1 Friday, 13 October 2013 2 (10.00 am) 3 MR BLAKE: Good morning, sir, can you see and hear 4 me? 5 SIR WYN WILLIAMS: Yes, I can, thank you. 6 MR BLAKE: This morning we're going to hear from 7 Mr Inwood. 8 PAUL INWOOD (sworn) 9 Questioned by MR BLAKE 10 MR BLAKE: Thank you. Can you give your full name, 11 please? 12 A. Paul Inwood. 13 Q. Thank you very much Mr Inwood. In front of you, 14 you should have a witness statement? 15 A. Yes. 16 Q. Is that witness statement dated on the final 17 page 15 May 2023? 18 A. It is, yes. 19 Q. Is that signature on your page? 20 A. It is. 21 Q. Is that statement true to the best of your 22 knowledge and belief? 23 A. It is. 24 Q. Thank you very much. That witness statement has 25 the Unique Reference Number of WITN05780100. 1 1 That witness statement will be published on the 2 Inquiry's website in due course. 3 Mr Inwood, you worked for the Post Office 4 for a period of over 30 years. 5 A. That's right. 6 Q. I think you started as a postal officer, serving 7 customers in a Crown Post Office branch? 8 A. That's correct, yes. 9 Q. You were Assistant Branch Manager and then 10 Manager. You became Area Manager? 11 A. Mm-hm. 12 Q. Between 2002 and 2004 you were the Contracts 13 Manager for the eastern side of South East 14 England; is that correct? 15 A. That is correct, yeah. 16 Q. Then you held number of different roles, Rural 17 Development Manager, Contracts Development 18 Manager, and the most significant for today's 19 purpose is, 2011 to 2018, you were Contracts and 20 Policy Development Manager? 21 A. I believe those are the dates, yeah. 22 Q. Thank you. Can you briefly describe that final 23 role for us? 24 A. Well, it -- there were two parts to at. The 25 first part was to develop policies that would 2 1 support people within the company in terms of 2 managing day-to-day issues that would happen in 3 a postmaster's life-cycle, for example 4 insolvency, death in service. And those 5 policies were developed either upon demand from 6 internal clients or because I noticed that there 7 was a sort of gap in the current approaches, 8 possibly caused by statute or other gaps in the 9 way that we are managing the relationship with 10 postmasters. 11 The second part was to develop either 12 variations to the existing contracts, and 13 I refer to, like, the traditional contracts, 14 which were the subpostmaster contract and 15 variants of that, or to develop new contracts 16 for postmasters, normally in response to, like, 17 a set piece business transformation programme, 18 such as Network Change or Network 19 Transformation. 20 Q. Thank you very much. 21 Could I ask, you're a little bit quiet. 22 Could you possibly come slightly closer to the 23 microphone, not on top of them but slightly 24 closer. Thank you. 25 Can you tell us where in the Post Office 3 1 hierarchy did that role sit? 2 A. It was a senior managers role. But it was -- 3 the people I were reporting into, you know, were 4 probably two to three steps removed from the 5 ExCo. 6 Q. Can you give us examples of who it was that you 7 were reporting into during that period? 8 A. Latterly it was Nick Beal, who managed the 9 Agents Development Team that looked after 10 postmasters' remuneration and the contract and 11 policy developments. You know, Craig Tuthill, 12 similar, but he was -- similar level, but he was 13 looking after the Contracts team. That is the 14 Contracts Advisers that would deal with the 15 day-to-day postmaster issues. 16 Q. Did you have any cause to liaise with those 17 higher up in the Executive, for example? 18 A. No. 19 Q. I want to start by asking you about what we know 20 as Legacy Horizon in the early years of Horizon. 21 Can we, please, turn to POL00006666, please. 22 This is a document that I'm going to come back 23 to a number of different times today. So, just 24 to assist us, can you tell us what this document 25 is? 4 1 A. I can't see it on the screen. 2 Q. It should hopefully come up on your screen. 3 This may be the second time it's happened: it 4 may not be turned on. 5 Ah, somebody is running over to assist. 6 Can you see it on your screen now? 7 A. Yes. 8 Q. It's a document we'll return to a number of 9 times this morning. Can you assist us with the 10 circumstances in which you came to be talking to 11 a solicitor at Womble Bond Dickinson? 12 A. I think this is what was referred to as the 13 witness proofing statement that was taken in, 14 I think, January 2018, in advance of the Group 15 Litigation Order. 16 Q. It looks as though you were sitting down with 17 somebody called Victoria Brooks, who was 18 a managing associate at Womble Bond Dickinson? 19 A. That's correct, yeah. 20 Q. What was the purpose of the meeting? 21 A. I think the purpose of the meeting was for them 22 to ask me a whole bunch of questions about my 23 experiences in the company and to see the extent 24 to which that would be helpful with POL's 25 position in the Group Litigation. 5 1 Q. Were you involved in the Group Litigation 2 outside of this? 3 A. No, no. 4 Q. 2018 is also the year, I think, that you left 5 the Post Office? 6 A. That's correct. 7 Q. Is there any connection between the Group 8 Litigation -- 9 A. No. 10 Q. -- matters and your departure? 11 A. No. 12 Q. No. Can we please turn to page 64. Are you 13 able to assist us with why you left the Post 14 Office? 15 A. Contract came to an end. 16 Q. I'm going to take you through a page and a half 17 of the transcript between you and the solicitor. 18 I'm going to start about halfway down and it's 19 where -- "PI" is you and "VB" is Victoria Brooks 20 of Womble Bond Dickinson. You say there: 21 "My understanding is the advent of 22 automation at least in the directly managed 23 estate improved that situation." 24 That was a situation about the difficulty 25 adding certain figures up, et cetera? 6 1 A. Mm. 2 Q. Then she says, "Yeah," and you say: 3 "You know. 4 She says: 5 "Did you find it to the extent that you've 6 used it -- how did it compare to the manual 7 system?" 8 You say: 9 "You know, it's er, it was less reliance on 10 mental processing -- because you know you push 11 a button and the system works out the balance 12 due to the customer." 13 Sorry, could we just stay on page 64. I'm 14 going to start, actually, slightly higher up, 15 about halfway. Could we zoom out slightly. 16 It's halfway down there, I'm going to start 17 slightly higher up: 18 "My understanding is that advent of 19 automation at least in the directly managed 20 estate improved that situation ... 21 "Because all right if you put garbage in you 22 get garbage out." 23 She says, "Yeah". 24 Then you say: 25 "But a calculator is less inclined to make 7 1 mental mistakes than a human being." 2 A. Mm. 3 Q. She says: 4 "Yeah, that's true. 5 "PI -- And effectively Horizon is 6 a calculator." 7 A. Mm. 8 Q. Just pausing there, "calculator" is 9 a description we've heard before and it's 10 a description we'll hear again today. Where did 11 that description come from? 12 A. I think when automation was introduced into the 13 Crown Post Office estate, there was evidence 14 that the shortages were reduced because of that. 15 So my understanding was that the advent of 16 automation would result in fewer discrepancies. 17 Q. But a calculator can be very simple -- 18 A. Yeah, it's -- 19 Q. -- it can be used by children. 20 A. It's a simplification of something that's more 21 complicated, yeah. 22 Q. Where do you think that term came from, was that 23 a term your colleagues used or -- 24 A. Yeah, it's one that I'd heard used internally. 25 Q. Then if we go below that it says: 8 1 "Did you ever work in branch [something] 2 Horizon was installed -- I've forgotten the 3 timeline." 4 A. Mm. 5 Q. You say: 6 "I did because what I used to do when I was 7 an area manager was I used to go out at 8 Christmas and because BMs [I think that 'PMs', 9 must be] were too busy to talk, branch manager, 10 and to be visible I would go and work on the 11 counter alongside a colleague and I still do 12 that actually but in a slightly different way -- 13 so I had used Horizon and ... it was a brilliant 14 system." 15 A. Yeah, "BMs" is an abbreviation of branch 16 manager, yeah, not -- it's not PM. 17 Q. Branch manager, thank you. You described 18 Horizon there as a "brilliant system". Can you 19 assist us with how it was that in 2018 you still 20 considered Horizon to be a brilliant system? 21 A. Well, I'd used it personally and I'd not 22 encountered any problems using it. That said, 23 I'd never completed a balance at the end of the 24 week around that time. As I said, we would go 25 out in times of Christmas pressure and execute 9 1 transactions using Horizon. So it wasn't 2 perfect but I'd found it fairly intuitive to 3 use. 4 Q. So you would place entries onto the system -- 5 A. Yes. 6 Q. -- but you wouldn't ever balance the system? 7 A. You may do a cash declaration at the end of the 8 day but not check all of the stock, so that you 9 know that there hadn't been a major problem 10 caused by me during the day. 11 Q. So the comment that it was a brilliant system is 12 based on occasional use -- 13 A. Yes. 14 Q. -- and occasional use that doesn't involve the 15 Wednesday balance? 16 A. Yeah, and, obviously, it wasn't made with the 17 benefit of hindsight. 18 Q. She says, "Yeah". 19 You say, "You know". 20 She says: 21 "Did you find it to the extent that you've 22 used it -- how did it compare to the manual 23 system?" 24 You say: 25 "You know ... it was less reliance on mental 10 1 processing -- because you know you push a button 2 and the system works out the balance due to the 3 customer." 4 She says: 5 "Yeah, that's true." 6 If we go over the page: 7 "And from the customer -- but it also 8 reminds you what you have to take from them or 9 give to them in terms of the products. 10 "VB -- Yep. 11 "PI -- So in my view ... it was a real 12 watershed. 13 "VB -- Yeah. 14 "PI -- In the way we interfaced with the 15 customer. 16 "VB -- Ok. 17 "PI -- And we saved time because at the end 18 of weekly balancing procedures were much quicker 19 ... so if you ... had you know a postmaster ... 20 I think it's quite intuitive." 21 So, again, that comment has to be taken in 22 the context that you hadn't actually completed 23 a weekly balancing procedure? 24 A. Earlier on when I was a branch manager, then 25 yeah, there would be weekly balancing of 11 1 individual stock units and there would be a cash 2 account produced which is an amalgam of all of 3 the stock accounts for all of the stock units 4 but that was an automated environment 5 pre-Horizon. 6 Q. Yes, and your reference there to saving time 7 because the balancing procedures were much 8 quicker, that wasn't because you had actually 9 used Horizon and carried out that out yourself, 10 that was -- 11 A. No, that was anecdotal. 12 Q. Anecdotal? 13 A. Yeah. 14 Q. Why did you think it was much quicker? 15 A. Because I think when automation was introduced 16 into the Crown and the Agents Estate, the 17 narrative was that there were time savings in 18 the production of the weekly cash account. You 19 know, when I was doing manual accounts, you 20 know, you could easily be there an hour and 21 a half to two hours on a Wednesday evening and 22 I think in the Crown estate efficiency savings 23 were made when automation was introduced. So it 24 would be reasonable to think that it was quicker 25 when automation was introduced into the agency 12 1 estate. 2 Q. You described it as the "narrative". Where was 3 that coming from? 4 A. There were business efficiency teams within POL 5 and, you know, you would hear about savings that 6 had been made in the Crown Post Office estate 7 and, anecdotally, from postmasters that it was 8 faster to produce not just the balance but the 9 weekly cash account in an automated environment. 10 Q. So you've described there the weekly balancing 11 being quicker and that it's quite intuitive. 12 This Inquiry has heard quite a lot of evidence 13 to the contrary: long periods of time on, for 14 example, the helplines; unhelpful helplines; 15 difficulty with actually using the system, 16 balancing it -- putting aside bugs, errors or 17 defects, just pressing wrong keys and things 18 like that. Were you not familiar with those 19 kind of complaints in 2018? 20 A. Well, I didn't receive complaints directly but, 21 where there were discrepancies in accounts, then 22 clearly it could take longer to bottom out those 23 discrepancies or sometimes the discrepancies 24 wouldn't be resolved at that point. And, 25 therefore, the postmaster would have to roll 13 1 over into another balancing period and accept 2 those discrepancies at that point and hope that 3 an error notice or a transaction correction 4 would come back. 5 Q. So where you've said the balancing procedures 6 were quicker, in fact, what you mean, really, is 7 that pressing the button to calculate the total 8 is quicker? 9 A. Yes. 10 Q. But there could be a whole host of problems with 11 that process? 12 A. If everything went okay, it would be quicker. 13 If things didn't go okay and there was 14 a discrepancy, then, clearly, that would take 15 some remediation to get to the bottom of that 16 and, therefore, it would not have been quicker. 17 Q. Did you think about that at this time when you 18 were answering these questions? Was that 19 something on your mind -- 20 A. Err, no. Not reacting to the questions that 21 were put to me, no? 22 Q. You then said: 23 "I've never seen in the evidence that it was 24 inaccurate. It's er it's a calculator plus and 25 it does a whole lot more than that obviously you 14 1 know why would our EPOS be inaccurate and no one 2 else's is ..." 3 Pausing there, how would you know that 4 nobody else's EPOS system was inaccurate? 5 A. Just speaking from person experience. I'd not 6 received or couldn't recall any evidence that 7 there was a problem with the EPOSS. 8 Q. You're referring there to nobody else's being 9 inaccurate; are you referring to other companies 10 that use an EPOS system? 11 A. Yeah. 12 Q. Did you consider, for example, whether other 13 companies prosecuted on the basis of data 14 produced by the EPOS system? 15 A. Not at that point but I'd had meetings with 16 other franchisors and didn't seem to be any 17 evidence that they'd had these problems with 18 their EPOS systems because we would often talk 19 about their approaches to contract breach. 20 Q. Who do you have in mind? 21 A. McDonald's was one example. 22 Q. Do McDonald's prosecute on the basis of data 23 provided by their EPOS system? 24 A. Do they? 25 Q. Yes. 15 1 A. Well, if there are problems internally, I would 2 imagine they would but I've not seen any 3 evidence of that. 4 Q. I mean, looking back at this account here, do 5 you think that you gave enough thought there to 6 the implications of relying on the EPOS system 7 and its comparison with a company like 8 McDonald's? 9 A. Not in the moment. 10 Q. How about now? 11 A. Well, over the last two or three years, I've 12 read a lot that's now in the public domain 13 regarding the integrity of the Horizon system 14 and, at various points, I've tried to think back 15 of specific examples where I'd seen evidence 16 that it was unreliable. 17 Q. Yes. One task for this Inquiry is really to 18 understand why, in 2018, people from the Post 19 Office in quite senior roles, like yourself, 20 considered that Horizon was a calculator and 21 that why would your system be inaccurate if 22 nobody else's is. Where does that mindset come 23 from? What was it within the company that was 24 telling you that? 25 A. I think there was a narrative internally that 16 1 spoke to the integrity of the system and the 2 narrative was that the system was robust. 3 Q. Can you tell us where that narrative was coming 4 from? 5 A. Fairly senior levels in the company but it was 6 discussed broadly at my level when I had 7 meetings with contracts team. There was never 8 any suggestion that discrepancies at audit had 9 been caused by the system. 10 Q. Are you able to assist us, in particular, with 11 anybody, in particular, who you had those kinds 12 of conversations with, who reassured you? 13 A. It's quite difficult to think back for specific 14 individuals. I'm talking about, you know, 15 a large community where there was almost like 16 a corporate groupthink, that the system was 17 robust but not foolproof. Sometimes, the system 18 would crash. That was happening back when I was 19 a Contracts Manager 2002 to 2004; data could be 20 lost, in the event of that happening. 21 So it clearly wasn't completely foolproof 22 but nor was there any trend of cases that I'd 23 seen where the EPOS system had caused phantom 24 discrepancies in people's accounts. 25 Q. Where you say "trend", I mean, how was it that 17 1 people would prove that to you? 2 A. Well, there was never any attempt to prove 3 a negative, that, you know, the system was 4 completely foolproof and there were no examples. 5 There were, from time to time, examples where 6 data was lost to do with power outages or the 7 equipment crashing, that there would have had to 8 be some attempt at remediation of the 9 postmaster's accounts. 10 Q. Did you not receive complaints over the years 11 from subpostmasters that there were more 12 significant problems with Horizon? 13 A. When -- over the two or three -- period when, 14 you know, information entered the public domain 15 regarding flaws in the system and when 16 I completed your questionnaire, I thought back 17 long and hard for specific examples where it had 18 been put to me directly that a discrepancy had 19 been caused by the system and I couldn't think 20 of any specific examples at those points in 21 time. 22 Q. Can you think of examples now? 23 A. I can because I've seen one that was disclosed 24 to me quite late this week, where there was 25 an email exchange around one specific case where 18 1 the postmaster had claimed that the discrepancy 2 was caused by Horizon, and I've obviously read 3 that there were hundreds of other claims that 4 emerged during the course of the Group 5 Litigation and beyond that. 6 Q. Yes, but in terms of your personal knowledge, 7 you're saying there was one occasion when there 8 was a complaint made about the system? 9 A. I can think of one but that's only because I saw 10 an email exchange in the bundle. 11 Q. Which one was that? 12 A. I can't remember the name of the post office. 13 Q. Okay, it may be that we come to it, I'm just 14 going to read on a few more lines, she says: 15 "Can I ask you what you think the biggest 16 weakness in Horizon is from your experience?" 17 You say: 18 "I think probably there are too many screens 19 to go through to get to what you want to it do. 20 Sometimes it was awkward to remember where 21 things are and in order to get to where you want 22 to go you have to remember which screen you have 23 to go through. You know the printer was 24 probably too slow and noisy but we are improving 25 it and it has changed a lot recently I think 19 1 there is no major issue with it really." 2 She says: 3 "It's interesting to speak somebody about 4 that who has got experience of both. 5 "PI -- I don't think anyone would want to go 6 back to a manual. 7 Then she says: 8 "That's what we should ask them shouldn't 9 we? We should ask subpostmasters if they want 10 to go back to that." 11 So in this discussion in 2018 you hadn't 12 recalled that one occasion when a complaint -- 13 A. No. 14 Q. -- had been made about the system? 15 A. No, I had not. 16 Q. Were you in any way playing things down in this 17 conversation with the lawyer? 18 A. No, I was just responding to their questions. 19 Q. Can we also bring up your witness statement, so 20 WITN05780100, please. We've talked a little bit 21 about using the system and some difficulties 22 that some subpostmasters may have had using the 23 system. Can we look at paragraph 23, please, 24 and that's page 4. 25 At paragraph 23, you say you do not feel 20 1 that any improvements could be made to the 2 training given to subpostmasters. Do you still 3 think that's correct? 4 A. Based on my experience during the period of time 5 I was in the company, I wouldn't change that. 6 Q. Could we look at POL00093184. This is a letter 7 to you from somebody called Laurence Green; is 8 that somebody you remember? 9 A. I haven't but I've got a vague recollection of 10 this when I read it this week. 11 Q. Can you remember who he was at all? 12 A. I think he was either a -- he was probably 13 a postmaster. 14 Q. He is there writing to you following an NFSP 15 Eastbourne branch meeting. 