1 Tuesday, 9 April 2024 2 (10.00 am) 3 SIR WYN WILLIAMS: Mr Beer, can I explain that one of our 4 assessors is joining remotely this morning and 5 I understand that, before we begin hearing evidence, you 6 wish to raise the issue of disclosure. 7 Statement by MR BEER 8 MR BEER: Yes. It's a matter of importance that I wanted to 9 update you and the Core Participants on, before we 10 called Mr Bates to give his oral evidence and commence 11 the substance of the hearings in Phases 5 and 6. The 12 Core Participants were sent an email via the solicitor 13 to the Inquiry yesterday that contained relevant 14 correspondence from the Post Office, that dates between 15 28 March and 5 April, sent to the Inquiry, that consists 16 of nine letters. 17 I would propose to give you a brief background 18 before moving to the current issue. I am going to try 19 and keep it as succinct as possible but I also think 20 that putting the current issue in context may assist 21 you. 22 Sir, you will recall that the Post Office's late and 23 problematic disclosure of documents has been a constant 24 theme in this Inquiry, resulting in you ordering that we 25 hear oral evidence from the Post Office and its Inquiry 1 1 representatives in two disclosure related hearings held 2 in July and September last year. On 12 January this 3 year, the Inquiry held a further hearing on disclosure, 4 and called Post Office's recognised legal 5 representative, Mr Jackson of Burges Salmon LLP, to give 6 oral evidence. 7 You will recall that, by and large, the key issue 8 that was discussed at that hearing was how the Post 9 Office had discovered a further Post Office repository 10 or data source known as Microsoft Exchange/365. 11 You will recall that the Microsoft Exchange/365 12 repository was brought to the Inquiry's attention during 13 the Phase 4 hearings and, as a result, the Inquiry 14 received numerous, sometimes voluminous, last-minute 15 disclosure of documents said to relate to Phase 4 16 witnesses, on some occasions only days before some 17 witnesses were to you to give their evidence. 18 During the January hearing, Mr Jackson said that 19 such last-minute disclosure by the Post Office during 20 the Phase 4 hearings had been "suboptimal". Those late 21 disclosures had put immense pressure on the Inquiry 22 counsel and solicitor teams who worked extremely hard to 23 ensure that the Phase 4 hearings could, in fact, 24 continue as planned. In some instances, regrettably, 25 a decision was made to postpone or reschedule a witness 2 1 at short notice, including, you will remember, 2 Mr Jenkins and Mr Longman, both of whom the Inquiry has 3 now scheduled to hear during Phases 5 and 6. 4 Whilst other matters were discussed at the hearing 5 held on 12 January, the focus was on the Post Office's 6 work related to the Microsoft Exchange repository. 7 On 31 January this year and following the hearing, 8 you made directions which were published on the Inquiry 9 website. Those directions provided that, firstly, 10 a meeting would be held between the representatives of 11 the Inquiry and the Post Office to discuss disclosure 12 issues as soon as reasonably practicable and, in any 13 event, well before the commencement of oral hearings in 14 Phases 5 and 6. You directed that the meeting would be 15 minuted and that the minutes should be agreed and 16 thereafter disclosed to Core Participants. 17 Secondly, you ordered that a further disclosure 18 hearing should be convened either before or during 19 Phases 5 and 6 of the Inquiry. 20 On 28 February 2024 members of the Inquiry Team and 21 Information Management Team met with the Post Office and 22 its representatives in this building, as directed by 23 you, and the Inquiry later circulated a copy of the 24 minute of that meeting, as agreed with the Post Office, 25 to Core Participants. 3 1 I will not read the minute in full but I note that 2 paragraph 3 of the minute, as circulated, says as 3 follows: 4 "At the outset of the meeting, leading Counsel to 5 the Inquiry [that's me] noted that, from the Inquiry's 6 perspective, the aim of the meeting was to ensure that 7 the Post Office are doing as much as possible to ensure 8 Phases 5 and 6 can proceed in accordance with the 9 Inquiry timetable. 10 "Mr Jackson confirmed that the Post Office agreed 11 and noted that the Post Office's starting point for the 12 meeting was prioritising and clarifying what needed to 13 be done in line with your directions, ensuring 14 reasonable and proportionate disclosure whilst 15 minimising and hopefully avoiding disruption to the 16 hearing timetable and the Inquiry's proceedings. 17 "Counsel to the Inquiry confirmed that the aim was 18 not minimising disruption to the hearings but 19 eliminating it, given the Post Office's highly 20 disruptive late disclosure in Phase 4. 21 "Mr Jackson confirmed that the Post Office also 22 aspired to eliminate disruption wherever it was possible 23 to do so and that the Post Office's recent structural 24 work should have mitigated the likelihood that a new 25 disclosure issue would come from left field. 4 1 "In order to achieve that objective, prior to the 2 meeting, the Inquiry had provided the Post Office with 3 a series of deadlines for any further late disclosure of 4 Microsoft Exchange documents in correspondence." 5 In summary: 6 "For all oral witnesses but for those listed in the 7 for your weeks of the Inquiry timetable, the Inquiry 8 directed that any late disclosure must be provided by 9 the Post Office no later than six weeks before the date 10 on which the witness is due to be called to give 11 evidence. For the witnesses listed in the first four 12 weeks, separate specific deadlines had been set in 13 March 2024." 14 The Inquiry and the Post Office also discussed 15 other, what the Inquiry understood to be, relatively 16 ad hoc and less significant potential document sources, 17 ie other than Microsoft Exchange. This was outlined in 18 the meeting minute at paragraph 10: 19 "Mr Jackson then took the Inquiry Legal Team through 20 the work completed by the Post Office regarding other 21 potential document sources, including Mimecast, SMS, and 22 instant messaging, and e-media sources (corporate 23 devices, servers, back-up tapes and file stores). Post 24 Office's representatives confirmed that they had sent 25 and were still sending questionnaires regarding data 5 1 sources to specific former Post Office employees and 2 board members. Material held by third-party advisers 3 and material relating to whistleblowing was also 4 discussed. 5 "In short, the Inquiry understood that work was 6 still ongoing in relation to some of the additional data 7 sources but should Post Office have any material update 8 and, in particular, should any particular data source 9 contain highly relevant material, Post Office would 10 alert the Inquiry as soon as possible." 11 On distributing the minute to Core Participants, the 12 Inquiry noted that, as the disclosure process by the 13 Post Office was continuing and the disclosure of 14 additional documents to the Inquiry had only recently 15 started, I had advised you that the Inquiry Legal Team 16 ought to continue to monitor the Post Office's 17 compliance with the Inquiry disclosure requirements and 18 report to you at regular intervals. 19 The reporting ought to include whether the Post 20 Office continued to meet the deadlines the Inquiry had 21 set in order to enable the Phase 5 and 6 oral hearings 22 to proceed and thereafter continued as scheduled. 23 At that stage, I and the solicitor to the Inquiry 24 advised that we considered it premature for the Inquiry 25 to hold a further disclosure hearing prior to the 6 1 commencement of Phases 5 and 6 today. You considered 2 our advice and confirmed you agreed with it but, in the 3 light of the historic disclosure issues and the 4 disruptive nature of the Post Office's late disclosure 5 of Microsoft Exchange material in Phase 4, you noted 6 that you wanted to keep this issue under very close 7 consideration. You also noted that you would not 8 hesitate to hold a hearing should it become necessary in 9 due course. 10 Throughout February and March, the Post Office 11 continued to disclose a large volume of material, as 12 a result of its Microsoft Exchange disclosure failings 13 and the remediation exercises put in place to rectify 14 them. The last of these productions was made on 15 22 March 2024. 16 Can I turn to the present issue then. 17 On Thursday, 28 March the legal representatives for 18 the Post Office notified the Inquiry that the Post 19 Office would be providing the Inquiry with documents 20 that day and the following week, in relation to 21 witnesses giving evidence during the first week of 22 Phases 5 and 6 of the hearings and in the latter part of 23 April or documents which might otherwise be "of interest 24 to the Inquiry". 25 The volume of documents was said to be in the low 7 1 hundreds and no more than 1,000 and to have come from 2 "a last check scoping exercise", particularly in 3 relation to documents from third-party advisers. Some 4 such documents were in response to the Inquiry's 5 Section 21 notice, issued as long ago as 21 July 2023, 6 known as section 21(3). Others were not responsive to 7 a notice or a request from the Inquiry but were 8 otherwise of interest. 9 As I say, section 21(3) was sent by the Inquiry to 10 the Post Office back on 21 July last year, in which the 11 Inquiry mandated that the Post Office disclose several 12 categories of material relevant to Phases 5 and 6 of the 13 Inquiry, ie documents addressing what was defined in the 14 notice as "relevant issues". The relevant issues 15 including reviews of Horizon carried out by Ernst & 16 Young, Deloitte, KPMG and Linklaters. The notice 17 expressly stated that the documents be those created by, 18 sent to or received by, recorded a conversation or 19 meeting involving, or otherwise made reference to 19 20 specific individuals within the Post Office. 21 The individuals named in the notice included but 22 were not limited to: Paula Vennells, Alice Perkins, 23 Alwen Lyons, Angela van den Bogerd, Mark Davies, Tim 24 Parker and Susan Crichton. 25 At 5.32 on Thursday, 28 March, the Post Office sent 8 1 a covering letter for a production of 1,071 documents. 2 The cover letter noticed that the Post Office had 3 "initiated two assurance exercises", the first being 4 a review of specific third-party adviser material, and 5 the second being search and review of email inboxes of 6 personal assistants (PAs) to the Section 21(3) 7 individuals, and other email inboxes of potential 8 relevance where considered appropriate for this 9 exercise. 10 The letter further explained that the Post Office's 11 Section 21(3) search methodology focused on the relevant 12 individuals' data sources, third-party adviser files and 13 personal assistant emails have previously been reviewed 14 or other Rule 9s and Section 21s, as explained in 15 previous interim disclosure statements. However, as 16 part of assurance, Post Office has now run such searches 17 across specific third-party adviser files, as was set 18 out in the letter. 19 So such third-party advisors included those who the 20 Inquiry had specifically named in the Section 21 notice, 21 including Linklaters, Deloitte and KPMG. 22 The Post Office explained that, within the 23 production of 1,071 documents, 788 of them were said to 24 be relevant to Section 21(3), of which 583 related to 25 witnesses and 15 documents were said to be "of high 9 1 relevance and material". 2 44 documents were said to be documents of interest, 3 being documents that the Post Office said were not 4 directly responsive to the notice but were otherwise of 5 relevance to the Inquiry's terms of reference. Of 6 those, six related to witnesses; the remaining 239 7 documents were family members of such documents. 8 The Post Office noted that a number of the documents 9 could be apparent duplicates of previous documents 10 already produced but that information to assist in 11 identifying duplicates would be provided separately. 12 Sir, the Easter break then took place between 13 Friday, 29 March and Monday, 1 April. At around 14 10.00 am on 2 April, the Post Office's legal 15 representative contacted the Inquiry legal team to note 16 that further documents were to be expected. The Post 17 Office requested a meeting with the Inquiry to provide 18 an update and discuss how the Post Office intended to 19 disclose further documents. 20 At 11.47 on 2 April, the Inquiry confirmed it would 21 be grateful if the Post Office could please provide the 22 Inquiry with the information it should have, or would be 23 assisted in having, in relation to the late disclosure 24 that was relevant to hearings or witnesses this week. 25 At 6.58 pm that day, the Post Office sent the Inquiry 10 1 a four-page letter seeking: 2 "... to provide a brief update regarding the Post 3 Office's further urgent witness-focused review to best 4 assist the Inquiry with anticipated time meetings for 5 further productions." 6 That letter has been provided to cops and I'm not 7 going to repeat it. 8 However, it was in this letter, received after hours 9 on Tuesday, that the Inquiry was informed that the Post 10 Office intended to make "a small number of further 11 Burges Salmon/Field Fisher productions in the near 12 future of further documents relevant to Phases 5 and 6". 13 It was said that most will be directly relevant to 14 witnesses scheduled to appear later in April and then in 15 May to July, but a limited amount will relate to 16 witnesses scheduled to appear during this week, 17 ie starting today. 18 The letter said that the Post Office anticipated 19 that the documents that relate to witnesses appearing 20 this week are likely to be low in number and/or not 21 likely to contain many documents that will give rise to 22 potential questions for those witnesses but will rather, 23 particularly for non-Post Office or Royal Mail Group 24 witnesses, for the most part be documents that refer to 25 them. 11 1 Importantly, the letter said that the Post Office 2 anticipated making yet further productions of material 3 following five further reviews. It confirmed that the 4 reviews were not related to the Microsoft Exchange 5 remediation process but, as noted already, the documents 6 were relevant to Phases 5 and 6 and to witnesses 7 scheduled to be called as early as this week. 8 Those five reviews were summarised by the Post 9 Office as follows: first, the third party adviser and 10 personal assistant review; secondly, the NAS drive and 11 FileShare review; thirdly, the supplementary 12 precautionary Mimecast review, arising from the Phase 5 13 and 6 remediation review; the hard copy documents 14 review; and, finally, the Patrick Bourke 2017 Mimecast 15 data review. 16 The Post Office did not provide the numbers of 17 documents for witnesses commencing this week, although 18 they anticipated providing those numbers shortly. 19 Between 2 April and 5 April, the Inquiry received 20 seven further letters about one or more of those 21 reviews. Those letters have also been provided to Core 22 Participants and I shouldn't repeat them. 23 Within those letters, the Post Office disclosed 24 a number of additional documents as follows: 25 On 3 April, 196 documents were disclosed, said to be 12 1 from the NAS drive. The Post Office said they were 2 continuing to collect material from the Post Office 3 FileShare that might be relevant to the Phase 5 and 6 4 hearings. However, the Inquiry understands such 5 a measure to be out of an abundance of caution. 6 Also on 3 April, 3,188 documents were disclosed, 7 said to be from: 8 "... further material identified from third-party 9 adviser files and material identified as part of 10 a second assurance review, involving searches of email 11 inboxes of personal assistants to Section 21(3) 12 individuals and other inboxes of potential relevance 13 where considered appropriate." 14 This was further to the 1,071 documents already 15 disclosed to the Inquiry back on 28 March. 16 On Friday, 5 April, so the Friday that's just 17 passed, the Post Office disclosed 189 documents 18 following a review of Post Office's hard-copy material, 19 200 documents following an additional precautionary 20 Mimecast review, a further 374 documents were disclosed 21 said to be the third tranche of documents, including 22 "further material identified as part of a second 23 assurance review involving searches of email inboxes of 24 personal assistants to Section 21(3) individuals". This 25 was in addition to the 1,071 documents disclosed on 13 1 28 March and the 3,188 documents disclosed two days 2 further. 3 The Post Office said that it was now "urgently 4 reviewing data for personal assistants to the 5 Section 21(3) individuals who are witnesses and are due 6 to give evidence from 23 April onwards", and they 7 anticipated they would provide the documents to the 8 Inquiry on or before this Friday, 12 April. 9 Sir, taking the five reviews, about which the 10 Inquiry was informed on 2 April in turn, I understand 11 the position to be as follows: the third-party adviser 12 and personal assistant review has seen the disclosure of 13 a total of 4,633 documents since 28 March alone, the 14 Post Office has told us that review is not yet complete. 15 The NAS drive and FileShare saw the disclosure of 16 196 documents from the NAS drive last week but the 17 review is ongoing in relation to other witnesses. 18 The supplementary precautionary Mimecast review 19 arising from the Phase 5/6 remediation review saw the 20 disclosure of 200 documents but that's now said to be 21 complete. 22 The hard copy documents review saw the disclosure of 23 189 documents last week, it's unclear if that review is 24 complete or remains ongoing. 25 The Patrick Bourke 2,017 Mimecast data work appears 14 1 to be ongoing. We understand the data is being selected 2 and processed urgently. The volume and timing of such 3 disclosure is unknown but the Post Office said they were 4 working to disclose any further documents well in 5 advance of Patrick Bourke's hearing on 7 May. 6 Sir, we in the Inquiry Team wish to inform you and 7 the Core Participants of these developments without 8 delay. They present issues with which the Inquiry has 9 become extremely and unfortunately familiar with over 10 the past three years. 11 I should also put the developments in a wider 12 context. Since the end of the Phase 4 hearings alone, 13 so that's since the closing submissions on 2 February 14 2024, the Post Office has disclosed 73,720 documents to 15 the Inquiry, of which the Inquiry Legal Team have 16 characterised 67,210 documents as possibly relating to 17 Phases 5 and 6 of the Inquiry. 18 The Inquiry has received documents from other 19 providers during that time, albeit none as substantial 20 in volume as the Post Office, and the Inquiry's 21 information management team have confirmed that, as of 22 late yesterday, at least 78,211 documents, including but 23 not limited to the Post Office's documents, that likely 24 or potentially relate to Phases 5 and 6 of the Inquiry 25 may fall for disclosure to Core Participants. 15 1 The matters that the Inquiry is investigating span 2 two decades and a number of detailed issues. In order 3 to proceed with hearings in a meaningful way, the 4 Inquiry has needed to prioritise its disclosure to Core 5 Participants and will continue to do so. 6 It's with this in mind that we in the Inquiry Team 7 specifically set deadlines for the receipt of the late 8 exchange material likely to be relevant to the Phase 5 9 and 6 hearings on a witness-by-witness and week-by-week 10 basis, in order to ensure that the hearings could go 11 ahead as planned. 12 This was communicated to the Post Office and the 13 Inquiry understood that the Post Office considered that 14 it had completed its Phase 5/6 exchange remediation 15 exercises by 22 March. 16 The obligation of disclosure to the Inquiry is, of 17 course, ongoing. The Inquiry had expected and indeed 18 anticipated ongoing disclosure from providers of 19 documents in certain instances -- documents can be found 20 late, hard copies or electronic files or messages may 21 turn up in unexpected devices -- but the issues that the 22 Post Office's disclosure to this Inquiry have presented 23 have been much more than minor, ad hoc or additional 24 disclosure. 25 In particular, the Post Office's assurance review, 16 1 as it has called it, of personal assistant emails and 2 other inboxes of potential relevance in response to the 3 Inquiry's Section 21(3) notice of last year is very 4 concerning. As I say, that notice was sent in July of 5 last year. It lists a number of senior key Post Office 6 individuals. Such individuals would undoubtedly 7 communicate via their personal assistants. The inboxes 8 of what are called "inboxes of potential relevance" have 9 not been explained by the Post Office so we don't know 10 to whom they relate. 11 Even more concerning, the Inquiry emphasised that 12 the Post Office ought to apply a common-sense approach 13 to senior custodians, as far back as a meeting with the 14 Post Office in April 2023. 15 Sir, you asked for your team closely to monitor the 16 Post Office's disclosure to the Inquiry, we have done so 17 and so will continue to do so. Whilst these new 18 developments are, to use a Parliamentary word, 19 unwelcome, your team is not unprepared. We are 20 committed to doing all that we can to ensure that the 21 hearings can go ahead as planned and, subject to your 22 views, that's what we intend to do: to continue with the 23 hearings. The alternative -- further delay to allow the 24 Post Office to get its disclosure house in order -- is 25 not one which is acceptable. 17 1 It, of course, follows from that approach that there 2 may be a need to re-call some witnesses to ask them 3 questions about documents which have not been processed 4 in time for them to be asked questions about such 5 documents in the coming weeks. Sir, that's the approach 6 we intend to take and that's all I say at the moment 7 about this latest late Post Office disclosure. 8 SIR WYN WILLIAMS: Thank you, Mr Beer. 9 The substance or a summary of what Mr Beer has just 10 explained publicly was provided to me late last week, 11 together with Mr Beer and his team's advice that, 12 despite the problems which have occurred, we should 13 carry on. 14 I have had the weekend to think about that and also 15 whether it would be necessary to invite Core 16 Participants to provide their views to me about that. 17 The decision I have reached is as follows: first of all, 18 I don't wish to hear from the Core Participants and, 19 secondly, we're going to carry on. 20 Now, that is perhaps a bold thing to do because it 21 does mean that there may be occasions in which witnesses 22 are giving evidence where the documents haven't caught 23 up with the witnesses, so to speak, and that is a highly 24 undesirable state of affairs but, as Mr Beer has 25 explained, that can be cured, albeit with some cost to 18 1 the witness, by re-calling them if necessary. 2 The alternative is to have a substantial break and, 3 in my opinion -- dare I say judgment, even though I'm 4 not a judge anymore -- that is not desirable. 5 Make no mistake, everyone, I understand fully that 6 the problems with disclosure are capable of creating 7 very significant pressures for all participants in the 8 Inquiry but protracted adjournment, so as to ensure that 9 every relevant disclosable document is in the hands of 10 all Core Participants prior to a witness giving evidence 11 would also cause very damaging stresses to all the 12 participants, and so I have to exercise judgement and 13 come to a balanced decision. 14 As I've said, my view is that, at the moment, the 15 problems are not such that we need to call a halt and my 16 intention is to continue with the evidence sessions in 17 accordance with our published timetable, so far as is 18 reasonably possible. I stress, as Mr Beer has stressed, 19 that the monitoring of disclosure, which I promised 20 would continue throughout, will continue throughout and, 21 if I deem it appropriate, I will certainly use one of 22 our days off, a Monday or sometimes a Friday, to hold 23 a disclosure hearing. So there's a threat to you all. 24 I want to publicly acknowledge -- and this is the 25 last of the observations which I wish to make -- that, 19 1 at least in part, I may be to blame for some of the 2 problems relating to disclosure. There may be some in 3 this room -- in fact there are some in this room and, 4 certainly, there are some in the Inquiry Team -- who 5 consider that the timetables which I set for the hearing 6 of evidence are unrealistically tight. 7 On any view, the volume of material to be disclosed 8 to the Inquiry and then by the Inquiry to Core 9 Participants is enormous. I acknowledge that, if the 10 hearing phases had been spread out with greater breaks 11 between them, as some have advocated, then some of the 12 disclosure pressures would be eased. However, I am 13 acutely conscious that this Public Inquiry has been in 14 existence for very nearly three years. Although by the 15 standards of some inquiries, that is a comparatively 16 short period of time, I am unshakable in my belief that 17 this Inquiry should not last for a day longer than is 18 strictly necessary and, if that means that the pace at 19 which we proceed causes significant work pressures for 20 us all, then I'm afraid that's a price we're all going 21 to have to pay. 22 So thank you for your words, Mr Beer, and I think 23 we're ready for some evidence. 24 MR BEER: Well, just before we do that, can I turn to 25 a brighter note? 20 1 SIR WYN WILLIAMS: All right, a brighter note. Thank you. 2 MR BEER: As you know, sir, and as was publicly announced by 3 the Inquiry on 9 January this year, the Inquiry jointly 4 appointed Dame Sandra Dawson and Dr Katy Steward to the 5 role of governance expert witnesses. 6 Dame Sandra is Professor Emerita of management 7 studies, University College Cambridge, and a Fellow, 8 formerly the Master of Sidney Sussex College Cambridge. 9 She acted as an expert member on organisation, 10 governance and leadership on the Expert Advisory Group 11 on the Windrush Lessons Learned Review and regularly 12 advises viruses on leadership, governance and 13 organisation structure. 14 Dr Steward is a policy governance expert and was 15 a visiting scholar at Sidney Sussex College Cambridge. 16 Dame Sandra and Dr Stewart have been instructed to 17 produce two reports addressing issues relating to 18 leadership, management and governance. The first of 19 those reports has been disclosed to Core Participants. 20 It's dated 27 March 2024 and has the URN EXPG0000006. 21 It sets out the expected and best practice in relation 22 to the standards of governance, management and 23 leadership in companies such as the Post Office in the 24 period 1999 to 2019. It's a substantial body of work, 25 being 133 pages in length, including its appendices. 