1 Tuesday, 14 May 2024 2 (9.44 am) 3 MR BLAKE: Good morning, sir, can you see and hear me? 4 SIR WYN WILLIAMS: Yes, I can, thank you. 5 MR BLAKE: Thank you very much. This morning we're going to 6 hear from Mr Davies. 7 MARK RICHARD HANSELL DAVIES (affirmed) 8 Questioned by MR BLAKE 9 MR BLAKE: Thank you very much can you state your full name, 10 please. 11 A. My name is Mark Richard Hansell Davies. 12 Q. Thank you very much, Mr Davies. In front of you, you 13 should have a witness statement in a bundle. Can I ask 14 you to turn to the first page, is it dated 10 April 15 2024? 16 A. It is. 17 Q. If I could ask you to turn to the signature page, that's 18 page 52; is that your signature? 19 A. It is. 20 Q. Is that statement true to the best of your knowledge and 21 belief? 22 A. It is. I have two amendments, if I'm able to draw the 23 Inquiry's attention to them. 24 Q. Absolutely. 25 A. In paragraph 55 -- apologies, 56, I refer to a document, 1 1 "This document is an email chain between myself and 2 senior board members", that should read "colleagues" not 3 "senior board members", and it then says, "discusses 4 media coverage around Horizon issues and SS's Part Two 5 Report" that should be "SS's Interim report". 6 Q. Thank you. 7 A. Then in paragraph 117, there's a sentence which reads 8 "All criminal cases have been reviewed by external legal 9 teams", and I recall, having seen Brian Altman KC's 10 evidence, that, of course, his -- the review which led 11 from his review was going back to 2010. 12 Q. Thank you very much. That witness statement has the URN 13 WITN09860100. And will be published on the Inquiry's 14 website shortly. 15 Sticking with your witness statement, please, could 16 we have that up on screen and turn to page 5. I'm just 17 going to go through a few passages. Page 5, 18 paragraph 14. Thank you. The bottom half of that 19 paragraph says as follows, it says: 20 "While much has been written and said about my [Post 21 Office] colleagues, I wish to pay tribute to those with 22 whom I worked in communications, who were professional 23 at all times. I have no doubt we could have done more, 24 but I am proud of the steps taken to seek to change to 25 a more open culture, a mission which was led by Paula 2 1 Vennells as CEO and supported by the Executive." 2 Over the page, please, to paragraph 17: 3 "The decision to open up the business to external 4 scrutiny, and subsequently to seek to mediate cases, 5 were the actions of a business which took its 6 responsibilities to its people very seriously. These 7 initiatives, and others, were led with, in my opinion, 8 integrity and care by Ms Vennells and with the support 9 of the Board." 10 Paragraph 27, page 9: 11 "In my view, the Board and Executive were diligent 12 and effective in dealing with the issues relating to 13 Horizon." 14 Paragraph 35, please, at page 13 the final sentence 15 there on that page, if we could scroll down, please, it 16 says as follows: 17 "Any concern that the system did not work properly 18 was taken extremely seriously for the very reason that 19 it was so fundamental to so many people." 20 Paragraph 57, please, at page 21: 21 "The culture being developed in the business by 22 Ms Vennells and Alice Perkins was around three values -- 23 care, commitment and challenge -- and there was serious 24 intent behind these words." 25 If we scroll down, please, to paragraph 60. At the 3 1 bottom of that paragraph, you say: 2 "Angela van den Bogerd was key to this work and 3 an energetic advocate of delivering commitments to 4 continuous improvement, such as through the Branch User 5 Forum, improvement programme and the Post Office 6 Advisory Council." 7 Paragraph 88, please, on page 32. You say there: 8 "As noted above, [the Post Office] had at the time 9 a Press Office Team which would lead on all press 10 inquiries, reporting to me. They were a high performing 11 and high quality team." 12 If we could move towards the end, please, page 51, 13 paragraph 145, you address, in turn, each of the senior 14 members of the team. At 145, you say about Ms Vennells: 15 "The leader I knew was one who that deep integrity 16 and who was guided by deeply held personal values. She 17 seemed to me to place these values at the forefront of 18 her consideration of these issues. She was sincere in 19 the efforts she led to try to reach conclusions. It was 20 her and Alice Perkins, as Chair, who insisted on the 21 business investigating in detail." 22 147, about Alice Perkins, you say: 23 "Alice Perkins as Chair of Post Office also, it 24 seemed to me, wished only to find a way to resolve these 25 issues appropriately and sought to do so tenaciously and 4 1 with great care and an eye for detail." 2 Paragraph 148, please. You say: 3 "I would also like to mention Angela van den Bogerd. 4 I found her to be incredibly committed to public service 5 and to the Post Office. She was detailed, thorough and 6 empathetic. She was also, it seemed to me, committed to 7 getting to the truth, hampered by [a] lack of the 8 information we now have to hand." 9 Is it fair to summarise your evidence in those 10 paragraphs that I've read out as painting a picture of 11 a Communications Team and a Senior Leadership Team that 12 was committed to opening up to challenge? 13 A. Yes, that's fair. 14 Q. Can we please turn to POL00380985. It's an email that 15 the Inquiry has seen before, dated 2 July 2013. 16 SIR WYN WILLIAMS: It hasn't reached my screen yet, 17 Mr Blake. Oh sorry, it's about to, I think. 18 MR BLAKE: Thank you. This is the email from Paula Vennells 19 to yourself and others, in answer to the question: 20 "What is a non-emotive word for computer bugs, 21 glitches, defects that happen as a matter of course?" 22 Her answer is, from her husband: 23 "Exception or anomaly. You can also say conditional 24 exception/anomaly which only manifests itself under 25 unforeseen circumstances ... 5 1 "Does that help?" 2 Your response was: 3 "I like exception [very] much." 4 Was renaming "bugs" part of a culture that was open 5 to challenge at the Post Office? 6 A. No, I mean, the background to this email was that we 7 were concerned, in fact, that "bugs" sounded like too 8 sort of slangy a word, and we wanted to be really 9 serious about how we approached these issues, and the 10 reality of Paula Vennells talking to her husband, who 11 I believe works in that industry, was that she had 12 thought it would be worth asking him what his view might 13 be, did so, and I thought that "exception" had the due 14 seriousness about it. 15 Q. Mr Davies "what is a non-emotive word for computer 16 bugs"; it doesn't say, "What is a non-slangy word", does 17 it? 18 A. No, it doesn't. 19 Q. The suggestion there is that you're looking for a word 20 that doesn't evoke emotions? 21 A. I think I read the email as around, you know, how could 22 we find a more appropriate way to describe bugs or 23 glitches or defects in a way that was in line with 24 a sort of IT industry way of speaking. 25 Q. Can we please look at POL00297030, same day, 2 July 6 1 2013. The bottom of page 1, please. An email from 2 yourself to Martin Edwards "Re: PV & AP brief"; who was 3 AP? 4 A. Sorry could you just repeat the question? 5 Q. Who was "AP"? 6 A. Sorry, apologies, Alice Perkins. 7 Q. So there's a brief for Paula Vennells and Alice Perkins. 8 It says: 9 "The speaking note needs to be firmer -- we want to 10 make clear our position and underline our view that no 11 evidence to support the systemic failures." 12 If we go over the page, please, to page 2, the fifth 13 paragraph, you say as follows: 14 "We shouldn't call the user group a 'Horizon' user 15 group -- makes it appear that we are acknowledging issue 16 with Horizon -- branch management user group?" 17 Was the suggestion of removing the word "Horizon" 18 from the user group part of a culture that was open to 19 challenge at the Post Office? 20 A. No, I think what's happening in this email is this is 21 after the Second Sight Interim Report, which found no 22 evidence of systemic issues and we -- but very serious 23 issues around the way in which training and support 24 was -- well, not being delivered to postmasters. So 25 I think that's why we thought, given that this was 7 1 a wider issue than the computer system at that time and 2 in the context of that time, "branch management user 3 group" felt to me -- and I think it eventually was 4 called the Branch User Forum, but I may have recalled 5 that incorrectly -- but that seemed to be a more 6 accurate description of what we were seeking to do. 7 Q. "... makes it appear we are acknowledging issue with 8 Horizon." 9 Aren't you removing that word to avoid the 10 suggestion that there is an issue with Horizon? 11 A. Well, at the time it was very clear to us that there 12 wasn't an issue with Horizon because the Second Sight 13 Report had said that there were no systemic issues and 14 we wanted to be really clear that what we were talking 15 about was a very deeply held commitment to improving the 16 way in which we supported postmasters and all of those 17 people who used the Post Office system. 18 Q. Can we turn to POL00162068. We're now on 23 September 19 2013, same year. Can we please turn to the bottom of 20 page 4, please. This the email we've seen from Alan 21 Bates to Paula Vennells, Susan Crichton, Angela van den 22 Bogerd and others, and he said: 23 "This afternoon I received followed email, it is 24 a prime example of the thuggery being exerted on 25 defenceless subpostmasters (as [the Post Office] deny 8 1 legal representation) by arrogant and uncontrolled Post 2 Office personnel." 3 He forwards the email that says: 4 "Hello Alan 5 "I am writing on behalf of my son-in-law Martin 6 Griffiths who has recently been in touch with you about 7 the treatment doled out to him by the hierarchy at the 8 crown office in Chester." 9 If we scroll down, please, it says: 10 "This morning he drove off to work, got out of his 11 car and walked in front of a bus. 12 "He is dangerously ill in hospital at Liverpool, the 13 Post Office had driven him to suicide. 14 "All the family are [in] hospital, I am alone 15 waiting by the phone for further news of him. 16 "I would urge you to publicise this, another 17 incident that has been caused by the Bully Boys at the 18 crown office." 19 If we turn to the top of page 4, please, bottom of 20 page 3, there is an email from yourself in response, and 21 you say: 22 "Thanks -- Susan, given the potential media element 23 please can we line up a specialist media lawyer in case 24 we need urgent advice this evening?" 25 Was instructing a "specialist media lawyer", when 9 1 Martin Griffiths, at that point, was dangerously ill in 2 hospital, part of a culture that was open to challenge 3 at the Post Office? 4 A. This was a deeply tragic and terrible case and everybody 5 at the Post Office, when we read that email, was deeply, 6 deeply shocked and a number of conversations took 7 outside of email about it and, obviously, the natural 8 human instinct of every single person who heard about 9 that story was to be deeply, deeply shocked. In terms 10 of specialist media lawyer, my role within the Post 11 Office was to be the Communications Director, and there 12 was a very strong likelihood of communications media 13 coverage in relation to this tragic case, and I was very 14 conscious of the media guidance that exist around the 15 reporting of suicide or -- as it appeared in this 16 case -- attempted suicide and wanted to make sure we had 17 somebody on hand who would give us some guidance about 18 those matters. 19 Q. Was lining up a specialist media lawyer really intended 20 just to deal with the way that Mr Griffiths is 21 described: the suicide issue? Was it not protecting the 22 Post Office from negative publicity? 23 A. My thinking in lining up the specialist lawyer was 24 around the point around the guidelines in terms of 25 reporting suicide. 10 1 Q. Were you aware of those guidelines? 2 A. I was aware of them but not to a very detailed degree, 3 which is why I wanted to have some more advice on it. 4 Q. Are they complicated? 5 A. They're not complicated, no, but I think it's -- it was 6 the right thing to do, from a -- in terms of my role, it 7 was the right thing to do to potentially line up 8 specialist advice. 9 Q. Can we look at POL00101361, please. We're now into 10 2014, 11 September 2014. Can we turn to page 3, please. 11 There is an email from a postmaster, Bryan Hewson, 12 referring to a report on BBC Radio 4: 13 "Post Office's Horizon computer system 14 subpostmasters having lost their positions and 15 'including a handful who were imprisoned'. 16 "Tuesday evening. 17 "Scoured [the Post Office] website for official 18 statement -- couldn't find it -- I must have missed it 19 Media pages -- the press release must be there -- 20 nothing listed -- started to think I had imagined the 21 news on the radio." 22 "Wednesday ... 23 "'Warm-up' consisted of hearing staff talking of 24 seeing local TV news [regarding] Post Office Horizon, 25 innocence, jailed, lost businesses. 11 1 "My staff were in a state of shock and disbelief and 2 anger at how people like them and their friends could 3 have been accused of theft, lost their homes or even 4 worse sent to prison. 5 "I was half prepared to meet my staff's reaction. 6 I gave reassurance as best I could: 7 "New management at the top [Paula Vennells] 8 "New policies of openness, transparency & honesty 9 working together across the whole organisation, as per 10 last Forum meeting in London. 11 "Wednesday night. 12 "Scoured [the Post Office] website for another 13 hour -- no statement found ... my best efforts. 14 "Why was this handled this way? 15 "To ensure the stated policy of openness 16 transparency etc is fully implemented as designed, 17 ie nice sounding words that will never permeate even 18 within Head Office/Support Centre London? 19 "Why was there not a Memoview as a minimum means of 20 communicating simultaneous with the Press briefings? 21 "As Michael knows Angela, in the last few weeks 22 I have been trying to support branches with Mail's 23 coaching. Please do not underestimate the blow to 24 counter staff's and branch owner's morale of the 'news' 25 broadcast on Tuesday. 12 1 "I intend bringing this matter up under [any other 2 business] at today's meeting and am hoping this note 3 will allow time for an appropriate answer to be given." 4 Page 2, please, it's an email from yourself to 5 Angela van den Bogerd and others, at the bottom of the 6 page, please, and you say: 7 "I will email Bryan. I appreciate the point but 8 I am not prepared to make a decision based on feedback 9 from one source. If we had pushed messaging out, 10 thousands of people who didn't hear the coverage would 11 have been alarmed and worried and I don't believe that 12 doing that would be in anyone's interests." 13 Was not addressing a BBC Radio 4 story about 14 imprisoned subpostmasters part of a culture that was 15 open to challenge at the Post Office? 16 A. This was one case of where there had been media coverage 17 around these issues and it was always a very fine 18 judgement as to whether to effectively do a piece of 19 communications, internal communications, to the whole 20 Network, which was around 11,000 branches and 21 30,000/40,000 people, when, in fact, it was a piece of 22 coverage that was a one-off. I think, you know, I may 23 have got that one wrong and I do remember ringing Bryan 24 Hewson about it and talking him through it. I think, as 25 I say, they were very difficult lines to get right. 13 1 What we did make sure was that all of our field 2 teams and everybody in the NBSC, the business centre 3 that -- the helpline effectively, that was set up to 4 support postmasters, had lines, had had positions to 5 take, if those issues were raised with us and I think, 6 as I say in a separate email there, we hadn't had a huge 7 amount of questions about the issue, but I accept it's 8 a fine line and I accept I might have got that one 9 wrong. 10 Q. Thousands of people who didn't hear the coverage would 11 now hear it, if you had made a statement, wouldn't they? 12 A. Well, yes, and the reason, because, of course, this is 13 2014, where we're acting in good faith on the basis that 14 we don't believe there are systemic issues with Horizon, 15 where we have 50,000 people using the system every day, 16 and we have a number to clients and not to mention of 17 course the millions of customers who came to the Post 18 Office, and one of the considerations was not creating 19 something which would lead to people being concerned 20 about their Post Office business in whatever form that 21 took. Obviously, that's the context in which we were 22 operating at the time, where we weren't -- where we 23 didn't believe there were systemic issues with the 24 system. 25 Q. POL00162598, please. We're now in 10 August 2015, 14 1 second half of the page, please, an email from yourself. 2 "Dear all 3 "This note is designed, following a [group 4 executive] discussion today, to set out why we are not 5 proposing to put up an interview for Panorama on 6 Horizon." 7 We will come back to the substance of this document 8 but, if we scroll up, there's a response from Paula 9 Vennells. She says: 10 "I agree completely -- I have no wish to give any 11 legitimacy to Panorama and our statement should make 12 that clear. Where we can give an objective view, eg in 13 other media then fine." 14 Was that part of a culture that was open to 15 challenge at the Post Office? Not putting up somebody 16 for interview on Panorama? 17 A. Again, this was a very fine line. We had initially 18 planned to put an interviewee up for the Panorama 19 programme but ultimately decided not to because the 20 programme was clear that it intended to go into 21 individual cases and we weren't prepared to do that at 22 the time, largely because those cases were being looked 23 at by the CCRC. 24 Q. POL00174418, 18 August 2015. This is after the Panorama 25 programme. If we scroll down to the bottom. There is 15 1 an email to you from you Elena Nistor. Were you aware 2 she was the internal Audit Manager at the Post Office? 3 A. Mm. 4 Q. Yes? She says: 5 "Hi Mark, 6 "The programme last evening was indeed damaging and 7 I think highlights again the questions about the Horizon 8 systems and if it is true there were bugs within the 9 system? 10 "I know our external auditor raised couple of years 11 some issues regarding the change management process for 12 Horizon. 13 "Would you have time for a 15-minute chat this week 14 at any point ..." 15 Your response: 16 "Hi Elena 17 "Thanks for this. It's certainly the case that in 18 the cases referred to us, there has been no evidence at 19 all of Horizon being the reason for any losses in 20 branch. Indeed losses have been clearly the result of 21 individual action." 22 No evidence at all; clearly the result of individual 23 action: was that part of a culture that was open to 24 challenge at the Post Office? 25 A. It was the position as we understood it at the time, 16 1 following the Second Sight Report. 2 Q. What we have seen here from 2013 onwards is, year after 3 year, the same mantra. As director of communications, 4 were you responsible for pursuing that mantra? 5 A. Not at all. In fact, we did number of things that were 6 very open. For instance, you referred to Panorama, we 7 did a two-hour briefing for Panorama journalists on the 8 record with myself and Angela van den Bogerd and other 9 colleagues as well. When the Second Sight Report was 10 published in 2013, we published it on our website, with 11 a press release. I went on the Today Programme in, 12 I think, 2014, apologies if that's not the correct date. 13 It was always a final balance and the role of 14 a Communications Director is to find that balance, and 15 sometimes we got it right, sometimes we got it wrong. 16 But certainly our intention, throughout, was to be as 17 open as possible on these issues. 18 Q. Renaming bugs; removing the word "Horizon"; not giving 19 interviews, evidenced over number of years: do you 20 really think that is evidence of a culture of openness 21 at the Post Office? 22 A. I think when balanced with some of the other things we 23 did that I just mentioned, I think it -- I'm certainly 24 not saying it was the perfect approach to 25 communications, for sure. I have made many mistakes, 17 1 just as we all have, but I do think that we did our 2 very, very best to be open and transparent on these 3 issues. 4 Q. Let's go back to your witness statement, please, 5 page 10, paragraph 28. You say: 6 "In relation to my role specifically, what we could 7 not accept -- in the context of what we knew at the 8 time -- was inaccurate media coverage which damaged 9 customer and postmaster confidence in a key delivery 10 system." 11 Moving on, please, to paragraph 94, that's page 34, 12 you say there: 13 "Given the lack of interest from the vast majority 14 of journalists, and the apparent lack of impartiality on 15 the part of some of those covering the issue, we 16 believed we were acting in good faith and appropriately 17 based on the context of what we knew at the time." 18 Paragraph 108, please, page 39. You say there about 19 Nick Wallis: 20 "Mr Wallis is a journalist who has covered these 21 issues for many years and has been clear in his view 22 that Post Office was in the wrong -- that is his right, 23 of course, but it naturally influenced the way we 24 engaged with him, though we were always -- I believe -- 25 helpful and courteous." 18 1 Paragraph 113, please, page 40. You say there: 2 "It was clear to me that the programme would be very 3 damaging to [the Post Office's] reputation because it 4 would be extremely difficult to ensure balance and 5 impartiality." 6 This is a witness statement that you have written 7 this year. Weren't they -- Mr Wallis, Panorama -- the 8 ones who actually got it right? 9 A. Obviously, we now know a huge amount more than we did 10 back then about the Horizon system and I would actually 11 just like to say how very, very, sorry I am that this 12 issue has caused so much pain and anguish to so many 13 people over so many years, and particularly sorry that 14 I and Communications have played a part in prolonging 15 that pain and anguish. When we were operating in 16 relation to Panorama and Mr Wallis and other journalists 17 who approached us on these issues, we always acted on 18 good faith, based on the information we had at the time. 19 Q. That wasn't the question I was asking. The question 20 I was asking was: weren't they the ones who got it 21 right? 22 A. As I said, we now know from the court judgments of 23 Lord Justice Fraser that the situation was far more 24 difficult than we ever thought, so yes. 25 Q. Throughout your witness statement, you refer to 19 1 "inaccurate media coverage", "lack of impartiality", 2 "difficult to ensure balance and impartiality". Where 3 do you acknowledge that, in fact, those who you are 4 complaining about got it right? 5 A. I don't think I did acknowledge that in the statement. 6 Q. Can we please have a look at POL00173770. Can we turn 7 to the second page, please, the bottom of the second 8 page, an email not yet sent to you but it is in due 9 course forwarded to you: 10 "Hi both -- Matt has been contacted by a producer at 11 BBC Panorama [this is the 2013 programme] which is 12 considering running a programme on the Horizon/Justice 13 for Subpostmasters issue. 14 "To inform their decision on whether to run with the 15 programme or not, he's keen to talk to someone at the 16 NFSP in more detail about our take on the issue and 17 about our experience of Horizon more broadly." 18 So they have contact with the NFSP. If we scroll 19 above, we can see eventually, at page 1, it's sent to 20 you. Halfway down the page, please, and you say: 21 "This was never funny but is now beyond a joke! 22 "We really need Portland ..." 23 That's Portland Communications, is it? 24 A. That's correct. 25 Q. "... to earn their money now with some innovative and 20 1 interesting ways of getting us back on the front foot. 2 I am not sure what we've had from them. 3 "We need some other voices in this, the journalism 4 is appalling." 5 Could we please look at POL00101345. The email in 6 the middle of the page is from yourself to Paula 7 Vennells. Five paragraphs down, you say as follows: 8 "To your point regarding your fellow commuters there 9 is this, I think: the media reports were skewed to 10 present the picture the journalists wished to present -- 11 that of the corporate beast trampling on the downtrodden 12 subpostmaster. This kind of campaigning journalism is 13 always likely to capture sympathy and it's why they do 14 it that way. For the reasons set out above it wouldn't 15 be in our interests to get into a detailed debate on the 16 report. 17 "The problem we have is that journalists with 18 an agenda are always going to believe Second Sight ahead 19 of us." 20 Can we please look at POL00101629. 5 December 2014. 21 If we scroll down to the bottom of page 3, please: 22 "... Nick Wallis called regarding an interview with 23 Paula on Horizon for BBC News/One Show. They would like 24 to do this tomorrow or over the weekend. 25 "Basically, they have got wind of a letter that 21 1 Paula sent to a number of MPs regarding [the Post 2 Office's] position on the mediation system. The MPs are 3 expected to release a response over the coming days 4 which will bring a large degree of information on scheme 5 into the public domain. He hasn't seen the letter but 6 hopes to by the time the interview takes place. The 7 interview will question the integrity of the system and 8 the claims of the [subpostmasters] involved." 9 If we scroll up, please. There's an email from 10 Melanie Corfield on page 2 to yourself and also to Ruth 11 Barker. About 4 paragraphs down, she says as follows, 12 she says: 13 "We can go back to Nick to reiterate previous points 14 we have made about confidentiality of scheme, 15 inappropriateness of interview but offer statement along 16 the lines pasted below? After all he is essentially 17 asking Paula to respond to something that hasn't even 18 happened yet (ie the response to her letter!). While 19 Nick is still fishing around we need to avoid giving him 20 anything new? Happy to discuss. I am in a meeting this 21 [afternoon] and I know you are involved in another 22 issue. I have to leave promptly tonight for 23 a commitment but around in the morning." 24 You respond, in fact, you forward it to Belinda 25 Crowe, the bottom email, thank you, and you say: 22 1 "Read the chain from the bottom including the Nick 2 Wallis call note. Sounds like [Members of Parliament] 3 might do something as a collective shortly. If that 4 happens we need to think again about whether to agree to 5 an interview -- me, not Paula. Otherwise it could end 6 up back in Parliament. 7 "I pretty much agree with Mel's view here, but we 8 might need to be ready to change approach." 9 Then the response from Belinda Crowe is: 10 "Can we speak at some point about this on Monday?" 11 Then you send an email, your response to her. You 12 say: 13 "I called. I've just seen [Nick Wallis'] latest 14 email. I am tempted to offer an interview in which we 15 simply say in response to questions: 16 "'The BBC is asking us to break the confidentiality 17 of a mediation scheme, the workings of which were agreed 18 by all parties. This is an intolerable position. We 19 have gone over and above the responsibilities we have as 20 a business. In two and a half years there has been no 21 evidence etc ...' 22 "If I stick to that line, what is the proposal with 23 doing an interview? I appreciate you may think I am 24 sliding but I can't sit and take this garbage much 25 more." 23 1 Turning, please, to POL00102062, 23 January 2015, if 2 we scroll down, please. You've written an email, it's 3 a note, and you say: 4 "I've written the below for no reason other than it 5 made me feel better." 6 We will come back to this email but you say as 7 follows: 8 "It's fascinating to be part of a conspiracy. To be 9 at the heart of a corporate cover up. But frustrating 10 too, when the reality is a hard story to tell, and some 11 distance from the picture painted by a determined band 12 of at adversaries. 13 "In our case, we are up against a campaign group, 14 a few journalists (mainly from the BBC) and some MPs. 15 And you have to hand it to them: they know what they are 16 doing in terms of mounting a campaign. It's just 17 that --whisper it quietly -- all is not what it seems." 18 One final email, before I get to the question. 