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Witness Name: Catherine Churchard
Statement No.: WITN11230100
Dated: 8 November 2024
POST OFFICE HORIZON IT INQUIRY
FIRST WITNESS STATEMENT OF CATHERINE CHURCHARD
I, Catherine Churchard, will say as follows:
Introduction
4. I am a former employee of The Post Office and transferred to Consignia plc
(renamed Royal Mail Group plc (‘RMG”)) in 2001, and held the position of The
Post Office Solicitor and Director of Legal Services.
2. This witness statement is made to assist the Post Office Horizon IT Inquiry with
the matters set out in the Rule 9 Request dated 23 September 2024. I instructed
a law firm, Kingsley Napley LLP, to assist in the preparation of this statement.
Background
3. I graduated from Birmingham University with a Law Degree in 1972. I served
Articles of Clerkship with the National Coal Board and was admitted as a Solicitor
in June 1976. I was employed in the Legal Department of the National Coal Board
where I specialised in commercial law.
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Summary of career at the Royal Mail Group
4. I joined the Solicitors Office of the Post Office in 1979 as a Legal Assistant in the
Advisory Department. ! was promoted to Senior Legal Assistant in 1982 and to
Head of Division in 1986. I undertook a range of corporate and commercial work
with particular focus on the Post Office legislation and constitution. I have never
practiced in the fields of civil or criminal litigation.
5. I handled a wide range of commercial work, both personally and working with City
firms on major contracts e.g. the outsourcing of catering and engineering
services. I spent a lot of time on constitutional matters - I advised all parts of the
Post Office on the interpretation of the Post Office's powers as they explored
opportunities for new business and did a lot of work on the postal monopoly and
the liberalisation of the postal market and State Aid. I was also involved in
attempts to privatise the Post Office in its entirety and parts of it. All of the above
remained part of my workload when I was Director.
6. In 1993 I was appointed as The Post Office Solicitor and Director of Legal
Services. The Post Office Solicitor before my appointment in 1993 was Brian
Holland who reported to Ken Young, Board Member for Personnel. I continued in
this role until my successor took over management of the department in June
2006 and I retired at the end of December 2006.
7. I have not been employed in any capacity since my retirement in 2006.
Management Structure
8. I have been asked to provide an overview of the management structure within the
Post Office and RMG’s legal department when I joined and thereafter, with
particular reference to the way in which issues related to Post Office Limited
(‘POL’) (previously known as the Counters Business) were managed.
9. Following the separation of the Telecommunication Business from the Post Office
in 1981 the Post Office Solicitors Office, which I will refer to hereafter as “Legal
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Services” was organised into six teams; Advisory (2), Property, Civil Litigation,
Criminal Law and Property Law. The Heads of Division were all experienced
solicitors who reported to the Post Office Solicitor who in turn reported to the Board
Member responsible for Personnel. From 1986 to 1993 the Heads of Division
were: Michael Hirst and me, Advisory; Joe Ashton, Civil Litigation; Alan Simmonds,
Property; and Mike Heath, Criminal Law. The department handled all legal issues
for the Letters, Parcels and Counters Businesses.
40. After my appointment as Legal Services Director in 1993, the position of Head of
Division was filled by an internal promotion.
11. There were a number of changes to the management structure of the Post Office
Solicitors Office, and the approach to the provision of legal services during the
period 1993 to 2006 when I was Director of Legal Services. Throughout this time,
services were provided to all parts of the Post Office, then RMG, in the same way.
POL had the same access to legal advice, whether from the in-house team or
external advisors, as other parts of the group and the same professional
relationship was maintained with POL and its senior managers.
12.We made changes to the structure of the department to reflect the increasing
specialism of legal practice and an Employment Team was created followed by an
Intellectual Property Team.
13. From the time of my appointment as Legal Services Director, the department made
increasing use of external advisors to handle commercial, corporate and property
work to ensure the organisation had access to highly specialised advice and four
leading City firms were added to the panel following a competitive tendering
exercise. The in-house team remained the first port of call for managers requiring
commercial and corporate advice and they retained oversight of the involvement
of law firms when appropriate.