16 A. Mm. 17 Q. Does that assist you at all? Might he have been 18 a representative of some sort or -- 19 A. He may well have been. 20 Q. This was 2004 so you were Contracts Manager for 21 the eastern side of South East England at the 22 time? 23 A. Yeah, that was, I think, coming to the end of my 24 period of time as the Contracts Manager, yeah. 25 Q. Thank you, if we could scroll down to the bottom 21 1 of this page. He says at the very bottom: 2 "Most, like me, have received no system 3 training from the Post Office throughout their 4 careers. In 24 years, excepting various sales 5 training initiatives and a laptop based product 6 knowledge evening, my total system training 7 amounted to one day for Horizon plus two 8 assisted balances when Horizon went live. When 9 I took on my first office in 1980 I learned from 10 a fellow postmaster and paid for his help." 11 Pausing there, were you aware, therefore, of 12 historic complaints of training concerns even 13 pre-Horizon? 14 A. I think, from time to time, postmasters -- or 15 I would identify a capability issue with 16 a postmaster, as opposed to an integrity issue 17 and, from time to time, I would ask either the 18 training team or, perhaps, one of the field team 19 just to give them a bit of extra support, you 20 know. 21 Q. He says there: 22 "Two newly appointed postmasters were in 23 attendance and they advised that they had been 24 made aware of and had been trained in, the zero 25 balancing system, on appointment, and followed 22 1 this system." 2 Can you tell us what was the "zero balancing 3 system"? 4 A. No, I've got -- I don't know what he's referring 5 to. Perhaps it's that you have to balance the 6 accounts and accept discrepancies identified by 7 the system. That's a guess. 8 Q. He says: 9 "I advised that you had stressed that there 10 is only one policy universally applied and that 11 no one postmaster could be allowed to be 12 an exception." 13 It says: 14 "15 members reported that they had not been 15 trained in, nor were they aware of the 16 requirement for zero balancing. All reported 17 that if a discrepancy occurs during a holiday it 18 is not adjusted by the locum but is dealt with 19 on the postmaster's return. Also they operate 20 the 'old system' of showing any discrepancy in 21 the final cash account and then making it good. 22 "They were dismayed that they could be 23 disciplined and threatened with loss of contract 24 for not using a procedure of which they, like 25 me, were unaware and in which they are 23 1 untrained." 2 So that's 15 members from your region 3 complaining about difficulties, a lack of 4 training. Do you recognise those complaints at 5 all? 6 A. I think that part to the South East was managed 7 by a different Contracts Manager. I don't know 8 what he's referring to here because, clearly, 9 the postmasters had been trained to balance 10 their accounts on Horizon and I'm not sure what 11 the change is here. I've got no recollection of 12 that. 13 Q. He says: 14 "It may be that our branch is unique in this 15 matter and that the policy has been successfully 16 rolled out to all our colleagues. It seems more 17 likely from experience that this policy is as 18 yet far from universal in its application and is 19 hampered by poor communication and lack of 20 training. 21 "From our correspondence I had assumed that 22 I was the only one at fault and out of step. 23 I now wonder how many others are in the same 24 position as my branch colleagues and me." 25 Do you remember that correspondence at all? 24 1 A. No. 2 Q. No? Do you know why he might have felt that he 3 was the only one at fault? That's certainly 4 a phrase or a phrase similar to one we've heard 5 before in this Inquiry. 6 A. Well, I've heard it said that a lot of 7 postmasters, when they reported problems with 8 the Horizon system to our helpline they were 9 told "Well, you're the only person that's got 10 a problem with it". So what he's saying there 11 is consistent with what many other people have 12 said. 13 Q. Yes, and did that stick in your memory at all? 14 A. It doesn't stick in my memory, no, not this 15 specific case or any others similar to that. 16 Q. Do you agree that in 2004 you had received 17 complaints -- that's from relatively early on in 18 the life of Horizon -- about a lack of training? 19 A. It was either sporadic complaints that someone 20 felt that they needed more training to cope with 21 the system or because I'd identified a problem 22 that was to do with capability where I'd 23 identified the need for more support. 24 Q. We'll come to the policies in due course but, 25 when it came to formulating various policies, 25 1 did you have in your mind at all difficulties 2 that subpostmasters may have with training? 3 A. Well, the company had a policy that was already 4 in place to deal with what were capability 5 issues with postmasters and there was a process 6 that sat alongside that. So they could be 7 offered either, upon their request or upon the 8 request of others that worked for POL, 9 additional training and support, and that would 10 be delivered by the training team, perhaps, or 11 their Area Manager. 12 Q. But did any lack of training or issues with 13 training feature in any way in your thinking 14 when you were drafting various policies? 15 A. What years later? 16 Q. Yes. 17 A. Err ... no, I don't think it did. I think that 18 the people that had a close relationship with 19 postmasters like Area Managers, Field Advisers, 20 Contracts teams, were quite adept at identifying 21 where there were capability issues and providing 22 additional support. So that was just something 23 that happened, really, across a whole range of 24 issues in a postmaster's life-cycle. It wasn't 25 necessarily connected to their accounting, it 26 1 could be any aspect of the way they operated the 2 business. 3 Q. So we have this letter from 2004. Are you aware 4 of it being followed up and those people being 5 trained? 6 A. I've got no recollection of that, no. 7 Q. Can we, please, look at POL00114930, please. 8 We're now moving forward to 2009. Can we go 9 over to the second page. It's a chain of emails 10 in 2009. Can we look at the bottom half of that 11 page, please. I'm going to start here with 12 an email from Jessica Madron. Do you remember 13 who she was? She was in Legal Services -- 14 A. She was a principal lawyer in Post Office Legal 15 Services. 16 Q. Can you assist us with the recipients of this 17 email, how senior they were, what kind of roles 18 they held? 19 A. Tracy Marshall was my line manager at the time. 20 I think the people that were cc'd intended to be 21 more junior in the hierarchy of the 22 organisation. 23 Q. Thank you. I'll briefly read some of this 24 email. Do you recall having received this? 25 A. Well, I -- only this week, you know, I don't 27 1 have any recollection, back to 2009, of this 2 case, no. 3 Q. It's entitled "letter from BERR" -- that's now 4 the Department for Business -- "re challenge to 5 Horizon integrity". It says there: 6 "A reporter has written to her MP referring 7 to conversations she has had with 8 a [subpostmaster] to the effect that the Horizon 9 system is faulty and shows deficits where there 10 are none and that POL [Post Office] just 11 reclaims these deficits from [subpostmasters]. 12 There is also reference to a website for 13 [subpostmasters] who have been 'victims' of [the 14 Post Office's] approach." 15 Why would you be contacted in this regard? 16 A. Because my job title included the word "agent" 17 or "postmaster", I would often be sent or copied 18 in on emails that related to agent postmasters. 19 Q. When you say because your job title included 20 that, what do you mean by that? 21 A. Well, if something was not to do with the Crown 22 Post Office and it was to do with a postmaster, 23 I would often find myself being copied in on 24 something. 25 Q. Because you were -- 28 1 A. Either for information or because I was being 2 asked to say or do something specifically in 3 response to the email. 4 Q. So, in this particular email, you were in the 5 "to" list rather than the "cc" list? 6 A. That's correct, yeah. 7 Q. So does that signify to you that somebody 8 thought you were the appropriate person, 9 alongside Tracy Marshall, to address this issue? 10 A. Correct, yeah. 11 Q. Can we look at the first page and I'm going to 12 take you through an email, the response from 13 you. Thank you, so you say: 14 "Dear Jessica ... 15 "... I have some experience of this type of 16 complaint from my time as a Contracts Manager." 17 So just pausing there, we spoke about half 18 an hour ago, or so, about whether you had 19 received complaints and you couldn't recall any 20 during your conversation in 2018. You then 21 recalled one, having seen the documents in the 22 bundle. 23 A. Yeah. 24 Q. This certainly suggests that you did have more 25 than just one complaint from a subpostmaster? 29 1 A. From 2002 to 2004. 2 Q. Yes. 3 A. Yeah. 4 Q. That was the context of my questioning earlier 5 as well, about the early days of Horizon and 6 I think you could only recall one, having seen 7 documents, but it's clear here that in 2009 you 8 could recall that you had received a fair few 9 more? 10 A. I can't say how many but more than one. 11 Q. You go on there to say: 12 "From time to time, either existing agents 13 or those suspended/terminated due to accounting 14 irregularities/unpaid debts, will say that it is 15 'the Horizon system that has caused the loss'. 16 On each occasion I had asked a [subpostmaster] 17 to substantiate the allegation, they had been 18 unable to provide any evidence to support it." 19 Now, "from time to time" suggests certainly 20 more than one, probably a fair few, given that 21 it's from time to time. 22 A. Over a three-year period, yeah. 23 Q. "Unable to provide any evidence": how was it 24 that a subpostmaster would be able to provide 25 evidence that the Horizon system has caused the 30 1 loss? 2 A. Well, I don't -- the postmaster's ability to 3 interrogate the system was limited. So, for 4 example, they could look at event logs to see 5 who had had access to the system, they could 6 look at transaction logs to see the detail of 7 the transactions processed through the system, 8 and it would be possible to perform some type of 9 reconciliation between physical documents and 10 what the system was producing. 11 But I think that their ability to 12 interrogate the system was limited. 13 Q. Looking back at this now, do you think that that 14 was too high a hurdle for a subpostmaster to 15 overcome, to substantiate that there had been -- 16 that they had to provide evidence? 17 A. Yeah, I think looking back on it now, I don't 18 think many postmasters would have the capability 19 or the resources or the time to perform, you 20 know, a long audit of their own work in the 21 system in order to detect why discrepancies had 22 happened. 23 Q. Even if they could compare certain physical 24 documents with what is on screen, if a bug, 25 error or defect affected the data that was on 31 1 the screen, do you think that they could 2 actually identify that bug, error or defect? 3 A. No, absolutely not, and nor would they be able 4 to know that it was possible to access the 5 system at the back end without their knowledge. 6 Q. That, I think, you've said in your statement was 7 something you only found out relatively late in 8 the day? 9 A. I'd heard of this around the time that the Group 10 Litigation order was imminent. 11 Q. You say: 12 "In many respects, Horizon is 13 a sophisticated calculator, and operates on the 14 principle of GIGO -- garbage in, garbage out. 15 It is no more likely that, with 100% accurate 16 input, Horizon produces inaccurate outputs than 17 a calculator would, which is extremely 18 unlikely." 19 I said we'll come back to this description 20 of it being a calculator. Looking back, that 21 can't be right, can it? 22 A. I think that is an oversimplification of what 23 Horizon is and I did go on to say that you 24 couldn't say absolutely that the system was 25 flawless. 32 1 Q. You say: 2 "In some respects though, there are items of 3 data transferred between other terminals 4 in-store, and from Horizon to Home Office -- it 5 is always possible that in these data streams 6 electronic data could go astray, either because 7 of human error or an IT failure, and that could 8 cause transaction corrections to be produced, 9 either in favour or against an agent." 10 A. Correct. 11 Q. You then say: 12 "It is not possible to say, absolutely, that 13 the system could not cause a loss or gain, and 14 some time back when Horizon was introduced, [the 15 Post Office] wrote off a considerable number of 16 losses that appeared in agents' account on 17 migration from manual accounts -- after some 18 investigation it was not possible to show where 19 the losses had occurred." 20 So, quite frankly, you made very clear that 21 there were cases where the Post Office couldn't 22 show where the losses had occurred? 23 A. Yeah, I think there was an issue around the 24 physical migration from manual accounts to 25 Horizon, where a POL employee attended the 33 1 postmaster's premises, did the physical count of 2 the cash and stock to make sure that the 3 starting point on Horizon was accurate. I think 4 quite a lot of discrepancies were uncovered at 5 that point, shortages or surpluses. 6 Q. So this would have been during the rollout of 7 Horizon? 8 A. It was, yeah. I've had direct experience of 9 visiting one branch where I think there was 10 a discrepancy, not huge, that had just happened 11 as part of the weekly balance and, anecdotally, 12 I think a number of other people had found that 13 to be the case. 14 Q. You say: 15 "[Post Office's] approach is consistent in 16 that when a [subpostmaster] challenges 17 a [transaction correction], they have 18 an opportunity to produce evidence to support 19 their claim, and that is considered by the 20 contracts team, and consideration can be given 21 to writing off all or part of the loss. It is 22 a fact that these days, far fewer losses are 23 written off, as some years back there was 24 a culture of weak management where some losses 25 that were inappropriate for write-off, were 34 1 written-off -- perhaps the proliferation of 2 these complaints is the outcome of that, or [the 3 Post Office] becoming more hawkish in the way it 4 manages debt/integrity issues." 5 I'd like to look at the culture of the Post 6 Office. Can you assist us with that, what seems 7 to be described as some sort of culture shift? 8 A. I think I'm referring back to a period of time 9 where every postmaster would have a direct 10 relationship with an Area Manager and all the 11 branches were account managed. And I think, for 12 many postmasters then, the relationship was 13 a lot closer and they were receiving a lot more 14 direct face-to-face support. 15 And when I started off as an Area Manager in 16 the '90s, I think you often used to see or hear 17 about cases where a postmaster had requested 18 a shortage to be written off. And I think there 19 was possibly more leniency in that period of 20 time and I think the change happened because of 21 business efficiency, far fewer postmasters had 22 that direct face-to-face relationship with 23 postmasters and they were more reliant on the 24 helpline. 25 Q. Can you assist us with time periods? 35 1 A. Yeah, well, you know, the time when I think all 2 postmasters had that direct account managed 3 relationship was when I started as an Area 4 Manager, which was probably in the early '90s, 5 and then there were subsequent reorganisations 6 of the business that meant that there were fewer 7 people out in the field supporting postmasters 8 and that just -- process seemed to continue for 9 a long time and various business 10 rationalisations. And, as I said, they became 11 more reliant on their relationship with the 12 helpline and they would see POL people in the 13 field on far fewer occasions and, normally, when 14 there was a problem. 15 Q. You describe it here a "culture of weak 16 management". 17 A. Yeah. 18 Q. That's a term that you used in 2009. 19 A. Mm. 20 Q. Did the Post Office, as at 2009, see the former 21 approach as a culture of weak management? 22 A. I'm not sure that the Post Office did. That was 23 just my opinion of how things were at the time, 24 you know. There were just decisions made in 25 terms of writing things off that perhaps the 36 1 losses weren't properly evidenced why that had 2 happened. It was more -- it was probably a more 3 sympathetic culture. 4 Q. Why, in 2009, would you have considered 5 a sympathetic culture to be a culture of weak 6 management? 7 A. Because, you know, there were approaches, 8 processes, policies to follow, and it may have 9 been that those were bent out of shape a little 10 bit in the terms of providing outcomes for 11 postmasters, with the best intentions: to help 12 them. 13 Q. You described how, previously, the management 14 was more regional, more local -- 15 A. Yeah. 16 Q. -- and that they would have more of 17 a relationship with the subpostmasters and that 18 became more central. 19 A. Yes. 20 Q. What I'd like to understand is how it is that 21 a change from somebody who knows a subpostmaster 22 to somebody who doesn't know a subpostmaster is 23 interpreted as the former being effectively weak 24 and the latter being strong? 25 A. I think there were examples of what I've 37 1 described there as "weak" behaviours, ie not 2 sticking to agreed policies and processes. And 3 I think when it moved to a less -- a more 4 central relationship, you know, the operators of 5 helplines stuck rigidly to policies and 6 processes. 7 Q. You say they stuck rigidly. Was that at the 8 request of those who were in charge of the 9 policies and procedures? 10 A. I think it was just an outcome of 11 an organisational change, where people who were, 12 like, Tier 1 helpline operators had less. They 13 didn't have management discretion. You know, 14 they were helpline operators, trying to do their 15 best, sticking to scripts and processes, whereas 16 Area Managers back in the '90s, I think, had 17 more leeway than management discretion, control 18 of their own budgets, to do certain things. 19 Q. Looking at this now, knowing what you know, do 20 you still see the earlier approach to be 21 a culture of "weak management"? 22 A. Well, if you applied that approach and cut and 23 paste it on to the Horizon era, no, because 24 there should be more analysis of why shortages 25 have happened than there was, from 2001, 38 1 I think, when Horizon was introduced. 2 Before postmasters were asked to repay 3 shortages and, you know, I'll go further than 4 that and say that there should have been 5 a process where, if a discrepancy had arised 6 (sic) either at audit or some other way, the 7 possibility that that discrepancy had been 8 generated by the system and, therefore, was 9 a phantom discrepancy should have been ruled out 10 prior to the discrepancy being recovered. 11 Q. I'll just read one more sentence it says: 12 "I think our line must be that [the Post 13 Office] is always prepared to consider 14 representations that are based on proper 15 documentary evidence, and not simply an obtuse 16 'the system did it'." 17 I think, following the evidence you've just 18 given, your reflection on that is that that was 19 actually too high a hurdle for subpostmasters to 20 overcome? 21 A. I agree. 22 Q. Do you know if you were ultimately involved in 23 the response to this complaint from the 24 journalist and the Member of Parliament? 25 A. I was never involved in drafting responses to 39 1 any of those. 2 Q. Do you recall any follow-up after your email? 3 A. No. 4 Q. So this is 2009. We've looked at your comments 5 in 2018 to the lawyer, in relation to the Group 6 Litigation. They're very similar in response to 7 the issues with Horizon, lack of knowledge of 8 issues with Horizon. Was there nothing in that 9 10-year period, or almost 10-year period, 2009 10 to 2018, that made you rethink your position? 11 A. I think in the background you had the Justice 12 for Subpostmasters campaign. I wasn't directly 13 involved in answering anything that came from 14 that campaign and I'd tend to think that the 15 people around me in the company were quite 16 sceptical and dismissive about the things that 17 were being said, and I can't recall any trend of 18 anything happening, really, that would cause me 19 to think that there were significant problems in 20 the system. 21 Q. We know the Computer Weekly article, for 22 example, was published on 11 May 2009, so very 23 soon after that email exchange? 24 A. Yeah. 25 Q. Did that not make you rethink the experiences, 40 1 for example, when you were being Contract 2 Manager and had received those complaints about 3 training? 4 A. No, because I didn't read it or have any 5 knowledge of it. The only thing that made me 6 rethink about how cases were managed is the 7 information that emerged from the Group 8 Litigation onwards. And I would think back and 9 try and think of specific examples of what 10 I would have done differently, or had I seen any 11 evidence that the Horizon system was flawed and, 12 at all of those points, I wasn't able to 13 identify anything that I could have -- specific 14 examples, historically. 15 Q. You had that email exchange in 2009, very 16 shortly before Computer Weekly, about a letter 17 from a Member of Parliament having been informed 18 by a reporter. 