day reading the file of papers that
she had provided. I kept the lessons learned from Magnox at the forefront of
my mind, both at this initial stage and throughout the handling of the GLO, as I
understood how important it was that UKGI implement those lessons.
. On reviewing my induction pack, I gained an understanding of the concerns
that had been raised about the Horizon IT system, in both its current and historic
versions, as well as the overarching concerns raised relating to POL’s
contractual relationship with SPMs. These included a dispute over whether
there were systemic IT issues within Horizon that were liable to affect a
significant number of SPMs. I do not now recall whether reference was made
specifically to bugs, errors or defects (“BEDs”), but I do remember thinking that
it would not be unusual in principle for an IT system occasionally to have a bug
/ glitch that would need resolving and that what was important was whether
there was a process in place by which such issues would be identified, raised
and resolved.
. At around this time, I also recall being shown a contingency planning document
relating to what would happen if POL failed to successfully defend the common
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issues element of the GLO, although I cannot now recall whether that was
included within my induction pack, or whether this was provided later.
10.During my induction, I also became aware of the allegations made relating to
remote access. I recall Ms O'Neill mentioning it to me as part of her briefing
and my understanding at the time was that the dispute was over the question
of whether a SPM’s account could be manipulated without their knowledge. I
am aware now of the allegations made in relation to remote access, including
by a former Fujitsu employee as part of the Panorama programme, but I do not
recall whether these allegations were referred to during my induction or I came
to learn about them subsequently. My recollection is that POL maintained that
Horizon could not be altered remotely without a SPM’s knowledge until shortly
before the Common Issues trial, and this issue was then conceded in principle
in the Horizon Issues trial (i.e. POL accepted it was technically possible but not
that it had happened in practice).
1
a
.It was only during my induction that I learned that POL had previously
prosecuted criminal offences. I was aware that private prosecutions were
possible and the nature of business being conducted within Post Offices,
involving substantial cash transactions and accounting declarations, meant that
I could understand why, at least potentially, POL conducted prosecutions for
the kinds of offences that were being mentioned (i.e. theft, fraud and false
accounting). My previous experience within the Department had involved the
provision of advice to its Companies Investigations Branch concerning offences
under the Companies Acts and Insolvency legislation and I was aware that
these had sometimes led to prosecutions being brought by the Department's
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internal prosecutions team or other prosecuting authorities such as the Serious
Fraud Office. In that role, I also supported the Chair of the Whitehall
Prosecutors Group so was aware that a number of bodies outside the Crown
Prosecution Service exercised prosecution functions. I therefore did not
consider the fact that POL had previously prosecuted criminal offences to be
that unusual, given its history as part of the Royal Mail and as a public body.
12.At the point of my induction, I do not recall learning in any greater detail about
the mechanics of how POL investigated offences, made charging decisions, or
conducted the prosecutions in-house. Indeed, it was not until much later, at
around the time of the criminal appeals in 2020, that I started to become aware
of the ways in which POL’s investigators and members of its criminal law team
were Said to have conducted themselves.
My initial meeting with POL
13.Shortly after I took up my role, I set up meetings with the General Counsels of
each of the assets for which UKGI was responsible at the time. This included
a meeting with Jane MacLeod, POL’s General Counsel, which took place at
POL’s offices in Finsbury Dials. The meeting, which lasted for about an hour,
covered a range of topics and was not only to discuss Horizon and the GLO,
although naturally that was a significant topic of conversation. During that
meeting, I recall Ms MacLeod telling me how robust the Horizon system was
and how confident POL was in it. She emphasised that the number of
complaints was very small compared to the vast number of transactions that
Horizon completed each day and reassured me that if a BED was found in the
system, that this was resolved under POL’s normal IT processes.
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14.In relation to criminal prosecutions, Ms MacLeod mentioned that the Criminal
Cases Review Commission (“CCRC”) had been asked to look into a small
number of complaints by SPMs that they may have been wrongfully convicted.
From my induction, I was aware that ShEx had already given an assurance to
the CCRC to preserve any relevant material and had provided some
documentation to them. During our meeting, Ms MacLeod reassured me that
POL was also fully cooperating with the CCRC.
15.During our meeting, I also recall discussing the possibility of settlement of the
GLO, as this was something that Tom Cooper, the Shareholder NED, had
raised with me during my first meeting with him which was again part of the
lessons learnt from the Magnox Inquiry. I recall explaining to Ms MacLeod that
Mr Cooper was very keen that POL consider contingency planning and the
options for settlement and that her response was to the effect that POL could
not even think about settlement until after the Common Issues trial. She
explained that a window for settlement had been included in the GLO timetable
and I recall stressing to her the importance of settlement forming a necessary
part of POL’s strategic thinking about the litigation, albeit I could understand
why actual settlement discussions should await the outcome of the Common
Issues trial, particularly as she had explained that the claimants were unwilling
to consider settlement discussions at the time.
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The Strike-Out Application
16.In October 2018, shortly after I was appointed as General Counsel, POL made
an application to strike out aspects of the Claimants’ evidence that had been
served in advance of the Common Issues trial.
17.Although I was made aware of the basis for the application in advance
[POL00257564], through the provision of information under the Information
Sharing Protocol, I did not consider it was my place to advise on the merits of
that application: POL had its own team of lawyers, including leading counsel,
for that purpose. I do recall being slightly surprised that POL considered it
necessary to seek to exclude elements of the Claimants’ evidence on grounds
of irrelevance, as my experience was that judges were accustomed to
disregarding irrelevant information when deciding a case. Nevertheless, I
understood the premise of the application and considered the decision whether
to make it was a strategic one for POL to determine.
18.Despite my awareness of the application, when I received a copy of Fraser J’s
judgment on the strike-out application on 17 October 2018, I was surprised by
the level of criticism that it contained and by the description of POL’s litigation
tactics. I recall discussing my concerns with Tom Cooper who also expressed
similar views. In an email I sent to Mr Cooper on 17 October, I told him that the
strike-out judgment gave “...me very considerable cause for concern about their
litigation tactics/handling, not to mention the merits of the case itself
[UKG100008535].
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19.By this point, the Common Issues trial was about to begin and I was anxious
that the POL Legal team took on board and sought to address Fraser J’s
criticisms when it came to that trial. As I recall, POL’s legal team gave various
assurances to the POL Board that they would change their approach and Tom
Cooper informed me that Paula Vennells, POL’s CEO, had also got involved
and sent an email to the POL Board giving this assurance [UKGI00008547].
The Common Issues Trial
20.Shortly before the Common Issues trial began, I recall being provided with a
copy of the arguments and being surprised to read in POL’s Opening
Submissions that it was asserting that the litigation represented “an existential
threat’ to POL [POL00004106]. The suggestion seemed to be that because
the situation was existential, POL’s arguments must be correct. That was not
something I thought any judge would consider relevant.