14.In 1996 we undertook a review of the way in which the department provided legal
services and the relationship with external advisers was changed. Prior to that
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review the Litigation Team retained the management of all cases and instructed
law firms around the country to act as its agent in legal proceedings. Following
consultation with the Businesses, Royal Mail, Parcels and Counters, the decision
was taken to outsource the majority of Civil Litigation and Employment Tribunal
cases. After a competitive tendering process four leading regional firms, Bond
Pearce, Eversheds, Hammond Suddards and Weightmans, were appointed to
handle the work from 1998. Protocols were agreed to enable managers in the
Businesses to instruct them directly on new cases and training provided to
familiarise them with the process. The Panel Firms were required to maintain
records of the cases they handled that enabled them to provide Legal Services
and the Businesses with data about the cases. This approach ensured access to
specialist advice, provided flexibility as the nature and volume of work changed
and was cost effective. The in-house team still handled Civil Litigation and
Employment Tribunal cases in London and the South East. The Criminal Law team
continued to deal with prosecution cases instructing Counsel as appropriate and
using firms as agents rather than outsourcing cases to them.
15.Following a corporate review in 2002/2003 the Board took the decision to reduce
the size of Group Headquarters to a headcount of approximately 120. This led to
a Voluntary Redundancy Programme in 2003/2004 which encouraged any
manager who wished to do so to leave the organisation on advantageous terms.
So far as Legal Services was concerned it was understood that the participation
of lawyers would result in a smaller in-house team and greater reliance on external
advisors which would provide all parts of RMG with access to advice tailored to its
changing needs and greater flexibility.
16. The in-house team ceased to handle any Civil Litigation in 2004 and outstanding
cases were transferred to the Panel Firms. At the same time both the Property
Law Team and the Criminal Law Team ceased to report to me and became part
of the Estates Department and Security Services respectively. My recollection is
that after 2004 the department, still known as Legal Services, comprised
approximately 20 lawyers whose work focused on areas such as Regulation,
Employment, Pensions and Corporate and Commercial transaction where their
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knowledge of the Businesses enabled them to add value, working closely with
external advisers when necessary. The department continued to work closely with
all the Panel Firms and regarded the relationship with them as a partnership to
serve the evolving needs of all parts of the Royal Mail Group.
My role as Legal Services Director and reporting lines
17.The role of Legal Services Director required me to provide legal advice, manage
the in-house legal team and procure external legal advice. All of the team leaders
reported to me. ! did not however have any operational management responsibility
for the work of the different teams and would rarely have been involved in the
discussion of specific work that they were conducting. My role in relation to the
management of Criminal and Litigation teams was similar to that of any manager
of a team of specialists which is very much how I saw them. They were well aware
that I had no knowledge of the relevant areas of law and procedure and that I relied
on their skills. To the best of my recollection I never had any direct involvement in
any criminal law matter.
418.My role and responsibilities as Legal Services Director remained the same
throughout my service. My reporting line changed several times as corporate
reorganisations placed Legal Services Department in different units. On my
appointment in 1993, Legal Services was part of the Post Office Headquarters and
I reported to the Post Office Secretary, Morag McDonald and then David Saville.
49. In 1995, Post Office Services Group (“POSG") was established as a business
unit. Legal Services ceased to be part of Headquarters and moved to POSG. I
reported to the Managing Director of POSG. Four people held this position in my
time. They were Stuart Sweetman, Mick Linsell, Malcolm Kitchener, and Gerry
Smith.
20. After another review of the internal organisation, Legal Services became part of
the Corporate Centre (Group Headquarters) again in 2002 and I reported to the
Company Secretary, Jonathan Evans, until my retirement in 2006. ! did not report
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directly to the Board of Directors of Post Office, POL or RMG or Royal Mail
Holdings Plc (“RMH’). I had regular meetings with the Secretary which provided
the opportunity to raise any matters relating to significant legal issues arising in
any part of the Group. I was able to raise issues of concern with the relevant Board
member of Post Office, POL, RMG or RMH if the need arose and would have kept
the Secretary informed.
Legal issues relating to POL
21.1 have been asked how legal issues related to POL were managed and any
material changes to this while I worked at RMG. Throughout my time as Legal
Services Director, the department continued to provide legal services to all parts
of the Royal Mail Group. Members of one of the teams handling commercial work
specialised in POL cases including issues other than litigation arising in relation to
the Network but there was no one team or team member designated for POL in
the Criminal or Civil Litigation teams. As previously described, important changes
were made to the structure of Legal Services and the relationship with external
advisors but these applied to POL in exactly the same manner as to Royal Mail. I
recall the possibility of establishing a separate legal team for POL was considered
during the corporate review in 2002/2003 but an analysis of the Business’ use of
legal services by Group Finance based on time recorded and costs allocated
determined this would not be cost effective.