19 A. Mm. 20 Q. You then have the Computer Weekly article. Is 21 that not something you saw at the time, was 22 brought to your attention that people talked 23 about? 24 A. No. No. The first time I heard of the Computer 25 Weekly article was reading Nick Wallis' account 41 1 of developments online in the last two to three 2 years. 3 Q. Did you notice any change in activity within the 4 Post Office, within the various hierarchies, 5 with those who you communicated with, in 6 response to trying to get to the bottom of any 7 problems that were identified? 8 A. Well, I know that there was concern within the 9 company about the number of postmasters that 10 were being suspended as a result of bad audits, 11 and there were changes put in place to make sure 12 that these suspensions were authorised at quite 13 a high level in the company. But that didn't 14 tell me that there were inherent problems with 15 the Horizon system. It just told me that there 16 was a general concern about the number of 17 suspensions that were happening, because we were 18 finding it problematic to keep services going in 19 some communities and that was always a strong 20 imperative for the company. 21 Q. Who, in particular, do you recall being 22 concerned about the number of suspensions? 23 A. Well, at the time I was working in the Agency 24 Development Team -- I'm trying to approximate 25 the years -- I think it was around 2017/18 -- 42 1 sorry, 2008/2009, and Kevin Gilliland was the 2 head of that team and I know that he had 3 concerns about some specific cases where 4 a postmaster had been suspended, and I recall 5 that there was a change to the approach 6 regarding either prosecutions or suspensions 7 around that time, based on a meeting that he'd 8 had with Legal Services and Paula Vennells, who 9 was Network Director at the time. 10 And then I think there was some 11 authorisation process at a reasonably high level 12 before a suspension could happen, you know. 13 Q. Thank you very much. 14 Was there a concern that you noticed within 15 the Post Office about shining a light on this is 16 issues in that 2009 period? 17 A. No, no. 18 Q. I want to return to your interview with Womble 19 Bond Dickinson, so that's POL00006666 and it's 20 page 46 that I'd like to look at. It's the 21 bottom half of page 46. It seems there that 22 you're going through with the solicitor 23 a document, maybe a pleading or a request of 24 some sort, from the claimants; do you recall 25 that? 43 1 A. Which paragraph? 2 Q. If we look at VB, she says "64.9". I'll read 3 that to you. She says: 4 "64.9 to communicate or alternatively not to 5 conceal the extent to which other subpostmasters 6 were experiencing issues relating to Horizon and 7 the generation of discrepancies and alleged 8 shortfalls. So what they want to have here 9 I think is information sharing about postmaster 10 A has got a problem and that should be told to 11 postmaster B or possibly to all the other 12 postmasters." 13 A. Mm. 14 Q. So there seems to be a request that the Post 15 Office should be communicating with postmasters 16 about problems with other postmasters -- 17 A. A request from whom? 18 Q. Well, exactly. That was my question. Do you 19 recall, it seems to be some sort of document of 20 requests, perhaps from the claimants in the 21 Group Litigation? 22 A. No. 23 Q. Your answer to that proposal was as follows. 24 You said: 25 "Well first of all there is the issue of 44 1 confidentiality and data protection concerning 2 other people. Secondly commercially it would 3 make no sense to do that because that 4 information could then be used by others as 5 a smokescreen to defraud the company. The other 6 point is where we have seen examples of good 7 practice or bad practice then we would publicise 8 and do publicise that because we do not want 9 agents to suffer financial harm so to suggest 10 that could be an obligation on us I think 11 commercially it makes no sense at all." 12 So you raise there issues of 13 confidentiality, data protection, you say it 14 would be commercially bad, you say it could 15 encourage fraud. There seem to be a quick list 16 of reasons not to provide information to 17 subpostmasters about bugs, errors or defects 18 within the system. How is it that you gave that 19 answer? 20 A. I think it just seems to make sense, really -- 21 Q. Can you see the problems with that answer? 22 A. -- at the time. In the context of? 23 Q. The lack of information sharing with 24 subpostmasters about other subpostmasters having 25 discrepancies and alleged shortfalls? 45 1 A. Mm, I think that you wouldn't talk to one 2 postmaster about experiences other postmasters 3 had had. That doesn't seem to make any sense 4 for the business to do that. 5 Q. Why wouldn't it make sense for the business? 6 A. Well, it may not be helpful, in terms of dealing 7 with the complaint that a postmaster had put to 8 us. 9 Q. Because it wouldn't help the Post Office? 10 A. It wouldn't get to the bottom of the dispute, 11 would it? If a postmaster A says they had 12 a problem with their accounts, it wouldn't be 13 helpful to them or us to publicise other 14 postmasters that had also had problems with 15 their accounts. They've still got a discrepancy 16 in their accounts, haven't they? 17 Q. Was that your view, the view of your department, 18 the view of the company as a whole? 19 A. It was just response that was put to me at that 20 particular point in time by Victoria, really, 21 and it was just a practical objection to sharing 22 information regarding other postmasters, 23 I think. 24 Q. Do you now recognise the problems with that? 25 A. Like I -- you know, in the last two or three 46 1 years I've read that a lot of people have said 2 that they were told that they were the only one 3 experiencing problems with their Horizon system 4 and, clearly, they weren't. So yeah, it's hard 5 to reconcile what I now know with what I said 6 back then. 7 Q. The company, of course, was prosecuting 8 people -- 9 A. Yeah. 10 Q. -- and people were losing their livelihoods. 11 You were involved in, for example, the debt 12 recovery policies. 13 A. Yeah. 14 Q. People were affected who were saying that they 15 had discrepancies or alleged shortfalls caused 16 by bugs, errors or defects? 17 A. Yeah. 18 Q. I mean, revisiting that position from 2018, not 19 so long ago, do you see the problem with that 20 approach? 21 A. I think, looking at it now, I think it was 22 incumbent on the company to be completely open 23 and honest about problems with the system at the 24 point that they were aware of those problems. 25 Q. Where was that mindset of confidentiality, data 47 1 protection, commercial implications? Where was 2 that coming from? 3 A. That was just my own opinion at that particular 4 point in time, in reaction to a question that 5 was being put to me by Victoria, really. 6 Q. Having received, for example, from time to time, 7 during your time a contract manager, complaints 8 from subpostmasters, having been involved in 9 that 2009 correspondence from the journalist, 10 the complaint to the Member of Parliament, why 11 do you think it is that you didn't recognise the 12 importance of information sharing and put up, 13 quite quickly, those barriers? 14 A. I think it's because, over a long period of 15 time, you know, I would deal with -- you know, 16 there was something like 13,000/14,000 17 postmasters and, as a Contracts Manager, you 18 would deal with a certain number of those, maybe 19 1,000, in my part of the South East. And you 20 would always look at the scale of complaints 21 compared to the total network size and it didn't 22 appear to be huge. 23 It was difficult for me, just looking after 24 1,000 agents, to see that perhaps the problem 25 was much bigger than I thought it was. 48 1 Q. So you didn't have visibility of the figures 2 around the country? 3 A. No, there was no sort of data sharing of what 4 was going on around the country. I think, at 5 one point, it became apparent that the number of 6 suspensions and terminations had, sort of, 7 increased, compared to a time when there were 8 manual accounts, pre-Horizon. And the narrative 9 in the company was that was because the Horizon 10 system provided us more insight into what was 11 going on in branch and, therefore, audit 12 activity could be targeted with more 13 intelligence and, therefore, you would expect 14 the Post Office to uncover more discrepancies. 15 Q. The identification of the issue with a large 16 number of suspensions, et cetera, is that the 17 time period that you had previously told us 18 about and the discussion, I think you mentioned 19 a number of names that were involved in that, or 20 is this a different period? 21 A. It was during the period of time when I was 22 working for Craig Tuthill and John Breeden was 23 in charge, and Lin Norbury in charge of the 24 Contracts Advisers. And there was some 25 sharing-off information on a, sort of, bimonthly 49 1 basis about the number of suspensions. 2 So that was maybe the period of time, 3 probably '14/'15/'16, sometime around then, and 4 yeah, the -- there was concern in the company 5 about the number of suspensions, and that was 6 roughly around the same time where there had 7 been a sort of policy change, a top-down policy 8 change, regarding who could authorise 9 suspensions on the basis of a bad audit, or for 10 any other reason. 11 Q. Where did you see that drive coming from? 12 A. At the top. 13 Q. What do you mean by "top", sorry? 14 A. At ExCo level. 15 Q. The Executive? 16 A. Yeah. 17 Q. The views that we've seen in those emails about 18 Horizon acting like a calculator, et cetera. Is 19 it fair to say that you held those views when 20 you drafted the various policies that we're 21 going to see, in particular debt recovery 22 policy? 23 A. Yeah, that's fair. You know, my view about the 24 system didn't change until the emergence of, you 25 know, a large amount of information from the 50 1 Group Litigation regarding the flaws in the 2 software and the bugs. 3 Q. When you were drafting the policies -- we'll 4 look now at the debt policy, debt recovery 5 policy -- 6 A. Yeah. 7 Q. -- the ability or potential for there to be 8 bugs, errors or defects in the system, was that 9 ever part of the conversation? 10 A. No. You know, I'll be very clear that the debt 11 recovery policy was quite simple. You know, 12 debts are there to be recovered by the company. 13 And it was quite unusual for me to be asked to 14 get involved in something like that, that was 15 managed elsewhere in Finance and between the 16 Contracts team. 17 And I think the reason I was asked to do it, 18 it was more to do with the process and there 19 were some -- it was a bit clunky, there were 20 problems between the Contracts team and Finance. 21 It wasn't working well. It wasn't anything to 22 do with the real policy of recovering debt, it 23 was just process mapping, really. 24 Q. Can you summarise for us the problem? 25 A. I don't recall what the specific disjoins in the 51 1 process or what the tensions were between 2 Finance and the Contracts team. I wasn't told. 3 It was Craig Tuthill, I think, that instructed 4 me to refresh the process. It wasn't policy. 5 It was process mapping. And I had numerous 6 conversations with people in that part of the 7 world, just to agree a better process, a more 8 efficient process. 9 Q. I'm going to bring that document onto the 10 screen. It's POL00113670. This is the 2013 11 version of the policy. 12 A. Yeah. 13 Q. It's called "Operators' In Service Debt", and we 14 see at the bottom of this page you are listed 15 there as "Assurance". If we could scroll down, 16 sorry. There, that's your name there. Why does 17 your name appear there? 18 A. Because I'm the owner of policy and, therefore, 19 didn't get implemented unless I was content with 20 it. 21 Q. I think you said in your witness statement that 22 you drafted this policy or were responsible for 23 drafting it. Did you actually input some of the 24 text or? 25 A. I think a lot of the screwdriver work was 52 1 probably done by one of my team and, therefore, 2 there were just iterations between me and Ravi, 3 in terms of developing the approach and the 4 drafting work. I think he did a lot of the 5 process mapping but that's about the extent that 6 my memory will allow. 7 Q. Would you have been the most senior member of 8 the Post Office to have reviewed this before it 9 was finalised? 10 A. No, there were people in that circulate -- if 11 you scroll up, yeah, there were people in that 12 circulation list that -- 13 Q. They're listed as stakeholders. Would they have 14 reviewed it before it was finalised? 15 A. Yeah, they would have been asked to comment on 16 the process mapping. 17 Q. Thank you. If we look at page 3, it sets out 18 the purpose of the policy. 19 A. Yeah. 20 Q. It says: 21 "The purpose of this policy is to clearly 22 set out the processes Post Office Limited will 23 follow to recover debt incurred in service by 24 Operators of all Post Office branches." 25 If we scroll down to the glossary, it 53 1 defines "Operator" there, a little bit lower 2 down on the page. An operator is: 3 "Any individual, company or partnership 4 (including subpostmasters and franchisees) 5 responsible for the operation of any Post Office 6 branch." 7 A. Yeah. 8 Q. So this policy, to summarise, it sets out the 9 processes for the Post Office to follow to 10 recover debt incurred by -- 11 A. Postmasters. 12 Q. -- amongst other people postmasters. 13 A. Yeah, "operator", at that time, was just using 14 an umbrella term for agents. Now, it's 15 postmasters on different contract types. 16 Q. Thank you. Could we go over the page to page 4, 17 please. 3.2 says: 18 "This policy is designed to provide clear 19 and consistent guidelines and processes for [the 20 Post Office] to recover transactional and 21 non-transactional debt incurred whilst in 22 service by Operators of all Post Office branches 23 whether they are still in service or have 24 subsequently resigned." 25 Then we have "Background". It's the 54 1 background section that I'm particularly 2 interested in. Is it possible, if we could keep 3 this on screen and I'm just going to bring up 4 alongside it a slightly later version of the 5 same policy. So if we could keep that, perhaps, 6 on the left-hand side, if that's possible, and 7 if we could bring up POL00088312. 8 This is a 2017 version. Is that the same 9 policy but just a later version? 10 A. I'm just looking for -- 11 Q. The earlier version is called "Operators' In 12 Service Debt" and this one is called 13 "Postmasters' In Service Debt"? 14 A. Yeah, I think it's a later iteration of -- 15 Q. Thank you. That also has your authorisation in 16 2017. 17 A. Yeah. 18 Q. So it looks as though in 2013 you authorised 19 a policy, you subsequently authorised updates, 20 and you authorised this one in 2017. 21 A. Yeah. 22 Q. If we could go to page 3 on the right-hand side, 23 we should be able to see the bottom half of 24 page 3. If we could zoom in, in the same way as 25 we have on the left-hand side, thank you very 55 1 much. It's the "Contractual position", if you 2 could scroll down slightly, thank you. 3 It seems as though they're largely the same, 4 these two. On the left-hand side, we have: 5 "From a purely contractual perspective, the 6 Operator of a Post Office branch is responsible 7 for ..." 8 Then it has three points. I'm going to come 9 to each of those. 10 I think the only real difference between 4.1 11 and 3.1 is the reference to "without delay", on 12 the right-hand side, "making good without 13 delay". So on the left-hand side we have the 14 word "making good" in the bullet points; in the 15 right-hand side, we don't have them in the 16 bullet points, but they are in 3.1, but there is 17 a difference and it seems to be in the time 18 period in which they had to be made good. 19 Do you see that difference? 20 A. Yeah, in the first document, it says "without 21 delay". In the second document it doesn't say 22 that. 23 Q. I think it's the later document says "without 24 delay", the earlier one doesn't. 25 A. Oh, I see. Right. 56 1 Q. Do you recall a change in the time period, for 2 example, that things needed to be made good, or? 3 A. No, because that would have been managed between 4 finance and the contract team, in terms of the 5 amount of time that was allowed to make good 6 losses. 7 Q. Both of those say, "From a purely contractual 8 perspective". 9 A. Mm. 10 Q. Can you assist us, were all subpostmasters on 11 the same contract? Were there different 12 contracts? 13 A. No, you had what I referred to as the 14 "traditional" contracts. So that would be 15 subpostmaster, modified subpostmaster, community 16 subpostmaster. Then you had the contracts that 17 emerged as part of the Network Transformation 18 Programme and they were referred to as 19 operators. So that was an entirely different 20 type of contract and there were -- sorry, and 21 there were lots of variants of those contract 22 types. 23 Q. Were these three bullet points intended to 24 capture all of those different versions of the 25 contract? 57 1 A. Yeah, the latter -- I think the original policy 2 wasn't developed in the life-cycle of Network 3 Transformation. So the latter policy would have 4 been designed to take into account the Network 5 Transformation contracts. 6 Q. So am I right to understand that some 7 subpostmasters would have signed a contract 8 pre-Network Transformation and be operating 9 under whatever contract it is they signed 10 there -- 11 A. Correct. 12 Q. -- others post, but both would be held to this 13 policy? 14 A. Yeah, the policy spanned all postmasters, yeah. 15 Q. Can you assist us with why the reference there 16 is "from a purely contractual perspective, the 17 operator is responsible for"? What do you think 18 is meant there by "purely contractual 19 perspective"? It seems to imply that there's, 20 for example, some discretion over and above what 21 the contract says? 22 A. No, I think I was just making it clear that it 23 was a contractual obligation, not that I thought 24 it was something happening beyond the contract. 25 Q. I mean, you've said in your statement, and 58 1 I think you've really repeated it today, that 2 subpostmasters could write to their Manager, 3 Contracts Adviser or even to the Post Office. 4 A. Mm. 5 Q. Might that be why there's a reference there to 6 the contractual perspective, because the reality 7 was that you could go outside of your contract 8 and make an approach to somebody? 9 A. No, I just don't think that was in my mind at 10 all at that point. As I said, the whole issue 11 of dialling down losses or writing them off, 12 that was a long time ago, you know, in any 13 volume. I didn't see, in 2017/18, that 14 happening but I wouldn't because I wasn't 15 managing the Contracts Advisers or Area 16 Managers. It was something, if it was 17 happening, it was discrete to me. 18 Q. To assist us with time periods, do you mean in 19 the early days, Legacy Horizon, so 20 2000/2001/2002, et cetera, there was still 21 that -- 22 A. No, I mean in the era of manual accounts where 23 postmasters were account managed, had a closer 24 relationship with Area Managers in the field. 25 Q. You don't believe that happened during the 59 1 lifetime of Horizon? 2 A. If it did, I wouldn't have any knowledge of it 3 because, you know, I was in a more senior role 4 and I wasn't managing postmasters directly, 5 except for the time when I was a Contracts 6 Adviser -- Manager in 2002 to 2004. And, even 7 at that point, my recollection is that it was 8 extremely rare to receive these type of requests 9 from postmasters. 10 Q. Looking at those bullet points, the first one 11 is: 12 "Making good any loss of Post Office cash 13 and stock without delay." 14 In fact, so the "without delay" there 15 appears on the left side. 16 A. Mm. 17 Q. There's no real difference there. But the first 18 one is: 19 "Any loss of Post Office cash and stock." 20 The second is: 21 "Any losses incurred whilst operating under 22 their respective contractual agreements that 23 come to light following termination of the 24 agreement." 25 A. Mm. 60 1 Q. The third is: 2 "All losses incurred through their own 3 negligence, carelessness or error and also for 4 losses caused by their Post Office assistants." 5 A. Mm-hm. 6 Q. So the first bullet point we have there is "any 7 loss", so the postmaster is responsible for any 8 loss, and the third one is "all losses save 9 for", for example, it seems, if it wasn't caused 10 by their own negligence, carelessness or error. 11 Can you explain to us why the first of those 12 reads as though any losses must be paid back, 13 but the third reads as though there might be 14 some reasons to excuse a subpostmaster? 