1 Thursday, 19 October 2023 2 (9.58 am) 3 MR BLAKE: Good morning, sir, can you see and hear 4 me? 5 SIR WYN WILLIAMS: I can, yes. Thank you. 6 MR BLAKE: Thank you, sir. You have granted 7 Ms Bolsover permission to attend remotely today 8 so she appears in front of me on a screen. 9 SIR WYN WILLIAMS: So I see, yes. 10 MR BLAKE: Thank you. Can I call Ms Bolsover. 11 SIR WYN WILLIAMS: Yes. 12 ALISON BOLSOVER (affirmed) 13 Questioned by MR BLAKE 14 MR BLAKE: Thank you very much. Can you give your 15 full name, please? 16 A. Alison Bolsover. 17 Q. Ms Bolsover, you should have in front of you 18 a witness statement dated 5 May this year; is 19 that correct? 20 A. That's correct, yeah. 21 Q. Can I ask you to turn to page 42, the final 22 substantive page. Is that your signature on the 23 page there? 24 A. It is, yes. 25 Q. Is that statement true to the best of your 1 1 knowledge and belief? 2 A. It is yes. 3 Q. Thank you. For the purpose of the transcript 4 that statement is WITN06120100 and that 5 statement will be published on the Inquiry's 6 website shortly. 7 I'm going to begin just with a little bit of 8 background. You worked for the Post Office for 9 36 years between 1985 and 2021; is that correct? 10 A. Correct, yes. 11 Q. You progressed from an administrative grade, the 12 whole way up to Senior Manager? 13 A. Yes, that's right. 14 Q. For today's purpose in particular, between 2007 15 and 2018 you were the Senior Debt Recovery 16 Manager; is that right? 17 A. Yeah, that's right. It did have different 18 titles but in my statement I've continued to say 19 Senior Debt Recovery Manager. 20 Q. Can you give us an idea of a few of those titles 21 or some of those titles? 22 A. I think there was one of around like a Branch 23 Accountant and various names, Revenue Protection 24 Manager, but mainly it's been, in latter years, 25 Senior Debt Recovery Manager up until me not 2 1 having debt recovery in 2018. 2 Q. Thank you very much. The department you were 3 based in was originally called the Product and 4 Branch Accounting Department; is that right? 5 A. That's right, yes. 6 Q. Then it became the Financial Services Centre? 7 A. Yes. 8 Q. Are you able to assist us in terms of the timing 9 of that change? 10 A. I can't remember the exact dates, it actually 11 moved different names, because then it also, 12 latterly, became the Branch Reconciliation Team 13 within Network, so it's had three different 14 steps, although the same teams within it or 15 similar teams within it, Product and Branch 16 Accounting first, then Transaction Correction, 17 Transaction Processing and then Branch 18 Reconciliation Team. 19 Q. Thank you and were there any substantive 20 difference between those departments or 21 significant differences between those 22 departments? 23 A. Other than different teams that I was managing. 24 So whenever there was a reorganisation or teams 25 were moving about, I might take different leads 3 1 for different teams. 2 Q. In 2018 you became Senior Manager in the Network 3 Operations Support Team, heading the Branch 4 Reconciliation Team; is that correct? 5 A. That's correct, yes. 6 Q. That was until 2021 when you retired? 7 A. Yes. 8 Q. Was there a difference between your role in 2018 9 onwards and your role prior to that? 10 A. I didn't have the Current and Former Agents Debt 11 Team working to me after, I think, 2018, so they 12 split into another path within the Network 13 Support Team but I took on all the issuing of 14 transaction corrections within my area and 15 enquiries. 16 Q. Thanks. I'm going to take you to an organogram, 17 which might give us an idea of your position in 18 the hierarchy for quite a lot of that time. Can 19 we look at FUJ00116860, please. It's page 57. 20 So we have you in the top of the hierarchy 21 there. This is, I think, a 2009 organogram? 22 A. Yeah. 23 Q. We have you there at the top, Branch Conformance 24 and Liaison Manager -- 25 A. Yes. 4 1 Q. -- managing, for example, Andrew Winn, the 2 Relationship Manager? 3 A. Yeah. 4 Q. We have the Fraud and Conformance Team 5 underneath you, another layer below? 6 A. Yeah, that was until 2012 and then that moved 7 into Security. 8 Q. Can you assist us with that? What do you see is 9 the difference between fraud and conformance? 10 A. The team were looking for various patterns and 11 I think the biggest role that they did play was 12 looking for excessive cash in the Network, so 13 contacting branches to try to reduce, 14 potentially, risk of -- you know, if an office 15 had a robbery or a burglary, so to reduce the 16 cash holdings that were in there. 17 But also looking for patterns of anything 18 that caused concern. So were there patterns 19 that, you know, there was excessive transaction 20 corrections or things like that, and it could be 21 that, yes, there could have been an element of 22 fraud but it was also around the conformance 23 aspect. 24 Q. So, on the one hand, you have fraud which is 25 an offence of dishonesty and, on the other, you 5 1 have conformance which might be somebody simply 2 not following the right processes and 3 procedures; is that a fair distinction between 4 the two? 5 A. Yeah. 6 Q. Did you see it as appropriate that those two 7 teams were part of the same team? 8 A. Not potentially, no. I think the fraud element 9 was around looking at data to see if there were 10 patterns. The team wouldn't necessarily 11 progress fraud themselves; they'd pass it to 12 a Security team. So it was around finding the 13 data, it -- were there any patterns and raising 14 a flag to say "Is there an issue here? 15 Security, can you investigate it?" 16 Q. You say in 2012 that team moved to the Security 17 team. Are you able to assist us with why it 18 moved to the Security team? 19 A. I think it was seen that, you know, they could 20 do the analysis themselves and it fits, rather 21 than being within Product and Branch Accounting, 22 it sat better within the Security area. 23 Q. We're going to come to it in due course but in 24 2012 it was quite an important period in the 25 Post Office in respect of emerging concerns 6 1 about the Horizon system. Are you aware of that 2 in any way playing a role in that team moving to 3 the Security Department? 4 A. I don't believe it formed a role in -- formed 5 that role. It was just around looking at what 6 teams we were managing at the time and it moved 7 out. Likewise, Cash Control moved out of my 8 area, so there was different splits of teams. 9 So I was predominantly around Accounts 10 Receivable, as such, and collecting debts. 11 So some teams were moved out and one being 12 Fraud and Conformance into Security. Cash 13 Control went to sit within another Senior 14 Manager within Product and Branch Accounting. 15 Q. Thank you very much. That can come down. 16 I'm going to take you through a few basic 17 terms and principles that you'll be well 18 familiar with, quite a few people in this room 19 will be familiar with, but it will assist us in 20 looking at the various policies. I'm going to 21 begin by looking at the process for disputing 22 debts then I'll move on to the recovery of debts 23 before moving on to other topics. 24 So starting with disputing debts, in your 25 statement you refer to the SAP or the POLSAP or 7 1 the SAP system. Can you assist us with, in 2 basic terms, what that was? 3 A. It's a -- well, it's supposed to be a standard 4 SAP package that the finance ledgers were sat 5 on, as such. So all transactions at summary 6 level daily fed through to a SAP, POLSAP GL 7 account. And information from clients came in, 8 and were matched, so then, if there was 9 a mismatch, it was investigated and that could 10 lead a transaction correction being issued. 11 Q. Thank you. I'll take you through transaction 12 corrections in a moment. 13 A. Yeah. 14 Q. In terms of that system though, was that the 15 main system, then, that your department used in 16 order to carry out their function? 17 A. Yes, that and Credence. So looking at 18 individual transactions in Credence, whereas 19 POLSAP was a summary of that day's transaction, 20 Credence was seen as each individual 21 transaction. 22 Q. Thank you very much. Are we talking about 23 post-2005, in respect of these systems? 24 A. No. 25 Q. They predated the changes? 8 1 A. They were -- POLSAP was introduced in 2005, late 2 2005, after the branches were -- started using 3 Horizon. Then Chesterfield -- prior to 2005, 4 Chesterfield was working on a paper basis. 5 After 2005, it was more electronic data. 6 Q. Thank you. Error notices: you say that pre-2005 7 nothing in relation to the cash account was 8 automated in branches and the subpostmaster 9 completed a paper cash account and sent it to 10 Chesterfield. 11 A. That's right. 12 Q. I'd like to clarify what you mean there by 13 "paper cash account". Presumably that did 14 include a Horizon printout of some sort? The 15 subpostmasters weren't still keeping a separate 16 written record, for example, of all their 17 transactions? 18 A. Until the whole network was transformed, as 19 such, we were still keying documents. So I do 20 believe there were some branches that sent 21 Horizon data, as such, or an Horizon sheet, but 22 there were still paper cash accounts as well, 23 which was literally a piece of paper that was 24 completed by hand. 25 Q. So prior to 2005 there were -- for those who had 9 1 the Horizon system in place, Chesterfield was 2 actually referring to Horizon printouts, though, 3 in order to carry out their analysis? 4 A. I think they were being keyed. I'm unsure. 5 I can't quite remember whether there was any 6 level of interface prior to 2005. But, mainly, 7 it was around keying a cash account, manually 8 keying a cash account, and the supporting 9 documents -- 10 Q. Can you assist us with what you mean by 11 "keying". 12 A. Physically keying the data into a system. 13 Q. Thank you. Can you tell us what an error notice 14 was, please? 15 A. It's either -- where there's a difference in the 16 values, either a debit or a credit, so were 17 either requesting money for a debit TC or giving 18 a credit to the branch where they've understated 19 something and they're claiming a credit. 20 Q. Prior to 2005, that would be dealt with by 21 Chesterfield; is that correct? 22 A. That's correct, yeah. 23 Q. That wasn't something that you were involved in? 24 A. I was involved in managing of the teams, as such 25 but there was a whole raft of people there, as 10 1 well, so there was quite a few Senior Managers 2 who had different areas at that time. 3 Q. Moving to transaction corrections, those who 4 have been following the Inquiry carefully will 5 know what transaction corrections are but can 6 you briefly tell us what you understood 7 transaction corrections to be? 8 A. A transaction correction is issued via the 9 POLSAP system or -- and it's an electronic 10 message to Horizon that confirms what's 11 happened. So it's got -- it's either a debit or 12 a credit to the branch and it's got a narrative 13 on it to say what has happened, what's gone 14 wrong, as such, postmaster's not claimed enough 15 within his pouch or, you know, a cash 16 remittance, and things like that. 17 So any product that was matched, we -- any 18 differences were sent to branches. 19 Q. The issuing of transaction corrections came from 20 within your department; is that correct? 21 A. I took the issued of transaction corrections 22 around 2016, I think. So, initially, I was 23 doing it from 2005 to 2007, then I wasn't 24 issuing -- my teams weren't issuing transaction 25 corrections up until, I think, 2016, but -- 11 1 yeah, '16. 2 Q. Who was responsible in between those periods? 3 A. Other Senior Managers within Product and Branch 4 Accounting. So I think there was five Senior 5 Managers reporting in to Rod Ismay. 6 Q. Can you assist us with why a system of 7 transaction corrections is needed? 8 A. To enable us to, as such, balance the book -- if 9 in a purely -- everything going right scenario, 10 if a branch has keyed something in wrong to 11 Horizon, the clients would be paid incorrectly. 12 By issuing the transaction correction, we are 13 then amending that product to pay the clients 14 correctly and balance the books, as such, in the 15 branches. So if they've taken £1,000 but only 16 keyed 100, they should have a surplus, and 17 a transaction correction would request that 18 surplus. 19 Q. The way that it would work is data would come 20 from two main sources and that's the Horizon 21 system but also data from the clients. So when 22 we speak about clients, you're talking about, 23 for example, Camelot or an ATM or debit cards; 24 is that correct? 25 A. Yeah, or cash management from a -- for cash 12 1 remittances. 2 Q. Thank you. There's also something called 3 a transaction acknowledgement. Very briefly, 4 can you tell us what a transaction 5 acknowledgement is and how that's different from 6 a transaction correction? 7 A. A transaction acknowledgement sends out the data 8 that the clients have given us as an electronic 9 message into Horizon to ask the branch to 10 confirm or acknowledge that that transaction is 11 what they took that day, or those transactions. 12 So such as Camelot, for the online game it 13 would -- when it was originally put in place it 14 was called a ping project. It was around 15 pinging data out to branches, rather than 16 branches having to put the figures in 17 themselves. 18 Q. Thank you. Moving back to transaction 19 corrections, can you assist us with what level 20 of expertise and experience the staff who were 21 carrying out those transaction corrections were? 22 A. There was a lot of experienced staff within 23 Product and Branch Accounting and some left 24 after, you know, 49 years' service to retire, so 25 there was a lot of experience there on the 13 1 product. So the teams dealt specifically with 2 products, so they became expert in that product 3 line and how to gain additional evidence was 4 such as Camelot, or, you know, another 5 supplier -- another client, as such. So they 6 could then investigate -- use the systems as 7 well, so such as cheque remittances, there was 8 a system where we could see all the cheques that 9 had been processed and be able to analyse that, 10 and the staff were able to analyse that against 11 the data. 12 Q. Thank you. That's their experience but, in 13 terms of their level within the company, I think 14 you've said you started at administrative grade 15 and moved to, eventually, Senior Manager. Where 16 on that hierarchy did the people who were 17 dealing with transaction corrections fall? 18 A. They were administration grades, Postal 19 Officers. 20 Q. Thank you. Can we look at POL00029370, please. 21 This is a document from 2010 called "Review of 22 the Creation and Management of Transaction 23 Corrections in POLFS to Correct Accounting 24 Errors in Horizon" and it has you down there as 25 an "approver". Is this a document that you 14 1 remember from your time? 2 A. I vaguely remember it being produced, yes. 3 Q. Can we look at page 8, please. It's 3.1 I'd 4 like to look at, please. It says there 5 "[Investigating] and Correcting Transaction 6 Corrections": 7 "There are several ways to create 8 a Transaction Correction in POLFS. The manual 9 option is used by teams that don't raise many 10 Transaction Corrections. These teams spend time 11 [investigating] errors and enquiries that don't 12 result in a Transaction Correction. The 13 automated option creates Transaction Correction 14 individually but carries data into fields from 15 the original open item. 16 "Teams that are driven by requested 17 Transaction Corrections are able to use 18 a spreadsheet to upload bulk branch details. 19 This saves time and effort." 20 Are you able to assist us there with what 21 that all means? It sounds as though there are 22 multiple different ways of creating 23 a transaction correction. 24 A. Yes, there were -- the open -- individual open 25 item was for the branch, so a branch with -- 15 1 that had a difference on the general ledger 2 account. The team could go in and issue 3 an individual transaction correction straight 4 from the system. So it went onto a file that 5 was then uploaded into Horizon. 6 The other method, such as cash remittances, 7 they could be bulk uploaded, as such. So the 8 cash centres would send information on the 9 differences between what was stated as returned 10 from a cash remittance from the branch to the 11 Cash Centre, any differences were uploaded on to 12 a spreadsheet and that would be uploaded into 13 the system. So it was a bulk upload, as such, 14 of information going out. 15 Q. Was that quite a manual process in terms of 16 creating a spreadsheet and uploading it in that 17 way? 18 A. Not from a cash point of view. The data was 19 collated by the Cash Centres. So from a Product 20 and Branch Accounting or transaction processing 21 point of view, it was a file that needed 22 loading, rather than individual items that 23 needed to be gone through and a narrative put 24 on -- 25 Q. So another department created that file? 16 1 A. Yes, I did. 2 Q. Thank you. Can we look at paragraph 19 of your 3 witness statement, it's WITN06120100, and it's 4 page 11. Paragraph 19, you have described it 5 this way, you say: 6 "The open item accounts were fed by two 7 streams of data, one from the Branch via Horizon 8 and the other stream from a Client, Cash Centre 9 or Supplier that processed items, such as the 10 Cash Centres, Camelot, ATM, Cheques, Debit Cards 11 and MoneyGram. The open items accounts were 12 matched daily, any mismatched or unmatched 13 accounts were investigated to give evidence and 14 narrative for a [transaction correction] to be 15 issued." 16 Can you assist us with what kind of 17 investigation was carried out? 18 A. It depends on the product line, so, as I've just 19 said around cheques, if a branch had dispatched 20 cheques to processing, any differences, the team 21 member could look at the batch control voucher 22 sent by the branch and each individual cheque 23 that was processed behind that batch control 24 voucher. So if there'd been a keying error by 25 the branch or they'd transposed figures, it 17 1 could be seen on the individual cheques and 2 copies of those cheques could be sent out to 3 branch and the narrative would be formed around 4 which cheques were incorrect. So anything that 5 we could investigate in that vein was done. 6 Q. We'll come to it something in due course but 7 something like an alleged bug, error or defect 8 in Horizon wasn't something that your team would 9 investigate; is that correct? 10 A. Not -- I think the word "bugs" or "defects", 11 were not necessarily used, so I think that's 12 where some of the confusions happened. So there 13 were sometimes issues that were raised by the 14 NBSC and my team, or the team leader or analyst, 15 would be involved in those meetings but not in 16 any scale that, you know, they'd ring up and say 17 they'd got a bug. It would go into NBSC. 18 Q. But, as part of those investigations that you've 19 described, if it was, say, a software error, for 20 example, that's not something that you would be 21 able to investigate? 22 A. No, no, it would have to be IT that investigated 23 that. 24 Q. When you say IT, who do you mean? 25 A. The IT Service Desk. 18 1 Q. Thank you. Can we go back to the document we 2 were looking at. It's POL00029370, and it's 3 page 5. It's the bottom of page 5, please. 4 There's a section here on "Failed Transaction 5 Corrections". 6 A. Yeah. 7 Q. Then, if we look over the page, it gives some 8 examples of why some transaction corrections 9 would fail. 10 A. Yeah. 11 Q. For example, the branch is closed; the value of 12 the transaction correction is not within the 13 parameters of product; the product is not valid; 14 Crowns settled centrally; the wrong flag is 15 chosen when creating a transaction correction; 16 and then the final one: 17 "Horizon allows branch to roll over to next 18 trading period without accepting all Transaction 19 Corrections. There is an anomaly in Horizon 20 that when a multi-terminal branch has two or 21 more terminals completing a transaction 22 simultaneously the branch is able to roll over 23 to the next trading period without accepting all 24 the Transaction Corrections. This not a widely 25 known or occurring problem." 19 1 Are you able to assist us with that final -- 2 A. I'm struggling with that one because we did do 3 checks that branches were rolling over and the 4 report that we used to get used to show which 5 transaction correction would have failed, and 6 then the investigation would go on to all these 7 points around, you know, is it -- is the branch 8 closed, that's why it's not been able to be sent 9 or to be received? But I don't know, I can't 10 remember this anomaly. 11 Q. It says there "This is not a widely known or 12 occurring problem". Was there a system within 13 your department to share and inform those who 14 are dealing with transaction corrections about 15 these kinds of issues? 16 A. At 2010, I wasn't managing transaction 17 corrections. I don't know, is the honest 18 answer. 19 Q. But during the period that you were managing? 20 A. I'd never known that happen, so -- 21 Q. But was there a system in place that shared this 22 kind of -- I mean this is one paragraph in quite 23 a thick and complex policy document. Was there 24 a system in place within the department to make 25 those administrative officers who were dealing 20 1 with transaction corrections aware of these 2 kinds of issues that might occur with failed 3 transaction corrections? 4 A. If a failed transaction had happen, it would be 5 investigated by the issuer and their team leader 6 to ensure the transaction corrections did go 7 out. 8 Q. But that's in an individual case. 9 A. Yeah. 10 Q. But was there a process to share that knowledge? 11 A. I think there was -- there was some sort of 12 documentation around failed transactions, 13 transaction corrections. So it would have been 14 in the library of processes within that. 15 Q. So -- an individual at administrative grade 16 would have to go into the library, the 17 electronic library, and try and find out that 18 kind of information? 19 A. Yeah, I think we had a systems team at this 20 stage, I believe, within Product and Branch 21 Accounting that created the ledgers, et cetera, 22 and they flagged that -- I think at this stage 23 they flagged back to the team leader that 24 a transaction correction had failed. It was 25 then investigated and it was the responsibility 21 1 of the team leader to ensure it was reissued or 2 steps were then taken to -- if it was a closed 3 branch, the transaction correction would be 4 transferred over to the customer account, so to 5 clear the open item. 6 So there were steps and control steps in 7 place to ensure we didn't just have transaction 8 corrections hanging on the system. 9 Q. Again, that's for individual cases -- 10 A. Yeah. 11 Q. -- but it seems to be on the head of the team 12 leader, effectively, to cascade any information 13 around the team, about those kinds of issues, 14 plus a document in a library; is that a summary? 15 A. Yeah, there were procedures in place around 16 that, yes. 17 Q. Were there procedures in place? I mean, what 18 were the procedures in place? 19 A. That the team leader gained the information from 20 the system manager and actioned it. So if the 21 transaction correction didn't go out, it stayed 22 as an open item on that GL account. 23 Q. But I think the process you're describing is 24 simply one of: it's on the team manager? 25 A. Yes, and it was. 22 1 Q. The list here is quite long of failed 2 transaction corrections. We've heard about 3 spreadsheets being created for bulk transaction 4 corrections -- 5 A. Yeah. 6 Q. -- the system having input from various 7 different sources. It sounds like quite 8 a complicated system; is that fair? Was that 9 your experience? 