22.The legal services provided to, and the relationship with POL were the same as
those provided to Royal Mail and to Parcels. It would have been a matter for POL
to determine which managers had authority to seek legal advice whether from
Legal Services or from the Panel Firms in accordance with the protocols in place
and to approve settlements of disputes in light of that advice or to reach decisions
in relation to commercial matters.
ShEx
23.1 have been asked to describe my understanding of ShEx oversight of RMG and
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POL specifically. ShEx was the Shareholder Executive Group. My understanding
is that it was the role of the ShEx to provide strategic direction to the companies
in their portfolio and to monitor their performance. I have no recollection of the
appointment of a civil servant as a non-executive director to the board of either
RMG or POL and to the best of my knowledge I had no dealings with any member
of the ShEx in relation to either RMG or POL.
Document POL00031124 - Dave Miller
24.1 have been asked to consider document POL00031124 and to describe my
working relationship with Dave Miller. POL00031124 is a letter dated March 1999
from Bird and Bird, who I believe advised the Department of Social Security, to
Dave Miller and copied to Slaughter and May as well as myself and others. It
contains a draft of a letter concerning problems with the Horizon project. I do not
specifically remember this letter but recall the subject matter in general terms. I
had limited involvement in this project to the extent that I attended some progress
meetings with the advisors, Slaughter and May. I do not think that I would generally
have been copied into letters on this subject and I do not know or recall why I was
copied into this one. The handwriting on the draft is not mine and I do not recognise
it. My recollection is that Dave Miller had a senior operations role in the
implementation of Horizon. I had previously worked with Dave Miller in the 1980s
when I advised on issues in relation to the development of new services by the
Counters Business.
Horizon and data from it in criminal proceedings
25.1 have been asked to describe the nature and extent of my involvement in the
negotiation of the contract between ICL Pathway Ltd and POL. I was not involved
in the negotiation or drafting of the contract between ICL Pathway Ltd and POL for
the provision of the Horizon IT System. POL was advised by Slaughter and May
and I attended some update meetings with them as negotiations progressed. I
have no particular recollection of any of the meetings.
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Document HOC00000001 — Law Commission Consultations
26.1 have been asked to consider document HOCO0000001, two letters to the Law
Commission dated 31 July 1995 and 26 October 1995. I remember that there were
law commission consultations with which the organisation engaged from time to
time. I do not remember this one specifically. I am confident that I would not have
drafted these letters. I was not involved in criminal law matters and would certainly
not have been able to offer observations on these technical areas of criminal
evidence. I notice that the first letter appears to have been signed by the Head of
the Criminal Law Division and has the reference ‘MJH' which is a reference to
Michael Heath, who held that role. The second letter has the signature obscured
but has the reference ‘TB’ which could refer to either Theresa Berridge or Tony
Brentnall, both of whom were lawyers in the Criminal Law Team.
27.1 notice that the first letter has my name at the top. This is also true of other letters
that have been disclosed to me by the Inquiry. This does not imply that the letter
is from me or involved me in any way. It was simply the convention at the time that
most formal correspondence had my name at the top in my role as the Group
Legal Services Director.
Errors in Horizon IT system
28.1 have been asked to describe the nature and extent of my knowledge of errors in
the Horizon IT system. I was aware that a new system had been introduced but I
had no knowledge of bugs, errors or defects in the Horizon IT.
Training relating to Horizon
29.1 have been asked what, if any, impact did the roll out of Horizon have on the work
carried out by the Post Office / Royal Mail Group legal department. I am not aware
of the impact that the roll out of Horizon had on the work carried out by the Post
Office) RMG legal department. I have no personal knowledge of any changes to
the relevant aspects of the work undertaken by the Civil Litigation team or the
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Criminal Law team necessitated by the roll out of Horizon but some would clearly
have been required. The assessment of the impact of such changes and the
requirement for training would have been the responsibility of the team leaders.
The annual Legal Services budget contained provision for training and attendance
at training courses was captured by the time recording system.
Knowledge of ICL / Fujitsu in providing litigation support
30.1 have been asked to what extent, if at all, I was involved in negotiating or arranging
for ICL or Fujitsu to provide litigation support. I was not involved in negotiating with,
or arranging for, ICL or Fujitsu to provide litigation support.
Proceedings against SPMs
31.1 have been asked to consider the following documents: UKGI00012463,
POL00158509, POL00094100, POL00083350, POL00067084, POL00047820.
POL00067481 and POL00107549. I had not seen these documents until they were
provided to me in relation to the Inquiry. I have no recollection of any of the cases
to which they refer and do not believe I had any involvement in them.