15 A. I think that there was a difference between the 16 Network Transformation contracts and the 17 traditional contracts in terms of what the 18 postmaster's obligations were, and I think there 19 was a probably, in the Network Transformation 20 contracts, I think it was the obligations were 21 probably heavier, from memory -- I can't 22 remember specifically how -- than what was 23 placed upon the postmasters who had traditional 24 contracts. I think there was some tightening of 25 the drafting. 61 1 Q. So, in fact, it may have been that the first 2 bullet point was intended to capture those who 3 had signed the post-Network Transformation 4 contract and the third bullet point was intended 5 to capture those who had signed the original 6 subpostmaster's contract? 7 A. It's quite possible but I can't remember 8 specifically what my thinking was at the time. 9 Q. Can you see there potential cause for confusion 10 amongst those who were operating this policy as 11 to whether they were to take action in respect 12 of all losses or just those that weren't caused 13 by their own negligence -- that were caused by 14 their own negligence, carelessness or error? 15 A. Well, I think typically the people managing the 16 whole issue of recovery of losses were either 17 Finance or the Contracts Advisers, and that was 18 their sort bread and butter business, really, 19 part of it, it was recovering debts. And they 20 would always be mindful of what type of contract 21 the postmaster was on when doing that, or should 22 have been. 23 Q. Looking at this document, though, the policy 24 document about recovery of debt, can you see 25 that there could be cause for confusion in 62 1 respect of the circumstances in which you can, 2 in fact, recover debt from subpostmasters? 3 A. If you relied purely on the policy document and 4 weren't cognisant of which type of contract the 5 postmaster was on and the circumstances in which 6 the debt had arisen, yeah, there would be. 7 Q. Separately, was there any thinking at this time, 8 I think you've already given this answer, but to 9 bugs, errors and defects, and how that might fit 10 into -- 11 A. No. 12 Q. -- the situation? 13 A. No. 14 Q. Just before the break, I'll just take you to the 15 community subpostmaster contract that's 16 POL00000246, and it's page 71. So, I mean, we 17 have various different iterations of this 18 policy. 19 A. Yeah. 20 Q. Perhaps if we go over -- sorry, yes. That's 21 fine. On page 71, you have there -- this is 22 under section 8 -- "Responsibility for Post 23 Office's stock and cash" and at paragraph 12 we 24 have a heading "Losses". 25 A. Mm. 63 1 Q. It says there: 2 "The subpostmaster is responsible for all 3 losses caused through his own negligence, 4 carelessness or error, and also for losses of 5 all kinds caused by his Assistants. 6 Deficiencies due to such losses must be made 7 good without delay." 8 So does that assist you, that that looks 9 very much like that third bullet point but not 10 at all like the first bullet point? 11 A. Yeah, I think, looking at that, it's -- that 12 policy spans the sort of more modern Network 13 Transformation contracts and the traditional 14 contracts. 15 Q. Well, it doesn't span both, does it? This is 16 pre-Network Transformation? 17 A. It is, yeah. 18 Q. It has there a provision that refers to 19 negligence, carelessness or error -- 20 A. It does, yes. 21 Q. -- and is quite differently worded to that first 22 bullet point in the policy, isn't it? 23 A. Yeah, that's what I'm trying to say. I think in 24 the Network Transformation contracts, I think 25 the obligations were more onerous upon the 64 1 operator than they were in the traditional 2 contracts and, therefore, the first and third 3 bullet points in the policy document attempts to 4 deal with that. 5 Q. Mr Justice Fraser in the Bates litigation, in 6 one of the judgments, he refers to a case where 7 a subpostmistress received a letter saying that 8 they were contractually obliged to make good any 9 losses that occurred during their term in 10 office, and he remarks that that overstated the 11 position because, as you can see in 12, it's not 12 in fact any losses. 13 Do you think that some of those problems 14 come down to the policy that we've just looked 15 at and the ambiguity between those three bullet 16 points. 17 A. Yeah, it's possible if someone looked back at 18 the policy document and wasn't mindful of which 19 contract the postmaster was on, when they sent 20 a letter, then there is scope for confusion, 21 yeah, I agree. 22 MR BLAKE: Thank you. 23 Sir, that might be an appropriate time to 24 take our mid-morning break. 25 SIR WYN WILLIAMS: Yeah, sure. 65 1 MR BLAKE: If we could come back at 11.35. 2 SIR WYN WILLIAMS: Yes, that's fine. Thank you. 3 MR BLAKE: Thank you very much. 4 (11.19 am) 5 (A short break) 6 (11.35 am) 7 MR BLAKE: Sir, Mr Inwood, I'm going to move on to 8 a different topic and that's the resolution of 9 disputes. 10 You explain in your witness statement that, 11 as Contracts Manager and as Appeals Manager, you 12 were involved in disputes regarding alleged 13 shortfalls and the procedures that they 14 involved. 15 A. Correct. 16 Q. Can you assist us, how would evidence be 17 gathered in respect of that? 18 A. So, for example, if an audit had occurred and 19 there was a discrepancy, significant 20 discrepancy, in the accounts, then the auditors 21 would complete a report about what they had 22 found and then, after the precautionary 23 suspension of the postmaster, if that was 24 necessary, that would be sent to me and, 25 therefore, I would evaluate that report to see 66 1 if there had been a potential breach, material 2 breach of contract. 3 And then a charge letter would be sent to 4 the postmaster, setting out the charge, which 5 could be something like false accounting or 6 misuse of Post Office funds, and then they would 7 be -- they would have the option of making 8 a written representation or have a personal 9 hearing, often attended with a member of the 10 National Federation of SubPostmasters, and they 11 would have the opportunity to present any 12 exculpatory evidence for those charges. 13 And then, based on that and any further 14 investigation that was necessary, because of the 15 outcome of that hearing, then I and other 16 Contracts Managers would draw up a balance sheet 17 of the evidence and determine whether there had 18 been a material breach of contract based on the 19 balance of probability. And once that decision 20 had been made and then, if there had been, then, 21 an evaluation was made as to what would be the 22 most appropriate outcome for POL and the 23 postmaster. 24 Q. Can you assist us with whether there was some 25 sort of disclosure process to subpostmasters 67 1 during that procedure? 2 A. The postmaster should be provided with a copy of 3 the evidence that the Contracts Manager had 4 received from the auditors or the Security team. 5 The Security team were not always involved. It 6 would depend on the circumstances. So they 7 should receive a copy of the inculpatory 8 evidence. 9 Q. We've heard quite a lot about something called 10 ARQ data or the audit data obtainable from 11 Fujitsu itself. Is that something you recall 12 being provided to postmasters? 13 A. I was not aware of that during the period of 14 time I was a Contracts Manager or after that. 15 Q. What kind of period are we talking about, when 16 you would sit on those hearings? 17 A. As a Contracts Manager, it was 2002/03 to the 18 end of, I think, 2004. There was a period of 19 time when I was an Appeals Manager but it's 20 difficult for me to approximate the years during 21 which that was the case. 22 Q. But it would have been after your time -- 23 A. It would have been after 2005 because, to be 24 an Appeals Manager, you had to be at a certain 25 level in the company, senior manager level in 68 1 the company. 2 Q. So we'll start with the first level, Contract 3 Manager. You've said that a representative of 4 the National Federation of SubPostmasters could 5 attend or, I think, you also said in your 6 statement that a friend could attend? 7 A. Or a friend, yes. 8 Q. I just want to take you back to the 9 subpostmaster contract. So that is POL00000246. 10 It's page 93 -- actually, if we could look at 92 11 and 93. Page 92, section 14, seems to govern 12 the appeals procedure, so I think that's the 13 second stage, isn't it? 14 A. Yeah. 15 Q. If we look at page 93, I don't think this is the 16 first stage, is it? This is a different type of 17 investigation for a criminal offence, or do you 18 understand this to have governed that first 19 stage? 20 A. No, I agree with what you just said, yeah. 21 Q. I just want to use an analogy though and, if we 22 turn to page 95, there is reference to friends 23 at investigation interviews? 24 A. Mm. 25 Q. Then if we turn to page 96 at the top there, 69 1 paragraph 19, it says this, in relation to those 2 criminal investigations. It says: 3 "A friend may only attend and listen to 4 questions and answers. He must not interrupt in 5 any way, either by word or signal; if he does 6 interrupt he will be required to leave at once 7 and the interview will proceed without him. 8 Whatever is said at the interview is to be 9 treated as in strictest confidence. The friend 10 may take notes of the interview but he must keep 11 the notes in the strictest confidence. The only 12 communication the friend is entitled to make on 13 behalf of the person who has been questioned 14 will be in the form of a written 'in strictest 15 confidence' statement which may be submitted by 16 the latter, in support of any official appeal 17 which the person questioned may desire to make 18 in connection with the methods followed at the 19 enquiry. No other communication about the 20 interview is allowed (unless made by permission 21 of the Post Office) as it might constitute 22 a breach of the Official Secrets Acts. The 23 questioned officer may, however, if he so 24 desires, communicate the friend's statement to 25 the National Federation of SubPostmasters in 70 1 strictest confidence." 2 As I say, this doesn't apply to those 3 hearings but was a similar regime in place for 4 those hearings, in respect of what the friend or 5 assistant could or could not do? 6 A. I think that the custom and practice, when I was 7 a Contracts Manager, was that the friend who may 8 also be an officer of the National Federation of 9 SubPostmasters could attend the -- what they 10 referred to as the reasons to urge hearing, and 11 it was the case that the NFSP officer would 12 speak on behalf of the postmaster. 13 And I think that was because a lot of 14 postmasters found that to be quite a difficult 15 meeting and were not able to properly articulate 16 their defence or mitigation to the charges, and 17 I think that was custom and practice through the 18 period of time I was a Contracts Manager. 19 Q. If you weren't an officer of the National 20 Federation of SubPostmasters, were you allowed 21 to speak? 22 A. I believe it was custom and practice to make 23 some representation. 24 Q. So if you were attending as a friend, for 25 example -- 71 1 A. Yeah. 2 Q. -- were you allowed to say something? 3 A. I don't think there was any differentiation at 4 the time between what type of friend you were or 5 whether you was an NFSP officer. It just 6 happened to be the case that was people were 7 represented by officers of the NFSP because they 8 had some considerable experience and training in 9 dealing with these issues. 10 Q. Were lawyers allowed to attend? 11 A. No. 12 Q. Do you know the reason for that at all? 13 A. Well, because -- well, I guess if a friend was 14 also a lawyer that wouldn't preclude them from 15 attending but if they were there in a capacity 16 as a lawyer and acting on behalf of their 17 client, that would not be allowed because it was 18 a private matter between the company and the 19 postmaster. 20 Q. Were you assisted at that stage 1 decision by 21 lawyers in the Post Office? 22 A. No, not as a Contracts Manager, no. No, if 23 there was any criminal investigation into the 24 case, that was dealt with entirely separately in 25 a silo from any action that the Contracts 72 1 Manager would take in the civil case. 2 Q. Thank you. Can we look at POL00088982, please. 3 If we look over the page, this is a document 4 drafted by you. 5 A. Mm. 6 Q. Your name is at the bottom of that second page. 7 Then if we turn back to the first page there's 8 handwritten "In Confidence and Draft". Am 9 I right to say you drafted this or this is 10 a draft that you drafted? 11 A. I drafted this policy, yes. 12 Q. I'm not sure if we have the final version of 13 this, and you can tell me if you recall that 14 anything was significantly or substantively 15 different from the version that we're looking 16 at. "Background", it says: 17 "From time to time contracts advisers and 18 appeals managers will be required to give 19 consideration to what would be an appropriate 20 outcome where an agent is found to be culpable 21 of a serious breach of contract. Typically but 22 not exclusively these breaches will be in the 23 form of false accounting and/or misuse of Post 24 Office funds." 25 What kind of period was this in operation, 73 1 do you recall? 2 A. I think the policy was drafted some time around 3 20 -- let me think -- 2014 onwards. 4 Q. Was there a policy before that? 5 A. There was an approach, yeah. I think there were 6 historic policies that existed prior to that, 7 obviously. 8 Q. To what extent did you consider yourself to be 9 qualified to be drafting this policy? 10 A. Because it was a policy that supported people 11 within POL dealing with material breaches of 12 contract or alleged material breaches of 13 contract and it was done with iterations between 14 myself and Legal Services. 15 Q. Who in Legal Services do you recall liaising -- 16 A. I think the principal person would have been 17 Jessica Madron. 18 Q. We see there under "Guidance notes", it says: 19 "In cases where guilt has been proven on the 20 basis of 'balance of all probabilities' ..." 21 Do you recall, was that the test that you 22 applied: guilt on the basis of balance of all 23 probabilities? 24 A. Yes, whether the charges were proven on the test 25 of balance of all possibilities, as opposed to 74 1 beyond any reasonable doubt. The threshold was 2 lower in a civil case. 3 Q. Do you recognise any difficulty, looking at that 4 now, that test. First of all "guilt"; this 5 isn't a criminal matter? 6 A. No, it was loose terminology. I think it was 7 better to say culpability for the charges, yeah. 8 Q. "Balance of all possibilities", it sounds a bit 9 like a conflation between "balance of 10 probabilities", which is a civil test, and 11 "beyond reasonable doubt" or -- 12 A. That was not what I had in mind when I was 13 I drafted it. It was perhaps loose terminology. 14 Q. Do you think that was the test applied by people 15 who were using this policy? 16 A. If they had followed the policy, yeah. 17 Q. When these kinds of policies were being drafted, 18 was there any consideration of what impact bugs, 19 errors or defects in Horizon may have? 20 A. No, the reason that the instructions were given 21 to me to develop this policy is because the 22 company was concerned that there weren't a broad 23 enough array of options to apply, where it had 24 been proven that there had been a material 25 breach of contract, and that ties in with the 75 1 belief that there were, you know, perhaps too 2 many suspensions and, you know, outcomes were 3 problematic for the company in terms of 4 maintaining continuity of service. 5 So the policy prescribed additional outcomes 6 that could have been applied by Contracts 7 Advisers, for example, a suspended termination, 8 where it was believed that termination was not 9 appropriate in the circumstances. So it was 10 just driven by providing a broader array of 11 options for Contracts Advisers. 12 Q. So, if we scroll down, we can see there are 13 aggravating factors and mitigating factors that 14 might assist in making a decision as to how to 15 deal with a contract breach and, as you say, 16 this policy was implemented because there was 17 a concern that too many people were having their 18 contracts terminated or suspended? 19 A. No, no, no, I think it was -- the main driver 20 was that the Contracts Advisers needed to have 21 a broader array of options in terms of the 22 outcome of the case, that was the main driver 23 for the policy. 24 Q. Because, prior to that, the only option would be 25 to suspend or terminate? 76 1 A. Yeah, it would be binary. Yeah, well, 2 a precautionary suspension would be a precursor 3 to this process and then, once this process had 4 started, then the options were that either the 5 postmaster would be reinstated or that the 6 contract would be summarily terminated. 7 Q. They needed, aggravating, mitigating factors, 8 more options; was that not driven by the fact 9 that they were experiencing a high level of 10 terminations? 11 A. I think there was a background concern in the 12 company that there were too many suspensions, 13 too many cases where we were losing Post Office 14 services in some communities and not being able 15 to maintain those after the fact of termination. 16 Q. You say this was 2013, did you say, or -- 17 A. I think it was around 2014, perhaps. 18 Q. So a fair amount of time after, for example, 19 that Computer Weekly article that we've talked 20 about or the correspondence from the journalist 21 to the Member of Parliament about complaints 22 about -- 23 A. Yeah, I don't believe there was a nexus between 24 the two. 25 Q. No, and do you think there should have been 77 1 a nexus between the two, in that bugs, errors or 2 defects in Horizon might have been something to 3 consider during this -- 4 A. Yeah, with hindsight, I think that, as part of 5 the whole process around suspension, dealing 6 with alleged material breaches of contract, as 7 I said earlier, I think there should have been 8 a process in place where the possibility of 9 a discrepancy being caused by software errors, 10 bugs, should have been ruled out as a possible 11 cause prior to contractual action being taken. 12 Q. I'm going -- sorry. 13 A. I can see why it would be necessary to issue 14 a precautionary suspension upon the advent of 15 a significant discrepancy in a postmaster's 16 accounts. But, in that period of suspension, 17 I think there should have been more diligence by 18 the company in flushing out any possible IT 19 causes. 20 Q. Moving to appeals, you said you were an Appeals 21 Manager? 22 A. I was, yes. 23 Q. In your statement, you referred to conducting 24 your own investigation as part of that process? 25 A. Mm. 78 1 Q. What exactly did that involve? 2 A. Well, the purpose of the appeal was to rehear 3 the case, so looking at any inculpatory and 4 exculpatory evidence and then examining both 5 and, if necessary, conducting a further 6 investigation into the facts internally, prior 7 to reaching a conclusion. 8 Q. In terms of, say, audit data, do you think you 9 were capable of properly understanding audit 10 data and obtaining the right information from, 11 for example, Fujitsu, if required? 12 A. I think the audit report would be taken at face 13 value by any Appeals Manager. 14 Q. Was that because the Appeals Manager didn't have 15 the right skillset to analyse those kinds of 16 things? 17 A. I don't think they would have been able to 18 analyse the data but, at that point in time, it 19 wouldn't have entered my mind or any Appeals 20 Manager, I don't believe, to test whether the 21 discrepancy had been caused by failures in the 22 system. 23 Q. If a subpostmaster had said that losses were 24 arising because of a software error, what would 25 you be able to do as part of your investigation 79 1 to get to the bottom of that? 2 A. Well, that would be raised internally and I'd 3 have to investigate how to determine whether 4 that was the case or not. I can't remember 5 a case when I was an Appeals Manager where that 6 was the -- was raised with me internally, but 7 the number of appeals you would hear were very 8 small. You know, if you heard one a year, you 9 know, that would be normal. There was quite 10 a large panel of appeals managers. So it was 11 difficult to get a sort of holistic view about 12 whether that was being raised a lot at the 13 appeals stage. 14 Q. You've said that at the first stage you weren't 15 assisted by lawyers. At the appeals stage, was 16 there legal involvement at all? 17 A. No, no. 18 Q. If I could go back to the contract, so that's 19 POL00000246, page 92, where it addresses the 20 appeals procedure. 21 If we could look at the bottom of page 92, 22 please, there's a reference there to appeals and 23 then it says, "Approaches to persons outside the 24 Post Office", paragraph 6. It says: 25 "Until the subpostmaster has exercised his 80 1 final right of appeal, he should not ask persons 2 outside the Post Office to take up the case on 3 his behalf although this does not prevent 4 a subpostmaster from obtaining such advice and 5 support from the NFSP or any other outside 6 person as may help him to present his case 7 effectively. The subpostmaster should not 8 detain Post Office papers or allow them out of 9 his custody for the purpose of such consultation 10 without the permission of the Retail Network 11 Manager." 