19 POL00111699, much later on, 21 February 2019, an email 20 from yourself to Paula Vennells and others. You say as 21 follows: 22 "Our external communications strategy on this is to 23 minimise negative coverage by holding the robust line we 24 have deployed throughout. In doing so we have thus far 25 succeeded in minimising coverage in the mainstream 24 1 media. Throughout the trial we have been measuring 2 sentiment among external audiences -- the trial has had 3 no discernible impact in terms of increasing external 4 interest in this issue. 5 "There are a group of journalists who have staked 6 their professional reputations on campaigning on behalf 7 of those who have now taken us to court. They -- and 8 one in particular -- drive most of the periodic 9 increases in external coverage. We have sought to 10 engage with this group but there is an unwillingness to 11 engage with our side of the story. That is regrettable, 12 of course." 13 You then say: 14 "Private Eye has also featured the issue regularly, 15 claiming Post Office has knowingly covered up evidence 16 of what it calls the 'deep dodgy' Horizon system. We 17 believe the content in Private Eye is almost certainly 18 provided to it by one of the 'campaigning' journalists 19 who have staked their reputation on proving that Post 20 Office has conspired to see otherwise innocent people 21 jailed or penalised. 22 "By holding our line and not giving the story 23 further oxygen, we prevent the issue going the channels 24 above and while of course it is uncomfortable when we 25 face negative coverage it has never reached the stage of 25 1 a media onslaught as seen on other such issues facing 2 organisations such as ours." 3 Email, after email, after email, blaming the 4 journalists, isn't it? 5 A. Well, with the benefit of hindsight, they absolutely -- 6 some of them look ludicrous, I agree. 7 Q. Had you ever asked yourself "Might we, in fact, be the 8 baddies"? 9 A. I have asked myself that question; I've asked myself 10 many, many questions over this issue many, many, many 11 times, over the course of the last few months, over the 12 course of the last few years and throughout the whole 13 period I was dealing with these issues. We really 14 believed that we were doing the right things. We'd 15 appointed Second Sight to lead an investigation, which 16 we thought was the right thing to do. We then create 17 a mediation scheme because we wanted to give people the 18 opportunity to raise the issues that they had. We 19 advertised for people to come forward to the scheme, the 20 Mediation Scheme, using our communications channels to 21 do so. You know, we held a two-hour briefing with 22 Panorama. We published a press release, et cetera, 23 et cetera. 24 We'd really tried and the context is that we really 25 believed that we'd tried to do the right things. 26 1 Q. Were you absolutely blinkered -- 2 A. No. 3 Q. -- at this time? Who is the one journalist who is 4 mentioned in this email? 5 A. That would be Mr Nick Wallis. 6 Q. Did you at any time think, actually, there might be 7 something in what he's saying? 8 A. Of course. As I've said, I asked myself the question 9 many, many times and I regret that I didn't ask more 10 questions. I wish I'd pushed harder, I wish that I'd 11 been perhaps as hard on and as assertive with our 12 supplier as I was with Panorama and with journalists at 13 times, for sure. Of course, I've asked myself those 14 questions many, many times and will continue to do so. 15 I have a huge amount of regret over this issue and will 16 always have that regret. 17 Q. Looking at those later emails that I've shown you, the 18 emails addressing journalists, attacking journalists, 19 were they part of a culture of openness? 20 A. I think it's unfair to take a few emails as symptomatic 21 of what the broader environment that we -- that I led in 22 the Communications Team at the Post Office. I've always 23 been hugely committed to openness and transparency with 24 journalists. I was a journalist myself for 14 years. 25 I've got a huge amount of respect for journalists and 27 1 journalism. On this particular issue, absolutely, I was 2 assertive. As I say, I regret that I was as assertive 3 as I was but, ultimately, I'm not a technical expert, 4 I'm not a legal expert. I had to operate based on -- in 5 good faith, on the information that I had to hand at the 6 time and did so in that way. 7 Q. They're not just a few emails, are they, though, because 8 the emails that I've shown you are over several years: 9 emails from 2013, emails from 2014, emails from 2015. 10 Emails from before the Second Sight Interim Report, 11 emails from after the Interim Report, and they all have 12 a very similar line about them, don't they? 13 A. They have a very line in the sense that we felt that the 14 actions that we were taking, the appointment of Second 15 Sight, the setting up of the Mediation Scheme, the 16 openness that we showed to Panorama in the initial 17 stages of our engagement with Panorama, we felt that 18 those issues were not being fully recognised. For 19 instance, with Panorama, we felt that it would have been 20 helpful if they'd have spoken to the National Federation 21 of SubPostmasters, who represent -- represented 6,000 22 postmasters at the time and who, I think as the Inquiry 23 is aware, didn't, at the time, didn't have any concerns 24 about the Horizon system, and it felt as though the 25 journalists had an agenda and that that agenda was to 28 1 say that the Post Office was in the wrong. Obviously, 2 context and hindsight tells us that we were in the wrong 3 and I deeply regret that that's the situation. 4 Q. Do you think that the Post Office did enough 5 investigating of its own to look into the problems with 6 Horizon? 7 A. Well, self-evidently, I don't think enough investigation 8 went into it. It's not really a question for me as 9 Communications Director. 10 Q. But you were communicating that very message, weren't 11 you, that Horizon was robust, nothing to see here. 12 Surely you can have an opinion as to whether the Post 13 Office carried out enough investigations and, frankly, 14 whether you personally looked into matters enough? 15 A. No, well, I mean, clearly not enough investigation went 16 on, because issues have emerged in the course of the 17 last few years that have shown that Horizon was far 18 more -- had far more faults, far more bugs in it than we 19 ever realised and ever understood at the time. So, 20 absolutely, for whatever reason the correct levels of 21 investigation didn't take place. I agree with that. Do 22 I -- as I said, I regret deeply that I didn't do more to 23 question internally. I always insisted that our 24 Communications Team, we weren't just effectively 25 a postbox for information. If colleagues told us 29 1 something, we would scrutinise it and push back. I wish 2 we'd pushed back harder, I wish I'd pushed back harder. 3 Q. I'm going to move on to the topic of Second Sight. Can 4 we begin with POL00164510. This is an email from Hugh 5 Flemington to Alwen Lyons, you, Rodric Williams, Jarnail 6 Singh and Lesley Sewell: 7 "1. We have a new criminal case starting in [that's 8 Birmingham] next Monday [and that's a matter we have 9 seen with other witnesses]. Jarnail to get [Cartwright 10 King] up to speed using Alwen to enable [Cartwright 11 King] to say something to the judge regarding bugs [the 12 Post Office] have found and disclosed ([the Post Office] 13 have found them, not [Second Sight] -- that's 14 an important PR point) ..." 15 Just pausing there, and we'll see it often repeated 16 that Post Office had found the bugs, were you aware, as 17 to whether it was Gareth Jenkins or the Post Office who 18 had notified Second Sight about bugs in Horizon? 19 A. I may have been aware. I don't recall. 20 Q. Do you ever recall asking anybody whether it was correct 21 that the Post Office found the bugs and notified Second 22 Sight? 23 A. I recall that I was told that Post Office had found the 24 bugs and told Second Sight. I don't recall whether 25 I questioned that or not. I would like to think I did 30 1 but I can't possibly recall whether I did or not. 2 Q. So: 3 "... using Alwen to enable [Cartwright King] to say 4 something to the judge regarding the bugs [Post Office] 5 have found and disclosed ([the Post Office] have found 6 them, not [Second Sight] -- that's an important PR 7 point) ..." 8 To what extent is a PR point relevant to a Crown 9 Court judge? 10 A. Well, that would be a question for -- sorry, who is this 11 email from? 12 Q. It's from Hugh Flemington? 13 A. That would be a question for Mr Flemington. I would 14 place a Crown Court judge very high above a PR point. 15 Q. "... and fact that a [Second Sight] Interim Report may 16 be coming out before the MPs summer recess (16 July) to 17 offer judge the chance to adjourn the case. That just 18 makes us look open and transparent and seems the prudent 19 thing to do." 20 Number 2: 21 "Mark D -- could we prepare an 'on the offensive' 22 [communications] statement to go out on Monday -- and we 23 send out letters to relevant affected [subpostmasters/ 24 ex-subpostmasters] of the 14 bug on Monday too?" 25 Now, this is something that we've seen with other 31 1 witnesses: there were these two bugs, what were referred 2 to there as the 64 and the 14 bugs and there are letters 3 that are going out to affected subpostmasters; do you 4 recall that issue? 5 A. I recall the issue in relation to the Second Sight 6 Interim Report. I don't, in all honesty, recall this 7 specific -- I mean, I've seen this email since it was 8 disclosed, obviously but I didn't -- when I saw it this 9 time, it didn't ring a bell. 10 Q. It says: 11 "Mark D -- could we prepare an 'on the offensive' 12 [communications] statement ..." 13 Do you think it was appropriate to prepare an "on 14 the offensive" communications statement when the Post 15 Office was notifying subpostmasters or former 16 subpostmasters of those two bugs? 17 A. As I say, I don't recall this email. I don't find this 18 language particularly -- I'm not keen on that. 19 Q. What would you have understood "on the offensive" to 20 have meant? 21 A. Well, I suspect he's suggesting that we do a proactive 22 press release of some kind to set out these issues but 23 I honestly don't recall what actually happened as 24 a result of this email. 25 Q. "This comms statement to include: 32 1 "[The Post Office] found the bugs and told [Second 2 Sight] (ie [Second Sight] didn't find them). 3 "[The Post Office] are being open about them. 4 "Get [Fujitsu] to confirm bugs don't affect the 5 transaction data." 6 There's then a Board meeting, a couple of days 7 later. Can we please look at POL00021515. We may see 8 other Board minutes. You're down in attendance. Were 9 you regularly in attendance at Board meetings? 10 A. I attended Board meetings on a fairly regular basis but 11 not routinely. 12 Q. Who invited you to those Board meetings generally? 13 A. I would generally be invited, well, by the Chair, but 14 Paula would have passed on the request. 15 Q. Did you have a personal relationship with the Chair? 16 A. I think, as is known to the Inquiry, I worked for a time 17 for the Chair's husband. 18 Q. That was Jack Straw? 19 A. That's correct. 20 Q. Was she your link to the Post Office: did you join 21 because of her or ...? 22 A. I heard about the vacancy at the Post Office and 23 applied. I went through a rigorous recruitment process, 24 which involved, I think, two or possibly three 25 assessment interviews plus an assessment day. I'd 33 1 certainly heard about the vacancy through my connection 2 but -- 3 Q. Which connection, sorry? 4 A. Through the fact that I'd previously worked for Jack 5 Straw. 6 Q. Who told you about the vacancy? 7 A. I don't recall. 8 Q. How do you recall that you'd heard about it through that 9 connection? 10 A. I think it was -- I was approached. I honestly can't 11 remember, Mr Blake. I think I was either approached by 12 a headhunter, potentially, or it could have been that it 13 was mentioned to me by Mr Straw. I honestly can't 14 recall. 15 Q. If it was through the connection then it wouldn't have 16 been a headhunter, would it? 17 A. I think -- well, obviously, the headhunter -- if it was 18 a headhunter, and I genuinely can't recall, they would 19 have recalled that I'd worked -- or they would have 20 known that I'd worked for Jack Straw and that Alice 21 Perkins was the Chair of Post Office. 22 Q. Returning to these minutes, at this particular meeting, 23 is there a lawyer present? 24 A. No. 25 Q. Do you recognise any IT specialists present? 34 1 A. No. 2 Q. If we scroll down, please, there is a section on 3 Horizon. I'm just going to read a couple of paragraphs 4 from that: 5 "(a) The CEO apologised for the short notice in 6 keeping the Board update but explained that issues had 7 arisen over the last couple of days. She gave an update 8 on the Horizon review which was being undertaken by 9 Second Sight and their Interim Report which was to be 10 presented at a meeting of MPs on 8 July. The 11 investigation to date had found no systemic issues with 12 the Horizon computer system but had highlighted areas 13 for improvement in support areas such as training. 14 "The CEO explained that the Horizon, like any large 15 computer system, would occasionally have anomalies and 16 two were known of over recent years. The business had 17 dealt with these anomalies to ensure no subpostmaster 18 was out of pocket and these anomalies had not affected 19 any of the cases which Second Sight had reviewed. 20 Second Sight had been told of these anomalies and they 21 would include them in their report." 22 Over the page, please: 23 "The CEO was concerned that the report from the 24 independent forensic accountants was not as factual as 25 expected and could lead to loose language at the MP 35 1 meeting. 2 "The Board asked the Business to challenge Second 3 Sight to ensure changes were made to the report where 4 possible and asked the Business to prepare their 5 communication to combat any inaccuracies." 6 We have there: 7 "Action: 8 "CEO/Mark Davies." 9 Why were you personally tasked with changing the 10 report of an independent investigation? 11 A. I don't think I was. I think the action that refers 12 there in (d) is to the business to prepare their 13 communication to combat any inaccuracies. I don't 14 believe that -- and I certainly didn't take it that 15 I was being asked to challenge Second Sight to ensure 16 changes were made to the report -- 17 Q. Do you recall seeing any copies of the report before it 18 was published? 19 A. I don't recall. I don't recall. 20 Q. Do you recall making any proposals to change a draft of 21 the report? 22 A. I'm as certain as I can be that I didn't. 23 Q. Do you think it is unusual, given that the context, that 24 the only two named people for action here are you and 25 the CEO? 36 1 A. Is it possible to just scroll back to who was in 2 attendance at the meeting, Mr Blake, if possible? 3 Q. Yes. 4 A. I'm surprised, looking at that list of attendees, that 5 Susan Crichton wasn't there at the time because my 6 understanding or my recollection is that she sort of 7 held the relationship with Second Sight at that time. 8 So I'm surprised that she's not listed as being present. 9 Q. Do you recall the relationship with Susan Crichton and 10 the Board at this time? 11 A. No, I don't. 12 Q. Are you aware of any reason why she might not have been 13 present at the Board? 14 A. I'm not, no. 15 Q. Have you heard any suggestions relating to why she might 16 not have been at the board? 17 A. No. 18 Q. Can we please look at POL00296941. This is a draft 19 briefing to Paula Vennells of 1 July, so the same day. 20 Is this a document you recall? 21 A. Only since I've seen it disclosed for the Inquiry. 22 I may have seen it when it was first produced but 23 I cannot recall if I did or not. 24 Q. If we scroll over the page, it's a briefing on the 25 Second Sight review, Interim Report. Is it likely that 37 1 you would have seen this at the time? 2 A. I think it's likely. 3 Q. Could we please turn to page 6, bottom of page 6 into 4 page 7 is the "Forward Strategy": 5 "Plan A: Meet [James Arbuthnot] and try to persuade 6 him to postpone his meeting with Second Sight on 7 Tuesday, 9 July. 8 "If not successful, Plan B: We are preparing a full 9 communications strategy and will consider rebuttal and 10 tactics in line with an approach aimed to minimise 11 reputational impact to Post Office Limited." 12 Do you recall there being this Plan B? 13 A. Absolutely, in terms of the Second Sight Report, as with 14 any major report, which would have had external focus, 15 I would have been asked to come up with a -- to work 16 with my team to produce a communications strategy and 17 I think that's -- you know, that's not unusual at all. 18 Q. It certainly reads as though Plan B is to go against 19 Second Sight; do you agree with that? 20 A. No, I don't agree with that. On the contrary, actually, 21 I do recall at the time I was extremely keen that we 22 were very open about the Second Sight Report. I can't 23 say whether it was my idea that we published the Second 24 Sight Report externally but I certainly was very 25 supportive of that, as I was supportive of issuing 38 1 a press release to go on the same day as the Second 2 Sight Report being published. 3 Q. Rebuttal and tactics sound very much like the plan was 4 to rubbish Second Sight's findings? 5 A. That's absolutely not correct. 6 Q. If we scroll down, please, we have "Key Messages". It 7 says for you to "review and amend as necessary", so it's 8 likely that this did land on your desk? 9 A. Oh, very likely, yeah. 10 Q. "With respect to the 62 Branch and 14 Branch anomalies", 11 points to be made are, for example: 12 "We found the anomalies ... 13 "The anomalies were detected, resolved, and we 14 communicated the problem to subpostmasters." 15 Do you recall who was responsible for developing 16 these points? 17 A. Well, my team would have been -- I and my team would 18 have been responsible for developing the -- a press 19 release based on the report, but not -- so where it says 20 there, "With respect to the 62 Branch and 14 Branch 21 anomalies", we would have been asked to take these 22 points into consideration as we developed a press 23 approach, a press release, which I think was then -- 24 well, I know was then developed. Obviously, that 25 wouldn't be done in isolation of the wider business, as 39 1 no piece of communications ever was done in isolation of 2 the wider business; it would have been a collaborative 3 approach across the business, including obviously Legal, 4 IT, Network, Security, et cetera, et cetera, and I'd 5 imagine, in this case, although obviously it's -- 6 I think it's 11 years ago, I imagine Fujitsu -- we would 7 have liaised with the Fujitsu Press Office as well, 8 which we did as a matter of course on these matters too. 9 Q. Can you assist us with that? You say as a matter of 10 course. So you had a counter part at Fujitsu that you 11 liaised with? 12 A. Yeah, of course. So the Post Office -- it might help 13 the Inquiry if I just set out briefly what the Post 14 Office Communications Team comprised of. I mean, it 15 comprised of a Press Office of, I think, four or five 16 press officers, a Stakeholder Management Team, who 17 worked with MPs and councillors and other stakeholders, 18 an Internal Communications Team which, obviously, was 19 responsible for internal communications with our 20 colleagues, our employed colleagues but also our 21 franchised colleagues and the postmaster community as 22 well, and then the people who put together the website 23 and other elements too. 24 So whenever a report such as this one -- and there 25 were many reports and press initiatives during the time 40 1 I was at the Post Office -- were developed, they would 2 effectively come to us -- whichever part of the business 3 was leading on the issue, would come to us and say, "We 4 need a press strategy, a media strategy and an internal 5 communications strategy for it, as well". So we would 6 then work with whichever part of the business that was 7 to put together the relevant materials. So it might be 8 a press release, it might be an internal communications 9 piece and I think, for the Second Sight Report, or from 10 my recollection, is, and I'm sure it's the case, that we 11 produced a press release but we'd have also produced 12 internal communications materials as well, to talk to 13 the business to tell the story of what was happening in 14 relation to the Second Sight Report. 15 Sorry, does that help? 16 Q. Well, Mr Davies, the impression that you're giving is 17 certainly one where you were just effectively carrying 18 out the orders of others within the business but we saw 19 at the Board that you were, actually, specifically 20 tasked with the response, weren't you, at Board level? 21 A. Specifically tasked with the response in terms of 22 creating the communications package, absolutely. I -- 23 Q. So it wasn't just a press release. It wasn't 24 anything -- part of your usual day-to-day work. This 25 was a Board level direction for you to personally direct 41 1 the response to the Second Sight Interim Report? 2 A. I think it's really important to say that the media 3 response, so the creating a press release, creating 4 an internal communications messaging, I think to go back 5 to the Board meeting. It is absolutely not the case 6 that I was tasked with trying to persuade Second Sight 7 to change their report. That did not happen. What did 8 happen was I was tasked with creating a press media 9 communications response, absolutely. 10 Q. You were mentioning Fujitsu. Who did you liaise with at 11 Fujitsu? 12 A. I don't recall -- sorry, you did ask me that question, 13 apologies. I don't recall specific names and most of 14 the communication between my team, the Press Office 15 Team, would have been directly between my Press Office 16 Team and the Fujitsu Press Office team and, obviously, 17 Fujitsu like any other organisation, like the Post 18 Office, has its own media team. 19 Q. Did you have somebody you could pick up the phone to at 20 Fujitsu? 21 A. I don't recall names but I dealt with the Director of 22 Communications, I think it was, at the time. I don't 23 recall names, though, apologies. 24 Q. Would you feed them technical questions, for example? 25 A. No, I mean, most of the sort of day-to-day questions on 42 1 technical matters would go via my Press Office, our 2 Press Office, the Communications Press Office, 3 absolutely. I didn't get involved in dealing with 4 technical questions myself. But any technical questions 5 that were being fed to Fujitsu would also be fed through 6 the IT Team as well. So it was a collaborative 7 approach. There wasn't a sort of separate set of people 8 asking questions and then another set of people asking 9 questions, if that makes sense. 10 Q. Given that you were responsible for the strategy, why do 11 you say that you weren't getting involved with the 12 technical matters? Wasn't that quite an important part 13 of your job? 14 A. Well, essentially, we would be -- the Second Sight 15 Report would be presented to us and we would then take 16 that report and then build out a press release from the 17 report, and then, in doing so, liaise with other 18 colleagues within the Post Office and also with Fujitsu. 19 So we wouldn't be taking raw material ourselves and 20 creating material ourselves; we would be building out 21 from the existing report. 22 Q. Can we look at POL00029627. This is the very next day, 23 and it's a later draft of the same briefing note. Can 24 we look at page 6, please, the bottom of page 6 into 25 page 7. So we see at the very bottom the forward 43 1 strategy the wording has slightly changed there because 2 Plan A, it now says, "This is unlikely to be 3 successful". So by the day after the board meeting, it 4 seems as though the likely scenario is that you're going 5 to have to prepare a full communications strategy. Do 6 you recall that? 7 A. I really don't recall the interplay between the meeting 8 with Lord Arbuthnot, as he is now, and the 9 communications strategy. I don't recall those two 10 things being connected. I think our intention always 11 was that we would publish the Second Sight Report. 12 Q. Do you think it may be surprising that, by that stage, 13 your plan was to rebut and develop tactics in respect of 14 a firm of independent investigators that had been 15 instructed by the Post Office to carry out 16 an independent investigation? 17 A. No, because rebuttal and tactics would refer to what 18 questions we might receive off the back of the Second 19 Sight Report, so we would receive questions relating to 20 the report. So we would therefore have -- and where it 21 says, "Rebuttal" that effectively means a Q&A, a set of 22 question and answers that we would expect to be asked by 23 journalists or others. "Tactics" is really about 24 whether we would do TV interviews about it? Would we do 25 radio interviews about it? Would we put out an internal 44 1 communications plan? Would we contact MPs, other than 2 Lord Arbuthnot? Those sort of considerations. So it 3 doesn't strike me as surprising. 4 Q. Aiming to minimise reputational impact on Post Office in 5 respect of an independent report -- I'll go back to the 6 questions that I was asking first today, which is: do 7 you think that was part of a culture of openness? 8 A. I think that managing reputational risk for any large 9 organisation, such as Post Office, is a fundamental part 10 of a Communications Team, along with facilitating 11 responses, along with informing key audiences about new 12 products, about the performance of the business, 13 et cetera, et cetera. Minimising reputational risk is 14 part and parcel of communications -- the communications 15 profession. 16 MR BLAKE: Thank you, sir. That might be an appropriate 17 time to take our morning break. 18 SIR WYN WILLIAMS: Yes, by all means. 19 MR BLAKE: Thank you very much. 20 SIR WYN WILLIAMS: Let me just check. 21 MR BLAKE: I think 11.05. 22 SIR WYN WILLIAMS: Yes, 11.05. 23 (10.52 am) 24 (A short break) 25 (11.05 am) 45 1 MR BLAKE: Thank you, sir. 2 Can we please turn to POL00189880. We're on the 3 same day, 2 July 2013, and you have drafted a statement, 4 and you are seeking comments from various people. Could 5 we please look at the statement, it's POL00189881. I'm 6 just going to read to you from the statement quite a lot 7 of text that I will go through. It starts: 8 "DRAFT Post Office statement on Horizon system. 9 "An interim review into concerns around the computer 10 system used in the Post Office branches has concluded 11 that there are no systemic issues in relation to the 12 system, the Post Office has announced. 13 "The review -- undertaken independently by Second 14 Sight Support Services Limited in consultation with the 15 Post Office, James Arbuthnot MP and Justice for 16 Subpostmasters Alliance -- addressed four cases raised 17 by MPs. 18 "It found no evidence of any systemic failures in 19 the system. The Post Office now plans to invite the 20 JFSA to work with it and Second Sight to complete its 21 review of [further] cases ..." 22 If we scroll down, please. It says: 23 "As a result, Post Office Limited plans to create 24 a User Forum to explore these issues with the JFSA and 25 other interested parties. The User Forum will be 46 1 chaired by Post Office Chief Information Officer Lesley 2 Sewell." 3 Just pausing there, is that User Forum the forum 4 that was originally going to be described as the Horizon 5 Forum? 6 A. I think so. 7 Q. It then says: 8 "During the course of the Second Sight Review, the 9 Post Office -- assisted by its supplier Fujitsu -- has 10 engaged with Second Sight to provide evidence around the 11 use of the Horizon system. 12 "This included details of where accounting shortages 13 or overpayments have occurred as a result of minor 14 issues in the system. This amounted to two sets of 15 transactions -- one impacting 62 of the Post Office's 16 11,800 branches between March and October 2010 and the 17 other affecting 14 branches due to an anomaly with 18 accounting entries for 2010/11 being incorrectly 19 reproduced in 2011/12 and 2012/13 ... 20 "The accounting anomalies in these cases were picked 21 up by the Horizon system, Post Office proactively 22 informed subpostmasters and any losses -- however 23 minor -- were reversed." 24 You then have an announcement from Lesley Sewell, it 25 says: 47 1 "Lesley Sewell said: 'We are grateful to James 2 Arbuthnot MP for his support for the Second Sight 3 Review, and to Second Sight themselves for their work. 4 "'The Post Office takes its responsibilities -- 5 whether to customers, subpostmasters, staff or 6 taxpayers -- very seriously and it is right that we took 7 the steps to ensure that claims about the Horizon system 8 were reviewed. 