32.As explained above, as the Director of Legal Services, my name appeared at the
top of much correspondence and documentation, in a similar way that a company
name is used as a letterhead. This was true of anyone who held the position, so
before me it would have been Brian Holland's name. We handled thousands of
cases every year but I was never directly involved in the day to day conduct of
criminal prosecutions by the Criminal Law team or Civil Litigation team.
33.1 have been asked who within the Post Office and Royal Mail Group had authority
to provide instructions on the following matters, and how the exercise of such
authority was overseen by senior management and / or the boards of POL, Post
Office, RMG or RMH:
a. issuing and / or pursuing claims in debt or damages against SPMs;
b. accepting offers of settlement in such claims;
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c. to go to trial on such claims;
d. charging SPMs with theft, false accounting or an offence under the Fraud Act
2006;
e. to prosecute such charges to trial; and
f. to accept guilty pleas (including on a basis of plea).
34. Within the Post Office, and RMG, the people with authority to provide instructions
on such matters would have been the managers in the relevant business
unit/department. These managers would have been required to seek advice from
a member of Legal Services or from the Panel Firm covering their region. The
oversight of the exercise of such authority would have been a matter for the senior
management and the boards of POL, Post Office, RMG and RMH. I have no
knowledge of how they exercised such oversight.
35.The Royal Mail Prosecution Policy (which was approved by a Board
subcommittee), which also covered POL, provided that decisions to prosecute
SPMs were to be taken by authorised managers in the business on the basis of
the legal advice provided to them. In accordance with the Code for Crown
Prosecutors, it was the policy to prosecute individuals if there was sufficient
evidence and it was in the public interest. The oversight of such authority would
have been a matter for the senior management and the boards of POL, Post
Office, RMG and RMH. I have no knowledge of how they exercised such oversight.
36.Legal Services handled thousands of cases each year. I was not directly involved
in any Civil or Criminal cases which were dealt with by specialist teams. When
legal proceedings are issued by a law firm, the name of that firm appeared on the
Writ and court documentation. However, when proceedings were issued by an in-
house team the name of the head of that department appeared on the Writ. As
Legal Services Director my name appeared on Writs issued on behalf of Royal
Mail, Parcels and POL and on all correspondence. Each case opened and
allocated to a lawyer was given a reference number that appeared on all
correspondence. When correspondence relating to litigation was received in the
Legal Services post room, it was delivered to the lawyer identified by the case
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reference on the document and not to me, even if the sender referred to my name,
as sometimes happened.
37.1 have been asked to consider document POL00118218, a trial bundle in the case
of POL v Julie Wolstenholme, and provide details of my involvement in the case.
I have no recollection of the case of POL v Julie Wolstenholme and had not seen
the Trial Bundle until it was provided to me in relation to the request for a Witness
Statement. As explained, litigation documents often bore my name but were not
prepared by me nor did I see them.
38.1 have been asked to describe what, if any, safeguards were in place to ensure
that Post Office and / or Royal Mail Group was investigating suspected criminal
conduct and / or conducting litigation lawfully. In respect of such safeguards, I had
no responsibility for, or involvement in, the management of the Royal Mail Security
and Investigation team which was quite separate from Legal Services. The
Criminal Law team worked closely with colleagues in Security and Investigation
and provided training on law and procedure, drawing on expertise from members
of the Bar when appropriate.
39.In Royal Mail Legal Services, the day to day management of civil and criminal
proceedings was delegated to experienced solicitors who led the teams and the
lawyers who reported to them. All solicitors had considerable experience in their
area of law and were required to maintain Practicing Certificates or, in the case of
any barrister, to comply with all relevant professional rules for members of the Bar.
Lawyers were encouraged to undertake regular professional training and required
to comply with the rules for Continuing Professional Education when these were
introduced by the Law Society.
40. Care was taken when allocating cases to individuals to ensure they were working
within their field of competence and regular reviews of the hours recorded would
have identified anyone struggling with an excessive workload. The teams were
relatively small and all the team leaders operated an open-door policy to
encourage everyone to seek guidance when appropriate. Annual reports
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summarising each lawyer's achievements and performance were prepared by
their team leaders and reviewed by me.