12 Can you assist us with the purpose of that 13 provision? 14 A. I think the view internally was that, at that 15 stage, it was purely a private contractual 16 dispute between us and the postmaster and that 17 there was a process internally to manage that. 18 Once that process had exhausted, of course, it 19 would have been open for the postmaster to take 20 whatever course of action they thought was 21 appropriate, if they felt that the outcome of 22 the case was unsafe or unfair. 23 Q. Who is it preventing a subpostmaster from making 24 contact with? 25 A. Well, anyone, anyone outside of the company, 81 1 really. 2 Q. We discussed earlier the problems involved with 3 the inability for subpostmasters to find out 4 about similar problems that other subpostmasters 5 were experiencing. 6 A. Yeah. 7 Q. Do you see this provision as causing any issues 8 in that regard? 9 A. Well, it may or would make them think that, you 10 know, they were having to deal with this in 11 a sort of silo, almost, and that they weren't 12 able to openly discuss the circumstances of the 13 case with other people or share information with 14 other people. 15 Q. Do you recall any cases that you were involved 16 in that were overturned on appeal? 17 A. I think when I was a Contracts Manager there was 18 one case that was heard by Lin Norbury, who was 19 an Appeals Manager at the time, that was 20 overturned. 21 Q. So that's one case in a two/three-year period? 22 A. In a two or three-year period. I think there 23 was some information internally that said, 24 I think, around 10 per cent of appeals were 25 upheld, you know, that -- 82 1 Q. In terms of your personal experience and 2 personal knowledge, you're only aware of one? 3 A. I'm only -- I can only recall one that would 4 have happened in, like, a three-year period but 5 I can't remember how many terminations that 6 I would have been involved in over that period. 7 Q. That's when you were the Contracts Manager. 8 What about when you were -- 9 A. Contracts Manager, yeah. 10 Q. -- sitting on the appeals? Did you ever 11 overturn an appeal? 12 A. No. 13 Q. I'm going to move on to -- 14 A. I think you meant uphold an appeal? 15 Q. Yes. Sorry. 16 A. No. 17 Q. Thank you. I'm going to move on to what happens 18 when you've been terminated, when your contract 19 has been terminated. Can we look at 20 POL000075610, please. This is a 2009 policy 21 where you are the author? 22 A. Yes. 23 Q. You're named as the author. Do you recall 24 writing this or being responsible for it? 25 A. Yeah, I've got some recollection of, you know, 83 1 looking at that document now, yeah. Yeah. 2 Q. Do you think you wrote it? 3 A. Yeah, I would have authored that approach, yeah, 4 yeah. It's got my name on it, yeah. 5 Q. If we look at the bottom of the page it explains 6 what the change is. It says: 7 "For agents who have had their contracts 8 summarily terminated by Post Office Limited, or 9 who, in our opinion, have resigned to avoid 10 termination, it is important that we are open 11 with them in communicating the possible outcome 12 of that decision in respect of what type of Post 13 Office operating model, if any, we determine is 14 appropriate in the locality." 15 A. Yeah. 16 Q. "One of these outcomes may be the deployment of 17 a different operating model, eg Post Office 18 essentials, to that currently used." 19 It says on that final paragraph on the 20 screen: 21 "It is important to note here that 22 subpostmasters do not have any right of 23 assignment of their Post Office business, so any 24 enquiries in that respect should be managed 25 using the normal reactive lines", et cetera. 84 1 Can you assist us with what this all means? 2 A. This is in the context of, like, a set piece 3 business transformation programme where the 4 business had developed a different type of Post 5 Office operating model. I think the document 6 refers to Post Office essentials, which was 7 a forerunner of the local Post Office model that 8 was implemented as part of the Network 9 Transformation Programme. 10 So the purpose of the document was to say 11 that, in the event of termination or resignation 12 to avoid termination, we need to be open with 13 the outgoing postmaster that it may not be the 14 case that a traditional contract -- a Post 15 Office with a traditional contract, is deployed 16 in that location. 17 Clearly, an outgoing postmaster would be 18 perhaps advertising their retail business for 19 sale with the concession of a Post Office within 20 it. So it was necessary for them to understand 21 what type of post office, so that they could 22 inform any potential buyer. 23 Q. So might it be that a subpostmaster's contract 24 is terminated? 25 A. Mm. 85 1 Q. They're then left with a post office and they 2 then need to find another subpostmaster, sell 3 it, et cetera, and this document is telling them 4 or is outlining the position that actually they 5 might be left with something -- 6 A. Something different to what was there, yeah. 7 Q. Typically something less than what was there? 8 I mean, Post Office essentials sounds perhaps 9 smaller, or -- 10 A. I think the remuneration aspect was different in 11 Post Office essentials because it was on a fully 12 variable basis so, on a traditional contract, 13 the subpostmaster would receive a fixed payment 14 plus a variable payment. On the more modern 15 operating models, it was on a fully variable 16 basis. It's quite an important distinction if 17 you're thinking about buying a business that has 18 a post office in it. 19 Q. So potentially less profitable? 20 A. Potentially, yeah. 21 Q. If we are thinking about implications for 22 subpostmasters once their contract has been 23 terminated, are we to read into this document 24 that not only would they lose their contract but 25 they might suffer financial harm because their 86 1 post office is less sellable than it perhaps was 2 before their termination. 3 A. Yeah, that's quite possible, yeah. 4 Q. Thank you. I'm going to look at a few other 5 policies. I'll take them quite quickly. They 6 address issues such as suspension and contract 7 breach, for example. 8 Can we look at POL00005933. This is a 2012 9 policy, "Precautionary Suspension Policy". 10 I think you've mentioned before precautionary 11 suspension? 12 A. Mm. 13 Q. Can you briefly summarise for us what 14 precautionary suspension was? 15 A. Well, that would normally be where there had 16 been a bad audit with a significant discrepancy, 17 and there would need to be a process following 18 that. So a precautionary suspension may be the 19 most appropriate thing to do at the time. 20 Q. We see there you're the owner of that particular 21 policy? 22 A. That's correct. 23 Q. Can we turn to page 3, please. It's 3.3. It 24 says there: 25 "[The Post Office] may consider it to be in 87 1 its interests to spend the Operator of a Post 2 Office branch if it deems there is a risk to its 3 brand and reputation, cash or stock or the 4 interests of our customers." 5 3.13, over the page to page 4, says: 6 "During the period of any suspension [the 7 Post Office] will cease all payments to the 8 suspended Operator." 9 So am I to understand that a subpostmaster 10 may be suspended on a precautionary basis -- 11 A. Mm. 12 Q. -- and the result of that is that the Post 13 Office will stop paying the subpostmaster? 14 A. That's correct. What would happen in that case 15 is that we would seek to appoint a temporary 16 postmaster to operate from the premises. He 17 would negotiate some payment with the suspended 18 agent for consideration for using the premises, 19 and then the remuneration would go to the 20 temporary postmaster. 21 Q. Thank you. Another policy, POL00086116. This 22 is the "Guiding principles for suspension". So 23 that's substantive suspension, is it, rather 24 than precautionary suspension? 25 A. I think there was only precautionary suspension, 88 1 yes. 2 Q. Thank you. Were you involved in the drafting of 3 this document? 4 A. What was the date of the -- 5 Q. I don't think this document is dated. If we can 6 zoom out, please? 7 THE WITNESS: Okay, is it possible to have 8 a five-minute comfort break? 9 MR BLAKE: Yes, absolutely. 10 THE WITNESS: Okay, thanks. 11 MR BLAKE: Sir, can we break until 12.15? We have 12 plenty of time today. 13 THE WITNESS: Thank you. 14 (12.07 pm) 15 (A short break) 16 (12.15 pm) 17 MR BLAKE: Thank you, sir. 18 Mr Inwood, one final policy before I move on 19 to two very small discrete issues. It is 20 POL00088475. This is a 2014 policy with you 21 named as the owner and it's entitled "Contract 22 Breach". Can you just briefly assist us with 23 how this policy fits in with the various 24 policies that we've already seen. 25 A. I think this was probably the most recent 89 1 iteration of the policy and I think it was at 2 the request of Angela van den Bogerd, she was 3 the sponsor of this work. So it was just 4 something that I worked up with Legal Services, 5 really, that was deployed into the contracts 6 community. 7 Q. Thank you. At page 2 it sets out at the very 8 top the purpose; does that assist you in its 9 purpose? 10 A. Yes. 11 Q. This policy and the previous policies that we've 12 seen today, am I right in saying that there was 13 nothing in those policies about how to deal with 14 situations where there are bugs, errors or 15 defects in the system? 16 A. No. 17 Q. Thank you. I'm going to move on to a different 18 topic and that's involvement in criminal and 19 civil proceedings. I think you said in your 20 statement that it was rare to receive contact 21 from lawyers and that you played no part in 22 criminal prosecutions and don't have 23 recollection of civil cases. 24 A. Criminal cases. 25 Q. Of criminal cases. Now, I can show you a number 90 1 of different documents but perhaps I'll just ask 2 you the open question as to whether you've 3 reconsidered that position since you've seen 4 documents? 5 A. I can recall one particular case, I think, when 6 I was a Contracts Manager, 2003/2004. I think 7 it was some contact from Jarnail Singh, who was 8 involved in the criminal prosecutions team. But 9 it was only that. It was just to inform me of 10 progress and to find out progress with the 11 contractual case. There may be others that 12 I wasn't able to recall when I completed the 13 witness statement, of course. 14 Q. Did you ever give evidence in criminal 15 proceedings? 16 A. Only when I was a branch manager in the Crown 17 Office estate and a case of a POL employee, and 18 I think I was called to give evidence in one 19 other case as an expert witness. I think it was 20 a postmaster, something that I wasn't directly 21 involved in. 22 Q. When you say an expert witness, in what way were 23 you an expert witness? 24 A. That can provide an insight into branch 25 accounting procedures. It was to do with 91 1 an issue of something that was known as British 2 Excursionary Document and they were being issued 3 inappropriately to members of the public. So 4 I think the court just needed to know what the 5 correct procedure was, in terms of validating 6 a person's identification. 7 Q. Was the Post Office a party to that case? 8 A. I can't remember if they were the prosecuting 9 authority, no. 10 Q. Because you've described yourself as an expert, 11 did you know the difference between an expert 12 witness and somebody who isn't an expert 13 witness? 14 A. Well, someone who isn't an expert witness 15 wouldn't know a great deal about the subject and 16 I did know a great deal about the subject. So 17 that's why I described myself in that way. 18 Q. Were you ever told by anybody in the Post Office 19 Legal team, for example, about the duties to 20 a court that an expert witness owes? 21 A. No, I don't think there was any discussion. 22 I think it was the Post Office Investigation 23 team that had asked me to appear. It was an odd 24 one because it just wasn't a case I'd been 25 directly involved in. 92 1 Q. Do you recall who in the Post Office 2 Investigation team? 3 A. No, it was a-- that was a long time ago when 4 I was a branch manager, so I think it was 5 probably some time in the 1990s. 6 Q. Thank you. I'll take you to a few documents 7 very quickly. Can we look at POL00086582, 8 please. This is a discussion with somebody 9 called Victoria Brooks, who was an associate at 10 Bond Pearce, about a case that involved a branch 11 called Newcastleton branch. Halfway down the 12 page, she says there: 13 "You have seen my emails with Roderic and 14 Paul Inwood regarding the interview process, 15 where this comes from and whether it is 16 necessary. Paul has said that these points 17 would be picked up as part of a review that is 18 imminent, so for now I have proceeded on the 19 basis that [the Post Office] wants to allow the 20 opportunity for an interview to take place." 21 Can you assist us, does this assist you with 22 the types of occasion when you would come into 23 contact with lawyers? 24 A. Well, I was working with Legal Services very 25 closely all of the time, so it wasn't something 93 1 that was odd for me to have emails from Legal 2 Services about individual cases. 3 Q. Can we, please, also have a look at POL00072146, 4 the second page here. You're copied into 5 an email from Mandy Talbot and it's about the 6 Marine Drive Post Office, that's a Post Office 7 that was previously run by Lee Castleton, and 8 she says about halfway down the page: 9 "Given the problems we had with Castleton 10 I would have thought that [the Post Office] 11 would be happy if a prospective permanent 12 postmaster had come along? Can the BDM or the 13 Contracts Manager for the relevant part of the 14 country advise whether or not she ever applied 15 for the position at Marine Drive or at another 16 branch and if so what the response was." 17 Does this assist you in recalling what if 18 any involvement you had with the legal case 19 against Lee Castleton or what followed that 20 case? 21 A. No, I think it was -- this was an issue around 22 a temporary postmaster and there was some, when 23 I read this earlier there was some issue around 24 whether they would receive a termination 25 payment, which clearly wasn't appropriate for 94 1 a temporary postmaster. And I think there was 2 concerns about the fact that she felt that she 3 was entitled to such a payment. 4 Q. Would you be consulted by the Legal team about 5 contractual matters involving subpostmasters? 6 A. From time to time, yeah, in the context of 7 a civil case, yeah. 8 Q. Do you recall Mandy Talbot? 9 A. I'm familiar with the name and I think perhaps 10 she was involved in criminal prosecutions side. 11 I'm not entirely sure. 12 Q. If we look at the email, it has, on the next 13 page "Mandy Talbot, Dispute Resolution, Company 14 Secretary's Office". Does that assist you? 15 A. Err -- 16 Q. Do you recall, for example, how senior she was, 17 or how senior you understood her to be? 18 A. I think she was probably around the level of 19 principal lawyer, around the same level as 20 Jessica Madron. 21 Q. What did you understand by the same principal 22 lawyer? 23 A. Well, not a paralegal, you know, someone who had 24 direct reports, you know, solicitor working for 25 them, or some -- you know, job titles tend to be 95 1 determined by whether you had direct reports or 2 not. 3 Q. Direct reports to who, sorry? 4 A. Into them. 5 Q. Yes. 6 A. So she may have had a solicitor working for her 7 or a paralegal. 8 Q. In your understanding of that Legal team, 9 looking at this or recalling from this 10 discussion about the Lee Castleton case, can you 11 give us your understanding of whether she was 12 a case worker or something more significant? 13 A. I can't recall, sorry. 14 Q. Can we look at POL00041427, please, page 2. 15 An email from yourself to Jessica Madron and 16 Rodric Williams and it says, if we could scroll 17 down: 18 "We'll need your help with this case please 19 as there is an indication that it may be heading 20 towards litigation." 21 Does that assist you at all in your 22 involvement in litigation against subpostmasters 23 and the role that you had? 24 A. I think it would be very infrequent if at all. 25 As I said to you earlier, the whole management 96 1 of the civil aspect of a dispute was sort of in 2 a silo from any criminal prosecution. I don't 3 believe anyone would come to me for advice about 4 how to manage a criminal prosecution but would 5 come to me for advice about how to manage the 6 civil aspect of the case. 7 Q. The Inquiry has heard evidence suggesting that 8 actions taken by Contracts Managers, for 9 example, in some way, formed part of 10 a prosecution case against a subpostmaster. 11 Were you aware of the actions that you were 12 taking as Contracts Manager? 13 A. No, it was the opposite to that. As I said 14 earlier, I don't think there was any nexus 15 between the two. I was trained to treat the 16 civil aspect of a case entirely separately from 17 the criminal aspect of the case. That's because 18 the burden of proof in the two is completely 19 different. And, as I said earlier, it was very 20 rare for me to -- in the context of the whole 21 number of cases that would cross my desk, would 22 be to hear about the criminal aspect of a case, 23 as opposed to the civil aspect. 24 Q. Were you aware that information that you 25 gathered, for example, might subsequently be 97 1 used in a criminal prosecution? 2 A. I'm not -- I can't think of any examples where 3 it was because, in the context of a civil aspect 4 of the case, I can't recall being asked to 5 provide any evidence by someone -- 6 Q. Would you have known if information that you 7 gathered as part of your processes was 8 subsequently used in a -- 9 A. Not necessarily, you know, because once the case 10 had been put to bed, you know, the paperwork 11 would be retained for six or seven years in the 12 ex-postmaster's papers and I guess it would have 13 been possible for someone looking at the 14 criminal prosecution to call those papers in and 15 look at them but I wouldn't have been alerted to 16 that fact, had it happened. 17 Q. The final topic I have is Second Sight. You say 18 in your statement that you had no involvement 19 with Second Sight. 20 A. Yeah. 21 Q. You've subsequently seen some documentation. 22 Does that assist you at all? 23 A. I've seen documentation where I was copied in to 24 either an email or a document that was being 25 developed to inform the response to Second 98 1 Sight. 2 Q. Perhaps I can show you POL00022167. If we go to 3 the final page here, page 4 has your name there, 4 2014? 5 A. Yeah, it does, yeah. 6 Q. If we look at the first page it explains what it 7 is. "Second Sight Mediation Briefing Report". 8 Do you remember writing this report? 9 A. No. 10 Q. It may be difficult to say why you don't 11 remember it but it wasn't so long ago, 2014? 12 A. Well, it's nearly 10 years ago. 13 Q. Is there a reason why issues relating to Second 14 Sight you I can't recall, certainly haven't 15 detailed in your witness statement? 16 A. It was something I was aware of and it's clearly 17 something I've helped draft a response to, but 18 it's not something that really stuck in the 19 mind, really. 20 Q. Perhaps if we could look at POL00021853. It's 21 an email of 27 August 2014. You're listed there 22 as a copy recipient. 23 A. Mm. 24 Q. If we could scroll down a little bit, thank you 25 very much. It's an email chain commenting on 99 1 the Second Sight Part Two report. Why might you 2 have been included in that email distribution 3 list? 4 A. Why would I have been? 5 Q. Yes. 6 A. Because someone believed I needed to see it. If 7 they were asking for a specific comment, I think 8 that would be different. 9 Q. Do you know why you in your particular role at 10 that particular time may have been included in 11 the distribution list. Looking at the names 12 there, for example, what is it that you might 13 have added or why you might have needed to see 14 that? 15 A. I think it was -- as I said earlier, it was 16 quite common for me to be copied in to email 17 chains for anything pertaining to postmasters, 18 as a sort of comfort blanket, you know, in case 19 I could read it and think of something where it 20 added value to the conversation in the email. 21 Q. Do you recall reading the Second Sight Part Two 22 report? 23 A. No. 24 Q. There are other emails, two other emails, I can 25 give the references, I won't bring them up on 100 1 screen: POL00021883 and POL00022240. Again, 2 you're part of a small distribution list -- 3 A. Yeah. 4 Q. -- that is addressing the Second Sight Part Two 5 report? 