21 1 A copy of that report, the first report, is to be 2 treated as being having read into the record today and, 3 therefore, a copy will be uploaded to the Inquiry's 4 website today. 5 Dame Sandra and Dr Steward will be considering the 6 evidence given in Phases 5 and 6 of the Inquiry, both 7 the written evidence and the oral evidence and will 8 produce a second report in the light of that evidence 9 when Phases 5 and 6 have concluded. 10 SIR WYN WILLIAMS: Thank you, Mr Beer. I think we can all 11 agree that is a brighter note. 12 MR BEER: Can I call Alan Bates, please. 13 SIR WYN WILLIAMS: Yes, of course. Ah, he has appeared. 14 ALAN BATES (sworn) 15 Questioned by MR BEER 16 MR BEER: Good morning, Mr Bates. 17 A. Good morning. 18 Q. My name is Jason Beer, as you know, and I ask questions 19 on behalf of the Inquiry. Can you tell us your full 20 name please? 21 A. Alan Bates. 22 Q. Thank you very much for previously providing 23 a comprehensive and detailed witness statement to the 24 Inquiry and for coming to London today to give evidence 25 to assist the Inquiry in its work. Can we start by 22 1 looking at your witness statement, please. 2 A. Sure. 3 Q. It's the only hard copy document I'm going to be asking 4 you to refer to. It's got, for the purposes of the 5 transcript, the URN WITN00050100 and it's up on the 6 screen. It's 59 pages long, excluding the exhibits 7 page, and is dated 29 February. 8 I have picked up a couple of typos. I wonder 9 whether we could just correct those first. If we look 10 at page 23, the foot of page 23, at paragraph 75, it 11 says: 12 "The CWU were not provided in this period, as 13 I recall. The NFSP, in the letter ..." 14 Should that say "from Colin Baker" -- 15 A. Yes, it should. 16 Q. -- "dated 13 January"? So cross out the words "January 17 200" and put in the word "Baker"? 18 A. Yes, please. 19 Q. Page 32, paragraph 102. It says: 20 "In my letter to Mr O'Neill dated 9 September 2009 21 ..." 22 I think that should be 2004. 23 A. The original letter? Yes, it would be. Yes, you're 24 right. 25 Q. Yes. So if that can be corrected to 2004, thank you. 23 1 If you can turn to page 59, please, in the hard 2 copy, do we see your signature there? 3 A. Yes, you do. 4 Q. With those two typos corrected, are the contents of the 5 statement true to the best of your knowledge and belief? 6 A. They are. 7 Q. Thank you very much, Mr Bates. I'm not going to ask you 8 questions about every aspect of your witness statement 9 because it's long and detailed and a copy of it will be 10 uploaded to the Inquiry's website today, so the public 11 can read it. 12 The statement can come down, please. 13 Can I start with a little bit about your background. 14 You tell us in your witness statement, it's paragraph 5, 15 no need to turn it up, that before you became 16 a subpostmaster, you worked for 12 years in the heritage 17 and leisure project management sector; is that right? 18 A. That's correct. 19 Q. Is it right that, in the course of that work, you 20 developed experience in Electronic Point of Sale (EPOS) 21 systems? 22 A. Yes, I did. 23 Q. You developed experience in the development of 24 site-specific business software and the provision of 25 staff IT training? 24 1 A. That's correct. 2 Q. To what extent, if any, did that background assist you 3 when you became a subpostmaster and were later required 4 to work with the Horizon IT System? 5 A. I think when Horizon came in, I think I was quite 6 positive about it because I knew what technology and 7 these sorts of systems could do, so I was quite 8 positive. But I found it a bit frustrating, once the 9 system was installed and we were operating, I found 10 there were many shortcomings in the system and, knowing 11 what these systems could do, it just seemed a bit of 12 a lost opportunity. 13 Q. You were a subpostmaster, I think, between 31 March 1998 14 and 5 November 2003 -- 15 A. Yes. 16 Q. -- by my reckoning, so a period of five and a half years 17 or so? 18 A. That's correct. 19 Q. By comparison, if you don't mind me saying, to other 20 subpostmasters, that's a relatively short period, isn't 21 it? 22 A. It is. Sorry, it is but it's due to Post Office, not to 23 myself. 24 Q. Quite. Also, I suppose, ironically, you spent more than 25 four times that period campaigning? 25 1 A. Oh, yes, yeah. 2 Q. Why has that been necessary? 3 A. Because -- well, initially it was because Post Office 4 terminated my contract, giving me three months' notice 5 and not giving me a reason for doing so. Purely 6 because, in my belief, is that it was -- I kept raising 7 problems and concerns over its Horizon system, due to 8 a number of faults I'd found over the years. 9 Q. You tell us in your statement that you spent that period 10 of time seeking justice, accountability and redress for 11 not just yourself and your wife but also on behalf of 12 a much wider group of people; is that right? 13 A. Yes, I did. Once I'd started my individual little 14 campaign in there, we found others along the way and, 15 eventually, we all joined up, and so the JFSA was born 16 and onwards went the campaign. 17 Q. You say in your witness statement that you have 18 "dedicated this part of my life to this cause". Is that 19 how it has seemed or felt -- 20 A. Well, yeah -- 21 Q. -- firstly, that it has required dedication but, 22 secondly, that it's a cause? 23 A. Yes, I think it's also stubbornness as well. But 24 it's -- I mean, as you got to meet people and realised 25 it wasn't just yourself, and you saw the harm and 26 1 injustice that had been descended upon them, it was 2 something that you felt you had to deal with. It's 3 something you felt you had to deal with. It's something 4 you couldn't put down and you had the support of the 5 rest of the group in there as well. Sorry. 6 Q. Do take a moment to clear the frog in your throat. 7 A. Yeah, I have. Hopefully not a Welsh one. 8 Q. Talking of which, you ran a post office in North Wales? 9 A. I did. 10 Q. What was the name of the post office and in which town 11 was it? 12 A. It was Craig-y-Don post office in Llandudno. 13 Q. Say that again? 14 A. Craig-y-Don post office in Llandudno. 15 Q. What kind of Post Office -- what kind of post office was 16 it? 17 A. It was a three-position counter in that it was -- when 18 we first bought the property, it was very much at the 19 back of the property in there and it was a bit run down, 20 and it also had another side, a retail side to the 21 business which was a whole variety of things: crafts, 22 knitting, haberdashery, a whole range of things. So, 23 for the first year or two, we just ran the business as 24 it was and slowly developed it from there, putting on 25 a big extension, updating the -- updating a lot of the 27 1 stock. But, more importantly, we actually saw it as 2 a big potential to grow the Post Office business and we 3 brought it right to the front of the building and -- 4 with a large queueing area for people, unfortunately it 5 seems what post offices need, and so we invested quite 6 heavily in developing the post office and that was at 7 the time Horizon came in. 8 Q. Thank you. I think you and your wife Suzanne were 9 44 years old when you took it over; is that right? 10 A. About that, yes, it would have been. 11 Q. You tell us in your witness statement -- there's no need 12 to turn it up, it's paragraphs 9 to 13 -- in summary 13 terms about your decision to become a subpostmaster, 14 your decision to pick this post office, your hopes and 15 aspirations and the process by which you applied and by 16 which your application was approved. 17 I just want to look at an account you've given in 18 the past in more detail about that -- 19 A. Sure. 20 Q. -- if we may. Can we look, please, on the screen at 21 POL00024194. This is a witness statement you made in 22 the course of the Group Litigation proceedings in the 23 High Court, and we'll deal more about that later today; 24 is that right? 25 A. Yes, it is, yes. 28 1 Q. We can see the date on it in the top right, 9 August 2 2018. So this witness statement was made for the 3 purposes of what came to be known as the Common Issues 4 trial; is that right? 5 A. That's correct. 6 Q. So the process by which you applied to become 7 a subpostmaster, the documents that were or, in fact, 8 were not given to you, were important issues and 9 addressed in this witness statement in very great 10 detail; is that right? 11 A. That is right, yeah. 12 Q. Can we look, please, at page 3, and pick up at 13 paragraph 11, please. You say: 14 "A key attraction to working with Post Office was 15 that it would provide secure employment, based upon the 16 fact it provides a community service and has 17 an established brand in the community. From among the 18 various small business options available, a Post Office 19 branch would, in my mind, be a safe option. I was also 20 encouraged by the fact I could run a secondary business, 21 such as a retail shop, alongside the Post Office 22 branch." 23 That sets out, in summary, your reasons for picking 24 Post Office as a future enterprise with your wife; is 25 that right? 29 1 A. That's correct. 2 Q. Now, paragraph 12 on this page, right through to 3 paragraph 23 on page 5, addresses the initial enquiries 4 you made with the existing or the outgoing 5 subpostmaster -- Peter Savage, I think his name was -- 6 A. That's correct. 7 Q. -- and the planned visits that you made and, indeed, 8 some unannounced visits you made to the post office in 9 question as part of your due diligence; is that right? 10 A. That's correct. 11 Q. Can we just look at paragraph 21 on page 5, please. 12 You say you do remember that: 13 "... during one of my visits to the Branch Mr Savage 14 explained that he had a practice of keeping 'unders and 15 overs' in a tin in the safe as a system to deal with any 16 odd shorts or overs. I remember this because I thought 17 it to be rather casual and unusual for a business. 18 Nevertheless, I was not particularly concerned and 19 considered it to be a matter for Mr Savage and his staff 20 and I did not understand it to involve large figures or 21 to be problematic." 22 Is that right? 23 A. That is right and it was very odd and very strange, 24 I thought, for a cash-based system where you didn't 25 actually record anywhere the amounts and you didn't 30 1 provide Post Office with returns of the position each 2 week in there as well. But that seemed to be the way it 3 operated. 4 Q. But these were small sums of money; is that right? 5 A. They were small sums of money, yeah. 6 Q. From paragraph 24 if we scroll down, please, right 7 through to paragraph 33, at the bottom of page 7, you 8 deal with the agreement to purchase the Post Office, 9 yes? 10 A. Yes. 11 Q. Then if we go forward to page 8, please, from 12 paragraph 34 on this page, right through to paragraph 86 13 on page 19, you deal with the following issues -- I'm 14 just going to summarise them without reading the text: 15 firstly the application to the Post Office to be 16 a subpostmaster; secondly, the interview at the regional 17 office in Bangor that you and your wife attended; 18 thirdly, the confirmation that your application had been 19 successful and the material that you were then given. 20 Yes? 21 A. Yeah. 22 Q. If we just go forward to page 15, please, and look at 23 paragraph 62, you say: 24 "... at no stage during the process of my 25 application, appointment and branch opening ... was 31 1 I ever sent a copy of the [subpostmaster contract]. 2 I first obtained a copy of the [subpostmaster contract] 3 much later, in the circumstances I explain below ... At 4 no point during my appointment process was it mentioned 5 or explained to me that the [subpostmaster contract], 6 which was a lengthy document of 114 pages, governed the 7 terms of my appointment." 8 Now, we will hear later that, is this right, that 9 the Post Office robustly challenged you on that issue, 10 alongside other issues, at the trial, and then the trial 11 judge, then Mr Justice Fraser, held that you were 12 an honest witness, that you were telling the truth and 13 that, like many other subpostmasters, you did not 14 receive a copy of this document? 15 A. That's correct. 16 Q. You address later in this section of your witness 17 statement your initial classroom training and then 18 lastly, the transfer of the branch to you and the 19 opening of it, correct? 20 A. Correct, yes. 21 Q. Can we turn to the introduction of the Horizon system 22 into your branch and can we go to your Inquiry witness 23 statement, please, at page 5. At paragraph 14 you tell 24 us that: 25 "In October 2000, [the Post Office] introduced 32 1 Horizon at my branch and imposed upon me the requirement 2 that I use it to record transactions at the branch and 3 to submit branch accounts. To the best of my 4 recollection, Horizon was installed from 2 October 2000. 5 I remember that the branch was closed around this time 6 to allow for this." 7 So Horizon installed under two years after you took 8 up the position as subpostmaster of this office? 9 A. Correct, yeah. 10 Q. Then scroll down to 15, please. You say: 11 "I did not have any involvement in discussions about 12 the introduction of Horizon, I had no choice but to 13 accept and accommodate this variation. Obviously, this 14 was also a huge change in how I operated the branch, as 15 many of the previous processes that I had been trained 16 on and had operated at the branch were made obsolete not 17 only for me, but also for my assistants." 18 Paragraph 16, please. You say: 19 "When Horizon was introduced, given my background 20 with [Electronic Point of Sale] systems ... I regarded 21 the introduction of Horizon at first as a positive 22 innovation." 23 You have told us that in summary this morning. 24 A. Yes. 25 Q. "However, I did not expect there to be any apparent 33 1 discrepancies shown on the system that I was unable to 2 identify the cause of and resolve, either by myself or 3 with support or information from [Post Office Limited]. 4 Certainly, I did not expect discrepancies to occur for 5 which [the Post Office] would try and hold me liable 6 without the cause being investigated and established. 7 To that point, I had been preparing accounts manually, 8 using the Capture system." 9 Just going back to what you say on the previous 10 page, you say in the third line: 11 "... I did not expect there to be any apparent 12 discrepancies shown on the system that [you were] unable 13 to identify the cause of and resolve ..." 14 What do you mean by that? 15 A. Well, I expected to be able to track down any 16 transaction that I'd undertaken -- myself or my staff 17 had undertaken at the branch, one way or another. There 18 were a variety of ways of interrogating systems and the 19 data on the systems and I presumed that the system would 20 enable you to do that at the outset but -- I mean, in 21 previous roles, you know, before Post Office, I'd used 22 something like Crystal reports on software packages to 23 extract information, using certain parameters in there. 24 But there was very little flexibility in Horizon, as 25 I saw it at that time, for reports that you could 34 1 control the parameters of your searches for. 2 There were a set of reports, don't get me wrong, 3 there were a set that were already built into the system 4 but they were quite restrictive in there, and it did 5 seem to cause problems. 6 Q. We see this as a feature in the correspondence that 7 we're going to turn to a little later -- 8 A. Sure. 9 Q. -- today and a constant theme that you pursued, ie the 10 visibility of transactions and the auditability of 11 transactions from a subpostmaster's perspective was 12 lacking in the Horizon system; is that correct? 13 A. Very much so, yes. 14 Q. Can we turn, please, back to your High Court statement, 15 POL00024194, and turn to page 32, please. Can we pick 16 it up at paragraph 144. You say that you've been 17 referred to a part of the Post Office's defence and to 18 its defence and counterclaim and you say that you 19 understand from this that the Post Office's case for the 20 purposes of the Common Issues trial is that "losses do 21 not arise in the ordinary course of things without fault 22 or error on the part of the subpostmasters and their 23 assistants ..." and -- this what the Post Office said: 24 "... 'it would not be right to infer or presume that 25 a shortfall and loss was caused instead by a bug or 35 1 error in Horizon' and that the truth of whether 2 a shortfall did or did not result from losses for which 3 the subpostmaster was responsible '... lies peculiarly 4 within the knowledge of subpostmasters as the person 5 with the responsible for branch operations and the 6 conduct of transactions in branches'." 7 You say: 8 "... these things were in my own experience very far 9 from the case." 10 Then you set out, from your own experience, by 11 comparison, what you say, by reference to what the Post 12 Office suggest. Can we look at paragraph 145, please. 13 You say: 14 "... I did not expect there to be any apparent 15 shortfalls that [you were] unable to identify." 16 That's essentially what you said in your Inquiry 17 witness statement. 18 Then 146, you say: 19 "... one of my fundamental concerns when Horizon was 20 introduced, which [you] clearly communicated ... through 21 various letters, was the lack of transparency and 22 control available to me in reviewing transactions when 23 trying to balance." 24 You refer to a letter and you say: 25 "I could not fully access data that I needed in 36 1 order to properly track and, if necessary, to correct 2 transactions." 3 Your concerns came to a head in December 2000 4 following a particularly difficult balance. You were 5 therefore dependent, you say, upon the Post Office for 6 this sort of information and, therefore, in order to 7 ascertain the cause of any apparent shortfall and 8 whether it was in fact a real loss. 9 Then you say in 147, although Post Office later 10 moved to monthly balancing, during your tenure you were 11 required to produce weekly accounts, which meant you had 12 to conduct a weekly balance on a weekly basis on 13 a Wednesday: 14 "When carrying out this balance on Wednesday, 15 13 December 2000, the Horizon system showed there was 16 an unexplained variance of over £6,000 relating to Giro 17 deposits." 18 That can come down. Thank you. 19 So the first substantial unexplained variance was 20 over £6,000; is that right? 21 A. Yes, and it was only a number of weeks after the system 22 had gone live. 23 Q. I was going to ask you that: system live about 24 2 October? 25 A. Yeah. 37 1 Q. We're now talking about 13 December, so two months or so 2 after the system -- 3 A. Yeah. 4 Q. -- had been installed, this variance arose? 5 A. Yes. 6 Q. If we go back to paragraph 148, please, of POL00024194, 7 so over the page, please, you say: 8 "As you mention [in a paragraph above], I contacted 9 the helpline seeking support and help as to why this 10 apparent variance had occurred. They were unable to 11 assist in any meaningful way. I tried to investigate 12 the matter myself. I printed various reports from two 13 of my three counter terminals. I left the third 14 terminal for use to serve customers as we were very busy 15 in the branch, with customers queueing out of the door." 16 You cross refer back to paragraph 143.1 -- I'm not 17 going to go there -- but, essentially, you tell us in 18 that paragraph that, on that day, 13 December 2000, you 19 contacted the helpline seven times; is that right? 20 A. That's correct. 21 Q. And one of the calls was about an hour in length? 22 A. Yeah. 23 Q. Were they of any assistance at all in those seven calls? 24 A. Not really. "Stating the bleeding obvious", I think, 25 really, is one description I might use, but it was all 38 1 things that I'd tried. There -- 2 Q. Did they suggest anything -- 3 A. No, and the other impression I got is they couldn't 4 access the system any further than I could at that time. 5 Q. Just by way of an aside, I think you tell us in your 6 statement that Post Office records subsequently 7 disclosed to you show that in the two year and nine 8 month period, up until November 2003, ie when your 9 contract was terminated, you and your assistants made 10 507 calls to the helpline -- 11 A. Correct. 12 Q. -- of which 85 related to Horizon and balancing 13 problems? 14 A. Yes. 15 Q. And that you found the helpline to be ineffective, 16 indeed of no help? 17 A. Very much so and often we never bothered ringing it. 18 Q. Can we go on to paragraph 149 of your High Court witness 19 statement here. You say using the limited reports you 20 were able to print, you ascertained that around £5,000 21 of the alleged shortfall related to Giro items that had 22 become wrongly duplicated on Horizon: 23 "These reports were in the form of lengthy, 24 multi-line, narrow till receipts and were many metres 25 long making them difficult to review in any event. At 39 1 the time, I believed that a majority of the remaining 2 alleged shortfall, being one £1,182.81, was also 3 attributable to Giro errors. However, I was unable to 4 track these potentially smaller sums in the absence of 5 proper reporting functions on Horizon. Therefore, far 6 from being within my knowledge, I was unable to 7 ascertain the root cause of the apparent shortfall at 8 all." 9 You have your thoughts, which you set out later: 10 "I also called my Retail Network Manager, Gerry 11 Hayes, the following day to inform him. In the absence 12 of a proper response from the Post Office, I carried 13 over the apparent shortfall from that week's cash 14 account to the following week's cash account, by 15 transferring it to a suspense account, which was visible 16 to Post Office." 17 So £5,000 of the £6,000 was attributable to wrongly 18 duplicated giros, the loss which had been left, about 19 £1,100, you couldn't account for on the information 20 available to you. Is it that sum, £1,100 that you ended 21 up in dispute with the Post Office over? 22 A. At that time, yes, it was, yeah. 23 Q. I think the first thing you did was to write a detailed 24 letter to the Post Office about it? 25 A. I did. Yeah. 40 1 Q. Can we look at that, please, POL00004598, at page 134, 2 please. We can see this is dated 19 December 2000, so 3 about six days after the balancing issue emerged, and, 4 again, about two and a bit months after the installation 5 of Horizon at your branch and it must be noted, I think, 6 very early in the life of the Horizon system taken as 7 a whole; would you agree? 8 A. Yes, I would. 9 Q. You'll see that the heading of it is "Horizon Faults". 10 Can we read the letter together because this sets out 11 what might be an important account, early in the life of 12 Horizon. You refer back in the first paragraph to 13 a conversation and, as is good practice, you confirmed 14 it in detail in writing. You say: 15 "The balance at this office on [the 13th] was not 16 only very stressful but also very worrying. The 17 evidence that appeared during that day proved beyond any 18 doubt that the Horizon system cannot be relied upon to 19 give 100% accurate figures. The problem which was 20 highlighted to this office that day was with regard to 21 Giro Deposits and at one point the weekly returns were 22 showing a variance to the addition of the daily returns, 23 of over £6,000. 24 "The whole of that afternoon was spent making 25 a number of phone calls to the different helplines, one 41 1 of almost 1 hour long, and kept two of the three 2 terminals producing nothing but reports, at a peak 3 trading time when we had can you see out of the door, 4 though eventually I did manage to track down the 5 majority of the money. That said, the cash account for 6 that week is still showing a shortage of £1,182.81. 7 I can without any doubt attribute £368.50 of that to 8 Giro items that have been double entered and that I am 9 unable to track because of the way Horizon is set up. 10 Of the remaining £814.31 shortage, I am presuming that 11 £409.15 of that is the shortage from the previous week 12 that has become added to the total. This leaves 13 a difference of £405.16 which I am unsure of where it 14 comes from. It may well be a Giro system error as might 15 be the previous weeks £409.15 shortage or it may be 16 something else. Unfortunately, the current Horizon 17 system does not let you access previous transactions 18 adequately enough to track problems with shorts or overs 19 at the end of the week." 20 Continuing: 21 "Having spoken to the local Branch Secretary of the 22 Federation of SubPostmasters on these problems and 23 realising the problems I am experiencing are being found 24 by others around the country I really do believe it 25 would be unreasonable for Post Office Network to hold me 42 1 liable for losses on the cash account until such time as 2 100% guarantee can be given about the accuracy of 3 Horizon. 4 "I had been hoping to leave any comments in writing 5 about Horizon until the office is quieter in January and 6 then write a detailed submission about the cost we have 7 incurred with it (around £1,000), the problems with the 8 counter (staff working with money and stamp books on 9 chairs or on the shelf behind them), the very poor 10 layout of the screen and menus, the slowness of the 11 printers, the lack of report writing facilities, the 12 chaotic end of day and end of week procedures and the 13 problems of having to do 'office work' at a terminal on 14 the counter. Given time I shall produce the report for 15 you. 16 "Please do not think that I am being nothing but 17 negative about the system. I am a firm believer in the 18 way forward being through such a system. But bear in 19 mind my comments are made by someone who has had 20 considerable experience of [Electronic Point of Sale] 21 systems before joining the Post Office 1998. I first 22 began working with them in 1986 and have used a variety 23 of systems ..." 24 Reading on: 25 "So I do have some insight into those systems and 43 1 would gladly be willing to offer constructive feedback 2 if asked. 3 "With regard to the current deficit showing on our 4 cash account for last week how do you want me to 5 progress this week's balance? Shall I just roll it 6 through and see what happens, or what?" 7 Then you ask for assistance. 8 So in that letter you make it clear, on a number of 9 occasions, that Horizon is at fault and you explain in 10 detail why, so far as you could tell, that was so; is 11 that right? 12 A. That's correct. 13 Q. You tell the Post Office that you're not alone and that 14 this was happening around the country. 15 A. That's what I understood, yeah. 16 Q. Did that information come from your local branch 17 Secretary of State at the NFSP? 18 A. It did. 19 Q. Was that Dave Foster? 20 A. It was Dave Foster. 21 Q. You ask a question "What should I do?", at the end? 22 A. Yes. 23 Q. Did you ever get a reply -- 24 A. No. 25 Q. -- a written reply, to the raft of the points? 44 1 A. No, I never did. 2 Q. No reply to this letter at all? 3 A. Never. 4 Q. Can we move on, please, to page 140 in this bundle. 