10 A. After working on it 36 years, no, it didn't seem 11 complex to me but it would, I believe, with the 12 complexity of the products and everything else. 13 You know, there was a lot of work within it. 14 Q. If you were an administrative officer who was 15 working in that team, do you think it was quite 16 a complicated process? 17 A. As an administrator, no. I think all the 18 procedures were laid down, staff did get 19 training if they moved on to new teams, and it 20 was basically a step-by-step process for them to 21 administer. 22 Q. Do you think there was potential for error in 23 what they were administering because of the 24 underlying complexity to the system? 25 A. I don't think we could ever say that it was -- 23 1 it could be 100 per cent when there's human 2 intervention. There were issues and, if 3 a branch had got an issue, they could call the 4 person that had issued the TC to discuss it or 5 to dispute it. 6 Q. In terms of numbers, in your statement you say 7 that there are approximately 125,000 transaction 8 corrections a year. 9 A. Yeah. 10 Q. I'd like to take you to one other document that 11 you have detailed some further figures, it's 12 POL00006650. We'll come back to this a number 13 of times today. This is a conversation that you 14 had with a solicitor at Womble Bond Dickinson in 15 2018. I think this is -- 16 A. Yeah. 17 Q. -- related to the Group Litigation. Is this 18 something that you remember? 19 A. Only from reading it, yeah. I remember it 20 happening. 21 Q. We have at page 10, it's about halfway down on 22 page 10, you have given other figures. You say 23 to the interviewer at the bottom there: 24 "We're issuing between sort of 7,500 and 25 12,000 [transaction corrections] a week. It is, 24 1 there's quite a lot in there. Some are 2 automatic so like your Lottery TCs, your stock 3 TCs, we do them by upload." 4 So, I mean, if it was 12,000 -- 5 A. No, it should say a month. 6 Q. That should be a month, should it? Okay. Did 7 those numbers, though, quite high numbers, did 8 they raise any cause for concern? 9 A. The majority of TCs that we issued were for cash 10 remittances, where the cash returned by branches 11 wasn't correct, so there was a shortage or 12 a surplus within the pouch. And I think it was 13 around -- I'm wanting to say between 50 and 14 60 per cent of those TCs were related to cash. 15 Q. Did that mean, where the cash figure didn't meet 16 the figure that Horizon produced, that would be 17 included in that figure? 18 A. So it was -- yes, it was whatever the postmaster 19 had sent back as a cash remittance to the Cash 20 Centre -- 21 Q. Yes. 22 A. -- and then the cash was counted in the Cash 23 Centre under camera. 24 Q. Where that figure didn't meet the figure on the 25 Horizon printout, that was considered within 25 1 that percentage that you've just given? 2 A. Yes, it was, and I think it's remembering there 3 were both debits and credits, so where there was 4 a surplus in the cash that was sent, so the 5 branch had understated cash, as well as 6 overstating it. 7 Q. Let's say there were 12,000 transaction 8 corrections a month. Do you think that the team 9 was appropriately resourced to deal with that? 10 A. There were various cuts within the teams along 11 the years, so we did struggle at times with 12 resource and we were always being targeted to 13 reduce staffing but, as a whole, I think it 14 became -- it was a process that we were on top 15 of in, you know, the latter years. 16 Q. Can you give us an idea you've spoken about 17 trends and times, was it an overall downward 18 trend in staffing numbers or were there 19 particular times where pressure was put on you 20 to reduce staffing? 21 A. There was always or always seen to be pressures 22 to reduce staff and efficiency processes, you 23 know, trying to make the system more efficient. 24 So yes, there was a downward trend of staffing. 25 In some of the times, during peak times, you 26 1 know, around the holidays, or we had term time 2 staff working for us, we would have additional 3 agency staff brought in to supplement the 4 permanent resource that we had. 5 Q. Do you recall there being any analysis looking 6 for trends or root causes of that large number 7 of transaction corrections? 8 A. Yes, there was and there was documentation 9 around it, so what are the causes of these 10 transaction corrections? 11 Q. Yes. What kind of period: was that throughout 12 your time in office or in a particular period? 13 A. I think we did it quite regularly, where, when 14 you look at the biggest numbers being cash, 15 that's how can you get a branch to count the 16 cash any different, you know, putting secondary 17 checks in, and things like that. For areas such 18 as Lotteries, that's when the transaction 19 acknowledgements came in. 20 So rather than sending transaction 21 corrections on all the product lines, we sent 22 transaction acknowledgements because there 23 tended to be timing delays or timing differences 24 when the branch took the reports off the Horizon 25 terminal and put it in -- sorry, off the Lottery 27 1 terminal and put it into Horizon versus when 2 that Lottery terminal actually closed down. So 3 the Post Office side may shut at 5.30 but the -- 4 and take a summary off Camelot, the Camelot 5 terminal, but the terminal was still working up 6 to 7.00, 8.00 at night. So the figures were 7 always different on a daily basis. So -- 8 Q. Did anybody carry out any analysis, to your 9 knowledge, of the impact of software errors, for 10 example, on the percentage or number of 11 transaction corrections that were being made or 12 being requested? 13 A. Not to my acknowledge, no. 14 Q. The Inquiry has heard evidence of delays in the 15 transaction correction processes, in some cases 16 where the system for a subpostmaster was quite 17 slow; is that something you recognise at all? 18 A. As in the Horizon system? 19 Q. No, the transaction correction system, so the 20 ability to obtain a transaction correction? 21 A. Yes, I -- I think when we first went live in 22 2005, there were a lot of issues with the data 23 that we -- that was being input into the POLSAP 24 system and that led to delays in transaction 25 corrections going out -- 28 1 Q. So there was a particular problem in 2005. 2 I don't know if you heard Rod Ismay's evidence 3 on that but he raised concerns about, for 4 example, egg timers on screens and things like 5 that. 6 A. Yeah, so that's more around the staff in 7 Chesterfield had slow equipment. So it would 8 take ages for them to be able to issue 9 a transaction correction, which then the 10 productivity levels in the teams were very low 11 because of the IT that Chesterfield had -- 12 Q. That's a 2005-specific issue, is it, or is it 13 a broader issue? 14 A. No, it was a broader issue and, probably even 15 around up to 2010, there were issues with the 16 kit that Chesterfield were using. 17 Q. Was that addressed? 18 A. It was, eventually, yeah. They swapped out 19 a lot of the computers within Chesterfield. 20 Q. Were you aware of other complaints from 21 subpostmasters about delays in the transaction 22 correction process? 23 A. I think, if -- we used to do a KPI that said 24 that we were issuing 95 per cent of all 25 transaction corrections within 60 days, which is 29 1 still a long time and, you know, everyone trying 2 to get it closer to the 30 days. But we -- 3 Q. How long was the trading period? 4 A. The trading period is a four or a five-week 5 period, as such. 6 Q. So if it was 60 days it would be quite 7 significantly longer than the trading period? 8 A. Yes. Yeah. 9 Q. Can we look at POL00039028, this a 2008 10 document. It's the "Operating Level Agreement". 11 It's a draft version. I don't know if this is 12 a document that you recall at all? If we scroll 13 down and perhaps look over the page. 14 It doesn't really matter if you saw this at 15 this time or not because I just want to take you 16 to an indication of the kinds of times that 17 certain provides for transaction corrections 18 seemed to take. 19 A. Yeah. 20 Q. If we look at page 6, we have there at 2.1, if 21 we scroll down, "Transaction Corrections issued 22 by P&BA". If we go over the page, 2.1.4, so 23 slightly down, it addresses "Automated Payment 24 Overpayments and Personal Banking Overpayments": 25 "These have to be queried with the Client 30 1 and customer. A Transaction Correction will 2 only be issued if the Client and Customer agrees 3 and these can take up to 2 years." 4 Then "Fraudulent Cash Cheques" below, it 5 says there: 6 "Transaction corrections will be issued 7 within 4 months of the transaction date." 8 So those are two cases where quite long 9 periods seem to be recognised or inbuilt into 10 the transaction correction process; is that 11 something you recall at all? 12 A. I don't by then because, as I say, my teams 13 weren't issuing transaction corrections but on 14 the 2.1.4, it all -- if there was an over or 15 an under-- usually an overpayment on the 16 automated payment bill, say, it took the client 17 to agree that, you know, we could adjust the 18 money and give the branch the money back. So if 19 they'd over-keyed a bill, it needed client and 20 customer agreement to get that money back. I do 21 find it quite astonishing that it's documented 22 there as up to two years. That does seem 23 excessive. 24 Q. So did you say 90 per cent or so would be within 25 60 days; is that -- 31 1 A. 95 per cent. 2 Q. 95 per cent within 60 days -- 3 A. Yeah. 4 Q. -- albeit you recognise that that in itself is 5 quite a long period? 6 A. Yeah. 7 Q. Then the other 5 per cent, in your experience, 8 could they take significantly longer periods? 9 A. It could, yeah, I think for automated payments, 10 there was no open item. So there wasn't an open 11 item that said this is an aged item, the branch 12 reported that they'd keyed something wrong. We 13 would then have to go to the clients to try to 14 retrieve the money and the transaction could 15 only be created once we'd got the money back 16 from the clients. 17 Q. So where particular information needs to be 18 sought from the client it could take 19 significantly longer? 20 A. Yes. 21 Q. Thank you. 22 A. Or if a customer said they'd got a banking item, 23 you know, they believe they deposited X amount 24 but their account's only been credited with Y. 25 So a client -- a client, a banking client, could 32 1 come up back to us to say, "This is information 2 we've got", you know, "You've not credited our 3 customer enough and they've got a receipt". 4 And I think a lot of the issues were around 5 the branch potentially had not put it through 6 Horizon but they'd stamped a paying-in book or 7 something like that, and that -- 8 Q. A lot of the things that you're mentioning are 9 potential human errors but, where a complaint 10 was made, for example, about a software error, 11 typically how long would a transaction 12 correction take to be processed? 13 A. Well, unless we knew about it there wouldn't be 14 one issued. So it needed to be flagged up to us 15 that one would be needed, as such. 16 Q. Flagged up by who? 17 A. By whoever was dealing with the anomalies that 18 were there. So the IT department needed to 19 confirm that there was an issue that had caused 20 a financial issue. 21 Q. Typically, how long would it take for that team 22 to get back to you? 23 A. I don't know. I can't potentially put 24 a timescale on that. I think there's only a few 25 instances that I can remember. I didn't 33 1 necessarily deal with the detail of it but there 2 was a receipts and payments mismatch, and that 3 was highlighted to us, and I think Rod and Andy 4 Winn dealt with it but we were told there was 5 an issue and it was then looking at what is the 6 financial impact of that. And I believe they 7 went on to issue transaction corrections and 8 write to branches but I'm not that close to it 9 that I understood all the issues that were 10 raised. 11 Q. Thank you. We'll get to the receipts and 12 payments issue shortly. Was there a system in 13 place that allowed a subpostmaster to know that 14 a transaction correction would or would not be 15 issued or was it simply a case of waiting and 16 seeing? 17 A. In some instances, the branch -- if they rang 18 NBSC, we could in -- Product and Branch 19 Accounting could look to see if there was 20 an open item ready to be issued and issue it, or 21 it was a wait and see. So they might have 22 a branch discrepancy and be ringing up to say, 23 "Is there a transaction correction that's going 24 to come down the line?" and we would issue. 25 Q. Some of the evidence that the Inquiry has heard 34 1 concerns subpostmasters trying to find out 2 whether there would be a transaction correction 3 and not receiving that information and having to 4 wait and see. Is that something that you 5 recognise at all? 6 A. No, because I think if they'd gone into NBSC and 7 asked specifically for Product and Branch 8 Accounting, there should have been a response to 9 that. 10 Q. But might the response have been "We can't tell 11 you just now"? 12 A. If it was the same day that they balanced, we 13 wouldn't be able to see the data, no. But -- 14 Q. You've talked about quite long periods, up to 15 60 days for 95 per cent of cases. 16 A. Yeah -- 17 Q. If you called on day 30, for example, what would 18 be the typical response? 19 A. That they should be able to see if there's 20 a transaction or an open item there waiting to 21 be issued, and staff -- 22 Q. What do you mean by an "open item"? 23 A. An open item within the general ledger waiting 24 for a transaction correction to be either 25 investigated or/and issued. 35 1 Q. So if you phoned up on day 30 and you were told 2 it was an open item, what kind of certainty 3 would you have as to whether a transaction 4 correction would or would not be issued? 5 A. If it had been investigated or it was confirmed, 6 you know, the branch said "I sent my cheques off 7 wrong", or whatever, the team would confirm it 8 and send the transaction correction out. 9 Q. But, again, we're dealing here in particular 10 with things like software errors. If you had 11 said there was a software error and you call up, 12 you haven't received a transaction correction, 13 and you were told it was an open item would you 14 have any certainty as to when, in fact, that 15 would be dealt with? 16 A. I don't think those two correlate, as such, or 17 have done. So the data that is in the system is 18 what Product and Branch Accounting or the staff 19 within Chesterfield dealt with. They didn't get 20 queries raised to say, "I've got a software 21 issue" -- 22 Q. Are you saying that no subpostmasters in the 23 context of transaction corrections raised issues 24 of software issues of potential software issues? 25 A. No. Not to do with transaction corrections, is 36 1 my belief, no. There may have been some issues 2 or some issues in sending TCs out but not the 3 Horizon system being at fault or a system issue 4 in Horizon. 5 Q. So at no point while you were responsible for 6 the transaction corrections process or for 7 managing that process, were you aware of 8 complaints about the Horizon system that may or 9 may not require a transaction correction? 10 A. No. Only on a very few occasions, in which case 11 (unclear) were involved. 12 Q. Knowing what you know and how long you've been 13 involved and the fact you were involved, even in 14 the early stages of the litigation, do you find 15 that surprising that you were never informed 16 about that? 17 A. Yes. I think it's -- if there were more bugs 18 and defects, et cetera, it's were Product and 19 Branch Accounting and Transaction Processing 20 joined up on that? 21 Q. I think we're struggling -- what we may struggle 22 to understand is how complaints about the 23 Horizon system causing discrepancies, 24 discrepancies that require transaction 25 corrections, didn't reach the person that was 37 1 responsible for managing those transaction 2 corrections. Are you able to assist us at all 3 with that? 4 A. No, I think the only time -- if a branch that 5 got a branch discrepancy and they settled it 6 centrally, they could raise it then, that they 7 believe there was an issue. But it's what 8 support we could give or what NBSC could give in 9 trying to find out why there was a branch 10 discrepancy. 11 Q. During that investigation, presumably 12 a transaction correction hadn't been issued? 13 A. It could have been, and -- so the branch could 14 have been issued a transaction correction for 15 a debit, so you have not put this much cash in 16 your till. If they then accepted that, so like 17 the Lotteries, they accepted a transaction 18 correction for £1,000, but they didn't put the 19 cash into the till, that would then, when they 20 were balancing, form a £1,000 discrepancy that 21 they then could put -- settle centrally. And 22 that happened on a-- quite a few occasions. 23 So the branch should have had £1,000 sat in 24 the retail till for the lottery but they didn't 25 transfer it into their Horizon till and, if they 38 1 accepted a transaction correction and didn't put 2 the cash in, that would lead to a branch 3 discrepancy. 4 Q. Thank you. I'll deal with the issue of 5 discrepancies shortly. Perhaps we'll move on to 6 the suspense account because I think that 7 addresses this particular issue. What did you 8 understand a suspense account to be? 9 A. As in a local suspense account -- 10 Q. Yes. 11 A. -- within the branch? 12 Q. Yes. 13 A. I think it changed in 2005. So, pre-2005, I'm 14 led to understand that a branch could leave 15 something in local suspense for a while, and it 16 was authorised out in the regions, I think. 17 Chesterfield didn't do the authorisation. 18 After 2005, the local suspense is still 19 there on a weekly basis but at branch trading, 20 on week 4 or 5, they had to clear the local 21 suspense and either put the cash in or settle 22 the amount centrally. 23 Q. Thank you. Can I just take you to your 24 statement on this just so we can see a small or 25 perhaps maybe insignificant difference between 39 1 the evidence you're giving and the evidence of 2 Susan Harding on this issue. It's WITN06120100 3 and it's page 15, paragraph 30. It says: 4 "Susan Harding states that the local 5 suspense account which had previously been 6 available to [subpostmasters] to hold losses 7 until they removed them, is said to have been 8 removed. The Local suspense is actually still 9 available to branches to use when they complete 10 their daily/weekly balance, but it is not 11 available to hold losses or surpluses for long 12 periods of time or on a permanent basis as 13 branches may have done previously." 14 So I think you are agreed with the essential 15 point that the IMPACT Programme, in essence, 16 meant that subpostmasters were required to 17 either accept the debt or cease trading when it 18 came to the end of the trading period and, in 19 that sense, they couldn't hold any money in 20 a suspense account; is that a fair summary? 21 A. That's correct, yeah. They could settle the 22 amount centrally. 23 Q. Yes. So they had to accept it or settle it 24 centrally -- 25 A. Yeah. 40 1 Q. -- or they had to stop trading, essentially? 2 A. Well -- 3 Q. I mean, those are the only options? 4 A. Well, they wouldn't -- the option was that they 5 didn't roll the branch trading statement. 6 Q. Which would have, in effect, meant -- 7 A. Pardon? 8 Q. Which would, in effect, mean that they couldn't 9 continue to trade? 10 A. Well, they could trade, yeah, even without doing 11 a Branch Trading statement. 12 Q. How could they do that? 13 A. It just continued. 14 Q. Pardon? 15 A. It just continued. 16 Q. They'd have to -- 17 A. It -- 18 Q. I mean, the Horizon system would not let them 19 continue if they didn't complete that -- 20 A. It did. 21 Q. So -- 22 A. There were branch -- they had not completed 23 branch trading, so one of the controls within 24 Chesterfield is to check after the branch 25 trading period for the branch if there are items 41 1 left in local suspense. If there are, that 2 would indicate that the branch has not rolled 3 their branch trading period. 4 Q. That would begin your actions to begin debt 5 recovery? 6 A. No, that would -- it would be an escalation 7 route to get the branch to actually complete 8 their branch trading -- 9 Q. So where Susan Harding says that the suspense 10 account isn't actually available at the end of 11 the trading period, or at least at the end of 12 the trading period, is that wrong? I mean, 13 where would you put these figures? Where would 14 they go? 15 A. No, it was -- it's available on a weekly basis 16 so I think Sue said that the local suspense was 17 removed and it wasn't removed so, over a trading 18 period, a branch may on the first week have 19 a surplus and the second week have a loss, and 20 they could be aggregated together to a net. So 21 they -- 22 Q. But at the end of that trading period what was 23 the option? 24 A. Any discrepancies, if they're over £150, they 25 could settle them centrally or make good the 42 1 loss or take out the gain. 2 Q. If they didn't do any of those options, what 3 could they do? Is your evidence that they could 4 continue to trade despite that, if they did 5 neither of those options? 6 A. If they didn't complete a branch trading 7 statement but, if they completed the branch 8 trading statement, they had no option other than 9 to either put the cash in, take the cash out or 10 settle centrally. If, at the end of the branch 11 trading, they continued then into another 12 trading period and didn't put the cash in, it 13 would be classified as a rolling loss, so a loss 14 from one period in a the next period. 15 And such as originally, the -- like, the 16 branch conformance team would check for rolling 17 losses, where a loss appeared to be getting 18 larger and larger but not declared. 19 Q. Thank you. 20 So can I give you a scenario. If you 21 postmaster had identified a cause of 22 a discrepancy and was waiting for a transaction 23 correction but it hadn't yet been received, 24 could they complete their branch trading 25 statement? 43 1 A. Yes, but they'd have to declare a loss or 2 a gain. So they could say, the £1,000 scenario, 3 "I've got a difference at the end of branch 4 trading, I know it's going to be a transaction 5 correction", and they could settle it 6 centrally -- 7 Q. Are they then putting themselves at risk of 8 facing debt recovery action? 9 A. Yes. But if -- letters went out to postmasters 10 on the amounts held in their customer account 11 and they could say, "I'm waiting for a TC", and 12 the operator who was dealing with the customer 13 account could get in touch with the issuing 14 teams to say "There's a transaction correction 15 on this, can we have it issued, please?" 16 Q. Where a subpostmaster hadn't completed their 17 branch trading, did that instigate action from 18 your team to start investigating? Was that one 19 of the things that started an investigation? 20 A. If -- yes. If there was an item in local 21 suspense after branch trading cut-offs, the team 22 would escalate it and find out is there 23 a problem -- has the branch shut down? Has 24 there been a fire in branch? What is the reason 25 for the non-completion of a branch trading 44 1 statement? 2 Q. So -- 3 A. So they would essentially put it out into the 4 network to ask questions, what's happening here, 5 and monitor the levels that were in local 6 suspense. 7 Q. So I think, if I'm to understand correctly, your 8 evidence is that you could continue trading but, 9 from that moment onwards, you would effectively 10 be under investigation or you would have 11 triggered an investigation? 