9 "'Having done so, Second Sight has confirmed that 10 there are no systemic issues in the computer system. We 11 will of course continue to work with them, and with the 12 JFSA, to examine other cases put to us'", and it 13 continues. 14 At the time you drafted this statement, had you read 15 the Second Sight Report? 16 A. I'm sure I had, yes. 17 Q. Can we please turn to page 1 of this document and also 18 bring on to screen alongside it the Second Sight Interim 19 Report, and that is POL00099063. So we now have on the 20 left-hand side the Second Sight Report. Can we please 21 turn to page 5 on the left-hand side, page 5 of the 22 Interim Report. 23 Thank you very much. If we could scroll down to 6, 24 thank you: 25 "Did defects in Horizon cause some of the losses for 48 1 which subpostmasters or their staff were blamed?" 2 It says: 3 "There is still much work to be done on the cases 4 Second Sight has been asked to investigate. We have 5 concluded in one of the four spot reviews [so a quarter 6 of the reviews carried out] covered by this Interim 7 Report that, although the Horizon system operated as 8 designed, the lack of timely, accurate and complete 9 information presented to the subpostmaster was 10 a significant factor in his failing to follow the 11 correct procedure. 12 "In that incident, shortcomings in the branch's 13 primary and fallback telecommunications equipment 14 exposed a weakness that led to a poor counter-level 15 experience both for the [subpostmaster] and his 16 customer." 17 It then refers to another spot review and then at 18 6.4 it says: 19 "In the course of our extensive discussions with 20 [the Post Office] over the last 12 months, [the Post 21 Office] has disclosed to Second Sight that, in 2011 and 22 2012, it had discovered 'defects' in Horizon Online that 23 had impacted 76 branches." 24 Over the page, please. Thank you. 25 It says: 49 1 "The first defect, referred to as the 'Receipts and 2 Payments Mismatch Problem' impacted 62 branches. It was 3 discovered in September 2010 as a result of Fujitsu's 4 monitoring of system events ... The aggregate of the 5 discrepancies arising from the system was £9,029 ... 6 "The second defect, referred to as the 'Local 7 Suspense Account Problem', affected 14 branches and 8 generated discrepancies totalling £4,486 ..." 9 Then it says this, at 6.7 onwards: 10 "[The Post Office] was unaware of the second defect 11 until a year after its first occurrence in 2011, it 12 reoccurred and an unexplained shortfall was reported by 13 a [subpostmaster]. 14 "[The Post Office's] initial investigations in 2012 15 failed to reveal the system defect and, because of the 16 cause could not be identified, the amount was written 17 off. Fujitsu looked into the matter in early 2013 and 18 discovered, and then corrected, the defect. 19 "It seems, however, that the shortfalls and 20 surpluses that occurred at the first occurrence (in 21 2011) resulted in branches being asked to make good 22 incorrect [accounts]. 23 "[The Post Office] has informed us that it has 24 disclosed, in witness statements and English courts, 25 information about one other subsequently-corrected 50 1 defect or 'bug' in the Horizon software." 2 Now, on the right-hand side, can we please scroll 3 down to the passage that begins with "This included 4 details". Thank you. 5 In your draft press release, after having read the 6 Second Sight Report, you say as follows: 7 "There included details of where accounting 8 shortages or overpayments have occurred as a result of 9 minor issues in the system. This amounted to two sets 10 of transactions ... " 11 You say: 12 "In the first of these cases, 17 subpostmasters were 13 ... affected -- and later reimbursed ... 14 "In the second set of cases, the total impact was 15 xxx. 16 "The accounting anomalies in these cases were picked 17 up by the Horizon system, Post Office proactively 18 informed the subpostmasters and any losses -- however 19 minor -- were reversed." 20 Is that correct? 21 A. It would seem that that's not correct, in that draft 22 press statement. 23 Q. Because they weren't picked up, in some cases, for 24 a significant period of time? 25 A. It appears that that statement has, to some degree, sort 51 1 of, you know, collapsed a load of different elements 2 into one, and yeah, it would appear to be inaccurate, 3 that. 4 Q. There's also no mention there of the additional bug, is 5 there? 6 A. No. 7 Q. On the left-hand side, if we scroll down to frequently 8 reported issues, they set out at 7.2: 9 "The following issues have been reported to us by 10 multiple subpostmasters as being of particular concern 11 about the Horizon system: 12 "A multi-product system that is far more complex and 13 demanding than, for example, that found in a typical 14 high street bank; 15 "Multiple transactional interfaces ... 16 "Unreliable hardware leading to printer failures, 17 screen misalignment ... and failed communications links; 18 "The complexity of end of Trading Period processes 19 ... 20 "Inexperienced trainers and gaps in training 21 coverage; 22 "The lack of some form of onsite supervision and 23 quality control ... 24 "The receipt of centrally input, overnight 25 'corrections' and other changes allegedly not input by 52 1 subpostmasters or their staff; 2 "Inadequate Helpdesk support, with responses that 3 are 'script based' and sometimes cause further or 4 greater problems; 5 "[Post Office] Investigation and Audit Teams that 6 have an asset recovery or prosecution bias and fail to 7 seek the root cause of reported problems; 8 "A contract between subpostmasters and the Post 9 Office that transfers almost all of the commercial risk 10 to the subpostmasters, but with decreasing support being 11 provided. In its risk/review decision making, [the Post 12 Office] benefits from any savings, while subpostmasters 13 may suffer increased risk." 14 Are those concerns of Second Sight reflected in the 15 draft announcement that I have just taken you to on the 16 right-hand side? 17 A. They're only reflected in the sense that we highlight 18 the need for improvement in terms of training and 19 support, et cetera, et cetera, and the response to be to 20 create the user forum to look into those issues and 21 others and, of course, I suppose the other thing I'd say 22 is that we also intended, and did, publish the entire 23 Second Sight Report. So all of those things, as set 24 out, were on the record, on the public record. 25 And, by its nature -- sorry to continue -- by its 53 1 nature the press release was a summary, if you like, of 2 the overall report. 3 Q. You've already accepted it was an inaccurate summary in 4 relation to bugs, errors and defects in the system? 5 A. Yeah, I hope that that's a -- that's a draft press 6 statement. I obviously haven't seen the final press 7 statement. I don't recall it. I hope those anomalies, 8 those mistakes, would have been picked up. If they 9 weren't, then that's a matter of really grave respect, 10 as opposed to -- 11 Q. Your evidence was that you drafted it having read the 12 report that is on the left-hand side of our screen. 13 A. Yeah. 14 Q. It's pretty clear that you are putting a very positive 15 spin on the Second Sight Report, aren't you? 16 A. I think it's a summary of the report. 17 Q. Well, it's not a summary; it's an inaccurate summary, 18 of, the Report, isn't it? 19 A. Well, there are points in there that I would, if I was 20 writing it again, I would be absolutely much clearer 21 about, yeah. 22 Q. Not clearer. There are points in there that are just 23 wrong, aren't there? 24 A. Yes. 25 Q. If we stick to the left-hand side and scroll down, 54 1 please, to paragraph 8 on page 8. Left-hand side, 2 "preliminary Conclusions" -- so a big header 3 "Preliminary Conclusions": 4 "This is an Interim Report and there is much work 5 still to be done. Any conclusions reached at this point 6 will need to be updated in the light of new information 7 that arises as the investigation continues. 8 "Our preliminary conclusions are: 9 "(a) We have so far found no evidence of system wide 10 (systemic) problems with the Horizon software ..." 11 If we look at the right-hand side and scroll up to 12 the top of that page, please, you will recall, I read it 13 out, it says: 14 "An interim review into concerns around the computer 15 system used in Post Office branches has concluded that 16 there are no systemic issues in relation to the system 17 ..." 18 Then it says in the third paragraph: 19 "It found no evidence of any systemic failures in 20 the system." 21 Does your proposed statement say anywhere that there 22 was much work still to be done? 23 A. No. I say Second Sight has called on the Post Office to 24 examine its information technology training support, but 25 no. 55 1 Q. Does it say anywhere that the conclusions are 2 preliminary? 3 A. No. It describes it as an interim review, but no. 4 Q. Does it say anywhere that the suspense account problem 5 took years to correct? 6 A. No. 7 Q. Does it say anywhere that there was a third bug in the 8 system that was identified? 9 A. No. 10 Q. Is the word "defect" or "bug" used anywhere in your 11 statement? 12 A. Sorry, I don't recall how we referred to them, if it's 13 possible to scroll down? 14 Q. Absolutely. 15 A. I presume not but ... 16 Q. I mean, for example: 17 "This included details of where accounting shortages 18 or overpayments had occurred as a result of minor issues 19 in the system. This amounted to two sets of 20 transactions ..." 21 I mean, do you think that your draft statement that 22 was drafted after reading the Second Sight Report was in 23 any way an accurate reflection of what Second Sight had 24 found? 25 A. I think if I was writing it again, I would write it 56 1 more -- I would be more -- I would be clearer. 2 Q. Is that because you would now be more ethical than you 3 were at the time? 4 A. No. 5 Q. You have entirely removed the sting from the report, 6 haven't you? 7 A. No, I don't believe so and I think, again, I'd say that, 8 because we were publishing the report itself, in its 9 entirety, I think it's reasonable to say that the report 10 would therefore be in the public domain. 11 Q. You were working for a company that was wholly owned by 12 the Government. Did you think that it was appropriate 13 in those circumstances to spin the report in this way? 14 A. I reject the word "spin". I wasn't seeking to spin. 15 I don't recall whether this is the final press release 16 that we issued. I don't know what processes it went 17 through after this point and it probably went through 18 a number of different colleagues. I was seeking, 19 probably too hurriedly, to put together a summary of the 20 report but absolutely doing so in the full and certain 21 knowledge that we would be publishing the full report. 22 So it would be there for the public and others to 23 make -- to draw their conclusions. 24 Q. Mr Davies, I won't use the word "spin". Did you think 25 it was appropriate to lie, the way that you have on the 57 1 right-hand side, in the press release? 2 A. I think -- I don't believe that I've lied there. 3 Q. Do you think, working for a company that was wholly 4 owned by the Government, that that is an appropriate 5 press release to have drafted, having read the report on 6 the left-hand side? 7 A. I think if I'm guilty of anything there, it's of being 8 sloppy. I've never lied in my entire career and 9 I certainly didn't lie at any point during this -- over 10 this issue either. 11 Q. Can we please return to an email we looked at this 12 morning, it was POL00297030, and if we look at page 3, 13 please. If we scroll down, we can see that Susan 14 Crichton has sent around a brief of Paula Vennells and 15 Alice Perkins, 2 July 2013. So the same day. 16 If we scroll up, please, it's a brief for a meeting 17 between Alice Perkins and Paula Vennells and 18 Lord Arbuthnot that has been produced by Alwen Lyons and 19 Susan Crichton, just prior to the release of the Second 20 Sight Report. 21 If we scroll up, please, to the bottom of page 1, so 22 this is an email from you -- I took you to it this 23 morning -- where you say: 24 "The speaking note needs to be firmer -- we want to 25 make clear our position and underline our view that no 58 1 evidence to support systemic failures." 2 If we scroll down, please, you say: 3 "On training, we need to be very careful about 4 language -- the current version is too loose -- this is 5 your point about not leaving any glimmer which suggests 6 that cases might need to be reopened. So we need to 7 acknowledge that training can always be improved (rather 8 than our training must be improved -- important 9 difference) and need to follow that with further 10 statement that there is no evidence of systemic 11 failures. 12 "The brief needs to make clear that none of the 14 13 or the 62 impact on the spot reviews in the Interim 14 Report and are therefore not relevant to the Interim 15 Report." 16 This the passage I took you to earlier: 17 "We shouldn't call the user group a 'Horizon' user 18 group -- makes it appear as we are acknowledging user 19 issue with Horizon -- branch management user group?" 20 You then say a bit further down: 21 "It may be worth setting out three overall 'rocks' 22 for the two of them to return to: 23 "[1] there is no evidence in the Interim Report to 24 support any suggestion of systemic failures. 25 "[2] this is a system which deals with six million 59 1 transactions a day or more than 40 million a week, and 2 is used by more than 50,000 people every day. 3 "[3] we must be satisfied that when the report is 4 released it truly reflects the position -- the Post 5 Office business is too important to do many people for 6 either to be questioned unfairly. 7 "Another point which needs bringing out is the 8 public money point. We do have a duty to protect public 9 money and where there's wrongdoing, we must act. It 10 would be entirely wrong if we did not. We want to 11 support our people and we will make sure that we do 12 everything we can to improve training and support in 13 order to ensure that their stewardship of public funds 14 questioned be questioned." 15 This is more than just drafting of a press release, 16 isn't it? You are here carrying out the task that was 17 proposed at the Board meeting, to take forward the 18 entire strategy with regards to the response to the 19 Second Sight Interim Report? 20 A. Can I clarify, this email is related to the speaking 21 note for Lord Arbuthnot; is that right? 22 Q. Yes. 23 A. So it's not in relation to the press release? 24 Q. No. Well, it's the same day and it follows the Board 25 meeting the day before, where you've been tasked with, 60 1 you say, a communications response. 2 A. Mm. 3 Q. But is does very much seem as though, by 2 July, you 4 were getting involved in the company's response? 5 A. Oh, I mean -- 6 Q. You weren't simply issuing press releases; you were 7 actually involved in developing a strategy for the 8 company and developing here "rocks" to return to. 9 A. Mm. I mean, the company's position would be the 10 position as set out in the press release. They weren't 11 separate pieces of work. So -- 12 Q. So the press release would lead the company's position? 13 A. It would. 14 Q. Do you think that was appropriate? 15 A. Well, that draft -- I haven't seen the final press 16 release that was issued. I would, you know, if that 17 draft release that we've seen was the final release, 18 then clearly not and I take full responsibility for 19 that. But, in terms of the sort of broader company 20 position, as set out here, there was no evidence in the 21 Interim Report to support any suggestion of systemic 22 failures and we were operating at the time with no 23 indications at all from the 6 million transactions every 24 day and the 50,000 people using it that there was 25 an issue with the system, and it was really important -- 61 1 really, really important -- that, you know, for 2 a business as important as the Post Office to so many 3 millions of people -- so many millions of customers but, 4 obviously, also clients, as well, not to mention 5 postmasters, that we were absolutely clear about our 6 view at the time about the Horizon system, which leads 7 to the public money point as well, and I think those 8 four rocks are reasonable and justified in the context 9 of what the report had told us. 10 Q. Mr Davies, shouldn't a company sit down, develop its 11 strategy and then the Communications Team communicate 12 that? What's happening here is the Communications Team 13 are developing the corporate strategy. In fact, the 14 Head of the Communications Team is developing the rocks 15 to rely upon, aren't you? 16 A. No, that's not the case at all. It's not how 17 Communications Teams operate and certainly not in my 18 experience anyway. Obviously, the Communications Team 19 has a significant part to play in the development of the 20 position that the company would take externally and, of 21 course, responsibility for issuing press releases for 22 developing press releases and for making suggestions and 23 strategic and tactical elements of any external 24 communication is obviously a fundamental part of the 25 Communications Team. That doesn't mean that it operates 62 1 separately from the rest of the business and it 2 certainly didn't at the Post Office. I'm putting my two 3 penn'orth in here, if you like. I can't recall where we 4 ended up with the final press release but it's certainly 5 the case that, obviously, you know, communications was 6 an influential part of a wider company structure, of 7 course, which included IT, Network and, obviously, the 8 CEO and others as well. 9 Q. You see there's not very much involvement in the IT Team 10 in these kinds of messages, is there? That might have 11 been useful but it's the -- 12 A. Well, I think -- 13 Q. -- Communications Team developing the rocks. 14 A. Apologies, I didn't mean to interrupt. I think the IT 15 Team would have absolutely been involved in developing 16 the position. I think Lesley -- Lesley Sewell -- was on 17 that initial draft press statement and, obviously, 18 I would never want a Communications Team to put out 19 information that was incorrect from an IT perspective. 20 Q. Can we please turn to POL00190546, starting at page 2. 21 You are there sending internally a draft letter to James 22 Arbuthnot: 23 "... following the meeting this morning. Alwen is 24 writing up her notes so we may flesh it out further, but 25 grateful for immediate thoughts and amendments please." 63 1 Were you present at that meeting with James 2 Arbuthnot? 3 A. I don't recall. I did attend at least one meeting, 4 I think, with Lord Arbuthnot, but I don't know if it's 5 this specific one. 6 Q. If we scroll up, please, to the bottom of page 1, Susan 7 Crichton has provided some comments. If we scroll up to 8 the very top, you say as follows: 9 "Thanks for all the comments on the letter. I have 10 attached a third draft which I hope is final. It has 11 added an important section on the exceptions which 12 I need clearing and comments from all those copied, 13 tonight or first thing tomorrow if possible please (and 14 sorry)." 15 "Exceptions": is that bugs? 16 A. Yes. 17 Q. Who did you expect on that copy list to be the person to 18 help you clear the section on exceptions? 19 A. Well, Lesley Sewell is -- was the CIO at the time. That 20 would be -- she'd be the person that I'd expect there, 21 yeah. 22 Q. Can we please turn to POL00190547 and this is the draft 23 letter that is attached to this email, to 24 Lord Arbuthnot: 25 "Thank you for your time yesterday. I felt it was 64 1 a very useful meeting and thought it would be helpful to 2 follow it up by putting together this note of the key 3 points." 4 Scrolling down, there's a section on "The Second 5 Sight review and next steps": 6 "As you know, the draft report we expect to receive 7 on Friday represents the conclusion of the interim 8 review by Second Sight into four specific cases. We 9 will of course take on board its findings where it is 10 possible to do so. In particular, we are keen to work 11 even more collaboratively with the [Justice for 12 Subpostmasters Alliance] to conclude the Second Sight 13 review. We believe this is critically important." 14 Just pausing there, do you think that was an honest 15 reflection of the company's position at that time? 16 A. In the sense of wishing to work collaboratively with the 17 JFSA and others to conclude the Second Sight review? 18 Q. Yes. 19 A. Yes, I do. 20 Q. If we go over the page, we have the section on 21 "Exceptions", otherwise known as bugs: 22 "We discussed the small number of exceptions or 23 anomalies ..." 24 I mean, the very first document I took you to was 25 the email from Paula Vennells who had spoken to her 65 1 husband, who suggested the terms "exceptions" or 2 "anomalies"? 3 A. Mm. 4 Q. That's that language now incorporated into your 5 corporate documents and draft letters? 6 A. Mm. 7 Q. Do you recall doing that intentionally? 8 A. I don't recall doing it intentionally. Clearly, I've -- 9 I have done. 10 Q. "... small number of exceptions or anomalies which Post 11 Office had brought to the attention of Second Sight 12 during its review and which had been dealt with in the 13 appropriate way, namely that they were picked up by the 14 Horizon computer system, corrected and subpostmasters 15 were contacted where it was relevant to do so." 16 Was that right? 17 A. I think that's correct. 18 Q. I mean, we saw earlier how long it took to correct those 19 issues. 20 A. Mm. 21 Q. Do you think that is -- again, I know you object to the 22 word "spin" but do you think that is a full and frank 23 description or summary of what happened? 24 A. Oh, I think this is a summary of a meeting with 25 Lord Arbuthnot. In the context of a summary, I think 66 1 this is fair. 2 Q. We then, if we scroll down, get to a section on remote 3 access, "Access to live data"; did you draft this 4 section? 5 A. I can't recall if I drafted that section or not. 6 Q. Reading the words there, is it likely that you draft 7 that section? 8 A. I think it's unlikely. 9 Q. You sent around the first draft letter to James 10 Arbuthnot following the meeting. This is a draft of 11 that letter. Why do you think it's unlikely that you 12 drafted that section? 13 A. I suspect that, in drafting the letter, I've probably 14 talked to colleagues in the IT Team to -- on this 15 specific issue around access to live data and 16 incorporated their response on this particular issue 17 around remote access into it. 18 Q. So, in fact, is your evidence that you are likely to 19 have drafted it but just with input from others? 20 A. Yes. 21 Q. You say: 22 "Finally, during our meeting you also asked us about 23 an email which has been brought to your attention having 24 come up during the Second Sight review. I have looked 25 into this and can provide you for the following on this 67 1 issue. 2 "The email Ms Read to Second Sight alongside many 3 others after they requested email access to the system 4 testing team based in Bracknell. 5 "The email in question was sent by a junior Business 6 Analyst ... to a wide distribution list, including some 7 members of the test team. [It] contained the following 8 words: 9 "'Although it is rarely done it is possible to 10 journal from branch cash accounts. There are also 11 [Product and Branch Accounting] concerns about how this 12 would be perceived and how disputes would be resolved'. 13 "Second Sight have asked us whether this indicates 14 that the Bracknell team had access to live data. This 15 is not the case." 16 If we scroll down, it says: 17 "It is not possible to automatically send accounting 18 updates from the POLSAP system to the Horizon system. 19 If changes do need to be made, this can only take place 20 with the agreement and acceptance of any change by the 21 relevant subpostmasters (what we call the transaction 22 correction process). In the case discussed in the 23 email, there was no change in the subpostmasters cash 24 position, therefore no [transaction correction] would 25 have been required." 68 1 Who do you think provided you with this information? 2 A. I can't recall. Apologies. 3 Q. Are you able to assist with which department provided 4 you with that information? 5 A. Well, it would have been from within the IT Team. So, 6 I mean, I think Lesley Sewell's team would have been the 7 team that would have input into that part of this -- of 8 what is a draft letter for, I assume, for Paula to send 9 to Lord Arbuthnot. 10 Q. Did you yourself carry out any investigations or 11 enquiries, further than asking the IT Team? 12 A. Well, insofar as I asked the IT Team for their position 13 in response to that section in italics on the page, 14 I mean, they were the -- you know, I have asked the 15 question of a technical team in response to that 16 specific question around Product and Branch Accounting 17 concerns, and that's the response I have received, and 18 I'm not a technical expert; I'm a communications expert, 19 and so I had to rely on what I was told. 20 Q. Can we please look at POL00115973, please. We are now 21 on 6 July 2013, if we scroll down, perhaps we can start 22 on the bottom of page 3. Saturday, 6 July, you're 23 emailing Paula Vennells and you say: 24 "Hi Paula 25 "I think this points to the need for our package of 69 1 measures to include two and possibly three new 2 initiatives: 3 "1. A Branch User Forum -- for existing users to 4 share views, discuss issues, examine processes etc. 5 Chaired by ExCo reporting to ExCo. But this doesn't 6 cover historic issues (ie the JFSA and MP cases) so we 7 could also have (2)." 8 (2) is: 9 "A working party, to use Alan's phrase, to complete 10 the MP and [Justice for Subpostmaster Alliance] cases. 11 This could 'take over' the Second Sight review (perhaps 12 involving them but perhaps not as they have effectively 13 'cleared' Horizon, the remit of their Inquiry)." 14 Just pausing there: did you really think the Second 15 Sight Interim Report had effectively cleared Horizon? 16 A. It's a very broad summary of what they found. 17 Q. It's a wrong summary of what they found, isn't it? 18 A. Well, their preliminary findings were that there were no 19 systemic issues with Horizon and I think -- 20 Q. Does that clear Horizon? 21 A. I think that's probably why I've put it in inverted 22 commas in an email. 23 Q. "This would involve the JFSA and us working 24 collaboratively on the remaining cases." 25 If we scroll down, please, thank you. 70 1 "3. A review by a Mike O'Connor or Patrick Burns 2 figure to consider potential independent levers which 3 could be developed to give [subpostmasters] a means of 4 independent adjudication or (non-statutory) ombudsman." 5 Then you say this: 6 "This package, it feels to me, covers all bases. If 7 it looks ahead to fix internal issues and create 8 independent balancing view, but it also completes the 9 review and has the potential for doing so with [Second 10 Sight] playing a different, or no, role. 11 "It is also a compelling package for media, which 12 handled carefully, could contain the story." 13 It seems there that what you're doing is making 14 proposals to take matters forward for the company to 15 contain the story. You're making substantive proposals 16 for the conduct of the Second Sight or post-second Sight 17 way forward. 18 A. I'm absolutely making proposals. The Second Sight 19 Report contained some really disturbing elements in 20 terms of the way in which postmasters had been treated, 21 in terms of training and support, and there was a huge 22 amount of concern within the business about that and 23 a huge amount of concern and desire to try to fix it, to 24 try to change the way in which we operated as 25 a business, and so what I'm doing there is actually 71 1 putting forward proposals for starting to deal with that 2 and there was ongoing discussions within the business 3 about how we might address those things. 4 Is it possible to scroll back up to the two points 5 above? 6 Q. Yes. 7 A. So, you know, yes, absolutely, a Branch User Forum to 8 look at some of the issues that had been highlighted by 9 Second Sight, and that was set up. A working party, to 10 use Alan's phrase, well, I think in a way what happened 11 there was that we created the Mediation Scheme. And 12 then, on the third point, if it's possible to scroll 13 down, a review. Well, I guess that covers the -- it's 14 sort of covered by the Mediation Scheme as well and we 15 were looking at whether -- and it was one of the things 16 I thought might be of interest -- was whether we created 17 some kind of ombudsman for the Post Office in order to 18 look at cases where issues had come up. And I think 19 it's entirely appropriate for me, as a member of the 20 executive of the Post Office, to put forward suggestions 21 and proposals for taking things forward. 