5 This is a follow-up letter of 7 January 2002, so now 6 over a year has passed. You're writing to the Post 7 Office about this long in the tooth alleged shortfall. 8 You say: 9 "As you are aware, the cash account for this office 10 is still showing an amount of £1,041.86 in the suspense 11 account. This cumulative figure was placed in the 12 suspense account towards the end of 2000 and I have no 13 doubt at all that it was due to errors in the Horizon 14 system over a number of weeks at that time. In my 15 letters to Gerry Hayes [of] 19 December [which we've 16 just looked at] and 16 July 2001 [I've skipped over that 17 one because of time], neither of which did I receive 18 a written reply to, I gave further details on this 19 matter. 20 "I really do think that enough time has now passed 21 for Post Office to have resolved this issue and unless 22 I receive a written comment to the contrary by the end 23 of this month I will take it that this matter is closed. 24 When I signed my contract with Post Office Counters 25 I did not sign to accept the liabilities arising from 45 1 the shortcomings of a less than adequate Horizon system, 2 all liabilities from such a system are clearly the 3 responsible of Post Office Limited or ICL Pathway. 4 "Allowing this issue to drag on not only continues 5 the stress and strain of the original problems but 6 I fear also continually casts doubt over my honesty and 7 that of my staff. Therefore I would greatly appreciate 8 it if you would bring this matter to a head in order 9 that we can move on." 10 Can we turn to your Inquiry witness statement, 11 please, at paragraphs 39 and 40, which are on page 12. 12 You say: 13 "Finally, by letter of 6 March 2002 I was notified 14 that 'Post Office ... has decided to take no further 15 action in respect of the loss' at my branch and that 16 this will be written off. No reason was given, but 17 I have since seen a copy of a 'Write Off Authority' 18 voucher disclosed by [the Post Office] which gives the 19 reason for the write off as 'Disputed Horizon Cash 20 Account Shortage'. 21 "The letter of 6 March also said that [the Post 22 Office] had taken time to respond because '... it has 23 been necessary to formulate a consistent response to all 24 such cases'. I take from this that [the Post Office] 25 was aware at the time of many such complaints. I also 46 1 take from the fact that [the Post Office] was willing to 2 write off the considerable apparent discrepancy I had 3 disputed that my complaints were valid, and that [the 4 Post Office] was aware that was the case and wished to 5 avoid the controversy on this matter, given that I was 6 willing to assert my legal rights." 7 Can we turn up, please, POL00004598, at page 143, 8 please. Just look back at page 142, please. This is 9 the letter of 6 March 2002 that you were referring to in 10 your witness statement. 11 A. Yes, that's right. 12 Q. If we look at the third paragraph, there's the passage 13 that you cited: 14 "After due consideration of the facts surrounding 15 [your] loss and of your report, Post Office has decided 16 to take no further action in respect of the loss which 17 will be written off." 18 The Write Off Authority, if we just look at the 19 second page that was included, if we could just scroll 20 down a little bit, thank you. This is the unsigned 21 version -- 22 A. Yes. 23 Q. -- essentially: 24 "I have received a Write Off Authority Voucher to 25 the value of [the amount] which has been cleared from my 47 1 suspense account ... and the voucher has been cleared in 2 the appropriate manner in the cash account number week 3 number ..." 4 Was that amount, £1,041.86, actually cleared out of 5 your suspense account so you went back to zero in 6 balancing terms? 7 A. Yes, yes, it did. 8 Q. So it didn't remain thereafter a shortfall which you 9 were required to roll over? 10 A. No. 11 Q. Then can we look at the loss authorisation document, 12 which you also referred to in your witness statement, 13 that's POL00328099, page 3, please. I think that's 14 "Loss Authorisation" document, if we just pan out so we 15 can see all of it, please. 16 I don't think this is something that you saw at the 17 time; is that right? This is an internal Post Office 18 document. 19 A. That's correct, yeah. 20 Q. But you got disclosure of it later; is that right? 21 A. That's right. 22 Q. We'll see that it seems to be in standard form. It's 23 got your branch name and your FAD code, the amount of 24 money, and it says: 25 "The following decision has been made with regard to 48 1 the loss at the above office which relates to an aged 2 shortage which the subpostmaster insists was 3 attributable to a Horizon 4 system/software/equipment/training failure." 5 Then three boxes or three options are given, the 6 second of which was the subpostmaster makes it good, the 7 third of which was an amount of it must be made good, 8 an amount of it will be written off, and the first of 9 which was the full amount will be written off and the 10 subpostmaster has been sent the appropriate voucher with 11 which to clear the loss of the amount. Yes? 12 A. Yes. 13 Q. Did you see this document, the writing off of a loss 14 because you said the loss was attributable to the 15 Horizon system, at the time of the dispute with the Post 16 Office in 2002 and 2003, ie before termination of your 17 contract? 18 A. No, no, I didn't see it. No, I didn't see it. 19 Q. So were you aware at that time that the Post Office 20 seemingly used a standard form with "delete as 21 appropriate" boxes on it? 22 A. No, I didn't, but, now that you mention it, I do recall 23 a conversation that the Retail Network Manager had at 24 the time with this department at my office, so I only 25 heard one side of the conversation, and it was about 49 1 arranging for this write off amount or a write off 2 voucher. And I seem to recall, and it stuck in memory 3 because of what it was, he said "Oh, it's another one of 4 the Horizon losses", and it's just one of those little 5 things that, you know, sticks in the back of your mind 6 that was said at the time, when the Retail Manager was 7 speaking to this department on the phone, arranging the 8 voucher. 9 Q. In any event, there existed a form in which a loss could 10 be authorised to be written off on the grounds that the 11 subpostmaster said the loss was attributable to 12 Horizon -- 13 A. Yes, it did. 14 Q. -- and that's what happened in your case? 15 A. Yes. 16 Q. Thank you. That can come down. 17 Now, before you had authorisation to write this loss 18 off, you continued to roll it over from week to week? 19 A. Yes, I did. 20 Q. Was that done with the knowledge and approval of your 21 then Retail Line Manager? 22 A. Well, they were aware of it, they were certainly 23 informed that that's what I was doing, so ... 24 Q. We've heard from some Post Office staff, the evidence of 25 Susan Harding springs to mind particularly to me, that 50 1 the Post Office believed that the suspense account was 2 used by subpostmasters to cover up theft and fraud. 3 Your evidence is that you were being transparent from 4 an early stage in the life of Horizon in your complaints 5 about Horizon discrepancies, about the use of the 6 suspense account, to hold over disputed sums whilst 7 continuing to assert that the money wasn't owed and 8 ought not to be made good; is that right? 9 A. That's correct. 10 Q. Did there come a time when that practice was challenged? 11 A. Not during my tenure. I understand it was later on. 12 Q. I think after this write off, there continued to be some 13 shortages/shortfalls shown on Horizon; is that right? 14 A. That is. That's right, yes. 15 Q. And -- 16 A. It's not just -- sorry, you say shortages. It was also 17 overs and under. It was -- 18 Q. So surpluses as well? 19 A. Surpluses, yeah. 20 Q. Did you seek to discover the cause of both the surpluses 21 and the shortages? 22 A. Yes. As much as we could. 23 Q. Did you encounter success? 24 A. On occasion, yes. 25 Q. Did it remain the case, however, that a sum just over 51 1 £1,000 was carried as shortage in the suspense account? 2 A. No, not to my recollection. There was a claim at the 3 very end of my contract that I think they said that the 4 office was owing something in the region of £1,200 or 5 £1,400 but -- 6 Q. It's that I'm referring to. 7 A. Sorry? 8 Q. It's that I was referring to. 9 A. Yeah, but that wasn't carried as such. What happened 10 was that I refused to -- when we undertook our weekly 11 balance, you were then meant to put in money to make up 12 to the figure or take money out, if it was over in 13 there. I refused to do that. I rolled through the 14 shortages or the losses in there -- sorry, the shortages 15 or the overs each time. So it had a running total, it 16 was adjusted from week to week, because I really did not 17 know where the office was up to, you know, I had no 18 idea. 19 And often, some of these, where there had been 20 an error, might come back in a week or two weeks or 21 something of that -- that sort of time, or it could be 22 a lot longer, when the actual error was discovered 23 elsewhere and it can be corrected. But no, I never, 24 actually, reset, or zeroed the system but I just kept 25 rolling through the shortages and losses, and Post 52 1 Office were aware of what I was doing. 2 Q. Did the installation of a new Retail Line Manager, 3 Mike Wakley, cause matters to be brought to a head in 4 that respect? 5 A. Eventually, yes. 6 Q. Can we look at that "eventually". POL00004598, 7 page 144, please. This is a letter to you dated 8 14 April 2003, "Reference: Losses and Gains". Just want 9 to read the first part of the first paragraph: 10 "Further to our conversation, you confirmed that you 11 have been rolling over losses and gains for the past two 12 years or more." 13 That's what you just described. 14 A. Yes. 15 Q. He says: 16 "I was unaware of this practice". 17 Then, in the second paragraph, he says: 18 "I am now instructing you, that with immediate 19 effect, you are required to make good the outstanding 20 loss and to cease with this current practice of rolling 21 over any losses and gains." 22 Can we see your reply, please, page 145. You say: 23 "I am in receipt of your letter ... 14 April [that's 24 the one we just read] confirming our conversation 25 regarding losses and gains at our office which have 53 1 always been rolled over since the installation of 2 Horizon. I appreciate that you may well have been 3 unaware of this practice but can assure you many other 4 Post Office staff knew of it. 5 "My comments regarding this were all well documented 6 in a number of letters ... such as that dated 7 19 December ... which like all letters was sent recorded 8 delivery. 9 "The problem with rolling over the losses and gains 10 is that I presume I would be accepting liability for 11 them which is something that I have pointed out in 12 writing to you since the introduction of Horizon here, 13 I am unable to do until such time I am able to access 14 the data that I am being asked to be responsible for. 15 As I have written previously 'The totally inadequate 16 report system has been made so complex it lacks the 17 ability to interrogate the system when you know the 18 information is inside', if I am unable to access the 19 data to check items it is totally unreasonable to expect 20 me to accept the liability from uncheckable data." 21 I think that reply speaks for itself but did this 22 exchange of correspondence, the new-ish, I think, Retail 23 Line Manager, raising the issue, requiring you to make 24 good the shortfall, to cease the practice, ultimately 25 lead to your contract being terminated? 54 1 A. I believe so, yes. 2 Q. Can we look, please, at page 147 of this bundle. Letter 3 from Mr Wakley, 2 May. Scroll down. 4 "Thank you for your letter of 16 April [that's the 5 one we've just looked at], the content of which has been 6 noted. 7 "Nevertheless, I must point out that you are bound 8 by the Terms and Conditions of your Contract for 9 Services, which was acknowledged by you on 31 March 10 2003", and somebody has written in, correctly, I think, 11 1998. 12 That was you, was it? 13 A. Yes. 14 Q. "1998!": 15 "... accepting your appointment. 16 "To this effect you are charged with ensuring that 17 all accounts entrusted to you are kept in the form 18 prescribed by Post Office, by using the approved 19 accounting system ... and, therefore, in the event of 20 any losses occurring, these should be made good without 21 delay ... 22 "Accordingly, failure to comply with these 23 obligations can be construed as a breach of contract, 24 which could ultimately put your Contract for Services 25 'at risk'." 55 1 Over the page: 2 "I would therefore request that you acknowledge the 3 content of this letter within 10 days of its date of 4 posting confirming that your accounts are being 5 maintained in the correct fashion [and make good the 6 losses] as per your Contractual Obligations." 7 Then 149, please. Your reply to that letter: 8 "With regard to your letter [of] 2 May ..." 9 The first paragraph, I think you pick him up on the 10 typo: 11 "You refer me to section 12 of the contract ..." 12 Rather than what he has suggested to you, you're 13 liable to repay all losses, you point out that 14 section 12, in fact, states: 15 "'The subpostmaster is responsible for all losses 16 caused through his own negligence, carelessness or 17 error, and also for losses of all kinds caused by his 18 Assistants. Deficiencies due to such losses must be 19 made good without delay.' 20 "You rightly point out that I have agreed these 21 terms and I can confirm that I would gladly make good 22 any losses caused in these manners. But I can see 23 nothing in this clause which states that I am also 24 liable for data that I am unable to check." 25 That's a summary of the position you had been 56 1 maintaining, I think, consistently since installation. 2 A. Yes. 3 Q. "To take an extreme, if the Horizon system said I owed 4 £1 million, you would say I would have to make good the 5 loss without delay and without question. 6 "There is no way I will agree to be held responsible 7 for data I have input until such time as I am able to 8 access the data that I am being asked to be responsible 9 for. In trying to state that I have acknowledged such 10 things in the Terms and Conditions of my Contract ... 11 you are, in effect, purporting to vary this contract." 12 We can skip over the next paragraphs, which are 13 about something else, and then go to the next page, 150, 14 and then the letter ends. 15 So you correct the Post Office on the terms and 16 conditions, you make it clear the point that many have 17 missed -- that the contract does not oblige you to repay 18 all losses -- and then you make the point of emphasis, 19 the £1 million example, in your third paragraph. Was 20 there any effort by the Post Office to engage with the 21 points that you were making in this letter? 22 A. None at all, never addressed them. 23 Q. Can we turn, please, to POL00004598, page 30, that's the 24 same bundle. Page 30, scroll down, please. Mr Wakley: 25 "In accordance with [your contract] I am writing to 57 1 issue you with three months notice of termination of 2 [your contract]. 3 "The termination ... will take effect on 5 November 4 2003." 5 So this is the letter that brought your contract to 6 an end; is that right? 7 A. That is, correct, yes. 8 Q. The letter, of course, speaks for itself. It gave you 9 no explanation for the reason for termination of your 10 contract? 11 A. That's correct, yeah. 12 Q. Was any such explanation given to you by the Post Office 13 at this time? 14 A. Never. 15 Q. It may seem an insensitive question, but how did 16 receiving this notice make you feel? 17 A. Well, I was annoyed with them, but -- to put it mildly, 18 but I think it was partly expected in a way because it 19 was pretty obvious they were determined to -- they were 20 after me, one way or another, and the build-up of 21 correspondence over the period was certainly pointing in 22 that direction. But I always find it quite interesting 23 that I pulled them up on the point about trying to 24 terminate me and my contract under clause 12 of the 25 contract, but they didn't do it that way. They decided 58 1 to go for -- they didn't to go just under this, you 2 know, any reason they wanted, three months' notice, 3 without giving a reason. 4 Q. So it's a without-fault, without-reason -- 5 A. That's right. 6 Q. -- termination, just on three months' written notice? 7 A. Yeah, that's it. 8 Q. But you'd had the £1,100 written off? 9 A. Mm-hm. 10 Q. You'd had the Post Office acknowledging that it was 11 because of a genuine dispute over whether Horizon was to 12 blame for it, over the operation of Horizon. You'd been 13 rolling over other shortfalls and surpluses since then 14 with Post Office knowledge, and then this arrives? 15 A. Well, it was -- it was a bit strange in a way because we 16 were a very busy post office. In fact, it was a time 17 when a lot of post offices were losing trade but our 18 sales figures were extremely high in the region, we'd 19 developed a lot of new business in there. But, you 20 know, it was their decision to do it and so be it. 21 I mean, I did offer, I did offer at one point, when 22 there were discussions between the Retail Manager and 23 myself, when we were heading in this direction, he was 24 saying, "Come on, Alan, you know, change your mind, do 25 this, do that", and all the rest of it, and I said, 59 1 "Look, if you're unhappy with the way that I'm providing 2 your service, then pay us back our initial investment 3 and take the post office away". I would have been quite 4 happy for them to do that and I probably wouldn't have 5 been here today on that basis. 6 But, I mean, it's -- they just decided they were 7 going to -- I felt they were going to make a lesson of 8 my case because a number of other people knew what was 9 going on at that time, and I think it was something that 10 Post Office liked to try to give lessons of how they 11 were in charge. 12 Q. Can we just look, before the morning break, at some 13 reasoning that the Post Office gave subsequently for 14 terminating your contract. To start with, can we look 15 at POL00107538. Page 11, please. This is a letter 16 written to an MP, Betty Williams, in relation to 17 a letter that she wrote as a constituency MP to Allan 18 Leighton, the then Chairman of the Post Office. It's 19 29 October. If we just go to the second page, scroll 20 down, we can see who it's written by: Dave Barrett, Head 21 of Commercial Urban Area for Wales, The Marches and 22 Merseyside. 23 Back to page 1, and look at the second paragraph. 24 "Briefly, we've given notice to Mr Bates, the 25 present subpostmaster, that we're withdrawing from our 60 1 contract with him." 2 Then this: 3 "This is because we've lost confidence in his 4 willingness to conduct the job in the manner expected." 5 Was that ever explained to you, that they had lost 6 confidence in your willingness to conduct the job in the 7 manner expected? 8 A. No, not at all. 9 Q. Can we look, please, at POL00031815. This is 10 a presentation on Horizon integrity prepared by Dave 11 Smith. It's undated and it seeks to tell a story about 12 the integrity of Horizon. It's, we may find in due 13 course, an interesting account overall but I just want 14 to look at what it says about you on page 6. Scroll 15 down, please. 16 Mr Smith says: 17 "On the cases I am aware, Bates had discrepancies, 18 was dismissed because he became unmanageable." 19 Was that ever explained to you, that you became 20 unmanageable? 21 A. No, not at all. 22 Q. Then Mr Smith says of you that you: 23 "... clearly struggled with accounting and despite 24 copious support did not follow instructions." 25 Firstly, did you struggle with accounting? 61 1 A. No, not at all. 2 Q. Were you given copious support? 3 A. No. 4 Q. Did you seek to follow the instructions that you had 5 been given by the Post Office? 6 A. Basically, try and bankrupt myself? No, I didn't, not 7 to that extent. 8 Q. If these after-the-fact reasons or justifications for 9 the termination of your contract are not, on your 10 understanding, correct, what do you understand to be the 11 reason for the termination of your contract? 12 A. Well, I mean, basically, I think it was because: (a) 13 they didn't like me standing up to them in the first 14 instance; (b) they were finding it awkward; and (c) 15 I don't think they could answer these questions and 16 I think they had a feeling I was going to carry on in 17 a similar vein going forward. 18 Q. Just lastly then, can we look at POL00024194. This is 19 your witness statement. Can we look at paragraph 170. 20 I'm afraid I haven't written which page that is, try 21 about 25 -- hopeless, try about 30 -- try about 35. 22 Then if you can scroll forward to paragraph 170, please. 23 You say -- this is your High Court statement for the GLO 24 Common Issues trial: 25 "I have little doubt that the reason for my 62 1 termination is that I had not only uncovered limitations 2 and potential errors with the Horizon system but that 3 I continued to question the Post Office on the 4 contractual relationship between subpostmasters and the 5 Post Office." 6 Was that your belief at the time? 7 A. Yeah, it is a good summary of how I felt. 8 Q. Does it remain your belief now? 9 A. Oh, yes. 10 MR BEER: Mr Bates, thank you. 11 Can we take the morning break, please. There is 12 a slight glitch with the transcription service, which 13 I think means we need to take 20 minutes rather than our 14 usual 15. 15 SIR WYN WILLIAMS: All right, so what time shall we resume? 16 MR BEER: I think that means 11.55. 17 SIR WYN WILLIAMS: 11.55. All right, see you all then. 18 (11.34 am) 19 (A short break) 20 (11.55 am) 21 MR BEER: Sir, good morning. 22 If we continue, please, Mr Bates with August 2003. 23 You remember where we are in the narrative. You've been 24 given notice of termination of your contract. I think 25 one of the first things you did was to write to the 63 1 Chairman of the Royal Mail Group Plc; is that right? 2 A. That's correct. 3 Q. Can we look at that letter, please, POL00107538. We 4 will see this is dated 7 August 2003 to Mr Allan 5 Leighton, Chairman of Royal Mail Group Plc. We will 6 look at the detail in a moment but can I ask you in 7 general terms what the purpose was in writing to the 8 chairman of Royal Mail Group Plc. By this time you'd 9 received Post Office's decision to terminate your 10 contract; what was the point? 11 A. Well, I was still in post, if you like, for the next few 12 months. So I thought it was well worth trying to write 13 to the Chairman to make him aware of what was going on 14 because he may well have not known. So I'm hoping that 15 he might be able to undertake some sort of review into 16 it and look at the case for us, or whatever, take it on 17 board a little bit more seriously. 18 Q. This is, of course, still, taking a step back, 19 relatively early in the entire narrative of the scandal, 20 August 2003. 21 A. Yeah. 22 Q. Horizon had only been rolled out for three years or so? 23 A. Yeah. But it was wrong. Sorry, I knew it was wrong 24 then, there were things wrong with it and, having heard 25 that others had had problems with it as well, surely 64 1 someone should have been looking at all of this and 2 taking these things into consideration. 3 Well, in that sense, you're obviously right because 4 many people were yet to be terminated; many people were 5 yet to be prosecuted; many people were yet to be 6 convicted; and many people were yet to go to prison. 7 A. Mm. 8 Q. Can we look at what you said to the Chairman. First 9 paragraph. 10 "I am writing to you with regard to a letter I have 11 just received from Post Office Limited giving me formal 12 notification of their decision to terminate my 13 subpostmaster contract. As Chairman of the Group 14 responsible for Post Office Limited, I thought it 15 important that you should be aware of what is being 16 undertaken in your name." 17 You very much personalised things in that first 18 paragraph. 19 A. Yes. 20 Q. Did you expect this letter to at least be seen by the 21 person to whom you wrote it? 22 A. I certainly hoped it would be. I can't do more than 23 draw their attention to it. I can't force them to read 24 it but, if you don't write to them, then they'll never 25 know. 65 1 Q. At paragraph 2: 2 "Please find enclosed a copy of that letter, as well 3 as copies of previous correspondence and notes regarding 4 the problems in question ..." 5 I'm not going to go through the previous 6 correspondence or your notes upon it: 7 "... which I've tried to keep in a chronological 8 order. In reality, this matter should never have 9 reached this stage but the extremely poor handling by 10 Post Office Management in the past has led to the 11 situation which could result in us not only losing our 12 business but [something else]. Unlike the Post Office, 13 I do not have endless funds to fight this injustice 14 through the courts." 15 Why was that in your mind at that stage, the 16 relative funds available to each side to fight a case 17 through the courts? 18 A. Well, I suppose, realistically, I had been speaking with 19 lawyers at that time and I was being advised that you 20 probably wouldn't be able to afford to take Post Office 21 on. It just -- you know, it was just an impractical 22 situation from a financial point of view, more than 23 anything else, regardless of the case. 24 Q. Moving on to the rest of the paragraph: 25 "I do realise it's imperative for as many people as 66 1 possible to have an opportunity to see in detail the 2 management style applied by Royal Mail Group to the very 3 public face of the local post office. It is again 4 trying to use what seems to be so often described as its 5 outdated Stalinistic management approach, in order to 6 bludgeon its will onto the poor subpostmaster with 7 an issue that could bankrupt every sub post office in 8 the country. Whilst I appreciate that principles can be 9 expensive, I cannot agree to any position which would 10 leave me and every other subpostmaster liable for claims 11 of millions of pounds from the Post Office without any 12 redress or access to data to check such claims." 13 Is that a reference to the auditability or 14 visibility, the reporting function available to 15 subpostmasters on the system? 16 A. Well, certainly the lack of it, yes. 17 Q. "My only defence until I can find an organisation 18 willing to offer support is to ensure that the media and 19 all those politicians who represent a ward with a sub 20 post office, as well as everyone who runs a sub post 21 office or who uses one, has an opportunity to read all 22 the facts. 23 To that end, these documents enclosed and others 24 will shortly be available online, once the hoarding at 25 the front of our building advertising our website, 67 1 www.postofficevictims.org.uk is ready in a week or so. 2 Originally, I had registered postofficevictim.me.uk to 3 use but as the launch will undoubtedly bring up many 4 other cases from across the country, it was thought 5 a larger and less personal site would be more 6 appropriate." 