12 A. Could have triggered one, yes. 13 Q. Thank you. Can we look at paragraph 32 of your 14 statement it's WITN06120100. 15 A. Yeah. 16 Q. It's page 15, paragraph 32. So we're looking 17 now at when that investigation has been 18 triggered. 19 A. Yeah. 20 Q. This is your description of what that 21 investigation would involve. So you say there: 22 "FSC investigation/escalation would be 23 focused on", and it sets out the various things 24 it would be focused on. 25 A. Yeah. 45 1 Q. First: 2 "Escalation to the Network Teams to enable 3 branch training to complete the branch trading 4 statement ..." 5 If we could scroll down: 6 "Understanding if there was a fundamental 7 problem with the Horizon kit in branch and the 8 branch was closed, [for example] had it been 9 permanently damaged in branch (by a fire) ..." 10 So one of the things that you would 11 investigate was whether the kit was -- there was 12 a fundamental problem. Am I right that that is 13 intentionally distinguishing it from something 14 like there being a software problem? 15 A. I think it is, yeah, because it's quite 16 fundamental if there was a fire in branch and it 17 had destroyed the kit. 18 Q. "If the Horizon kit had been removed from the 19 branch due to problems with the terminal and 20 balances had not been completed. (FSC would not 21 be involved in the reason why the kit had been 22 removed or have [investigated] its removal) ..." 23 Then (d): 24 "Establishing if the branch had unexpectedly 25 closed without balancing and Network support or 46 1 intervention was required." 2 A. Yeah. 3 Q. So those are quite limited circumstances. Am 4 I right in saying that none of your 5 investigations involved the investigation of 6 software issues, as far as your department was 7 concerned? 8 A. I don't believe it did, no. If the -- if the 9 terminal had been removed, it could be said that 10 there were problems with the kit but it wouldn't 11 necessarily be that was showing up to us. It 12 was a case of we'd got an item in local suspense 13 and it had not been cleared, but not the ins and 14 outs of if a terminal wasn't working what was 15 the matter with it and why had they had 16 a swapout. 17 Q. Trying to get to the bottom of a discrepancy, 18 for example, to enable you to issue 19 a transaction correction, it doesn't seem that 20 that was in any way part of that exercise that's 21 set out from (a) to (d)? 22 A. No. 23 Q. Following an investigation, what were the 24 options available? Was it a binary issue of 25 issuing a transaction correction or not issuing 47 1 a transaction correction? 2 A. Not in local suspense. Predominantly it was 3 around getting the branch to roll the trading 4 period to declare their own discrepancy. 5 If it was caused by a fire or something 6 else, there could be an option to write off the 7 value and not pursue it or gaining intervention 8 or training from the Network to support the 9 postmaster in completing a branch trading 10 statement. 11 Q. But, in terms of the transaction corrections 12 were the options, essentially, you're going to 13 get -- 14 A. We didn't issue -- we didn't issue transaction 15 corrections on local suspense. 16 Q. Putting aside the local suspense issue, just 17 talking about your investigations, the 18 investigations carried out by your team, can you 19 assist us with what was the end result of 20 an investigation: was it one of we will issue 21 a transaction correction or we won't issue 22 a transaction correction? Was there anything in 23 between? 24 A. The transaction correction came about because of 25 an open item on a general ledger. So they would 48 1 issue, if there was an open item, ie the two 2 product streams didn't match or they'd raised an 3 enquiry and we'd received money back from 4 clients or banks to enable us to issue 5 a transaction correction. So it wasn't 6 arbitrary, "We'll just issue one". If you 7 issued a transaction correction without there 8 being an open item, it would create an open item 9 on the ledger that needed actioning. 10 Q. What would be the next step from there? 11 A. If they did issue one? 12 Q. If they didn't issue one. 13 A. If they didn't issue one, it would be an open 14 item that would be monitored at our weekly 15 meetings: why has it not been cleared or issued? 16 Q. Can I look at paragraph 36 of your witness 17 statement it's WITN06120100 and there's 18 a passage in there that I'd just like your 19 assistance with. It's about halfway down. It 20 says: 21 "A postmaster could dispute a [transaction 22 correction] even if they had accepted/settled 23 centrally the [transaction correction], which 24 would usually have been due to branch trading 25 time constraints." 49 1 When you say, "branch trading time 2 constraints", do you mean the need to enter the 3 next trading period or is that something else? 4 A. Yes. So if they'd received a transaction 5 correction two days before branch trading, they 6 didn't investigate it, they could settle it 7 centrally and then request, when the team rang 8 up or when the team sent the letters around, 9 "You have this transaction correction on your 10 account", they could say, "But I want to dispute 11 it". 12 Q. You then say that a relationship manager could 13 block the debt. Can you assist us with blocking 14 the debt and what that means? 15 A. So if they a postmaster had settled an item 16 centrally, there was a blocking option to say, 17 "Do not chase on this debt". So if somebody had 18 said, "I'm going to dispute this", there was 19 a blocking code put on the line within the 20 customer account and the debt wasn't chased. 21 Q. So a blocking would occur, am I right in 22 thinking, only if an investigation was taking 23 place? 24 A. Yes. 25 Q. For those reasons we saw earlier, the 50 1 investigations that were carried out by your 2 team were rather limited. 3 A. That was local suspense, that was totally 4 different to transaction corrections. 5 Q. Okay, thank you very much. So in terms of 6 transaction corrections, what kind of 7 investigations would take place in relation to 8 alleged software errors? 9 A. I don't see correlation between that. 10 Q. Well, if a subpostmaster said that there is 11 a discrepancy due to a software error, in what 12 circumstances would their debt be able to be 13 blocked, if there was no investigation into that 14 software error? 15 A. So if the postmaster came back to us and said, 16 "This transaction correction is incorrect, 17 I believe the Horizon figure is incorrect", then 18 Andy, the relationship manager -- 19 Q. Is that Mr Winn? 20 A. Mr Winn, yeah -- would take that up and try and 21 get it resolved with the IT suppliers. 22 Q. Were you involved in that process at all? 23 A. Not in the nitty-gritty of it, no. All Andy's 24 disputes that came in were in writing. So that 25 we understood what the postmaster was trying to 51 1 convey the issue was. 2 Q. So every time -- 3 A. So -- 4 Q. -- there was a software issue raised by 5 a subpostmaster, that would be in writing? 6 A. No, it's a totally different thing to 7 a transaction correction. 8 Q. Well, if somebody is seeking a transaction 9 correction, would like a transaction correction 10 because there's a discrepancy caused by 11 a software error ... 12 A. How would they know it's caused by a software 13 error? 14 Q. Well, we'll absolutely come to that. 15 A. Yeah, and that's -- I think that's where I'm 16 struggling because the team in Chesterfield were 17 just processing the data that they'd got, so 18 what had come in from Horizon and what had come 19 in from clients. 20 If the -- if a postmaster said, "That 21 Camelot data is incorrect, I keyed this into 22 Horizon", or whatever, we would go back to 23 Camelot for evidence that that's what had 24 happened on that terminal but it wouldn't be 25 a software issue. 52 1 Q. So if they said, "There is an error there in the 2 Camelot issue, I think it's down to a software 3 error", would they be able to block the debt or 4 not? 5 A. But I don't believe it would be down to 6 a software error. If they'd not keyed -- 7 Q. How do you reach that conclusion? 8 A. If they'd not keyed the amount into Horizon from 9 the end-of-day Camelot slip, there would have 10 been differences between what Camelot said 11 they'd completed on that terminal versus what 12 the postmaster input into the Horizon till. 13 Q. So am I right in thinking that, as part of the 14 transaction correction process, so far as your 15 department was concerned, software errors just 16 didn't feature in that process? 17 A. I don't think it did, greatly, no, and the level 18 of disputes we had on transaction corrections 19 were very low. 20 MR BLAKE: Thank you, sir. That might be 21 an appropriate time to take our mid-morning 22 break. Could we come back at 11.30? 23 SIR WYN WILLIAMS: Yes, certainly. So feel free to 24 have a wander around wherever you are, 25 Ms Bolsover, and just come back by 11.30, all 53 1 right? 2 THE WITNESS: Yes, thank you. 3 (11.10 am) 4 (A short break) 5 (11.30 am) 6 MR BLAKE: Thank you, sir, can you see and hear me? 7 SIR WYN WILLIAMS: I can, thank you, yes. 8 MR BLAKE: Thank you very much. 9 I'm going to move on to the topic of 10 recovery of debts. Can you assist us with what, 11 if any, legal experience those who were charged 12 on a day-to-day basis with recovering debts had? 13 A. None. 14 Q. Can we look at POL00084996, please. This is 15 a presentation from 2009. If we go over to 16 page 2 -- do you recall this workshop at all? 17 A. I think I do, yes. 18 Q. What were the circumstances? If we go back to 19 page 1, then. Sorry, it might assist. Do you 20 remember the purpose of it? 21 A. Yeah, I think it was around the efficiency 22 programme to reduce staffing levels within 23 Chesterfield. 24 Q. If we go over the page, there's a heading there 25 "Legal Skills", on the left-hand side, and it 54 1 says: 2 "Determine the legal skills required by 3 Product and Branch Accounting for managing debt 4 recovery processes." 5 It has your name next to it. 6 A. Yeah. 7 Q. Can you assist us with that? 8 A. I think it was highlighted as a -- there was 9 a gap there that the team were there to process 10 information and recover the debt amount but 11 didn't have the legal skills or terminology. So 12 if solicitors were coming back to the team with 13 a long-winded email, they didn't always 14 understand the terms, and I believe the steps 15 taken was workshops with -- and I can't remember 16 whether it was Bond Dickinson or other legal -- 17 legally qualified people to do workshops with 18 the team to enable them to gain an understanding 19 of the processes for moving to civil recovery. 20 Q. We've heard some evidence of the size of the 21 Legal team being reduced at the Post Office. 22 Would this be around this time or was that some 23 other time, to your recollection? 24 A. I don't know. We were gaining input or passing 25 cases to the Royal Mail Legal team to pursue 55 1 debt recovery, so it -- at the point of we can't 2 recover this debt then we would seek legal 3 support to then chase the debt until Legal 4 Services Royal Mail and Post Office split, and 5 then work was undertaken by myself and, I think, 6 Rebekah Mantle to set down what steps should be 7 taken and to gain a fixed price pricing, as 8 such, for the work that needed undertaking. 9 Q. Thank you. Sticking with this document, we see 10 there Mandy Talbot's name mentioned quite a lot, 11 "Solicitor Service Improvements". She's to 12 "Create a checklist of evidence required by 13 solicitors": 14 "Solicitor Service Improvements 15 "Develop standard checklist of information 16 provided to solicitors." 17 If we keep on going over the page, we see 18 your name mentioned together there, "Use of 19 local Solicitor Services": 20 "Investigate viability of using local 21 solicitors (ie for low value debt) where it is 22 uneconomical to pursue the debt using existing 23 external Solicitors." 24 What did you understand Mandy Talbot's role 25 to be? 56 1 A. She was the internal lawyer, as such, that we 2 went to. 3 Q. Her name is mentioned quite a lot. Are we to 4 read into that any particular level of 5 responsibility that she may have had on a policy 6 side or taking -- 7 A. I'm unaware of that. All she was seen as is 8 another interface for us to then gain support to 9 recover the debt. So, from a legal aspect, 10 sending letters before action out, et cetera, 11 and/or passing on to an external solicitor. 12 Q. But something like investigating the viability 13 of using local solicitors which are both tasked 14 as the lead role, in carrying out that kind of 15 work, did you see Mandy Talbot as simply a case 16 worker who handled cases or something else? 17 A. She was a touch point for us, so I didn't really 18 know her position, as such. 19 Q. Did she give you any indication -- 20 A. (Unclear) that didn't happen. We didn't. 21 I think there was some suggestion that we would 22 put cases of a low value into court ourselves 23 and -- of which I said that wasn't feasible. 24 You know, we weren't experienced in lodging 25 claims for money, not within Chesterfield. 57 1 Q. Ignoring that particular issue, was Mandy Talbot 2 someone who you saw as having decision-making 3 power or something else? 4 A. I did, yeah, from a legal aspect, yes. 5 Q. How about from a policy aspect or something 6 slightly wider than a legal aspect? 7 A. I don't know. 8 Q. Thank you. That can come down. I want to ask 9 you about -- I think it's the Dunning Process, 10 is that correct? I think it's set out in your 11 witness statement? 12 A. Yeah. 13 Q. Can you tell us what the Dunning Process is? 14 A. Once a debt is created on POLSAP, so if 15 a postmaster settled centrally a transaction 16 correction or a branch discrepancy, the Dunning 17 Process started one week -- automated one week 18 after branch trading, letters would be sent and 19 statements to the branch to say "This debt is 20 outstanding". 21 So it was done over three letters, 22 I believe. One seven days after branch trading 23 and then one 21 days after branch trading. 24 I think that's it for the current agents. There 25 was two. And if we'd got either no response 58 1 from the branch or the postmaster, or they 2 pointblank refused to pay, rang us up and said 3 they weren't prepared to pay it, the debt would 4 be referred to the Contracts Advisers. 5 Q. So when we spoke before the break about the 6 IMPACT Programme, et cetera, and the fact that 7 a subpostmaster would settle centrally, even in 8 cases there the discrepancy was caused by 9 a software error, that would then trigger this 10 process where they would then be sent a letter 11 within a week? 12 A. If the debt was set on the customer account 13 which was the individual to the branch and 14 postmaster, then the letters would say to 15 contact us and discuss it or discuss it with the 16 agent that was dealing with that debt. But if 17 they just pointblank either didn't respond, then 18 it would be passed to the Contracts Adviser to 19 discuss it over the telephone with the 20 postmaster. 21 Q. I think you said there were three different 22 letters. Were they increasing in escalation? 23 A. As such, yes. Yeah, "We've not heard from you". 24 They were rewritten, the letters were rewritten 25 as part of the -- I believe the Branch 59 1 Efficiency Programme, so there was different 2 wording put in each letter. 3 Q. When you say rewritten, to become more or less 4 confrontational, aggressive, or? 5 A. Potentially less, but I'm wondering whether that 6 actually happened. The letters were passed 7 through Legal and Communications teams. So -- 8 Q. You described in your statement that there are 9 separate processes for current agents and former 10 agents. Very, briefly can you tell us the 11 differences? 12 A. Yeah, well, we couldn't then depend, if it was 13 a former agent that had left the business, then 14 there was no contact via the Contracts Managers. 15 So it was the same Dunning Process, letters sent 16 out at different intervals, and then it might be 17 a third letter, which was a letter before 18 action. So we could potentially be pursuing 19 civil recovery. 20 Q. In respect of writing off debts, in what 21 circumstances would debts be written off during 22 this process? 23 A. For the former agents? 24 Q. For either. 25 A. If an administrator said there was an issue with 60 1 the debt and they would document the issues 2 raised and request a write-off by their team 3 leader, and it was done on an authority level. 4 So if there were problems identified, then the 5 individual could pass it to the team leader or 6 to myself to seek authority to write off. 7 Q. Problems identified by who? 8 A. By the branch calling the Current Agents Team or 9 the Former Agents Team being unable to trace the 10 former subpostmaster. They could put 11 recommendations in to write off because it 12 wasn't viable to pursue. 13 Q. So we have a circumstance where they can't be 14 traced, that's one case in which it would be 15 written off. Can you give us some more examples 16 of typical circumstances where debts would be 17 written off? 18 A. If we'd gone into using a solicitor, they might 19 say "This is not worth pursuing, there's no 20 assets". So you would only be securing 21 a judgment for judgment's sake. I think it was 22 later that we determined this is, you know, 23 it's -- we're spending an awful lot of money 24 trying to get something back for what? To no 25 gain. So that process was reviewed but I can't 61 1 remember the date it was reviewed, but it could 2 be that "It's going to cost you this much to 3 pursue this debt, are you prepared to spend that 4 much?" 5 Q. So we have can't trace, we have to effectively 6 a waste of the Post Office's money to pursue. 7 A. Yeah. 8 Q. Any other circumstances? 9 A. Or not economical to pursue, yeah. There could 10 be varying scenarios. It depended what came up, 11 you know, what circumstances there were. 12 Q. In your experience or to your recollection, at 13 this stage, so the Dunning Process stage, prior 14 to it moving to solicitors, how often would 15 a debt be written off in the case of, for 16 example, a subpostmaster who complained about 17 a software error with Horizon? 18 A. I think prior to the court case, we had very 19 little escalation that it was Horizon or 20 software issues. It was only after the 21 judgment, the Alan Bates litigation, that we got 22 people saying it was Horizon. So there were 23 very few numbers, I believe, prior to that. 24 I can't give you numbers on how many were 25 written off. The stats would all be there on 62 1 the values that we wrote off each month and each 2 write-off would be backed up with a reason and 3 a paper around it of why we should write this 4 debt off. 5 Q. So would there be a statistic that could tell us 6 how many debts were written off because 7 subpostmasters had raised complaints about the 8 software? 9 A. No. I don't believe so. 10 Q. Your experience was that it wasn't until the 11 Bates & Others Group Litigation that people were 12 making complaints about the software that were 13 escalated -- 14 A. No. 15 Q. -- to your team? 16 A. No, because I believe the Justice for 17 Subpostmasters Alliance, that started raising 18 the initial issues, and then there were MPs' 19 cases, mediation cases so there were various 20 places that things were coming in and we were 21 asked "Is there debt on these accounts?" And we 22 would then feed back "We've got this debt" and 23 we would be told to hold recovery and, again, 24 put a block in on the debt, if we were told that 25 there was an issue. 63 1 Q. Do you find it surprising now, given what you 2 now know, that, during your time in this role, 3 nobody said that, as part of the Dunning 4 Process, as part of that increase in escalation 5 to recover funds, people were raising bugs, 6 errors or defects or software problems with 7 Horizon? Is it surprising to you that that 8 didn't reach you, that message? 9 A. Yes. 10 Q. Why do you think that is? 11 A. I don't know, in all honesty. We had very few, 12 you know, say that -- if we were told "it was 13 this", then we would investigate it. But, for 14 my recollection, I can't remember that happening 15 and I think I've said in my statement I'm very 16 surprised that the evidence given to say Fujitsu 17 were amending postmasters' accounts, that 18 that -- 19 Q. Had the facility to amend subpostmasters' 20 accounts? 21 A. Had the facility, yes. And I think 22 I potentially knew something could be done but 23 it was under a controlled process. 24 Q. But if there were -- if there was a pattern of 25 complaints during this recovery process, where 64 1 subpostmasters were saying "I know you're saying 2 X equals Y or X should equal Y but, in fact, the 3 numbers there are wrong and it's because of the 4 Horizon system", and that simply wasn't reaching 5 you in any kind of pattern or trend, what's gone 6 wrong there? 7 A. The communication from wherever it's been 8 reported. So if it was a financial loss or they 9 wanted a transaction correction, say, and prove 10 that there was a system issue, then the 11 communication lines appear to have broken. 12 Q. All of those administrative officers who were 13 dealing with the transaction corrections 14 process, those who were dealing with the 15 recovery process, you were their manager? 16 A. Yeah. 17 Q. Were they not raising these issues with you? 18 A. They were asked to, if they were being raised to 19 the individuals, yeah. 20 Q. Were you regular meetings at which those topics 21 were raised? 22 A. I can't think of regular meetings but I know, 23 internally with the Legal Services Team, Rodric 24 Williams, et cetera, we had discussions on the 25 cases that we held or, if a postmaster raised it 65 1 that it was a Horizon issue, it was fed over to 2 Legal. 3 Q. Your evidence is that that was exceptionally 4 rare? 5 A. Yeah. I think the biggest chunk of work was the 6 Justice for Subpostmasters and that was around 7 former agents debt that we raised -- we were 8 told which postmasters it was that had raised 9 it, and we sent copies of the files that we held 10 over to Legal Services, if we held the file. 11 Q. Prior -- 12 A. (Unclear) postmaster -- 13 Q. Sorry, we'll get to all of those documents but, 14 prior to the Justice for Subpostmasters 15 campaign, can you recall debts ever being 16 written off in respect of a subpostmaster who 17 said that the debt was actually just an apparent 18 debt that was caused by a bug, error or defect 19 or software failure with Horizon? 20 A. No, it doesn't stick in my mind that that was 21 raised no. 22 Q. It doesn't stick in your mind that it was ever 23 written off? 24 A. They may have been written off but we sought 25 reasons for debts to be written off. So -- 66 1 Q. Nowhere, to your recollection, prior to that 2 campaign, was a debt written off because of 3 a complaint about a bug, error or defect or 4 other software issue with Horizon? 5 A. Not to my knowledge, unless we'd been requested 6 to write a debt off. So within the business, 7 people could come to us and say, "Please write 8 these figures off because of X, Y and Z", and 9 that was the part of the case that we used to 10 control the write-offs. 11 Q. You were the manager of this team? 12 A. Yeah. 13 Q. To the best of your knowledge and recollection, 14 you don't recall anyone coming to you and 15 saying, "I have written off this debt", or, "Can 16 this debt be written off because the 17 subpostmaster is complaining about the Horizon 18 system and there might be something in it"? 