6 A. Mm. 7 Q. Is it -- it's not something that you recall 8 discussing with anybody at the time? 9 A. Not really, no. Not at all. 10 Q. I mean, looking at the names, were they people 11 who you had regular conversations with? 12 A. The whole Second Sight thing, I think it was 13 intended to be managed in a silo by Legal 14 Services. Obviously, I had been copied in to 15 email chains but it's something that I could add 16 very little value to. So I didn't take a huge 17 interest in what was going on. 18 Q. Who in particular? You say Legal Services. 19 A. I think the General Counsel, Susan Crichton, who 20 I think was instructed to appoint Second Sight. 21 Generally, some fairly senior lawyers were 22 involved in that. 23 Q. The Second Sight report contained some aspects 24 that were critical about the Horizon system. 25 A. It did. 101 1 Q. This is 2014. We started today with that 2018 2 interview with the solicitors where, you'll 3 recall, Horizon's a calculator, no problems, 4 et cetera, et cetera? 5 A. Mm. 6 Q. Is it slightly strange that it didn't feature 7 more prominently in discussions with you and 8 those individuals? 9 A. I think there was a narrative that was beginning 10 to develop in the company that was quite 11 dismissive and unhappy with some of the findings 12 that the Second Sight had arrived at and it's 13 not really what they wanted. 14 Q. Who, in particular? 15 A. I think that, around that point, the General 16 Counsel left the company quite quickly, Susan 17 Crichton. 18 Q. Other than what you've read in the media 19 subsequently, is there anything that you knew at 20 that time or know now as to the reasons for her 21 departure? 22 A. I think internally there was a -- sometime 23 after, there was a feeling that she felt that 24 she was being blamed for the developments with 25 Second Sight. I mean, when General Counsel 102 1 leaves the company quite rapidly, clearly there 2 is a reason for that. 3 Q. Were there any discussions you had in that 4 regard? 5 A. No, that wouldn't have been at my level. I'm 6 referring to anecdotes within the organisation 7 that I overheard. 8 Q. You've said that there was unhappiness about 9 that Second Sight report? 10 A. Mm. 11 Q. Was that from her or directed towards her? 12 A. I think it was the latter. 13 Q. Who would be directing it towards her? 14 A. Probably people at ExCo level. 15 Q. Can you assist us with that? 16 A. I think it may have been Paula Vennells. 17 Q. Is that through any particular knowledge, any 18 particular discussions with anybody? How is it 19 that you reached that conclusion? 20 A. Overhearing anecdotes and conversations 21 internally, some time after the fact. 22 Q. Can you give us an approximate time for those? 23 A. Well, from -- it's difficult to approximate 24 when. 25 Q. We know you left in 2018, so presumably it was 103 1 in between 2014 and 2018? 2 A. Correct. 3 MR BLAKE: Thank you. 4 Sir, I don't have any further questions. 5 I know Mr Stein has a small number of questions. 6 Do you, sir, have any questions before Mr Stein? 7 SIR WYN WILLIAMS: Can you hear me, Mr Blake? 8 MR BLAKE: I can, yes. 9 SIR WYN WILLIAMS: Fine, because there's a glitch on 10 the IT on my side of this. I can't mute or 11 unmute myself. Anyway, I will remain on unmute. 12 I haven't got any questions, no, thank you. 13 MR BLAKE: Thank you, sir. Mr Stein? 14 Questioned by MR STEIN 15 MR STEIN: Mr Inwood, my name is Sam Stein 16 I represent a large number of subpostmasters and 17 subpostmistresses. 18 Just that last point, you've been discussing 19 with Mr Blake about Second Sight and the Second 20 Sight report. Your answer to him a few minutes 21 ago was that, in agreement with him, was that 22 the Second Sight report raised concerns, and 23 your answer to him was "It did". 24 Now, help us understand a little bit more 25 about your evidence about this. 104 1 A. Mm. 2 Q. You were aware of the contents of the Second 3 Sight report when it came out? 4 A. I don't believe that I ever read it. 5 Q. So is this in the same way that you've discussed 6 with Mr Blake the fact that there was discussion 7 within the company about such things? 8 A. There was corridor talk -- 9 Q. Corridor talk? 10 A. -- around the fact that the company were not too 11 happy with the way it was going. 12 Q. Well, the Second Sight report did set out that 13 there had been defects and difficulties within 14 the Horizon system, that those had been noted, 15 and that there were problems, to a certain 16 extent, based upon the information they had at 17 the time. So the Second Sight report seems to 18 have been discussed amongst people in the 19 corridors, as you say, with knowledge that it 20 was showing some defects in the system; is that 21 fair? 22 A. I believe so, yeah. 23 Q. Right. The reason why I ask you that is that at 24 paragraph 98 of your statement -- and, sir, the 25 statement is WITN05780100, paragraph 98, page 17 105 1 of 28 -- that you talk about, during the final 2 year of your service: 3 "... I had heard that it was possible for 4 Fujitsu engineers to gain 'backdoor' access into 5 the system without the knowledge of 6 subpostmasters." 7 A. Mm. 8 Q. You then go on to say: 9 "That did give me some cause for concern as 10 I had previously heard a rebuttal to this 11 internally." 12 A. Mm. 13 Q. Next sentence: 14 "That aside I was not aware of any concerns 15 regarding the robustness of the Horizon system." 16 Now, your last year of service, unless I've 17 got this wrong, was 2018; is that right? 18 A. Correct. 19 Q. Okay. So the sentence there that says, "That 20 aside I was not aware of any concerns regarding 21 the robustness of the Horizon system", is not 22 true, is it? 23 A. Not from postmasters. When I completed that 24 statement I was thinking in terms of specific 25 examples from postmasters, regarding flaws in 106 1 the Horizon system. 2 Q. Well, let's read onwards. 3 "That aside I was not aware of any concerns 4 regarding the robustness of the Horizon system. 5 I had used the system myself on occasions, over 6 a long period of time, and it had appeared to 7 work well. I had not seen any evidence that it 8 was not working well. I had heard of a campaign 9 by the Justice for Subpostmasters group, however 10 we were assured internally that the system was 11 sound." 12 A. Mm. 13 Q. Well, you had had concerns brought to your 14 attention in corridor discussions -- 15 A. Well, they weren't brought -- 16 Q. -- relayed in relation to and in discussion in 17 relation to -- 18 A. Yeah, they weren't -- 19 Q. -- the second Sight report? 20 A. Yeah, but I'm referring to anecdotes internally 21 regarding some disquiet about Second Sight, 22 generally. I'd not uncovered any specific 23 examples that demonstrated to me that there were 24 flaws in the system. 25 Q. Well, let's just nail this down. Why did you 107 1 say at paragraph 98 that you were not aware of 2 any concerns regarding the robustness of the 3 Horizon system? 4 A. Yeah, well -- 5 Q. When, in fact, you knew, going back in time to 6 the Second Sight report, in corridor 7 discussions, that it was raising concerns? 8 A. I think people were being dismissive about the 9 findings of Second Sight and narrative 10 internally was that, you know, these are 11 forensic accountants not lawyers. How could 12 they have concerns with regards to the fairness 13 of the contracts? You know, I'm talking -- in 14 the statement I'm talking about the fact that 15 I wasn't aware that there were specific examples 16 bought to my attention directly regarding the 17 integrity of the system. 18 Q. Well, Mr Inwood, what it says, "I was not aware 19 of any concerns" -- 20 A. Yeah, I understand of that. 21 Q. -- when concerns are being raised. 22 A. Well, let me elaborate -- 23 Q. Well, why didn't you actually get it right in 24 your statement and actually say "I was aware of 25 problems in the Second Sight Report but, in 108 1 fact, I was told by X or Y to ignore it"? 2 A. Well, I've made it clear to you now. 3 Q. You've also mentioned in your evidence about -- 4 you said something about the Tier 1 helpline -- 5 A. Mm. 6 Q. -- and you described it in this way, that -- you 7 were discussing with Mr Blake the fact that the 8 helpline didn't seem to have much by way of 9 operational discretion and you spoke about 10 sticking to scripts. 11 A. Mm. 12 Q. Okay. Now, help us, please, understand, how 13 many tiers operated in the helpline? 14 A. I don't know. I wasn't directly involved in 15 that area of the business. 16 Q. Well, we know there's Tier 1, that seems to 17 suppose there's more than one tier? 18 A. Yeah, but you asked me how many and I'm not 19 aware of that. 20 Q. Well, all right, what did the other tiers, other 21 than Tier 1, do? 22 A. I don't know. I wasn't directly involved in 23 that part of the business. Refer -- Tier 1 24 would refer issues that they could not deal 25 with -- 109 1 Q. To? 2 A. -- up the chain of command to Tier 2, and 3 beyond. If there was a beyond. 4 Q. Right. So you didn't have any information 5 about, what, maybe Tier 2, 3, 4, 5? 6 A. That wasn't a sphere of the business that I had 7 any involvement or oversight with, no. And it 8 would change from time to time in business 9 reorganisation, so no. 10 Q. Okay. Can we have on the screen, please, POL -- 11 this a document we looked at earlier -- 12 POL00006666, page 46, please. Roughly the 13 middle of the page, where we see a "VB: 64.8" 14 right. So if you could highlight, please -- 15 thank you very much. 16 You see where it's just been kindly 17 highlighted at "VB: 64.8", now this is the 18 discussion that you had. It's saying this: 19 "... is Post Office should communicate or 20 alternatively not conceal known problems, bugs 21 or errors in or generated by Horizon that might 22 have financial and other resulting implications 23 for claimants?" 24 A. Mm. 25 Q. Okay, right. Now, with all due acceptance that 110 1 that particular sentence is being written down 2 perhaps as it's said conversationally, then your 3 answer: 4 "I agree entirely and if we did do that it 5 would be entirely inconsistent with our values 6 as an organisation and I do not believe that any 7 individual or individuals would do that in this 8 organisation." 9 A. Mm. 10 Q. Okay. So help us understand what you're saying 11 here. Are you saying there that you felt that 12 the organisational values were not to keep back 13 or hold back information about the operation of 14 the Horizon system errors, bugs and problems? 15 A. I think it -- generally the values of the 16 organisation would be to be open, transparent 17 and honest at that point in time. 18 Q. What point in time are you talking about? 19 A. At the point in time that I made that statement, 20 which is 2018 -- 21 Q. What the year before? Completely dishonest and 22 wouldn't trust them an inch? 23 A. No, at that point in time and before that. 24 Q. So you're saying, generally, that's your view of 25 the system? 111 1 A. Of the organisation. 2 Q. Okay. 3 A. Yeah. 4 Q. Now, the bottom of the page, please, "64.10", 5 I think it is. Right, here we go. Yes. So 6 again, highlight, please, "VB: 64.10". Thank 7 you very much. This is a reference: 8 "... not to conceal from claimants Post 9 Office's ability to alter remotely data or 10 transactions upon which the calculation of the 11 branch accounts and any discrepancy or alleged 12 shortfall is depended. I am not sure whether 13 you would comment on that or are not sure about 14 that?" 15 Then your answer: 16 "I am aware why this has been put in there 17 but I cannot comment on whether we do have the 18 ability to do that or not. I suspect it goes 19 back to a rogue individual in Fujitsu saying 20 that they could [not] manipulate and 21 individual's agents' accounts I do not know 22 whether this is true or not." 23 Okay? 24 A. Mm, mm. 25 Q. So we've got two parts of the same page, one you 112 1 saying you think that the ethos of the Post 2 Office is good, and that, no doubt, bugs and 3 errors, if found, would be discussed and, 4 secondly, regarding altering the system, you 5 didn't know about any ability to do that, other 6 than some bloke or some person in Fujitsu? 7 A. At that point in time. 8 Q. At that point in time, okay? 9 A. Yeah. 10 Q. Then your statement, just as a reminder, you say 11 this, the paragraph we've looked at: 12 "During the final year of my service, I had 13 heard that it was possible for Fujitsu engineers 14 to gain 'backdoor' access into the system 15 without the knowledge of subpostmasters. That 16 did give me some cause for concern as I had 17 previously heard a rebuttal to that internally." 18 A. Mm. 19 Q. Okay, let's add two things together. This 20 possibility that you talk about in your 21 statement for Fujitsu engineers to gain backdoor 22 access to the system without the knowledge of 23 subpostmasters, where did you get that idea 24 from, that you talk about in paragraph 98? 25 A. It's something that I heard after the witness 113 1 proofing statement. So in the first quarter of 2 2018, I think -- 3 Q. Right. 4 A. -- after I made the statement. 5 Q. Right. You go on to say: 6 "That did give me some cause for concern as 7 I had previously heard a rebuttal for this 8 internally." 9 Who did you hear the rebuttal from? 10 A. It was a rumour internally that a senior manager 11 had rebuked someone else for suggesting that it 12 was possible for Fujitsu engineers to access the 13 system remotely. 14 Q. Forgive me for interrupting, Mr Inwood, the 15 senior manager being -- 16 A. Alwen Lyons, the company secretary. 17 Q. Say it again? 18 A. Alwen Lyons, the company secretary. 19 Q. Right. Okay. Now, I'm going to take you to 20 another document, please, which is FUJ00081584. 21 I don't believe you've had this before but it 22 relates to the evidence you've given on these 23 two matters. Can we just go through who we've 24 got here. This document is a 2010 document, 25 okay, and it relates to "Receipts/Payments 114 1 Mismatch issue notes", as you'll see in the 2 middle. 3 MR BLAKE: Mr Stein, sorry to interrupt but is this 4 a document that was in the Rule 10 request? 5 MR STEIN: No, it arises out of the answers that the 6 witness has given. 7 MR BLAKE: If Mr Inwood hasn't seen it, I think he 8 should have an opportunity to see the entire 9 document. It may be we can do all of that 10 before lunch but I do ask. 11 Sir -- I mean, perhaps we can -- 12 SIR WYN WILLIAMS: Well, I'm -- this is all very 13 interesting but the truth is that we now know 14 absolutely that it was possible for Fujitsu to 15 access the system remotely and I'm not quite 16 sure that exploring this with the witness for 17 whom this must have been peripheral in the 18 extreme during the course of his work, is going 19 to get me very far, Mr Stein. 20 MR STEIN: Can I try and shorten it then and put it 21 in two different ways other than the document? 22 Okay? 23 Can we take the document down. 24 Mr Inwood, in 2010, the document I was about 25 to show you, if you had been aware of such 115 1 issues, was discussing what's called a mismatch 2 bug. It's a bug that affected branches. It 3 infiltrated a branch to the extent that you 4 couldn't tell that there was something gone 5 wrong but, in fact, there was a shortfall, okay? 6 So completely submarine-like for subpostmasters. 7 Were you, in your terms of employment, made 8 aware of any such bug that could have 9 a devastating effect upon Post Office branches. 10 A. No. 11 Q. No. Secondly, the document goes on at the very 12 end to talk about the fact that the Fujitsu can 13 alter branch accounts -- 14 A. Mm. 15 Q. -- through a back door. This is in 2010. Were 16 you aware of that? 17 A. No, not in 2010. 18 Q. Do you think you should have been told about 19 such issues? 20 A. I think anyone that was managing contractual 21 issues with a postmaster should have been aware 22 of that, yeah, because it introduces the 23 possibility that the evidence that they're using 24 to determine a contract is unsafe. 25 Q. The fact that a bug, a mismatch bug, that 116 1 operates in the way I've described in 2010 2 rather undermines what you said about there 3 being a good ethos of openness about bugs and 4 errors within the Post Office, doesn't it? 5 A. Well, yeah, the flaws in software bugs, backdoor 6 access to the system, should not be a secret in 7 the company because it -- as I've just said, it 8 introduces the possibility that contracts were 9 being determined or worse, based on the possibly 10 unsafe evidence. It's difficult to see how 11 anyone could arrive at any other conclusion than 12 that. 13 MR STEIN: Sir, no further questions. 14 SIR WYN WILLIAMS: Thank you. 15 MR BLAKE: Thank you very much, sir, there are no 16 further questions. 17 SIR WYN WILLIAMS: Right. So how are we looking, in 18 respect of this afternoon, Mr Blake? 19 MR BLAKE: We're absolutely fine. This afternoon's 20 witness will not be particularly long, perhaps 21 an hour, so perhaps if we could come back in one 22 hour's time to 1.50. 23 SIR WYN WILLIAMS: Yes, that's fine. 24 Hopefully, I'll be able to solve the mystery 25 of why I can't mute myself any more. Thank you. 117 1 MR BLAKE: Thank you very much, sir. 2 (12.50 pm) 3 (The Short Adjournment) 4 (1.50 pm) 5 MS PRICE: Good afternoon, sir, can you see and hear 6 us? 7 SIR WYN WILLIAMS: I can, thank you. 8 MS PRICE: May we please call Mr Pegler. 9 SIR WYN WILLIAMS: In a moment, I just wanted to put 10 on record the fact that, due to my concern that 11 my IT system was breaking down just before 12 lunch, I omitted to thank Mr Inwood for his 13 witness statement and for his oral evidence. 14 I would like to put on record my thanks to 15 him for providing the statement and oral 16 evidence. 17 Now you can call the witness, Ms Price. 18 MS PRICE: Thank you, sir. 19 THOMAS ABRAHAM PEGLER (sworn) 20 Questioned by MS PRICE 21 MS PRICE: Could you confirm your full name, please, 22 Mr Pegler. 23 A. Yeah, it's Thomas Abraham Pegler. 24 Q. You should have in front of you a hard copy 25 witness statement in your name, dated 12 May 118 1 2023; do you have that? 2 A. Yes. 3 Q. If you turn to page 20 of that statement, 4 please? 5 A. Yes. 6 Q. Do you have a copy with a visible signature? 7 A. I do and it's my signature. 8 Q. Are the contents of that statement true to the 9 best of your knowledge and belief? 10 A. Yes. 11 Q. For the purposes of the transcript, the URN is 12 WITN08980100. Thank you for coming to the 13 Inquiry to assist it with its work and for 14 providing the witness statement that you have. 15 As you know, I will be asking questions on 16 behalf of the Inquiry. 17 Today I'm going to be asking you about 18 issues which arise in Phase 4 of the Inquiry, 19 focusing on the policy, procedure and practice 20 of the Post Office, in relation to the action 21 taken by the Post Office against Post Office 22 employees, following discovery of apparent 23 shortfalls in branch accounts. 24 You were with the Post Office for 31 years, 25 I think, after you joined in 1984; is that 119 1 right? 2 A. That's correct. 3 Q. Initially you joined as a postman? 4 A. Yes. 5 Q. You became a counter clerk in 1986 -- 6 A. Yes. 7 Q. -- and a Supply Chain Manager in 1986. 8 Apologies, I think we must have the wrong date 9 there. Forgive me. 10 You moved across to Counters as a counter 11 clerk in 1986? 12 A. That's correct, yes. 13 Q. You were subsequently promoted to assistant and 14 then branch manager -- 15 A. Yes. 16 Q. -- and an ECCO+ Implementation Manager. Could 17 you please explain what ECCO+ was? 18 A. Yeah, ECCO+ was a forerunner to the Horizon 19 system, employed solely in Crown Offices. It 20 wasn't networked, it was a standalone, but every 21 counter position that a terminal and I think 22 there was a back office processor and, if 23 I remember correctly, it was operated via 24 a 3.5-inch floppy disks, which went to Product 25 and Branch Accounting weekly in Chesterfield, 120 1 which contained all of the branch's accounts. 2 Q. What was your role in relation to this system? 3 A. It was basically there as a support to branch 4 managers and their staff when ECCO was 5 implemented, which basically ran -- two weeks 6 before the office, I would take delivery, run 7 diagnostics, be in branch while they performed 8 their final written manual cash account, having 9 already installed all the positions, and then 10 I'd be there for a week until they completed 11 their first electronic balance, and there as 12 a support and trainer, and then move on to the 13 next branch. 14 Q. What were the differences between the ECCO+ 15 system deployed in Crown Offices before Horizon 16 was introduced? What was the difference between 17 the ECCO+ system and the Horizon system? 18 A. The main difference, I think, were better 19 hardware with touchscreens, which we didn't 20 have, so a difference in the keyboard, 21 a difference in the hardware, the fact that it 22 was all networked as well, and -- down the line, 23 meant there was no need for floppy disks. 24 Q. Can you recall when Horizon was rolled out in 25 Crown Offices? 121 1 A. It must have been front ended. There was 2 probably, I think there was a Thames Valley 3 project of sorts, so it could well have been the 4 late '90s, early 2000s. 5 Q. You were seconded, I think, to the head office 6 project team in 1997; is that right? 