7 Over the page. 8 "It is important to make clear I have not breached 9 my contract. I will not be ceasing to trade on 10 5 November 2003. If I did, I certainly would be in 11 breach of my terms. 12 "If you read the enclosed documentation, it is all 13 self-evident. I am sure you can tell my back is up 14 against a wall but until the hoarding is ready and in 15 place and all the web pages are downloaded to the 16 server, I'd welcome any option that would resolve this 17 matter with the minimum of fuss, without the national 18 publicity this matter is bound to draw, hence my letter 19 to you as a last attempt to reach a sensible 20 conclusion." 21 Now, I don't think you got a reply from Mr Leighton, 22 did you? 23 A. No, I got one from his office. Somebody did acknowledge 24 it, if I recall. 25 Q. Can we look at POL00040354. You can see this is 68 1 27 August: 2 "Thank you for your letter dated 7 August addressed 3 to Allan Leighton, which has been forwarding to me for 4 reply." 5 Can we look at the second page, please, and scroll 6 down. You can see that it is from somebody in the 7 Operations Department, Ria MacQueen, a Case Liaison 8 Manager. Go back to the first page, please. 9 Then if we look in the second paragraph, she says: 10 "I have now completed my enquiries ... they have 11 taken longer than expected." 12 She says: 13 "I have spoken with a number of the personnel 14 involved in the search for a solution to the situation 15 at the branch. Although I regret that the situation has 16 reached the point of termination of your contract, I am 17 confident that the various teams concerned in the events 18 have worked hard to provide support and assistance to 19 you in a consistent and sympathetic manner." 20 Was that your experience? 21 A. No, but this is Post Office's view. It's not mine. 22 Q. "This support included a number of onsite attendances to 23 assist with balancing ..." 24 Did that occur? 25 A. I had two people visit to try to assist with balancing 69 1 but they could access the system no further than 2 I could, so it was absolutely no help at all. 3 Q. "... and also to provide extra training on the Horizon 4 system." 5 Did you get additional training on the Horizon 6 system? 7 A. Not that I can recall. 8 Q. "The aim was always that of achieving a solution to the 9 difficulties you were experiencing in managing 10 transactions and processes at the branch. 11 "The Horizon system [at the branch] has been 12 reviewed and interrogated in response to your complaints 13 and the reports from the Horizon Field Support Team and 14 the NBSC have confirmed that there is nothing inherently 15 wrong with the Horizon system installed at the branch." 16 Was the system installed at the branch, to your 17 knowledge, reviewed and interrogate? 18 A. Not that I'm aware of. No one ever came to the place. 19 I've always been confused over "nothing inherently 20 wrong", that turn of phrase. It just seems a little 21 unusual. "Nothing wrong" I can understand but 22 "inherently wrong" seems like a back-covering sort of 23 phrase. 24 Q. Then read on, please, if we scroll down, thank you: 25 "The subpostmaster contract is clear on the 70 1 requirement that postmasters must make good losses or 2 gains when misbalances occur." 3 In fact it isn't clear on that at all, that's 4 a complete misstatement of the contract: 5 "It is evident you have consistently refused to do 6 this, even when specifically requested to do so by the 7 Area Management Team. The contract also states that 8 either party ... may terminate it with three months 9 notice without a reason being given." 10 That's what we've done. 11 Then: 12 "I am sure you have carefully considered the idea of 13 your website. I feel you should be aware that the use 14 of the Post Office Limited's imagery on your website may 15 constitute trademark infringement." 16 You say in your witness statement that, despite you 17 having sent the Chairman a full clip of the relevant 18 correspondence with notes about each item within it, to 19 quote your witness statement: 20 "... predictably, the response of the Post Office 21 was to ignore the content and predictably to fail to 22 investigate the real issues." 23 Why, in your view, was that the predictable response 24 of the Post Office? 25 A. It was the way they tried to deal with things, which you 71 1 experienced through their Area Manager -- I mean, it was 2 constantly Post Office was in the right and you were 3 always in the wrong, and it was -- it just seemed to be 4 their nature. 5 Q. You tell us in your witness statement that this reply 6 was the "usual box ticking exercise written entirely 7 from the Post Office's perspective"? 8 A. Of course, yeah, that's what it was. 9 Q. The last paragraph concludes: 10 "The management team has been wholly professional in 11 the management, deliberation and investigation of your 12 issues." 13 Had, in fact, the issues that you raised been 14 investigated at all? 15 A. Not that I'm aware of. 16 Q. Can we turn to paragraph 52 of your witness statement, 17 please, your Inquiry witness statement, which is 18 page 16. 19 We asked you a question of what data you believed 20 you needed to access in order to determine the cause of 21 discrepancies in the Horizon generated branch accounts. 22 You say: 23 "... I required access to all data, even in 24 a read-only format, held on the system in relation to 25 all input by me and my staff which happened at the 72 1 branch ... in respect of verifying information regarding 2 those transactions, or the accounts that they ultimately 3 formed a part of, I could only check transaction logs 4 that were available on Horizon for limited periods of 5 time or use the limited range of information and reports 6 I had access to, and which could be printed from Horizon 7 terminals, comparing them to stock in the branch. I had 8 no real way of checking information held in Horizon that 9 came from Post Office itself, or from its clients such 10 as Camelot or indeed the way in which those had been 11 reconciled with transactions in the branch." 12 Then if we go further on, please. Scroll down, 13 please, to 54: 14 "Whilst the position as stated in the letter [that's 15 the letter we just read] is that they had reviewed and 16 interrogated and concluded that there was nothing 17 'inherently wrong with the Horizon system', I had seen 18 no evidence of the apparent review and interrogation 19 they had claimed to carry out. I was still without the 20 data which I had been requesting for a number of years. 21 Nor had they discussed their findings with me. I do not 22 believe that there was any investigation or evidence 23 that the purported investigation had taken place." 24 Have you seen any evidence to date that the 25 purported investigation, that's referred to in the 73 1 letter sent on behalf of the Chairman, had taken place? 2 A. No, I haven't. I've only ever seen claims that it had 3 taken place. 4 Q. So far as you know, was the data that you are speaking 5 about in these paragraphs, that you needed access to in 6 order to understand the cause of an apparent shortfall 7 or an over, common to all cases in sub post offices that 8 you later came across, ie that no one could, actually, 9 in the Post Office branch, get access to the data they 10 needed to see what had happened? 11 A. Not that I'm aware of, anyway. 12 Q. You, I think, wrote to your MP; is that right? 13 A. Correct. 14 Q. Can we look, please, at POL00040368. You tell us in 15 your witness statement that you wrote to your MP about 16 your case -- that's Ms Williams, is that right -- 17 A. That's right. 18 Q. -- on 27 October 2003, and she in turn raised it with 19 Post Office and with the Minister. She received a reply 20 saying that they had taken a decision to review the case 21 in its entirety. You say that was carried out behind 22 closed doors and didn't involve any contact with you; is 23 that right? 24 A. That's correct. 25 Q. Then she wrote again to Post Office and your MP, as 74 1 a result of which Post Office wrote this letter on 2 19 January 2013. If we look at the second page -- 3 sorry, just scroll up to the bottom of the first page. 4 We can see that it's written by Richard Barker, the then 5 General Manager of the Commercial Network. Go to the 6 top, please. He says to Betty Williams MP: 7 "I promise to write to you once a comprehensive 8 review had been undertaken of the issues raised by 9 [you]. That review has been completed by a senior 10 manager within Post Office, with considerable experience 11 in the handling of disputes and subsequent appeals. 12 "The conclusions of that review, which I fully 13 endorse, are that the termination of [your] contract was 14 done with proper investigation, coupled with proper 15 warnings and appropriate offers of additional training 16 and support. No evidence was found which in any way 17 substantiates the various claims being made by 18 Mr Bates." 19 Mr Barker goes as far as saying that: 20 "The decision to terminate [your] contract was not 21 only correct it was the only sensible option. The best 22 way is to consider the matter closed." 23 Were you involved in any such comprehensive review? 24 A. No, and that was one of my big objections. No one ever 25 came and spoke to me about it or tried to speak to me 75 1 about it or tried to understand what the problem had 2 been, as has been said for or as has been recorded; it 3 was carried on behind closed doors. 4 Q. So we've seen you write to your MP, we've seen you write 5 directly to Allan Leighton and the reply, we've seen 6 your MP write to Post Office, and we've seen this reply 7 trying to ask questions. It's suggested in some parts 8 of your witness statement that they were being shut down 9 or fobbed off by the Post Office; is that your view? 10 A. That seems to be the way the business works, yeah. 11 Q. Can we turn, please, to POL00328099. If we just pan out 12 a little bit, it may be that these five paragraphs on 13 this undated piece of paper are the comprehensive review 14 that has been referred to in the correspondence. 15 A. It may be but I hadn't seen them until recently. 16 Q. No. I just want to look at what the author, Sandy 17 Stephen, says. They say: 18 "I have reviewed [if we scroll to the top paragraph, 19 please] all the files from the date of Horizon 20 installation until the termination of Bates' contract 21 and read all the subsequent correspondence. I have 22 summarised the salient points. 23 "... following Bates' assertions against the Horizon 24 system, there were clear attempts made by several people 25 to ascertain if there were systems problems. Eventually 76 1 it was decided to write off the debt and a clear signal 2 was given to Bates that all future losses would be 3 recovered. Significantly, further training and support 4 was given to Bates at that time." 5 Is that true? 6 A. Well, it's true that that's what it says, yes. 7 Q. I meant in reality? 8 A. Yeah, no, I'm afraid it wasn't that way, no. 9 Q. "Later it transpired, and Bates admitted, that he 10 continued to roll over losses." 11 Did you have to admit to this or were you, in fact, 12 telling your line managers -- 13 A. Sorry -- 14 Q. -- that you were doing -- 15 A. -- I had already informed them, and I wasn't hiding the 16 fact at all. They were well aware of what -- 17 Q. So: 18 "Later it transpired and [you] admitted that you 19 continued to roll over losses and had done so since the 20 introduction of Horizon. He received a formal letter 21 instructing him to stop the practice [that's true, we've 22 seen that, from Mr Wakley] and make good any losses 23 [that's also true]. He did not [that's also true]. 24 Losses continued to be made and rolled over and the 25 Retail Line Manager sought advice from Contracts and 77 1 Legal Services before terminating the contract. 2 "From the evidence contained in the files it's clear 3 that Retail Line conducted themselves correctly and 4 acted in accordance with the rules." 5 Then this: 6 "Leaving aside the anecdotal evidence on file which 7 demonstrates Bates' unsuitability as a postmaster ..." 8 Was that ever put to you, that you were unsuitable 9 to be a postmaster? 10 A. No, but they'd appointed me in the first instance. 11 Q. Are you aware of what anecdotal evidence there might be 12 which demonstrates your unsuitability to be 13 a postmaster? 14 A. If -- I mean, I have records of that time, which were 15 statements from the Retail Network Manager or my current 16 Retail Network Manager at that time, which was 17 Mike Wakley, to say how well the office was doing, and 18 well done for all the hard work. I mean, it's 19 a nonsense. 20 This was just them flexing their muscle and just 21 deciding they're right and I was wrong. 22 Q. They point out Post Office has the absolute right to 23 terminate a contract with three months' notice. That's 24 also one of the true statements in this document: 25 "It was done in this instance following proper 78 1 investigation, formal warning, coupled with support and 2 additional training. Yet [you] continued to flaunt and 3 ignore the legitimate instructions from your Retail Line 4 Manager." 5 Then we see a sentence that gets cut into the letter 6 that we just read: 7 "The decision to terminate was not only right, it 8 was the only sensible option", which is what led me to 9 think that this was the comprehensive review and 10 investigation that had been referred to. 11 It says that you continued to "flaunt the legitimate 12 instructions of the Retail Line Manager". Did you 13 "flaunt" his instructions? 14 A. No, I just pointed out what I was doing and the reasons 15 why I was doing it but they'd never respond to me. 16 They'd never discussed the issue about data and data 17 access and liability and holding -- and how long that 18 liability lasted for, and all the rest of it. When 19 I went into Post Office, it was sold to me at the time 20 as you were in partnership with the business but you 21 very soon learnt that this was a very one-sided 22 partnership. I mean, basically you do whatever you're 23 told, was your side of the partnership, and they just 24 didn't seem to like it if you raised any queries even -- 25 no matter how justified they were. 79 1 Q. In relation to this part of the narrative, can we 2 lastly, please, look at POL00004598, page 3, please. 3 Scroll down, please. 4 This is part of a slew of correspondence, that I'm 5 not going to investigate in detail, over whether you 6 would continue to provide a service within the Post 7 Office as an interim measure and the arrangements that 8 were being made for the Post Office to come into the 9 branch and take away what they say belonged to them. 10 You say: 11 "At no time did Post Office ever ask me if I would 12 continue providing a service as an interim measure. 13 I would not deny you did make a sort of request to use 14 our premises and our facilities to have someone else 15 come in to provide a service at a time when you had 16 taken away our livelihood, investment and savings but, 17 as you don't seem to live in the real world, I can tell 18 you that this was just received as an insult. 19 "It seems your 'organisation' will do anything and 20 everything to try to keep the failures of Horizon 21 hidden, regardless of who they have to trample down on 22 the way, such as us or our community. 23 "I can assure you of my continued and now increased 24 resolve to bring the real facts of what is going on to 25 those who will have no choice but to act, regardless of 80 1 whether it takes years." 2 In relation to the penultimate paragraph there, that 3 the Post Office would do anything and everything to try 4 to keep the failures of Horizon hidden, why did you 5 think that they were trying to keep the failures of 6 Horizon hidden? 7 A. I think a number of reasons. First off, I think their 8 field personnel didn't understand it to any great depth 9 and they just seemed to follow the corporate mantra that 10 Horizon is robust, and that's it, and everyone else is 11 wrong. They didn't seem to want to engage in useful 12 discussions about how to try to improve things. Any 13 that they did make, any approaches they made, were very 14 much a surface. It was just for show, rather than to 15 change things in many meaningful way. It was a variety 16 of things at that time. 17 Q. Was what you wrote in that paragraph based on your own 18 experience or were you drawing from wider experiences of 19 others, then? 20 A. Well, first off, it -- I had some experience of those 21 types of systems, and it was obvious it was extremely 22 poorly designed, and it didn't really do the job it was 23 meant to and there were a huge amount of problems. 24 I kept on hearing problems, little problems, from all 25 sorts of people. Other subpostmasters, because I used 81 1 to go to regional Federation meetings as well, and you 2 did sit and chat and everyone had a moan and a whinge 3 about it, and you heard of stories where people were 4 literally taking their computers and the whole systems 5 and leaving them on the pavement outside and telling 6 Post Office to come and collect it. Those were the sort 7 of stories that were running around at the time in 8 there. 9 But I think it was the lack of real engagement in 10 all of this to try to resolve the problems, address the 11 problems, and resolve them, which made me think that 12 they'd just, you know, they'd just put up a stone wall 13 on the whole thing. 14 Q. Your last paragraph might be considered to be 15 prophetic -- 16 A. Yeah. Yeah -- 17 Q. -- I don't suppose when you wrote it, you would end up 18 20 years later sitting here answering my questions. 19 A. No. 20 Q. In the clip of materials that identified or led to the 21 Sandy Stephen comprehensive review that we saw, the five 22 paragraphs on the one page, in that clip of material is 23 a note from Mike Wakley, your Retail Line Manager, 24 contributing to that document and he said that: 25 "At this time Alan believes his actions are now 82 1 a matter of principle." 2 Is that how you felt? 3 A. It was because it goes back to an earlier letter that 4 they could hold me liable for any amount in there. 5 That's what I -- that's what they wanted me to agree to 6 and that was wrong. 7 Q. That can come down. Thank you. 8 I think one of the first things you did after 9 termination of your contract was to set up the website, 10 the www.postofficevictims.org.uk. 11 A. Yes, I did and I also wrote to the local newspaper to 12 explain to the local community what had gone on and, 13 fortunately, the local paper printed my letter in full 14 to explain what had happened with Post Office. I also 15 had large-scale posters blown up of that letter which 16 were attached to the front of the door of our premises 17 and remained there for quite a time. 18 Q. Postofficevictims.org.uk was the nascent group that 19 subsequently became the JFSA; is that right? 20 A. It -- I suppose it was like a seed. I wouldn't say 21 organisation. It was what I set up initially there to 22 try and attract and draw other cases, and also as 23 a warning to others about getting involved with Post 24 Office: this is the type of organisation you are 25 planning to get involved with. And there were other 83 1 things I did, as well, around that time to try to raise 2 the profile of the issue. 3 Q. Can we turn to page 28 of your witness statement, 4 please, paragraph 92. If we could zoom in on that, 5 please, you say: 6 "My main objective for creating the JFSA was to 7 expose the truth. I wanted to create a body of former 8 and current subpostmasters and branch assistants which 9 could provide a community for all those going through 10 the same experiences with the Post Office. I knew that 11 I was not alone in my dealings with the Post Office and 12 the JFSA was set up in order to ensure that other people 13 in the same situation as myself knew that they too were 14 not on their own. As mentioned above, there was 15 a complete lack of support from Post Office and 16 I believe those in similar circumstances required 17 support." 18 I have read elsewhere that one of the reasons that 19 you set up the group was that you and others had felt 20 that you had been abandoned by every other organisation 21 so that you had to group together; is that right? 22 A. Yeah, and I think that's true what you're saying there: 23 it was myself and others as well. It wasn't -- I know 24 that -- I seemed to take the lead in it but there were 25 a lot of others -- certainly in the early days, there 84 1 was a great deal of support from -- 2 Q. Which other organisations had abandoned you and others? 3 A. Well, certainly the Federation. The Federation was 4 absolutely useless. I mean, they were just another 5 department of Post Office, as I believe it still is 6 these days as well. But they -- 7 Q. Why do you think they're just another department of the 8 Post Office? 9 A. Well, I -- at one time, I believe they had an office in 10 Post Office headquarters but, ignoring that, it depends 11 which bit we're going -- if you go right back to the 12 early days, the 2002s, 2003s, and when I was going to 13 the Federation meetings, I know I tended attended one 14 meeting where a subpostmaster at the back of the meeting 15 group, he started saying, "I've just had my post office 16 taken off me and I'd had problems with Horizon", and all 17 the rest and the Federation -- the Federation Exec 18 people who were there escorted him out of the back of 19 the place. They took him away, out of that meeting. 20 I know perfectly well, when my contract was 21 terminated, I went to a Federation meeting to try -- 22 well, a local branch one. I went to a Federation 23 meeting where I tried to speak on behalf of that, and 24 there was one of the National Executive Federation 25 members at that meeting and he stopped -- tried to stop 85 1 me speaking. He refused to say this -- I should be 2 allowed to talk about such things at the meeting and, if 3 it hadn't been for the local Chairman, who was Noel 4 Thomas, at that time, if it hadn't been for him, talking 5 and moving this chap out of the way, I'd never have been 6 able to get over what had happened to me and explain to 7 the others in there. 8 So there was an awful lot of pressure from the 9 Federation to support Post Office. In fact, there is -- 10 I don't know if you are going to show it, there is 11 correspondence from the Federation where they actually 12 support Post Office's position in terminating my 13 contract. I don't know whether you're going to cover 14 that. 15 Q. Slightly out of order but I think I know what you're 16 talking about. 17 A. Sorry, you asked me about the Federation. 18 Q. I'm the one that's supposed to bowl the fast balls! 19 I think, if I can cover drive it back, it's 20 POL00215384. 21 SIR WYN WILLIAMS: If you're right, that's a good slip 22 catch! 23 MR BEER: Is that the document you're talking about, 24 a letter to you from Colin Baker the General Secretary 25 of the NFSP? 86 1 A. Yeah, I think that's the one, yeah. 2 Q. You had written a couple of letters to him, I'm not 3 going to show now -- 4 A. No. 5 Q. -- of December 2003 and January 2004 and he notes that 6 Betty Williams has written to Allan Leighton. We've 7 seen that. He says: 8 "I can go no higher within the Royal Mail Group than 9 Allan Leighton. I am sure that your Member of 10 Parliament will have had as much if not more success 11 than I would. Hopefully you will have more information 12 from that route." 13 Then the last paragraph, I think, is the one you're 14 referring to: 15 "We are not in a position to provide information 16 regarding other subpostmasters' dealings with Post 17 Office Network. We are aware there are some disputes 18 from around the time that offices migrated from the 19 manual system to the Horizon system but we are now of 20 the view that Horizon works well and there are no real 21 problems with post offices which are operated by the 22 Horizon system." 23 Was that essentially the NFSP position as 24 communicated to you: Horizon works well, there are no 25 problems in post offices with it? 87 1 A. Yeah, and it was very much -- I mean, the Federation 2 always seemed to try to manage any of the problems 3 around Horizon, I can recall a conference, Federation 4 conference, main conference, I think it was in 2002, 5 around there, in -- it was in Llandudno, which is why 6 went to it, and there are a whole host of people raising 7 queries, delegates raising queries about Horizon during 8 conference, and it got to such a state that they 9 couldn't move on with conference and conference decided 10 to set up a separate committee to look into a Horizon 11 issues, and for members to report to them, and they 12 would then discuss them with Post Office. 13 Q. To what extent has the NFSP assisted you in establishing 14 the facts in your case? 15 A. None. 16 Q. To what extent has the NFSP assisted you in seeking 17 redress in your case? 18 A. None. 19 Q. To your knowledge, what role did the NFSP play in 20 assisting other subpostmasters when it was alleged 21 against the subpostmaster that they had a shortfall? 22 A. I have not heard of one instance where they have 23 successfully done anything of that nature. 24 Q. I think you tell us that you've been informed that the 25 Post Office would often only allow a representative of 88 1 the NFSP or a friend to sit in on interviews where 2 suspension or termination was contemplated? 3 A. That's correct. 4 Q. You tell us in your statement that the NFSP nearly 5 always agreed with the Post Office and said sometimes to 6 the subpostmaster "Come on, own up, tell them what you 7 did with the money"? 8 A. Yeah. 9 Q. Are these accounts that other subpostmasters have given 10 to you? 11 A. Yes, they are. 12 Q. To your knowledge, has the NFSP ever once helped 13 a subpostmaster in any court case in which the operation 14 of the Horizon system or the integrity of the data which 15 it produces has been questioned? 16 A. No. 17 Q. To what extent did the NFSP assist in the Group 18 Litigation? 19 A. None at all. 20 Q. To what extent has the NFSP assisted others following 21 the Group Litigation in obtaining redress? 22 A. I don't know. 23 Q. Thank you. If we can go back to where we were in the 24 account. That can come down from the screen. Thank 25 you. You'd set up the JFSA and you tell us that, from 89 1 the late 2000s onwards, so from about 2009 onwards, you 2 have spent an estimated 30 to 40 hours a week 3 campaigning in relation to Post Office and Horizon; is 4 that right? 5 A. Easily, yes. 6 Q. Can we look, please, at page 27 of your witness 7 statement, and paragraph 87 at the top. You say: 8 "The challenges were faced at every step of the way 9 since the Post Office would obstruct me. The gravity 10 and the enormity of the problem was not recognised by 11 others in power, including Government, and it became 12 clear that the only way to achieve progress was through 13 a formal legal route, which has its own challenges, 14 including obtaining the necessary funding for this 15 route." 