19 A. I can't say that there would be none. I just 20 can't recollect any. 21 Q. I've said prior to the Justice for 22 Subpostmasters campaign, how about after? When 23 was the first case that you can recall that was 24 actually written off during this pre-litigation 25 phase, due to an allegation about the Horizon 67 1 system? 2 A. I think during the mediation sessions that 3 happened, we were requested to write debt off. 4 Q. So -- 5 A. So -- 6 Q. -- are we talking 2013, 2015, 2018? 7 A. 2013, I think. So we would be advised "Don't 8 pursue this debt, please write it off". 9 Q. Was that the first period really when you became 10 aware of issues? 11 A. We didn't -- I didn't necessarily know what the 12 issues were. We weren't privy to the mediation 13 sessions that happened or the reasons for it. 14 We were just told "This is a mediation case, 15 please write it off under the authority of 16 Angela". 17 Q. Thank you. Where debts weren't written off, 18 I think you've said in your statement that you 19 would then liaise with the lawyers, and Mandy 20 Talbot is a name you've mentioned in particular? 21 A. We would liaise on the case, on the pursual of 22 it. If there was no recovery from it then it 23 would potentially go for a write-off -- as 24 a write-off recommendation and be written off. 25 If it wasn't worth pursuing or unable to pursue. 68 1 Q. But at some point during that Dunning Process 2 the lawyers would become involved. Which stage 3 was that? 4 A. After we'd sent at least two letters out to the 5 branch -- to the ex-postmaster, if we -- 6 Q. Then I think you say a pre-action letter was the 7 third letter; is that right? 8 A. Yeah. 9 Q. Was that drafted by Mandy Talbot and the Legal 10 team? 11 A. I believe it was in the early days pre-the split 12 of Royal Mail. 13 Q. Can we look at POL00006650. This is the 14 interview with Womble Bond Dickinson that I've 15 already taken you to and I'd like to look at 16 page 30 of that. I'm afraid I'm going to read 17 a fair bit of this transcript. I'm going to 18 start at the bottom of page 30. So "VB" is the 19 interviewer, Victoria Brooks, and "AB" is 20 yourself. She says: 21 "We've talked a bit -- and now I need to 22 know a bit about civil claims and recoveries 23 action which is definitely more you. 24 "AB -- Yep. 25 "VB -- ... we've talked ... about the 69 1 procedure for bringing a claim, erm so is it 2 it's basically a commercial decision as to 3 whether or not to bring a claim based on whether 4 or not you think they're going to get the money 5 back." 6 Over the page. You say: 7 "Yeah -- in the past we've always gone 8 Judgment if we can -- if we think we've got 9 a good enough case we've gone for judgment." 10 "VB -- And was that always the commercial 11 decision about whether you get the money back or 12 was it more, was it more because sometimes erm 13 I think about the Post Office specifically but 14 some clients are like no they owe us money we're 15 going for the Judgment, doesn't matter about the 16 cost and someone will be like you know we're not 17 actually going to get money at the end of it so 18 we're not going to do that. Does that change?" 19 "AB -- I think we've been swayed by this 20 action ..." 21 Can you just assist us with that? What do 22 you mean there? 23 A. I think in the past we did go for judgment, 24 irrespective of whether there were any -- it 25 would come to fruition on a payment. But it 70 1 became, in my view, uneconomical to go for 2 judgment on some of the cases because it was 3 costing us too much to do that. 4 Q. So where you describe it before as basically 5 a commercial decision, was that the core to your 6 thinking in respect of actions, that they were 7 ultimately commercial decisions and to be 8 approached in that way? 9 A. Yes. 10 Q. She says: 11 "Ok. 12 "AB -- ... into not doing it. 13 "VB -- So you used to just go for it all the 14 time. 15 "AB -- If we would go for Judgment erm and 16 I would say 95% of the time would get into the 17 default so it's then -- you've got on it record. 18 "VB -- Yeah. 19 "AB -- We've got an option of [then 20 something] years." 21 So was it important to get a judgment and to 22 get a finding on record against the 23 subpostmaster? 24 A. I think that was the view in the early days, 25 yes. 71 1 Q. "AB -- And we've got some leverage if they get 2 a job, attachment of earnings, etc. 3 "VB -- Yeah. 4 "AB -- And if they got property you would 5 definitely ... 6 "VB -- Yeah. 7 "AB -- ... to try to get it secured even if 8 they have got kids in there or whatever and by 9 this time we've had erm changes come to fruition 10 after 30 years. 11 "VB -- Really. 12 "AB -- ... which we didn't know we'd got. 13 So Royal Mail used to put our charges on. 14 "VB -- Oh right. 15 "AB -- And now we are having to ask them to 16 lift this charge, we also have people dying and 17 no charge change and debt not being paid so 18 there were a case the other week, he died in 19 2009. The family have just continued, so they 20 can't [something] anything. 21 "VB -- So they didn't sell the property or 22 prove the will or whatever they'd have needed to 23 do and then. 24 "AB -- Why I don't know so why they've done 25 nothing from a, you know. I don't know. I find 72 1 it very interesting. 2 "VB -- That is very interesting. 3 "AB -- Yeah. And I did want to go for more 4 than Roderic wanted to go for. 5 "VB -- Yeah [laughs]. 6 "AB -- He looks quite happy with himself for 7 120,000 I think." 8 Was this the attitude towards subpostmasters 9 and recovery of debts in terms of, for example, 10 there's reference there to try and get secured, 11 even if they've got kids. There seems to be 12 a slight lack of sympathy in the approach that's 13 taken; do you agree with that? 14 A. Potentially, yeah. It was a debt that was 15 outstanding to the business, a loss. 16 Q. Can we go on to page 33, please. About halfway 17 down, the interviewer says: 18 "... what involvement does your team have 19 with actually if at all looking at the contracts 20 when they're considering recovering shortfalls 21 from either formal or current Postmasters. Do 22 they ever look at the actual contracts for those 23 individual Postmasters or is it more of a 'this 24 is our process based on those contracts'. 25 "AB -- All contracts say they should pay the 73 1 losses. 2 "VB -- They do. 3 "AB -- So irrespective of which contact 4 they've got they should be paying the losses. 5 "VB -- Fine, that's fine. I thought that 6 would be the answer but erm. 7 "AB -- We would, we would gain a copy of 8 contract and have it in the file from the former 9 agent's point of view. 10 "VB -- Yeah. 11 "AB -- But from a current agent's point of 12 view they owe us the money. 13 "VB -- Yeah, and it doesn't really make 14 a great deal of difference because. 15 "AB -- What contract they are on now. 16 "VB -- Ok, so looking at the contracts and 17 probably more what the contract advisers don't 18 do if it's more of a problem that might justify 19 suspension or termination but other than what 20 you're doing because you're right, they do all 21 say in one way or another that you've got to pay 22 the money back." 23 Do you recognise that that isn't actually 24 correct in terms of -- you've said there "All 25 contracts say they should pay the losses" and 74 1 the interviewer says, "In one way or another 2 they've got to pay the money back". 3 A. I think it's only come to light to me since 4 watching some of the testimonies that have come 5 on through the Inquiry. I think the viewpoint 6 was that all losses should be paid and I do take 7 it that, you know, if they were caused by 8 software issues, then they are not caused by the 9 branch but I think the view, from a business 10 point of view, was the debt was there and it was 11 owed, and the team that we had were processing 12 debts. 13 Q. If we look at POL00000246, please. If we start 14 at the first page to see what it is we're 15 looking at. It's the "Community Subpostmasters 16 Contract" and if we look at page 71 -- if you've 17 seen other evidence you may well have seen 18 witnesses being taken to this particular 19 paragraph -- it's paragraph 12, which says: 20 "The Subpostmaster is responsible for all 21 losses caused ..." 22 Then it limits it: 23 "... through his own negligence, 24 carelessness or error, and also losses of all 25 kinds caused by his Assistants. Deficiencies 75 1 due to such losses must be made good without 2 delay." 3 Do you recognise, looking at that and 4 looking at your account in the 2018 interview, 5 that, in fact, the suggestion that was made in 6 that interview was, in fact, wrong, in terms of 7 all losses are payable? 8 A. I do now. I don't necessarily think it was 9 thought that way previously. 10 Q. If we -- 11 A. I think that was -- you know, one paragraph 12 covered all losses because they were committed, 13 as such, through a branch discrepancy by the 14 branch themselves or a transaction correction 15 being accepted and settled centrally, creating 16 the debt. 17 Q. I think you may have seen me take Mr Inwood to 18 the next document, it's POL00113670. This is 19 a document that you'll be familiar with. It's 20 the "Operators' in Service Debt" policy. 21 A. Yeah. 22 Q. Your name is on the front there as a key 23 stakeholder, approved by Mr Inwood. I think 24 you've said that you actually worked on this 25 policy to some extent? 76 1 A. Yeah. 2 Q. If we look at page 4, did you see me take 3 Mr Inwood to this particular document? 4 A. Yes. 5 Q. So it's paragraph 4 and it describes there: 6 "From a purely contractual perspective the 7 Operator of a Post Office branch is responsible 8 for ..." 9 Then the first one: 10 "Making good any loss of Post Office cash 11 and stock without delay." 12 Can you see there how that error and that 13 approach seems to be included in this particular 14 policy? 15 A. Yeah. 16 Q. Can we please look now at NFSP00000043, please. 17 This, I believe, is a draft policy in 2004. If 18 we could go over the page to page 2. We see 19 there "Reviewed" and your name is in the 20 "Reviewed" section. It's called "Debt 21 recovery -- Horizon related errors", and if we 22 look at the "Objective" on page 3 please, we see 23 there it says: 24 "The objective of our debt recovery process 25 is to achieve a 100% success rate in proven 77 1 charge errors brought to account and made good. 2 The only exceptions will be where there has been 3 a dispute that on investigation has been upheld 4 or, as referenced in the Liability for losses 5 policy, agreement has been given by the retail 6 line representative to write off the loss to 7 their profit and loss account." 8 So where we're past the Dunning Process, the 9 approach is to try to achieve a 100 per cent 10 success rate. Is that something that you would 11 agree with, something that you recall? 12 A. Well, this was in 2004 that this document was 13 written. 14 Q. Yes. 15 A. So that's where I would struggle because I don't 16 know the processes for debt recovery back in 17 2004. I appreciate I'm on the circular of this 18 but it wasn't within my remit. 19 Q. Is that an approach that is consistent with the 20 approach that occurred throughout your time when 21 it was within your remit, that the approach was 22 in reality for a 100 per cent success rate? 23 A. No, because we couldn't receive -- we couldn't 24 achieve 100 per cent success rate for all debt. 25 Q. But the objective of the debt recovery process 78 1 is to achieve a 100 per cent success rate; is 2 that something that you subscribed to during 3 your time? 4 A. No. I never had that as an objective, no. 5 Q. Can we look at POL00088867, please. This is the 6 "Liability for Losses Policy", it's a 2003 7 version. It's a document that I've taken some 8 witnesses to previously. It's page 8 that I'd 9 like to look at, which refers to "Horizon 10 Issues". It says there: 11 "If an agent feels that an error has 12 occurred via the Horizon system, it is essential 13 that this be reported to the Horizon System 14 Helpdesk. The Horizon System Helpdesk will only 15 consider the incident for further investigation 16 if the branch has evidence of a system fault. 17 If no evidence is available, the case will not 18 be investigated and the agent will be held 19 responsible for making good the loss." 20 So it's only going to be investigated if the 21 subpostmaster can produce evidence of a system 22 fault. Am I right in saying, then, that we have 23 the Horizon System Helpdesk there that won't 24 investigate unless the branch can evidence 25 a system fault. I think, in respect of your 79 1 team and their processes, they didn't see it as 2 part of their job to investigate an alleged 3 software fault either? 4 A. Well, I don't think they were told about it, no, 5 because they were sending transaction 6 corrections out. This is 2003, so it's prior to 7 the POLSAP system. 8 Q. Were you aware, whilst you were the head of the 9 team, that the Helpdesk was only considering 10 an incident where the subpostmaster themselves 11 had evidence of a system fault? 12 A. No, prior to the Inquiry sending me the 13 paperwork, I've never seen this document from 14 2003. 15 Q. Were you aware of any particular team, then, 16 that was investigating system faults that were 17 raised by subpostmasters but who didn't have 18 evidence of such a fault? 19 A. Not necessarily, no. I think it should have 20 gone in to Service Delivery area, if there was 21 an issue. 22 Q. Should have gone into who and where? 23 A. So there was an IT Helpdesk within, I think, 24 Service Delivery that should have raised any 25 issues and, if there were financial impact, then 80 1 should have been engaging with either Rod Ismay, 2 in the first level, or whichever Senior Manager 3 were managing the area where the system was 4 deemed at fault. 5 Q. As part of your debt recovery actions, nowhere 6 in your experience did you receive the product 7 of an investigation that had evidenced a system 8 fault that meant that you had to stop the debt 9 recovery action? 10 A. Other than the one that's -- I am aware of, the 11 receipts and payments misbalance, it didn't 12 create a debt but it did show as an overall loss 13 in branch, then, other than that one, no. And 14 I think that's probably one of the first times 15 we were engaged in "There's an issue here". 16 Q. Thank you. If that could come down, could we 17 bring on to screen your witness statement, 18 WITN06120100, it's page 21, paragraph 46. It's 19 here in your statement that you talk about the 20 system issues raised by branches to the NBSC? 21 A. Yeah. 22 Q. I think you explain it in this way. You say at 23 the bottom: 24 "FSC worked with the NBSC if multiple 25 branches raised the same queries. Some of those 81 1 ..." 2 Just pausing there, did you have a system in 3 place to record the fact that multiple branches 4 were raising the same queries? 5 A. NBSC would come in to FSC, yes. 6 Q. But it wasn't something that FSC itself kept any 7 record of or? 8 A. No. 9 Q. "Some of these were referred to as system 10 issues, and these would be escalated to the 11 [Post Office] IT service desk and onto the IT 12 suppliers [and you've said] (ATOS/Accenture) for 13 investigation." 14 You've given examples there. First: 15 "Non-arrival of TAs in branch for 16 Lottery/pay station." 17 Then over the page -- 18 A. I think my point on this one was they were 19 classified as system errors where they weren't 20 Horizon system errors. It was around the data 21 going out to branches that was an issue. 22 Q. So, as far as you were concerned with system 23 errors, in fact they are to do with the 24 transaction authorisations and transaction 25 corrections and not to do with the broader 82 1 Horizon system; is that correct? 2 A. Transaction acknowledgements, yeah. 3 Q. It's only at paragraph 49, so if we go down the 4 page, where you talk about the receipts and 5 payments issue. 6 A. Yeah. 7 Q. You say: 8 "There were only a few occasions that I can 9 remember that I came across branch trading 10 problems due to what may now be referred to as 11 a Horizon bug (although I do not remember it 12 being called a Horizon bug at the time). 13 I believe that these were for Receipts and 14 payments mismatch issues. I am however afraid 15 that I cannot recall the details of these as the 16 issues were managed by Rod Ismay ... and Andrew 17 Winn ... I was not aware of widespread issues or 18 names for Horizon bugs at the time. The IT 19 Service Management helpdesk would need to be 20 contacted to give details of these issues, their 21 specific cause and resolution that was supported 22 by the FSC." 23 Was this recorded in some way by your team 24 at the time? First of all, can we start by 25 saying when was this time? It's quite 83 1 an important issue for this Inquiry to know when 2 it was that you became aware of the receipts and 3 payments mismatch issues. 4 A. I can't put an exact time on it. I want to say 5 2013/14 but I don't know. If this was reported 6 into us from the IT Service Helpdesk, then Rod, 7 I believe, took the lead on it with Andy to 8 understand what the issues were and what should 9 be done about it. And I think the conclusion to 10 this issue -- I don't know how it was resolved 11 with the system, what went wrong or what they 12 did to make it right. 13 I do remember, though, that I think, if it 14 caused a loss in branch, this mismatch, then we 15 issued the branch with a credit TC, so they 16 didn't stand the loss and, if it created 17 a surplus, I believe in the letter that Rod and 18 Andy sent out, it said that we would not be 19 seeking to recover the surplus. 20 But I can't honestly remember whether it was 21 around 20 offices or how big it was. 22 Q. How would that information be shared amongst 23 those who were dealing with transaction 24 corrections? 25 A. This wasn't a transaction correction issue. It 84 1 wasn't an open item but it was flagged up as 2 a misbalance of the account. 3 Q. But you've said that they would issue, for 4 example, credit transaction corrections as 5 a result of this? 6 A. Give the branch cash back, yes, and -- 7 Q. Via a transaction correction? 8 A. Yeah. So they issued them the credit that, 9 potentially, this misbalance caused. 10 Q. Absolutely. 11 A. So if there was a misbalance of £1,000, 12 I believe that a cash transaction correction was 13 issued to them to accept, to negate the loss 14 that they -- had occurred on their account. 15 Q. We began today talking about the various people 16 at administrative officer grade who were dealing 17 with transaction corrections. This does seem to 18 have resulted in a transaction correction in 19 certain cases. Was there a process by which 20 information about the receipts and payments 21 mismatch issues was cascaded down to those 22 administrative officers who were dealing day to 23 day with transaction correction issues? 24 A. I don't believe so, no, because they wouldn't 25 hit the GLs that the individuals were working 85 1 on. They were separate product GL accounts, 2 general ledger accounts. 3 Q. Why do you say that? How can you say that with 4 any confidence? 5 A. Well, I suppose I can't but, to my knowledge, it 6 didn't affect the product lines. I don't know 7 what the bug created. I know the transactions 8 didn't match the cash, so the receipts in and 9 the payments -- receipts out didn't match with 10 the cash in branch. 11 Q. Do you think that the fact that the transactions 12 didn't match the cash -- and I think you said 13 that 95 per cent, or something, of your 14 transaction corrections related to cash -- 15 A. Cash (audio disruption). 16 Q. Yes. Was it not information that was important 17 for those dealing with the transaction 18 corrections to be aware of? 19 A. I don't know. I didn't believe so at the time, 20 no. 21 Q. Knowing what you know now, do you believe so? 22 A. Not necessarily within the individual product 23 teams, no. 24 Q. This is the, I think, the only issue that you 25 say you were aware of that meant that X didn't 86 1 necessarily mean Y, in terms of the numbers that 2 were being shown in the accounts. I think we 3 spoke about a Camelot issue earlier, for 4 example. To use that issue, that 5 a subpostmaster's Horizon figure and the Camelot 6 figures, if they weren't the same, what would 7 happen in those situations? Was this something 8 that those dealing with transaction corrections 9 should have had been aware of? 10 A. In the early days, if there was a Camelot 11 transaction correction sent out, it was "Horizon 12 says this -- you've input Horizon as this, and 13 Camelot data says this". 14 Q. Yes. 15 A. And with the Camelot transactions, I believe it 16 was done over a full month. So it could -- the 17 branch could be up one day, down the next, 18 et cetera, and it was netted out over probably 19 a 30-day period until, for the online gain, it 20 went to transaction acknowledgements. 21 Q. So the position that was being considered was, 22 "Does X equal Y?" but there was no factoring 23 into that the possibility that a bug, error or 24 defect, a bit like the receipts and payments 25 mismatch issue, might have featured in there 87 1 somewhere? 2 A. I suppose it could have done, yeah, but it's the 3 postmaster that's inputting the Lottery figure 4 into Horizon. 5 Q. Well, again, how can you be sure that the figure 6 that you are seeing is the figure, in fact, that 7 the postmaster was inputting? 8 A. If there was a difference and we'd issued 9 a transaction correction, he would be able to 10 challenge it but it would be down to the slip 11 from the Lottery terminal as well. 12 Q. You're looking at two pieces of paper and seeing 13 if they match. 14 A. Yes. 15 Q. But, in fact, if one of the pieces of paper 16 shows an incorrect figure because of a bug, 17 error or defect, you simply wouldn't be aware of 18 that, would you? 19 A. Other than there's a difference from what the 20 client's saying that had been transacted on the 21 Lottery terminal. 22 Q. You generally took the view that that was 23 probably something like a miskey? 24 A. Yes. I think it was more around the Lottery 25 slip on the terminal, on the retail side of the 88 1 business, being taken at the wrong time, and it 2 being inputted into Horizon before the close of 3 business on the Camelot terminal. 4 Q. If you stand back now, though, and really think 5 about it and think about the fact that you knew 6 about a bug that could cause a mismatch between 7 receipts and payments, looking back at the work 8 that those people who were dealing with 9 transaction corrections were dealing with, do 10 you think it would have been useful for them to 11 have known that the Horizon system was capable 12 of causing a mismatch of some sort rather than 13 it being down to user error? 14 A. It may have been but I think these were, as I've 15 just said, probably 20 branches with a receipts 16 and payments mismatch versus 125,000 transaction 17 corrections going out a year. 18 Q. I think I said that you couldn't be sure about 19 those figures and I think you accepted that you 20 couldn't be sure about those figures of the 21 numbers of branches affected by receipts and 22 payments mismatches? 23 A. Well, I just -- I said it earlier, that I think 24 it was maybe around the 20 mark, this incident 25 that -- 89 1 Q. Did you carry out an investigation into the 2 Horizon system to identify if was only 20 3 branches? 4 A. No. That information went to Rod and Andy, 5 I believe, on a spreadsheet of these are the 6 offices that it involves. 7 Q. Does it strike you that a system that is capable 8 of a receipts and payments mismatch issue might 9 also be capable of another issue affecting 10 figures in a different way? 11 A. I suppose it could have been, yeah, but I wasn't 12 aware of it. 13 Q. Do you think that the fact that the system was 14 capable of such an issue was something that 15 should in fact have been cascaded down to those 16 who were dealing with transaction corrections? 