21.The Common Issues trial had been set up to examine the terms of the SPM
contract. Amongst the arguments being considered, I could understand the
basis for the dispute relating to the principal-agent relationship, although I did
consider there to be some disconnect between the liability clause position
asserted by POL and how the accounting processes worked in practice. In
particular, it struck me that now that the accounting was being conducted
electronically through the Horizon system mandated by POL, and not on paper,
SPMs no longer had full control of their own accounting information and yet
were solely liable under the contract for any shortfalls that the system reported.
The competing arguments relating to this issue had been outlined to me by
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Jane MacLeod during one of our early meetings and it was my understanding
that POL had been advised by counsel that it had the better of the arguments
relating to this issue. As part of my induction, I had also read the merits opinion
that addressed this issue and although I had not been familiar with the detail of
the legal arguments on that point in advance, I was aware in more general
terms that a duty of good faith in contractual arrangements would be considered
unusual.
22.The Common Issues trial began on 7 November 2018. I attended the first
couple of days of the trial to observe the proceedings. After that, it was neither
practical nor proportionate for me to attend court every day and instead I
received regular written updates from POL by email. A member of my team
also attended some of the other days and provided me with an oral update.
Government Oversight of POL
23.1 have been asked to set out my views as to the nature and extent of, firstly,
any responsibilities that the Department had for the operations of POL arising,
respectively, from its position as shareholder and as a government department,
and, secondly, any role that the Secretary of State and the Minister should have
taken in overseeing the operations of POL.
24.1 should first clarify for the benefit of the Inquiry that the Secretary of State, the
Minister and the Department are not separate entities in law. The only legal
entity is the Secretary of State. Duties, powers and responsibilities are
conferred on the Secretary of State (for example, by legislation) and are
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delegated to the Minister, as decided by the Secretary of State. I therefore do
not consider there is a distinction to be drawn between the obligations of the
Secretary of State and Minister: both have those same overall duties, powers
and responsibilities with any distinction being between how those
responsibilities are allocated and discharged. Departmental Ministers typically
have more day-to-day engagement in the detail relating to their allocated briefs
whilst the Secretary of State will typically have a higher-level view across all
areas of responsibility. The Department, meanwhile, is the administrative office
of the Secretary of State and exists only to administer the duties, powers and
responsibilities of the Secretary of State and their Ministers as delegated. Any
action taken by the Department is taken in pursuance of those duties, powers
and responsibilities.
25.As to whether either the Secretary of State or the Minister should have taken a
role in overseeing the operations of POL, as senior members of the
Government ultimately accountable to Parliament for Arms-Length-Bodies
(‘ALBs”) within their portfolio and for the use of public money, in my view both
the Secretary of State and the Minister clearly need to satisfy themselves that
those ALBs are delivering on their policy objectives and, as part of that, that
there are appropriate governance structures in place to ensure ALBs are being
run properly and any public money is spent appropriately. Through the
information fed back to the Department by its own officials, the shareholder
team and / or in its other interactions with the asset directly or indirectly, the
Secretary of State and the Minister can satisfy themselves that there are
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appropriate governance arrangements and structures in place and that their
policy objectives are being achieved.
26.1 do not consider the Secretary of State (or the Minister) or the Department to
be responsible for POL’s operations. POL is an ALB that is responsible for its
own operations in delivering the objectives that are set for it. In my view, that
position makes practical sense, as civil servants in the Department do not
typically have the necessary skillset, experience or capacity to carry out or
provide detailed oversight of the day to day operational activities of a
commercial ALB, such as POL, whilst also carrying out their other
responsibilities. The Secretary of State sets overall policy objectives for the
ALB with the advice of civil servants in the Department — something that the
Civil Service is skilled to provide - and expects POL to deliver those objectives.
27. The Secretary of State, and the Minister on their behalf, can seek to inform and
influence POL’s delivery of those objectives using a wide variety of hard and
soft levers. One of the most important levers available to Government is the
suite of rights or powers provided to the Secretary of State in POL’s articles of
association, including the powers over the appointment of the chair and the
removal of directors. Those levers also include the funding package, as the
policy of successive governments has been for POL to provide public services
across the Post Office network and, to that end, the Government provides
funding to POL to help it deliver the policy objectives and the breadth of services
required to deliver those objectives across the country.
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The Structure and Role of UKGI
28.During the period of my tenure, UKGI had what I would describe as a typical
corporate structure. It was governed by a Board of Executive and Non-
Executive Directors that was led by the UKGI Chair, who at the time was Robert
Swannell. Below the Board, the executive was run by the Chief Executive
Officer (“CEO”), who was accountable to the Board. When I was first seconded
to UKGI, the CEO was Mark Russell. He departed as CEO in September 2019
and Justin Manson stood in as interim CEO until March 2020, when Charles
Donald was appointed as UKGI’s new CEO and he remains in post. The CEO
then led a team of Directors and Executive Directors, who in turn would direct
and coordinate the operations of UKGI down through a number of teams. As
UKGI’s General Counsel, I was an Executive Director and member of ExCo,
UKGl’s internal leadership group, which I describe further below. My line
manager was the UKGI CEO but as I remained a member of the GLD, Patrick
Kilgarriff (one of the Department's Legal Directors) told me he would be my
point of contact from a GLD perspective. This seemed very sensible to me; we
worked in the same building (1 Victoria Street) and UKGI carried out a
shareholder role for a number of the Department's ALBs so part of my role
would be to work collaboratively with the Department's lawyers, many of whom
I already knew.
29.During my tenure and in the context of POL, the POL Shareholder Team in
UKGI was led by Tom Cooper (a UKGI Director) who sat on the POL Board as
the Shareholder NED. Both Mr Cooper and the Shareholder Team would
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interact with POL directly on a regular basis and, through those interactions,
gain an understanding of key issues relating to POL from a governance
perspective. That information would then be used to inform Ministers and the
Secretary of State, via the submissions process that operates within
government and/or other formal/informal means, about those issues that were
likely to be considered relevant to the Department’s oversight of POL or
otherwise relevant from a shareholder perspective. In addition, members of the
Shareholder Team would also interact directly with their counterparts within the
Department to support the Department's own work in overseeing POL (this
increased over time once the Department had its own policy team for POL).
30. The way in which I would describe UKGI’s role in relation to ALBs where it has
a shareholder role, is that the Shareholder NED and Shareholder Team are
there to help manage the relationship between government departments and
their ALBs and to support those departments with their oversight of the ALBs.
The Shareholder NED will not only act as a NED on the Board of the ALB but
will also help ensure that the ALB understands the Department's priorities as
shareholder and provide the Department's view on how it should fulfil the
strategic objectives that are set for it by the Government. In addition, UKGI
seeks to ensure that those ALBs are run properly from a corporate governance
perspective and advises ministers on governance issues and risks based on its
ongoing monitoring of the ALBs and their performance.