16 You say there that "challenges were faced at every 17 step of the way, since the Post Office would obstruct 18 me"; what had you got in mind when you were saying that? 19 A. Well, disclosure is a good one. They -- I mean, we went 20 through -- before we got to the court case, we went 21 through a whole host of schemes and they always used to 22 say, "Yes, we'll be supportive, yes, we'll try and" -- 23 you know, with MPs and all the rest of it -- "Yes, we'll 24 get on board with it, yes, we're looking for the truth", 25 and all the rest of it, but all they did is cause 90 1 problems. They were not forthcoming with the details in 2 there. Certainly disclosure is a very good example of 3 that. 4 I mean, cases used to take months and months to 5 progress. I am thinking of the initial Mediation 6 Scheme, for example, and it -- you just felt you -- 7 though they were there, you were still banging your head 8 against a brick wall to try to get anything out of them, 9 because they were determined to protect the brand at any 10 cost and they didn't want anything coming out or being 11 disclosed that might cause damage to Post Office. 12 Q. You ceased work as a subpostmaster in November 2003. 13 A. Yeah. 14 Q. Yes? 15 A. Yes. 16 Q. I think you've not returned to other work since then 17 because, instead, you've dedicated to campaigning for 18 accountability, justice and redress; is that right? 19 A. Yeah, I mean, I think the key issue has always been to 20 expose the truth, right from the outset, because the 21 other thing sort of always felt -- they followed on. 22 Once you know the truth about issues, the rest will 23 hopefully follow on afterwards. 24 I mean, I didn't set out to spend 20 years doing 25 this. I hadn't expected to be doing this so much by 91 1 myself, but it got more and more complex and it was 2 very -- it was harder and harder to share out and work 3 as a bigger group to take things forward. So, yeah, 4 I did finish up sort of leading, in a way, in there but, 5 obviously, going back to the others when there was 6 an opportunity for their endorsement. 7 It was encouraging along the way, one of the things 8 we did do is bring people together and a lot of 9 people -- it was a bit like -- I don't mean this in 10 a derogatory way but it's a bit like stray lambs. 11 People were lost out there. They were the only ones, 12 they were wandering around wondering, you know, what 13 have I done wrong? They're suffering so badly. But 14 once you manage to bring them together to meet others in 15 a similar situation, it had enormous effect on their 16 lives. 17 Q. You spent two decades undertaking this work, presumably 18 thousands of hours? 19 A. Yes. 20 Q. Why, in your view, has that been necessary? 21 A. Because the further down the road you went with it, the 22 more you realised you couldn't let it go. 23 Q. I think you at one stage attempted the strategy of 24 speaking to Government about this? 25 A. Yeah, yeah. 92 1 Q. Can we turn, please, to correspondence with Ed Davey MP 2 in May 2010. That can come down from the screen. Thank 3 you. 4 So to put this into context, to orientate ourselves, 5 May 2010, JFSA was well established now. 6 A. Yeah, yes. 7 Q. The Computer Weekly article had been written by Rebecca 8 Thomson on the 11 May 2009? 9 A. Mm-hm, yes. 10 Q. And I think you were indeed interviewed by her as part 11 of her work? 12 A. Yes, that's correct. 13 Q. Her work drew together the facts about a number of 14 cases? 15 A. Yes. 16 Q. Can we look then at the letter you wrote to Ed Davey MP 17 on the 20 May 2010, UKGI00016119. As we can see from 18 the way you've addressed the letter at the top, Minister 19 for Postal Affairs within the Department of Business, 20 Innovation and Skills sometimes called BIS. So I think 21 to put his position in context there, he was the then 22 Minister for Postal Affairs, the new government having 23 been formed 14 days earlier on 6 May 2010 -- general 24 election that year was 6 May, so he's 14 days in. 25 Can we read the letter together. You say: 93 1 "I am writing to you with regard to your position as 2 Minister on behalf of JFSA. We are an independent group 3 of ex and serving subpostmasters who have suffered at 4 the hands of the Post Office and their Horizon system 5 ever since it was first installed. Our website outlines 6 how we came about and our aims, as well as offering 7 sample cases that were provided by some of the group. 8 "Currently the group numbers close to 100, although 9 we continue to be joined by others who have learnt of 10 JFSA and have found that there is nowhere else to turn 11 for help. 12 "In every instance, the Post Office acts as judge, 13 jury and executioner and the individual is deserted by 14 their reputed representative organisation, the National 15 Federation of SubPostmasters. Invariably, these cases 16 all stem from the flaws of the Horizon system that the 17 Post Office introduced and which they refused to admit 18 has ever suffered from a single problem. 19 "The evidence is there to be found by anyone in 20 a position of being able to unlock doors, instead of 21 placing barriers in the way of those pursuing the 22 information. Our organisation has access to a number of 23 specialists who could provide the questions and analyse 24 the resulting data if required, though an independent 25 external investigation instigated at ministerial level 94 1 would be most appropriate and will, without doubt, 2 easily find evidence of the error ridden system. 3 "I am sure you will appreciate that there is not 4 a single computer system that does not, from time to 5 time, suffer from errors, especially when the size and 6 level of complexity of the programs associated with the 7 Horizon system. The Post Office blindly state that 8 there are not, nor have wherever been, any system 9 errors, so subsequently anything wrong is entirely the 10 responsibility of the subpostmaster, as that is what 11 they have agreed to when signing their contract. This 12 is a contract that was produced in 1994 and does not 13 address nor identify new technology but they are still 14 using it to intimidate and prosecute subpostmasters." 15 Over the page: 16 "The weight of evidence we have been collating over 17 the years continues to grow and gain in standing. It is 18 only the flat refusal of the Post Office to allow 19 experts to examine the system which is holding back this 20 major scandal from breaking. But with the growing 21 numbers in JFSA and the support we are now finding from 22 the IT community and the media, it is just a matter of 23 time until the real truth about the Post Office and 24 Horizon is exposed. 25 "Over the years, I have personally submitted written 95 1 details of all of this to the Select Committee of the 2 DTI, and then on two other occasions to that of BERR 3 and, put simply, the information has either been buried 4 or disappeared. Others of JFSA have followed the route 5 of contacting their MPs who would take the matter up 6 with the Post Office on their behalf. Subsequently, 7 they are stonewalled or 'handled' by the Post Office 8 often with off the shelf answers where they only change 9 the name and address. 10 "I writing to you on behalf of the group, I am 11 asking for a meeting where we can present our case to 12 you. Much has appeared in the press over the last few 13 days that Government is going to change and I only hope 14 that is true. If it is, the abuse of subpostmasters 15 that has been going on under the protection of the 16 previous Government may well come to an end." 17 So your letter to Mr Davey MP provides some detail, 18 either in the body of the letter or through 19 cross-referencing to your website as to the issues that 20 subpostmasters were facing and informs Mr Davey that the 21 Post Office's conduct amounted to a scandal. 22 A. Yes, very much so. 23 Q. Can we look at the reply please ABAT00000001: 24 "Dear Alan Bates, 25 "Thank you for your letter of 20 May requesting 96 1 a meeting. Since 2001, when the Royal Mail (which 2 includes Post Office Limited) was set up as a public 3 limited company with the Government as its only 4 shareholder, the Government has adopted an arm's length 5 relationship with the company so that it has commercial 6 freedom to run its business operations without 7 interference from the shareholder. 8 "The integrity of the Post Office system is 9 an operational and contractual matter for the Post 10 Office and not government and, whilst I do appreciate 11 your concerns and those of Alliance members, I do not 12 believe that a meeting would serve any useful purpose." 13 You tell us in your witness statement that you took 14 offence at the term "arm's length" to describe the role 15 that the Government played in relation to overseeing and 16 monitoring the Post Office. Why? 17 A. Well, it's because of the structure, wasn't it? The 18 Government was the sole shareholder, they were the 19 owners, as such, of all of this, and how can you run or 20 take control or -- sorry, take responsibility for a -- 21 an organisation without having some interest in there, 22 or trying to be in control? In fact, Government were 23 pumping huge amounts of money into Post Office, year 24 after year. So, you know, they need to be held 25 responsible for it, they need to be addressed, really, 97 1 about the way that they've been going on, and it's very 2 hard to engage them in it. Not nowadays, they're a bit 3 more interested these days but, I mean, at that time, to 4 try to get Government to take it on board seriously, it 5 was -- 6 Q. Before a four-part drama on ITV? 7 A. Well, no -- in fairness, yes, the drama was great and 8 did a lot for us but we've had enormous cross-party 9 support from many MPs over the years and some of whom 10 I think you'll see, you know, shortly. But, I mean, you 11 know, the time this letter was written was in 2010, and 12 I think at that time we were involved with a firm called 13 Shoosmiths, a law firm called Shoosmiths, and there had 14 been a number of meetings bringing people together and, 15 in fact, Shoosmiths had been working with the MPs, so we 16 were growing a body, we were growing an interest, and 17 a number of the other MPs were finding their own 18 constituents who'd had problems, subpostmaster problems. 19 So it was starting to become a little more gelled as 20 an organisation, and the number -- with a substantial 21 number -- and growing number in there. 22 And it was very much why we felt government should 23 have been involved at that time. I mean, you show me 24 this letter from Ed Davey and I -- I don't know what 25 your script is but I'm more concerned about another 98 1 letter that came in response from a letter I wrote to Ed 2 Davey, and I'm not sure whether you're going to go to 3 that. 4 Q. Let's see. 5 A. Let's see, yes. 6 Q. You tell us in your witness statement -- I'm not going 7 to turn it up, it's paragraph 104 -- that this response 8 from Mr Davey was disappointing because he had not taken 9 account of anything which you had said in your letter 10 and indeed appeared to be a standard template form of 11 response; is that correct? 12 A. Yes, yeah. 13 Q. I think you didn't keep those feelings to yourself at 14 the time. You, in fact, sent a reply to Mr Davey on 15 8 July 2010. Can we please look at UKGI00016099. You 16 say: 17 "I have to say that your response to me dated 31 May 18 [the one we just looked at] regarding the very serious 19 issues I had raised was not only disappointing but 20 I actually found your comments offensive. It seems, 21 that, though there are new politicians in post, the 22 Government hasn't changed. The letter you sent is 23 little different to the one I received seven years ago 24 from the Minister responsible for post offices at that 25 time and so many more lives have been ruined in the 99 1 interim because of that same attitude. 2 "It is not that you cannot get involved or cannot 3 investigate the matter. After all, you do own 100 per 4 cent of the shares and, normally, shareholders are 5 concerned about the morality of the business they own. 6 It's because you've adopted an arm's length relationship 7 that you have allowed a once great institution to be 8 asset stripped by little more than thugs in suits, and 9 you have enabled them to carry on with impunity 10 regardless of the human misery and suffering they 11 inflict. 12 "You can listen to your civil servants telling you 13 that these are really an operational matter for the Post 14 Office to deal with. You can even listen to the Post 15 Office telling you Horizon is wonderful, that there's 16 never ever been a problem, it is inherently robust, and 17 these are just a few malcontents trying to cause 18 trouble, or you can meet with us and hear the real truth 19 behind Horizon and what the Post Office is actually up 20 to. 21 "Your civil servants in the Post Office will not 22 tell you about Post Office staff harassing sick 23 ex-subpostmasters, demanding written promises of money 24 or they will send the police around. They won't tell 25 you that the Post Office, watching post offices heading 100 1 into trouble, fails to provide any help and then waits 2 until the problem shows a loss of £20,000 plus so that 3 the subpostmaster then falls foul of the Proceeds of 4 Crime Act. They won't tell you that when someone wants 5 to sell their post office and has a suitable buyer, Post 6 Office will turn down the applicant to drive that 7 business into the ground. You won't hear about 8 subpostmasters endingly requesting audits of their 9 offices and having to wait for up to five years for 10 someone to turn up in offices turning over £5 million 11 a year. Neither will they tell you of the cases where 12 the Post Office have run an audit, closed the Post 13 Office, bankrupting the owner who loses his business, 14 house and family, holds a pending court case over him 15 for 18 months, then drops the charges and walks away. 16 Nor will they tell all about how they are stopping 17 subpostmasters selling on the Post Office side of their 18 business in order to recover the original investment. 19 They won't even tell you that the Horizon system is 20 designed to entrap subpostmasters so that they can 21 easily finish up in prison, just by trying to open up 22 the day after a trading period balance. 23 "This is just a taste of some of the practices your 24 company is carrying out in your name day after day. 25 They brandish decision a big legal stick, fail to 101 1 provide evidence in court and rely on a clause in the 2 1994 contract about a subpostmaster being liable for any 3 loss from their office, however it occurs. Yet their 4 shoddy Horizon system is the root cause of all of this. 5 Post office themselves lose thousands of to pounds from 6 each of the Crown Offices that they run using Horizon 7 although their staff are not treated as guilty until 8 proven innocent but a subpostmaster is. The whole of 9 this scandal is teetering on the edge of a precipice at 10 this point but it's still not too late for you to 11 reconsider convening a meeting to discuss this issue 12 involved if you are prepared to keep an open mind." 13 It seems that, following your letter, Mr Davey 14 agreed to a meeting? 15 A. Yes. I think so. 16 Q. At paragraph 105 of your witness statement, there's no 17 need to turn it up, you confirm that you attended 18 a meeting with Mr Davey on or about 7 October and you 19 tell us that you don't, in fact, have a note of the 20 meeting and can't recall details of the meeting. 21 The Inquiry is in possession of a briefing document 22 for Mr Davey for the purposes of his attendance at that 23 meeting with you. Can we see whether we can look at 24 that please, UKGI00000062. It's dated, as you'll see, 25 5 October 2010, and the purpose of the document is 102 1 a rescheduled meeting with you on 7 October to discuss 2 the JFSA's claims that endemic flaws in the Horizon 3 system have resulted in a number of subpostmasters 4 having their contracts wrongly terminated and, in many 5 cases, prosecuted for false accounting. 6 If we scroll down, please. It sets out the 7 background to the meeting, recalling the history of your 8 two letters, describing the second as being more 9 confrontational. Then it says, this the fourth line of 10 that paragraph: 11 "That letter was followed by reports that Channel 4 12 were planning to run a news item on the JFSA campaign. 13 We then recommended offering a meeting in response to 14 this second request [that's the letter we've just read] 15 'for presentational reasons', against the background of 16 potential publicity playing heavily on Government 17 Minister 'refusing to meet victims of government owned 18 Post Office Horizon system which has systemic faults 19 resulting in wrongful accusations of theft/false 20 accounting'." 21 So this records that the recommendation to Mr Davey 22 was that he should offer to attend a meeting for 23 presentational reasons against the background of 24 potential publicity, ie the Channel 4 News item. When 25 you attended the meeting, can you recall whether 103 1 Mr Davey appeared to engage with the substance of the 2 issues that you were raising? 3 A. I don't recall. 4 Q. You don't recall whether he did or not -- 5 A. No, I -- 6 Q. -- or you don't -- 7 A. -- I don't recall the detail of the meeting and I'm 8 quite certain that, if there had been something positive 9 that was coming out of it, I'd have remembered that. 10 Q. If we scroll on on the briefing note for Mr Davey, it 11 sets out the objectives. He is to: 12 "... seek to establish at a very early stage whether 13 legal action against Post Office is imminent or planned 14 and it will be prudent to adopt a sub judice approach in 15 the comments you make. [He] should emphasise the issues 16 raised by the JFSA are operational or contractual 17 matters ... should make the point about government 18 having an arm's length relationship; establish whether 19 the JFSA is committed or planning to initiate action 20 against the Post Office; note that it will be for the 21 relevant legal process to decide on the JFSA case; 22 demonstrate you are prepared to hear the JFSA's side of 23 the story but make it clear you are not in a position to 24 offer substantive comment and avoid committing to 25 setting up an independent or external review of 104 1 Horizon." 2 Do you recall whether Mr Davey responded to the 3 points you made in detail in your letter of 8 July? 4 A. No, I don't recall, sorry. 5 Q. To your mind, was Mr Davey aware at the conclusion of 6 your meeting that a scandal, in your view, had taken 7 place and was in the process of still taking place? 8 A. I don't recall. 9 Q. Did Mr Davey alter the position that he had set out in 10 the letter, that the Government enjoyed an arm's length 11 relationship with the Post Office in the light of the 12 concerns that you had raised? 13 A. I don't know. 14 Q. What was the outcome of the meeting? 15 A. I can't think of anything startling that came out of it, 16 otherwise I'd probably recall it but I suppose -- this 17 has been like a long journey, you sort of -- you finish 18 one thing, you move on to the next -- been there, done 19 that, tried that, so let's just keep going. So I think 20 it was just another step along the way. 21 Q. Did you walk away from the meeting with Mr Davey having 22 said that he was going to do anything at all? 23 A. Not that I can recall, which I can recall from other 24 ministers that I've met. 25 Q. Are you able to remember any positive development 105 1 arising from the meeting? 2 A. No. 3 Q. Thank you. That can come down. 4 Looking at the way that the Horizon scandals 5 developed, what view do you take of the arm's-length 6 approach that the Government took in relation to its 7 oversight of the Post Office? 8 A. I think it should have been involved or got involved far 9 earlier on and, in fact -- I don't want to pre-empt 10 where you're going but there was -- I think one of the 11 responses I think I got from Ed Davey's office at 12 a later time, which -- oh no, it might have been 13 a different minister, I'm sorry. I may be jumping the 14 gun then. 15 It was a response that I'd written to one of the 16 ministers for a meeting but the -- and to inform them 17 that full letters of intent had been issued by the 18 lawyers, Shoosmiths, at that time, but the response 19 didn't come from the Minister; it came from the 20 Shareholder Executive, ie Government. So they were 21 fully aware that legal proceedings were potentially 22 about to begin. 23 Q. Throughout your statement, you refer to the responses of 24 Government Ministers across the years -- Pat McFadden, 25 Ed Davey, Norman Lamb, Jo Swinson, and others, on being 106 1 repeatedly informed about the concerns of subpostmasters 2 and Crown Office employees, the formation of the JFSA, 3 and indeed the GLO, in which they say that the Post 4 Office is an arm's length body, that the matters raised 5 were matters for the Post Office to deal with and that 6 the Post Office was independent of Government. 7 A. Mm. I mean, I do think a lot of the ministers, a lot of 8 them come in for stick in the Inquiry, and all the rest 9 of it, and I'm sure some of it is deserved, but 10 I actually hold the Department and I hold the Civil 11 Service more to blame in a lot of these instances, why 12 things never progressed at the time. Because I'm sure 13 between them and Post Office briefing ministers, they 14 were briefing them in the direction they wanted to brief 15 them in, not that was for the benefit of the group or 16 the individuals in there, because of the positions that 17 they felt they were in and that should be taken at that 18 time. And also knowing that they probably have other 19 organisations hammering away and nagging at them, but 20 they were going to probably wait and see who got the 21 further -- who got the furthest. But do think it's -- 22 I do certainly hold the officials far more guilty in all 23 of this than the politicians. 24 Q. You tell us, finally before lunch, in paragraph 298 of 25 your witness statement, that around this point, the 107 1 point being after the settlement of the Group 2 Litigation, the Government abandoned the line that this 3 was all a matter for the Post Office and moved on to the 4 new line that it had been misled by the Post Office. Is 5 that your view? 6 A. Yeah, I don't think they could deny anything else, could 7 they really? 8 MR BEER: Thank you very much, Mr Bates. 9 Sir, if that's an appropriate moment, can I ask 10 that -- I think it's 1.05 now. Can we reconvene at 11 1.55? 12 SIR WYN WILLIAMS: Yes. 13 MR BEER: 1.55, please. 14 SIR WYN WILLIAMS: 1.55 everyone, yes. 15 (1.03 pm) 16 (The Short Adjournment) 17 (1.54 pm) 18 MR BEER: Good afternoon, sir. 19 SIR WYN WILLIAMS: I think we're about to start, if we may, 20 please. 21 MR BEER: Mr Bates, we left off before lunch by looking at 22 correspondence with Ed Davey. Can I turn to Mr Davey's 23 successor, Norman Lamb MP, and on 25 February 2012, you 24 wrote to him. Can we look at that letter, please, 25 POL00107331. Thank you. 108 1 I think, from public records, that -- 2 SIR WYN WILLIAMS: Just hang on a second. 3 MR BEER: I think from public records it's the case that 4 Mr Lamb had taken over as Minister for Postal Affairs on 5 3 February 2012, Mr Davey having been promoted to become 6 Secretary of State for Energy and Climate Change, and so 7 you were here writing again shortly after a change in 8 post; is that right? 9 A. Yes, yes. 10 Q. If we look at the letter, you say you're writing on 11 behalf of the JFSA, as you did with the former Minister: 12 "On that and subsequent occasions I wrote to draw 13 his attention to the plight of subpostmasters at the 14 hand of Post Office Limited [the reference number was 15 given] and it will provide an outline of our concerns. 16 "During November 2010 I met him at his office ..." 17 I think that was October 2010. 18 "... to raise many of the issues which have been 19 causing devastation and distress in the subpostmaster 20 community. Following the meeting, I understand he 21 queried a number of points with Post Office Management 22 and he seems to have taken them at their word." 23 On what was that based? Can you recall, that 24 following the meeting you understood that Mr Davey had 25 queried a number of points with Post Office Management 109 1 and he seems to have taken them at their word. 2 A. Well, nothing changed. Nothing changed. 3 Q. "I write to you on this occasion to request a meeting to 4 discuss this matter further with you. As you will see 5 from previous correspondence, solicitors are now acting 6 on behalf of a number of victims of Post Office Limited 7 but the law moves slowly and, in the meantime, many more 8 subpostmasters will suffer. Whilst JFSA very much 9 reflects the views of those who have fallen victims to 10 the failures of Post Office Limited's Horizon system, 11 I want to draw your attention to the enclosed survey, 12 which has just taken place. As you will see, it has 13 been completed by serving subpostmasters, with their 14 anonymity ensured to safeguard them from reprisals. 15 I am sure you will find the results disturbing and in 16 total conflict with the assurances given by Post Office 17 Limited to your predecessor and no doubt yourself, if 18 you were to raise our concerns with them." 19 Who conducted the survey? 20 A. Well, I did, really, via the website. I think we only 21 had it up for about a week. It was a very short, sharp 22 survey, just to get some sort of feedback from 23 subpostmasters of what extent things happened before 24 people started to abuse the survey. 25 Q. I think, on the subsequent pages, if we just quickly 110 1 look at them in the interests of time, we look at 2 page 3, you tell us in the second paragraph: 3 "The survey remained online for eight days." 4 A. Yes. 5 Q. It was a SurveyMonkey led survey. Then, over the page 6 to page 5, some examples. I'm not going to go through 7 all of this: 8 "Do you have regular balance shortages that you have 9 to put money in to address?" 10 77 per cent of respondents said yes. 11 A. Yes. 12 Q. Going back to page 1 of the letter, please. The last 13 paragraph or penultimate paragraph: 14 "Previously, we offered to work with your department 15 to assist with uncovering this major scandal and I now 16 extend that offer to you." 17 You got a reply to this letter, I believe. 18 A. Yes, yes. 19 Q. Can we look at that, UKGI00016112? If we just blow up 20 the main text, from Norman Lamb. I think you'd followed 21 it up in the meantime with a chaser on 20 March, which 22 is why it refers in the first paragraph to letters of 23 25 February, which is the one we've looked at, and 24 20 March, which we haven't. He apologises for the delay 25 in replying, and he says: 111 1 "As you're aware from your contacts with my 2 predecessor, Ed Davey, the concerns raised by the JFSA 3 relate to operational and contractual matters for the 4 Post Office and, as the shareholder, Government has 5 an arm's length relationship with the company and ['does 6 not' I think that should say] have any role in its 7 day-to-day operations. I also understand that legal 8 action against Post Office is under way ['on behalf', 9 I think that should say] of a number of JFSA members. 