17 A. Maybe it should have been, I don't know. 18 Q. I want to address, perhaps, cascading upwards 19 now. Before I do, can you tell us why Rod Ismay 20 and Andrew Winn? Why were they managing the 21 receipts and payments issue, in particular? 22 A. I don't know. I just know that Andy was 23 involved with Rod when this was raised as 24 an issue. 25 Q. Can we look at POL00001538, please. This is 90 1 a "Major Incident Management Process" document 2 and it sets out different levels of management 3 within the Post Office. If we look at page 7, 4 it sets out "Level 2 -- [Post Office Limited] 5 Business Protection Team". It's at the bottom 6 of page 7: 7 "This team consists of empowered business 8 representatives from across [Post Office] 9 Limited. These business area 'experts' are 10 available at all times and will be used to 11 support, inform and influence the management of 12 a medium/high severity incident." 13 Am I right in saying that you were one of 14 the "empowered business representatives"? 15 A. Yes, I was. 16 Q. If we look at page 22, please, we see there the 17 members of this team and, if we scroll down, 18 your name appears about three quarters of the 19 way down. 20 A. Yeah, I think Rod was the lead on it so he was 21 highlighted in bold and I was the sort of deputy 22 if Rod wasn't there or we both were on the call. 23 Q. Was this the kind of forum where those kind of 24 issues could be discussed and shared? 25 A. Yes. If there was a major incident, major power 91 1 outage or something, a call would be put out to 2 all the people on the list, I believe, at that 3 time, so -- saying there was a Business 4 Protection Team call at 11.00. So everybody 5 dialled in, within this remit, to determine what 6 the impact of the issue was. And I'm not 7 necessarily saying it's bugs and defects but it 8 was any major incident or that was classified as 9 a major incident. 10 Q. We have Rod Ismay listed above you there. You 11 say you're not saying it was bugs, errors and 12 defects necessarily. Was it ever bugs, errors 13 and defects in this group? Do you recall any 14 discussions of that nature? 15 A. No. 16 Q. This is a 2009 document. Can you assist us with 17 how long you were on this team and how long Rod 18 Ismay was on this team? 19 A. I don't know. I don't know whether it was -- 20 Q. Would this likely have been during your time in 21 a managerial role you sat in this team? 22 A. Yes, it would. Even to me leaving, you know, at 23 the point of leaving, there could still be, 24 like, a business protection type meeting called 25 if there was an issue. So if NBSC were raising 92 1 an issue, "There's a problem here", there could 2 be a call put out for people to go on the call 3 to understand the impact of any issues that were 4 being raised. 5 Q. You don't recall, for example, NBSC ever raising 6 the issue of software issues with Horizon 7 amongst this group? 8 A. No, I don't. 9 Q. I'd like to now move on to knowledge of bugs, 10 errors and defects in the system. Can we look 11 at POL00006650, that's the document that we've 12 looked at quite a few times. It's the Womble 13 Bond Dickinson interview. It's page 38 that I'd 14 like to look at. 15 So the bottom of page 38, you're asked: 16 "And really interesting, erm as I am 17 somebody who has done a lot of Post Office work 18 over the years as well erm it's really 19 interesting to meet people and hear what 20 actually happens erm so it's been really useful. 21 "AB -- I think in any case I'll sort of say 22 that we [something] were Lee Castleton and Lee 23 Castleton's evidence is sat in a box in office 24 and it is this big. 25 "VB -- Really? My boss who I work with in 93 1 Bristol, Stephen Dilley -- he did that case with 2 Lee erm so I remember that being an interesting 3 case at the time and that was a really ... 4 "AB -- Was it? 5 "VB -- ... important case of a bit of 6 a Judgment that erm to do with signing off the 7 accounts and the meaning of what that was so you 8 know that was erm so was that the only one that 9 went to trial. 10 "AB -- That's the one that was seen as the 11 test case of all test cases that we got here." 12 Now, Lee Castleton's case, that was in court 13 in late 2006, judgment in early 2007, that was 14 when you were in the position of Senior Debt 15 Recovery Manager. Would you have known about 16 the case at the time? 17 A. I wasn't -- until 2007 -- I went into the role 18 in late 2007. 19 Q. Yes, so the same year the Lee Castleton 20 judgment. 21 A. Yeah, I think when I took the role over, there 22 was a cupboard within the office that had a very 23 large box in it and I was told that was the Lee 24 Castleton case, don't destroy it, it was seen as 25 a test case. 94 1 Q. Were you aware of why it was seen as a test 2 case? 3 A. Other than proving that Horizon -- to prove that 4 Horizon worked, was my understanding. 5 Q. What was your understanding of why there was 6 a need to prove that Horizon worked? 7 A. Well, I don't think -- it was the challenges 8 that were probably coming forward at that time, 9 but I had no real -- it had no real impact on 10 the areas that I was working on then. It wasn't 11 until 2007 that I went into Debt Recovery. 12 Q. So from 2007 and going into Debt Recovery, you, 13 very soon into that role, were aware that there 14 were challenges coming forward relating to the 15 Horizon system? 16 A. This one I was, but I wasn't aware of mass 17 numbers. 18 Q. But you were aware of a particular important 19 case, the case of Lee Castleton, that challenged 20 the integrity of Horizon? 21 A. Other than -- yeah, because it was a big box 22 taking a lot of cupboard space up that I was 23 told "Don't ever destroy it". 24 Q. In 2009, so two years later, there was 25 an article in Computer Weekly about the Horizon 95 1 system. Was that something that you were aware 2 of or that was brought to your attention at the 3 time? 4 A. I believe Rod Ismay have brought it to our 5 attention that there was an article. 6 Q. An article that challenged the integrity of 7 Horizon or that raised concerns about the 8 integrity of Horizon? 9 A. Yes. 10 Q. Moving on to the Seema Misra case, can we look 11 at POL00093686. We're now at 21 October 2010, 12 so the next year. If we could look at page 5, 13 please. Could we zoom in to that bottom email, 14 please. There's an email to you, it's to Mandy 15 Talbot as well and number of other people. 16 You're listed there alongside Rod Ismay, Susan 17 Crichton, et cetera, and it's about the Seema 18 Misra case from Jarnail Singh. He says: 19 "After a lengthy trial at Guildford Crown 20 Court the above named was found Guilty of theft. 21 This case turned from a relatively 22 straightforward general deficiency case to 23 an unprecedented attack on the Horizon system. 24 We were beset with unparalleled degree of 25 disclosure requests by the Defence. Through 96 1 hard work of everyone, Counsel Warwick Tatford, 2 Investigation Officer Jon Longman and through 3 the considerable expertise of Gareth Jenkins of 4 Fujitsu we were able to destroy to the criminal 5 standard of proof (beyond all reasonable doubt) 6 every single suggestion made by the Defence. 7 "It is to be hoped that the case will set 8 a marker to dissuade other Defendants from 9 jumping on the Horizon bashing bandwagon." 10 Why were you a recipient of this particular 11 email? 12 A. Because I believed that we'd got debt 13 outstanding for Seema Misra. 14 Q. Do you recall receiving it? 15 A. I don't know whether I can or not. I can 16 remember the Seema Misra trial, which -- I know 17 it was instigated by Security, I believe, as 18 a criminal prosecution. 19 Q. If we look at the comments from Jarnail Singh 20 there: 21 "It is to be hoped the case will set 22 a marker to dissuade other Defendants from 23 jumping on the Horizon bashing bandwagon." 24 Would that comment have struck you as 25 unusual, business as usual, totally normal, 97 1 something else? 2 A. I think it's probably very unprofessional for it 3 to be written like that. 4 Q. Because, of course, you were already aware of 5 the Lee Castleton being a significant case in 6 respect of protecting the integrity of Horizon. 7 We now have the Seema Misra case. As at this 8 time, so October 2010, do you think it's fair to 9 say that you were aware of reputational concerns 10 at the Post Office about the Horizon system? 11 A. Yes, that they were being raised but, equally, 12 that the business was defending that Horizon was 13 robust. So I think that's the message that was 14 coming down -- down the line, that Horizon -- 15 the integrity of Horizon, it was a robust 16 system. 17 Q. But you were also being made aware that there 18 were quite significant challenges to the Horizon 19 system? 20 A. I think -- well, there's two there, yes. 21 Q. Can we look at POL00073014. I'll move away from 22 Seema Misra for a minute but I will return to 23 that case in a second. 24 A. Yeah. 25 Q. Thank you very much. We have there, if we look 98 1 at the subject, it's Katherine McAlerney, it's 2 a case that we may be hearing more about in due 3 course. We have there 22 September 2011, so the 4 next year. Who was Jacqueline Witham? 5 A. I believe she was the team leader for Former 6 Agents at that time. 7 Q. Thank you. Could we please -- I'm going to 8 actually start -- I'll read quite a bit of that 9 email out, actually. It says: 10 "Dear Joe 11 We currently have some cases on hold where 12 former agents are claiming that Horizon has 13 caused their discrepancies and so this case 14 gives us some cause for concerns. 15 "The ideal solution for us would be to 16 secure a confidential settlement of £4,000 to 17 £6,000 on commercial grounds which would avoid 18 any risk of criticism of Horizon by the Judge. 19 "To progress to Court I think we would need 20 to give serious consideration to acquiring the 21 Fujitsu data to validate the integrity of our 22 Horizon system." 23 So I'm going to take each of those one by 24 one. "We're currently having some cases on 25 hold", so you were aware that there were cases 99 1 on hold where Horizon was being raised as the 2 source of discrepancies, and that's September 3 2011. 4 A. I think that was the JFSA cases. 5 Q. "The ideal solution is a settlement so that we 6 avoid any criticism of Horizon"; was that 7 an approach you were familiar with from within 8 the Post Office? 9 A. Yeah, I think it was suggested by one of the 10 solicitors as well but I think around that, I've 11 read the other papers on this, there was 12 a cheque for £4,100 and something so that's why 13 they suggested 4,000 was there, that there was 14 a cheque within the deficit of 10,000 that had 15 not been received at the processing centre, so 16 we'd not had the funds. 17 So I think that's probably where the 18 rationale came from for 4,000 to 6,000. 19 Q. If the Post Office was concerned about criticism 20 of Horizon by the judge, why would they pursue 21 the matter at all if there was cause to 22 criticise Horizon? 23 A. Potentially, we shouldn't that have, then, you 24 know, in that scenario. 25 Q. In the final sentence there about "giving 100 1 serious consideration to acquiring Fujitsu data 2 to validate the integrity", do you recall there 3 being issues with obtaining data from Fujitsu or 4 cost implications or a reluctance to obtain that 5 data? 6 A. Yeah, so I think on this debt of £10,000, 7 Fujitsu were quoting 6,000 something to gain the 8 data, which again, commercially, is madness. 9 Q. Might it be worthwhile to acquire the data 10 before bringing an action against 11 a subpostmaster? 12 A. Then yeah, I suppose that could have been one 13 way round but the cost of doing that, there were 14 no budget held for requesting data from Fujitsu 15 by the FSC teams and the quotes that were being 16 said were astronomical. 17 Q. Do you think, in all those circumstances, it was 18 appropriate to pursue settlement in the Post 19 Office's favour when you knew, for example, that 20 there could be arguments about Horizon, that 21 Post Office might have difficulty in proving 22 parts of its case? 23 A. I think possibly on this case -- and I can't be 24 100 per cent certain without seeing case 25 papers -- that this subpostmistress hasn't 101 1 raised Horizon Issues until Joe Napier went or 2 sent his paperwork or his letters over, the 3 solicitor in Northern Ireland sent the paperwork 4 to her. So I don't know whether she had 5 responded and said it was a Horizon case prior 6 to it being sending it to Legal. 7 Q. Was the burden always on the subpostmaster 8 themselves to try to figure out what it was that 9 was going wrong with their system? 10 A. Potentially, yes, but I think if you get 11 a letter saying you owe £10,000 worth of debt 12 broken down in this way and, initially, you've 13 not responded to us to say, "I believe it's 14 a system error" or "Horizon caused this", then 15 the normal BAU process would take place. 16 Q. You were top of the tree in terms of management 17 of this team and you weren't even very familiar 18 with system errors, were you? Do you think it 19 was appropriate to put that burden on 20 a subpostmistress? 21 A. Potentially not, no. But, equally, it's what 22 level of reporting it or telling us there was 23 an issue had taken place and I don't know that. 24 You know, you'd have to look at the paper case 25 on this to understand what level of 102 1 communication we had. 2 Q. I'm going to return to the Seema Misra case. 3 Can we look at POL00057681? 4 SIR WYN WILLIAMS: Sorry Mr Blake, before you do, 5 just the first sentence, Ms Bolsover are you the 6 "Alison" referred to there. 7 A. Yes, I am. 8 SIR WYN WILLIAMS: So before this email was written, 9 you'd actually reviewed what was to happen with 10 Jacqueline Witham; is that correct? 11 A. Err -- 12 SIR WYN WILLIAMS: That's what the email says. 13 A. When Joe Napier wrote back to say it was being 14 challenged, the debt was being challenged, 15 I believe Jackie sat down with me and reviewed 16 what was in the case at the time. 17 SIR WYN WILLIAMS: This email, no doubt, was written 18 as a result of the work that you and she did on 19 the available information? 20 A. Yes. 21 SIR WYN WILLIAMS: Fine. Thank you. 22 MR BLAKE: Returning to the Seema Misra case, can we 23 look at POL00057681. We are going broadly 24 chronologically. If we look at the second page 25 there, there's an email from yourself to Jenny 103 1 Smith and Zoe Topham. Can you assist us with 2 who they were? 3 A. Zoe was the postal officer on Former Agents Debt 4 and I think Jenny was the team leader. 5 Q. Thank you. That is an article you're forwarding 6 and you say "The Misra", so it's about the Seema 7 Misra case? 8 A. Yeah. 9 Q. If we scroll up, we can see an email from 10 yourself to Dave Posnett and others, including 11 Rod Ismay, as well, and I'm just going to read 12 that email. You say: 13 "Dave 14 "The Misra case was closed on 1 March 2011 15 but she has been in court in April 2012 re 16 confiscations hearing see new article on link 17 below. 18 "Can we have an update on this and a view on 19 if any further work re civil recovery would be 20 viable as it looks like there are no assets left 21 here to go after. 22 "This is one of the cases on our Horizon 23 issues spreadsheet that we may need to close." 24 Can you assist us with what the "Horizon 25 issues spreadsheet" was, please? 104 1 A. This, I don't know whether it was Justice for 2 Subpostmasters or not. I'm struggling on the 3 timeline of, you know, what was raised by what 4 areas, whether it's an MP's case or a Justice 5 for Subpostmasters case. 6 Q. So at some point in 2012 there was either 7 a complaint raised by Members of Parliament or 8 complaints raised by the Justice for 9 Subpostmasters Alliance that caused the Post 10 Office to build up a "Horizon issues 11 spreadsheet"; is that correct? 12 A. Yeah, yes. 13 Q. Can you assist us with what was on the Horizon 14 issues spreadsheet or what you considered to be 15 a Horizon issue? 16 A. Not -- only that it had been raised as a Horizon 17 issue, so it was just a -- the branch name, the 18 FAD code, the date and that it had been raised 19 as an Horizon issue, not the details of the 20 issue. 21 Q. As at 2012, did it have quite a lot of names, 22 only a few? 23 A. I don't know. 24 Q. Who was responsible for managing the Horizon 25 issues spreadsheet? 105 1 A. I think it was the team in Chesterfield that put 2 in the Horizon sheet, if -- or the solicitors 3 advised us that these were the Horizon Issues 4 cases. I think it may have been the latter, 5 that we'd been informed that these were 6 postmasters that were claiming Horizon. So we 7 kept a list of all cases. 8 Q. Thank you. If we can scroll up, we'll see the 9 emails that followed. From Zoe Topham, Former 10 Agents Debt Team: 11 "I refer to the latest developments below, 12 please could you confirm if you attended the 13 confiscation hearing? Also I know Ms Misra's 14 house had been repossessed and back in January 15 was being sold, do we know how much this went 16 for and where the money went? Obviously if the 17 house was repossessed then Ms Misra would not 18 have received any payment from the sale." 19 The response above that is: 20 "My understanding from Jarnail Singh (who 21 deals with criminal cases for [the Post Office]) 22 is that the confiscation order remains in place, 23 albeit for a nominal sum of £1 on the basis that 24 Misra has no assets. This can, however, be 25 varied in the event that her financial position 106 1 changes in the future." 2 Are you able to assist us with how the 3 relationship was between yourselves and the 4 criminal team and how it was that you became 5 involved in emails about a criminal case? 6 A. Because there was a debt outstanding. So there 7 would have been a debt on the customer line for 8 West Byfleet and we wanted to know what was the 9 next part of the process. Were the Security 10 team recovering the debt or not? And if they 11 saw no advantages in -- so if they'd not gone 12 through with the case, do they see an advantage 13 in us going for civil recovery or trying to make 14 civil recovery? 15 Q. Say in your statement that the decision to take 16 proceedings to recover debt via the criminal 17 courts was a decision of the Security and 18 Investigations Team; is that correct? 19 A. That's correct, yeah. So we wouldn't pursue 20 civil recovery if there was a criminal 21 investigation or an investigation taking place. 22 The debt would be blocked and noted that it was 23 with Security. 24 Q. The decision making, though, you have said it 25 was the Security and Investigations Team, am 107 1 I right to say that the ultimate decision then, 2 in your view, was not with a Legal team of some 3 sort? 4 A. I don't know the processes around the Security 5 team's decision making. 6 Q. Now, we've spoken about the receipts and 7 payments mismatch issue. Do these emails about 8 the Seema Misra case, do they assist you in 9 giving a timeline as to when you were aware of 10 the receipts and payments mismatch issue? 11 A. No, I didn't know that -- if Seema Misra was 12 part of that, I don't know about that. 13 Q. But do you think it was around about 2012 that 14 you found out about that issue, very roughly? 15 A. I didn't work on it so I don't know. I'm only 16 doing it from memory. This is what I remember 17 at the time but -- when I did my statement but 18 I can't remember actual dates around it. I can 19 remember all the letters being on a SharePoint 20 site in Chesterfield, and I think they were 21 still there when I left, for the receipts and 22 payments mismatch, which would probably, you 23 know, guide you around what time this happened. 24 Q. Thank you. Can we -- 25 A. (Unclear) 108 1 Q. -- please look at POL00073165, please. I'm 2 going back in time, slightly, just back to the 3 end of 2011, December 2011. We have an email 4 from you in the bottom half of the page, to 5 Emily Springford and Sabrina, can you assist us 6 with who Emily and Sabrina were? 7 A. They were Legal, within the internal Legal team, 8 I think. 9 Q. You say: 10 "Emily/Sabrina 11 "Re my action from the meeting last week 12 please see the attached file for all cases 13 I have and the recommendations made to progress. 14 "Can you confirm your availability for 15 a [telephone conference]", et cetera. 16 Then you have an update on the JFSA meeting 17 and you say: 18 "Of the 533 live cases there are 23 known 19 cases that are Horizon challenges totalling 20 £751,000." 21 Are you able to assist us, we saw reference 22 earlier to a Horizon spreadsheet. Is that the 23 same issue or a different issue to this 24 particular correspondence? 25 A. I think it's probably the same, the same as what 109 1 was quoted then, yes. 2 Q. So in December 2011, it's likely that there were 3 23 cases that were considered to be Horizon 4 challenges of some sort? 5 A. Yeah. 6 Q. Then there's suggestions about which ones are 7 progressed. If we scroll down, I won't take you 8 to the individual cases but there's reference to 9 which ones will be proceeded with or how they'll 10 be proceeded with. Was there a pause at any 11 stage in respect of recovering from Horizon 12 related cases? 13 A. Was there a what, sorry? 14 Q. A pause on the recovery action? The fact that 15 something is on a spreadsheet, does that mean 16 that you paused action until there was further 17 investigation on these particular cases? 18 A. These were all paused, yeah, and I think the 19 request was made how would we prioritise these 20 cases if we were to resume -- if we were to 21 resume debt recovery. 22 Q. Can we look at POL00085749. There's a document 23 produced by Emily Springford, Royal Mail Legal 24 Services. Do you remember Emily Springford? 25 A. Yes, I remember Emily's name. 110 1 Q. Is this a document that you recall seeing? 2 A. In the bundle. I can't remember prior to this 3 but, from the bundle, I can remember reading it. 4 Q. It seems that in December 2011, there was 5 a weighing up as to whether to pursue those 6 who'd raised Horizon Issues for debt or not; is 7 that right? Is that something you recall? 8 A. Yes. 9 Q. She's there weighing the benefits and risks. 10 Can we look at the risks, please. 11 A. I think this was done on the request of Susan 12 Crichton. 13 Q. Thank you. The risks there: 14 "If [the Post Office] is pursuing claims in 15 several County Courts, there is a risk that the 16 Post Office could lose some, as the quality of 17 judges invest variable." 18 Is that something that you heard said at 19 all? 20 A. Not particularly, no. 21 Q. No: 22 "[Post Office] could be accused of acting 23 prematurely (and potentially penalised on costs) 24 if it were to start Court proceedings against 25 [Scott] Darlington and Walters whilst the 111 1 'pre-action' dialogue with Shoosmiths was 2 ongoing." 3 You she then says: 4 "Arguably, bringing more claims increases 5 the risk of systemic problems coming to light 6 (such as training for support failures). 7 However there is little that can be done to 8 minimise the risk, apart from analysing the 9 claims carefully at the outset, and bringing 10 them in batches, with the strongest first, as 11 suggested." 12 Now, in December 2011 were you aware of 13 concerns that systemic problems might come to 14 light, systemic problems that relate to Horizon, 15 appreciating that, in brackets there, we have 16 "training and support failures" as what are 17 recognised as systemic problems? 18 A. I don't know what Emily Springford's -- where 19 she put that, got that from. So, you know, 20 I can't really comment on what she's written 21 there. 22 Q. Were you aware -- 23 A. (Unclear) about spreadsheets, so the JFSA, there 24 are also letters coming in from -- or Shoosmiths 25 or Shoosmiths-type letters coming in to the 112 1 Legal team or to ourselves. 