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=
. The delivery of this remit depends critically on having people with the right skills
and experience for the task. In my view, the Civil Service does not generally
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have people with the corporate governance expertise required to act as a
Shareholder NED at Board level, which is why I consider a government
department could not achieve the same outcomes as effectively as UKGI does
regarding the public bodies with which it is involved. That is not to say, however,
that UKGI is delegated all responsibility for overseeing an ALB instead of a
department (which will also have its own policy team for the ALB), Ministers or
the Secretary of State. Rather, UKGI provides support by exercising its
shareholder function of an ALB such as POL, and in so doing, is then able to
provide information back to a department and to the Minister / Secretary of
State, to enable them to perform their own oversight of the ALB and set the
policy direction (which UKGI does not do). Whilst this necessarily requires
UKGI to exercise judgement in determining what information should be
communicated and the extent of it, in my opinion, that evaluative exercise is a
necessary consequence of the fact that Ministers and Secretaries of State
require information to be distilled and expressed succinctly, in order for the
quantity of information that they receive to be manageable and focussed.
32.1n relation to POL, the delivery of this remit is described in a number of key
documents. A Framework Agreement for POL sets out a common
understanding about the nature of the relationship and helps, in my view, to
articulate what UKGI’s role is and what it expects from POL. A Funding
Agreement then sets out a number of requirements that POL is expected to
meet in exchange for the funding that the Government provides.
33.When I joined UKGI, the Framework Agreement with POL was not yet in place;
it was implemented part-way through my tenure in 2020. Nevertheless, in my
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view, in the context of the ongoing litigation at least some of the benefit of the
Framework Agreement was already being achieved as a result of the
Information Sharing Protocol that had been agreed with POL, which enabled
POL to share legally privileged materials with UKGI in the context of the GLO.
34.During the period of my tenure, UKGI monitored its delivery of its remit in
relation to POL in a number of ways. Firstly, a Portfolio Review was held on a
regular basis, at which issues affecting POL would be raised by the Shareholder
NED or other members of the POL Shareholder Team for discussion with a
UKGI panel who were not part of the Shareholder team. Coupled to this was
the asset-level risk register process for POL, in which the most significant risks
to POL from a shareholder perspective were identified and scored, with any
mitigation actions considered. UKGI Legal were involved in both of these
processes.
35.1 have also been asked by the Inquiry to provide details of any external
oversight that was in place to monitor UKGI and whether it was adequately
overseeing POL or POL’s operations. UKGI was an HM Treasury ALB and its
Second Permanent Secretary was a member of the UKGI board as was the
Department's Permanent Secretary. From memory, I do not recall there being
any formal external oversight as such, although UKGI’s relationship with the
Department did mean that its actions came under scrutiny by the Minister and
his/her department, who I felt were in a position to raise any concerns about
UKGI’s actions with us directly. Otherwise, there was also the possibility of a
National Audit Office (“NAO”) investigation that could be instituted to examine
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any of UKGI’s actions, although I only recall one interaction with the NAO during
my tenure, in late 2018, as I describe further below.
My Role as UKGI’s General Counsel
36.In general terms, my role as UKGI General Counsel was to coordinate and
manage the provision of legal advice within UKGI, including advice relating to
UKGI itself, the portfolio of ALBs which it managed and the projects and
transactions carried out by UKGI. The legal advice would be prepared internally
by me or my team and some would be procured from the GLD or externally.
Typically, for the ALBs UKGI manages, the sort of advice that would be sought
would be in relation to the legal issues that arose as UKGI undertook its
shareholder role for ALBs, rather than the legal position as against those ALBs.
My team and I might also be asked to provide a sense check on legal advice
that was being received by such an asset.
37.As General Counsel, I was a member of the UKGI ExCo, which is UKGI's
internal leadership group. The ExCo during my tenure was made up of the
UKGI CEO, the UKGI Directors, the Chief Operating Officer, the Chief Financial
Officer and myself. Initially during my tenure, all ExCo members would be
encouraged to attend for the entirety of the UKGI Board meetings save for
towards the end of those meetings when there was always a slot for a Board
only discussion. However, part way through my tenure, this changed and each
of us would normally only attend for those items that were relevant to our roles.
Nevertheless, we would all have access to UKGI Board papers (provided by a
system called BoardPad) and I would read the papers in advance of UKGI
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Board meetings and would have an input into those papers that had a legal
aspect to them. From my recollection, even after the above change was made,
I would attend those parts of the meeting when POL issues were being
discussed, as this was one of the more significant focusses of my daily work
over the period.
38.1 have also been asked to explain the circumstances in which I attended POL’s
GLO Sub-Committee. Before I do so, I should be clear that the capacity in
which I attended the meetings of the Sub-Committee was as an observer and
not as a full member, unlike the other POL Directors that attended (including
Tom Cooper who was the Shareholder NED on the POL Board). The
Permanent Secretary of the Department had agreed a series of
recommendations with Ministers to address their concerns over the
management of the litigation. One of these recommendations was for a UKGI
lawyer to attend the Sub-Committee, and so I was asked to attend as an
observer following the Common Issues judgment, to give the Minister a greater
understanding of the legal issues in the GLO. It was felt that my attendance and
reporting back to the Department could inform the development of future
options, including the settlement of the litigation, and provide the Minister with
greater reassurance that the POL Board was examining the right issues in the
right way.
39.As an observer, my role was not specifically defined by POL. Within UKGI
however, we had a document that made a distinction between attendance as a
director and an observer, which made it clear that an observer did not have a
voting right. At the time, this was my clear understanding of my position and
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therefore whilst I would attend meetings, listen and contribute to the
discussions, I was mindful that I should not involve myself in decision-making.
I would therefore participate in Sub-Committee meetings by describing things
that I felt would be of assistance, such as how a prior approvals process works
or what were likely to be issues that Ministers would be interested in, after which
I would then allow the full members of the committee to decide any actions. I
would also ask questions or raise constructive challenge when I considered it
appropriate.
40.1 certainly did not consider it my role to provide legal advice to the Sub-
Committee; indeed, as I saw it, my role in terms of legal advice was only to
advise Tom Cooper, the Shareholder NED, in relation to the advice that he was
receiving as a member of the POL Board. My attendance at the Sub-
Committee and my reporting back to the Department may have brought me
closer towards the provision of legal advice to the Department, but the
Department also had its own legal advisers who could provide it with advice.
During my tenure as General Counsel, I had regular meetings with Patrick
Kilgarriff and Sinead Murray — both of whom were Legal Directors within the
Department — and we would discuss any issues that had arisen since our last
meeting including, unsurprisingly, POL, which featured heavily in our
discussions. Following the Common Issues judgment, BEIS Legal quite
understandably took a much greater interest in the GLO and when submissions
were being prepared for the Minister, we would often all contribute to these
albeit I was much closer to the detail. As a member of the GLD, I was very
used to working collaboratively with colleagues in BEIS, HMT and other legal
teams where there were cross cutting issues and I saw it as a clear part of my
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role to build relationships with those colleagues so we could ensure that the
Department and Ministers were receiving appropriate legal advice.