22 In relation to Second Sight, whether they played 23 a different or no role, it was clear, once the report 24 was published and the Post Office Minister made 25 a statement in Parliament, that she was very clear that 72 1 Second Sight should continue and so I think that became 2 an academic point. 3 "It is also a compelling package for media", well, 4 that is true. You know, it showed -- that doesn't mean 5 it's been created in order to satisfy a media demand but 6 it is a compelling package in the sense that it shows 7 the business doing the right thing or seeking to do the 8 right things off the back of the Second Sight Report. 9 Q. It looks very much as though what you are creating here 10 is effectively a PR package; would you accept that? 11 A. Not at all, no. Not a PR package, it was an attempt to 12 resolve the issues that had been raised by Second Sight. 13 Q. It seems to be a package, that penultimate paragraph, 14 where it doesn't involve Second Sight, that, in fact, 15 you're now seeking to move away from Second Sight? 16 A. There was a -- well, it's not a question of whether 17 I was looking to move away from Second Sight. There was 18 discussion within the business about, "Well, what do we 19 do now second Sight has reported? Do we continue?" 20 But, as I say, once the report was published and there 21 was a statement in Parliament about it and the Post 22 Office Minister then made it very, very clear that she 23 wished Second Sight to continue, it, for me, became 24 an academic point because there was no way that we would 25 want to continue, in my view, with any kind of scheme, 73 1 and, of course, what happened out of these discussions, 2 and I'm not taking credit for what happened from these 3 discussions -- from this email, which then led to the 4 creation of the Mediation Scheme, did involve Second 5 Sight. So it was not PR package at all; it was 6 a package aimed at delivering and addressing the issues 7 that had been raised by Second Sight. 8 Q. It may be suggested that this is effectively 9 a communications plan or scheme that's dressed up to 10 look like it's assisting subpostmasters. 11 A. Well, the outcome was the creation of the Mediation 12 Scheme and I don't think the Mediation Scheme was 13 anything like the way you describe it. 14 Q. Were you concerned about the fate of those who had been 15 prosecuted by the Post Office? 16 A. There was obviously a debate within the Mediation Scheme 17 about whether the Mediation Scheme could look at the 18 criminal -- the cases that had been through the courts 19 and it was clear that mediation wasn't something that 20 could reverse criminal conviction. Obviously, that then 21 played out over the course of the next couple of years. 22 Q. Mr Davies, if I could stop you there -- 23 A. Apologies. 24 Q. -- I'm asking about this particular point in time: were 25 you concerned about the fate of those who had been 74 1 prosecuted by the Post Office? 2 A. Well, of course. If there was a claim of a miscarriage 3 of justice, of course I was concerned, yes. 4 Q. Can we scroll up, please, to the bottom of page 2. We 5 have a response from Martin Edwards, who is the Chief of 6 Staff to Paula Vennells. He says: 7 "Hmm, the boundaries between these groups are 8 getting quite blurred and confusing (at least in my 9 mind!)." 10 He then says, at the bottom there: 11 "We also need to think about how the review of past 12 cases by our external lawyers plays into the messaging 13 (if at all). Certainly not something we would put in 14 our proactive media statement I would have thought, but 15 would we refer to this in meetings as an avenue if 16 pushed by MPs or JFSA?" 17 There is then a detailed follow-up from Paula 18 Vennells, if we scroll up to page 1, please. This is 19 all happening very late at night. She is responding at 20 10.46 on 6 July, and she says as follows: 21 "I think we have the following which is a variant 22 ..." 23 She works off your three suggestions but she adds 24 some more: 25 "1) A working party over the next three/four months 75 1 this comprises [the Post Office] working collaboratively 2 with the JFSA ..." 3 Then if we scroll down, she has there: 4 "Thirdly, our external lawyers review all 5 prosecutions in the past 12/18 months since [the Post 6 Office] has been independent of [Royal Mail] in light of 7 the [Second Sight] findings. The [Justice for 8 Subpostmasters Alliance/the Post Office] working group 9 reviews the findings. 10 "(Why would they not review all cases of false 11 accounting, eg over the last 5-10 years, especially 12 where the amounts have been 'small'? I assume 'large' 13 amounts would be less likely to get away with saying 14 they were muddle-headed and not helped? But could we 15 review all? It is the false accounting charge [James 16 Arbuthnot] was most concerned about.)" 17 Over the page, please, (2) is setting up the review, 18 the kind of review you talked about. 19 (3), the future introduction of an ongoing branch 20 user group. Then she says as follows, a fourth: 21 "A statement that although the system has proved to 22 have no systemic issues, and our training, support 23 processes and helplines have worked for most of the 24 50-60,000 colleagues over the past decade, we are 25 nonetheless genuinely sorry that some of our 76 1 subpostmasters who were struggling did not feel that we 2 offered them sufficient help and support when they 3 needed it and that we are grateful to the [Justice for 4 Subpostmasters Alliance] and [James Arbuthnot] for 5 highlighting the issues. Many are historic and already 6 improved but we are always open to new ways to improve 7 how we do business to ensure the [Post Office] stays as 8 trusted and effective in its communities as it ever was. 9 "Last thought: if we can draft this into something 10 I could send to Alan Bates 'in confidence', it would get 11 us to a better place in agreeing the press statement and 12 way through with [James Arbuthnot] on Monday. Could 13 Martin try and corral views into a draft by Sunday early 14 [evening]? The more I speak with him the better I feel 15 it would be. 16 "Susan, would we ever ask the lawyers to consider 17 reviewing past prosecutions? Is that what we are 18 talking about in 1) above but simply not using the 19 terms? If not, why would it be different? Of our 500 20 prosecutions, how many are false accounting? (For 21 clarity these are open questions -- just want to know 22 the answers, not an indication that I want us to do 23 so.)" 24 If we scroll up, please, to the very first email in 25 the chain, it's an email from yourself to Martin Edwards 77 1 at 11.39 pm. So, having read that -- email from Paula 2 Vennells was 10.46 -- you say: 3 "Hi 4 "Mind if I try to draft this? Feel I need to keep 5 a line through the media handling -- and to be honest we 6 are in danger here of going way too far." 7 It seems very much from this email that you are 8 trying to direct the response to the issues raised by 9 Second Sight and that you, in fact, are trying to 10 formulate an approach that was less than that that was 11 wanted by Paula Vennells; is that right? 12 A. No, I don't think that's right. I mean, I'm talking to 13 Martin, who was obviously her Chief of Staff, on this, 14 and Martin -- I'm not sure what Martin said in response 15 but, certainly, we worked together very, very closely on 16 all of these matters. So, no, it wasn't the nature of 17 the way in which we worked together that certain people 18 would seek to try to direct the way in which matters 19 were handled at all. 20 Q. Paula Vennells was there suggesting that "our external 21 lawyers review all prosecutions in the past 12/18 22 months". And your response to that email is that "We 23 are in danger here of going way too far". What did you 24 mean by going way too far? 25 A. Well, I don't recall what I meant by that 11 years on, 78 1 but the idea of reviewing criminal cases certainly 2 wasn't something that I thought was a bad idea; 3 I thought it was an extremely good idea. 4 Q. Can I ask you to have a look at that email below, if we 5 scroll down. Just have a look at that email and if you 6 could let us know what it is that you thought was going 7 way too far. 8 A. I can't recall what I felt was going way too far and nor 9 can I recall what the purpose of this -- and you may be 10 able to remind me -- what the purpose of this particular 11 discussion is. Is this around a media release or the 12 letter to James Arbuthnot? I'm not totally clear. 13 I think it's a general discussion about the steps that 14 we might want to take as a result of the Second Sight 15 Report. 16 Q. We can turn to page 4. 17 A. Sure. 18 Q. There's an email from Paula Vennells to Alan Bates about 19 the way forward, 6 July. She says: 20 "Alan, thank you for the note. Yes, I thought the 21 meeting with James was positive too. My main concern is 22 still how we manage the publicity, to avoid -- as you 23 said -- it 'going ballistic'. 24 "We had a useful conversation regarding a statement 25 from James with quotes from you and me ..." 79 1 So it's developing a response to that meeting 2 following the meeting with James Arbuthnot and Alan 3 Bates. 4 A. Thank you. That's -- thank you. 5 Q. Does that assist you with identifying how it was that 6 you were concerned that you were going too far or the 7 Post Office was going too far? 8 A. I genuinely don't recall where I feel that that's going 9 would too far. 10 Q. The Second Sight Report was then finalised on 8 July 11 2013. Can we please now turn to POL00191689. We are on 12 11 July. If we could scroll down, please. There's 13 an email from you, it seems to yourself. Is it likely 14 that you were just saving it or could you have been 15 sending it to a wider audience that were bcc'd in, or? 16 A. I don't recall, I suspect from the email above that 17 Susan had asked me for a summary of how the Second Sight 18 Report had been received in terms of the media, and I've 19 probably written an email to do that and then sent it to 20 myself. I'm not entirely sure why I -- 21 Q. It looks as though they were different email 22 addresses -- 23 A. It may have been that they were on my personal email and 24 then sent it to myself, yeah. 25 Q. "Horizon report -- media and Parliamentary report 80 1 "Our strategy in relation to media coverage was to 2 seek to contain coverage to those outlets which have 3 followed the issue for some time. Supported by 4 an external agency, Portland Communications, we were 5 successful in doing so. This meant some high profile 6 coverage on the BBC News at 10 on Monday and on 7 Radio 4's Today Programme, but beyond this, and a small 8 piece in Metro, there was no other mainstream media 9 coverage of the report. The news cycle in relation to 10 the report lasted little over 12 hours ... This is 11 highly satisfactory, all the more so as no national 12 newspapers followed up on the story (though we are 13 currently dealing with a Telegraph enquiry). 14 "We decided not to accept interview requests from 15 the BBC on the basis that doing so could give 16 broadcasters a new line on which to run the story." 17 I will return, again, to, that question I asked you 18 this morning: do you think that that is part of an open 19 culture? 20 A. I think it's very much part of a communications 21 Directorate's responsibilities. There's a number of 22 elements to what the communications profession is about, 23 informing facilitating, but also minimising reputational 24 risk, and one of the issues, as I said before, we were 25 super -- extremely concerned about was the potential 81 1 damage that stories around the system being faulty could 2 cause to customers, to postmasters, to clients, and so 3 minimising negative media coverage of the report was 4 part of what my job was about. 5 Q. "We were also proactive in challenging inaccuracies and 6 contacted the BBC Legal Team through our external 7 lawyers to register concerns over misleading headlines. 8 This was successful in changing headlines and 9 rebalancing coverage." 10 Do you think that it was appropriate for the BBC 11 Legal Team to be contacted by your external lawyers in 12 order to change headlines? 13 A. Where headlines were misleading, absolutely, yes. 14 Q. Can we please turn to POL00161960, 12 July. If we 15 scroll down, please -- sorry, scroll up slightly. 16 12 July 2013, it's an email from you to Paula Vennells 17 and you're proposing, I think, a line: 18 "How about: 19 "As you know, the report into Horizon was published 20 on Monday. While there was significant coverage on the 21 BBC, the news cycle for the issue last little over 22 12 hours and there was little other coverage. We have, 23 however, been contacted by the Telegraph which is 24 planning a follow up piece. 25 "We expect this article to be significant, featuring 82 1 case studies of those who believe they have been wrongly 2 disciplined/convicted. We have worked hard this week to 3 get our message across, including a pledge to meet with 4 any subpostmaster who feels they have been poorly 5 treated, but I do expect there will be negative comment. 6 Specifically we are being asked to apologise to 7 subpostmasters: without a final report, I judge that 8 this would not be the right course of action." 9 Why would it have to wait for a final report to 10 apologise to subpostmasters? 11 A. Well, I think -- and there's another email, I think, 12 that you may come on to where we talk about whether or 13 not to issue a blanket apology, and I think that's the 14 answer to the question, in a sense, is that, at this 15 point in time, in July 2013, we're in a situation where 16 we believe the system is working well and effectively, 17 and, yes, people are making complaints about it. We are 18 offering to meet with anyone who feels that they've been 19 poorly treated and I think that was the right thing, 20 absolutely the right thing, to do. But to issue 21 a blanket apology, based on what the evidence was at the 22 time, wouldn't have been the right course of action. 23 Q. So were you, as the Communications Director, on 12 July 24 2013, advising Paula Vennells, the Chief Executive that 25 she should not apologise to subpostmasters? 83 1 A. That's what -- yes. 2 Q. It says "without a final report". I mean, was it your 3 view at that time that you might be able to influence 4 the report to water down Second Sight's findings, 5 perhaps to limit their involvement to reduce the amount 6 of information that Post Office provided them, so it 7 might mean that an apology wasn't necessary? 8 A. Not remotely. 9 Q. From that point on, was there any genuine attempt to 10 actually assist Second Sight? 11 A. Absolutely, as far as I know. I mean, I didn't have 12 dealings directly with Second Sight but my understanding 13 always was that we sought to be cooperative and support 14 Second Sight's work. 15 Q. I'm going to take you to two documents before we break 16 for our second break of the morning. Can we look at 17 POL00192075, 15 July 2013: 18 "I have been reflecting on our conversation on 19 Friday around Horizon." 20 This to Paula Vennells: 21 "The danger in reputational terms is that the issue 22 rumbles on without conclusion both before and after the 23 'final' Second Sight Report. This could really damage 24 the business and hamper NT." 25 NT? 84 1 A. Network Transformation. 2 Q. Thank you: 3 "We need somehow to take the sting out of it, in 4 advance of the report." 5 So Second Sight haven't yet reported but you want to 6 take the sting out of what might become their final 7 report: 8 "We are taking the right steps in looking to the 9 future (with the Working Group, User Forum and 10 independent adjudicator). 11 "But none of those will go far enough to address the 12 damage which some believe they have suffered. These 13 cases will continue and the noise will be louder as the 14 [Second Sight] process concludes ... 15 "So I wonder whether something like the following 16 would work: 17 "We create an independent panel to oversee cases 18 where a subpostmaster feels lack of training or support 19 contributed to an issue ... 20 "We proactively invite people to submit their cases 21 to the panel ... 22 "The panel is chaired by a QC or perhaps a former 23 MP/peer. 24 "It hears evidence from a [subpostmaster] and [the 25 Post Office] on the training and support elements and 85 1 reaches a 'judgement'. 2 "Evidence is made public. 3 "We allocate funding to compensate in cases where 4 training and support judged to have fallen short ..." 5 It looks there as though you are now trying to 6 direct things away from Second Sight and their 7 investigation and to, instead, focus on the training and 8 support? 9 A. Not at all, no. I think this was a genuine suggestion 10 for an approach that we could take to try to address the 11 issues that were being raised with us. As I said, the 12 statement in the House of Commons that was made, I think 13 on the day that the Second Sight Report was published, 14 in which the Post Office Minister, Jo Swinson, said that 15 she was extremely keen that Second Sight continued, for 16 me, that made that position academic, which is why 17 I think I don't refer to Second Sight here because 18 I think whatever anybody in the business wanted or 19 didn't want at that point, a commitment from the 20 Minister in the House of Commons was really, really 21 important. So I think, you know, as I say, these cases 22 will continue and the knowledge will be louder as the 23 Second Sight process concludes, and I don't think there 24 was any remote possibility that Second Sight wouldn't be 25 involved further, following that commitment from the 86 1 Minister. 2 Q. You have emailed that document again to a wider group. 3 Could we please look at POL00192329. If we start on 4 page 3, at the bottom of page 3, Susan Crichton is 5 emailing Andrew Parsons and says: 6 "Andy, our Comms Director at [the Post Office], Mark 7 Davies, is keen to explore the concept of mediation 8 (I will send you his thoughts separately) who is the 9 bets person at [Bond Dickinson] to discuss this with and 10 when could we do it?" 11 If we scroll up, we can see, on the first page, 12 you've resent the email that I just read you to Susan 13 Crichton, Andrew Parsons and a team of lawyers. 14 It does seem as though key planks of the Post Office 15 policy were being driven by your communications 16 objectives; would you agree with that? 17 A. No, I wouldn't agree with that. It was being driven by 18 a desire to take action based on the Second Sight 19 Report. I'd had some experience of seeing mediation in 20 a previous role, when working in Government, and thought 21 that, potentially, mediation might be a way forward in 22 this instance, and that's why I suggested it, and 23 I think, as a member of the executive, it was entirely 24 reasonable for me to do so. 25 Q. If we look down, scrolling down on that email, it looks 87 1 very much as though you've decided that the message here 2 on in would focus on the lack of training or support 3 rather than the Horizon system; do you agree with that? 4 A. No, I don't agree with that because, obviously, Second 5 Sight were continuing with their work on the system, but 6 the lack of training and support that they raised was 7 deeply, deeply shocking. I remember vividly talking to 8 Paula Vennells about it when on the train home from work 9 one day, and it was really, really shocking. She talked 10 about the need for some kind of reconciliation process 11 and I thought she was absolutely right about that 12 because it was just not the kind of business that we 13 were seeking to be. So that's where that thought came 14 from. You know, obviously communications was my 15 day-to-day, my bread and butter, but I was a member of 16 the Executive with responsibility for the broader 17 direction of the organisation and this was an idea that 18 I put forward. 19 Q. So Second Sight's findings in relation to training and 20 support were shocking, were they? 21 A. They were. 22 Q. Were they so shocking that you included them in detail 23 in the press release that followed the Second Sight 24 Interim Report? 25 A. We published the report and they were clear in there, 88 1 and it was clear in the press release that we said that 2 we were -- they'd identified that training and support 3 wasn't adequate and we, of course, took the decision to 4 publish their report so it was there on the public 5 record. 6 Q. Did you properly convey the shock that you and Paula 7 Vennells had in relation to the Second Sight Interim 8 Report's findings in that press release? 9 A. With hindsight, no. 10 MR BLAKE: Sir, that might be an appropriate moment for us 11 to take our second morning break. 12 SIR WYN WILLIAMS: Yes, by all means. What time shall we -- 13 MR BLAKE: Can we be back at 12.20, please. 14 SIR WYN WILLIAMS: Fine. Thank you. 15 (12.07 pm) 16 (A short break) 17 (12.20 pm) 18 MR BLAKE: Thank you, sir, can you see and hear me? 19 SIR WYN WILLIAMS: Yes, I can, thank you. 20 MR BLAKE: Thank you. 21 Mr Davies, we're going to move now to 2015. Could 22 we please look at POL00150869. This is 23 January 2015, 23 if we scroll down, an email from you to a number of 24 people within the Post Office. You say as follows: 25 "All 89 1 "I have been thinking about the question we will get 2 about why we won't let [Second Sight] look at 3 everything -- to which the obvious answer is there is no 4 evidence of a problem -- and how can we demonstrate no 5 evidence of a problem." 6 Then you say, "Could we get details of", and you set 7 out various things to look at. 8 You said before that you were committed to the 9 Second Sight investigation and their final report. It 10 does seem there as though you are trying to justify not 11 letting your independent investigators make up their own 12 minds as to what they should see; do you agree with 13 that? 14 A. I think there were elements that I was being advised 15 that we wouldn't want Second Sight to have access to, 16 and I was concerned about that because, obviously, to 17 your very point, it appears that we're not therefore 18 giving them access to everything and so, I think, I was 19 just trying to look -- to think of ways in which we 20 could address that issue. 21 Q. Who are you saying advised you that Second Sight 22 shouldn't look at everything? 23 A. Well, I don't recall, I just don't recall the -- don't 24 really recall the background to this email, if I'm very 25 honest. 90 1 Q. So were you, as at 2015, still committed to supporting 2 Second Sight and their investigation? 3 A. We were absolutely committed to trying to find whether 4 there were systemic issues with the system and to 5 support Second Sight in doing their independent 6 investigations of all of the cases and their role within 7 the Mediation Scheme, for sure, yeah. 8 Q. That sounds like a very careful answer to the question. 9 Were you committed to supporting Second Sight in 10 carrying out their investigation? 11 A. I personally had no reason not to be supporting them, 12 no. 13 Q. Let's go back to a document that we saw earlier this 14 morning, POL00102062, 23 January, and it's -- if we 15 scroll down -- your feelings as at 23 January: 16 "It's fascinating to be part of a conspiracy. To be 17 at the heart of a corporate cover up. But frustrating 18 too, when the reality is a hard story to tell, and some 19 distance from the picture painted by a determined band 20 of adversaries. 21 "In our case, we are up against a campaign group, 22 a few journalists (mainly from the BBC) and some MPs. 23 And you have to hand it to them: they know what they are 24 doing in terms of mounting a campaign. It's just 25 that -- whisper it quietly -- all is not what it seems. 91 1 "Yes there has been a Parliamentary debate. True, 2 earnest journalists have presented breathless exposes on 3 TV and radio. And indeed, the campaign group are 4 nothing if not determined. 5 "But, you know, we've looked and we've looked. And 6 looked again. We've had legal teams look. We've turned 7 ourselves inside out trying to see if somehow, somewhere 8 we've got things fundamentally wrong. We've questioned 9 ourselves, prepared and open-minded to find scandal, 10 error, systemic failure. I sometimes wish we had: it 11 would all be water under the bridge by now. 12 "The issue is our computer system, the one we use to 13 record six million transactions every day. Around 140 14 people think that it -- or the associated processes 15 around it -- have caused them to experience financial 16 loss in their branch. 17 "Bear in mind that almost half a million people have 18 used the system since we introduced it more than 19 a decade ago. Without problems (and we know that 20 because if there were problems our subpostmasters, and 21 the Federation which represents them, are rightly quick 22 to tell us when we get things wrong). 23 "But we take the complaints we've had seriously, so 24 we set up an inquiry. When that found no systemic 25 problems, but suggested that our training and support 92 1 had failed at times, we set up a Mediation Scheme to 2 give people with complaints a chance to highlight 3 issues. We invited people to come forward and xxx did 4 so we then paid for them to get professional advice on 5 making their case. 6 "Each of those cases has been reinvestigated, 7 a minority ... to be exact, were cases where people had 8 been convicted. 9 "In some of the cases we have taken part in 10 mediation, and in some we reached an agreement: admitted 11 that in training and support we didn't do enough. 12 "But in others we are standing firm. I've read many 13 of the investigations. And we are right to stand firm. 14 I'm sorry if that sounds unpleasant but it is just, I am 15 afraid, the right thing to do. 16 "Of course it is really sat when people have faced 17 challenges in their lives. Some of those with 18 complaints have letters homes, gone bankrupt. But it 19 doesn't follow that the Post Office is responsible for 20 those situations. As one complainant acknowledged in 21 a letter he sent us for publication following 22 conviction, urging others not to do what he did. He's 23 since changed his position and blames the losses he 24 faced on our system. 25 "I can't, though, provide more details. Each case 93 1 is confidential -- not a unilateral decision but 2 an agreed position with those representing the 3 individuals who have brought cases. 4 "This amounts, according to some of those who are as 5 certain as they can be of our culpability, to secrecy. 6 Despite our having shared literally thousands of pages 7 of details of each case. None of which, by the way, has 8 suggested any systemic problem. 9 "That hasn't stopped MPs and journalists presenting 10 the picture as they see it. That is their right, of 11 course. It's just that it is only part of the picture. 12 And the missing bits tell a very different story. 13 "A story, as I said at the beginning that, because 14 we are doing the right thing, we can't tell. Which is 15 hard. 16 "But that's how it is at the heart of this corporate 17 cover up." 18 What was the purpose behind writing this? 19 A. I don't recall. I think I -- it was an email that 20 I wrote, I think potentially thinking maybe we could 21 publish it or seek to publish it somewhere. I mean, 22 obviously it looks absurd and ludicrous in the context 23 of what we now know. I don't think it ever was 24 published anywhere else. I'm not sure what my 25 colleagues thought about it. 94 1 Q. So that's 23 January, and your view there was that the 2 Post Office was alleged to be part of a conspiracy and 3 that they were a determined band of adversaries set 4 against it. Was Second Sight at that time part of the 5 determined band of adversaries? 6 A. I don't think so no. 7 Q. Could we please turn to POL00117054. 