2 Q. Yes. Were you aware of concerns at the Post 3 Office about the risk of systemic problems 4 coming to light? 5 A. I think, yes, and I think that's why the 6 messages kept coming down that say Horizon was 7 robust. 8 Q. So by the end of 2011 and into 2012 you knew 9 about the Lee Castleton case that was important 10 in defending Horizon; you knew about the Seema 11 Misra case that needed to defend the Horizon 12 system; you knew that the Post Office wanted to 13 avoid criticism of Horizon; and it's there being 14 circulated that there were systemic problems 15 about the Horizon system; you also have this 16 spreadsheet of concerns being raised about the 17 Horizon system. 18 A. Yeah. 19 Q. Did you not at that point think that it was 20 important for your team to be aware of those 21 concerns and criticisms of the Horizon system? 22 A. I think they were, from the communication that 23 came down line but it was always rebuffed that 24 Horizon was reliable. 25 Q. Was your impression that the company, the Post 113 1 Office was doing enough, in that regard? 2 A. Communicating to teams, or? 3 Q. Communicating that there were significant issues 4 being raised with the Horizon product? 5 A. I don't think -- when you say it's considerable, 6 I don't know what the numbers were. I knew what 7 cases we'd got flagged as potentially raising it 8 as an Horizon issue. 9 Q. 23 known cases as at December 2011 -- 10 A. 23 at alleged Horizon, yeah. 11 Q. -- plus concerns about systemic problems, plus 12 two very significant cases that were trying to 13 defend the Horizon system? 14 A. But I think at that time there was about 14,000 15 offices, so the ratio was potentially small. 16 Not that that, you know, negates anything else 17 but two cases out of potentially 550 that I had, 18 or even 23, were a low percentage. 19 Q. I think that was two lead cases which were used 20 by the Post Office. I think, by this period, 21 you also knew about or likely to have known 22 about the receipts and payments mismatch issue. 23 A. Potentially, yeah. 24 Q. Do you think at this time the Post Office was 25 doing enough to interrogate the integrity of the 114 1 Horizon system? 2 A. Potentially not, no. 3 Q. Did you consider that continued enforcement 4 action against subpostmasters in 2011/2012, 5 during the period of those emails that we've 6 seen, do you think that that was appropriate, in 7 all the circumstances? 8 A. In -- I think in respect of was it raised back 9 to us as an issue? So if you're sent a letter 10 and you vehemently don't agree with it, you 11 would get in touch with the issuer. So, you 12 know, if somebody wrote to me to say, "I owe 13 this much money", I'd want to know why I do, and 14 "Here's your statement", so work out, did I owe 15 that money? 16 So I think some of it, whilst I appreciate 17 issues have been raised and numbers have risen, 18 if you, as the recipient of that debt letter, 19 don't come back to the Post Office and say, 20 "Hold on a minute, you know, it's not this, it's 21 caused by this", then we would continue on the 22 process that was set in place. 23 Q. Do you think it was fair, given the imbalance in 24 the state of knowledge between the two parties, 25 for the burden to be on the subpostmaster to be 115 1 the one who has to bring that forward? 2 A. I think if you consider -- there wasn't just 3 Horizon that came into play for branch 4 discrepancies. When you consider we may be 5 issuing £1 million a month in credit TCs to 6 a branch, that should have been offset against 7 a branch discrepancy that they'd got. So if 8 there was a -- you know, a branch -- there must 9 have been hundreds of branch discrepancies that 10 postmasters may have made good and we were 11 crediting them back with the transaction 12 corrections that we sent out. 13 So it's a wider picture, but £1 million 14 a month in credits going back out to branches is 15 a lot of misbalances within branch. It's not 16 necessarily caused by Horizon. As I've said, 17 you know, the cash scenario is a postmaster 18 counting the cash to send to the Cash Centre, 19 and that cash being counted under camera and 20 a shortage or a surplus being found. But 21 £1 million a month is a lot that could 22 potentially be classified as an Horizon issue, 23 that wasn't. 24 Q. Before we break for lunch I'll take you to one 25 example that might assist you with the potential 116 1 consequence of that attitude. Can we look at 2 POL00090669, please, page 11. We're now in May 3 2012, so after many of those documents that I've 4 just taken you to about concerns with the 5 Horizon system. Page 11, please. 6 There's an article in North West Wales BBC 7 News, "Subpostmistress Margery Williams 8 sentenced for ... post office fraud": 9 "A subpostmistress who stole more than 10 £14,000 to help keep a community shop open has 11 escaped a prison sentence." 12 If we look at the page before, just for your 13 information, that particular case, the 14 conviction was subsequently quashed. The Court 15 of Appeal found that it was an unexplained 16 shortfall case, that there was a basic failure 17 to investigate the issues that she had raised in 18 interview. Nothing to suggest that ARQ data had 19 been obtained and that there was no evidence to 20 corroborate Horizon evidence that was used 21 against her. 22 Can we please look at page 14, sorry. At 14 23 we have an email from Helen Dickinson, April 24 2012: 25 "Please see attached the case closure ... 117 1 "A full recovery of [£14,000] has been 2 achieved." 3 There's a big "YAY!" there on the top. If 4 we go back to page 10, which the reference to 5 the BBC News article in May 2012, Matthew 6 Hibbard, who is a Product Accountant, says: 7 "She sounds like a nice lady just doing her 8 best, then the nasty Post Office comes along and 9 finds an error! 10 "I bet this is your fault!" 11 He sent that to you. Why did people at the 12 Post Office, including within your team, feel 13 that they were able to joke about Horizon cases 14 as late as May 2012, given that all of those 15 documents that we've looked at with spreadsheets 16 being put together about problems being raised 17 about the Horizon system. 18 A. I think you'd have to direct that question at on 19 Matt Hibbard on why he sent it through. 20 Q. Was he somebody who you were managing? 21 A. No, he was a Senior Manager within Product and 22 Branch Accounting. 23 Q. Do you think that there was an atmosphere within 24 the Post Office that saw the conviction of 25 Ms Williams as something to joke about? 118 1 A. I don't know. He obviously did. 2 MR BLAKE: Thank you, sir -- 3 A. I can't defend that, can I? And I can't. It's 4 in writing now. 5 MR BLAKE: Sir, might that be an appropriate moment 6 to take our lunch break? 7 SIR WYN WILLIAMS: It is, but I just want to address 8 Mr Enright or, if Mr Stein or Mr Jacobs are 9 present, them. So could the camera go onto 10 those persons, please? 11 MR BLAKE: Mr Stein and Mr Enright are both present. 12 SIR WYN WILLIAMS: Right. Fine. 13 Well, I understand that Mrs McAlerney and 14 Mr Scott Darlington and members of their family 15 after present and one of the reasons they came 16 to the Inquiry this morning was their belief 17 that Ms Bolsover was giving evidence in person. 18 MR STEIN: Sir, that's right. 19 SIR WYN WILLIAMS: I'm very sorry that that 20 understanding on their part wasn't correct, and 21 that the Inquiry hadn't done more to alert the 22 public at large, but those persons in 23 particular, that this was a remote witness. 24 In the future, I will try to ensure that, if 25 a witness is giving evidence remotely, that that 119 1 will be publicised in sufficient time for those 2 who may be particularly interest in that 3 witness, to make a decision about whether they 4 wish to attend the Inquiry in person or look on 5 through Internet channels, if I can call it 6 that. All right? 7 I just wanted to make that clear. 8 MR STEIN: Sir, thank you and thank you for 9 considering the matter. 10 SIR WYN WILLIAMS: All right. Then we'll start 11 again at 2.00. 12 MR BLAKE: Thank you. 13 (1.01 pm) 14 (The Short Adjournment) 15 (2.00 pm) 16 MR BLAKE: Good afternoon, sir, can you see and hear 17 me? 18 SIR WYN WILLIAMS: Yes, I can, thank you. 19 MR BLAKE: Thank you very much. 20 Can we bring up on to screen POL00057991, 21 please. We're now into June 2012 and you'll see 22 at the bottom there's an email from yourself to 23 Angela van den Bogerd. It may assist if we 24 actually start on the page after, which is 25 an email that's been forwarded. That is 120 1 an email from Chris Darvill, who is in Legal 2 Services, to Angela van den Bogerd, about "MPs 3 visit" and it seems as though Members of 4 Parliament's visit. He says: 5 "Angela 6 "I have compared the list of branches 7 against the known cases being fronted by 8 Shoosmiths. 3 of the 5 cases formally notified 9 to [the Post Office] fall within the 10 constituencies of one of the 37 MPs due to 11 attend the meeting." 12 It gives some names there: 13 "I have set out a summary of the facts 14 below. I have taken some of this information 15 from the letters prepared by Shoosmiths, but 16 have not yet had an opportunity to verify it." 17 The first case there is the case of Scott 18 Darlington and it says, for example: 19 "Letter before action sent by Shoosmiths on 20 16 August 2011. It is alleged by the 21 [subpostmaster] that he was compelled to make 22 the false declarations by virtue of economic 23 duress and that the offences resulted from the 24 unfairness of the system devised for use by the 25 [subpostmasters] and/or as a result of errors 121 1 generated by the Horizon system itself. As 2 a result, the [subpostmaster] claims that [the 3 Post Office] was not entitled to terminate his 4 appointment and consequently [the Post Office] 5 is liable for the wrongful termination of his 6 contract." 7 It says below that: 8 "It is alleged that (a) the training 9 provided was inadequate, (b) the helpline 10 provided by [the Post Office] was unfairly 11 difficult to access due to both its hours of 12 operation and the insufficiency of operators to 13 deal with the level of demand placed on the 14 service, (c) the Horizon system suffers with 15 inherent defects and/or an unfair system of 16 operation and (d) the standard operating 17 procedures used by [the Post Office] make it 18 impossible to properly reconcile errors." 19 If we go over the page, to page 1, and the 20 second of those emails, we have yourself 21 emailing Angela van den Bogerd about the Scott 22 Darlington case, and you say: 23 "This is one of our top 5 cases that I have 24 recommended that we proceed on but I am awaiting 25 a risk analysis and cost estimate from Bond 122 1 Pearce on the top 5 cases ..." 2 Can you assist us, when you refer to "top 5 3 cases", what did you mean by that? 4 A. I think potentially in value of debt, I don't 5 know. 6 Q. You were awaiting risk analysis. Can you recall 7 who was carrying out the risk analysis and what 8 kind of a process that was? 9 A. I think that was the Emily Springford page that 10 you had up previously. 11 Q. So the pros and the cons? 12 A. Yeah, Susan Crichton had asked for a risk 13 analysis to be done. 14 Q. Can you assist us with why on 7 June 2012 you 15 would be in contact by Angela van den Bogerd 16 discussing these issues? 17 A. She would have asked me for some information on 18 the cases, I would imagine. 19 Q. What do you recall of her involvement with these 20 kinds of issues? 21 A. She was majorly involved in -- you know, in the 22 MP cases, the mediation and with our internal 23 solicitors. 24 Q. At this time, what did you understand her views 25 to be on the Horizon system and its integrity or 123 1 its robustness? 2 A. I believe she conveyed that it was a robust 3 system. 4 Q. So where we have those pros and cons that we 5 were looking at before lunch and there were some 6 risks identified, including risk of systemic 7 problems coming to light, such as training or 8 support failures, those were things that both 9 you and she was aware of at this time, because 10 that document was dated 20 December 2011. 11 A. Yeah. 12 Q. The allegations being raised by Mr Darlington, 13 for example, include allegations about training 14 being inadequate. Do you remember any 15 conversation about Mr Darlington's case, about 16 how some of those factors might actually chime 17 with the risks that have been identified? 18 A. No, I can't remember the -- unfortunately, 19 I can't remember of the specifics around that or 20 in seeing the document you had up previously. 21 Did I see that? I don't know. 22 Q. If we scroll up, we have it forwarded -- or 23 an email from Angela van den Bogerd to Alwen 24 Lyons, can you remind us who Alwen Lyons was? 25 A. Company Secretary, I think. 124 1 Q. Do you recall from this period what his views on 2 the integrity of Horizon was? 3 A. It's a her. 4 Q. Her, sorry. 5 A. Both Susan Crichton and Alwen Lyons came to 6 visit Chesterfield to discuss debt recovery and 7 see the operation in FSC. So I don't know what 8 her involvement was within the MP's visit so 9 I can't answer that but she saw the cases that 10 we'd got and we discussed them, just on the 11 basis that we've got a level of debt. 12 Can we look at POL00107907, please, and 13 starting on the second page. It's the bottom of 14 page 1, sorry, top of page 2. In fact, 15 actually, we can start at the bottom of the 16 page. 17 The bottom email there -- sorry, if we could 18 scroll down, from Michelle Stevens, you're 19 copied in: 20 "Dear all 21 "Please see details from a Former Agent who 22 has already pleaded guilty and has been 23 sentenced to 12 months community order but is 24 now claiming Horizon. 25 "I intend to [follow] my debt recovery 125 1 process and proceed with chasing our debt unless 2 otherwise instructed." 3 That's April 2013. We have an answer there 4 above from Roderic Williams that you're copied 5 into and he says: 6 "We need to consider how this impacts on the 7 investigation into the Horizon system and what 8 we said we would do about pursuing recoveries 9 while that investigation is ongoing." 10 So am I right in saying that in April or by 11 April 2013, there was a pause in certain cases 12 on recoveries? 13 A. Yeah, I think as instructed by either Rodric 14 Williams or other parts of the business, the 15 mediation cases, I think they were pre-this, but 16 if any challenges had come in, then we were 17 asked to put -- if we -- who are holding debt, 18 to put it on hold. 19 Q. Can we look at POL00086707, please. Where it 20 refers to "investigation" in that document we've 21 just seen, is that the Second Sight 22 investigation? 23 A. Yeah, and wherever a claim had been raised, the 24 Shoosmiths, the JFSA, if the debt was flagged as 25 blocked due to Horizon Issues raised, so if 126 1 anybody told us to block the debt because of X, 2 then that's what we would do. 3 Q. If we scroll down on this page we have an email 4 from yourself to Roderic Williams, Simon Baker, 5 Andrew Winn, Rod Ismay: 6 "I have been reviewing the cases that we 7 have that state Horizon issues/pending the 8 Second Sight review but there appears to be gaps 9 on what we have and what cases have been 10 progressed. 11 "I am assuming we need to keep these cases 12 on hold but could you please advise." 13 Then you receive a response from Roderick 14 above that says: 15 "... I suspect there will be number of 16 subpostmasters (current or former) who have 17 raised Horizon Issues directly with the 18 JFSA/Second Sight and who would not necessarily 19 be known to us. 20 "Simon -- can we please ask Second Sight for 21 a list of everyone who submitted an issue to 22 them under 'Raising Concerns with Horizon' 23 agreement we signed with them and the JFSA? We 24 need to ensure we comply with our obligations 25 under that agreement, specifically that we don't 127 1 start taking action against an individual who 2 has raised a concern until the investigation has 3 been completed." 4 If we scroll down the page and over to the 5 next, we have there the list of cases that you 6 had. But I think, to summarise this chain, it's 7 that you didn't necessarily have the 8 comprehensive list because it may be that some 9 people complained to Second Sight rather than to 10 the Post Office. 11 A. Yeah, and I think that was our biggest concern: 12 that we may be chasing debt where concerns had 13 been raised but we had not been made aware of it 14 in FSC, so we couldn't block a debt -- or we 15 didn't block a debt being chased if we didn't 16 know there was issues being raised. 17 Q. At this stage, so we have people who are making 18 proactive complaints about the Horizon system 19 that are notified on this spreadsheet or ones 20 that have complained to Second Sight. What 21 happens in a new case? So where a subpostmaster 22 complains they're being pursued for recovery and 23 they say, "I simply don't know why the figures 24 say that they say what they say, I can't explain 25 it"; did you feel any duty on yourselves to 128 1 notify them that there were these cases that 2 were raising issues with Horizon? 3 A. If they told us that they thought I was 4 an Horizon issue then we flagged it back into 5 Legal. 6 Q. So where somebody said to you "I have a problem, 7 I know it's caused by a some issue", that would 8 be entered on to this spreadsheet? 9 A. If they said it was an Horizon issue, yes. 10 Q. If they couldn't explain what the issue was but 11 knew that they hadn't been the cause, did you 12 see any duty on the Post Office to alert them to 13 this mounting body of complaints about the 14 Horizon system? 15 A. I didn't at the time, no. 16 Q. Later that year, October 2013, there was 17 something called the Detica report. Is that 18 a report that you were aware of at all? 19 A. No, because I believe it was around the work 20 undertaken by what used to be the Fraud and 21 Conformance Team and they moved out of my area 22 into Security in 2012. So I think the report 23 was commissioned by Sally Smith in the Security 24 team but I'd not seen it until you sent it to 25 me. 129 1 Q. It's not something that was ever summarised to 2 you or brought to your attention? 3 A. No. 4 Q. No. Can we please turn to POL00022296. We're 5 here in January 2015 now, so quite a significant 6 time has passed. This is a meeting at Bond 7 Dickinson or with Bond Dickinson and the matter 8 is "Horizon Challenges General". You are listed 9 there as one of the attendees, if we could 10 scroll down, so we have there Second Sight, some 11 senior members of the Post Office, including 12 Angela van den Bogerd, for example, and General 13 Counsel, Chris Aujard. Why were you attending 14 that meeting, do you remember? 15 A. I don't know -- no, I don't know why I was. 16 I think probably to brief us on where they were 17 with Second Sight or what was happening. 18 Q. It's a relatively small list of attendees. Does 19 that indicate that you were seen as particularly 20 significant in respect of Horizon issues or are 21 we to read something else into that? 22 A. I think possibly it was just around the debt 23 that I was holding and knowing what we were -- 24 you know, how we were commencing. If there were 25 anything out of this that said "We're not going 130 1 to chase subpostmasters", then I attended, but 2 I can't remember -- I can't remember attending 3 it but I can, you know, vaguely remember the 4 meeting but I don't know. It's only from the 5 notes that you've sent me. 6 Q. So, in that case, I'll go through it quite 7 quickly and I'll only read the first two bullet 8 points: 9 "[Chris Aujard] explained that this was 10 a working meeting and that the Scheme was 11 designed to resolve the complaints of 12 [subpostmasters]. [Second Sight] have a role in 13 reviewing the complaints in the Scheme. The 14 role of [Second Sight] is well defined and 15 constrained as their terms of reference. Due to 16 the wide range of questions raised by [Second 17 Sight], [Chris] sent his recent letter. The 18 concern is that the wide-ranging questions asked 19 by [Second Sight] would put [the Post Office] in 20 the position of dealing with information in 21 a non-compliant way and also that they did not 22 relate to any specific cases. [The Post Office] 23 expected focused questions relevant to specific 24 cases from [Second Sight] to be able to assist 25 with the mediation process and to be able to 131 1 finalise the Part 2 report. The applicants' 2 concerns would be with their specific cases and 3 not how something is generally handled across 4 the whole network." 5 Then IH is Ian Henderson of Second Sight: 6 "[He] disagreed with the characterisation of 7 [Second Sight's] role and based on the 8 introduction ... did not see the point of the 9 meeting going ahead. [Second Sight] is 10 an independent reviewer and it was clear that 11 [the Post Office] was treating this as if it was 12 litigation." 13 Is this a meeting that you recall at all? 14 I mean, they're quite strong words used there, 15 is it not something that sticks in your memory 16 at all? 17 A. It doesn't, no, I'm sorry. 18 Q. Do you recall at all the relationship between 19 the Post Office and Second Sight? 20 A. No, I can remember answering questions to Second 21 Sight but I think, at that stage, I was part of 22 a team of five Senior Managers within FSC, so 23 dealing from the debt point of view, I could 24 answer questions on that, but not necessarily on 25 every part of the work undertaken in the Finance 132 1 Service Centre. 2 Q. Some of the topics that we've dealt with already 3 today -- and we've started with Castleton; 4 Misra; we've looked at various spreadsheets of 5 complaints that people raised about the Horizon 6 system; we've seen references to the Post Office 7 not wanting publicity about Horizon; we've seen 8 that you were aware of the receipts and payments 9 mismatch -- do you have any views or did you 10 have any views, as at 2015, about the way Second 11 Sight were being treated at this meeting or 12 during this period, or is that something you 13 simply don't remember? 14 A. I don't because I didn't have a lot of input 15 with Second Sight. I think it was more Rod that 16 was fronting up some of the responses that were 17 happening to Second Sight rather than myself. 18 Q. Can we look at POL00117439, please. 26 June 19 2015, there is a message that's communicated to 20 a large number of people by Mark Davies, the 21 Communications and Corporate Affairs Director at 22 the Post Office. You are listed there, I mean 23 it may just -- I think it's just because your 24 name begins with an "A" that you're near the top 25 but you are one of the first recipients named 133 1 there in this communication. If we could scroll 2 down, please. Thank you. If we could go over 3 the page. Mark Davies says: 4 "Thanks for taking part in the conference 5 call on Horizon this week. This note went out 6 yesterday and I wanted to make sure you received 7 it ..." 8 If we look down at the note, there was 9 a note from the Communications Team, it seems to 10 be a global communication of some sort within 11 the company. I'll just read you a few extracts 12 from it. He says: 13 "Hello 14 "As I think most colleagues are aware, we 15 are facing further media and Parliamentary 16 scrutiny about the Horizon system and 17 allegations about how we have handled a small 18 number of cases where losses have been 19 identified in branches." 20 If we scroll down he says there, for 21 example: 22 "I have held teleconferences over the last 23 couple of days to update colleagues across the 24 business on this new activity in relation to 25 this issue. I am really grateful to all those 134 1 who took part and asked questions." 