41.Although my attendance at the Sub-Committee was unusual in the sense that
UKGI’s General Counsel would not typically attend meetings of an asset's
Board or its sub-committees, I do consider my attendance at the Sub-
Committee was a material improvement to the arrangements, as I was able to
listen to the discussions directly, many of which included lawyers from the
various law firms and counsel that POL had instructed, and did not have to rely
on Tom Cooper to convey them after the event. I was then better-placed to be
able to advise Mr Cooper, and UKGI colleagues internally, on the issues
relating to POL relevant to the Shareholder, which was the overall remit of my
role as UKGI General Counsel, and to help policy and legal colleagues in the
Department when they were advising Ministers.
Information Flow
42.By the time I was appointed as General Counsel, the Information Sharing
Protocol with POL had already been implemented. I understood that this was
agreed after UKGI insisted that it should have access to key legal advice for
POL relating to the group litigation, which was one of the lessons it had learned
from the Magnox litigation. Prior to this, it is my understanding that POL was
very resistant to sharing legally privileged information with UKGI and sought to
impose restrictions on the Shareholder NED about the information that he could
share with his UKGI colleagues. However, by the point that I came into post, I
felt those obstacles had been overcome and that I was free to share any
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information that needed to be shared with anyone provided they had signed the
Information Sharing Protocol and were on the list of authorised recipients. As
such, I do not consider there were any restrictions imposed on my ability to
request, receive or share information relating to POL, or that UKGI’s ability to
support the Department's oversight of POL was hindered by any such
restrictions, although clearly I remained reliant on POL being transparent with
UKGI about the information that it held.
43.Indeed, by the time I joined UKGI, it seemed to me that there was a clear two-
way passage for information to be received from and shared with POL via the
interactions between the Shareholder NED and POL, and between the POL
Shareholder Team within UKGI and their counterparts within POL, who would
engage directly. To my understanding, the creation of a dedicated policy team
within the Department further helped to facilitate the transmission of information
to enable the Department's oversight of POL, as thereafter not only were there
interactions between the Department and UKGI, but there were also
interactions between the Departmental Policy Team and the POL Executives
directly.
44.Whilst one might expect that information concerning POL’s strategy would have
been more likely to be communicated to the Department via the Shareholder
NED as a result of his position on the POL Board and that operational matters
would be discussed at a lower level between POL staff members and their
counterparts within UKGI or the Department, in fact, over the period of my
tenure I would say that it was difficult to separate the strategic from the
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operational. This was particularly the case following the Common Issues
judgment, as the distinction between strategic and operational information was
increasingly blurred and those working in the Department became more
interested in all aspects of POL’s activity. To my perception, the only difference
over that period, if anything, was that there appeared to be less of a focus on
POL’s other operational activities in terms of the information that was shared
with UKGI / the Department, but that may have been because POL was itself
less focussed on its other operational activities as a result of the GLO.
45.1 cannot, of course, comment on what the position may have been prior to my
appointment. In particular, I do not therefore have direct knowledge of the
extent to which UKGI received information concerning POL’s investigation into
the SPMs’ allegations concerning the Horizon IT system, or how such
information may have been fed back to the Department and Ministers. I did
gain some knowledge of those investigations during the GLO and thereafter,
but at the point that I joined UKGI all of those investigations had been
completed and it appeared to be a common understanding within UKGI that
previous investigations had not revealed any systemic issues with Horizon.
NAO Involvement
46.In November 2018, UKGI was contacted by the NAO and asked to respond to
certain questions that the NAO had received from the Public Accounts
Committee (“PAC”). The NAO, as the independent body responsible for
auditing public spending for Government departments and other public bodies,
supports the work of the PAC, and has wide information gathering powers. I
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was not initially copied into the correspondence, but was subsequently added
to the email string by Stephen Clarke, who was coordinating the response on
behalf of the Shareholder Team [UKG1I00008732]. As can be seen from those
exchanges, the PAC had received correspondence from an_ individual
concerning the GLO who had expressed concerns about the use of public
money to defend the litigation. Within UKGI, there was some concern that the
information that we would provide in response to the NAO’s questions, might
be susceptible to being released publicly. Colleagues therefore asked for a
meeting to discuss those issues, which took place towards the end of
November 2018, at which I was in attendance.
47.As can be seen from the last email in the string dated 29 November 2018 and
which was subsequently followed by some further emails on the same topic
[UKGI00008799], one of the things the NAO wanted to receive was a copy of
any advice provided to Baroness Neville-Rolfe following the review set up by
POL’s new Chair, Tim Parker. As the email of the 29 November 2018
demonstrates [UKG100008732], it was UKGI’s understanding at the time that
no formal written advice existed and that a proposal was therefore made to
share a copy of Mr Parker's letter to Baroness Neville Rolfe dated the 4 March
2016 in which Mr Parker set out his interim findings along with a copy of the
advice that UKGI prepared for the Minister at the same time [UKG100008799].
48.1 can confirm categorically that I had not seen a copy of Jonathan Swift's written
advice to the POL Chair at the time that we were engaging with the NAO and I
did not know that it even existed. The emails I have referred to suggest to me
that all those on the distribution list from UKGI were in the same position, as
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they would each have known that we were under an obligation to provide a
copy to the NAO if it had asked for it (as is specified in the emails) and at no
stage was it ever suggested that we knew otherwise. Indeed, I think it was not
until 2020 that the existence of the written advice came to my attention
[UKG1I00045960].
The Group Litigation
49.By the point that I was appointed as General Counsel, the GLO had been
underway for more than a year and the dates for the Common Issues trial and
Horizon Issues trial had already been set. Whilst I received a copy of various
papers relating to the GLO as part of my induction as described above, I was
not expected to provide any advice to POL concerning POL’s general litigation
strategy and the oversight for that strategy was a matter for the POL Board,
which was advised by external law firms and specialist leading counsel.
50.1 was also not expected to advise POL on or provide oversight for any issues
concerning POL's disclosure obligations or the production of witness evidence
and I simply received updates on these issues under the Information Sharing
Protocol from POL, but I would have advised Tom Cooper on those issues in
his role as Shareholder NED. I have described above how POL’s failed strike-
out application heightened concerns about POL’s conduct of the litigation, but
prior to this I had no reason to think that I should be more proactive in the
information that I sought. Thereafter, and even more significantly after the
Common Issues judgment, both Tom Cooper, the UKGI Board and the
Department wanted much greater assurance from POL about its future conduct
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51.
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and the information flow and level of oversight was accordingly enhanced,
including through my Board observer role.
I was more actively involved in the issue of settlement, in particular in advising
around the need for the Government to provide approval for a settlement sum.
To be clear, it was not my role to advise POL about the merits or quantum of
any settlement; that advice was provided by Herbert Smith Freehills (“HSF”)
and by counsel (see for example, [UKGI00043108]). My role was to assist with
the Department and HMT’s consideration of the proposed settlement, which
required them to have access to POL’s legal advice in order to approve a
bracket for settlement. I reviewed and contributed to submissions to Ministers
on this issue and prepared briefings for HMT officials drawing on the information
to which I had access via the Sub-Committee. I also regularly forwarded copies
of advice that was being provided by HSF to POL, to allow the Department to
have oversight of the process.