10 "Taking into account that any meeting would take 11 place within this overall context, I would ask you to 12 contact my diary manager, if you would still like to 13 arrange a suitable date." 14 Taking the point about an arm's length relationship 15 meaning that the Government has no role in operational 16 and contractual matters but, nonetheless, offering 17 a meeting. 18 You, I think, know that you attended the meeting 19 that's referred to in that paragraph, although you can't 20 recall the date. You say it was mid-2012. We know from 21 other evidence that it was on 27 June 2012, so you're 22 exactly right. You tell us in your statement -- that 23 letter can come down, thank you -- that Mr Lamb appeared 24 to be willing to listen to you. 25 A. Yeah, it's the first time I thought a minister was 112 1 actually taking on board the concerns we were raising 2 with him and he did seem to be genuinely concerned about 3 it. 4 Q. Did you form the impression at the meeting with Mr Lamb 5 that he understood that a scandal had developed? 6 A. I think -- I think he was starting to recognise there 7 was a real problem. 8 Q. Did you form any view as to whether or not Mr Lamb was 9 going to continue to rely on the justification that the 10 Government had an arm's length relationship with the 11 Post Office? 12 A. I don't think that's the way his support, if it was 13 support, for our cause, went. I think it probably 14 manifested itself in a different way, but I could be 15 wrong on that. 16 Q. It's fair to point out that this meeting on 27 June 2012 17 ought to be viewed in the context of some other 18 developments that had taken place in the meantime? 19 A. Yeah. 20 Q. If we can just reference those without going into the 21 details, there had been meeting with James Arbuthnot and 22 Oliver Letwin? 23 A. Yeah. 24 Q. A small group of MPs had joined and had met with senior 25 Post Office Management and, on 18 June 2012, they had 113 1 agreed to commission an independent review? 2 A. Yeah. 3 Q. Did you know those things at the time of the meeting 4 with Mr Lamb? 5 A. I was aware of what was going on there and I think -- 6 I could be wrong, this is my reading of the situation. 7 I would not be surprised at all whether -- this is what 8 I'm saying, that Norman Lamb perhaps showed his support 9 somewhat differently, maybe putting a quiet word with 10 Post Office that maybe they should support some sort of 11 MP or whatever investigation. That was my impression. 12 I could be wrong. It's just that the timings seemed to 13 work quite well. Everything seemed to slot into place 14 there. 15 Q. After Norman Lamb was replaced -- he was in this office 16 for a short period of time, six months or so -- 17 A. Yeah. 18 Q. -- did you pursue the matter immediately with his 19 successor? 20 A. I don't recall. I think we were following another route 21 at that time, weren't we? 22 Q. Ie the Second Sight -- 23 A. Yeah, that's right. 24 Q. -- Review? 25 A. Mm. 114 1 Q. Can we turn, then, to the appointment of Second Sight. 2 We know from your written evidence and the documents 3 that we've got how it was that the idea of 4 an independent review came to be conceived and carried 5 into effect and that Second Sight were to be appointed 6 in order to conduct the investigation or the review. 7 How did you first feel when it was suggested that Second 8 Sight be brought in to undertake an investigation or 9 a review? 10 A. We're talking now of the MP case review. 11 Q. Yes. 12 A. Suspicious. We were highly suspicious of it because 13 where they'd been brought in to, if you like, whitewash 14 it on behalf of Post Office, because Post Office brought 15 them forward to ourselves to see how we thought they 16 would get on. But, I mean, as time went on with Second 17 Sight, we had more and more confidence in their 18 independence in it, but initially, we were highly wary 19 of them. 20 Q. Was that because they were being paid for -- 21 A. Yeah, in a lot of things -- 22 Q. -- by Post Office? 23 A. By Post Office, yeah. And that's been a concern down 24 the line with all the different schemes, that Post 25 Office has been funding them. I've always said, and 115 1 I continue to say now, throughout the whole of the 2 period with all of this sort of scandal that's been 3 going on, it's been about control of the narrative and 4 it's something that Post Office was incredibly keen to 5 do. They had the money, they had the powers. They 6 wanted to brief the MPs, they wanted to do X, Y and Z, 7 they wanted to sit on the committees of all of these 8 things. They wanted to pay for everything in there. 9 And it was -- it always has been the concern, this 10 controlling the narrative. I mean, I think they lost 11 that at the time we got to the GLO or just after the GLO 12 but, I mean, up until then, they -- I think it was their 13 approach to managing the whole of this situation. 14 Q. Looking at the work of Second Sight as a whole and, in 15 particular the Post Office's approach to it, did you 16 form a view on the basis of what the Post Office said 17 and what the Post Office did -- 18 A. Well, I -- 19 Q. -- as to whether the Post Office wanted the 20 investigation to succeed to engage openly and 21 transparently with it and for the truth to emerge? 22 A. I don't know. They used to say at the meetings that 23 they wanted the truth as well but, I mean, I had a lot 24 of faith in James Arbuthnot, who was like the lead MP 25 supporter for us, and I think, actually, as it quotes in 116 1 the drama, what other choice did we have at that time as 2 well? And it seemed a way of taking it forward, at 3 least people starting to investigate and look seriously 4 at these cases, and, you know, let's see how it went, 5 let's see how we get on, yeah. 6 Q. You said, "What other choice did we have"? 7 A. Yeah. 8 Q. Why did you feel you had no other choice? 9 A. Well, we had no money, the legal option wasn't available 10 to us at that time, there seemed a willingness. There 11 seemed, by Post Office, albeit it might have been 12 a reluctant willingness, but there did seem to be 13 a willingness by Post Office at that time, and I mean 14 the MPs were quite positive about it at that time, 15 obviously wary, but they were quite positive. So it did 16 seem a good way forward, at least to start with. 17 Q. Can I just briefly explore the extent of the JFSA and 18 your involvement in the appointment of Second Sight. 19 You tell us in your witness statement, it's 20 paragraph 109, that you and the JFSA were not involved 21 in the appointment of Second Sight, albeit MPs were keen 22 to seek your approval of Second Sight's appointment. 23 Can we look at a few documents please on that, starting 24 with POL00107174. We can see that, if we scroll down 25 a little bit, just to get the email, an email from Ron 117 1 Warmington of Second Sight to Susan Crichton, Simon 2 Baker and copying in his colleague, Ian Henderson on 3 4 July. It's a report of a meeting that day with MPs 4 and it says in the second paragraph: 5 "As well as James and Janet ..." 6 That's James Arbuthnot and Janet Walker; is that 7 right? 8 A. Correct. 9 Q. His Chief of Staff? 10 A. Yes. 11 Q. There were the following, and all four MPs set out, and 12 a representative of Andrew Garnier. Oliver Letwin sent 13 his apologies. Then scrolling down a bit, about halfway 14 down the page: 15 "JA [James Arbuthnot] stated that it was a pity 16 that, having cleared it that the JFSA leader Alan Bates 17 could attend, in the end he was unable to do so at short 18 notice." 19 So it's right, is it, that you were invite to attend 20 the meeting with MPs to discuss whether Second Sight 21 should be appointed? 22 A. Yes. 23 Q. Then: 24 "JA clearly wanted to and now wants to get some buy 25 in from Alan Bates and seemed genuinely disappointed 118 1 that the whole thing couldn't be buttoned up today. He 2 asked whether Ron Warmington would be prepared to come 3 back for a three-person meeting in James Arbuthnot's 4 office. Ron Warmington of course offered to do that." 5 Then if we go to page 3, please. If we scroll down 6 a little bit, just three paragraphs from the bottom: 7 "In regard to Alan Bates and the JFSA, whilst James 8 Arbuthnot clearly wants Alan Bates' buy-in, he doesn't 9 want to give Alan Bates the impression that he, Alan 10 Bates, has a power of veto over who carries out the 11 review, its scope and how it is to be carried out. 12 "The meeting concluded with James Arbuthnot 13 confirming on behalf of all present that they are 14 satisfied that Second Sight is a suitable choice and it 15 now remains to get Alan Bates and JFSA concurrence." 16 So it seem, would you agree, that the MPs wanted 17 your approval on behalf of the JFSA, in order to, as its 18 put "button up" Second Sight's appointment. 19 A. Yes. 20 Q. Would you agree that it wasn't therefore necessarily 21 a done deal, the appointment of Second Sight, without 22 your approval? 23 A. No, but I don't think we were going to be able to hold 24 them sort of hostage over it, as well. I think they'd 25 have gone on without it but, obviously, they preferred 119 1 to have our blessing. 2 Q. I think you therefore attended a meeting with scale Kay 3 Linnell and Second Sight. 4 A. That's right. 5 Q. Can we look at that, please, POL00096817. At page 2, at 6 the foot of it, please, an email from James Arbuthnot to 7 Paula Vennells: 8 "I have just completed a very good meeting with Ron 9 and Ian from Second Sight and you. You were accompanied 10 by a forensic accountant, Kay Linnell. Both asked some 11 challenging questions of Ron and Ian, which they 12 answered to Mr Bates' and Ms Linnell's satisfaction." 13 Do you recall attending that meeting and coming away 14 with it having expressed satisfaction that Second Sight 15 were suitable appointees? 16 A. Yeah, I think so, yeah. 17 Q. Therefore, you essentially agreed to their appointment? 18 A. Oh, yes. 19 Q. So, to that extent, would you accept that you and the 20 JFSA were both, therefore, involved in the appointment 21 of Second Sight? 22 A. To that extent, yes. 23 Q. Can we turn to Second Sight's remit, please. You tell 24 us in paragraph 111 of your statement that you don't 25 recall being involved in setting Second Sight's remit or 120 1 terms of reference. Again, can we look at some 2 documents in relation to that. POL00143976. If we look 3 at the email at the bottom of the page, from Simon Baker 4 to you on 14 November, Mr Baker, the Head of Business 5 Change, saying he works for the Post Office and is 6 involved in supporting the Second Sight investigation: 7 "Following on from your conversation with Paula 8 Vennells and James Arbuthnot, we have updated your draft 9 immunity agreement so that it addresses both your 10 concerns. 11 "This is a draft document. Please call me once you 12 have had a chance to review. 13 "We will also send a copy to Kay Linnell to ensure 14 she is kept in the picture." 15 What was the immunity agreement about, please? 16 A. I don't clearly recall but I know there was -- we had 17 concerns about anyone coming forward to any of the 18 schemes there that there might be some sort of -- Post 19 Office may well, I don't know -- there might be some 20 sort of retribution by Post Office for anyone that -- 21 and what we wanted was some sort of agreement that such 22 an instance wouldn't happen in there, and I think that 23 hopefully -- and I'm pretty certain they did approve 24 something in the end, as well. 25 Q. Can we look, please, at the document that was attached 121 1 to that email, the "Raising concerns with Horizon" 2 document, at POL00143977. The draft document says: 3 "This is a paper that has been issued by the 4 agreement of Post Office Limited and the Justice for 5 Subpostmasters Alliance." 6 Is it right that it was intended that the raising 7 concerns with Horizon document, which was a foundational 8 document for this part of the review, was to be 9 a document that was issued with the agreement of both 10 Post Office and JFSA? 11 A. Well, yeah, we wanted to agree the wording of it and it 12 encompassed all the issues involved. It's quite 13 an interesting document with some of the comments that 14 are in it, nowadays, as I -- 15 Q. Can I take you to the things that I found interesting? 16 A. Yeah, sorry. 17 Q. Then you add if there are any others. I was looking at 18 page 4 of the document, under the heading "The remit of 19 the Inquiry"? 20 A. Yeah. 21 Q. "The remit of the inquiry will be to consider and advise 22 on whether there are any systemic issues and/or concerns 23 with the 'Horizon' system, including training and 24 support processes, giving evidence and reasons for the 25 conclusions reached. 122 1 "Inquiry is not asked to investigate or comment on 2 general improvements which might be made, it's not 3 a mediation or arbitration." 4 Does the remit described there essentially set out 5 the terms of reference? 6 A. I think it does. I mean, it was early days for us as 7 a group to be involved with this type of scheme, so 8 we're a little bit led by what was thought in there but 9 we felt it encompassed the main concerns at an early 10 stage, yes. 11 Q. Here the remit is said to consider and advise on whether 12 there are systemic issues or concerns with the whole 13 system? 14 A. Yeah. 15 Q. Was that JFSA's aim? 16 A. Well, it was to try to establish the truth about it, 17 yeah. 18 Q. Is that how it ended up? 19 A. Well, I think there was a slight disagreement over the 20 word "systemic issues" and how far they extended and all 21 that issue but, yeah, basically that's where it started 22 from. 23 Q. Can we move -- sorry, was there anything else in here 24 you wanted to draw attention to? 25 A. What, on that document? 123 1 Q. Yes. 2 A. Well, it was on page 1 of the original document. We've 3 gone on to the appendix though, haven't we? Yeah. 4 Yeah, I think -- I'm sorry, I probably shouldn't do this 5 but it was some of the wording in there. "We all 6 recognise" -- sorry, third paragraph: 7 "We all recognise that Post Office Limited cares 8 about its agents and thousands of subpostmasters. Post 9 Office Limited is committed to the highest standard for 10 corporate openness, brevity and accountability and is 11 happy to sensibly challenge and believe that ..." 12 I can't see the next bit, sorry. Can I see the 13 next, the full page, please? Thank you. 14 Yeah, I it was a statement underneath "Post Office 15 Limited would like to take this opportunity to emphasise 16 that these fears are unfounded", and they've been going 17 on about -- sorry, it's the top paragraph or second 18 paragraph down, "where there's been persistent 19 assertions that the Horizon system, Horizon, may be the 20 source of unresolved shortages in Post Office", and then 21 they're trying to dismiss it afterwards. 22 It's just that I think it's quite important for what 23 was known by Post Office at that time, and they were 24 quite happy to put their name to a statement like that. 25 That's -- sorry, that was just the point on there. 124 1 Q. Thank you, Mr Bates. I think you sent a reply to this 2 request for comments on the draft -- 3 A. Yeah. 4 Q. -- to Simon Baker. I'm not going to turn it up but the 5 reference is POL00183679. That was on 20 November 2012 6 and your only major change was to extend the deadline 7 for concerns to be lodged until 31 March 2013, I think. 8 So I think it's fair to say that, looking at that 9 exchange of emails and the drafts attached, that you, on 10 behalf of JFSA, had agreed the remit of the initial 11 Second Sight investigation? 12 A. I think we'd agreed with the remit, yes. 13 Q. I'm sorry, I missed that? 14 A. I think we agreed with the remit. 15 Q. Yes. Thank you. That can come down. 16 Can we turn to your statement, please, page 35. In 17 paragraph 110, you say something similar to that which 18 you've said already today: 19 "We had real concerns as they [that's Second Sight] 20 had been chosen by the Post Office. We were concerned 21 as to whether they would undertake a whitewash and were 22 in the Post Office's pocket in a similar way to that of 23 the NFSP." 24 Then paragraph 112: 25 "I was suspicious of the Post Office at this point 125 1 and the whole scheme in general, after having engaged in 2 countless communications with the Post Office over 3 a long period of time, all of which were sent with the 4 hope of receiving some support from the Post Office. No 5 one felt as if we could trust the Post Office in all of 6 this." 7 I think it's right that, despite your initial 8 suspicions, your impression of Second Sight improved -- 9 A. Yes. 10 Q. -- once you had had direct engagement with them; is that 11 right? 12 A. Yes. 13 Q. We can see that by looking at page 37 of your witness 14 statement, paragraph 118 at the foot of the page. 15 "My impression of Second Sight improved from initial 16 contact with them. I felt more confident in their 17 ability and can see them operating more independently 18 from the Post Office. My main reservation at the start 19 had been the fact they had been selected by the Post 20 Office. However, I came to see that they were keen on 21 working as an unbiased third party, which improved my 22 confidence in them as an investigating body." 23 Was that as a result of your direct engagement with 24 Second Sight? 25 A. Yeah. I did used to spend quite a bit of time, 126 1 certainly in the early days as well, providing 2 background information to how things had come about, and 3 also contact information about individuals or any 4 queries about those in the group, as well. 5 Q. I think you had a concern, nonetheless, that information 6 was not getting back to Paula Vennells on the Post 7 Office side; is that right? 8 A. Yeah, I did, yeah. 9 Q. You tell us about that in paragraph 123 of your witness 10 statement on page 39. You say: 11 "There was a concern that perhaps the information 12 was not getting through to Ms Vennells as I did not 13 think her staff were feeding back to her. I was 14 concerned she was not being told the full story so 15 I wanted to ensure she was being accurately informed of 16 the whole situation. This was perhaps a failure in the 17 way Ms Vennells handled the situation, in that I did not 18 feel confident that she had been receiving accurate 19 updates and was truly invested in the investigation and 20 the subsequent events." 21 We are going to explore with other witnesses, 22 including Ms Vennells and including, of course, by 23 reference to recordings of conversations that the 24 Inquiry is in possession of, the extent to which she was 25 not or was not being properly briefed and was 127 1 challenging of the information that she received. But 2 can we look at a direct communication between the pair 3 of you. 4 A. Yeah. 5 Q. It's POL00098418. 6 Look at the email at the foot of the page, please. 7 Thank you. So this is 21 May 2013. You copy Kay 8 Linnell in and it's a direct email to Paula Vennells. 9 You say: 10 "Hello Paula, 11 "It has been a while since we met at James 12 Arbuthnot's office but at that time you did say if I had 13 any concerns I should contact you directly, hence the 14 reason for this email. 15 "Would it be possible for Kay Linnell and I to meet 16 with you? You will recall that Kay is an independent 17 forensic accountant who, on behalf of JFSA, has been 18 monitoring the work Second Sight has been undertaking. 19 "The main purpose of the meeting is to ensure that 20 you have been receiving the full details of what has 21 been occurring with the Second Sight investigation. 22 Bearing in mind what has been discovered so far, I, for 23 one, am surprised that we haven't yet met to discuss the 24 implications. Whilst I appreciate that the majority of 25 the issues began under previous regimes and you have 128 1 expressed a genuine willingness to address the concerns 2 that JFSA has been raising, these issues are still 3 continuing. I have little doubt that it is now feasible 4 to show that many of the prosecutions that the Post 5 Office have pressed home should never have taken place, 6 and I believe this is a view shared by Kay." 7 Then you suggest some dates. 8 Overall, what was the purpose of making such direct 9 one-to-one contact with Paula Vennells? 10 A. I don't remember clearly at that particular time for 11 that particular issue but I certainly -- we obviously 12 did have concerns at that point about what was going on 13 and what was being reported back but I can't actually 14 place exactly where it lies in every -- 15 Q. In the chronology? 16 A. Yeah, yeah. 17 Q. Just trying a little harder on some of the details in 18 the email, you say: 19 "Bearing in mind what's been discovered so far, I am 20 for one surprised we haven't yet met to discuss the 21 implications." 22 Do you know what that refers to? 23 A. I'm just wondering whether that's after the interim 24 report had been produced. 25 Q. The interim report hasn't come out yet. 129 1 A. Hasn't come out. 2 Q. That's not until 8 July 2013. 3 A. Okay. 4 Q. I think this must be early emerging information from 5 Second Sight. 6 A. I wonder if it was a draft of it. 7 Q. I don't think a draft had emerged by 21 May. 8 A. I'm not sure. I'm not sure. I can't say. Actually, 9 I can't recall clearly the instances there. Perhaps Kay 10 can. 11 Q. Can you remember what happened as a result of this? 12 A. It depends where it drops in to the chronology of the 13 other issues, unfortunately, and I don't clearly 14 remember off the top of my head, no. 15 Q. If we look at the top of the page we can see that 16 Ms Vennells's assistant asks Alwen, Alwen Lyons, the 17 then Company Secretary -- 18 A. Yes. 19 Q. -- to then draft some words. Can you recall whether 20 this resulted in a meeting? 21 A. We did have a meeting with her and also I'm not sure 22 whether Paula was also there at that meeting but I do 23 remember a meeting in Old Street. 24 Q. The reason why I'm asking these questions in particular 25 is that one of the covert recordings that we have is 130 1 from 22 May 2013, which is the day after you sent 2 an email to Paula Vennells and in that covert recording 3 there is a discussion over the extent to which Paula 4 should or should not be told certain things. 5 A. Certain items right. Sorry. I can't help you further. 6 Q. Okay, if you can't remember, I'll move on. 7 A. Yeah. 8 Q. To what extent did you understand that, at the time of 9 the Second Sight, the MP cases investigation, as you 10 called it, Fujitsu was involved in the process? 11 A. I wasn't aware of anything at that time, not as far as 12 the discussions that were going on about the system and 13 all the rest of it. I had no idea of them being 14 involved. 15 Q. Did you know whether the Post Office was going back to 16 Fujitsu to check or verify information being given? 17 A. I think I've seen a later document more recently, which 18 does seem to suggest that, that Fujitsu were involved 19 and in part of discussions with Post Office on the 20 system. 21 Q. Although this will be a question for Second Sight in due 22 course, what was your understanding of the extent to 23 which underlying data and information held by Fujitsu, 24 including ARQ data, for example, contractual 25 relationships between Post Office and Fujitsu policies 131 1 and correspondence between the two organisations was 2 obtained and analysed as part of Second Sight's work? 3 A. It depends at what date you're saying about -- I did 4 become aware of it at some point, that -- but I think 5 this was probably during the Mediation Scheme itself, 6 when we became aware that -- I think it was something 7 like the 700 requests a year could be made by Post 8 Office for ARQ data from Fujitsu, without any other 9 charge being inflicted. But then, after that, I think 10 there was a charge involved. But I think that was 11 during -- as I say, during the time of the Mediation 12 Scheme itself. 13 Q. Can I fast forward to after the draft of the Second 14 Sight Interim Report was being circulated, and look at 15 POL00115961. This is an email from Paula Vennells 16 internally to a whole group of people within the Post 17 Office. So it's not something you will have seen at the 18 time. If we look at the first paragraph, she says that 19 she has had two very constructive telephone 20 conversations with you, which confirmed your willingness 21 to: 22 "... work collaboratively with the Post Office in 23 taking forward our response to the review. In 24 particular he agreed to participate in a new user forum 25 to provide feedback on training and support issues 132 1 related to Horizon and bring the existing review process 2 to a conclusion." 3 Is that right? Can you remember whether you gave 4 such a commitment? 5 A. I did have a -- I did have some telephone conversations 6 with Paula and I do remember one quite long one, really. 7 It was about -- but it was after the -- after the 8 interim report had been published. That's the one 9 I really do recall, that phone call. The others I'm 10 afraid I don't recall. 11 Q. She says: 12 "It is worth emphasising that your main issue is not 13 the computer but the human aspect, how, in his view, the 14 Post Office failed to support and help vulnerable and 15 'muddle headed' subpostmasters." 16 Was that your view? 17 A. Well, it wasn't just the computer but it was also the 18 way that -- I mean, she's put it down not the computer, 19 but I'd say it definitely was the computer in there, as 20 well. But it's also the way that Post Office dealt with 21 these sort of problems and dealt with subpostmasters in 22 an unconstructive way. I mean -- and I think that was 23 one of the big problems and that -- we'll probably get 24 to it, but something further on, but I'll wait for that. 25 Q. Can we turn to the next bullet point, please: 133 1 "He [that's you] also raised the idea of setting up 2 a new independent third party that subpostmasters can 3 approach if they after facing issues with Horizon, which 4 cannot be resolved through the normal Post Office 5 processes." 6 A. Yeah. 7 Q. She says that aligns with some of her own thinking and 8 they're therefore inclined to agree with the idea. 9 Does that accurately reflect what you were 10 suggesting. 11 A. Yes, it does. I mean, I've long felt there should be 12 a totally independent third party that subpostmasters 13 could go to, when they have problems, and that -- who 14 could then request Post Office records to check things 15 in there. It's an alternative scheme in there, so as 16 not to expose subpostmasters to the wrath of Post Office 17 straight off, and one of the reasons I used to suggest 18 something like that was because I was being contacted 19 over the years by a number of subpostmasters who had 20 serious losses -- I'm talking about £30,000, £40,000 of 21 losses -- which they'd never declared to Post Office 22 because they were so terrified of what was going to 23 happen to them, and they didn't know what to do or how 24 to move on from that position. And I could see 25 something like a third party that they could have gone 134 1 to directly that might have been able to assist or 2 direct their concerns might have been useful. 