2 By the look of the distribution list, you 3 did take part in some sort of teleconference; is 4 that right? Do you recall a teleconference? 5 A. I think it was to all Senior Managers within the 6 business, by the looks of it. 7 Q. "A key request" -- 8 A. So it was business-wide. 9 Q. Pardon? 10 A. It was business-wide that this communication 11 came out and the teleconference happened. 12 Q. "A key request was for a short script for use in 13 response to questions from customers, 14 postmasters, potential new operators, 15 stakeholders and others." 16 Do you know who that request came from? 17 A. I don't know, no. 18 Q. Were you looking for answers at this stage to 19 give to people? 20 A. I think we raised it on how do we respond if 21 there's things happening in the press or on TV 22 and postmasters raised it with us? So we did 23 ask that -- I can remember asking that question 24 and I think particularly I asked it to our Legal 25 team, to Roderic Williams, to say, "Well, how do 135 1 we respond if a postmaster says it's Horizon?" 2 Q. If we continue down the page, there are some 3 bullet points and he gives the key points to 4 make. He says: 5 "extremely serious, untrue allegations about 6 the Post Office and the Horizon system have 7 continued to be repeated over the past few years 8 by a small number of mainly former postmasters. 9 "the clear evidence we have in these cases 10 does not support the allegations being made." 11 We see there the other answers, the other 12 proposed key points. If we scroll down, there's 13 another one that I will read out and that's the 14 third one down. It says: 15 "if there were systemic problems with branch 16 accounting, it is reasonable to expect them to 17 have been more widely experienced across the 18 Post Office Network than the 136 individual 19 [complainants] spanning more than 10 years, 20 during which there have been 500,000 Horizon 21 users." 22 Were these points ones that were generally 23 accepted by you and your colleagues? 24 A. I think they were, yes. I think this came 25 through to be briefed out to our teams. 136 1 Q. If I can take you back to your discussion even 2 later, 2018, with Womble Bond Dickinson, if we 3 can go to POL00006650, page 34, about halfway 4 down. There's comment there about entrusting 5 postmasters with a lot of the Post Office's cash 6 and stock and your answer there is: 7 "Yep and there's nothing more tempting, you 8 know, you can see a new pair of shoes or a bill 9 needs paying." 10 Was that the kind of attitude that was taken 11 at the Post Office at that time, that it wasn't 12 Horizon, it was people who wanted new pairs of 13 shoes or who had bills that needed paying? 14 A. Yeah, I think that was a very unfortunate 15 comment that I made, if I'm quite honest, 16 reading it myself now. There were defendants or 17 there were cases where people admitted that 18 they'd not got the children's dinner money or 19 they'd not got, you know -- financially, they 20 were in a dire situation and, yes, they had 21 taken the money. 22 So not all around Horizon where other losses 23 were there. Likewise, there were some branches 24 that we lost some large amounts from for the 25 processes that they were able to get around with 137 1 Horizon. 2 Q. This Inquiry is looking at the culture within 3 the Post Office at the relevant times and here 4 we are, 2018, with those kinds of comments being 5 made. We have those lines to take in 2015. 6 Where do you place responsibility for that 7 culture having developed? 8 A. Potentially, yes, it -- on the comments that 9 were made there, then it come from me, you know. 10 I take responsibility for that. I think, from 11 a business point of view, the opinion was that 12 Horizon was correct. I appreciate that any 13 system can have flaws or issues with it and 14 I don't think we ever saw it as bugs and 15 defects, but I think there's an accountability 16 on Fujitsu to have reported it through to us, to 17 have understood what the issues were that were 18 being raised. 19 And I think that's where my concern is or my 20 concern was. So you're continuing totally naive 21 that there are issues because you don't hear 22 about them. 23 Q. I'm going to ask you a few miscellaneous topics, 24 it won't be very long, no more than ten minutes 25 on just a few different topics. 138 1 The first is the NBSC and script. And I'd 2 like to return back to the Womble Bond Dickinson 3 meeting so POL00006650, and it's page 8. Thank 4 you, so the bottom of page 8 and over the page 5 to page 9. You say there: 6 "... if they were. We work with the NBSC so 7 if things like scripting, we are checking or 8 teams will check on what scriptings they've got 9 on their products to try to ensure we are giving 10 right advice out. 11 "VB -- Sorry, if somebody rang NBSC and it 12 was something that related to your area, you 13 would have had a role in checking the answers 14 were ... 15 "AB -- We try to, so since we've come to 16 work in Chesterfield I think we've tried to 17 marry up a lot more than probably when they were 18 at Dearne. So, we have done some exercises on 19 looking at different scripts, you know, are we 20 giving right advice out, and equally they will 21 come to us for advice if they've got a customer 22 on and they want a refund or something or can we 23 see anything. So we can look at different 24 systems to see transactions that have gone 25 through." 139 1 Were you aware of any policy or specific 2 script that concerned issues with Horizon? 3 A. No, because it -- it's not a product. The 4 scripts that we were talking about were the NBSC 5 helpline scripts that were specific to, say, the 6 Lottery or the ATMs, or personal banking items. 7 It was around a product. 8 Q. To the best of your recollection, did any of 9 those scripts address situations where 10 postmasters raised issues with software issues? 11 A. I don't know, I think you'd have to direct that 12 at Kendra in the NBSC -- 13 Q. Thank you. 14 A. -- to say what was on Knowledge Base. 15 Q. The next topic -- we can stay with this 16 document, it's a different page that I'm going 17 to take you to -- it's page 18. This is the 18 issue, we've discussed Credence but I also want 19 to ask you about ARQ data. At page 18, at the 20 top, you say: 21 "So we have also got access to like your 22 Credence information so we can see it by 23 transaction but what they are wanting to know is 24 are we going to give them some money back. You 25 know if they have panicked all night because 140 1 they do not balance. As long as we have 2 interface, the client file might be full we 3 could see whether they are open ... on their 4 account." 5 Then you're asked: 6 "... What is Credence?" 7 You said: 8 "This gives us where [POLSAP] gives 9 a summary so that day you have done that many 10 transactions you could basically, in Credence, 11 you could see all, every customer's session. So 12 you could see what they have done within that 13 session." 14 Were you aware that Credence didn't show the 15 full picture of everything tracked that, for 16 example, the Horizon trail might, that's held 17 with Fujitsu? 18 A. I subsequently have from watching this but 19 I didn't know before. 20 Q. Were you aware that there were different types 21 of audit trails that might be obtainable from 22 Fujitsu, that could give more information than 23 Credence? 24 A. Only from the Inquiry, no. I wasn't aware. 25 Q. Thank you. One final topic and that is the 141 1 ability to settle centrally. Can we look again 2 at paragraph 31 of your witness statement, 3 please, WITN06120100. It's page 15, 4 paragraph 31. You say there: 5 "The change in 2005 by the IMPACT Programme 6 was that the local suspense needs to be cleared 7 at branch trading, creating a branch discrepancy 8 with the option to the branch to declare the 9 shortage/surplus as a branch discrepancy and 10 settle centrally (if over £150) or to make good 11 by cash or cheque (for shortages) or remove cash 12 (for surpluses). Local suspense does feed into 13 the POLSAP accounts." 14 I just want to take you to one final 15 document while we have that in mind and that's 16 POL00026854. This is a "[Transaction 17 Correction]/Debt Recovery Review". Is this 18 something you recall seeing or being involved 19 in? 20 A. I can remember seeing it in the bundle. 21 Q. But not before then? 22 A. I think I can vaguely remember this. 23 Q. Under the section that's headed "Legal", it 24 says: 25 "'Settle Centrally' signifies an acceptance 142 1 of debt liability." 2 Is that something that you were aware of? 3 That, actually, if you settled centrally it was 4 considered to be an acceptance of debt 5 liability? 6 A. I wasn't aware until Legal raised it here and, 7 what we did from this, we asked all our teams 8 not to issue transaction corrections on 9 a Tuesday prior to the branch trading. So they 10 would have at least a full day to get them. So 11 we didn't force acceptance, as such, on the same 12 day as received. 13 Q. So the answer to the problem caused by settling 14 centrally creating a debt liability is to give 15 people an extra day? 16 A. In some cases, yeah. I mean, that's not in all 17 cases but some of them may have received on the 18 same day as branch trading, so we put steps in 19 to ensure that they didn't receive TCs a day 20 before branch trading. 21 Q. Do you think that that was sufficient for people 22 who were experiencing, for example, 23 discrepancies that they couldn't get to the 24 bottom of? 25 A. I don't think the majority of TCs were issued on 143 1 a Tuesday prior to branch trading. We used to 2 get a daily report to show what TCs we had 3 issued and sometimes branches would ask for them 4 to be issued. So if they'd rung us up and it 5 was a Tuesday, which normally we wouldn't issue 6 on, then they'd ask us to issue them so they'd 7 got them for branch trading dates. 8 But the numbers going out on a Tuesday were 9 not as high as on other days of the week. A lot 10 of time the bulk TCs were issued on 11 a Thursday/Friday. 12 Q. So am I right to understand that the answer to 13 that problem was not to change the system so 14 that it didn't create debt liability but was to 15 change the process by giving people an extra day 16 in which to work out whether they needed to 17 settle centrally or not. 18 A. At least another day, yeah. It wasn't that 19 every -- because the branches do their branch 20 trading over four weeks, so in four different 21 segments. So there's only so many doing -- 22 completing a branch trading on week 1. Then on 23 week 2, week 3 and week 4. So there was 24 different number of offices, branches, 25 completing branch trading on different weeks. 144 1 Q. Looking back at everything you know now and 2 issues, for example, with bugs, errors and 3 defects and the difficulty in getting to the 4 bottom of all of that, do you think that the 5 creation of a debt liability by settling 6 centrally was appropriate? 7 A. I think in the majority of cases, yes, because 8 I don't think that all the debt that we had was 9 caused by bugs and defects. 10 Q. So I'll rephrase that. In the case where 11 a subpostmaster was concerned that they were 12 suffering from a software problem caused by 13 a bug, error or defect, do you think it was fair 14 to those individuals to create debt liability 15 when they settled centrally? 16 A. I don't think, even just settling centrally, 17 that it was a debt liability until we sent out 18 the information to branches. So it was -- 19 Q. Do you accept the words written there that it 20 signified an acceptance of debt liability? 21 A. I took the -- what Legal had said to us, yes, 22 that it was signifying a debt liability. 23 MR BLAKE: Thank you. 24 Sir, I don't have any questions. I believe 25 Mr Stein has some questions and then Ms Page. 145 1 SIR WYN WILLIAMS: Yes. Fine, Mr Stein. 2 Questioned by MR STEIN 3 MR STEIN: Thank you. 4 Ms Bolsover, I appear on behalf of a very 5 large number of subpostmasters and mistresses, 6 instructed by a solicitors firm called Howe+Co. 7 You've been asked a few questions about 8 what's called the receipts and payments mismatch 9 issue. 10 Your evidence earlier on today was that you 11 thought that you may have become aware of that 12 at around 2013. Just help us with a little bit 13 more detail, please. Now, first of all, your 14 line manager within the FSC, was that Rod Ismay? 15 A. It was, yeah. 16 Q. Right. Andrew Winn, who's described in your 17 statement, paragraph 49, was the FSC 18 Relationship Manager. What was he in terms of 19 management responsibilities to you? 20 A. He was my -- I was his line manager. 21 Q. Right. So these two individuals, one of them is 22 essentially your managerial boss and the other 23 one you manage; is that right? 24 A. That's correct, yeah. 25 Q. Okay. Now, the Inquiry has heard evidence from 146 1 both Mr Winn and Mr Ismay. Mr Winn was 2 involved, in the latter part of 2010, in dealing 3 with the receipts and payments mismatch bug, 4 okay? We know that from evidence that has been 5 provided to the Inquiry this year and we know 6 that from the documents. 7 Now, Mr Ismay gave evidence earlier this 8 year on 12 May 2023 that he thought he became 9 aware of that at the latest in early 2011. All 10 right. 11 So let's piece this all together. You've 12 got these two individuals, one of them 13 essentially working for you, the other one you 14 report to, who are in the know about the 15 receipts and payments mismatch issue. Can we 16 assume that you would have learnt about it at 17 roughly the same time they did, in other words 18 latter part of 2010/early 2011? 19 A. Potentially, yes, and I think I may have got the 20 date wrong because I wasn't wholly involved in 21 it. 22 Q. Yes. Right. Now, let's move on to step 2 in 23 relation to the receipts and payments mismatch 24 issue. Now, this particular bug that affected 25 the Horizon system meant to a Post Office branch 147 1 that they could not see that there was, from 2 their accounts, an issue; but to the Post 3 Office, the Post Office could see a shortfall, 4 all right? 5 So I've described this before as being 6 effectively a submarine bug, under the water for 7 the branch but affecting, actually, their 8 accounts. 9 Now, can we assume from, therefore, your 10 evidence that you were aware that this was 11 a devastating Horizon bug? 12 A. I think, yes, it was. 13 Q. So from that point onwards, it must have shaken 14 your faith, indeed Mr Ismay's and Mr Winn's 15 faith in the Horizon system; do you agree? 16 A. I think it's questioned why we weren't finding 17 out about these issues. 18 Q. Yes. The reason why it would question about you 19 finding out about these issues was because it 20 meant that the Horizon system was completely 21 capable of actually inventing a shortfall; do 22 you agree? 23 A. Yes. 24 Q. Now, you've just been asked a few questions by 25 Mr Blake, the barrister that was asking you 148 1 questions this morning, and he was identifying 2 with you the question of settling centrally. 3 You looked at with him, at the last part of his 4 questions to you, a document where it was 5 referred to, in other words settling centrally 6 means acceptance of debt liability. Okay? 7 So let's add these two things together. 8 You're aware that the mismatch bug can cause 9 real problem with branch accounts. After that 10 time, did the Post Office carry on using the 11 settling centrally system to -- 12 A. Yes. 13 Q. -- effectively make subpostmasters and 14 mistresses accept their debt liability? 15 A. Yes, they did continue using it. 16 Q. Didn't that give you any qualms, any concerns, 17 Ms Bolsover, that what was going on here was 18 a Horizon system that could create bugs, was 19 nevertheless being applied by the Post Office, 20 you included, to centrally settle with branch 21 managers, that means that they accepted the 22 debt? Didn't that give you any, you know, 23 concerns, sleepless nights, worries? 24 A. At the time, no, it didn't because it was also 25 a mechanism to enable postmasters to settle 149 1 centrally and then pay off at the end of the 2 month. So, if they'd not got the cash to put 3 into the till, then they had an ability to defer 4 their payment until the end of the month. 5 So for a pluralist or somebody that had got 6 somebody else managing the branch, those offices 7 were settling centrally on everything, all 8 transaction corrections, all branch 9 discrepancies and then paying the bill at the 10 end of the month. 11 Q. Subpostmasters, Ms Bolsover, that have been 12 through the hell visited upon them by the Post 13 Office may be rather concerned that you and 14 other people within the FSC carried on blithely 15 applying systems that penalised them in the 16 knowledge that the Horizon system was not okay. 17 Do you want to say anything to them? 18 A. I am sorry for how they've suffered and I didn't 19 know any of this prior or wasn't fully aware of 20 all the issues that were raised. 21 Q. I'm going to refer you to a document it's 22 POL00073012. That's POL00073012. If we can 23 have that on screen, please. 24 Now, if we can highlight -- thank you very 25 much -- the top part of the document and just 150 1 look at the date, this from Emily Springford, 2 dated 21 September 2011. So this is after the 3 period of time that we've identified that you 4 became aware of the mismatch bug. Then we look 5 through the bottom part of this -- sorry, in the 6 middle there it says: 7 "Thank you for the update [et cetera]. My 8 preliminary view is that we should seek 9 a confidential settlement", et cetera. 10 Let's go a little bit further down. Now, 11 that's the top email. Right, thank you very 12 much. 13 So this is the email, just before the top 14 email, same date, 21 September 2011, 9.35: 15 "Dear Alison and Emily 16 "Please see below update from Joe Napier 17 regarding a former agent of Leitrim Post Office. 18 "Lietrim is on our Horizon integrity list." 19 Now, could you help the Inquiry understand 20 what the Horizon integrity list means? 21 A. It was whatever had been raised, either the 22 Justice for Subpostmasters or Shoosmiths cases. 23 I think it came on to that list after this date, 24 is my understanding. 25 Q. Right. Now -- 151 1 A. So I think it referred to the solicitors, prior 2 to us being updated that later it was one that 3 was claiming Horizon integrity. 4 Q. Let's go a little bit further down the page and 5 we'll deal with a matter that you'd answered 6 a question about with Mr Blake earlier on, okay? 7 So we're seeing the starting point email to 8 this. That's fine, if you leave it there 9 please. 10 So again, same email chain, 21 September 11 2011, the start time is 07.27. Now, if we look 12 at what's being said on this particular page, we 13 go to -- I think it's the fifth paragraph, where 14 it says, "She pleads that she had problems with 15 her Horizon system", okay? 16 Do you see that? 17 A. Yeah. 18 Q. Next to the yellow highlight. 19 A. Yes. 20 Q. All right. So we know that this is a case 21 whereby Ms McAlerney was saying, in relation to 22 her dealings with the Post Office, that this was 23 a problem that she was having with the Horizon 24 system. It goes on to say: 25 "The records support her contention that she 152 1 did call the helpline from time to time." 2 All right. So let's go back to the top, 3 let's go back to the top of where we've got 4 these emails. Let's add things up together 5 again. We've got a system that, by now, in 6 2011, you know could have a very grave fault to 7 it. You've got this particular subpostmaster or 8 mistress, in fact, dealing with a problem that 9 she's been wrestling with: contacting the 10 confidential helpline saying that there's 11 difficulties with the system. Right. 12 What is going on here, as far as we can see, 13 is that the drive by the Post Office is still to 14 pursue her. 15 A. Yes. 16 Q. Why not investigate this more deeply? Why not 17 say to her "Look, we've got some deep-rooted 18 problems with the system, we just want to check 19 to make sure yours is not one of them"? Why is 20 that not the reach from the Post Office? 21 A. I don't know, I can't explain that. I think if 22 you read further down the email, my 23 understanding is, from the audit report, there 24 was different questions raised as well about how 25 the branch was being managed and the "chaotic 153 1 state of the branch", I think it quoted, in the 2 audit report. 3 So was it being managed correctly and, with 4 all due respect to the lady, I don't know but 5 that was the comments made within the audit 6 report. 7 Q. You're suggesting that that might be 8 a reasonable way of covering the problem when 9 you've got direct knowledge that there are real 10 problems with the Post Office Horizon system. 11 You're saying -- 12 A. No, I'm not -- 13 Q. It could be that -- 14 A. I'm not saying -- 15 Q. It could be that this particular subpostmistress 16 is making the odd mistake and that's fine, let's 17 pursue her anyway? 18 A. Yes, but I think further down the email, there's 19 a £4,100 cheque that went missing, as well, so 20 the cash was never there, so which would create 21 a discrepancy. 22 Q. Let's go to that. Let's go to the bottom of 23 that page, please. That email. 24 A. Yeah. 25 Q. Very grateful. Further down, please, a little 154 1 bit further. One more, that's it. 2 Right. So this is the bottom paragraph 3 there, where it says "It has been suggested that 4 there had been no actual loss", okay? If we can 5 just highlight that particular paragraph, 6 starting with "It has been suggested", thank you 7 very much. 8 It goes on to say: 9 "That cannot be correct in respect of the 10 final audit -- there being a real physical 11 deficit on inspection. The 22/11/2006 loss of 12 [£1,628] has been identified as a cheque logged 13 to the system which never arrived in the Cash 14 Centre. Again, the loss accrual can be seen; 15 the defendant having been credited for the value 16 of the cheque but POL prevented from benefiting 17 from it by being unable to cash it." 18 It goes on to say in brackets: 19 "It has been suggested that POL will have 20 had the details of the payer/payee and could 21 have been followed up once the cheque was noted 22 to be missing." 23 Let's piece that together. This appears to 24 be saying that the subpostmistress, 25 Ms McAlerney, had logged a cheque onto the 155 1 system that had never arrived at the Post Office 2 Cash Centre; do you agree? 3 A. Yes. 4 Q. Why would she log a cheque onto the system that 5 didn't exist? 6 A. I don't know (audio disruption) but that did 7 happen. 8 Q. What's the point of doing that? 9 A. Because there's no cash there. 10 Q. What, she's actually taking in a cheque, is she, 11 and putting it onto a system, for what reason? 12 A. Because it's either cash or cheque as a method 13 of payment or debit card. 14 Q. This is a cheque being logged on to the system? 15 A. Yes, but they don't always exist. 16 Q. I'm sorry? They don't always exist? 17 A. No. 18 Q. So you're -- 19 A. Not in every case -- 20 Q. -- suggesting that she made this up? 21 A. I'm not, but I'm saying not in all cases that 22 a cheque does exist. 23 Q. Well, she -- 24 A. A postmaster may make his losses good by cheque 25 but never send the cheque off to the processing 156 1 centre and, in which case, we can't find, as 2 well, transactions that relate to a cheque being 3 taken for products. 4 Q. So you're suggesting that one explanation for 5 this is that Mrs McAlerney had, in fact, put 6 a cheque in herself for £1,628.56, in order to 7 try to balance the system; is that what you're 8 trying to say? 9 A. No, I'm saying that's what could have happened 10 and does happen sometimes. I'm not saying in 11 this case it's what happened but it may have 12 happened. 