4
=
. The involvement in the casework of lawyers independent of Legal Services offered
opportunities for any concerns about the way in which litigation was conducted to
be identified. Criminal and Civil litigators instructed Counsel in accordance with
the normal practice for litigation. The outsourcing exercise mentioned above
provided the opportunity to benchmark Legal Services’ processes with firms
conducting litigation and there were no material differences. I would have hoped
that the firms who acted as Legal Services agents in the period preceding the
move to outsourcing, and the Panel Firms thereafter, would have raised concerns
had they discovered any impropriety in the manner in which litigation was
conducted. To the best of my knowledge none did so.
42.To the best of my recollection no members of the judiciary raised concerns about
the conduct of litigation by the in-house team. These would have been addressed
to me as the solicitor on the record and would have been an extremely serious
matter that required immediate investigation. It was also open to lawyers acting
for defendants to raise complaints but I have no recollection of any being received.
43.1 held weekly meetings with all of the team leaders who reported directly to me
and these provided an opportunity for the members of the management team to
discuss cases with me and their colleagues. I also held monthly one to one
meetings with them at which we discussed casework, outcomes and resources.
They were well aware that any concerns about the conduct of a particular case or
cases should be brought to my attention but, to the best of my recollection, no
cases involving the prosecution of, or litigation against, SPMs were raised as a
cause of concern.
44.To summarise, the use of experienced lawyers, supported by a process to review
their performance, and the absence of any negative feedback from members of
the bar, the law firms with whom they worked or from members of the judiciary,
gave me confidence that litigation was being conducted by members of Legal
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Services in accordance with professional standards.
45.When we moved to the outsourcing of civil litigation, the Panel firms handled all
aspects of the cases liaising with managers in the businesses.
46.1 have been asked what, if any, oversight the boards or senior management of
POL, RMG or RMH exercised over the conduct of civil or criminal proceedings.
The boards and senior management of POL, RMG and RMH had no oversight of
civil or criminal proceedings. The department's performance and my own were
subject to the same review processes that applied to all parts of the organisation.
47.There was no requirement to provide reports on civil or criminal proceedings
relating to SPMs to the boards or senior management within POL, RMG or RMH.
48.Legal Services was required to report major legal risks as part of an annual report
to Royal Mail Internal Audit. Financial information relating to civil litigation cases
and the need to make provision for contingent liabilities was provided to the Royal
Mail Finance team.
General
49.To the best of my knowledge there are no other observations I can make that will
assist the Chair. I would however like to express the hope that this Inquiry will bring
some degree of closure to all those who have suffered.
Statement of Truth
I believe the content of this statement to be true.
Dated: VV\avemloey s ROLL
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Index to First Witness Statement of Catherine Churchard
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No.
URN
Document Description
Control Number
POL00031124
Fax: Bird & Bird to Dave Miller
(POCL) enclosing draft letter to
John Bennett (ICL), March 1999
POL-0027608
HOCO0000001
Letter relating to Post Office Ltd's
submissions to the Law
Commission of 31 July 1995
supporting the repeal of section 69
of PACE 1984.
HOCo0000001
UKGI00012463
Letters and other correspondence
from Christopher Trousdale to C.
Churchyard Solicitor and Legal
Services Director RE: Royal Mail v
Christopher Trousdale.
UKGI023259-001
POL00158509
Email from Rod Ismay to Jennifer
Robson re: Information on Post
Office Claims cases.
POL-0147382
POL00094100
Letter from Debbie Helszajn to
Frisby & Co Solicitors re HM
Customs & Excise investigation.
POL-0094222
POL00083350
Lee Castleton Case Study: Letter
from Gordon Smith to Stephen
Lister re New Case(s) - POLS Ref:
LIT/247310, Case Title: Mr Lee
Castleton, Case Classification:
FSP/DEBT.
POL-0079913
POL00067084
Carl Page case study: Letter from
Debbie Helszajn to Messrs Frisby &
POL-0063563
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Co for the attention of Andrew W
Broome re: Regina v Carl Page
Dudley Crown Court.
POL00047820
Letter from J A McFarlane to
Messrs Hill Dickinson re: Royal Mail
Group plc v Hughie Noel Thomas
Holyhead Magistrates Court - 16th
February 2006 at 11am.
POL-0044299
POL00067481
Letter from Gordon Smith (Royal
Mail) to lan Herbert (Hugh James)
re: New case - Josephine Hamilton
FSP/DEBT.
POL-0063960
10
POL00107549
Brackenvale Post Office case study:
Outlet management summary and
documents relating to audit and
discrepancy.
POL-0105857
11
POL00118218
Trial Bundle A: Statement of Case
and Orders POL v JWolstenholme
Blackpool County Court CR101947.
POL-0120138
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