8 If we scroll down, please, on that first page, you 9 have an email from yourself to Paula Vennells, 10 26 January, so a couple of days later. You say: 11 "Hi Paula 12 "I hope you don't think I'm being too strong here, 13 but I think Patrick's description of Second Sight is 14 about right given their behaviour in recent weeks. They 15 are, I am sure, colluding with JFSA rather than acting 16 as independent players. I've never come across anything 17 quite like this and I have challenged the team but, 18 having done so, I'm now certain of it. Quite why this 19 is the case I am not sure: perhaps their heads have been 20 filled with the notoriety/attention they are getting, 21 but I'm afraid to say that there is coalition 22 campaigning against us, and they are part of it." 23 Would you like to revisit for the answer you gave me 24 a moment ago? 25 A. Yes, thank you, I appreciate you -- thank you for 95 1 bringing that to my attention and the dates, absolutely 2 right, and that does underline a concern that we started 3 to have around Second Sight as to whether they were 4 effectively working as independently as they should have 5 been. 6 Q. Those are strong words that follow a very strongly 7 worded think piece in that email that we've seen. 8 Do you think your memory has played tricks on you 9 a little bit in terms of your recollection of the 10 approach to Second Sight? 11 A. Sorry, can you -- 12 Q. Well, it looks very much like, by January 2015, the Post 13 Office did not consider Second Sight to be 14 an appropriate body to be investigating them? 15 A. Oh, I think you're right and I haven't, in terms of the 16 previous email -- which I think you said was 17 24 January -- 18 Q. 23rd? 19 A. -- absolutely, my recollection there has been incorrect. 20 I absolutely did have those concerns in January 2015. 21 Q. Paula Vennells responds in the email above saying: 22 "How many often the [Second Sight] reports have you 23 personally read?" 24 It looks as though that's a reference not to the 25 Interim Report but, in fact, to what we know as the CRR 96 1 reports. 2 A. Mm. 3 Q. We can't find a response to that email on file. Are you 4 able to assist us with whether you responded and, if so, 5 how many of the reports you had personally read? 6 A. I don't recall if I responded directly to that email. 7 I did read a significant number. I couldn't give you 8 a -- it would be wrong to guess at a number but I read 9 a number of them, yes. 10 Q. At that point in time, what did you understand 11 Ms Vennells's opinion on Second Sight to have been? 12 A. I can't recall. 13 Q. Was the view that you shared below one that was commonly 14 held within the senior leadership of the Post Office? 15 A. There was definitely a concern, yes. 16 Q. Did any particular individuals strike you as being 17 particularly prominent in that concern? 18 A. I don't recall, particularly. 19 Q. I want to now move on to a number of specific broadcasts 20 and the Post Office's response to those broadcasts, 21 starting with the BBC coverage of the Second Sight 22 Report in September 2014. Could we, please, look at 23 POL00101329. If we look at the bottom of the page it's 24 an email from 9 September 2014 from you -- sorry, if we 25 could -- yes, that's fine: 97 1 "Dear all 2 "Further to my note on Friday, a report on the leak 3 has been broadcast within the last few minutes on BBC 4 Radio 4. It is inaccurate and clearly will be 5 challenging these inaccuracies. 6 "We will circulate a fuller update." 7 So this is the leak of the Second Sight Interim 8 Report, is it? 9 A. No, because we published the Second Sight Report and 10 that was in 2013. 11 Q. Yes, this is 2014; so what was the leak? 12 A. I don't recall. 13 Q. If we scroll up -- 14 A. Sorry to interrupt. If -- yes, in fact, if you scroll 15 down, I think he talks about part two "Further to Chris' 16 update [so this is me] about Second Sight's 'Part Two'", 17 so presumably their Part Two report. 18 Q. Yes, the leak of the Part Two Report. Could we scroll 19 up to -- there's a further email from yourself, it says: 20 "Dear all 21 "The report has also been carried on Radio 5. We 22 are having robust conversations with the BBC on accuracy 23 issues, and holding on our lines." 24 Who would you have been having robust conversations 25 with at the BBC? 98 1 A. I don't recall the specific instance but, I mean, in the 2 case of a Radio 5 report, we would have been in touch 3 with their Newsgathering department, the news desk, 4 essentially, at BBC Radio 5 Live. 5 Q. When you say "we", is it likely that would have been you 6 personally or somebody else? 7 A. Apologies, it would be likely one of my Press Office 8 team. 9 Q. Do you recall the robust conversations that were had on 10 this occasion? 11 A. I don't recall this particular instance. It may be that 12 there are other emails that will help to remind me. 13 Q. There's another email on the same day. Let's look at 14 POL00101337. It's the bottom of the first page, please. 15 It's an email from you to -- is that the Communications 16 Team or the Press Team? 17 A. It's -- yes, it's -- well, it's -- and Legal. So Press 18 Team, Nina, Ruth, Melanie, David Oliver was, I think, 19 a programme manager on the Mediation Scheme, Chris 20 Aujard was General Counsel and Jessica and Piero were 21 both from the Legal Team. 22 Q. You say as follows: 23 "Hi 24 "Please specifically challenge suggestion that we 25 'acknowledge' there were faults with Horizon -- this is 99 1 straightforwardly inaccurate as below." 2 This is the form of words: 3 "'It wasn't dishonesty by people like Noel, so the 4 Post Office at least in this independent report that 5 they commissioned, acknowledging here that these, around 6 100, 150 subpostmasters who are now pursuing claims 7 against the Post Office may not have been at fault'." 8 So that's a transcription from the Radio 4 broadcast 9 and you are asking your team to challenge the suggestion 10 that the Post Office acknowledge that there were faults 11 with Horizon. 12 A. No, I'm asking them to acknowledge that, where they say 13 the Post Office is acknowledging here that these 150 14 subpostmasters may not have been at fault, and that 15 wasn't what the report had said. 16 Q. Well, it says, "So the Post Office at least in this 17 independent report that they commissioned, acknowledging 18 here that these postmasters who are now pursuing claims 19 may not have been at fault"; is that wrong? 20 A. Yes, the Post Office wasn't, at that point, 21 acknowledging that those around 150 subpostmasters may 22 not have been at fault. 23 Q. Was the independent report that they commissioned 24 acknowledging that those who are complaining may not 25 have been at fault, in the second report by Second 100 1 Sight? 2 A. I don't recall whether the Second Sight Part Two Report 3 said that but, certainly, we weren't acknowledging that 4 at that point. 5 Q. Another report of the same day POL00101365, please. If 6 we scroll down there's an email from yourself to Paula 7 Vennells, and you say: 8 "Hi Paula 9 "The coverage is essentially accepting that we now 10 accept through the report that there are issues with 11 Horizon. It is sloppy journalism in the extreme. 12 I have spoken direct to the journalist to (robustly) 13 correct the impression he is creating and we are also 14 talking to BBC Newsgathering. I've had a huddle with 15 Chris and the lawyers and we hold that in our back 16 pocket as potential action if coverage doesn't change." 17 Did you really think that the Second Sight second 18 report didn't suggest that there were issues with 19 Horizon? 20 A. Not systemic issues. 21 Q. Was there an allegation within that quote that we just 22 saw before about systemic issues, is anybody dealing 23 here with the question of systemic issues? 24 A. I think that previous quote was saying that we 25 acknowledge that the 100/150 subpostmasters may not have 101 1 been at fault and, at that point, we weren't 2 acknowledging that. 3 Q. In your email here, "The coverage is essentially 4 suggesting that we now accept through the report that 5 there are issues with Horizon". How is accepting that 6 there are issues with Horizon sloppy journalism in the 7 extreme? They were right, weren't they? 8 A. They were. There were the issues that were published in 9 the Second Sight Report but, in terms of systemic 10 issues, which was the allegation at the time made 11 against the Post Office that, at the time, we didn't 12 have evidence to support, I think that was -- that was 13 a fair position to set out. 14 Q. Mr Davies, you're clinging to the word "systemic", and 15 we see that in a number of emails: "No systemic 16 problems, no systemic problems". 17 Do you think you clung too closely to the word 18 "systemic" when, quite plainly, Second Sight were saying 19 that there were issues with Horizon? 20 A. I don't think so because I'm not a technical expert and 21 I'm not a legal expert, and every conversation that 22 I had within the Post Office throughout the time I was 23 at the Post Office suggested to me that there were no 24 systemic issues and so, all of the conversations I had 25 with my colleagues in the IT Team and elsewhere, and all 102 1 of the -- there simply wasn't the evidence to support 2 that there was a systemic -- there were systemic issues 3 with Horizon. 4 Q. Who is -- 5 A. As far as we could see -- 6 Q. -- suggesting there are systemic issues with Horizon? 7 A. The coverage from most of the journalism that we had was 8 saying that the Horizon system was, quotes, "dodgy" and 9 could have been leading to losses in branch and we 10 simply didn't, at that time, have the evidence to 11 support that, other than -- 12 Q. It could lead to losses in branch, couldn't it? 13 A. I beg your pardon? 14 Q. It could lead to losses in branch. You knew that much, 15 didn't you? 16 A. We knew and we'd identified those two or the Second 17 Sight Report had identified those particular issues, 18 beyond that, we were faced with a system that seemed to 19 be working very well, with 50,000 people using it every 20 day processing thousands of millions of transactions 21 every year and the NFSP, the Federation of 22 SubPostmasters, assuring us that, from their point of 23 view, that -- they weren't slow in complaining when 24 there were issues that they wanted to complain about. 25 Q. Mr Davies, these are lines are repeated in year, after 103 1 year, after year, that the Inquiry has seen in document, 2 after document, after document. Why can't you, in 3 September 2014, simply accept that Second Sight had 4 identified issues with Horizon -- and you still don't 5 seem to be able to accept that today? 6 A. I obviously, in hindsight, I accept that there were 7 issues with Horizon and I deeply regret that we spent so 8 long saying -- delivering lines that turned out to be 9 incorrect. That pains me grievously that we were in 10 that position. I've never went into my job in any 11 particular form as a journalist or in the years that 12 I've been a Communications Director, ever sought to 13 mislead, ever sought to not tell the truth to 14 journalists. So I was saying what I believed to be the 15 situation in good faith at all times. 16 Q. But you repeated today a number of times "systemic 17 issues". All that you are raising here is that the 18 coverage is essentially suggesting that there are issues 19 with Horizon. Why couldn't the Post Office accept that 20 there were issues with Horizon? 21 A. I think you have to see this email in the context of 22 that specific quote that we talked about in the previous 23 email, where the journalist had said that the Post 24 Office was acknowledging that we may have been at fault 25 in relation to 100 to 150 cases and, of course, at that 104 1 time, the Mediation Scheme was ongoing and we were 2 seeking to work through cases, through the Mediation 3 Scheme. And we'd entered into a process of 4 confidentiality with people as well. So, to our minds, 5 we were continuing with the investigation, and we were 6 continuing to work towards finding the truth, getting to 7 the truth. 8 Q. Let's go back to the quote. It's POL00101337, page 2. 9 This is a direct transcription from BBC Radio 4, second 10 page, please: 11 "It wasn't dishonesty by people like Noel, so the 12 Post Office at least in their independent report that 13 they commissioned, acknowledging here that these, around 14 100, 150 subpostmasters who are now pursuing claims 15 against the Post Office may not have been at fault." 16 What is wrong with that? 17 A. I think my reading of it at the time was that the 18 statement was saying that the Post Office was 19 acknowledging that around 100 to 150 postmasters had had 20 a strong case to suggest that we were at fault and that 21 wasn't the position at the time. Clearly, with 22 hindsight, everything has changed, and the context is 23 really, really important but that's certainly how I -- 24 Q. Why does it need hindsight to read the words that are 25 there on the page, that simply says "may not have been 105 1 at fault"; that was right, wasn't it? 2 A. Not at that point. 3 Q. They may not have been at fault. May. It's a pretty 4 low threshold, wasn't it? 5 A. I think the point we were objecting to, which I think 6 the journalist accepted in the end, was that the Post 7 Office was acknowledging, at this point, that around 100 8 to 150 subpostmasters may have had a case and they were 9 pursuing those particular claims at the time. 10 Q. I'll move on to POL00 -- 11 SIR WYN WILLIAMS: Before you do, Mr Blake, let me 12 understand this. We are here talking, are we, not about 13 the Interim Report of July 2013 but something that came 14 after it? When the words "independent report" are being 15 used, that isn't a reference back to the 2013 report? 16 It can't be because there was no mention of 100 or 150 17 subpostmasters in that? So this is something that came 18 after it. Have I got that right? 19 A. Yes, sir. 20 SIR WYN WILLIAMS: Right. So is it the second report 21 written by Second Sight or what? 22 A. It's the second report, sir, yes. 23 SIR WYN WILLIAMS: Right. In that second report, did Second 24 Sight say that 100 to 150 subpostmasters are pursuing 25 claims against the Post Office on the basis that they 106 1 may not have been at fault? 2 A. I don't recall, sir, whether that report specifically 3 made that point. The point -- 4 SIR WYN WILLIAMS: Well, that's what this extract appears to 5 be saying, doesn't it? Because it wasn't saying, in 6 fact, the Post Office, in its own document, had made 7 this acknowledgement, because it says that "the Post 8 Office, at least in this independent report that they 9 commissioned, acknowledged". There's a big difference. 10 In effect, I am repeating Mr Blake's question to 11 you: what was inaccurate about it, if indeed the report 12 suggested that 100 to 150 subpostmasters were pursuing 13 a claim on the basis that they may not have been at 14 fault? 15 A. My reading, sir, at the time of this particular 16 transcript was that it was suggesting that the Post 17 Office acknowledging here that these claims may not -- 18 these subpostmasters may not have been at fault. 19 SIR WYN WILLIAMS: Well, we can all, I'm sure -- and I don't 20 mean this as a criticism of you at the moment -- read 21 words in slightly different ways, but, to my way of 22 thinking, it is simply saying that, in an independent 23 report which the Post Office has commissioned, they, if 24 you like, the Post Office, may be acknowledging, 25 et cetera, all right? But it's making it clear, surely, 107 1 that it's coming from an independent report and quoting 2 from it? 3 A. I think that's fair, sir. 4 SIR WYN WILLIAMS: All right. Thank you. 5 MR BLAKE: Can we please turn to POL00117183, 7 March 2015. 6 If we scroll down we can see you have sent a number of 7 documents to that distribution list. If we go up, 8 there's a response from Angela van den Bogerd. I think 9 the documents, essentially, announce the end of the 10 Working Group and the completion of the Second Sight 11 investigations. She responds to you and she says: 12 "I have seen Jane's comments already and have 13 nothing further to add on the two letters." 14 That's a letter to Jo Swinson to Adrian Bailey, 15 Members of Parliament: 16 "However, I do have on the press statement and my 17 suggested changes are in red. These might not be the 18 right words but I want to indicate that we haven't 19 simply gone through the motions rather we have done so 20 with our eyes wide open." 21 Then there's a quote: 22 "'This has been an exhaustive and informative 23 process which has established that there are no 24 system-wide problems with our computer system and 25 associated processes. We will now look to resolve the 108 1 final outstanding cases as quickly as possible'." 2 Was that correct? 3 A. The quote from Angela? 4 Q. Yes. 5 A. I think so, yes. I mean, this, I think, is a report 6 that the Post Office itself published in March 2015. 7 Q. Had it established that there were no system-wide 8 problems, the second of the Second Sight Reports? 9 A. That was certainly the view within the business, yes. 10 Q. But was it correct? 11 A. To the best of my knowledge, it was correct at the time. 12 Q. Moving on to the Panorama programme in 2015 and the 13 Andrew Bridgen debate in Parliament, also around the 14 same time, could we please look at POL00117433. This is 15 an email from you to Alwen Lyons. You attach a note 16 below on the BBC Panorama and the Post Office. Is this 17 an internal note, yes? 18 A. Yes, I think this was probably intended for the Board, 19 if -- yeah, because I've sent it to Alwen, who was 20 Company Secretary, I think it was intended for her to 21 send to the Board so that they were in the picture. 22 Q. "I wanted to let you know that next week we expect 23 further adverse media coverage (and a debate in 24 Parliament) in relation to the Post Office and our 25 Horizon computer system. 109 1 "The BBC plans a Panorama programme on 29 June while 2 Andrew Bridgen MP has secured a short debate in the 3 House of Commons on the same day." 4 It says: 5 "We expect allegations to be made which suggest that 6 we pressure people to plead guilty to criminal charges, 7 have not provided appropriate information to 8 investigators, have the ability to remotely access and 9 alter branch accounts and have not investigated whether 10 Horizon could be to blame for losses in branch accounts. 11 "We are engaging vigorously with Panorama. We 12 provided a two-hour briefing earlier this month. It has 13 become clear, however, that they plan to continue to 14 make damaging allegations based on individual claims, 15 and have interviewed Second Sight in doing so." 16 It says: 17 "We are not currently planning to appear on the 18 Panorama programme. This is because it plans to focus 19 on three individual cases and we do not believe it is 20 right to break the confidentiality we agreed when we set 21 up the Mediation Scheme. 22 "It is also the case that those featured in the 23 programme have asked the Criminal Cases Review 24 Commission, an independent body, to examine their 25 prosecution case. That is their right and we will 110 1 cooperate fully with any requests made of us: what we 2 won't do is indulge in a public debate while that review 3 is being conducted." 4 Those two final paragraphs that I've read to you, 5 were they an accurate reflection of the picture? 6 A. The two -- beginning with "Not currently planning" -- 7 Q. So were you not currently planning to appear on the 8 Panorama programme, simply because it was focused on the 9 cases and because of the criminal cases review? 10 A. We'd initially considered appearing and we had started 11 to make arrangements to do so, but it became -- and we 12 had a two-hour briefing, as this note suggests, with the 13 Panorama journalists where we very openly answered 14 obviously any question that they had. It became quite 15 clear after that briefing that they particularly were 16 going to focus on individual cases, and we strongly felt 17 that -- I felt, and others in the organisation as well, 18 felt that because the CCRC was involved and because of 19 the confidentiality process that we'd agreed to through 20 the Mediation Scheme, that it would be wrong to have 21 a debate about individual cases on the TV rather than in 22 the appropriate place. 23 Q. We saw in 2013 emails from you saying that "We don't 24 want to appear on the Panorama programme because we 25 don't want to give it material", effectively -- 111 1 A. Yeah. 2 Q. -- to assist it in taking further lines to take. Was 3 that part of your thinking on this occasion? 4 A. Sorry, can you repeat the question? 5 Q. We saw earlier today an email from 2013, I think it was, 6 that suggested that you shouldn't appear on Panorama 7 back then because to do so would give them material? 8 A. Yes, I think that was a separate -- so in 2013 they'd 9 made a tentative, I think, enquiry, actually through the 10 NFSP, as to whether they might make a -- suggesting that 11 they might make a programme about these issues. I've 12 never really connected the 2013 email with the actual 13 Panorama programme that went out in 2015. The decision 14 to not appear on the programme was taken for the reasons 15 that I've set out there, that we didn't want to discuss 16 individual cases and it would have been -- we felt it 17 would have been inappropriate to do so. I felt it would 18 have been inappropriate and I think that was a view 19 shared across the business. 20 Q. Was it not part of your media strategy, though, to not 21 put somebody up for interview if it could help prevent 22 the story from becoming a story? 23 A. It's certainly a consideration. 24 Q. Is that reflected in this note? 25 A. It doesn't appear to be reflected in the note, but 112 1 I think it would be widely understood to be 2 a consideration, yeah. 3 Q. Can we turn to POL00174380, 5 August 2015. This is from 4 you to yourself but it may be a group email that you've 5 hidden the addresses from, perhaps: 6 "You will remember that I was in touch a couple of 7 months ago about a programme being planned by the BBC's 8 Panorama programme, (not to be confused with Signed, 9 Sealed and Delivered documentary which I am sure you 10 will all be tuning in for at 9.00 pm on BBC2 this 11 evening!) on the Horizon system. 12 "I wanted to drop you a quick line to let you know 13 that -- regrettably -- Panorama has returned to the 14 subject and plans a programme on 17 August. This will 15 clearly contain damaging yet unsubstantiated allegations 16 about the Post Office. 17 "The Communications Team continues to engage 18 robustly with Panorama and we will do everything we can 19 to protect our business and its reputation." 20 Could I please turn to POL00162652. If we please 21 turn to page 4., I believe a subpostmaster emailed in 22 regarding the BBC broadcast on 19 August 2015 and we 23 have here your response. You say: 24 "Dear Amjed 25 "Thank you for your email about the BBC programme 113 1 which was broadcast on Monday night. 2 "I am really sorry that it concerned you so much. 3 I also understand that. It painted a very worrying 4 picture. 5 "I would like to reassure you on a few points. 6 "Firstly, the programme was very one sided ... 7 "Secondly, I can assure you that the allegations 8 made are untrue. The Horizon system is efficient and 9 effective while the business takes its approach to 10 prosecutions seriously: we do prosecute where there is 11 evidence of wrongdoing but we never prosecute anyone for 12 making innocent mistakes. 13 "There is no evidence in the cases featured on 14 Panorama of issues in the Horizon system being to 15 blame." 16 Do you think it was right to send such a strongly 17 worded response describing the allegations as "untrue"? 18 A. I don't think I say anything there that we didn't say in 19 our statement to the programme. 20 Q. If we scroll up, he responds on page 3, he says: 21 "Yeah I understand what [you're] saying but if the 22 BBC [are] saying that innocent people [are] getting 23 prosecuted then that scarce the living daylights out of 24 me. 25 "They must have some evidence to broadcast the 114 1 programme? 2 "Also the BBC said that the Post Office has their 3 own laws regarding punishment?" 4 If we scroll up you respond, you say: 5 "Hi Amjed 6 I think Angela is going to call you but just to 7 reassure, the BBC has not seen all the evidence in the 8 cases it featured. We don't have our own laws -- we 9 have to meet the very high standards of the courts and 10 we prosecute very rarely." 11 He follows up again, at the bottom of page 2 and 12 says: 13 "Yeah but I don't understand why the Post Office 14 doesn't come forward and give their evidence or are they 15 hiding something? 16 "I am going to call Angela [tomorrow] morning and 17 have a talk." 18 If you scroll up, you say: 19 "Good idea Amjed. I can assure you we try really 20 hard to get our position across! But we can't talk 21 about individual cases publicly. This is the statement 22 we issued ... 23 "I [do] hope you have a good conversation ... " 24 Do you think take that that was a fair reflection by 25 the Post Office on the Panorama broadcast? Somebody who 115 1 was clearly concerned about the implications and you 2 have said, as I say, in strong terms "I can assure you 3 allegations made are untrue, there is no evidence of 4 cases featured in Panorama of issues in the Horizon 5 system being to blame". 6 Do you think the Post Office looked into that 7 sufficiently before producing rebuttals such as that 8 one? 9 A. I do, I mean, I'm reflecting to Amjed the statement 10 that's linked there, that we gave to Panorama -- our 11 response to the Panorama programme, and I don't know if 12 he spoke to Angela, I hope he did. I think it was 13 a fair reflection of the position, as we understood it 14 at the time, in the context of what we understood at the 15 time. 16 Q. One more document before we break for lunch. It's 17 POL00162672, 16 September 2015. Who are the recipients 18 here? 19 A. This would be Paul and Jonathan, who were the -- they 20 were responsible for the website, the internal website, 21 and also a document called In The Loop, which was a kind 22 of internal news document that we used to send out 23 regularly and we would occasionally send out one-offs, 24 and Alana Renner was Deputy Communications Director. 25 Q. You say: 116 1 "Hi 2 "Please can we schedule the note below for 3 a convenient moment over the next few days for an In The 4 Loop?" 5 So this to communicate to everybody who works at the 6 Post Office or ...? 7 A. Senior managers. 8 Q. Senior management: 9 "You will recall that in August, the BBC broadcast 10 a Panorama programme in which very serious allegations 11 were made about the actions of the Post Office. 12 "In short, it was alleged that some postmasters were 13 prosecuted over losses in branch when in fact there was 14 no evidence to support such action. The suggestion was 15 that the losses were caused by flaws in the Horizon 16 system (despite the absence of any evidence to support 17 this allegation in the cases referred to). 18 "We made clear at the time that these allegations 19 were not true and that the programme was highly 20 misleading. We also had some grave concerns about the 21 way in which the programme was prepared and whether our 22 position was properly reflected, given the BBC's duty to 23 ensure coverage is fair and balanced. 24 "I wanted to let you know that this week we have 25 submitted a formal complaint to the BBC about the 117 1 Panorama programme. This followed a meeting I held with 2 the BBC's director of news and current affairs and the 3 editor of the Panorama programme. 4 "Please let your teams know about this: it is 5 important that colleagues across the business are aware 6 that we are highly active in seeking to defend the 7 business's reputation in the face of these 8 unsubstantiated allegations." 9 We have, by that point, had the Second Sight Interim 10 Report and the Second Sight Second Report. Do you think 11 that you looked into and enquired about the issues with 12 Horizon sufficiently and reflected sufficiently in order 13 to so strongly rebut the BBC Panorama broadcast? 14 A. I do, yes. 15 MR BLAKE: Thank you, sir. That might be an appropriate 16 moment for lunch. 17 SIR WYN WILLIAMS: All right. What time shall we start up 18 again? 19 MR BLAKE: Can we come back at 2.00, please? 20 SIR WYN WILLIAMS: Yes, fine. 21 MR BLAKE: Thank you. 22 (1.01 pm) 23 (The Short Adjournment) 24 (2.00 pm) 25 MR BLAKE: Good afternoon, sir. Can you see and hear me? 118 1 SIR WYN WILLIAMS: Yes, I can, thank you. 2 MR BLAKE: Thank you very much. 3 Moving on to a new subject and that is advising in 4 respect of the Group Litigation. Can we begin, please, 5 with POL00162572, the bottom of the first page. This is 6 6 August 2015. It is just before the 2015 Panorama 7 programme. It seems as though you're circulating to 8 Melanie Corfield and Mark Underwood a draft letter to 9 Alan Bates, and you say: 10 "Hi 11 "What do you reckon? Would this work? I must say 12 I am quite taken with it." 13 The letter begins: 14 "As you know, a Panorama programme is due to air on 15 Monday in relation to the Post Office and the Horizon 16 system. At the same time we are writing to applicants 17 in the Mediation Scheme to urge them to engage with us 18 to arrange a time for mediation to take place. 