3 Q. If we just go lastly over the page, please. The last 4 bullet point: 5 "In terms of the report itself, we received a full 6 draft from Second Sight yesterday ..." 7 This was Saturday, 6 July, so it would have been 8 Friday, the 5th: 9 "... and we sent them back a version with tracked 10 changes on a number of sections which we (and Fujitsu) 11 believed our either factually inaccurate or open to 12 misinterpretation." 13 Did you know at this time that Fujitsu were working 14 with the Post Office to provide answers to concerns 15 raised during the Second Sight investigation process? 16 A. Not at this time. 17 Q. Did you at this stage have an opportunity to meet with 18 Fujitsu Senior Managers and any technical specialists 19 within Fujitsu to discuss directly your concerns? 20 A. No, it was never an offer made and Post Office always 21 used to take the position that we were contracted to 22 them, to Post Office, and Fujitsu was a third party, if 23 you like, contracted to Post Office. So we weren't 24 directly contracted to Fujitsu or had control over 25 anything that went on there, unfortunately. 135 1 Q. So the report, the Second Sight Interim Report, is 2 published on 8 July 2013. If we turn up page 41 of your 3 witness statement, please, at paragraph 128, you say: 4 "I am not sure how many of the group [that's the 5 JFSA] saw the report or whether it was discussed. 6 Overall, the interim report was positive in general, as 7 it showed that there were issues occurring but we had 8 a real concern over the interim report stating there 9 were no systemic flaws." 10 What was your concern about the report stating that 11 there were no systemic flaws? 12 A. Well, I actually thought there were systemic flaws in 13 there and there were systemic flaws in the way that Post 14 Office operated and the way it dealt with people, and 15 all the rest of it, perhaps not being interpreted in the 16 way that they were with the computer system, even though 17 there were flaws of that nature in there. But I knew 18 perfectly well that, out of a 30-odd page report, that 19 Post Office would jump on one particular line or one 20 particular comment, and that's what would be appearing 21 in the media and in their press releases, and it was 22 that -- 23 Q. To what extent did they deploy that line? 24 A. -- and they did, and they basically -- they kept saying 25 that Second Sight, you know, independent investigators, 136 1 found that there were no systemic flaws in Horizon. You 2 know, they just kept on picking that one line out of 3 a 30-odd page report, which identified many other 4 concerns right across the whole of the issue. 5 Q. Did it take until the judgments of Mr Justice Fraser for 6 anyone in a decision making role to acknowledge the 7 existence or find the existence of systemic faults and 8 failures in the Horizon system? 9 A. Well, we're going back now to controlling the narrative 10 and that was the first time Post Office lost control of 11 the narrative, once we got into the High Court. So yes, 12 that's when the truth started to come out, at that 13 point. 14 Q. Had you previously, ie months before then, ie months 15 before the 8 July publication, drawn attention to the 16 problems with using the phrase "systemic flaws", 17 "systemic failures" or "systemic faults" to Second 18 Sight? 19 A. Yes. 20 Q. Can we look, please, to POL00098315. The bottom email, 21 please. Thank you. This is two months before 22 publication time, so 12 May, where you write to Ron 23 Warmington of Second Sight, and there's a whole heading, 24 "System Errors v Systemic Failures". 25 You point out -- I'm not going to go through exactly 137 1 what you say here in the interests of time because we've 2 still got a lot of ground to cover but in short order, 3 what was your point? 4 A. Well, one of the points was that I've just made to you 5 there, that Post Office would jump on it as being the -- 6 no systemic failures with Post Office and their Horizon 7 system, which it says in there. I mean, there were 8 system failures in there but I just -- I couldn't 9 understand why they felt that was so important to put in 10 something of that sort in there, when it was obvious 11 that there were systemic failures in the way Post Office 12 dealt with subpostmasters and the way they processed 13 things and the support they gave. It was a total 14 failure of Post Office throughout all of that and I just 15 found it a bit frustrating and I think, even to this 16 day, Ron will remember this in great detail, and we have 17 a lot of discussions over it at the time. And I think 18 he feels that they got it wrong, the one thing they got 19 wrong in that report was that. 20 Q. Thank you. That can come down. Thank you. 21 The interim report is published on 8 July 2013. 22 A. Yes. 23 Q. Did you know at the time that, shortly after the 24 publication of Second Sight's Interim Report on 8 July 25 that the Post Office was informed that a witness that it 138 1 had used in a series of prosecutions, Gareth Jenkins, 2 had failed to disclose to the court material which 3 undermined the opinions that he gave, that he had not 4 complied with his duties to the court, that his 5 credibility as an expert witness was fatally undermined, 6 that the Post Office had been in breach of its duties as 7 a prosecutor and that there were a number of convicted 8 subpostmasters to whom disclosure of these facts should 9 have been given but was not given? 10 A. Not at that time. 11 Q. When was the first time that you learned that the Post 12 Office had been given that information? 13 A. It was quite late on. 14 Q. So, essentially, I've summarised the Clarke advice, the 15 first Simon Clarke advice there? 16 A. Yeah. I think it was probably at the time of the appeal 17 court hearings for the overturned convictions. I think 18 that's when it really started coming to light. 19 Q. So 2021? 20 A. Yeah. 21 Q. Was anything ever discussed or even hinted at in all of 22 the meetings you held, all of the conversations you were 23 a party to, all of the letters that you wrote, all of 24 the email exchanges that you had, with everyone at the 25 Post Office, from Alice Perkins and Paula Vennells down, 139 1 about such problems with convictions? 2 A. No. 3 Q. Were there convicted subpostmasters within the JFSA at 4 this time? 5 A. Yes. 6 Q. I read somewhere that it was about a third of them, that 7 must vary over the course of time? 8 A. It did, it -- 9 Q. What was the proportion? 10 A. Yeah, by the time we court to the GLO, of the 550, as 11 such, in there, I think about 60 of them -- it was about 12 10 per cent, roughly, had convictions. In fact, that 13 had been the issue that had caused problems with the 14 original lawyers that were supporting us, Shoosmiths, 15 back in 2010. It's because they couldn't obtain ATE 16 insurance because we had convictions in the group. 17 Q. Just winding forwards a little bit before the break, 18 that cohort of people -- I've said it was about a third 19 at this time -- 20 A. Yes. 21 Q. -- changed in number by the time you got up to 550 -- 22 A. Yes. 23 Q. -- at the time of the GLO. What approach did the Post 24 Office take in relation to that group of people, the 25 convicted subpostmasters, in terms of whether they could 140 1 take their claims to the Mediation Scheme or have their 2 claims adjudicated within a mediation? 3 A. They actually agreed that they could go forward into the 4 Mediation Scheme. 5 Q. Were such claims adjudicated upon in the mediation? 6 A. I don't recall specifically on that basis. That's 7 a whole other discussion. 8 Q. One of the consequences, indeed one of the only 9 substantial consequences, of the interim report was the 10 setting up of the Initial Complaint Review and Mediation 11 Scheme -- 12 A. Yes. 13 Q. -- sometimes called the ICRMS or sometimes the Mediation 14 Scheme. Can we look, please, at page 45 of your witness 15 statement, please. At paragraph 133 at the bottom, you 16 say: 17 "The purpose of the Mediation Scheme was to address 18 subpostmaster complaints and individual cases, so that 19 there could be an exploration into the way they had been 20 treated with a view to finding a solution for the 21 subpostmasters, which was likely to involve 22 compensation. It was also set up to establish what had 23 been the truth behind the circumstances." 24 Is that a complete summary, essentially, of your -- 25 A. It's a fair comment, it's a -- yeah. 141 1 Q. If we go over the page, please. You say in 134 that: 2 "At the outset, we thought that the Mediation Scheme 3 might well achieve the aims it had set out, provided 4 that the Post Office would enter it in good faith. We 5 entered into this process as we didn't have any viable 6 alternative at this time." 7 Then paragraph 137, over the page, please. You say: 8 "Unfortunately, the financing of the scheme came 9 from the Post Office and so it provided the Secretariat 10 and administrative support which were supposed to be 11 independent. However, we were not aware at the time 12 that Belinda Crowe was also a member of the Post 13 Office's covert Project Sparrow team as was the Post 14 Office's General Counsel, as indicated from some minutes 15 [that you refer to]." 16 At this time, at the setting up of the Mediation 17 Scheme, did you know of the existence of Project 18 Sparrow? 19 A. No. 20 MR BEER: Thank you. 21 If that's a convenient moment, sir, I wonder whether 22 we could break until 3.05, please? 23 SIR WYN WILLIAMS: Very well. 24 (2.47 pm) 25 (A short break) 142 1 (3.04 pm) 2 MR BEER: Good afternoon, Mr Bates. 3 Could we continue with the Mediation Scheme and 4 look, please, at page 50 of your witness statement, at 5 paragraph 146. I'll just wait for that to come up. It 6 says: 7 "It was never agreed that the working group would 8 discuss individual cases." 9 Just stopping there, can you briefly explain what 10 the working group was, in the context of the Mediation 11 Scheme? 12 A. The Mediation -- sorry, the Working Group was 13 a combination of the JFSA and Post Office and we had 14 an independent Chair, Sir Anthony Hooper, and then 15 Second Sight were employed to work for the Working Group 16 to do the investigations and report back to the group 17 accordingly and produce the reports as required. 18 Q. Thank you. You say: 19 "It was never agreed that the Working Group would 20 discuss individual cases and make decisions on whether 21 to mediate, it was down to Second Sight to decide this, 22 then there was the Mediation Scheme which would 23 undertake the process of mediating between the Post 24 Office and the subpostmasters. However, two example 25 cases were discussed prior to Second Sight starting to 143 1 produce reports but only to agree a format in which case 2 reports were to be produced." 3 I just want to explore this issue briefly of who 4 would make decisions on whether to mediate and whether 5 that was down to Second Sight. 6 You, I think, wrote an email about this to 7 Sir Anthony Hooper. Can we see POL00107151. In fact 8 that's a letter rather than an email. You can see this 9 is dated 10 November 2014 to Sir Anthony, and you say in 10 the second paragraph: 11 "JFSA is now of the opinion the scheme has strayed 12 so far from the original purpose for which it was 13 intended that the few applicants who have actually 14 reached a mediation meeting through CEDR ..." 15 Just explain what CEDR was? 16 A. I can't remember what it stands for now. It was a -- 17 Q. A professional centre for dispute resolution? 18 A. Dispute, yeah. 19 Q. "... have expressed such disappointment within the 20 scheme that at least one applicant has withdrawn." 21 Then under numbered paragraph 1 you ask that it is 22 noted: 23 "As has been stated on many occasions, it is JFSA's 24 view that it's not the role of the Working Group to 25 approve which cases go to mediation for the following 144 1 reasons, which are contained within the main document; 2 "That each of the applicants received within that 3 they were promised ..." 4 Then you set out some extracts from it. 5 A. Yes. 6 Q. Was that your view, that it wasn't the role of the 7 Working Group to decide or approve which cases should go 8 to mediation? 9 A. Only in specific instances. For example, if not enough 10 information had been supplied by an applicant as whether 11 to fully understand or investigate his case, would it go 12 forward there. Or other -- other perhaps -- I don't -- 13 variations on that thing. But the main bulk of them 14 should go through on their own, dependent on Second 15 Sight's recommendation. 16 Q. Whilst we're on it, on page 4 of the letter, please. In 17 the top paragraph there, second line, you say: 18 "The further the scheme progresses, the more 19 entrenched and defensive Post Office has become, and the 20 original concept of actually seeking the truth has long 21 since been abandoned, replaced by denial and a culture 22 of blaming the applicant time after time. The 23 underlying fact that it was the failure of the Post 24 Office to correct the shortcomings of the Horizon system 25 and its associated issues is ignored by Post Office 145 1 again and again." 2 That's plainly how you felt at the time. What 3 material or evidence was that view based upon? 4 A. Oh, one of the key ones, I suppose a favourite one of 5 the hearing, is the failure of disclosure. It was 6 holding up cases time and time again, and it was also 7 the amount of time Post Office -- sorry, the way the 8 scheme worked, basically, was someone applied to go into 9 the scheme. If it was shown -- Post Office quickly 10 looked at their application to ensure that they were 11 a subpostmaster and they had been there during the 12 period they say. At that point, they'd been accepted 13 into the Mediation Scheme, then they would have the 14 option of having an independent expert work on their 15 case, either a forensic accountant or a solicitor, at 16 a set fee. They would produce a report about their -- 17 this person's case. At the same time, Post Office would 18 be providing their own report on that person's case. 19 Both of these reports would then go to Second Sight, who 20 would investigate and put together and make 21 a recommendation to the Working Group on its findings. 22 Simple as that. 23 But once these cases were being investigated in 24 theory by Post Office, they were asking for more and 25 more time. There was meant to be a turnaround period of 146 1 about four to six weeks for them to undertake 2 an investigation, but they were asking for extension 3 after extension to investigate each of these cases and, 4 in some cases, they were going on for six months or 5 seven months, asking for extensions whilst they were 6 investigating. So it just dragged on and on and on and 7 on, and that was one of the big frustrations with all of 8 it. We had very little control of the flow at that 9 point. 10 Q. Thank you. 11 Just on the issue of who made a recommendation and 12 who made a decision on whether a case was suitable for 13 mediation, can we just go back and look at one of the 14 founding documents of the scheme -- 15 A. Yeah. 16 Q. -- at POL00022120. This is an overview of the Complaint 17 Review and Mediation Scheme and is one of the 18 originating documents published by Post Office at the 19 time of the initiation of the scheme. 20 If we look, please, at page 2, and three paragraphs 21 from the bottom, it says: 22 "As a result of this investigation, Second Sight 23 will produce a case review summarising its findings, and 24 a recommendation on whether the case is suitable for 25 mediation. A copy of the case review will be provided 147 1 to you. The Working Group will however take the final 2 decision on any cases that may not be suitable for 3 mediation." 4 What would you say to the suggestion that this makes 5 it clear that it was the Working Group that took final 6 decisions on which cases should and should not proceed 7 to mediation? 8 A. No, I think what you're missing here is a document which 9 is -- is it Q&As, or something of that -- that went with 10 it, as well, key points. And there's one of the 11 questions in it asks, "Will my case go to mediation?" 12 And I think the answer to that is it says in the 13 majority of cases they will go to mediation. I think 14 where it takes the final decision on any cases, that's 15 those controversial cases where there wasn't enough 16 information at all that had been supplied as part of the 17 application. 18 Q. I think maybe you're referring to page 5 of the 19 document. Are they the FAQs that you're talking about? 20 A. Yeah, that's right. FAQs, yeah. 21 Q. Is the one that you're thinking about on page 8: "Will 22 my case definitely be referred to mediation?" Is that 23 the one? 24 A. That's the one, yeah. It's the second paragraph down 25 I was trying to clarify. 148 1 Q. That second sentence of the paragraph, the second 2 paragraph, gives us an example: the ability of the 3 Working Group to decide that the case is not one which 4 requires resolution? 5 A. Yeah, if there was in -- yeah, exactly. 6 Q. Didn't that give the Working Group the ultimate power of 7 veto? 8 A. In those circumstances. In those circumstances. If 9 there's insufficient information about a case, we may 10 decide then that it wasn't worth it going to mediation. 11 But, as it says, in most cases if you provide detailed 12 and accurate information, it's likely in most instances, 13 and that was where we were relying on Second Sight to -- 14 Q. I think, in the course of the work of the mediation, you 15 wrote a number of letters to the then Minister, 16 Jo Swinson? 17 A. Mm. 18 Q. -- about its operation; is that right? 19 A. Yes, I did. 20 Q. Can we look at some of those, please. POL00144511. You 21 will see it's dated 17 April. I'm not going to read the 22 first page. If we can skip to the second page, please. 23 Look at the last paragraph on page 2 and on to page 3: 24 "There is no doubt at all that the systemic failures 25 identified so far have been brought to Post Office's 149 1 attention through their regular meetings with Second 2 Sight, and this alone raises the question as to why Post 3 Office is continuing with their prosecutions of 4 subpostmasters, when it is now so much more obvious that 5 they are standing on very shaky legal ground. As I have 6 mentioned before, the systemic failures are proven facts 7 which are at the root of many of the subpostmaster 8 cases, although from the Second Sight briefing document 9 presented at the Portcullis House meeting, they're only 10 going to be treated as an adjunct to the issue of 11 individual cases, to the point where only a few of them 12 may be featured in their forthcoming report." 13 "It is evident to us that these systemic failures 14 should become the yardstick that the individual cases 15 are measured against, as they are significantly easier 16 for others to comprehend without the requirement of an 17 in-depth knowledge of the finer points of Horizon. The 18 refocusing of the investigation on the systemic failures 19 would not only offer a quicker and far more efficient 20 method of addressing the whole issue, but would minimise 21 the information required from Post Office, which has 22 been the main cause of the slow, and at times no 23 progress, Second Sight has made with the individual 24 cases." 25 Did you get any reassurance back from the Minister? 150 1 A. I don't recall. 2 Q. No, can we -- 3 A. Yeah, sorry. 4 Q. Can we move on then, please, to POL00145664 and look at 5 page 3, please. Foot of the page. We're now on 6 18 July. This is another communication from you to the 7 Minister. You refer to a reply of 11 July where you 8 confirm that further cases can be put forward to review. 9 You say that you recently wrote to MPs, who raised 10 questions about 47 cases that only ever seemed to be 11 commented on, and you say: 12 "The 47 cases referred to in the report comprise 13 of ..." 14 Then you give a breakdown. 15 Then if we scroll up the page, please, a bit 16 further, please. Do you see that your email to the 17 Minister's correspondence address has found its way to 18 the ShEx, the Shareholder Executive within the 19 Department of Business, Innovation and Skills? 20 This is as the email has been produced to us. We 21 can't see how it got there. Addressed to Martin Edwards 22 and Susan Crichton and two members of the ShEx. If we 23 can take that off, please. 24 Mr Whitehead within BIS says: 25 "Martin, Susan, 151 1 "The email letter below from Alan Bates at JFSA to 2 Jo Swinson raises a number of issues which it would be 3 helpful for us to discuss with you before drafting 4 a reply. I think a meeting within the next week or so 5 might be the best way forward, given the range and 6 complexity of some of the issues [involved]." 7 Did you know, or did you appreciate, at the time, 8 that, notwithstanding what had been said by Government 9 Ministers about operating an arm's length relationship 10 with the Post Office, there was nonetheless 11 a back-channel of communications between the Government 12 and the Post Office? 13 A. No. I can't say I was aware of that, no. 14 Q. With your correspondence being copied from the 15 Government to the Post Office? 16 A. I could understand them perhaps having some concern, 17 because I was in regular contact with many of the MPs 18 there. But no, I can't say I was aware of it. 19 Q. If we just go to page 1, please. We can see, on this 20 page, emails within the Post Office, starting in the 21 middle of the page, from Alwen Lyons to Mark Davies, 22 Martin Edwards and Susan Crichton, and she says, when 23 discussing what reply to give: 24 "The problem we have is that he [that's you] doesn't 25 know we have seen the letter and we need to be careful 152 1 that the Minister is not seen to be aligning with us by 2 asking us to help her respond." 3 I will read that again: 4 "The problem that we have is that he [that's you] 5 doesn't know that we've seen the letter [that's your 6 letter] and we need to be careful that the Minister is 7 not seen to be aligning with us [the Post Office] by 8 asking us to help her respond." 9 So they're discussing, essentially, how to play it 10 with you without revealing that the Government has sent 11 on your letter to the Post Office, correct? 12 A. Seems to be that way, yeah. 13 Q. You say in your witness statement that there were no 14 changes as a result of your letter, the one we've just 15 looked at. Did Jo Swinson in fact respond to you? 16 A. I don't recall. I can't -- no, I don't recall. 17 Q. Can we turn to another letter you wrote to Jo Swinson 18 a year later on 16 April 2014 when she was still the 19 Minister for Postal Affairs, POL00022683. We can see 20 the date and to whom it's addressed. For some context, 21 by that date, was it right that no Post Office 22 investigation had been completed to a sufficient state 23 for Second Sight to complete its own reports? 24 A. Yeah. 25 Q. You set out how the scheme was meant to work, if we just 153 1 scroll down and keep scrolling. You say: 2 "The above structure was agreed and published at 3 scheme launch ... and the documentation is still 4 available for downloading at ..." 5 Essentially, that's the documentation that I showed 6 you earlier. 7 A. Yeah. 8 Q. "Unfortunately, the reality of where the scheme is 9 actually at is very different. 10 "As at the date of writing [this is mid-April 2014] 11 during the time the scheme was open for applications, 12 150 cases were accepted, although it should be noted 13 that, since the scheme has closed, there have been 14 others who would have applied if they'd been aware of 15 its existence. 16 "Of the 150, the earliest that POL became aware of 17 the names of individuals and the identities of the post 18 offices that were to be involved was [as follows]." 19 Next bullet point: 20 "Once the criteria to enter the scheme had been met 21 and the Working Group had approved the initial 22 application, the personalised CQR ..." 23 Can you explain what the CQR was? 24 A. It was the initial report. I can't -- 25 Q. "... was sent out to the relevant applicant for 154 1 completion with the assistance of their PA. So far, the 2 returned, completed CQRs are as follows ..." 3 You set them out over the page. 4 Then you say, top of the next page: 5 "Yet to date, POL has not finalised a single case 6 report to the point where it is ready for the Working 7 Group to consider its suitability for being sent to 8 mediation, and realistically that could still be 9 a considerable time off." 10 If we scroll down further and keep going, third 11 paragraph, you say: 12 "Regardless of what it says publicly, POL in 13 practice seems not only to be hardening its corporate 14 defence, but now seems to be prepared to invoke the 15 protection of the public purse as their last line of 16 justification for not righting the wrongs they have 17 inflicted on so many. It appears that whatever POL can 18 block, it does; for some reason [the Post Office] is the 19 only one that doesn't seem to be able to recognise what 20 everybody else can see so clearly." 21 Then you talk about: 22 "The only way we're going to resolve this is through 23 the media and the courts." 24 So what was your principal concern by the time you 25 were writing this letter? 155 1 A. I think this is a time when they, Post Office, had 2 changed their General Counsel. I think this was at the 3 point where Chris Aujard had come along. Do correct me 4 if I'm wrong in getting the -- 5 Q. I think that was September 2013, from memory. 6 A. Yeah, was coming along, and I think, when he turned up, 7 I think he had a very clear remit to get rid of the 8 Mediation Scheme or to change it, or to bin it, or 9 whatever, because he was also a part of this Project 10 Sparrow, which was, as we later to find, monitoring what 11 was going on in that scheme and how it was going ahead. 12 Now, I had a big discussion with Chris Aujard over 13 the interpretation of the aims and the objectives of the 14 scheme, and that was earlier on in the year, that year, 15 and I remember I had to detail him -- to him the whole 16 scheme, how it was meant to work, and I also copied in 17 Sir Anthony Hooper on that correspondence, as well. But 18 basically, it seemed they were trying to twist it, twist 19 it, twist it, the whole time to take away its 20 effectiveness. And it just wasn't -- it didn't feel 21 wholesome any more. It didn't feel like we were after 22 the truth any more. It just felt like we were trying to 23 defend Post Office's position in all of this. 24 Q. You tell us in your witness statement, paragraph 145 -- 25 no need to turn it up -- that, as a result of writing 156 1 this letter, there was no change as a result; is that 2 right? 3 A. Yeah, that's correct. 4 Q. I think, in fact, you got a letter back from Paula 5 Vennells which criticised you for writing in those 6 terms -- 7 A. For writing -- 8 Q. -- to Jo Swinson; is that correct? 