I was also more actively involved in the issue of recusal. Again, I should be
clear that it was not my role to advise POL about the merits of making a recusal
application; that advice was provided by POL’s internal and external legal team
and by counsel. My role was to advise Tom Cooper about his position on the
POL Board and the extent to which he could be involved in the Board’s
decision-making on this issue. In this regard, I had a number of interactions
with Patrick Kilgarriff and Gareth Evans (a Deputy Director) in BEIS Legal.
Patrick Kilgarriff explained to me that the issue had been escalated within the
GLD and advice had been provided that the concern was about maintaining the
separation of powers. That is what I was referring to in my advice to Tom
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Cooper on the 18 March 2019 [UKGI00009273], when I advised him that there
would be “presentational concerns” if the Government's Shareholder
representative were to participate in a decision that could lead to the
independence of the judiciary being questioned. I also provided a similar
explanation to Jane MacLeod by email on the 18 March, when writing to clear
up a misunderstanding about whether POL should share legal advice relating
to recusal with UKGI Legal [UKG100009262].
53. In providing my advice to Tom Cooper on this issue, I received copies of the
written legal advice that POL obtained, including the written opinion of Lord
Neuberger. Tom also summarised the advice that the Board received at
various urgent meetings that were arranged to discuss the issue and I was
copied into or forwarded copies of emails from within POL. Tom and I also
exchanged a number of emails on this issue and I was aware that some of
these were being shared with the Department. While it was not formally my
role to provide legal advice to the Department, as a GLD lawyer I fully expected
my advice to be considered by the Department. Whilst I am aware that the
BEIS Permanent Secretary, Sir Alex Chisholm, was involved in some of the
email exchanges with Tom Cooper on this issue, to my recollection I did not
have any direct substantive contact with him (although he was copied into parts
of the email exchange I had with Tom Cooper referred to below) and I did not
provide him with any written legal advice. Based on his exchanges with Tom
Cooper and the emails into which I was copied from the Department, it was
clear that the Department's position was that the Minister should not be involved
in the decision and that a situation should not therefore be allowed to develop
by which the POL Board’s decision on recusal was made conditional upon
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obtaining the Minister's approval [UKGI00009308]. Indeed, I recall Tom
Cooper saying words to the effect that the Department did not want him
anywhere near the decision because of the risk that whatever he might say
about the merits of the decision would create precisely that situation. I therefore
carefully prepared a script for him that would allow him to explain his position
to the POL Board without involving him in the decision itself [UKGI00009273].
54. After the decision had been taken, I recall discussing it with Tom Cooper. He
told me that the Board had been advised that it was their duty to make the
application and that Lord Grabiner KC had gone as far as to say that there was
no option but to do so. Whilst I was not present in the meeting, I can certainly
see how a Board of Directors presented with legal advice from such esteemed
sources, including a former President of the Supreme Court, would have
considered that they had no alternative but to follow the strong advice that was
being given.
55.More generally, in terms of UKGI’s strategy in overseeing the GLO, I was
concerned to ensure that UKGI had access to all the relevant information so
that this could be fed back to the Department to facilitate its own oversight of
POL’s activities. UKGI sought to achieve this via Tom Cooper’s role on the
POL Board, through my own receipt of updates and legal advice from POL
under the Information Sharing Protocol, and later through the information to
which I was privy as an observer on the Sub-Committee. In addition, it was one
of the learnings from the Magnox litigation that we should assure ourselves that
the Board of an asset was properly testing the litigation strategy and the legal
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advice that it was receiving and that the Shareholder NED was able to
contribute to that through his interactions with the Board and the Executive. It
was also a part of UKGI’s learnings to assure itself as to the capability of the
asset's legal team and challenge whether it was appropriately considering
alternative options including settlement. In my opinion, Tom Cooper undertook
the task of implementing those learnings with rigour: I am aware that he pressed
POL to contingency plan for an adverse outcome, challenged POL to justify its
approach to certain issues in the litigation, and encouraged the POL Board to
change course towards settlement and to replace its legal team, following the
Common Issues judgment. I am now aware that some within POL have
criticised Tom for being overly executive in this regard, however, in my opinion
Tom was doing exactly what a NED and specifically the Shareholder NED
should do in light of UKGI’s reflections on Magnox. In particular, I consider it
was necessary for the company’s legal team to be changed following the
Common Issues judgment and failed recusal application and I consider Tom
acted entirely appropriately in seeking to ensure that the POL Board received
appropriate legal advice directly.
56.Later on, in the context of the criminal appeals, Tom Cooper also encouraged
POL to test its legal strategy by recommending that the opposing sides to an
argument were presented to the Board for consideration. On one occasion, I
recall Tom suggesting to the Board that both the KCs advising POL (Zoe
Johnson KC and Brian Altman KC) present the opposing arguments on an issue
(as if they were in court and the Board were the judge) to help the Board reach
a view on how to proceed [POL00021595]. I considered this to be an effective
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way to illustrate how different perspectives might be placed on the legal issues
that the Board had to consider and therefore a good way of improving the
Board’s decision-making on those issues.
57. Overall, the level of engagement and oversight of the GLO was substantially
greater than UKGI would typically contribute towards operational matters or in
respect of civil or criminal proceedings involving an asset. However, it is
important to understand that the appropriate level of engagement has to be
determined on a case-by-case basis and where there are significant issues that
have the potential to cause a significant human impact, to impact the wider
business and / or which are novel, contentious or repercussive such that the
Minister is likely to face a public outcry, an increased level of engagement and
oversight can be justified.
58. That is not to say, however, that the responsibility for identifying potential issues
of concern rests with the Department or UKGI in order to determine the
appropriate level of engagement that should be applied. That initial
responsibility sits with the Executive of an asset to disclose potential cases of
concern and to provide details of those to the asset's Board, which can then
determine whether to notify the Department directly. UKGI expects all of its
assets to operate a ‘no surprises’ approach, not just at Board level but
throughout the organisation, and this is something that I impressed upon the
General Counsels of all the assets that I engaged with during my tenure.
59.Having been informed of a potential issue by an asset or via the UKGI NED,
UKGI and the relevant department can then examine that issue for itself to
determine whether it is sufficiently significant to justify a greater level of
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engagement and oversight. In other words, once UKGI and a department are
aware of a potential issue, it would not then be for the asset to dictate how the
department and UKGI should respond to it. In the context of the GLO, an
example of this can be seen in the Minister's request to increase the frequency
of updates concerning the litigation from fortnightly to weekly following the
strike-out application, which I communicated to Rodric Williams at POL on 26
November 2018 [UKGI00008699].
Following the Common Issues judgment
60.The Common Issues trial concluded on the 6 December 2018. I understand
that on the 8 March 2019, a draft copy of the judgment was distributed to POL
under embargo.