19 "I know the [Justice for Subpostmasters Alliance] is 20 urging applicants not to take part in mediation. That 21 is your right, of course, and you have your reasons for 22 taking this position." 23 Just pausing there, that's a phrase we see in quite 24 a lot of your emails, or press releases or drafts. We 25 see "that is your right, of course". Is that 119 1 an equivalent of you saying, "You're wrong, we don't 2 agree"? 3 A. No, it's not saying that at all. It's saying everyone 4 has their right to take their position as they see fit. 5 Q. You then continue: 6 "I wanted, however, to write to you to urge you to 7 reconsider the position", and you set out various 8 reasons. 9 If we scroll up to the top, Mark Underwood responds 10 as follows, he says: 11 "My biggest concern is that this 'recognises' the 12 [Justice for Subpostmasters Alliance] and since closing 13 of the [Working Group] ..." 14 "WG", is that Working Group? 15 A. Yes. 16 Q. "... we have made a conscious decision to try to avoid 17 recognising them and their power to seemingly 18 orchestrate applicants' decisions." 19 Were you aware of that conscious decision to try and 20 avoid recognising the JFSA? 21 A. I don't really recall. 22 Q. "Whatever we have sent in the past has been manipulated 23 and has been the springboard for conspiracy theories so 24 at the moment I would be minded not to send the letter 25 to JFSA, especially as [Alan Bates] will, as 120 1 a disengaged applicant, will be receiving his own letter 2 anyway which covers a lot of the similar points. My 3 other thought is that we did end up sending it, I think 4 sending it to all applicants would be dangerous as not 5 all would be represented by the JFSA and it would 6 promote JFSA to them." 7 Can you recall, as at August 2015, a concern about 8 recognising the JFSA and about sending potential 9 applicants their way? 10 A. I don't really recall that, I'm afraid, I'm sorry. 11 Q. Moving on. POL00025509. We're now in June 2016, and 12 this is the terms of reference for the Postmaster 13 Litigation Steering Group. It explains there that, at 14 1.2: 15 "The Postmaster Litigation Steering Group is 16 established to coordinate Post Office's approach and 17 response to the Claim, and therefore brings together 18 representatives from affected teams in the business as 19 set out below ..." 20 Can you recall whose idea the Postmaster Litigation 21 Steering Group was? 22 A. I can't recall whose idea it was. 23 Q. Do you know how often it met? 24 A. I think it met -- it's the one chaired by General 25 Manager Network? 121 1 Q. Can we scroll down? 2 A. Yeah, I think -- so Tom Moran chaired it. So I think 3 maybe -- I can't really recall but I think it probably 4 met weekly or at least fortnightly. 5 Q. Is this the body through which significant matters in 6 the litigation would be discussed and strategy 7 discussed? 8 A. It was certainly the sort of coordinating group, if you 9 like, that would come to together to assess what was, 10 you know, the latest developments, et cetera, et cetera. 11 Q. I want to look now specifically at the recusal 12 application. Could we please turn to POL00157065. 13 So this is going on quite a bit in time, we're now 14 on 17 March 2019. Jane MacLeod emails Alisdair Cameron, 15 as follows, she says: 16 "Al 17 "I have ready to send to the Board the following ... 18 "Draft paper from me ... which recommends the 19 recusal application and retaining counsel on the basis 20 I proposed to you yesterday. 21 "Lord Neuberger's preliminary advice. 22 "Advice from [Womble Bond Dickinson] ..." 23 It says: 24 "Lord Grabiner has commented this afternoon (not to 25 be repeated): 122 1 "'Treat this as my broad "yes that is okay'. 2 "I'm still wading through the treacle of this mad 3 judgment. I don't understand what he thought he was 4 doing or what he thought he was supposed to be doing. 5 The constant repetition of the mantra that he wasn't 6 deciding anything outside of the common issues is hardly 7 credible. I've yet to get to the many other matters but 8 I can see from Gideon's note and from the various quotes 9 that it just gets worse'." 10 Then she says as follows: 11 "I have discussed stakeholder and comms issues with 12 both Mark and Patrick. They both acknowledge that this 13 will be difficult to manage and will cause significant 14 noise in more than one quarter, however, they are both 15 supportive of a strategy that delivers the best legal 16 outcome for Post Office." 17 What do you recall of the conversation you had with 18 Jane MacLeod? 19 A. Well, my recollection is largely, as effectively set out 20 here, in that she updated me on the potential proposal 21 to apply for recusal and asked me for my view as to how 22 that would -- what sort of reaction that might provoke 23 in external communications terms, so in terms of the 24 media or, indeed, wider stakeholders, MPs, et cetera, 25 et cetera. 123 1 Q. Can you recall what her personal view was? 2 A. I can't recall her personal view, no. 3 Q. Why do you think it was that the Communications 4 Director, you, would be involved in the decision as to 5 whether to seek the recusal of a judge or not? 6 A. I think it's not really a question of whether I was 7 involved in the decision; I think it was a question as 8 to whether -- as to the business assessing what the 9 potential reaction externally, in media terms and MP 10 terms and other stakeholder terms, might be, as part of 11 a process of reaching a decision a very -- clearly very 12 difficult and challenging finely balanced decision. 13 Q. Can we turn to POL00021563, please. This seems to be 14 a Board meeting. Was it unusual to have these attendees 15 at this particular -- at the board meeting? 16 A. Sorry, unusual to have? 17 Q. We see a number of attendees from Norton Rose, we see -- 18 A. Sure, sure. 19 Q. -- Jane MacLeod attending as well. Do you recall this 20 being a particularly noteworthy meeting at all? 21 A. I recall that it was -- I think it was a -- effectively 22 a special meeting to consider the recusal question. 23 Q. If we scroll down, please, we have a summary of the 24 discussion with Lord Grabiner, and we have Jane MacLeod 25 there reporting about the call that had been held, that: 124 1 "[He] had reviewed the Common Issues Judgment and 2 understood how it impacted on the current and 3 prospective trials. He noted that the judge had 4 received several warnings about allowing inadmissible 5 materials but had chosen to do so and as such had 6 behaved improperly and was wrong as to the law. It was 7 an unusual case which was unusual procedurally." 8 If we go over to page 4, please, about halfway down, 9 it says there: 10 "Mark Davies' view was sought from a communications 11 and stakeholder perspective." 12 Who did you see as the stakeholders? 13 A. Well, it would be the -- I suppose all of the people 14 involved in this issue from the JFSA through to MPs and 15 peers, others, but obviously the broader media, as well. 16 I think it was, you know, a general question as to how 17 this decision would effectively land, if you like, in 18 those different quarters. So I gave my view, which 19 I think, notwithstanding it was likely to generate some 20 adverse publicity, but, obviously, it wasn't a decision 21 that should be taken based on, you know, how it would be 22 received in the media or among stakeholders. 23 Q. Were you often called upon to give a stakeholder 24 perspective? 25 A. Yes, it was part of my job. 125 1 Q. Do you count subpostmasters as stakeholders? 2 A. Yes. I mean, both in terms of the NFSP, so the 3 representative body, the JFSA, so individual 4 subpostmasters themselves. Obviously there were 5 different sorts of different groups of postmasters. 6 There was obviously the Crown branches that we owned or 7 the Post Office owns, there was the large main Post 8 Office branches, there were the local branches. So, 9 absolutely yes. 10 Q. It might be suggested that the decision to seek the 11 recusal of the judge was quite an aggressive litigation 12 tactic. Can you see how, if the stakeholders were 13 subpostmasters, it might actually be in their interests 14 not to take such a tactic? 15 A. Not to take recusal? 16 Q. Yes, as in might it have been in some stakeholders' 17 interests not to have approached the litigation in that 18 way? 19 A. Absolutely. 20 Q. Did you make that clear? 21 A. Absolutely. 22 Q. So you explained to the Board on this occasion that they 23 might want to consider the interests of subpostmasters? 24 A. Well, I mean, I don't recall the conversation, I really 25 don't. I do remember that it was, you know, obviously 126 1 a very finely balanced decision and there was no 2 question that such a significant step would have caused 3 a significant amount of media and other interest, and 4 a part of that would be a stakeholder reaction from 5 within the subpostmaster community that would 6 undoubtedly be concerned, at the very least, about such 7 a decision. 8 Q. Protecting the business long term, presumably also 9 included protecting the interests of subpostmasters? 10 A. Absolutely. 11 Q. Was that something you communicated to the Board? 12 A. I can't recall the conversation. 13 Q. If we turn over the page, we can see that: 14 "After careful consideration of all the arguments, 15 each Director present and participating in the decision, 16 supported a resolution of the Board that an application 17 should be sought for the judge to recuse himself from 18 the case ..." 19 Can we please look at POL00359871. If we look at 20 the bottom email, please. Can you assist us, was this 21 an announcement of some sort that you were drafting? 22 A. So this looks like we'd been asked to make a -- to draft 23 a statement on the decision that the Board had reached 24 to recuse, to -- sorry, to seek application to recuse. 25 Q. You say: 127 1 "We have reflected in great depth on the long and 2 detailed judgment from the first trial. After serious 3 consideration and following advice from external legal 4 counsel not previously engaged on these issues, we have 5 decided to seek leave to appeal the findings. 6 "Furthermore, we will today also be making 7 an application for the sitting judge to be recused from 8 the ongoing and upcoming trials. We are acutely aware 9 of the significance of this application, but (based on 10 the [evidence] we have received) we have serious 11 reservations about the judge's ability to remain 12 impartial in ongoing and future Post Office hearings. 13 "We do not take this action lightly. However we 14 passionately and firmly believe that this application is 15 in the best interests of Post Office customers, 16 postmasters and their staff and the communities who rely 17 on our network and services every single day. 18 "We will take urgent steps to address the criticisms 19 made in the judgment about aspects of the Post Office's 20 practices and behaviour but have confidence in our 21 position and defence of this group litigation." 22 If we scroll up, please, Patrick Bourke responds and 23 says: 24 "I think this is much better -- preserves the tone, 25 but much shorter. Two immediate observations -- can we 128 1 reintroduce the fact that we are making operational 2 changes following the judgment, so we can't be accused 3 of burying our head in the sand; and I might be tempted 4 not to use the word 'passionately', not because 5 I disagree with the sentiment, but because I wonder 6 whether, again, someone might say this is an emotional 7 reach which just goes to show how incapable we are of 8 being objective and open to the possibility of our being 9 wrong ... or some such." 10 Can you recall how high up within the organisation 11 this particular press release or statement went? 12 A. Well, it wouldn't have been signed off without it going, 13 I imagine, certainly to the Executive, to the Group 14 Executive and probably to the Board as well. 15 Q. Can we turn to POL00269602. You have, by this stage, if 16 we turn over to the second page, I think, circulated the 17 draft. 18 A. Yeah. 19 Q. This is 21 March, 9.43 am to Jane MacLeod, and you say: 20 "As the application for recusal will be made this 21 morning and likely to be public by lunchtime, we have 22 prepared the statement below with input from Portland 23 and Legal Team." 24 How often would you involve Portland Communications? 25 A. Well, over the course of the period I was at the Post 129 1 Office, it would depend whether they were working for us 2 at that particular time. They were a public affairs 3 communications agency who, I think, had been brought in 4 to work with us on this particular issue at this 5 particular time. They'd been -- worked for us 6 previously on different briefs and as had other public 7 affairs organisations. But, obviously, on a statement 8 as important as this one, we would absolutely get their 9 view on it. 10 Q. You say: 11 "I would like to send to the board and BEIS/UKGI for 12 information and we will also prepare internal and 13 stakeholder communications." 14 Then Jane MacLeod responds on the first page, if we 15 scroll up, she says: 16 "Try this ... (Al off copy)." 17 Can you recall why Alisdair Cameron was removed from 18 the copy? 19 A. I can't recall, no. I mean, I think -- and I think 20 I recall that Jane and I spoke about obviously needing 21 to have a statement prepared for this announcement and 22 I'm pretty sure we spoke either that day or the previous 23 day very early in the morning, which was then the basis 24 of the statement that she has then amended here. 25 Mr Cameron, at the time, was the Interim Chief 130 1 Executive, I think, or perhaps -- I can't quite recall 2 but Paula Vennells was -- had either left by that point 3 or was away because of family -- for family reasons. 4 So Alisdair was the acting CEO, so it's possible 5 that she removed him just to ease his inbox while we 6 made final changes before we then went to him with the 7 final proposal. 8 Q. We scroll down she has struck through the following, it 9 says: 10 "We will continue to make operational and other 11 improvements, including those raised by the judgment, in 12 the interests of our customers and postmasters." 13 She struck through as follows: 14 "... including those raised by the judgment. The 15 applications we will be making [have made] reflects, 16 however, our overall confidence in the legal position 17 relating to our defence of this Group Litigation." 18 Then she has also struck through below. Were you 19 aware of any concern on her part about the confidence in 20 the legal position? 21 A. Not that I recall, no. 22 Q. I want to move now to the Horizon Issues judgment. Can 23 we please turn to POL00281725. We're now on 28 August 24 2019. If we could have a look at the bottom email, 25 Melanie Corfield emails, there's a zip file of documents 131 1 for the recipients to look at. I'll come back to the 2 top email, I just want to take you to a couple of the 3 underlying documents. Can we please look at 4 POL00023606. This is one of the attachments, this is 5 number 5. There are, as I say, a large number. Were 6 you involved in the drafting of this? 7 A. No. 8 Q. Who would have been involved in the drafting? 9 A. Melanie led on the drafting. This was preparatory work 10 for a judgment, so, obviously, at this point, we didn't 11 know what the judgment would say but it was work we 12 would do as a matter of course, really, to prepare for 13 judgments or -- judgments or indeed any kind of event 14 that was about to take place that affected the Post 15 Office. We'd obviously prepare, have pre-prepared 16 material. 17 Q. Were you Melanie Corfield's manager, supervisor? 18 A. I wasn't her direct manager but she was part of my team, 19 absolutely, yeah. 20 Q. It looks as though there is a call script being prepared 21 for you or it says, "Mark Davies [to be confirmed]"? 22 A. Yeah. 23 Q. If we go over the page, please, one of the points to 24 make, it says: 25 "We should be reassured that the view of both 132 1 independent expert witnesses who gave evidence in the 2 litigation is that all the indications are that Horizon 3 is robust, comparing well with similar systems across 4 retail and financial service sectors which have to be 5 highly reliable." 6 There's another attachment. Can we please turn to 7 POL00023623. In very similar terms, there's a video 8 script. It says, "Delivered by Mark Davies [to be 9 confirmed]". 10 Were you going to be on camera making a statement or 11 what is this for? 12 A. Well, again, this is preparatory work for the judgment. 13 We didn't know when the judgment would be handed down so 14 these scripts, pieces of communications were being 15 prepared in anticipation of the judgment being handed 16 down and, of course, would be revised and amended, 17 subject to, of course, the finding, which, of course, 18 self-evidently at the time, we didn't know the what 19 judgment would be. So I think the "Delivered by Mark 20 Davies TBC" is a possibility that I might have done that 21 video but it's entirely possible that somebody else 22 might have done it. 23 Q. The second bullet point says: 24 "The judgment raises a number of issues [and 25 criticisms] but what I want to do straight away is 133 1 reassure you about that we can have confidence in the 2 overall robustness of Horizon and that it compares well 3 with systems used by other retail and financial services 4 companies each day. Both independent experts, for Post 5 Office and the claimants in the case, on opposite sides 6 of the litigation, confirmed this." 7 Then if we go back to the email we were looking at 8 before, that's POL00281725, we have comments to Melanie 9 Corfield from Andrew Parsons, the lawyer at Womble Bond 10 Dickinson, and he says as follows, he says: 11 "The one repeating message throughout the documents 12 is that Horizon is robust because both experts say so. 13 This is correct as at today, but if the judge finds that 14 Horizon is not robust then he will likely have found 15 a reason to sidestep or disavow the expert evidence. In 16 those circumstances then I'm not sure this comms message 17 will hold water. It may be worth working up an 18 alternative comms package on the basis that the Judge 19 throws out the expert's views." 20 Just pausing there, as at 28 August 2019, was it 21 unclear within your team that -- were you not aware, 22 within your team, should I say, that a possibility was 23 that the judge could actually find that Horizon was not 24 robust? 25 A. Oh, of course. I mean, it was entirely possible. 134 1 I mean, Andrew Parsons is right to raise these issues. 2 Q. Did they come as a surprise to you? 3 A. Not at all. I mean these were preparatory -- as I say, 4 documents that were being prepared in advance of any 5 announcement so we had to think through well, what sorts 6 of materials will we need for that judgment? So they 7 would be prepared as drafts but then, obviously, once 8 the judgment had come in, would be revised extensively 9 to be in line with that judgment, effectively ripped up 10 and started again. So Andrew was -- Andrew's quest -- 11 Andrew's point about the one repeating message -- "If 12 the judge finds that Horizon is not robust, then he will 13 likely find a reason to sidestep or disavow the expert 14 evidence, in those circumstances I'm not sure this comms 15 message will hold water" -- he's completely right about 16 that and Melanie and all of those who were preparing 17 this package would have been similarly aware but were 18 working based on what they understood at the time. 19 Q. Was Mr Parsons quite involved during the litigation, in 20 feeding into these communications messages? 21 A. We always sought to make sure that -- because 22 communications messages are not just produced by the 23 Communications Team; they're produced by Communications 24 Team and then in collaboration with other teams across 25 the organisation and Mr Parsons was -- and external 135 1 organisations as well, and Mr Parsons was part of that 2 broader group of people dealing with the litigation. 3 So, you know, he's right to raise the point but it would 4 have been a point that we would have all said, "Well, 5 yes, that's right Andrew, we totally hear what you say", 6 because we're not just going to put out what we want to 7 put out, we're going to see what the judgment says and, 8 of course, the judgment would have said something very 9 different. We would have torn up those materials and 10 started again. 11 Q. We see also a further comment on the paragraph below. 12 A. I beg your pardon, sorry? 13 Q. We see a further piece of advice on the third paragraph 14 on the page as well. 15 A. Mm. 16 Q. I want to move on to issues of non-disclosure in the 17 litigation. Could we please look at POL00112596. This 18 is an email halfway down from Ben Foat on 2 October 19 2019. He emails Nick Read, Alisdair Cameron and you. 20 He says: 21 "A disclosure issue has arisen in respect of the 22 [Group Litigation Order] Horizon trial for you to be 23 aware. It appears that Post Office failed to disclose 24 potentially relevant documents in those proceedings. 25 You will recall that we are currently awaiting the 136 1 Court's judgment in respect of those proceedings." 2 If we look at the top of the page, you say that you 3 will brief the Comms Team as discussed. Do you recall 4 this issue? 5 A. I absolutely recall the email from Ben and it was 6 obviously a -- I think there's another email that's been 7 disclosed from Alisdair Cameron, which I think captures 8 very -- 9 Q. Let's have a look at that, shall we? It's POL00112591 10 and this is Alisdair Cameron's response. He says: 11 "Ben I read this with real distress, it is 12 horrendous. Of course we must tell the court 13 immediately now we know. The narrative should be very 14 clear that Fujitsu told us one thing and have now told 15 us something else and we have at all times told the 16 court what we believe to be true." 17 He says: 18 "Fir FJ [I think that might be 'For Fujitsu'] we 19 have time to make decisions but this is the third time 20 they have misled us or changed stories and I think we 21 have to follow that logic. So, what is the appropriate 22 response? Do we need to insist that a third party 23 review and test their evidence?" 24 In your witness statement you have been very 25 complimentary about Paula Vennells, about Angela van den 137 1 Bogerd, about Alice Perkins. I don't believe that there 2 is a mention in complimentary terms about Alisdair 3 Cameron. The openness that you have been discussing 4 seems evident in this 2019 email. Why haven't you 5 praised Alisdair Cameron in the same way? 6 A. There's no particular reason for that. He captures in 7 this email extremely well the sense of distress and 8 anger that there was when we got that email from Ben. 9 I worked closely with Alisdair, a huge amount of 10 admiration for him. 11 Q. I'm going to move on to the topic of remote access now. 12 Could we please begin with POL00028062, and this the 13 Deloitte report of 23 May 2014. It's page 31 I'd like 14 to look at. When did you first become aware of this 15 report? 16 A. I don't think I've ever seen this report but I was aware 17 of Deloitte obviously having done the work, I guess 18 probably around the -- I don't know exactly when. I'd 19 be guessing. 20 Q. Okay. If we scroll down we can see some passages from 21 the report. The Inquiry has seen these number of times, 22 I will speed through them. The first is: 23 "A method for posting 'balancing transactions' was 24 observed from technical documentation which allows for 25 posting of additional transactions centrally without the 138 1 requirement for these transactions to be accepted by 2 subpostmasters ... Whilst an audit trail is asserted to 3 be in place over these functions, evidence of testing of 4 these features is not available ..." 5 Third bullet point says: 6 "For 'balancing transactions' ... we did not 7 identify controls to routine any monitor all centrally 8 initiated transactions to verify that they are all 9 initiated and actioned through known and governed 10 processes or controls ..." 11 The final bullet point: 12 "Controls that would detect when a person with 13 authorised privileged access used such access to send 14 a 'fake' basket into the digital signing process could 15 not be evidenced to exist." 16 You say that you were aware of the report in broad 17 terms. Can you recall when you first discussed the 18 report with anybody? 19 A. No, I can't recall that. 20 Q. Were you aware of the significance of the report? 21 A. No I wasn't. I don't think I ever saw this report and, 22 certainly, this is -- obviously I saw it when it was 23 disclosed to me but I didn't see it at the time. 24 Q. Could we please look at POL00308968. I'm going to look 25 at a series of emails discussing the issue of remote 139 1 access. This one is from Melanie Corfield to you in 2 December 2014, so the same year as that report. She is 3 sending an email regarding various comms lines. Then if 4 we look halfway down, there's a section on remote 5 access. She says: 6 "I am working on the dismissal of the 'remote access 7 conspiracy' theory. It is so totally loony and need 8 right words to explain that." 9 Was that a view that was shared within your team, 10 that the remote access issue is a loony conspiracy 11 theory? 12 A. They're not the words I would have used. 13 Q. Did you respond and say, "It's not a loony conspiracy 14 theory"? 15 A. I don't think so, no. I mean, I think we -- as 16 I understood it, remote access in whatever form had been 17 used in a very limited amount -- I think maybe one case 18 and so, in a sense, we -- where we were being told or 19 believed -- people believed that the Horizon system 20 didn't work as it should do and that money was being 21 lost through -- in branches as a result, it didn't seem 22 to make much sense that remote access would be the cause 23 of that. We were unclear who would be seeking remote 24 access to branch data and why they would be moving money 25 around using that, so it seemed unlikely. 140 1 We were told there was a basement facility at the 2 Bracknell headquarters of Fujitsu, where men in plain 3 clothes were accessing the system and moving money 4 around, and it all felt -- it didn't feel like the kind 5 of organisation that we knew we were part of. 6 Q. We've seen various emails from yourself talking about 7 conspiracy theories in very similar terms to the words 8 used there. Was there a culture in your department that 9 made it okay for those who worked under you to refer to 10 these kinds of issues as totally loony? 11 A. No, there wasn't. 12 Q. Can we please look at POL00162285. It's an email of 13 30 January 2015, very early in the morning 7.29 in the 14 morning, from Paula Vennells regarding the upcoming 15 appearance at the Select Committee. 16 "Dear both, your help please in answers and phrasing 17 those answers, in prep for the [Select Committee]: 18 "1) 'is it possible to access the system remotely? 19 We are told it is'. 20 "What is the true answer? I hope it is that we know 21 this is not possible and that we are able to explain why 22 that is. I need to say no it is not possible and that 23 we are sure of this because of xxx and that we know this 24 because we have had the system assured." 25 Did those words stick out for you at all? 141 1 A. They stick out in the sense that Paula was seeking to 2 get absolutely to the bottom of whether or not remote 3 access was possible or not because she needed to be able 4 to explain exactly what the position was. 5 Q. It might be suggested that the words there "I need to 6 say no it isn't", was, in fact, an instruction to look 7 for material that tended to go against remote access? 8 A. That's categorically not the case. 9 Q. "2) 'you have said that this is such a vital system to 10 the Post Office, what testing do you do and how often? 11 When was the last time?'" 12 So there are two separate questions: one on remote 13 access and the second on testing. It says: 14 "Lesley, I need the facts on these -- I know we have 15 discussed before but I haven't got the answer front of 16 mind -- too many facts to hold in my head! But this is 17 an important one and I want to be sure I do have it. 18 And then Mark, to phrase the facts into answers, plus 19 a line to take the conversation back up a level -- ie to 20 one of our narrative boxes/rocks." 21 That's the reference to rocks. Do you recall I took 22 you very early on to an email in which you outlined 23 three rocks? It certainly looks like Paula Vennells 24 there is referring to the rocks that you developed. 