7 A. That's correct, yes. 8 Q. What was the focus of your work when you were 9 part of this team? 10 A. The focus of that was mainly an organisation 11 review, looking at all aspects of the business 12 from territorial, regional and Head Office and 13 back office support as well. So I was primarily 14 involved as a support to the very senior 15 managers on that team and a librarian collating 16 all documentation about how the business was 17 run. 18 Q. You were a Head Office based Crown Service and 19 Efficiency Manager from around 1998; is that 20 right? 21 A. That's correct, yes. 22 Q. You held roles which focused solely on the 23 operation of the Crown Network from this point 24 until you left the Post Office in 2015? 25 A. Yes, all aspects of operational work other than 122 1 sales. 2 Q. The Crown Network covered Crown Office branches, 3 otherwise known as directly managed branches; is 4 that right? 5 A. Yes. 6 Q. Those who worked in Crown Office branches were 7 employed under contracts of employment by the 8 Post Office, weren't they? 9 A. They were, yes. 10 Q. In contrast to subpostmasters, who were not 11 employed by the Post Office but were agents and 12 operated branches pursuant to a contract for 13 services? 14 A. Correct, yes. 15 Q. Were you ever involved in the operation of 16 branches outside of the Crown Network? 17 A. Not really. When the business decision was to 18 look at the Crown Office and how profitable they 19 were, one of the options was franchising, so 20 I did become involved in supporting the 21 franchises as they occurred, which often meant 22 being on site when an office was closing or 23 converting to a franchise and then being there 24 as a bit of a support for the franchise office 25 as it started running. 123 1 This could have been an independent 2 franchise or a company franchise, for example 3 WHSmiths, but as time went on, there was more 4 bespoke support for how franchise offices were 5 brought in. 6 Q. Turning, please, to Post Office losses and gains 7 policy, you say in your statement to the Inquiry 8 that Crown net losses had always been an area of 9 concern over the years when you worked for the 10 Post Office; is that right? 11 A. Yes, yes. It was seen as a manageable line on 12 a P&L. 13 Q. Could we have on screen, please, POL00083982. 14 This is a document entitled "Losses in the Crown 15 Network". It appears from its contents to date 16 to late 2007 or early 2008; does that sound 17 about right? 18 A. It sounds about right, yes. 19 Q. You say in your statement that you remember 20 assisting your manager pulling some of the data 21 together for this document? 22 A. Yes. 23 Q. Under "Background", this document explains as 24 follows: 25 "There has been considerable concern in the 124 1 Crown Network due to the recent trend in counter 2 losses and Postshop shrinkage, together 3 totalling 2.5m for all Crown Offices." 4 Can you just explain for us what Postshop 5 shrinkage was? 6 A. Yeah, sure. When the business wanted to get 7 into the retail area, there were very few 8 Postshops, which were front of house, a retail 9 area not behind screens, and shrinkage was 10 effectively stock going missing, either coming 11 in or going out from the suppliers; stock going 12 out the front door from loss and theft; 13 accounting errors; basically any -- anything 14 where there's deemed to be a loss in the retail 15 stock side of the Postshop. 16 Q. There is a table below setting out net losses, 17 reported for offices remaining in the Crown 18 Network and there is a number given for that, 19 373 offices. 20 A. Yes. 21 Q. We can see the counter loss stood at 22 1.393 million in 2003, stayed at similar levels 23 in 2004 and 2005, and then went up by 24 53 per cent to 2.048 million in 2006, and up 25 25 per cent on that in 2007, with a figure of 125 1 1.740 million. Pausing there, was there any 2 discussion at this time of the possible reasons 3 for the losses in the Crown Office Network? 4 A. From what I remember, the biggest impact and 5 focus on the figures was that the business 6 wanted to move to a retail base and a financial 7 specialist base, and I'm not sure when we 8 partnered with the Bank of Ireland but a lot of 9 managers were coming in externally and wouldn't 10 necessarily know the operational processes in 11 order to manage the counter. 12 Now, simplistically and from my point of 13 view, when I went to training (a) we were told 14 don't think of cash as cash, it's just an item 15 of stock; and (b) always take the money first. 16 And simplistically, my belief, and the belief of 17 people in the team, was that the basics of 18 conducting a transaction, taking the money or 19 the payment was being missed off. 20 That's a very simplistic view to take, 21 I know, but the culture of the business was 22 trying to turn to get more profit and get back 23 to profitability from financial product sales. 24 Q. This document assists with the policy which was 25 in place from 1999, so about halfway down there, 126 1 "In 1999", it says this: 2 "In 1999 a loss policy was developed to 3 advise on the controls required at the Post 4 Office Counter, following the introduction of 5 'multi-user' tills in the Crown Office Network. 6 Guidance was provided to improve security of 7 stock, cash and equipment and user log on IDs. 8 "Branch Manager responsibilities were also 9 defined and clear instructions given to improve 10 awareness of loss performance at branch and 11 individual level. The need for balance and 12 supervisory surprise (Snap) stock checks were 13 reiterated as well as capturing loss and gains 14 data in order to deploy the escalation process 15 agreed at the time, ie '3 in 3 losses over £20', 16 '6 in 6 losses over £20' and '9 in 9 losses over 17 £20' resulting in interviews with staff. 18 "However, despite the introduction of 19 a national policy document it was consistently 20 deployed due to a number of factors." 21 A number of reasons are then set out for 22 that and the conclusion is set out over the 23 page, please, about a third of the way down the 24 page, and it says: 25 "Due to the recent poor loss performance and 127 1 trend over the recent years, it has been decided 2 that action should be taken to address future 3 losses in the Crown Office Network." 4 You refer in your statement at paragraph 18 5 to the silo way of working in the '80s and '90s. 6 Can you just explain what you meant by that? 7 A. Yeah. I mean, early on when I joined, 8 departments were very, sort of, insular and they 9 kept to themselves and there didn't seem to be 10 much collaboration around at the time, and 11 I think I said in my statement, we got better at 12 that. Obviously, when I went to Head Office in 13 the '90s, the view at head office differed 14 around the Retail Line, and when I say the 15 Retail Line, I mean directly managed branches 16 like Crown, sub offices and franchises. 17 My view is that we were there to support the 18 frontline. So branch managers and 19 subpostmasters had a big enough job, if you 20 factor in the customer care elements. So we 21 were very much as a support. And the business 22 developed that further. By the time, I'd left 23 they had sort of pipeline initiatives, where we 24 were looking at if we did this at Head Office, 25 how would it impact the Retail Line, and looking 128 1 at timing of events and things like that, which 2 would never have happened in the '80s or '90s. 3 Q. Was this silo way of working something which the 4 review happening at this time, in 2008, was 5 trying to address? 6 A. When you say the review, was it the -- 7 Q. So this document here is discussing actions 8 which should be taken, and we'll come on to the 9 policy document dated 2008, which appears to 10 result from this review and this consideration 11 given in this document. I'm asking, in relation 12 to the silo way of working, whether that was 13 something that this review, and then the new 14 policy in September 2008, was intended to 15 address? 16 A. I think it was addressed before then, probably 17 in pre-reviews, like sales and service reviews, 18 SCS reviews, probably from the late '90s 19 onwards, but I think this review was really 20 instigated around the actual loss performance. 21 But, at the same time, trying to make the 22 management of losses and gains seen as 23 a potential training, could be a training issue, 24 not just focused purely on the punitive side of 25 things. 129 1 Q. A new mandatory losses and gains policy in the 2 Crown Office Network was introduced in September 3 2008. Could we have that on screen, please. 4 It's POL00084075. You address this document at 5 paragraph 4 of your witness statement to the 6 Inquiry and you say you recall reviewing this 7 document at the time. 8 A. Yes. 9 Q. Can you just explain what you mean by reviewing? 10 A. Yeah, there was a document in place and I can't 11 remember, it would have been a similar title, 12 because when I first went to Head Office, there 13 was a document that covered the management of 14 losses and gains and, periodically, I was asked 15 in my position to review that document as other 16 impacts, for example, shared tills, Horizon 17 coming in would impact this. 18 So the 2008 review, I think was more 19 structured, in that we had more input from other 20 stakeholders around the business, and 21 I particularly remember working closely with 22 Finance because it was all around getting 23 ownership for branch managers on their P&L and 24 score cards. 25 Q. Could we go, please, to page 3 of this document, 130 1 which introduces the policy and sets out its 2 purpose. It reads as follows: 3 "The impact of losses in the Crown Office 4 Estate is having a serious effect on our ability 5 to deliver the three2eleven plan to bring us 6 back into profitability by 2011. This Policy 7 has been redesigned to provide clear and 8 consistent guidance to the Crown Office Managers 9 and their Assistants as to their 10 responsibilities for the recording, maintenance 11 and monitoring of losses and gains. The Policy 12 will also provide Crown Office Managers with 13 a tool to be able to effectively manage losses 14 and gains and to take appropriate measures to 15 reduce losses. It also reiterates the security 16 controls required to protect both the business 17 assets as well as the individuals themselves. 18 Finally, for the first time the Policy details 19 a commitment to provide training and support to 20 all Crown Office Managers in how to deploy the 21 Policy and deliver on their responsibilities." 22 Going over the page, please, Section 3 23 covers the "Annual Certificate of Compliance". 24 Could you explain briefly, please, what this 25 was? 131 1 A. Yeah, it was a certificate that branch managers 2 signed off yearly to say that all of the 3 compliance elements of running a Post Office -- 4 and that could be security, the management of 5 visitors to a branch, fire extinguishers, the 6 evacuation policy, contingency planning -- was 7 all signed off. So branch managers had a duty 8 to sign that off annually, staggered throughout 9 the year for the branches, and then it was 10 posted centrally. 11 Q. Then about halfway down this page, Section 4, we 12 have "Supervisory Surprise Checks & Misbalance 13 Checks". What was the difference between 14 supervisory surprise checks and misbalance 15 checks? 16 A. Branch managers, from when I remembered, always 17 had a duty to perform these checks. Not sure 18 that they went on as declared in the policy, as 19 on a regular basis as they I did prior to any 20 automation, but it was basically an element of 21 surprise to say, "Ah, Geoff, I'm going to check 22 your counter stock today", not necessarily after 23 balance, but it could be on any day of the week 24 which involved a branch manager, effectively, 25 just doing a surprise random check, but the 132 1 branch manager would record that and then the 2 Area Manager or above, when they visited the 3 branch, would ask to see their record of these 4 checks. 5 On the other hand, a misbalance check, 6 I think when I was involved in this £30 was the 7 set criteria. So what we said, a second pair of 8 eyes, be it the assistant or the manager or 9 another person in the branch, should physically 10 check the cash and stock before it is moved on 11 or used again. Because, sometimes, a second 12 pair of eyes could help find things. 13 Q. Going over the page, please, page 5., that is in 14 this document, about halfway down the page, we 15 have, in bold and underlined: 16 "The followed steps are carried out when 17 undertaking a financial audit at a Crown Office 18 and are recommended for the Crown Managers to 19 adopt when performing a stock check." 20 The bullet points there of steps to be taken 21 include: 22 "Confirm the location of all cash and stock 23 and ascertain if the stock is an individual or 24 multi-user stock; 25 "Obtain cash declaration print for the night 133 1 prior to the check and previous week's full 2 Balance Snapshot or Branch Trading Statement, 3 daily prints and all vouchers on hand; 4 "Obtain the following printouts from the 5 Horizon system 6 "office snapshot, if multi-user stock is in 7 operation 8 "stock unit snapshot for each stock, if 9 individual stock balancing is used 10 "suspense account summary." 11 Then: 12 "Reconcile stock to the snapshot printout; 13 "Reconcile daily prints and vouchers on hand 14 to the snapshot print; 15 "Reconcile non-value items (MVLs, bus 16 passes, etc); 17 "Inform colleague(s) of the result of the 18 check." 19 Then there is some further explanation in 20 the paragraph below: 21 "The basis of control is that there is 22 an awareness of the levels of discrepancies in 23 conjunction with any actions necessary to 24 implement improvements, protect our people, 25 where it highlighted poor performance, including 134 1 bringing disciplinary procedures to bear where 2 applicable." 3 Then finally on this page: 4 "The Crown Office Manager has responsible 5 for ensuring the approved systems for 6 controlling losses and gains are adopted and 7 implemented." 8 Over the page, please, Section 5, towards 9 the bottom of the page. This addresses "Branch 10 Trading" and explains: 11 "Branch Trading should be undertaken in 12 accordance with the latest Branch Trading 13 booklets, which include details of balancing 14 stock units, production of the Branch Trading 15 Statement, production of reports and despatch of 16 documents. 17 "Following the process below prior to Branch 18 Trading will help to ensure that only true 19 losses and gains are posted to Profit and Loss 20 at Branch Trading." 21 Do you recall the introduction of branch 22 trading? 23 A. Very vaguely. I think for Crowns it meant 24 moving to a branch trading calendar, which could 25 be a four or five-week period but what we did, 135 1 we took it in the Crown Network that we would 2 still prepare a balance weekly, which would be 3 a balance period, so, effectively, where this 4 happened on a Wednesday night we'd still do 5 that, but the main accounts would be posted 6 monthly, whereas I think in other parts of the 7 Network, for example sub offices, possibly 8 franchises or modified scale payment offices, 9 they effectively did their balances once 10 a month. But in Crowns we decided we'd still do 11 a weekly balance, which would effectively 12 declare fully the cash and stock on hand. 13 Q. Going over the page, please, the checks which 14 should be conducted before posting losses or 15 gains are set out. Scrolling a bit further 16 down, we can see that transaction corrections 17 are addressed. 18 Over the page again, please, to Section 6. 19 This deals with "Counter Loss & Gains Management 20 Reporting". In summary, this section sets out 21 the different steps to be taken for different 22 levels of losses, doesn't it? 23 A. Yes. 24 Q. So the first level of loss being £5 to £249.99, 25 then losses over £250, and then a bit further 136 1 down the page to the bottom, losses over £2,000. 2 Going, please, to page 11 of this document, 3 this addressed the loss escalation process and 4 trigger points. Could you please explain what 5 the loss escalation process was? 6 A. Yes, this had been around for many years and 7 anything to do with losses and gains was subject 8 to national discussion with the CWU Union and 9 the CMA Union for managers. Effectively, in the 10 early days, and I think I said in my statement, 11 it was part of the personnel rules and 12 regulations of anyone working in the Post 13 Office, and it had developed over the years, so 14 that if a trigger point was triggered, that 15 individual or the people using that multi-user 16 stock would enter in stage 1 and, basically, it 17 would have been a watching brief for the manager 18 to keep an eye on performance of the loss 19 record, because they could actually end up 20 balancing fine after that and then they would go 21 back on to start from scratch, or if further 22 losses were encountered, that it could be 23 triggered up to stage 2 and 3 above. 24 So I think the first stage there is quoting 25 three losses of £30 or more in a reference 137 1 period, and sitting behind this for the branch 2 manager, I think was a sheet, an Excel-based 3 spreadsheet, where they could keep track on all 4 of this. 5 Q. We see here that this table loss escalation 6 process sets out the various stages and we start 7 with the multi-user stocks, and stage 1, as 8 you've just referred to, the performance which 9 triggers action, and the action for stage 1 is: 10 "Informal interview [with a] Crown Office 11 Manager -- with colleagues, identified as having 12 access to the stocks that have incurred losses, 13 to raise awareness of their performance and to 14 reiterate the Loss Escalation Process. Action 15 Plans should be agreed and notes taken and 16 signed. Consideration given to a switch to 17 individual balancing if appropriate at this 18 stage." 19 We then have stage 2, a further three losses 20 of £30 or more, over the period of three months 21 following the stage 1 interview, and the action 22 at that point is: 23 "2nd informal interview [with a] Crown 24 Office Manager -- to review performance and 25 agree the level of support required. Action 138 1 Plan agreed and notes taken and signed. Notice 2 given to colleagues that they will switch to 3 individual balancing by stage 3 if improvement 4 is not forthcoming and switch is not appropriate 5 at this stage 2." 6 Then, finally in this section, stage 3, 7 further 3 losses of £30 or more, over the period 8 of three months following the stage 2 interview: 9 "3rd Informal Interview [is the action with] 10 Crown Office Manager -- colleagues moved on to 11 individual stocks. Action Plan agreed and notes 12 taken and signed." 13 What was the reason for moving someone on to 14 individual stocks? 15 A. I think the key thing is if you have an 16 individual stock as we operated earlier on, that 17 was your cash and stock, it was your own 18 responsibility. There would be no other people 19 using that stock. So, in agreement, what we 20 decided was that you couldn't take formal action 21 where a multi-user stock was being used. 22 Unless, for example, if you knew that somebody 23 was serving and a major transaction came in for, 24 say, £2,000 premium bonds and you forgot to take 25 the money, you knew that that individual had 139 1 caused that mistake. 2 So it was seen very much that on the 3 punitive side of things, obviously dealing with 4 the training first, if we had to take formal 5 action, it could only be taken where that 6 individual had sole responsibility for cash and 7 stock. 8 Q. We then in the table have individual stocks and 9 stage 1 of that, when someone is on individual 10 stocks: 11 "3 losses of £30 or moreover a period of 3 12 months." 13 The action is: 14 "Informal interview ... to raise awareness 15 of loss performance, agree the level of support 16 required and to reiterate the Loss Escalation 17 Process. Action plan with notes signed." 18 Then we see number of stages that follow. 19 Stage 2, further losses. There's another 20 informal interview. 21 Stage 3, we have formal interview, and 22 a number of steps taken out there, including 23 notification that all future losses of £5 or 24 more will be taken into account. Again, action 25 plan with notes signed. 140 1 Stage 4, at this point you have a further 2 four losses of £5 or more, over the period of 3 six months, following the stage 3 interview. 4 Here the action is formal interview with the 5 Crown Office manager to review performance and 6 agree the level of support required and to 7 reiterate the loss escalation process, reiterate 8 the possible consequences of reaching L&G 9 escalation stage 5. 10 Stage 5, further three losses of £5 or more 11 over the period of six months following the 12 stage 4 interview. Formal interview is the 13 action, with appropriate management level from 14 outside of immediate Crown Office, to review 15 performance and consider disciplinary action 16 under the Conduct Code. 17 You addressed the loss escalation process at 18 paragraph 16 of your statement to the Inquiry. 