61.1 did not see it until the Common Issues judgment was formally handed down
on 15 March 2019 . At the same time that the judgment was formally handed
down, I attended a meeting with POL who gave a high-level briefing about the
outcome. I read the judgment in full over the weekend of 16/17 March 2019.
62. In the days following receipt of the judgment, POL began discussing a potential
appeal of the judgment, as well as the issue of recusal as described above. As
with the other matters I have mentioned, my role was not to provide POL with
any legal advice about the merits of an appeal, but to provide advice to Tom
Cooper as the Shareholder NED and support him in his interactions with POL
and the Department. When further information concerning a possible appeal
was therefore provided by POL’s lawyers to the Board, I discussed their advice
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with Tom Cooper and we agreed what the significant elements appeared to be.
Principally, there seemed to be a common view that what Fraser J had decided
on the relational contract point was novel and that this alone therefore justified
an appeal. However, I recall Tom and I also discussing the fact that POL
wanted to appeal a number of other findings in the judgment, some of which
seemed logical conclusions to have reached and not amenable to an appeal.
63.Nevertheless, it did not come as a shock to me that POL wanted to launch an
extensive appeal. Prior to the judgment being issued, I recall Tom Cooper
telling me about a conversation that he had had with Jane MacLeod in which
she had told him that POL would appeal against anything if it lost. At the time,
I had interpreted this as an indication of the confidence that POL had in the
strength of its case, but having received and then read the judgment, I was
much more sceptical about the merits of such a wide-ranging appeal.
64.When a decision was then made to replace some of the legal team, this struck
me as a sensible one, not only because of the outcome of the Common Issues
trial, but also because it presented an opportunity for POL to reconsider its
strategy in relation to any appeal. I was not personally involved in the selection
of HSF or the decision to instruct Helen Davies KC, but I do recall thinking that
they brought a new focus to the litigation, including by streamlining the scope
of POL’s appeal. I was also not involved in the decision-making concerning
Jane MacLeod’s departure from the company, although I recall Tom Cooper
telling me about it afterwards.
65.1 have also been asked to explain why the POL Board proposed to manage the
GLO proceedings directly after the Common Issues judgment rather than
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through the General Counsel. I am unable to provide any direct evidence in
response to that question, as I was not party to the discussions when that
decision was made. However, to my mind, as soon as the Common Issues
judgment was handed down, it was clear that Board had completely lost faith
in POL’s legal team, both internal and external, and that managing the legal
proceedings directly going forwards was the right course of action for the Board
to take, not least because it would avoid the risk that relevant information or
legal advice might not be passed on by the POL executive to the Board and it
ensured the Board was even more directly engaged with POL’s legal advisers.
66.Whilst these changes to POL’s legal team were still being discussed, POL’s
application for recusal was heard and refused by Fraser J in a judgment handed
down on the 9 April 2019. This decision did not come as a surprise to me, as
the legal advice POL had received on recusal had always anticipated that the
real audience for the recusal argument was likely to be the Court of Appeal.
That hearing could not take place for a number of weeks and during the interval
the Horizon Issues trial had to be adjourned, having commenced on the 11
March 2019. On the 9 May 2019, the Court of Appeal refused POL’s application
for permission to appeal the recusal decision, bringing an end to that issue.
67. It was also clear that not only had complete trust been lost with the POL Legal
team but with the POL management as well. Fraser J’s findings about POL’s
conduct were shocking and it seemed obvious to me that a ‘root and branch’
reform of POL’s relationship with SPMs was going to be necessary
[UKGI00009419].
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68.A consequence of the Common Issues judgment was that POL needed to make
changes to its operations to reflect the findings of the trial judge. I recall that a
workstream within POL was set up to consider that issue and that UKGI was
aware of that activity, but also that it was a huge workstream and the issues
were not going to be resolved quickly. Furthermore, POL only had an acting
CEO and addressing the failings identified by the Common Issues judgment
would clearly be a key part of the new CEO's role. From recollection, the
workstream was led by POL and HSF and UKGI had visibility of it through its
receipt of HSF’s legal advice to POL but I do not recall having any significant
involvement myself.
69.At around the same time these consequences were being considered, I
received an email from Tom Cooper dated 1 April 2019 in which he asked me
how the burden of proof in criminal cases of theft could be squared with the
position in the SPM contracts, as found by the Court [UKGI00009419]. As the
Inquiry is aware, I no longer have access to my UKGI mailbox but I am told that
from the searches that have been conducted across those mailboxes that are
still available, including Tom Cooper's, that there is no record of me having
responded to Tom’s question. It is not my practice to simply ignore emails and
although I cannot now recall what happened, I suspect that Tom and I spoke
about it instead. We worked in an open plan office and frequently discussed
POL issues in both formal and informal meetings. If we did speak about it, then
I imagine that I would have told him that the two positions could not be easily
squared and that if POL had a burden of proving that money had been stolen,
that could be very difficult in practice given the operational arrangements within
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Post Offices. However, I should emphasise that I do not now remember us
having such a conversation and therefore what I have stated above is really
just my reaction to the question now, which I believe is likely to be consistent
with what I would have thought then.
Horizon Issues Trial
70. Having been adjourned as a result of the recusal application, the Horizon Issues
trial recommenced on 4 June 2019 and was concluded on 2 July 2019. The
trial examined the parties’ competing arguments about the Horizon system,
both current and historic, and significantly, considered both parties’ IT experts’
evidence.
71.As with the other matters I have referred to above, my role as UKGI’s General
Counsel was not to provide advice about the merits of the Horizon Issues trial.
Instead, I supported Tom Cooper and tried to help him understand the issues
that were being considered and what both sides were saying about them.
Importantly, I came to understand from POL that both experts had agreed that
the (then) current Horizon system was relatively robust, which was a significant
point because if that was doubted and then found against POL, it would have
caused real questions about the viability of continuing to operate the Post Office
network.
72.Although I had sight of the experts’ reports, I did not consider myself qualified
to give any views or advice on such technical matters that were outside my
expertise. As far as I recall, I relied entirely on the information provided by POL
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including any summaries of the issues/evidence that they prepared. In this
regard, I have been asked by the Inquiry to consider [UKG100022270] and what
my advice was in response. I am afraid I cannot recall this specific email,
although from the contents of the email, it looks likely that I would have
suggested including a copy of a table provided by Rodric Williams of POL as
part of UKGI's briefing to the Minister in relation to the Horizon Issues trial.
73.As to the other issues, POL’s legal team advised in advance that their expert
was the one to be preferred. However, POL’s confidence diminished as the
trial went on and in particular after the failed recusal application, such that by
the conclusion of the trial an outcome that was adverse to POL was anticipated.
74.The Horizon Issues judgment was handed down on the 16 December 2019
[POL00022839]. In advance of the formal hand-down, I am aware that a draft
was circulated to the parties on 28 November 2019 for any corrections. As with
the Common Issues judgment, I only became aware of the outcome and
received a copy of the judgment once it was formally handed down. Although
I was a board observer, I did not have any formal role within POL and so did
not consider that I was entitled to see the draft under the embargo and it was
agreed that the judgment would only be circulated to the Sub-Committee itself
[POL00104327] .