25 A. No, not those rocks. "Rocks" was a phrase that Paula 142 1 would use from time to time. She obviously, when she 2 was doing a Select Committee or some other kind of 3 interview she would often say: what are my three rocks? 4 What are the three key facts in this particular issue? 5 So it was a phrase she used regularly in all sorts of 6 contexts. 7 Q. Can we turn to POL00150992. We're still in the early 8 hours. It's the top email, Lesley Sewell -- it's not 9 sent to you but we'll see in due course what happens. 10 Lesley Sewell says: 11 "Julie/Dave ..." 12 Who are Julie George and Dave Hulbert? 13 A. As far as I recall, they were colleagues of Lesley's in 14 the IT Team. 15 Q. Lesley says: 16 "I need some help with both of these. 17 "Julie: the first is for you. This really is in the 18 back of the Deloitte review." 19 Now, looking at that now, do you understand that to 20 be a reference to the Deloitte report we just looked at? 21 A. Yeah. 22 Q. She says: 23 "This is fairly urgent as Paula is preparing for 24 Select Committee next week." 25 Was there a conversation between Lesley Sewell and 143 1 yourself about the Deloitte review at this stage? 2 A. I can't recall with any certainty. It's entirely 3 possible but I can't recall. I had many conversations 4 with Lesley. 5 Q. POL00386587. We're moving from 7.35 to 8.11 in the 6 morning. Lots of activity first thing. If we look at 7 the top email -- thank you -- so from Melanie Corfield 8 to you and Jane Hill. She says: 9 "Thanks Mark. We are already well covered on (1) -- 10 it's in the existing brief (remote access IS possible 11 but we have strong line on conditions for that)." 12 Do you recall that the initial response from your 13 team, Melanie Corfield in your team, was that remote 14 access is possible? 15 A. In certain circumstances, yes. Yeah. 16 Q. POL00162287. 8.29 in the morning, halfway down -- thank 17 you -- we have Lesley Sewell emailing you and saying: 18 "I've got my guys pulling something together, then 19 we should catch up." 20 You see that's why I asked about the Deloitte report 21 because Lesley Sewell has, straight after receiving the 22 email from Paula Vennells, referred to it being in the 23 Deloitte report. Then it seems as though there was 24 a proposed catch-up. Do you recall whether there was or 25 wasn't a catch-up around that time? 144 1 A. I don't recall, I'm sorry. 2 Q. If we scroll up to the top, we have an email from you 3 saying: 4 "Hi 5 "Ta. There are lines already which Mel can send 6 you -- then we should review." 7 Again, suggestive that there was some sort of 8 collaboration -- 9 A. Yeah. 10 Q. -- I don't mean that in a negative way but between you 11 and Lesley Sewell? 12 A. So no, it would be a case that the lines that Mel had 13 referred to on the previous email, which we already had 14 on this issue, making sure that those lines were still 15 correct, based on what Lesley and her team would -- the 16 work that they would do. 17 Q. If there were something significant like we've just seen 18 in the Deloitte report, would you have expected Lesley 19 Sewell to have brought it to your attention? 20 A. Yes. 21 Q. Can you recall having any conversation about it? 22 A. Beg your pardon? 23 Q. Can you recall having any conversation? 24 A. I can't. I can't recall the conversation with Lesley on 25 this subject. I mean, I'm sure I had many conversations 145 1 with her on the subject but I don't recall a specific 2 one on that day. 3 Q. Could we please look at POL00031538, page 3. It's 4 an email from Dave King at the bottom, the Senior 5 Technical Assurance Manager; do you recall Mr King? 6 A. No. 7 Q. He says: 8 "Julie, I have answered as best I can but 9 I understand that Kevin Lenihan is also getting the 10 information from Fujitsu (I do know these have been 11 answered for the lawyers and Deloitte when they were 12 looking at this):" 13 So again, another reference to Deloitte there. It 14 says: 15 "The system has remote access only for Fujitsu 16 support personnel through a support gateway against 17 which all activity is monitored. 18 "All transactions are written to an immutable audit 19 trail at the point of completion and it is from this 20 store that any evidential information is obtained." 21 So that looks like confirmation that remote access 22 is possible for Fujitsu support personnel? 23 A. Mm-hm. 24 Q. Do you agree with that? 25 A. I do. 146 1 Q. If we scroll up, there's an email -- it's that email at 2 the top, so if we could scroll slightly further up -- 3 an email again from Dave King to Julie George, and he 4 says as follows: 5 "There is no remote access to the terminals in 6 branches. The only access channel is through the 7 support network for software updates etc. There is 8 nothing stored on the terminal all transactions are 9 committed at the data centre. It is not possible to 10 instantiate a remote desktop session on a terminal and 11 undertake transactions as if it were being done at that 12 terminal." 13 So that seems to be confirmation that you won't see, 14 for example, a cursor moving or anything along those 15 lines; do you understand that? 16 A. I think so, yeah. 17 Q. Then if we scroll up on that page, we can see that 18 Lesley Sewell forwards that to you on 30 January. She 19 says: 20 "Mark 21 "Please see below." 22 Then if we scroll up, please, we see your response 23 as follows. You say: 24 "Hi 25 "I'm still really confused about this -- Dave says 147 1 below: 2 "There is no remote access to the terminals in 3 branches. 4 "The only access channel is through the support 5 network for software updates. There is nothing stored 6 on the terminal all transactions are committed at the 7 data centre. It is not possible to instantiate a remote 8 desktop session on a terminal and undertake transactions 9 as if it were being done at that terminal. 10 "This seems to conflict with our lines where it says 11 that 'it is possible to add to transactions to make 12 a correction'. 13 "We need (obviously) to be absolutely certain on all 14 this. Help!" 15 If we scroll above we have response from Julie 16 George which says: 17 "As I understand it ... Kevin Lenihan is pulling 18 this all together for Melanie to make sure there is only 19 one version and one comms route." 20 Could we please turn to POL00151050. It's the third 21 page, please. Thank you. The third page. It's 22 an email from Mark Underwood at 3.50 pm, and he is 23 emailing, is that James Davidson and Kevin Lenihan, and 24 he says: 25 "Hi Kevin my proposed answer to the first question 148 1 below (it can be sent in its entirety to Mel and she can 2 pick and choose). Though this will need to be signed 3 off by James as accurate." 4 Then if we scroll down: 5 "In terms of [Question] 1 6 "This question often phrased by applicants and 7 Second Sight is: 8 "'Can Post Office remotely access Horizon?' 9 "Phrasing the question this way does not address the 10 issue that is of concern to Second Sight." 11 This seems to be a stock answer that was prepared 12 for the Second Sight Report; is that correct? 13 A. I think that's correct. That looks correct, from 14 looking at these. 15 Q. "... issue that is of concern to Second Sight and 16 applicants. It refers generically to 'Horizon' but more 17 particularly is about the transaction data recorded by 18 Horizon. Also the word 'access' means the ability to 19 read transaction data without editing it -- Post 20 Office/Fujitsu has always been able to access 21 transaction data, however it is the alleged capacity of 22 Post Office/Fujitsu to edit transaction data that 23 appears to be of concern. Finally, it has always been 24 known that Post Office can post additional correcting 25 transactions to a branch's accounts but only in ways 149 1 that are visible to subpostmasters. It is the potential 2 for any hidden method of editing data that is of 3 concern." 4 Another question: 5 "Can Post Office or Fujitsu edit transaction data 6 without the knowledge of a subpostmaster? 7 "Post Office confirms that neither it nor Fujitsu 8 can edit transaction data without the knowledge of 9 a subpostmaster. 10 "There is no functionality in Horizon for either 11 branch, Post Office or Fujitsu to edit, manipulate or 12 remove a transaction once it has been recorded in 13 a branch's accounts." 14 So it looks as though that actually pre-dates the 15 other information that we've seen, because that is, as 16 we've discussed, a response to applicants and Second 17 Sight. 18 A. Mm. 19 Q. If we stick with this email chain and go to page 1, 20 please. If we scroll down, there's another response 21 from James Davidson, who's actually, I think, from 22 Fujitsu, the Post Office Account. He says as follows: 23 "I have just seen this as was working in another 24 mail to you which I have posted below." 25 He posts the original draft that he was going to 150 1 send: 2 "Having looked again at the request from Paula, it 3 appears that the fundamentals around this question 4 (remote access) are not understood. I suggest that 5 Paula is briefed along the lines of the following. 6 "1) No transaction data is held locally in any 7 branch. 8 "2) Subpostmasters directly manage user access and 9 password setting locally ... 10 "3) Once a transaction has been completed, there is 11 no functionality (by design) for transactions to be 12 edited or amended. Each transaction is given a unique 13 number and 'wrapped' in a digital encryption seal to 14 protect its integrity. All transactions are then posted 15 to a secure and segregated audit server. 16 "4) On approval, there is the functionality to add 17 additional transactions which will be visible and have 18 a unique identifier in the audit trail. This is 19 extremely rare and only been used once since Go Live of 20 the system in 2010 (March 2010). 21 "5) Support staff have the ability to review event 22 logs and monitor, in real time, the availability of the 23 system infrastructure as part of standard management 24 process. 25 "6) Overall system access is tightly controlled via 151 1 industry standard 'role based access' protocols and 2 assured independently", et cetera. 3 Could we please turn to POL00151049. That email is 4 then forwarded to you by Lesley Sewell, at 5.28 pm on 5 30 January. Can you see, if we scroll down, we can see 6 that email; do you agree with that? 7 A. Sorry, yes. 8 Q. Can we turn to POL00029812. This is an email from 9 Melanie Corfield just over an hour after confirmation 10 had been provided that it was possible. If we scroll 11 down, we can see we're there at 6.17: 12 "Thanks again to everyone. This all provides the 13 reassurance needed for Paula in my view [regarding] any 14 [questions] that come up on this. If we get more 15 queries on any aspect I will let you know." 16 By the end of January 2015, was it all a little bit 17 muddled at the Post Office, with regards to remote 18 access? 19 A. I don't think so. 20 Q. What do you think the position was? 21 A. That remote access was potentially possible in certain 22 circumstances. 23 Q. Could we please turn to POL00029849. This is Second 24 Sight's Part Two Report of 9 April 2015. Could we 25 please turn to page 30. So we were looking at January 152 1 2015 before, we're now in April 2015. Halfway down the 2 page, this is a section on "Transactions not entered by 3 the subpostmaster or their staff". 14.4 says: 4 "One applicant to the scheme had given evidence 5 relating to the facility in the Bracknell office ..." 6 They say at 14.5: 7 "Our review of those files has been inconclusive, 8 possibly due to just one month of data being provided, 9 rather than the 12 months requested. We believe that it 10 is essential to examine contemporaneous documents from 11 the relevant time, in order to form a reliable, evidence 12 based, conclusion on this important aspect. 13 "Several applicants have stated that they believe 14 (or suspect) that their branch terminals have been, or 15 can be, accessed remotely or that their branch data can 16 be amended without their knowledge or approval. Post 17 Office have denied that it is possible to: 18 "'amend branch data remotely'." 19 If we scroll down, please, to 14.10, they say: 20 "In our Interim Report we referred to a software bug 21 in Horizon that had impacted a small number of branches. 22 We have recently discovered two further documents that 23 describe in more detail how the Post Office handled this 24 issue. In both of these documents a process is 25 described that involves directly altering branch data. 153 1 The fix for this error reported in the document named 2 'Correcting Accounts for "Lost" Discrepancies', created 3 by a senior engineer at Fujitsu in September 2010 ..." 4 It says: 5 "The data can be corrected by adjusting the 6 appropriate Opening figures and BTS data that relates to 7 the current TP. This will result in the discrepancy 8 needing to be processed when rolling over into the next 9 [trading period]. 10 "I propose that if we are to do this then we take 11 a copy of the data for one branch and check out the 12 proposed changes on a test system and then roll over the 13 branch on the test system to ensure that the discrepancy 14 is handled correctly before we attempt to correct live 15 data." 16 Then it says at 14.11: 17 "This document refers to correcting live data, 18 a procedure that Post Office has denied was possible. 19 Of potential significance is the fact that this was not 20 just an internal document made available to a small 21 number of Fujitsu employees, as the copy we were 22 provided with was printed out by the head of Post 23 Office's legal prosecution team in October 2010." 24 So you've said that, looking at those earlier 25 emails, it was sufficiently clear to the Post Office 154 1 that it was possible in certain circumstances to access 2 the data remotely. It seems as though on 9 April 2015 3 it was certainly unclear to Second Sight and they didn't 4 feel they had received enough information from the Post 5 Office; do you agree with that? 6 A. I think this is Second Sight's Part Two Report, I think 7 I'm right in saying. 8 Q. Yes. 9 A. And I think I'm also right in saying that Post Office, 10 shortly after this report, we did a full response to the 11 Second Sight Part Two Report, which maybe you're going 12 to take me to. We're obviously in some very deep 13 technical territory here. I'd really be keen to see 14 what the Post Office's response had been in its response 15 to this particular part of the Second Sight Report. 16 Q. But the response that you gave me before was quite 17 simple, quite straightforward, quite clear to understand 18 that it was possible in certain circumstances. We have 19 here a question mark being raised by Second Sight and 20 I want to take you now to a response that you gave to 21 the Panorama programme in the same year, in June 2015. 22 Can we please look at POL00317548. It's page 10, 23 please. Sorry, if we could start at the bottom of 24 page 9. So we have an email here from you, 16 June 25 2015. So two months after that Second Sight Report. 155 1 Matthew Bardo and Connor Spackman, who were they? 2 A. They were Panorama researchers/reporters. 3 Q. "Many thanks for your email of late Friday afternoon and 4 for the further detail it provides in terms of the 5 ground you wish to cover in your programme, and for 6 Matt's follow-up. My apologies for getting back to you 7 slightly later than I had planned. 8 "As you know, I remain puzzled and concerned that 9 the BBC did not see fit to raise the majority of these 10 issues and the very serious allegations within them with 11 us when we met your colleagues at our offices last 12 Tuesday." 13 You then go on to address a number of matters. If 14 we could scroll down, and onto page 11: 15 "As we made clear in the lengthy session we had with 16 your colleagues last Tuesday, we are not prepared to 17 engage in a public debate about cases." 18 If we scroll down, it says: 19 "It follows that I will not be addressing each and 20 every point raised in your email. Happy, I am happy to 21 respond more thematically as follows ..." 22 You address issues such as prosecutions, if we 23 scroll down you address Horizon, and it is here and over 24 the page that I'd like to take you to. You say as 25 follows: 156 1 "Post Office cannot edit, amend or otherwise alter 2 branch data remotely; it can add a transaction to 3 a branch account -- this is, naturally, subject to 4 rigorous authorisation protocols and carries a unique 5 identifier code rendering it immediately distinguishable 6 from any other transaction." 7 Were these your words? 8 A. This would have been -- this email would have been -- 9 obviously, it's my words, it's my email. We would have 10 put it together as a team and with IT as well. 11 Q. The words used there are "Post Office cannot edit, amend 12 or otherwise alter branch data". 13 Were those words chosen carefully? 14 A. All the words were chosen carefully. 15 Q. Were they chosen intentionally because you knew that 16 Fujitsu could edit, amend or otherwise alter? 17 A. No. 18 Q. How can you be so confident in that? 19 A. Because there may be errors in this email but I know 20 that I never set out to intentionally mislead at any 21 point in my career at Post Office or indeed any point in 22 my career ever. So that's why I can be confident. Now 23 if there's a mistake in this email, I can only apologise 24 for it. 25 Q. Responding to Panorama, after the Second Sight's Part 157 1 Two Report, when they had raised concerns about it, 2 wouldn't you want to be 100 per cent sure that every 3 single word on remote access was very carefully used? 4 A. I would, yeah. 5 Q. Do you think that there was a failing here? 6 A. I'd like to see the statement that we issued to Panorama 7 in advance of the programme. This is not that. This is 8 an email to the researchers. I'd be keen to see what we 9 said in that statement. I hope that we were absolutely 10 correct in what we said in that statement but we 11 certainly didn't intend to mislead if we did. 12 Q. I want to now return to 2016. Could we please look at 13 POL00029994, please. We're still on the topic of remote 14 access. At the bottom email, we can see 21 July 2016 15 from Mr Parsons, he says: 16 "All 17 "Please find attached the proposed wording on the 18 remote access issue -- for discussion on our call at 19 6.00 pm today." 20 Do you recall being involved in the issue of the 21 wording of remote access for the Group Litigation? 22 A. I do. 23 Q. If we scroll up, please. Rob Houghton has reworded the 24 statement, and I'll read to you the final sentence. It 25 says: 158 1 "We believe, given the above methods open to the 2 Post Office to deal with errors in a branch's accounts, 3 the use of this access to amend a branch's accounts 4 would be rare however Post Office is making enquiries 5 adds to whether it has ever happened." 6 Your response is at the top of the email: 7 "All 8 "Assuming Rob's additions are the underlined 9 elements, I'm not keen on the final sentence." 10 So it looks as though you weren't keen on providing 11 the claimants in the litigation with a sentence that, if 12 we scroll down, read as is highlighted there. Do you 13 recall not being keen on that final sentence? 14 A. I don't recall that, no. I don't recall that. I think, 15 reading the sentence, it just looks a bit unclear. 16 I think I'd want it to be much clearer. But I don't 17 recall. 18 Q. You weren't a lawyer? 19 A. No. 20 Q. Was it unusual for the Communications and Corporate 21 Affairs Director to be commenting so carefully on 22 wording that was going, please, used in either a legal 23 correspondence or legal pleading? 24 A. I don't think it was inappropriate. 25 Q. Do you think you were qualified in respect of remote 159 1 access to provide such opinions? 2 A. Not in the technical sense, no, absolutely not. 3 Q. Do you think you had carried out enough investigations 4 into the matters that, as we saw in that earlier email, 5 you were slightly confused by? 6 A. I wish I'd carried out more. I wish I'd asked more 7 questions about remote access. I wish I'd got more into 8 the detail of it. 9 Q. Do you think you should have got more into it when 10 confronted by Panorama? 11 A. As I say, I think I've just answered the question. 12 Q. Can we please turn to POL00029998. If we scroll down, 13 please. There's still discussion about draft forms of 14 words, and you say as follows: 15 "Would it help to include 'whether this particular 16 form of access' in final sentence which emphasises that 17 we've never actually been asked about super users but 18 are going over and beyond to establish [the] position?" 19 If we scroll up above, we can see the form of words 20 that you are commenting on. It's an email from Andrew 21 Parsons. He says: 22 "Mark -- I am happy with your suggestion." 23 We can see it there. So we have: 24 "Database and server access and edit permissions is 25 provided, within strict controls, to a small, controlled 160 1 number of specialist Fujitsu personnel. The use of 2 these permissions is logged but rare. Enquiries are 3 continuing as to whether this particular form of access 4 could be used to affect a branch's accounts, and if so, 5 whether this has happened." 6 Is it odd that you, the Communications Director, was 7 having such a direct role in formulating words that were 8 going to be used in litigation relating to remote 9 access? 10 A. I don't think it was odd and I think, if anyone had any 11 concerns, they would have been raised with me but, no, 12 I don't think it was odd. 13 Q. If we scroll down on that page, you say, in respect of 14 the issue of a superuser, "emphasises that we've never 15 actually been asked about super users but are going over 16 and beyond". I mean, is that right? Wasn't superuser 17 something that was very much an issue for a number of 18 years? 19 A. I'm afraid I don't recall. 20 Q. Can we please turn to POL00030002. There are various 21 email threads -- there are two email threads. Can we 22 please start page 3 of this thread. If we scroll down 23 there's an email from Andrew Parsons to you. He says: 24 "In response to your question in the other email 25 thread about seeing everything we have said about 161 1 'remote access', we don't have a central log of 2 everything [the Post Office] has said on remote access. 3 However, the language used in the email reference below 4 (attached again) is reflected of the language used by 5 [the Post Office] towards the end of the scheme." 6 If we scroll up, please. We have an email from you 7 at the top, and you say: 8 "I am stuck with a live issue at present. My 9 uneasiness on this issue is why we can't give a firmer 10 position on the super user point before we reply? 11 "I suspect I know the answer but the current wording 12 leaves us vulnerable and we would need to look at what 13 we have said publicly ... before we commit the 14 position." 15 What did you mean by "I suspect I know the answer"? 16 A. I don't know. I mean, I think this email is about me 17 wanting to make sure we are absolutely firm in telling 18 the truth. 19 Q. It looks as though you are concerned that the answer 20 might be bad for the Post Office? 21 A. No, I don't think so. 22 Q. If we scroll up, please. We have there an email from 23 Thomas Moran to Mark Underwood, you're copied in. He 24 says: 25 "Mark/Andy. Please can you set out the timeline for 162 1 approving this text (eg Deloitte, [Fujitsu]) if this is 2 necessary." 3 Again, another reference there to Deloitte. 4 If we look at the top, a response from Andrew 5 Parsons. He says: 6 "I think we have agreed the wording on the Post 7 Office side. Tony has already signed off. I've sent 8 the wording to both [Fujitsu] and Deloitte and asked for 9 comments by [close of business] tomorrow." 10 If we scroll up to the first page, Mark Underwood 11 says: 12 "I have been through the scheme chronology and 13 reviewed the statements made by Post Office [regarding] 14 remote access. Please find attached what I feel are the 15 key statements made publicly." 16 Jane MacLeod then responds and she says: 17 "Thanks Mark this is helpful (ish!). 18 "To all on this email chain, please do not forward 19 this email to anyone else as it is critical that we 20 maintain privilege around it. 21 "Given the statements that Mark has collated, can we 22 please reference the advice from Fujitsu that we have 23 relied on in making these statements (for example did we 24 show [Fujitsu] the drafts of these before making them 25 etc?), as clearly there is a gap between these and what 163 1 we now understand may be the case. 2 "Andy, once this is available will you please 3 consider whether this affects the legal risk and 4 approach? Mark D (and others) -- we need to consider 5 the positioning around the current wording in light of 6 these statements." 7 Did that raise any concerns with you? 8 A. I am sure it did. I don't recall -- I mean, obviously, 9 I've seen the email since it was disclosed but I think 10 it underlined to me that we were seeking to make sure 11 that we were getting the right position, the correct 12 position, before the courts and that, if we'd made 13 mistakes, errors in the past, we would correct them 14 because that was the intention. 15 Q. Could we scroll up, please. What did you understand by 16 that first sentence: 17 "To all on the email chain, please do not forward 18 this email to anyone else as it is critical that we 19 maintain privilege around it." 20 Was there a concern on Jane MacLeod's perspective 21 that this could be bad for Post Office in the 22 litigation? 23 A. I think you'd have to ask Jane MacLeod that. 24 Q. We have here an email from you saying: 25 "I am away as of tonight so perhaps we should speak 164 1 this afternoon?" 2 Do you recall speaking to Jane MacLeod about it? 3 A. I spoke to Jane almost every day so I don't recall that 4 particular conversation. 5 Q. What do you recall of her concerns, if any, in relation 6 to this issue? 7 A. Like everyone I worked with at the Post Office, she was 8 very, very determined that we told the truth, that we 9 were accurate in what we told -- certainly, what we told 10 to the courts and what we told to the media. 11 Q. Could we please look at POL00245978. We're now in 12 November 2016. The bottom email is an email from Andrew 13 Parsons. I don't think you're copied in at that stage. 14 It reads as follows, it says: 15 "The key substantive area is section 9 on remote 16 access (in particular, Rob, I'd be really grateful if 17 you could review this section). 18 "Following feedback from Deloitte, we cannot 19 definitively say that [Post Office] (as distinct from 20 [Fujitsu]), never had the ability to change Horizon data 21 because Deloitte and the current staff at [Fujitsu] just 22 don't have enough knowledge of Old Horizon to confirm 23 this." 24 So it looks as though, in fact, even that earlier 25 statement that was given to Panorama was now proving to 165 1 not be correct; do you agree with that? 2 A. That would seem to be the case. They're saying that we 3 cannot definitively say that Post Office never had the 4 ability to change Horizon data, yeah. 5 Q. This was a point made in an early draft but it has now 6 been removed. 7 "We have (I hope) now found formulation of words 8 that avoids having to overly throw [Fujitsu] to the 9 wolves and avoids any risk of waiving any privilege in 10 any documents, but still gives us a fair story to tell. 11 We have also toned down the admissions of making 12 incorrect statements, though they are still there. 13 I hope this might make it easier to get this letter 14 cleared through [the Group Executive] and [Fujitsu]." 15 Do you recall issues or concerns being raised at 16 group executive level regarding the wording that would 17 go to the claimants in the Group Litigation? On the 18 issue of remote access? 19 A. I recall a deep sense of frustration at this point, 20 that, again, it appeared that we'd not -- that we'd made 21 misleading statements based on what we'd been told at 22 the time, and I do remember the frustration and anger 23 that that created, yes. 24 Q. If we scroll up to the first page, Thomas Moran then 25 emails the group. He says: 166 1 "My overall conclusion is that could very well have 2 serious implications on the proceedings and we 3 absolutely have to make sure we are briefing and 4 securing the support of the right people internally 5 before issuing. 6 "As I'm the lucky man with the responsibility for 7 this as the [Steering Group] Chair ..." 8 You were still on the steering group at this point? 