13 Q. Then you're also suggesting that that cheque 14 never -- 15 A. But I've got no -- 16 Q. Sorry, forgive me, you're talking and I'm 17 talking. I shouldn't let that happen. You go 18 ahead. 19 A. So a cheque is dispatched with -- if they've 20 taken a bundle of cheques that day, week, or 21 whatever, they are dispatched daily into 22 processing. They are all imaged and the funds 23 are then electronically transferred to POL. So 24 if a cheque has been classified as dispatched on 25 Horizon and doesn't arrive, then it's 157 1 understanding what transactions that cheque has 2 been taken for. 3 Q. Right. 4 A. So the comment that we'd got information on that 5 cheque, it's not captured on Horizon, the 6 cheque, only the value. 7 Q. Right. So are you explaining that that is the 8 reason why, in these circumstances, that the 9 Post Office would go after the subpostmistress 10 in relation to the sum claimed on the cheque? 11 A. Not only that, no. And I don't know why it 12 wasn't put on hold as a potential Horizon case 13 and it was passed to Joe Leitrim -- Joe Napier, 14 sorry. I don't know why. 15 Q. Let's remind ourselves what, in fact, did 16 happen, was that instead she was pursued for the 17 debt? 18 A. Yes. 19 Q. Let's turn to an email chain that relates to 20 Mr Scott Darlington, POL00057991. Thank you. 21 Now, you've again looked at this briefly with 22 the barrister that asked you questions earlier. 23 This was emails to Angela van den Bogerd who was 24 at that time Head of Network Services; all 25 right? 158 1 Let's go down to the next part of at page, 2 please. Thank you. This is from you to Ms van 3 den Bogerd: 4 "Angela 5 "Scott Darlington -- Alderley Edge, Debt 6 outstanding £44,193. 7 "This is one of our top 5 cases ..." 8 Again, you've been asked some questions 9 about that, so let's scroll down a little bit 10 more and we'll see a discussion of the types of 11 cases we're talking about. Again, further down. 12 Stop there, please. 13 So the information that's being passed 14 onwards within this email chain is that, from 15 Chris Darvill -- who is Chris Darvill, can you 16 help? 17 A. He was an internal solicitor, I believe. 18 Q. Okay. Sent in May 2012 to Ms van den Bogerd: 19 "Angela 20 "I have compared the list of branches 21 against the known cases being fronted by 22 Shoosmiths. 3 of the 5 cases formally notified 23 to POL fall within the constituencies of one of 24 the 37 MPs due to attend the meeting ..." 25 Okay. Let's deal with the Shoosmiths part. 159 1 Why does it matter that it's part of a group of 2 cases being fronted by Shoosmiths? 3 A. I don't know, because Chris wrote that. I don't 4 know. 5 Q. All right. Why does it matter that three out of 6 the five cases formally notified to POL fall 7 within the constituencies of one of the 37 MPs 8 due to attend the meeting? The particular 9 constituency MP we're concerned with here for 10 Mr Darlington was George Osborne. 11 A. I can't answer that. I wasn't involved in the 12 MPs raising issues. 13 Q. But there appears -- 14 A. I was -- 15 Q. Sorry, you go ahead. 16 A. We were the recipients of information to say 17 "Put this case on hold", not on the background 18 of what was happening with various MPs or 19 anything else. As such, it's a -- you know, 20 we're processing information. We weren't 21 dealing with the MPs' visits. 22 Q. Let's scroll further down the page and see what 23 else would have been on the email chain that you 24 were part of. Scott Darlington, first of all. 25 Now, various bullet points there and you'll 160 1 see there that, on to the sixth bullet point in 2 relation to Mr Darlington: 3 "It is alleged that training provided was 4 inadequate, the helpline provided by POL was 5 unfairly difficult to access due to ... hours of 6 operation ... insufficiency of operators to deal 7 with the level of demand ... the Horizon system 8 suffers with inherent defects and/or an unfair 9 system of operation ... the standard operating 10 procedures used by POL make it impossible to 11 properly reconcile errors." 12 So that's what's being said there in 13 relation to a summary of Mr Darlington's issues. 14 A. Yes. 15 Q. Just go further down, we'll see Julian Wilson. 16 You'll see there the fifth bullet point: 17 "Letter before action sent by Shoosmiths on 18 23 August 2011. The issues raised in that 19 letter are more or less identical to those set 20 out in Darlington." 21 Then further down, where we have in the 22 little dotted line box "GRO"? 23 A. Yeah. 24 Q. We'll see the GRO has been substituted for 25 an individual's name. Again, can you scroll 161 1 down a little bit further, please. Thank you 2 very much. 3 We see the second to last bullet point, 4 reference to court proceedings being commenced 5 in June 2011, and then the final sentence there: 6 "The allegations made are in almost 7 identical terms to the claims made in both the 8 Darlington and Wilson cases." 9 So can we again pull this all together. 10 These are all cases where identical concerns are 11 being raised about the system having many 12 problems, defects in training, access to 13 helplines, defects in the system, et cetera. 14 Why were these three cases being picked on by 15 the Post Office? 16 A. I don't necessarily think they were being picked 17 on. I think, reading this again now, both of 18 the two that you've said, excluding this one 19 that was a spent debt at that point anyway, they 20 were both Legal -- they were both Security 21 cases, that were criminal prosecutions, that 22 wouldn't have necessarily gone through my teams, 23 these two. So we wouldn't have proceeded with 24 civil requests until the Security had ended 25 their prosecution, as such. 162 1 Q. Ms Bolsover, by this time in 2012, what was 2 going on was that considerable concerns had been 3 raised about Horizon, MPs are being involved, 4 Shoosmiths are bringing their cases together, 5 the JFSA is involved in the background, Computer 6 Weekly is publishing issues that relate to it, 7 these cases needed to be stamped out, didn't 8 they? You needed to make good on these claims 9 and pursue them; do you agree? 10 A. I don't think we did pursue them. But they were 11 initially not just debts that were put on to the 12 customer account; they were sent to the Security 13 teams. But I don't disagree with you. 14 Q. Ms Bolsover, the individuals I've been asking 15 you some questions about, Ms McAlerney, 16 Mr Darlington, their families are in this room 17 where I sit at the Inquiry centre for the Post 18 Office Inquiry. Is there anything you would 19 like to say to them? 20 A. I'm just very sorry for what they've been 21 through. Potentially, I didn't believe that 22 there was a problem with Horizon. Subsequently, 23 I'm shocked about how things were not identified 24 or not investigated properly, and that I can 25 only say sorry. 163 1 MR STEIN: Sir, no further questions. 2 SIR WYN WILLIAMS: Mr Blake, did you say that there 3 was another -- 4 MR BLAKE: Ms Page. 5 SIR WYN WILLIAMS: Ah yes, right. 6 Questioned by MS PAGE 7 MS PAGE: Ms Bolsover, I'm asking questions also on 8 behalf of a group of subpostmasters and the 9 short first area of questioning I want to ask 10 you about is the non-commercial pursuit of debts 11 and there's a document that I'll show to you 12 that deals with that. 13 So if we could have POL00121191, please. If 14 we zoom in at the top there the heading says, 15 "Proposal for transfer of Write off authority 16 for Former Subpostmaster Accounts cases", and 17 then it sets out the years that we're talk 18 about, so we're talking about 2002 going into 19 2003, and it says "from Commercial and Community 20 Finance Managers to Transaction Processing". 21 So this seems to be a change of process 22 about write-off; is that right? 23 A. Yes, because I believe the Former Agents 24 Accounts were out. Before 2005 they sat out in 25 the Network. But they were transferred in when 164 1 the IMPACT Programme happened. 2 Q. Yes, and in that first paragraph, what we see 3 is: 4 "The current process means that cases over 5 £500 are documented and sent to the commercial 6 and community finance managers ..." 7 So that means out in the Network, yes? 8 A. Yes. 9 Q. "This is a fairly simple process but recently we 10 have received a number of queries regarding the 11 cases insisting that we continue investigations 12 even though we have been advised by Legal 13 Services that it would not be cost effective to 14 do so." 15 So what we see there is a suggestion that it 16 is out in the Network that there was a desire 17 sometimes to pursue cases when it wasn't 18 economically sensible to do so on Legal Services 19 viewpoint? 20 A. That's what I understand. I receive this last 21 night. 22 Q. It does say in the third paragraph that you 23 attended a meeting but perhaps you don't 24 remember that. It says you attended a meeting 25 with Tony Marsh and Phil Gerrish to discuss 165 1 accountabilities? 2 A. Yeah, and I am imagining this was probably when 3 I'd just taken over the debt recovery role. 4 Q. But you have no particular memory of it? 5 A. Not really, no. 6 Q. Well, you may not be able to answer the question 7 I was going to ask, then, which is really why do 8 you think it was that Finance Managers out in 9 the Network wanted legal action to take place 10 even when it wasn't economical to do so? 11 A. And I can't answer that, I'm sorry. I think 12 they didn't accept that we couldn't collect the 13 debt that was sat within the -- originally 14 within their accounts and, if we couldn't trace 15 a former subpostmaster, then we couldn't take 16 any further steps and I think it was pointing 17 that out to Tony that, you know, we were being 18 asked to do the impossible, because we 19 couldn't -- just couldn't pursue them. But 20 I don't know why commercial and community 21 Finance Managers believed we could. 22 Q. All right, well, that can come down. Thank you. 23 I'll move on, then, to a bigger issue for 24 you. You've described how your teams had to 25 match and reconcile data from Horizon branch 166 1 accounts with POL's clients, yes, like the banks 2 and National Lottery, and so forth? 3 A. Yeah. 4 Q. What I'd like to go to is the findings of Detica 5 about these processes in 2013. So that's 6 document POL00029677, please. So we see from 7 this front page what they were asked to look at, 8 "Fraud and Non-conformance in the Post Office", 9 and if you've watched previous hearings, you 10 might have seen this document before. What I'd 11 like to do, please, is go to page 20 and scroll 12 down to paragraph 4.3.2. 13 This is dealing particularly with the 14 reconciliation of ATM data and then I'll go over 15 the page where it talks about reconciling cash 16 data. So this says: 17 "ATM withdrawal data is collected by Wincor, 18 manually manipulated and provided to the Post 19 Office where it is emerged in POLSAP to 20 chess-check submitted 16.30." 21 Just pausing there, does that mean that the 22 cross-check is that the postmasters had to 23 submit information from the cashpoint at 4.30 24 each day; is that right? 25 A. I believe so. Back in 2013, I didn't manage the 167 1 ATM data but I subsequently did and they pulled 2 a report out of the system, is my understanding, 3 out of the ATM, that gave their 16.30 withdrawal 4 figures. 5 Q. It goes on: 6 "This information should be supplied as 7 an automated feed and made available beyond just 8 the Financial Services Centre, whose 9 responsibility is to account for ATM payments 10 and settle with Bank of Ireland rather than 11 detect error." 12 It goes on at the bottom there to say: 13 "Additionally a direct data feed would 14 negate the need to cross-check data, and for 15 branch staff to manually obtain and input this 16 data on a daily basis." 17 If we go over to 4.3.3, similar points are 18 made with regard to cash. It says: 19 "Currently declared figures, ended by branch 20 staff are used as the basis for cash dispatch. 21 This information has to be extracted daily from 22 Horizon as it only stores the last entry. 23 Currently the process relies on manual 24 intervention, given the value to the Post Office 25 in identifying discrepancies within branches it 168 1 should be automatically stored as an historical 2 record and made more widely available." 3 There's conclusions from this which I'll 4 just go to, as well, before we have some 5 thoughts and questions about this. 6 So if we go down to page 21, 4.3.3 -- sorry, 7 page 37, 7.2.2. Scroll down a little. The 8 heading there "Complex and fragmented systems": 9 "Post Office stammers not fit for purpose in 10 a modern retail and financial environment. Our 11 primary concern here relates to difficulty in 12 reconciling information from multiple 13 transaction systems both in terms of timeliness, 14 structure and access." 15 It deals with various examples and, if we go 16 over to the top of page 38, the conclusion is 17 this: 18 "Failure on this scale indicates that there 19 is a fundamental issue with the process or 20 controls in place around cash balancing. As if 21 to underline the point, a Key Risk Indicator 22 recognised by both the Fraud Analysis team and 23 the Pilot, is that of a branch that is too good 24 at matching these numbers; rather than branches 25 that balance perfectly every time being seen as 169 1 'good', this is seen as an indicator of branches 2 that are 'bad', with several cases of perfectly 3 balancing branches found to be fraudulent." 4 So there's some pretty strong words there. 5 That document can come down. 6 In essence, what Detica was saying in 2013 7 was that the way that POLSAP reconciled data 8 from Horizon and from the various other systems 9 was not fit for purpose and that it was causing 10 significant difficulties. Were those findings 11 shared with you when you took on the role that 12 you said you took on subsequent to this? 13 A. No, the Fraud and Non-Conformance team moved 14 from Product and Branch Accounting or 15 Transaction Processing into Security. So 16 I believe the Detica report was sent to 17 Security -- 18 Q. Not to you? 19 A. -- in 2013 -- no, I'd not seen that report. 20 Q. So -- 21 A. I don't know what the outcomes from that or what 22 improvements were offered after that report. 23 I can vaguely remember we started using a system 24 called HORice where you could see more detailed 25 transaction levels but there was only limited 170 1 licence to that, by -- only a few across the 2 business, maybe 50 licences. 3 Q. Was there ever -- 4 A. But I -- 5 Q. Sorry. 6 A. I don't know what Sally did with the Detica 7 report or if anything -- a product came out of 8 that. I don't know. 9 Q. On your side of things, though, was there ever 10 any attempt to automate so that there was no 11 longer the need for these manual 12 reconciliations? 13 A. Yes, so -- 14 Q. Was that the PING project? 15 A. The PING Project for Lottery, PING for pay 16 station, prior to me leaving, there was talk of 17 ATMs, the data being PINGed, as such, but then 18 another project being run, as I left, in 2021, 19 the changes to ATM reporting and how branches 20 would report. And I think it was always 21 a concern, when branches had kit that wasn't 22 attached to Horizon, it was then down to manual 23 input, which, in every scenario, human error can 24 happen. So I think we were trying to tie the 25 kit up for various products. 171 1 Q. All right. Well, prior to the tying up, as it 2 were, can you just help with a bit of process 3 around what Detica called these complex and 4 fragmented systems. Was your department 5 carrying out daily reconciliation of what was 6 going on with the Horizon feeds and what was 7 going on with the client feeds? 8 A. Yes, for certain products. So some -- selling 9 a stamp would not be a matched product but it 10 would need to be fed and it would go into 11 another area, not my area, to be paid to Royal 12 Mail. Bill Payments went straight through to 13 pay BT, or whatever bill provider. So the 14 information from Horizon went straight into 15 vendors to pay our clients but there was no 16 matching, so no matching routines taking place 17 from anywhere else, so there was no client data. 18 It all fed from Horizon. 19 Q. Did the clients, like BT or whatever, not 20 provide you with a data stream, then? 21 A. No. Not for Bill Payments, no. 22 Q. What about banks? 23 A. No. 24 Q. No? 25 A. We supplied it to them. 172 1 Q. Right. 2 A. So we took the payment, and it was paid to which 3 bank, A, B or C, whichever bank it was paid 4 to -- or withdrawal. You know, it was either 5 a deposit or a withdrawal from a bank. But the 6 information went directly into SAP, into 7 a vendor, to either pay or receive money from 8 the clients. 9 Q. So, unless the branch raised an issue it was 10 always assumed, was it, that that data going to 11 the client was correct -- 12 A. Yes. 13 Q. -- or presumably if a client raised an issue? 14 A. Yes. A client could raise an issue back to us, 15 so a customer could say, "This is not correct". 16 So when we were -- when we take bill payments in 17 a branch for whatever bill, the record is there 18 in branch. That sends a value information into 19 POLSAP to pay the client, but the client also 20 gets a data file to update their records to say 21 "This bill has been paid", or "This bill's 22 credited through the banking system". 23 Q. Right. So if a client said that there was 24 something wrong about that, they would raise it? 25 A. Yes. 173 1 Q. If -- 2 A. So (audio disruption) bank enquiries, yes. 3 Q. If there was a query raised by a client, was it 4 assumed that they were correct, or what? 5 A. We would investigate it with the branch. So we 6 would ask them about the transaction or what the 7 customer claimed. So although there was bank 8 inward enquiries coming in, we were pushing 9 a lot out to banks where postmasters had keyed 10 the wrong amount. So if they'd keyed -- if 11 they'd had a deposit for £200 and keyed 2,000, 12 we had -- they raised it with the NBSC and we 13 contacted the banks. But it had to be the 14 customer giving authority to the banks to deduct 15 that amount. And a lot of the time the 16 customers come back and say, "No, I did put 17 £2,000 in". 18 Q. All right. So you've got information sources 19 coming from the branch, from the customer and 20 from the client, yes? 21 A. Yeah. 22 Q. If there was a dispute, though, and the client 23 refused -- let's say in the case of a shortfall, 24 if the client refused to accept that they had 25 something wrong and that any money was owing 174 1 from them, then it would fall to the postmaster, 2 wouldn't it? 3 A. It would, yeah. 4 Q. All right, because -- 5 A. I think there were changes really late -- in the 6 last year or so that I was there, there were 7 changes made to that and the processes around it 8 to allow -- as such, allow the credits to be 9 given -- 10 Q. All right, but for most of the period we are 11 dealing with, unless the client agreed they had 12 got it wrong or the customer agreed they had got 13 it wrong, there would be no credit transaction 14 correction issued, would there? 15 A. No, because we'd got no money to pay them back 16 with. 17 Q. All right. Well, just focusing on that for 18 a moment, because we now know that sometimes 19 Horizon created fictitious shortfalls. So you 20 would have potential for the situation to 21 develop where Horizon had got it wrong, the 22 client was right in saying, "No, we don't owe 23 you any money", and, nevertheless, it would fall 24 to the subpostmaster to pay this fictitious 25 shortfall, yes? 175 1 A. Can you just put that to me again? I'm sorry. 2 Q. All right, let's imagine a situation where the 3 Horizon data is wrong; it's created a fictitious 4 shortfall -- 5 A. Yeah. 6 Q. -- yeah? So, when there's then the 7 investigation, and you've spoken to the client 8 and the client says, "No, no, we don't owe you 9 anything", and the customer likewise, if they've 10 been able to be got hold of, they say, "We don't 11 owe you anything", that fictitious shortfall is 12 still going to be paid by the subpostmaster, 13 yeah? 14 A. I think I would agree in some respects but, on 15 the other, if it was a transaction that was put 16 in to Horizon as a Bill Payment, then that's 17 what the client's receiving. The information 18 that it -- I think it's -- 19 Q. Okay, but let's say it's a bank situation where 20 there's a deposit and Horizon has, in fact, 21 created a deposit sum which really didn't exist. 22 A. Then it wouldn't have a customer number to 23 attach any -- and give to the client. 24 Q. Well -- 25 SIR WYN WILLIAMS: Ms Page, I, as you know, have 176 1 been very tolerant of hypothetical situations 2 and scenarios but I think we're going a bit too 3 far now. 4 MS PAGE: What I'd like to get to, if I may, sir, is 5 what went on with clients' suspense accounts 6 because there were sometimes millions held in 7 clients' suspense accounts, weren't there? 8 A. No. I don't know if you can broaden out on what 9 a client's suspense account was. 10 Q. Well, as I understand it, each Post Office 11 client had a suspense account where there was 12 sums held if there were disputes over those. 13 You say that didn't exist? 14 A. (Unclear) 15 Q. Well, maybe that's not something you can answer 16 questions about, then. 17 A. Not to my knowledge, no, there wasn't client 18 suspense accounts. Sorry, I'll disagree. I'll 19 disagree with myself. There was an account, if 20 we had a cheque processed with a credit, so we 21 knew that I had paid -- or a cheque had been 22 cleared in my name but the postmaster had not 23 stamped the back of the cheque or done anything 24 to identify it was their branch, then we put it 25 into a suspense account awaiting a customer to 177 1 come back to us to marry that position up. But 2 we wouldn't hold -- we only held them if we 3 couldn't allocate them to branch or to a client, 4 or whatever. 5 Q. Were you -- 6 A. But -- 7 Q. -- anything to do with what happened at the end 8 of whatever period they were managed under? 9 Were you anything to do with what happened to 10 sums held in clients' suspense accounts? 11 A. No, but there's still suspense accounts now. 12 Q. For sure. But my question is, did you have 13 anything to do with the process or management of 14 what happened with sums held in client suspense 15 accounts? 16 A. Not particularly, no. 17 Q. No. 18 A. I think it -- I'd have to really home in on what 19 we meant by -- I think your definition of 20 a client suspense might be different to mine. 21 Q. Well, it rather sounds like I'm not going to be 22 able to get any further with what I was going to 23 ask about. 24 A. Yeah. 25 Q. All right. Because you're saying that you're 178 1 not aware of large sums being held in those 2 accounts? 3 A. I don't believe so, no. 4 MS PAGE: All right. Thank you. 5 SIR WYN WILLIAMS: Thank you, Ms Page. 6 Is that it, Mr Blake? 7 MR BLAKE: Yes, it is, sir. Thank you. 8 SIR WYN WILLIAMS: Well, thank you, Ms Bolsover, for 9 coming to give evidence and, before that, for 10 making a detailed witness statement. I'm 11 grateful to you. 12 I think we have one witness tomorrow, 13 Mr Blake? 14 MR BLAKE: Yes, 10.00 tomorrow. Yes. 15 SIR WYN WILLIAMS: Can I just say to the Core 16 Participants who made a special effort to come 17 to the hearing today that, notwithstanding that 18 the evidence was given remotely, I hope they 19 have found the session informative and 20 constructive. Thank you. 21 (3.20 pm) 22 (The hearing adjourned until 10.00 23 the following day) 24 25 179 I N D E X ALISON BOLSOVER (affirmed) ....................1 Questioned by MR BLAKE ........................1 Questioned by MR STEIN ......................146 Questioned by MS PAGE .......................164 180