75.When I read the judgment, I was not that surprised by the outcome and
discussed the implications with Tom Cooper. We were both relieved that the
current system had been found to be “relatively robust’ and that Post Office
services would not have to be disrupted in a manner that had been feared.
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Nevertheless, it was obvious that the judgment would be a significant one for
POL that would attract substantial public interest.
Criminal Convictions
76.1 have set out above how I became aware of the fact that POL prosecuted
criminal offences during my induction as General Counsel. Whilst I was aware
of the SPMs’ allegations from that point onwards, the issue of criminal
prosecutions and the safety of convictions was not a significant focus of my
work until after the Horizon Issue judgment had been handed down. Rightly or
wrongly, I had also assumed that the CCRC was awaiting the outcome of the
GLO before reaching its conclusions on the safety of convictions.
77.Following the Horizon Issues judgment and Fraser J’s findings that legacy
Horizon had not been reliable, it was obvious that there would be serious issues
to confront about the safety of previous convictions that had been obtained in
reliance upon Horizon data. The settlement deed agreed between the parties
provided for the institution of a review to look into the safety of convictions and
also contained a carve out to allow claimants within the GLO to make claims
for malicious prosecution in the future. Both the criminal and civil law
implications of the GLO outcome were discussed at the Sub-Committee and
because the criminal law was not within my own area of recent expertise, I took
significant comfort from the involvement of Nick Vamos, a Partner from Peters
& Peters, who I was aware had previous experience in senior roles within the
Crown Prosecution Service and the Revenue and Customs Prosecutions
Office.
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78. It was during this period following the GLO, in 2020, that I first became aware
of the report produced by Jonathan Swift for Tim Parker in February 2016. In
his report, Jonathan Swift had raised various issues concerning POL’s previous
disclosure and had recommended that POL seek specialist legal advice from
counsel as to whether the content of a report produced by Deloitte in 2014
needed to be disclosed to defendants of criminal prosecutions brought by POL
and to the CCRC. This recommendation had not been referred to in Tim
Parker's letter to Baroness Neville-Rolfe and I did not know what steps, if any,
POL had taken to act upon the recommendation that had been made. In his
letter, Tim Parker had simply stated: “The Post Office has previously taken
advice from solicitors and Leading Counsel expert in criminal law on the
adequacy of the Post Office’s policy and practice on disclosure where it acts as
prosecutor. Based on that I am satisfied that Post Office has adopted a proper
approach to disclosure such that it satisfies its duty of disclosure as prosecutor”
[POL00024913]).
79.1 could not see how that statement could be reconciled with the
recommendation in the report and having received the Horizon Issues judgment
by that stage, I was concerned about the adequacy of any previous criminal law
review that had been carried out. Indeed, it was this issue that led to questions
being raised by Tom Cooper and myself about the suitability of Brian Altman
KC being involved in the review of the safety of convictions, given his earlier
involvement in the review of POL’s prosecution practices and procedures. I
recall Tom Cooper and myself raising this issue in a meeting we had with Ben
Foat, POL’s new General Counsel, and Alan Watts and Catherine Emanuel
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from HSF at POL’s Finsbury Dials office. Mr Watts explained that he was
concerned about the suggestion that Brian Altman KC should be side-lined on
grounds of a potential conflict of interest, because the Claimants in the GLO
had been told that he would be involved in the review because of his knowledge
of POL prosecutions, and the claimants had agreed with this. As an alternative,
it was therefore agreed that further criminal law experts would be brought in to
support the review of the safety of convictions, which as I recall, led to the
instruction of Zoe Johnson KC and Sir David Calvert-Smith, a former Director
of Public Prosecutions and retired High Court Judge. As I recall, a team of junior
counsel were also involved in supporting the review, as one would expect.
80.The criminal appeals progressed towards an initial hearing that took place
shortly before I left UKGI in December 2020. It was in the immediate aftermath
of that initial hearing that I recall being informed about the advice that Simon
Clarke had provided to POL in 2013, in an oral briefing provided by Brian
Altman KC to the Sub-Committee following the hearing. The Sub-Committee
was told by Mr Altman that there had been an issue at the hearing where one
of the Counsel team representing a group of appellants had apparently
disclosed Mr Clarke’s advice to the press in advance of the hearing. This was
the first time that I had heard anything about Mr Clarke’s advice and what I was
told about the contents was naturally very concerning.
81. Judgment in the first of the criminal appeals was handed down in March 2021,
after I had left UKGI, and given what I have subsequently learned about the
Clarke advices, the failings of Horizon and other aspects of POL’s prosecuting
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behaviours, it is unsurprising that the appeals were allowed and that the SPMs’
convictions were rightly quashed.
82.Reflecting on the issue of criminal prosecutions and their interaction with the
GLO, I have been asked to consider an email that was sent to me by Tom
Cooper on the 6 November 2018 [UKGI00008614]. In his email, Tom asked
me whether the SPMs could argue that even though they may be contractually
responsible for money that was missing from their accounts, prosecutions
should nevertheless not have been made without actual evidence of theft. I
cannot recall the advice that I provided to Tom in response to his email and I
am told that there is no evidence of me having provided a response to him by
email. As I have explained above (at paragraph 69) it is not my practice to
simply ignore emails and although I cannot now recall what happened, I suspect
that Tom and I spoke about it instead. We worked in an open plan office and
frequently discussed POL issues in both formal and informal meetings.
83.1 cannot now recall my response to this particular question, but I imagine that I
would have told him something to the effect that the existence of a contractual
obligation would not be sufficient evidence to prove theft on its own and that a
prosecution was therefore much more likely to depend on whether the Horizon
system could be relied upon. I imagine I would have also said that it in my
opinion it would be improper for a prosecutor to bring a charge for an offence
simply as a means of bringing pressure to bear on a defendant to plead guilty
to a lesser offence. I do not regard this advice as remotely controversial and I
can imagine that Tom would have taken comfort from it.
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The Department’s Knowledge
84.1 have set out above the respective roles that UKGI and the Department perform
in supporting Ministers and the Secretary of State in their oversight of ALBs
such as POL. I have also described the processes by which information was
able to flow from POL to the Department and how this was communicated to
the Permanent Secretary, Ministers and the Secretary of State, via the
submissions put up to their offices.
85. It is more difficult for me to provide any direct evidence on the extent of their
knowledge of the Horizon issues, including the existence of BEDs, the
possibility of remote access, the complaints made by SPMs as to the integrity
of Horizon or the fact that Royal Mail and then POL prosecuted criminal
offences, because I do not know the extent to which they read the information
that was fed upwards, in particular in the period prior to my appointment when
a number of these issues were first being investigated. In preparing for and
watching aspects of the Inquiry, I have certainly seen evidence that information
about those issues was included in emails and submissions into which
departmental colleagues were copied and I do not recall there having been any
occasion during my tenure when the Department complained to me that it was
not being provided with sufficient information.