19 Could we have that on screen, please, it is 20 WITN08980100 and page 15, please, of that 21 document. Paragraph 16 there: 22 "The loss escalation process in the Crown 23 Network was designed to raise awareness, share 24 best practice and monitor losses. It could also 25 lead to the conduct code being triggered on 141 1 individuals if loss performance fell outside of 2 agreed levels." 3 You also refer at paragraph 20 of your 4 statement to moving away from focusing on the 5 punitive side, and you have mentioned that again 6 today, and, instead, focusing on the why. So 7 the impact of losses on the business. 8 From the policy document we have just looked 9 at and these parts of your statement, it appears 10 that the focus, when it came to Crown losses was 11 on raising awareness about best practice, 12 establishing what support an employee might need 13 and, ultimately, considering disciplinary action 14 under the Code of Conduct. Is that a fair 15 assessment? 16 A. Yes, very much a fair assessment of the Crown 17 Network. 18 Q. There was no mention in the September 2008 19 losses and gains policy that we've just looked 20 at to any requirement for Crown Office employees 21 to make good any losses that were discovered, is 22 there? 23 A. No. The -- when I joined, it was 50p, plus or 24 minus. It went to £2 and I think it was £5 -- 25 Q. If I can just stop you there, in terms of my 142 1 question, requirement for the Crown Office 2 employees to make good losses, I'm asking 3 whether there was any reference in that policy 4 document that we looked at to any requirement 5 for them to do so? 6 A. No requirement, no. 7 Q. We'll come on to your statement that deals with 8 what options were open to Crown Office employees 9 in a moment. 10 A. Thank you. 11 Q. Was there any obligation on Crown Office 12 employees to use their own funds to cover any 13 losses identified -- and again, using the word 14 "obligation"? 15 A. No obligation, no. 16 Q. Was that something which was ever considered as 17 part of the strategy for dealing with Crown 18 Office losses? 19 A. As far as I can remember, no. 20 Q. Why not? 21 A. Basically, they're our employees and I think it 22 would be difficult, from a HR perspective, to 23 enforce that, unless there was a major rewrite 24 of the contract manual but I don't recall it 25 ever being a consideration. 143 1 Q. If we could go to page 18, please, within this 2 statement. That top paragraph there, I think 3 this is what you were referring to just a moment 4 ago, and so just to read that out: 5 "Within the Crown Network when I started you 6 had tolerance built into your balance, eg if you 7 were plus/minus 50p out on balancing you could 8 put in or take out the cash up to that value, 9 this became plus/minus £2 then plus/minus £5 10 over time. If Crown staff declared losses then 11 the Losses & Gains Policy would be applied by 12 the Branch manager." 13 Is what you're saying here this: that if 14 there was a minor amount by which the till was 15 out, they could put in up to that minor amount 16 rather than declaring -- 17 A. Yes. 18 Q. -- which would trigger the policy and the steps 19 we've looked at? 20 A. Certainly, you wouldn't expect to see any 21 declared -- depending on the time, you wouldn't 22 expect to see any declared losses, for example, 23 of less than £2 in the Crown Network. 24 Q. Going back a page in the statement, please, 25 towards the bottom, at paragraph 21 you deal 144 1 with your understanding of the position in 2 relation to shortfalls experienced by 3 subpostmasters. You say: 4 "My understanding was that Subpostmasters 5 had to make good any shortfalls within their 6 accounts in line with their contract with the 7 Post Office. This would mean Subpostmasters 8 putting in their own cash so that the total 9 balance agreed with the derived figure (eg paper 10 based pre-Horizon or what was held in Horizon 11 when their branch was automated)." 12 You've touched on this in your answer 13 already, but why was this different approach 14 adopted for subpostmasters when compared with 15 Crown Office employees? 16 A. Historically, there'd always been a difference, 17 going back long before I joined the business, 18 and it was the differentiation between 19 subpostmasters are there -- it's their own 20 business, they're agents of the Post Office, 21 whereas the staff are directly managed by Post 22 Office Limited. 23 Q. Did anyone raise any concern ever, as far as 24 you're aware, about the difference in approach 25 between the two groups? 145 1 A. No. 2 Q. Could we have, please, the September 2008 Crown 3 Office losses and gains policy back on screen, 4 please. That's POL00084075, and page 16 of that 5 document, please. Towards the bottom of the 6 page we have the start of section 8 entitled 7 "Security Compliance". Over the page, please, 8 to section 8.2 "Horizon". This reads as 9 follows: 10 "Crown Office Managers must ensure the 11 following actions are undertaken: 12 "Need to ensure that only colleagues who are 13 working at their offices are logged onto the 14 Horizon system. Anyone who leaves the office 15 must be removed from the system. 16 "All colleagues must have their own user ID 17 and must only be attached to the stock units 18 they are operating at the time -- it is not 19 acceptable to have all users attached to a stock 20 unit. 21 "Where possible, users not operating a stock 22 unit, should be placed into default. 23 "Passwords are sacrosanct, and for each 24 individual's protection. Under no circumstances 25 should passwords be known or shared, this is 146 1 vitally important not only from a security 2 aspect, but is a requirement under our licensing 3 requirements for the FSA (Financial Services 4 Authority). 5 "Crown Office Managers must make regular 6 checks as to the users listed on Horizon and 7 ensure people have the correct level of access 8 (minimum access requirement as per Information 9 Security Policy)." 10 What was the reasoning behind these mandated 11 actions? 12 A. It was best practice, good housekeeping. A good 13 example would be a reserve member of staff who 14 floated around, say, five or six offices and 15 they could potentially be attached to stock 16 units in those five or six offices. So that 17 element it's all about good housekeeping. We 18 probably got input from the Security team or the 19 Horizon team on these bullet points, as well, 20 for the policy. 21 Q. Turning, please, to page 19 of this document, 22 section 8.9. About halfway down, that's it, 23 "Suspicions", and the first bullet point here 24 reads: 25 "If the Crown Office Manager, deputy or any 147 1 colleague has any suspicion about someone, they 2 have a duty to report it. This can be 3 difficult, especially if you're not sure. 4 Please contact the NBSC, in complete confidence 5 on [a number]. Your information will be passed 6 onto the Investigation Team who will assess the 7 information. Your details will remain 8 confidential." 9 The last bullet point there: 10 "Any loss can be reported if there are 11 suspicious circumstances, irrespective of the 12 amount. Again, the Investigation Team will 13 assess the information and a decision will be 14 made on whether any further action is taken." 15 What would you have considered suspicious 16 circumstances to be? 17 A. It could have been a variety of things involving 18 cash or stock, volumes of transactions. One 19 that I did come across when we did certain 20 transactions was a huge increase one day, which 21 alerted the branch manager to say "Something's 22 not right here, who do I get in touch with?" So 23 that would fall under that category. 24 Q. Would a shortfall or loss on its own have been 25 enough to amount to suspicious circumstances for 148 1 you? 2 A. Potentially, yes. I think the issue for me is, 3 at the time, I was not aware of issues with 4 Horizon. If we were, that potentially would 5 fall under that category. 6 Q. We have another version of the September 2008 7 the policy document which you have commented on 8 at paragraph 6.4 of your statement to the 9 Inquiry. Could we have that document on screen, 10 please. It is POL00084076. You say in your 11 statement that this was a version for use as 12 an operational document for branch and Area 13 Managers. What was the reason for having 14 another version for branch and Area Managers? 15 A. From what I remember, this brought out the key 16 operational points without appendices. So it 17 was, basically, a quick guide. The contents 18 should be exactly the same as the overall 19 policy, without all of the various discussion 20 points. So it was really just identified as 21 a quick guide for branch managers. 22 And this, I think, was rolled out at 23 national workshops. So we had input from branch 24 managers and Area Managers when we put this 25 document together and we also rolled it out to 149 1 the Network, as well. So I think it came from 2 a branch manager or a team saying, "We need 3 something more snappier" because there's quite 4 a lot in there, there's a lot of material. 5 Q. Could we go to section 1 of this document, 6 please, page 3? 7 Section 1 here is a little different to 8 section 1 in the other version we've been 9 looking at. In particular, it includes the 10 actual figure for Crown Office losses in 2007 to 11 2008 of 2.2 million. Do you know why this 12 figure was not included in the other version? 13 A. No. No. So this document is the quick guide. 14 Q. Moving, please, to the balancing process for 15 Crown Office branches, you say in your statement 16 to the Inquiry that Crown Office branches used 17 to balance their stock units weekly on 18 a Wednesday evening. The office would then 19 amalgamate and run the office plans from 20 Thursday, sending all supporting documentation 21 for that week in a pouch to P&BA in 22 Chesterfield. Just to be clear, what does P&BA 23 stand for? 24 A. That would be Product and Branch Accounting. 25 Q. You say: 150 1 "After branch trading was introduced a full 2 branch account statement was only required 12 3 times a year." 4 Is that right? 5 A. Yes. 6 Q. But you say that: 7 "Individual stock unit balancing was still 8 taking place weekly in Crowns so there well up 9 balance periods within a trading period." 10 Is that right? 11 A. Yes, that's right. 12 Q. You've said usually four to five balance periods 13 in a trading period? 14 A. Yes. 15 Q. In terms of what a Crown Office branch should 16 do, if there was an unexplained discrepancy when 17 they were trying to balance, you address this at 18 paragraph 12VII of your statement. Can we have 19 that on screen, please, page 12 of that 20 statement, please. Scrolling a little further 21 down, please, it's that last paragraph there: 22 "For colleagues working on the counter in 23 a branch performing a balance (physical check of 24 their cash and stock), only one option really 25 existed and that was to confirm figures and roll 151 1 over into the next balance period or trading 2 period. If there was a discrepancy between 3 physical cash and stock they could recheck 4 themselves, ask a colleague or manager to 5 recheck -- this would of course be time 6 dependent and may find the error -- before 7 confirming and rolling over. The branch manager 8 may find errors next day, eg transfers between 9 Stock Units not balancing, which rectify the 10 original error. Depending on the value/volume 11 of the loss or gain would decide what route 12 through the Losses & Gains procedure the branch 13 manager would take". 14 What were the repercussions of rolling over 15 when a reason for a discrepancy had not been 16 found? 17 A. If the reasons hadn't been found, then the loss 18 or the gain would be declared and that would go 19 against the users who were using that stock that 20 week, or the individual, if it was an individual 21 stock, and that loss would be posted against 22 those individuals or that person, and that would 23 become subject for the losses and gains 24 procedure. 25 Q. Was there any way for a Crown Office branch to 152 1 challenge an apparent discrepancy where it was 2 unexplained? 3 A. I believe so, yes. I mean, I had a team of 4 people who faced up with branch managers and 5 regional managers. When this process was bedded 6 in, as I say, it was delivered via a workshop 7 and there were various spreadsheets to capture 8 loss record. All of my team were ex-branch 9 managers and I think, informally, they would be 10 on the end of a phone or a visit to a branch if 11 there were unexpected losses. 12 They were my eyes and ears. I got out quite 13 a bit myself but I do not recall any issues 14 rising to me about unexplained losses or gains 15 due to the Horizon system in the Crown Network. 16 Q. You've explained in your statement that, 17 although Crown Office branches could be audited 18 by the audit team or field support team as they 19 later were, financial audits of Crown Office 20 were few and far between under normal operation. 21 Was the reason for that linked to the process in 22 place whereby branch managers were obliged to 23 conduct certain checks themselves? 24 A. Yes, I think from a risk perspective, the audit 25 team saw the Crown Network as being low risk, 153 1 purely because of the supervisory element within 2 each branch and the fact that they had Area 3 Managers that visited. So they were seen as low 4 risk, which meant that they didn't get the level 5 of audit that potentially Crowns had when 6 I joined the business. 7 Q. Was there any other reason why this approach was 8 taken to auditing Crown Office branches that 9 you're aware of? 10 A. It became more procedural in terms of 11 compliance. The FSAs would go out. I had 12 a team of regional support advisers who would 13 administer, for example, the annual certificate 14 of compliance, and checks like that, but the 15 actual financial and stock control element of 16 an audit were few and far between in the Crown 17 Network. 18 Q. In 2013 there was a change, wasn't there, 19 whereby the Security team headed by John Scott 20 took ownership of the losses and gains policy. 21 A. Yes. 22 Q. This led to the rewriting of the mandatory 23 losses and gains policy for the Crown Office 24 Network by the Security team, didn't it? 25 A. It did, yes. 154 1 Q. You addressed this at paragraphs 6V and 6VI of 2 your statement. This rewritten version of the 3 policy was dated 24 April 2013. We need not 4 display it now but, for the record, the 5 reference for that document is POL00088124. 6 What did you understand the reason for this 7 change to be? 8 A. At the time, my understanding, my assumption, 9 was that, having been involved in organisation 10 design team in the late '90s, early 2000s, that 11 Network or the Retail Line were deployers of 12 policy, and the actual policies should sit 13 elsewhere at Head Office. That was my 14 understanding then. 15 Maybe now I've got a different view, in that 16 in 2013, it seemed that the business was looking 17 at bringing in management of policies centrally. 18 Q. This version of the policy removed the loss 19 escalation process. What was the reasoning 20 behind that? 21 A. It was branch managers taking ownership of 22 running their own offices. It was a bit nanny 23 state, if you look at the previous policies, and 24 we wanted to get to an endgame that branch 25 managers take full ownership of managing their 155 1 branch, their people, their P&L, and a certain 2 amount of -- not leeway but management of that 3 should be given back to branch managers and that 4 was the Security team we were working with at 5 the time. 6 Q. Was it any part of the reasoning that there 7 were, by this point, investigations taking place 8 into the integrity of the Horizon system, 9 following allegations that the system had been 10 causing apparent discrepancies? 11 A. That, at the time, I was not aware of at all. 12 Q. At paragraph 22 of your statement, you say that 13 the term "bugs, errors and defects" was not in 14 your vocabulary when you worked for the Post 15 Office and that the business line was that the 16 Horizon system was robust. Who was this 17 business line coming from? 18 A. Towards the end of my work in the Post Office, 19 so probably 2010 to 2015, I know that there were 20 various programmes. It was in the media. We 21 were told via our Internal Communications Team, 22 if you were approached by journalists or 23 subpostmasters, members of staff, branch 24 managers, that you were to explain that Horizon 25 was robust, there had been reviews and it was 156 1 fine and there was a contact number that we 2 should put people onto. So my understanding is 3 that came from the top, that came from the 4 board. 5 Q. You may not have used the terminology bugs, 6 errors and defects but you do recall, don't you, 7 there being blue screen issues arising with 8 Horizon? 9 A. Yes, yes. 10 Q. That's something you address at paragraph 23 of 11 your statement. You also recall there being 12 Horizon software releases planned and delivered 13 to rectify transaction issues; is that right? 14 A. That's right. 15 MS PRICE: Sir, those are the questions that have 16 for Mr Pegler. 17 SIR WYN WILLIAMS: Are there questions from anyone 18 else? 19 MS PRICE: There are questions from Ms Page, sir. 20 SIR WYN WILLIAMS: Right, all right. Yes, Ms Page. 21 Questioned by MS PAGE 22 MS PAGE: Thank you, sir. 23 Mr Pegler I'd like to ask you, if I may, 24 about the quick guide we were looking at, the 25 losses and gains quick guide. Perhaps we could 157 1 have that come back up, it's POL00084076. If we 2 go to Section 1 where the amount of loss was 3 actually included, which is on page 3, that 4 figure there of 2.2 million, how widely 5 circulated had that been? 6 A. It was certainly a figure known by the business 7 at Head Office. Obviously, it was a major 8 factor on the General Manager for Crowns' score 9 card. I'm not sure it would have been widely 10 known within the Crown Network, which was the 11 purpose of sharing best practice and letting 12 individual managers and staff know that the 13 business was losing its money. So, certainly 14 within the Crown Network and above, at Head 15 Office, it was a figure that was known, and with 16 finance as well. 17 Q. When it was circulated to the Crown Network did 18 it cause a bit of a buzz, if you like? 19 A. I think it was a shock to people because 20 obviously we've very good branches out there 21 that were incurring very small, if no losses 22 whatsoever, and there were branches were they 23 were haemorrhaging losses. So it was all about 24 getting individual ownership on this figure and 25 letting know the Network where we were, and what 158 1 plans were in place to try and address this. 2 Q. One thing that it reveals is that, just like sub 3 post offices, some Crown Offices were struggling 4 to manage as what they must have seen as 5 unexplained losses? 6 A. Potentially. Knowing what I know now, that is 7 a potential, yes. 8 Q. So the figure there, if subpostmasters had come 9 to know of it, was potentially quite an 10 incendiary thing for them to find out about; 11 would you see that? 12 A. I agree, yes. 13 Q. Do you have any knowledge of that document 14 having been, as it were, sort of the leaked from 15 Crown Offices to subpostmasters? Is that 16 something that's ever come to your attention? 17 A. It's never come to my attention, but I would 18 assume that it did get into the Crown Network. 19 I can't recall instances of it happening, but 20 anything that did get into the Crown Network 21 ultimately, you could bet your bottom dollar, 22 I guess, that it would get into the rest of the 23 network. 24 Q. Did you ever hear of anyone -- I put this 25 because Mr Lee Castleton received a copy of 159 1 this, and was told that he should never show it 2 to anyone, and it was something that he should 3 destroy because it was that incendiary -- is 4 that the sort of thing that you've ever heard 5 of? 6 A. No. 7 MS PAGE: Well, thank you. Those are my questions. 8 SIR WYN WILLIAMS: Thank you, Ms Page. 9 Is that it, Ms Price? 10 MS PRICE: Yes, sir, it is. We're back on Tuesday 11 at 10.00 for John Breeden. 12 SIR WYN WILLIAMS: Right. Well, before we formally 13 close, Mr Pegler, thank you very much for 14 providing a witness statement and for answering 15 questions orally this afternoon. I'm grateful 16 to you. 17 So we'll resume again at 10.00 on Tuesday 18 morning. 19 MS PRICE: Thank you, sir. 20 (2.48 pm) 21 (The hearing adjourned until the following 22 Tuesday, 17 October 2023) 23 24 25 160 I N D E X PAUL INWOOD (sworn) ...........................1 Questioned by MR BLAKE ........................1 Questioned by MR STEIN ......................104 THOMAS ABRAHAM PEGLER (sworn) ...............118 Questioned by MS PRICE ......................118 Questioned by MS PAGE .......................157 161