9 A. Yeah. 10 Q. Let's have a look at that, please. POL00116501. 11 I think this is a draft but I think it's in the terms it 12 was sent. No doubt we can chase that down if I'm wrong: 13 "Your letter of 16 April to the Minister has been 14 passed to me for reply ... 15 "Since the publication of the Second Sight Interim 16 Report, the Post Office has worked collaboratively with 17 JFSA as an organisation ..." 18 Is that true? 19 A. To a very small degree. 20 Q. "... and you, as its Chair, to design the Initial 21 Complaint Review and Mediation Scheme. The Scheme 22 documentation was agreed with you and put on your 23 website." 24 That is correct, isn't it? 25 A. Yes. 157 1 Q. "The Post Office has remained true to the aims of the 2 scheme ..." 3 Is that correct? 4 A. To a degree. 5 Q. "... committed substantial resource to ensure its 6 success and respected the confidentiality of the Working 7 Group." 8 Then there's about sharing a platform on 24 March: 9 "Against that background, your action in sending 10 your letter [the letter to the Minister] has come as 11 a shock and disappointment to her. I find two things 12 troubling: the content of your letter would appear to 13 breach the confidentiality of the Working Group and 14 furthermore paints a picture which is inconsistent with 15 the position as I understand it to be." 16 A. Well, that's another one of these things where, you 17 know, is she getting the right information from her 18 staff? She never attended these meetings, never ever 19 attended one of the Working Group meetings, to the best 20 of my knowledge. 21 Q. Of course, this to be set against the context of the 22 email discussion -- 23 A. Oh yeah. 24 Q. -- that I took you to, which is how do we inform the 25 Minister's reply to this letter without disclosing -- 158 1 A. That -- 2 Q. -- that we've informed the Minister's reply to this 3 letter, without disclosing that fact? 4 A. Mm. 5 Q. The second point you make is the fact you've bypassed 6 the structure of the Working Group to raise your 7 concerns: 8 "The Post Office has displayed a strong commitment 9 to the scheme over a prolonged period of time and have 10 remained committed in principle to making the scheme 11 work but your letter has damaged the trust the Post 12 Office has invested in you, as a member of the Working 13 Group. There are a number of specific points in your 14 letter the Post Office will need to address. I have 15 asked Chris Aujard to prepare a more detailed response. 16 In the meantime, I will need to consider the Post 17 Office's position in relation to the Scheme over the 18 coming days." 19 Did you know that the Post Office was having 20 an internal debate at this time over whether your letter 21 presented a golden opportunity, because of your alleged 22 breach of confidentiality, for the Post Office to back 23 out of the scheme and bring it to a quick close? 24 A. No, I wasn't aware of that. I mean, I presume this was 25 something that was discussed in Project Sparrow. 159 1 I don't know. It may be a question for them. But 2 I mean, my concern has always been the group first, 3 what's best for the group, and not what's best for Post 4 Office in all of this. So I was representing the group 5 in these discussions and -- with what was going on, and 6 I had to stand up for what right, at the time, for them. 7 Q. Can we turn to paragraph 157 of your witness statement, 8 please, which is on page 53. You say in paragraph 157 9 that: 10 "[You] believe the Mediation Scheme failed as it was 11 part of the cover up by POL. I expect the Post Office 12 discovered things that they did not like and did not 13 want to come out. There was definitely an element of 14 not wanting to accept fault. I believe the Post Office 15 had no intention whatsoever of getting to a mutually 16 acceptable and fair decision. If anything, it seemed as 17 if the Post Office had been using the Scheme as 18 a fishing expedition to see what evidence subpostmasters 19 actually had about Horizon." 20 Was what you say there based on information from 21 subpostmasters? 22 A. No, it was -- I suppose it's the feedback from working 23 on the scheme for that many months, or those years, and 24 knowing the way Post Office operated. I mean, I'd been 25 dealing with them then for many, many years, and 160 1 I certainly could see the way they operated and what 2 they were up to, and whether they were forthcoming on 3 issues. 4 Q. In what circumstances did the Post Office terminate the 5 scheme? 6 A. I got a phone call. I got a phone call just to say, 7 "Oh, we've decided to send all the cases to mediation 8 now, so there's no need for the Working Group to meet". 9 Now, interestingly, that was the day before 10 a meeting was due to be held in which we were going to 11 see the draft of the Second Sight part 2 report, which 12 was damning, and I think one of the reasons they did 13 that was to stop that report from coming out. 14 Q. What was your view of the decision of the Post Office to 15 terminate the scheme? 16 A. I suppose publicly, I was very dismayed about it. 17 I think privately, I was ecstatic about it, because I'd 18 been thinking of pulling out of that scheme for about 19 12 months and I'd been sitting in there the whole of 20 that period to get as much information and reports out 21 of them in order for us to move on to the next step of 22 legal action. 23 Q. Did you then make a decision that it was necessary to 24 commence legal proceedings? 25 A. We had been looking around for a little while. I think 161 1 the writing was on the wall, or had been for a number of 2 months, and we'd spoken to a few firms, a few firms. 3 Initial discussions -- 4 Q. The first claim, turning to the Group Litigation, was 5 issued in April 2016? 6 A. The first claim? 7 Q. Yes. 8 A. Yeah, I -- well, we eventually found Freeths in 9 September 2015. 10 Q. Yes. 11 A. That's when they came on board and when they really took 12 over. 13 Q. One of the first steps was an application by the 14 claimants for a Group Litigation Order? 15 A. That's correct. 16 Q. That was opposed by the Post Office; is that right? 17 A. That's correct. 18 Q. Despite that opposition, the court ordered that the 19 claim should be managed under a Group Litigation Order 20 from 22 March 2017; is that right? 21 A. Yes. 22 Q. I think the JFSA made an announcement by press release 23 of the making of the Group Litigation Order, didn't it? 24 A. I don't recall it. They probably did. 25 Q. Do you remember if there was a time, if people wanted to 162 1 join in the Group Litigation, a date by which they had 2 to do so, a cut-off date? 3 A. Yes, there was. I mean, with Freeths -- and Freeths 4 took quite an active role in this -- we had to find the 5 funding and then we had to go out and recruit far more 6 claimants in there, and so then they -- a whole batch of 7 PA and advertising was undertaken for a few months in 8 there to bring forward the numbers that were needed 9 to -- I think the -- I don't know what they're called -- 10 the schedules or the names that go forward to be 11 attached to the GLO, I think there were about three that 12 were attached to eventually finish up with the 550 that 13 went forward to the -- 14 Q. Can we briefly look at the release that you made, the 15 press release that the JFSA made. POL00248057. 16 Go to page 2, towards the bottom, please. This is 17 an email from Melanie Corfield, a name we will become 18 familiar with in these phases, and she is a member of 19 the Post Office's Communications Team. Just going back 20 to the email, you'll see she emails Rodric Williams, 21 Andrew Parsons of Bond Dickinson, and others, saying: 22 "We've been alerted by a trade mag to a statement 23 issued by the JFSA." 24 Then if we go down the page a little bit, there is 25 the JFSA statement cut into her email. Can you see 163 1 that? 2 A. Yeah. 3 Q. You say -- 4 A. That's right. 5 Q. -- in the statement: 6 "JFSA announced today that the Group Litigation 7 Order against the Post Office has now been approved by 8 the President of the Queen's Bench Division of the High 9 Court, which means that the case will continue through 10 the court as a group action. The Post Office Limited is 11 defending the claim. Over 1,000 subpostmasters from 12 across the UK have now applied to join the action." 13 A. I think about 1,200 eventually applied but I think by 14 the time they'd sifted through them, we finished up with 15 550. 16 Q. At the second paragraph on the second page there, you 17 can see a quote from you: 18 "Alan Bates of JFSA said the case is now up and 19 running and we have had over 1,000-plus candidates come 20 forward so far. Subpostmasters have until 26 July to 21 join the action before the cut-off, which prevents new 22 claimants joining the claim thereafter." 23 I just want to ask you some questions about the rest 24 of this email chain, even though you weren't copied into 25 it, because they are relevant to later witnesses. If we 164 1 scroll up the page, please, you will see that Mel 2 Corfield sends it to, amongst others, Andrew Parsons. 3 Then, in the email, there is a reply from the Head of 4 Portfolio, Legal Risk and Governance, Mark Underwood, 5 saying: 6 "JFSA have issued a statement that has been picked 7 up by Nick Wallis in Computer Weekly, the statement is 8 included in Mel's below note. I don't think there is 9 anything 'new' included within it, save for the claim 10 that 'over 1,000 subpostmasters from across the UK have 11 now applied to join the action'. 12 "Though concerning they have chosen to use the word 13 'applied' rather than just 'joined' or similar." 14 Then further up, Jane McLeod -- who we're to hear 15 from -- the Group Director of Legal Risk and Governance, 16 says: 17 "I think the key words are underlined below -- they 18 haven't joined yet!" 19 Then further up the page, Andrew Parsons says that 20 he is happy with the comms. That's a draft reply: 21 "Plus let's not forget that Alan Bates has 22 a somewhat loose relationship with the truth ..." 23 Just two questions on that, if I may. Firstly, was 24 what you were saying in the press release accurate? 25 A. Yes. 165 1 Q. Secondly, had you ever had any dealings with Mr Parsons? 2 A. Oh, yes. 3 Q. Had you had any dealings with Mr Parsons that might 4 properly allow him to form the view that you had 5 a somewhat loose relationship with the truth? 6 A. No. I mean, Andrew Parsons is one of those that used to 7 appear at the Working Group meetings, one of the many 8 lawyers that Post Office used to send to them and, 9 I mean, I don't know why he's come up with that. 10 I mean, I might embellish but I don't lie. I mean, 11 anything to promote it. I suppose I spent too much time 12 around lawyers from now and then, so the wording or 13 phrasing sometimes can seem a little bit that way. 14 But it was quite right: we'd had over 1,200 people 15 that did apply to join the scheme and, out of that, as 16 I say, 550 were signed up to it. 17 Q. I think, in the course of the litigation, there was 18 an application to strike out passages from your witness 19 statement; is that right? You know, the long 41-page 20 witness statement we looked at earlier? 21 A. Yeah. 22 Q. The Post Office applied to strike it out and that 23 application was dismissed. The reference is 24 POL00004094. In the course of that judgment, is it 25 right that the judge, and in a previous judgment, 166 1 delivered warnings about aggressive litigation tactics? 2 A. Yes. 3 Q. From your perspective, as a litigant, what, if any, 4 litigation tactics were being used by the Post Office? 5 A. Oh, they were definitely trying to outspend us. I mean, 6 we'd had to raise commercial funding from it. They had 7 a bottomless pocket, as such, being a Government 8 organisation. So anything they could do to spin it out, 9 or anything they could do to recuse the judge, or 10 whatever, they did, and anything to cost us money and 11 try and get us to stop the case. That was obvious. 12 Q. You gave evidence in the Common Issues Trial? 13 A. I did. 14 Q. The reference is POL00022936. For reference, between 15 pages 44 and 51, the judge deals with your evidence and 16 the findings that he made about your truthfulness and 17 honesty, which I'm not going to display at the moment. 18 In your witness statement, you provide examples of 19 what you say was the Post Office trying to prevent the 20 truth coming out in the Group Litigation. 21 A. Okay, yeah. 22 Q. Can you assist us with what those tactics were? 23 A. Well, obviously, to outspend us. That was the key one 24 throughout all of that, and I think I've just sort of 25 listed the main points that they've gone through. 167 1 Q. I think it's right that you have yourself made 2 an application for redress? 3 A. Yes, I have. 4 Q. When was the application made? 5 A. Gosh, it was -- it must have been -- I think it was 6 October last year. 7 Q. I'm not going to ask you what any of the figures are or 8 the offers are. When did you first receive an offer? 9 A. I received an offer I think it was 77 working days after 10 my claim had gone in, which -- against the target of the 11 Department responding in 40 days. I mean -- and the 12 offer that they actually made was only about a sixth of 13 the claim that had gone in there, and it's -- I mean, 14 you know, I'm trying to fight for everyone's financial 15 redress in this but I've also got to fight for my own, 16 as well, and I have no doubt that there's a bit of 17 vindictiveness coming in from the Department and the 18 Post Office on this. 19 And the reason I say that is quite simple: they 20 don't think there's any worth to any of the work that 21 I've done over the years. I mean, my claim has gone in 22 and it's been treated exactly the same as everyone 23 else's. They all have these heads of claims in there. 24 There are some heads of claim that apply to some people 25 and not to others: so I was never made a bankrupt, so 168 1 that doesn't apply to me; I was never suspended, and so 2 on and so forth. So they do vary. But -- and this was 3 without me knowing -- the lawyers representing or 4 dealing with my claim, and also the forensic accountants 5 dealing with my claim, put it together -- and I was not 6 involved with the figures -- and they put it together 7 and they included an amount for the work that I'd done 8 over the 20 years -- it's like another column heading -- 9 and that's been totally negated by them. In other 10 words, Government doesn't think anything I've done is 11 worth anything. 12 Q. I think the first offer you received was shortly before 13 your appearance before the Select Committee in 14 January -- 15 A. Yeah. 16 Q. -- and you said publicly that it was derisory? 17 A. It was. Still is. 18 Q. Have you received any further offer since then? 19 A. No. A challenge letter went in from my lawyer but -- 20 and they were meant to hear last week a response, which 21 they never did receive, and so I still don't know 22 anything. 23 Q. From your perspective, has the process of seeking and 24 obtaining redress been efficient and effective? 25 A. No. 169 1 Q. In your case, what have been the principal problems, 2 aside from the timeliness of the reply with the 3 operation of the scheme of redress? 4 A. The initial problem was disclosure by Post Office. 5 I mean, once again, they just would not come forward 6 with it and, considering they knew the names of all of 7 those people involved in that scheme from the date when 8 the Minister announced the scheme, which was, I think, 9 March '22, so there's no reason they couldn't have 10 started at that point. 11 Q. You mean had a head start? 12 A. A head start on it, yeah, obviously. I thought it was 13 quite fortuitous, the comment made by Sir Wyn first 14 thing this morning about disclosure and that you should 15 just carry on regardless and just ignore it. If it 16 hasn't come through, just get on with the job, and 17 I think that's really what should have happened quite 18 a while ago. 19 Q. Standing back, what's your experience of the culture of 20 the Post Office in your dealings with it over the years? 21 A. They're an atrocious organisation. They need 22 disbanding. It needs removing. It needs building up 23 again from the ground floor and, as I've been quoted 24 quite commonly, the whole of the postal service 25 nowadays, it's beyond -- it's a dead duck. It's beyond 170 1 saving and, to be quite fair, it needs to be sold to 2 someone like Horizon -- sorry, I said "like Horizon". 3 Last thing I'd say! Sold to someone like Amazon. It 4 needs a real big injection of money and I only -- 5 I think that can only happen coming in from outside. 6 Otherwise, it's just going to be -- it's going to be 7 a bugbear for the Government for the years to come. 8 MR BEER: Mr Bates, thank you very much for answering my 9 many questions today. 10 Sir, there is only one set of questions from 11 subpostmaster groups, and they're from Mr Henry and 12 I think will take under ten minutes. 13 SIR WYN WILLIAMS: Well, I'm just going to move over here so 14 I can see Mr Henry unimpeded by a large pillar. 15 Questioned by MR HENRY 16 MR HENRY: Thank you, Mr Bates. 17 You've exposed over many years the Post Office's 18 suppression of disclosure and covering up the truth over 19 Horizon's flaws but you have also exposed, have you not, 20 the Government's reckless indifference to the Post 21 Office's misconduct over many years; would you agree? 22 A. Yeah, I think that is the case and, I mean, since all 23 this -- well, since this year, I suppose, since the 24 drama, we've had far more publicity about the issue 25 nationally. I mean, I've noticed there's a general 171 1 frustration with many other organisations that have that 2 problem with Government, as well. It seems to be 3 a fundamental flaw in the way Government works, that 4 they can't deal with these types of things easily and 5 sensibly. 6 Q. Could I take you to a letter you received, and we'll 7 deal with it very briefly, but it's POL00102385. This 8 is a letter you received shortly after 19 March 2015 9 from the Minister, Jo Swinson. You had written to her 10 on 10 March regarding the Post Office Mediation Scheme. 11 Have you had a chance to look at this letter before 12 coming here today? 13 A. Possibly. 14 Q. Would you care to read it to yourself and, when you have 15 done so, could you let me know because I want to take 16 you to just one passage in it. But I want to give you 17 the opportunity to refresh your memory in case there is 18 anything you would like to point out. (Pause) 19 A. Yeah. 20 Q. Thank you. You can see, at the conclusion, that the 21 Minister states: 22 "To conclude, I note that through Second Sight's 23 Report and the subsequent investigations, there is no 24 evidence of system-wide problems with Horizon. This 25 conclusion has stood firm through nearly two years of 172 1 investigation." 2 When did you become aware that the Post Office had, 3 in fact, written to their insurers nearly two years 4 before that to notify them of issues with Horizon, 5 potential issues with Horizon, which were originally 6 going to be described as financial discrepancies that 7 have occurred in Horizon? When did you become aware 8 that the Post Office had written to their insurers? 9 A. Well, there are two parts to that answer. The first 10 one, I think, is when a lot of people became aware of 11 it, which was during the -- it was the overturning of 12 convictions over those cases, the Appeal Courts. 13 I think that's when it -- one of the times it arose. 14 But also, I mean, there's a similar reference that I've 15 seen recently in a document disclosed to me for the 16 hearing, and there was -- I'm trying to think of the 17 date. It was July ... 18 Q. 2013? 19 A. It might be 2013 or -- was this the one -- this is about 20 the -- what do they call it, the officer's and -- D&O 21 insurance? 22 Q. Shall I take you to it? 23 A. Yes, that would help. 24 Q. If we could go to POL00145716, please. I'm going to ask 25 you to look at some correspondence between Charles 173 1 Colquhoun -- and this is at page internal numbering 2 4 of 6 -- Charles Colquhoun, Susan Crichton and Andrew 3 Parsons, whom, of course, you know. 4 So if we go to page 4 of 6, Charles Colquhoun, 5 Wednesday, 24 July 2013: 6 "Been discussing this with Miller, what we should 7 tell JLT re Horizon issues. We have worked up the 8 attached version which hasn't been sent -- any 9 comments?" 10 Up a little bit: 11 "Andy, could you take a look at this draft letter to 12 go to our insurance broker re the Horizon issue. I have 13 not looked at it. 14 "Thanks, 15 "Susan." 16 So that's Susan Crichton. 17 Then we have Mr Parsons, 24 July 2013, at 6.51 in 18 the evening: 19 "Susan, 20 "The letter does nothing more than put POL's 21 insurers on notice of the Horizon issues. It's very 22 bland. My own hesitation is whether this is strictly 23 necessary to do. From a PR perspective it would look 24 bad if this got into the public domain -- sign of 25 guilt/concern from the board. 174 1 "I'd be happy to have one of our insurance lawyers 2 look over the D&O policy [directors' and officers' 3 policy] to see if POL is required to notify the 4 insurers. If not, then we might want to hold fire on 5 this. 6 "I would recommend tweaking the first paragraph. 7 The current version suggests that there are problems 8 with Horizon -- when at present there are no systemic 9 problems to report. 10 "It should just say that the press have reported on 11 'potential issues with Horizon' rather than 'financial 12 discrepancies have occurred in Horizon'." 13 If we could then go, please, to page 1 of the 14 internal numbering. We can see again, this time on 15 29 July, a further email from Mr Parsons and a bullet 16 point summary at the top. Six bullet points. Would you 17 be kind enough, Mr Bates, to read those six bullet 18 points to yourself. (Pause) 19 A. Yes. 20 Q. Do you see anything in there which you consider to be 21 symptomatic of the Post Office's habitual problem with 22 disclosure? 23 A. Yeah, certainly the fifth bullet point -- oh no, the 24 fourth and the fifth: 25 "The risk of notification is that it would look bad 175 1 for POL if it ever became public knowledge that POL had 2 notified its insurers. To reduce this risk, it is 3 recommended that rather than sending a formal written 4 notification, POL speaks to Chartis (renamed AIG) and 5 verbally notifies them so as not to leave a paper trail. 6 In our experience, AIG may be prepared to accept 7 a verbal notification." 8 Yes, exactly, yeah. 9 Q. So with a view, I suppose, thereafter to plausible 10 deniability over the issue, since there isn't anything 11 written down? 12 A. No paper trail. 13 Q. No paper trail. 14 Could I now, Mr Bates -- and this is my final 15 topic -- ask you a few questions about the litigation 16 that bears your name. I realise that Mr Beer has 17 already asked you some, but I want you to consider 18 whether the 'no holds barred' approach adopted by the 19 Post Office may not have been motivated not simply to 20 win at all costs to defeat you and your fellow claimants 21 but to kill the prospects of any future criminal appeals 22 that rested on the outcome of your litigation. 23 Now, have you formed a view -- bearing in mind all 24 that has passed, have you formed a view that the conduct 25 of the way in which they approached the Horizon Common 176 1 Issues and the Horizon Issues Judgment may, in part, 2 have been influenced by the fact that, rather than just 3 being concerned about losing a money claim, they were 4 also concerned that, if they lost that money claim that 5 you had brought against them, they would then be exposed 6 to potential criminal appeals concerning people who had 7 been wrongly prosecuted, some of whom, of course, had 8 been wrongly imprisoned? Have you formed any view about 9 that? 10 A. I'm quite certain that they were very concerned on 11 a whole number of fronts and, certainly, that would have 12 been one of them, and the other one would have been 13 protecting the brand at any cost, I think that was a key 14 one, and protecting the roles of those involved with 15 making the decisions over the years that they took so 16 wrongly. 17 I think there's a whole batch of reasons that they 18 went ahead with it, and I heard a comment that was meant 19 to have come from the board at that time that it should 20 be buried at any cost, this court case. I think we saw 21 that, or saw them trying to do that, along the way. So 22 I have no doubt that they were desperate to get rid of 23 it, and for a whole raft of reasons. 24 Q. That would include those criminal appeals -- 25 A. Oh absolutely. 177 1 Q. -- which rested on the outcome? 2 A. Absolutely, and that they had known they were wrong for 3 many, many years. 4 MR HENRY: Thank you, Mr Bates. 5 SIR WYN WILLIAMS: I suppose, following Mr Henry's point -- 6 and I think I have got this right -- the claims in the 7 GLO on behalf of some of the claimants included claims 8 for malicious prosecution. So, inevitably, the 9 propriety of the prosecutions were in issue, in effect, 10 in the civil proceedings? 11 A. Yeah, yeah. 12 SIR WYN WILLIAMS: Thank you, Mr Bates. 13 Mr Beer, anything else? 14 MR BEER: No, there's nothing arising. That's the end of 15 Mr Bates' evidence. 16 SIR WYN WILLIAMS: Well, thank you very much for coming. 17 THE WITNESS: Thank you. 18 SIR WYN WILLIAMS: Thank you for your witness statement and 19 thank you for providing answers to a great many number 20 of questions. 21 I can see hands preparing and I know what's coming, 22 because it's inevitable, and I fully understand why they 23 want to applaud you, Mr Bates, but I'm going to ask you 24 not to for this reason, that there will be witnesses who 25 are coming in the next so forth who may not be as 178 1 attractive to many of you and I would hate to think 2 that I would have to intervene, when they are here, to 3 prevent bad behaviour. So in the interests of people 4 being even-handed, I am asking you to remember that this 5 is not a public meeting but a public inquiry. It's not 6 a court of law but it's a judicial process. So please 7 leave it there. 8 Tomorrow morning, we will resume at 10.00. 9 As you know, I appeared on the first day of Phase 4 10 and then disappeared completely in the sense that 11 I conducted the hearings remotely. I fear my 12 circumstances are such that that will still be 13 necessary, ie that I will conduct most of the hearings 14 remotely during this passage. I do intend to appear as 15 often as I can but I wanted to be frank with you: it 16 won't be very often. I find that I can do this 17 acceptably but I want to be open with you about what's 18 happening henceforth. All right? 19 So we will resume tomorrow but I'll be on a screen, 20 not sitting here. 21 MR BEER: Thank you, sir. 22 (4.01 pm) 23 (The hearing adjourned until 10.00 am the following day) 24 25 179 I N D E X Statement by MR BEER ..........................1 ALAN BATES (sworn) ...........................22 Questioned by MR BEER ........................22 Questioned by MR HENRY ......................171 180