86.Furthermore, whilst I was in frequent contact with colleagues within the
Department, I had only very limited contact with the Permanent Secretary or
with Ministers prior to the Common Issues judgment. I recall attending one
meeting with the Minister (Kelly Tolhurst MP) in October 2018
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[UKGI00008589]. My impression from that meeting was that she was broadly
familiar with the issues in the GLO and had a focus on the potential financial
and other impacts the litigation might have on POL and seeking reassurance
that POL had adequate contingency planning in place.
Reflections
87.Based on my twenty years’ experience in the Civil Service, there was nothing
surprising in the way that various Secretaries of State and Ministers fulfilled
their roles and responsibilities in relation to POL, during my tenure as General
Counsel at UKGI. In my view, their focus on POL quite rightly increased
following the Common Issues judgment, particularly given the significantly
increased public and Parliamentary interest. Furthermore, throughout my
tenure, I consider there was an appropriate level of information sharing and
collaboration between UKGI and the Department's officials, including legal
colleagues, to help ensure that Ministers were kept appropriately informed and
provided with the best advice.
88.1 have been asked by the Inquiry to reflect on my time at UKGI and set out
whether, with hindsight, there is anything I would have handled differently in
relation to the oversight of POL. Of course, I wish now that I had received more
information about POL’s practices and it is truly shocking to me that POL
Executives appear to have kept relevant information from its Board, UKGI and
the Department. I simply cannot understand why POL appear to have taken
such a defensive approach when, as a public body providing public services,
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they should be open and transparent and work in partnership with Ministers and
the Department as the Shareholder.
89.As a lawyer, I also find it difficult to comprehend how POL’s legal team sought
to manage the GLO in the way that they did, given all the information they must
have known about POL’s practices and what has been uncovered regarding
the unreliability of the Horizon IT system.
90.1 have also been asked by the Inquiry to set out any suggestions I wish to make
concerning government oversight of POL and its governance. During my time
as a civil servant, I have had involvement with a wide range of public bodies. In
my opinion, public bodies are a necessary part of how government functions
and it is therefore crucial that they are managed and governed effectively so
that their public purposes can be fulfilled.
9
=
Situations vary from department to department, depending on the nature of
their ALBs, but I regard the functions UKGI performs for the ALBs for which it
acts as shareholder representative to be an important part in helping
government have oversight of those public bodies. I believe the shareholder
NED/Team model is an appropriate model for some ALBs and UKGI performs
this role well for its ALBs.
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92. During my time at UKGI I witnessed an organisation that was constantly striving
to improve the way in which it worked and to share knowledge and practice
across government. There was a huge focus on self-reflection and wanting to
learn from experience, both good and bad. Its culture was open and honest and
it was an excellent place to work. UKGI’s mix of private sector and civil service
expertise helped ensure that people developed new skills and
information/knowledge that could be shared across government.
STATEMENT OF TRUTH
! believe the contents of this statement are true
Date
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Index to First Witness Statement of Richard Watson
No.
Inquiry URN
Document Description
Inquiry Control
Number
UKGI00010421
Project Sparrow —- _ Pre-
Onboarding Protocol -
Recipients lists
UKGI021229-001
POL00257564
POL Group Litigation: update for
UKGI following POL Board
meeting on 25 September 2018
POL-BSFF-
0095627
UKGI00008535
Email chain from Richard
Watson to Tom Cooper copying
Stephen Clarke, Tom Aldred and
Others RE: Post Office Group
Litigation - SUBJECT TO
LEGAL PRIVILEGE —- DO NOT
FORWARD
UKGI019344-001
UKGI00008547
Email chain from Tom Cooper to
Richard Watson, Tom Aldred,
Stephen Clarke RE: Fwd:
Postmaster Litigation
UKGI019355-001
POL00004106
Post Office's written submissions
common issues trial - Alan Bates
& Others and Post Office Limited
VIS00005120
UKGI00008732
Email chain from Stephen Clarke
to Tom Cooper, copying Tom
Aldred, Richard Callard & others
RE: NAO —- POL litigation
enquiries
UKGI019540-001
UKGI00008799
Email from Stephen Clarke to
James Osborne, copying Helen
Evans, Declan Smyth and others
RE: Official Sensitive & Subject
to Legal Privilege: NAO — POL
litigation enquiries
UKGI019607-001
UKGI00045960
Email from Carl Cresswell to Lily
Putt, Tom Cooper, Richard
Watson and others RE: Highly
Confidential. POL Litigation/
Governance
UKGI023462-001
UKG100043108
Office GLO -
preliminary comments on
Settlement - in advance of
meeting with Richard Watson
and Tom Cooper on 18 July 2019
HSF Post
UKGI_CR_00000
066
10.
UKGI00009273
Email from Richard Watson to
Tom Cooper re: POL judgement
UKGI020081-001
11.
UKGI00009262
Email from Richard Watson to
Jane MacLeod, Rodric Williams
and cc'ing Tom Cooper re Post
UKGI020070-001
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Office Litigation -
CONFIDENTIAL AND SUBJECT
TO LEGAL PRIVILEGE
12.
UKGI00009308
Email chain with Richard
Watson, Gareth Evans and
others cc Alex Chisholm - Re:
Recusal CONFIDENTIAL AND
SUBJECT TO LEGAL
PRIVILEGE
UKGI020116-001
13.
POL00021595
Meeting minutes: minutes of
Board meeting held on 17th
September 2020
POL0000128
14.
UKGI00008699
Email from Tom Cooper to
Rodric Williams, Richard
Watson, Joshua Fox and others
re: Post Office Group Litigation.
UKGI019507-001
15.
UKGI00009419
Email from Richard Watson to
Tom Cooper re: PO Litigation
UKGI020227-001
16.
UKGI00022270
Email chain from Richard
Watson to Tom Aldred, cc'd
Stephen Clarke, Joshua Fox re
Horizon trial.
UKGI031165-001
17.
POL00022839
Email chain between Ben Foat,
Tom Aldred, Richard Watson
and others RE: GLO-HIJ
POL00019318
18.
POL00104327
Minutes of a meeting of the
Postmaster Litigation
Subcommittee Board
POL-0103910
19.
POL00024913
Letter sent from Tim Parker to
Baroness Neville-Rolfe RE: Post
Office handling of complaints
made by Sub-Postmasters
review
POL-0021392
20.
UKGI00008614
Email from Tom Cooper to
Richard Watson, Joshua Fox cc
Tom Aldred and others re:
Litigation
UKGI019422-001
21.
UKGI00008589
Email chain Tom Cooper (UKGI)
to Richard Watson (UKGI).
Stephen Clarke (UKGI), Joshua
Fox (UKGI) and others RE: Post
Office Litigation Briefing of
Minister and Perm Sec on 17
October
UKGI019397-001
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