9 A. Yes. 10 Q. Yes: 11 "... I must ask that we get this properly reviewed 12 by Mark Davies and also Angela who I don't think are on 13 the list. In particular we need a full assessment and 14 media plan based on the worst case consequences in place 15 before sending." 16 Do you think that it was important to get a media 17 plan in place before sending to the claimants in the 18 litigation an admission that there had been incorrect 19 statements made in respect of remote access? 20 A. I think it would always be right, and Tom was right, 21 I think, to raise the -- that as a factor. It's 22 certainly not the determining factor and it's not the 23 most important factor but there would undoubtedly have 24 been media implications from this situation. So it's 25 understandable, I think, any organisation in a similar 167 1 place would have had come up with a media plan to 2 address it. 3 Q. Could we please look at POL00024991. This is the 4 attached document that is being circulated and addresses 5 remote access. If we look over the page at 1.5 and 1.6, 6 we can see what they're now saying. They say at 1.5: 7 "... Post Office may have made some incorrect 8 statements, but refutes any suggestion that it ever did 9 so deliberately or did so to mislead or deceive." 10 The comment is: 11 "Not sure about this sentence -- I don't believe 12 you've answered inappropriately in the past." 13 I don't think that's right, is it? 14 A. I don't know who's making that comment in the brackets. 15 Q. That doesn't seem right, does it? 16 A. Sorry? 17 Q. It doesn't seem right that you hadn't answered 18 inappropriately in the past, I mean, the Post Office had 19 answered inappropriately in the past, hadn't it? 20 A. Well, answered -- I mean people have made -- delivered 21 answers based on what they understood to be the case at 22 the time and, as a result, those statements were 23 incorrect. 24 Q. So those words in brackets, do you disagree with them? 25 A. I don't know where they've come from. 168 1 Q. Do you disagree with them? 2 A. Inappropriate? I mean -- I think I do disagree with 3 them. I mean, the next sentence, "The Post Office 4 personnel responsible for those statements believed the 5 statements when they were made", and that's the 6 position. 7 Q. "What was said reflected what they understood the 8 position to be after making relevant enquiries. 9 Unfortunately, they did not pick up on the issue of 10 Fujitsu administrator access as Post Office would have 11 liked. This is a matter of great regret, but it does 12 not mean that Post Office exhibited wilful blindness to 13 reckless indifference to the truth of those statements. 14 (I think this is too much). Can we not just say. 15 "The Post Office responded appropriately to the 16 question of whether transactions could be altered by 17 Post Office without the postmaster's knowledge -- the 18 answer to this question is consistently the same -- it 19 is not possible. Expanding on this -- it is possible 20 for [Fujitsu] to access the system through administrator 21 access, which they have confirmed. This is not unusual 22 and is in common with any other organisation. You would 23 need to discuss with them their ability to modify 24 transactions; our expert assessment would say that this 25 is extremely difficult but theoretically possible." 169 1 Was there a certain defensiveness amongst your 2 steering group as to making full admissions on remote 3 access? 4 A. I don't think so, no. I don't think there was 5 defensiveness. I think there was frustration but not 6 defensiveness, no. 7 Q. Could we please turn to POL00024982. Page 2, please. 8 At the bottom of page 2, it's almost midnight on 9 28 November, Jane MacLeod is emailing Paula and Al 10 Cameron: 11 "Following discussions with our QC and Bond 12 Dickinson this afternoon, the following is the 13 recommended language to be included in the response to 14 Freeths in the wider section on remote access: 15 "'At each stage, Post Office ascertained the 16 position to respond to the questions it believed it was 17 being asked. With the benefit of hindsight, some of 18 Post Office's statements may have been incorrect in 19 light of what has since been identified in relation to 20 Fujitsu's administrator access rights ... But Post 21 Office refutes any suggestion that it ever made false 22 statements", et cetera. 23 It says at the bottom: 24 "The challenge has been to balance the risk of 25 adverse publicity ahead of the court process (Post 170 1 Office's concern) with the need to be open and 2 transparent with the court in admitting that certain of 3 the information we provided previously on this issue 4 could be construed as 'wrong'." 5 Scrolling down. It says: 6 "Given Mark D had other commitments today, I am 7 taking him through this wording early tomorrow." 8 Did you see that as the problem facing the Post 9 Office, if we scroll up slightly, "The risk of adverse 10 publicity versus the need to be open and transparent 11 with the court"? 12 A. No, I don't agree with that. I think the most important 13 thing was ensuring we were open and transparent with the 14 court. 15 Q. If we could scroll up, please, there's then 16 a conversation, I think, you then see at -- I think 17 you're then chased for it and then, at the very top, 18 page 1. You say, "Apologies", you read through and you 19 are content. 20 One more document before we have our break and 21 that's POL00163124. This is earlier in the day. Could 22 we please look at the bottom email from Jane MacLeod. 23 That's the email we just saw. If we scroll up, we have 24 a response from Melanie Corfield to you, and she says as 25 follows: 171 1 "Very slight suggested tweaks as discussed 2 (highlighted attached). I think the context and 3 language around the difficult parts are very good though 4 in portraying the ridiculousness of the claims about 5 'remote access' so I don't think we should worry too 6 much." 7 We're now in November 2016 and Melanie Corfield is 8 again emailing you very frankly with her views that the 9 claims about remote access are ridiculous. Was that 10 a view that was shared in your team at that time? 11 A. No. I wouldn't use the words that she's used. 12 Q. How is it that that far down the line, after everything 13 we've seen, after confirmation in emails from Fujitsu, 14 after various discussions about forms of words, lack of 15 clarity about remote access, that the Communications 16 Team, the team that you led, is still describing those 17 remote access claims as "ridiculous"? 18 A. I think it's a question that you would have to ask 19 Melanie. 20 Q. Well, you were her boss, effectively, weren't you? 21 A. (The witness nodded). I didn't regard them -- 22 Q. She is having no difficulty in expressing that view to 23 you. We've read email, after email, about conspiracies 24 and the press being unfair. Did you still think, in 25 November 2016, that the claims about remote access were 172 1 ridiculous? 2 A. Not ridiculous. I found it difficult to put a claim 3 about remote access, which I think we had ascertained 4 had been used once against the weight of the accusations 5 that were being made against the Post Office. 6 Q. You yourself had found it very difficult to even 7 understand the answer at one stage about remote access. 8 At paragraph 88 of your witness statement, page 32, 9 you've described, I think, the press team as "a high 10 performing and high quality team". Looking at that 11 email and looking at a similar email from Melanie 12 Corfield in relation to these issues, do you still 13 maintain that they were a high performing and quality 14 team? 15 A. I do. 16 MR BLAKE: Thank you, sir. That is a convenient moment to 17 take our mid-afternoon break. 18 SIR WYN WILLIAMS: All right. Until when? 19 MR BLAKE: Could we come back at 3.37 minutes, if possible? 20 We have quite a bit to get through, still. 21 SIR WYN WILLIAMS: Okay, fine. 22 MR BLAKE: Thank you very much. 23 (3.21 pm) 24 (A short break) 25 (3.37 pm) 173 1 MR BLAKE: Thank you, sir. Going to move on now to a number 2 of different topics. Starting with action at the Board 3 level. We've heard a lot of evidence about Simon 4 Clarke's Advice on the reliability of Gareth Jenkins. 5 That was dated 15 July 2013. When did you first know 6 about that advice? 7 A. I couldn't recall with any certainty. 8 Q. Do you recall it ever being mentioned at Board level? 9 A. Almost certainly, yes. Whether I was at the Board 10 meetings when it was referred to, I couldn't be certain. 11 Q. Almost certainly yes, you're assuming? 12 A. That it was referred to at Board level? 13 Q. Yes. 14 A. It would undoubtedly have been referred to at Board 15 level, yeah. I didn't attend the Board every -- excuse 16 me, I didn't attend every Board meeting. 17 Q. Why are you so sure it was referred to at Board level? 18 A. Because it was an important piece of the picture. 19 Q. Simon Clarke's Advice on the shredding of documents or 20 destruction of documents, that was dated 2 August 2013. 21 Can you assist us with when you first knew about that? 22 A. I'm sorry, I can't help on that. 23 Q. Brian Altman's general review, which concluded that 24 Gareth Jenkins was tainted as a witness, that was dated 25 15 October 2013; do you recall seeing that at all? 174 1 A. I recall hearing about it, yes. 2 Q. Would that have been around 15 October 2013? 3 A. It would have been around then, yeah. 4 Q. When you say "hearing about it", is that about the 5 review or about concerns relating to Gareth Jenkins -- 6 A. About the concerns. 7 Q. Can we please turn to some board minutes. That's 8 POL00021525, 21 May 2014. We have you named further 9 down, as being in attendance for item 14/70. Can we 10 please return to page 6? 11 14/70 is "Annual Report and Accounts". So you 12 joined the meeting at that point, and it says: 13 "The Board received the Annual Report and Financial 14 Statements ..." 15 Can we please look at (f): 16 "The Board discussed the inclusion of Sparrow in the 17 report and agreed that it should be excluded. However, 18 the Business agreed that it would be appropriate to 19 included a paragraph in the CEO overview to explain the 20 size of the enterprise risk and the major transformation 21 programmes being undertaken, referring back to the risks 22 already highlighted in the CFO report." 23 Can you recall the decision not to include sparrow 24 in the annual report? 25 A. I think I referred to this in my statement. I don't 175 1 recall the conversation. I was present at the Board for 2 that section because my team and I had responsibility 3 for producing the annual report. I don't recall the 4 conversation, I'm sorry. 5 Q. Do you recall there being a secrecy regarding the 6 Sparrow Project? 7 A. Not at all, no. 8 Q. Moving on to external PR terms, you've said at 9 paragraph 38 that external PR terms were used as 10 a second pair of eyes; can you assist us as to who in 11 the Post Office was responsible for instructing external 12 forms like Portland or Brunswick? 13 A. That would be me, usually. It would depend to some 14 extent on the nature of the business that we were 15 talking to that firm about, so we might have them 16 support us around a product, a PR launch, in which case, 17 it might be the Financial Services Director or 18 Commercial Director might take the lead responsibility 19 or potentially the Marketing Director as well, obviously 20 used external firms a lot. So, you know, it varied, but 21 I would certainly be involved in most of those cases. 22 Q. Can we turn to POL00117079, page 2, bottom half of the 23 page. So this is an email from yourself to, is that 24 members of your team and some others, Patrick Bourke, 25 for example? 176 1 A. (No audible answer) 2 Q. You say as follows: 3 "The Mediation Scheme was set up in 2013 to give the 4 small number of people with complaints about our system 5 a chance to make their case. 6 "We have now investigated every single case put to 7 us. It has taken longer than we would have liked. But 8 we can now say with absolute confidence that there are 9 no systemic issues with the Horizon system or associated 10 processes." 11 If we look above, Melanie Corfield responds: 12 "Looks good. We always said we are confident [with 13 the] system though so should we say 'with even more 14 confidence that Horizon works as it should'." 15 Patrick Bourke responds: 16 "I think we do need to be careful of absolute -- if 17 we tie it to these cases (eg absolute confidence that no 18 systemic issues with Horizon causing the problem 19 complained of) -- then I think it's safer." 20 Then if we please scroll up, and you say: 21 "Okay -- 'increased' then. Can Jane or Mel please 22 send me a note of how Brunswick pitched this opener 23 yesterday?" 24 It says, as follows, from Jane Hill, she says: 25 "Brunswick pitched this as follows: 177 1 "Post Office serving communities across the UK, 2 11,500 postmasters [et cetera]. 3 "We've spent £5 million investigating concerns ... 4 "Because we need to protect our brand and ensure we 5 have 100 per cent confidence in the system that 6 underpins our business. 7 "Initial [Second Sight] investigation found no 8 evidence of a problem with Horizon. 9 "We have now investigate every case. 10 "50 cases have been mediated or have been passed to 11 mediation." 12 What kind of information would you have passed to 13 Brunswick for them to have formulated that pitch? 14 A. I can't really recall, and I can't really recall what 15 the purpose of this pitch was around. I imagine we 16 would have given them the Second Sight Interim Report, 17 the Part Two Report, probably the Select Committee 18 briefing that we did for Paula Vennells. When is this, 19 30 January 2015? Those kinds of documents. 20 Q. I mean, "Initial Second Sight investigation found no 21 evidence of a problem with Horizon", that's not right, 22 is it? 23 A. No, it's a shorthand, yeah. 24 Q. If we scroll up, from you to Jane Hill, you say: 25 "Thanks -- Mike, please blend these into the pitch 178 1 drawing out the three key messages we need to get 2 across." 3 Was there a danger in involving these external firms 4 that they wouldn't actually have sufficient knowledge 5 about Horizon and the problems with Horizon and would 6 then make strongly worded statements like the one we 7 just saw? 8 A. Well, I mean, Brunswick or any other external 9 organisation wouldn't make any statements on our behalf. 10 They would always be working to a brief set by us. 11 Q. Would they have sufficient knowledge of years of 12 complaints from subpostmasters and the kinds of 13 information that you at the Post Office were able to 14 access? 15 A. No, but they weren't brought in to be experts in the 16 substance; they would be brought in to be an extra pair 17 of eyes to bring a different perspective to the 18 conversations that we were having -- 19 Q. Is there a danger in that because they weren't privy to 20 the kinds of information that you were privy to, develop 21 lines, and then it seems, as per this email, those lines 22 may risk being blended in with existing lines? 23 A. I'm not sure, there's no one from Brunswick on these 24 emails. 25 Q. Exactly. 179 1 A. So I'm not totally sure, in all honesty, what this email 2 chain is for and I don't fully recall it. I know that, 3 obviously, we worked with Brunswick. Of course, there's 4 absolutely a danger of an organisation which isn't fully 5 sort of steeped in the issue being brought in but, 6 obviously, the responsibility for ensuring that that 7 doesn't -- isn't a danger lies with the in-house team. 8 It would be the case, really, in the case of any 9 Communications Directorate bringing in external advice 10 and support that you'd obviously manage that external 11 advice and support appropriately. 12 Q. Would that be you? 13 A. It would. 14 Q. Can we please turn to POL00111228. This is later, we're 15 now in 2018, 12 October 2018. It's from Portland 16 Communications. Portland Communications were 17 instructing in respect of the litigation, were they? 18 A. I think this is them setting out their proposal of what 19 they would potentially do to support us, I think. 20 "Indicative programme of communications", yeah. 21 Q. "This short note sets out an indicative programme of 22 communications ... and public affairs supporting the 23 forthcoming Horizon Group Litigation following briefings 24 with [you], Melanie, and the Post Office leadership 25 team." 180 1 If we scroll down: 2 "Based on this week's briefings, there are three 3 mean communications pillars we want to work with you to 4 address ..." 5 The first is "an opportunity as well as a threat"; 6 the second is "coordination between legal strategy and 7 corporate communication"; the third is: 8 "It is vital we proactively engage with political 9 stakeholders ..." 10 Then, at the end, it has a section on cost: 11 "While we estimate the work required to support your 12 communications during the first trial in November 2018, 13 the work around the judgment and second trial is less 14 predictable and will depend on the coverage and interest 15 we see in the next couple of months. 16 "As such, we propose splitting the project in two 17 phases. The first phase will cover the first eight 18 weeks of activity, including the preparation and the 19 first trial. We can deliver phase one of this work at 20 a cost of £35,000 ... per calendar month, for two months 21 ... The price reflects the senior time dedicated to the 22 account", et cetera. 23 "For Phase 2, we review the reach to the first trial 24 in December and determine what level of support is 25 required." 181 1 Do you think that it was money well spent? Do you 2 think that it was appropriate for external 3 communications to be supporting your communications 4 during the litigation? 5 A. I think it was entirely appropriate. 6 Q. Could we turn to POL00163442. We're now in January 7 2019. Jane Hill forwards you an email and the email 8 says as follow, if we scroll down: 9 "We propose to end our relationship with Portland at 10 the end of January, and commence procurement for PA 11 agency immediately thereafter. 12 "Reasons to end our relationship with Portland ... 13 "£35,000 a month -- very expensive for questionable 14 value ... 15 "The next stage of the GLO will require a greater 16 internal comms element -- Portland have no experience 17 with this ... 18 "In the run-up to the Horizon trial, less background 19 knowledge and a fresh perspective would be a benefit, 20 and any good agency would be able to add value." 21 Are you able to assist us with why less background 22 knowledge might be of benefit? 23 A. I think always when you're bringing in external support 24 in the communications environment actually knowing less 25 about the subject is sometimes a benefit because it can 182 1 bring a fresh -- as Jane says there, bring a fresh 2 perspective. The internal comms element is really 3 important in this context because, clearly, here we are 4 in 2019 and I think we're about to get the Common Issues 5 judgment and internal comms was absolutely critical in 6 that context, particularly with a very complex franchise 7 subpostmaster environment. And Portland, I think by 8 their own admission, would they that internal comms 9 isn't their speciality at all, so ... 10 Q. Isn't there a risk, though, that messages are being 11 developed not just here but over the years by people who 12 don't have the requisite knowledge and requisite 13 background? 14 A. No, I don't think that's risk, because the bedrock of 15 the team remained in place. The in-house team controls 16 the position. It's organisations like Portland and 17 others, Brunswick we've talked about, are brought in to 18 assist and support, not to direct. 19 Q. Could we please move on to a different subject and 20 that's the relationship with the National Federation of 21 SubPostmasters. At paragraph 25 of your statement you 22 say you engaged with the Communications Team at the 23 NFSP. Can you assist us with what their general view 24 was regarding the Horizon system? 25 A. I think the Federation's general view was that they were 183 1 satisfied that Horizon worked as it should, that, had 2 there been systemic and very major problems with the 3 system, their members would have been -- would have been 4 very vocal about them. 5 Q. Could we please turn to POL00174423. We've heard 6 a number of communications from the Post Office. Do you 7 think they affected the NFSP's position or -- 8 A. Sorry, could you repeat that? Apologies. 9 Q. We've seen today number of comms press releases, 10 statements from the Post Office. Do you think they 11 affected the NFSP's position, their stance on Horizon, 12 or influenced their stance on Horizon? 13 A. I don't think so. My experience of the Federation was, 14 when George Thomson was their Chief Executive, he wasn't 15 somebody who could be easily persuaded of a position and 16 there were plenty of times when they were extremely 17 critical of the Post Office and its actions on other 18 subjects. 19 Q. Could we please look at POL00174423. It's the bottom of 20 that email, please. David McConnell emails you and 21 says: 22 "Hi Mark ..." 23 It's about the Panorama programme in 2015. He says: 24 "We have issued the statement below to members -- we 25 remain firm on Horizon, you'll appreciate too we need to 184 1 maintain the 'critical friend' stance." 2 If we scroll down, they say, for example: 3 "Put simply, the NFSP has not received calls from 4 subpostmasters querying Horizon and alleging systematic 5 failings. If there were a widespread problem, our 6 subpostmasters would have made us aware of it. As 7 a result, we have no choice but to conclude that Horizon 8 is a fundamentally safe and sound system." 9 If we go to page 1, please. Paula Vennells responds 10 to you: 11 "A very helpful if 'politically' positioned letter! 12 "George could never be accused of being in anyone's 13 pocket. 14 "Great mail to open tonight cared to some from last 15 night." 16 Was the Post Office's relationship with the NFSP too 17 close? 18 A. No, I don't think so. 19 Q. Could we please look at POL00321147. The bottom of the 20 page, please. You email Patrick Bourke and Rodric 21 Williams and you say as follows, and it's about Sparrow, 22 and you say: 23 "Separately [Shareholder Executive] met NFSP who 24 raised with them -- and worried them -- prosecutions 25 approach. NFSP view is subpostmasters are now widely 185 1 blaming losses on Horizon 'knowing' that there will 2 likely be no prosecutions. They also cited a case where 3 a member of staff was accused of theft, blamed Horizon 4 and we are now pursuing the [subpostmaster] for the 5 money despite clear evidence of staff being to blame. 6 Obviously I don't know any more details." 7 This is a conversation you had with Richard C; who 8 is that, Richard Callard? 9 A. That's Richard Callard, yeah, who was the -- who led the 10 Shareholder Executive at the time of this email. 11 Q. Did you have any conversation with the NFSP along these 12 lines? 13 A. I don't recall doing so. I spoke to their 14 Communications Team quite regularly. I spoke to George 15 Thomson, who was their Chief Executive, occasionally, 16 but the Post Office had a specific team responsible for 17 engaging with NFSP, who would have done most of those 18 liaisons. 19 Q. Is that view that's set out there consistent or 20 inconsistent with your understanding of their position 21 at the time? 22 A. Well, broadly so, that they were -- that they believed 23 that Horizon was fundamentally sound. 24 Q. Could we please turn to POL00357139. This is May 2016 25 now. Nick Beal, Head of Agents' Development and 186 1 Remuneration, emails Mike Granville and yourself and he 2 says: 3 "Hi both 4 "Was noisy first thing when the issue arose but 5 I had very few comments through the course of the day. 6 Senior NFSP have been relatively ok -- can't promise 7 there won't be a reaction from the floor but I am not 8 getting a sense that they are looking to make a big deal 9 of this. George has been consistent on Horizon and am 10 getting no indication this is changing -- he was very 11 robust at a regional meeting I was at where a question 12 was asked about the class action." 13 Why is Nick Beal sending this message? Is he 14 a route through which you heard the opinions of 15 subpostmasters or the NFSP? 16 A. Nick had responsibility for the relationship with the 17 NFSP. He was the engagement point, if you like, between 18 the business and the NFSP. I can't be certain but 19 I think this is an email sent during the NFSP's annual 20 conference -- I'm assuming -- or maybe from a regional 21 meeting, judging by the text "Can't promise there won't 22 be a reaction from the floor". He was a conduit, 23 I suppose, for NFSP views. 24 Q. I'm going to move on to the relationship with ShEx and 25 UKGI. Could we turn up paragraph 21 of your witness 187 1 statement. It's WITN09860100, it's page 7. You say: 2 "I ... worked very closely with Shareholder 3 Executive and UKGI colleagues throughout the period 4 covered by my statement. They understandably took 5 a very close interest in communications and stakeholder 6 issues. I had regular meetings with colleagues from 7 ShEx and UKGI. Relationships were strong and 8 collegiate. There was certainly concern from some in 9 [the Post Office] that their involvement in business 10 issues was sometimes too great and frustration was 11 expressed that this could be time consuming and resource 12 intensive. My view was that ShEx and UKGI were 13 understandably keen to ensure that they were sighted on 14 key issues in order to be able to address ministerial 15 and other concerns, particularly given the acute 16 political interest in a range of Post Office issues. 17 Meetings with ministers and special advisers were 18 regularly held on a range of issues, with ShEx and UKGI 19 always involved." 20 Did you believe that there were appropriate 21 boundaries between the Post Office and ShEx or UKGI? 22 A. Yes, I think so and I think I've expressed it there: 23 that it was understandable that ShEx and, subsequently, 24 UKGI had a close -- wanted to have a close involvement, 25 a close understanding of what was happening at Post 188 1 Office on a day-to-day basis. It did frustrate some of 2 my colleagues, for sure. But I think that the very 3 nature of the Post Office as a publicly owned business 4 with a huge amount of political interest in it meant 5 that it was inevitable that colleagues from the 6 shareholder would be closely involved. 7 Q. Which colleagues did it frustrate? 8 A. I don't think there was a specific sense, actually Paula 9 Vennells wasn't frustrated by it, actually. I think 10 some of my more commercial colleagues felt that, you 11 know, we weren't -- that we should have a greater degree 12 of distance from Government but I don't think that was 13 right. It was a sort of constant debate. 14 Q. Could we please look at POL00258672. It's an email of 15 30 October 2018 and this relates to attendance at the 16 trial. Page 2, please. Tom Aldred from UKGI says to 17 Patrick Bourke: 18 "We have previously discussed whether UKGI would 19 attend the trial. I've discussed with our Legal Team 20 and they believe there is a real merit in attending -- 21 to get a feel for how each side is presenting their 22 case, what the key issues are between them and, 23 sometimes, what way the judge might be leaning." 24 If we scroll up, please. Patrick Bourke says: 25 "I think this is poor judgement to say the least. 189 1 "Could you advise whether you agree and that we 2 should remonstrate?" 3 You respond: 4 "Very bad idea. Journalists will ask them who they 5 are and then write stories about [the Government] 6 watching over [the Post Office]." 7 Were you concerned about the Post Office to be seen 8 to be too close to Government? 9 A. I think in this particular case it was more about 10 a concern that it would benefit neither Government nor 11 the Post Office for the perception of the Government 12 watching over, to be found by people. 13 Q. We're looking now at relationship with Government, more 14 broadly. Could we please look at POL00101341. It's the 15 bottom half of the page, 9 September 2014: 16 "This is the BBC online report about Horizon. 17 Earlier inaccuracies have now been corrected and our 18 clear line included. We will continue to monitor 19 coverage, although it is pleasingly low on BBC 20 schedules. 21 "We will update the Board in the morning. BIS are 22 aware and in loop. Jo Swinson has requested a brief for 23 the morning -- we are working with Richard Callard on 24 that." 25 So you were working with UKGI to produce a brief for 190 1 the Minister? 2 A. Yes. 3 Q. Is that something that regularly took place? 4 A. Yes. I mean, if the Minister requested a brief, then, 5 absolutely, BIS would -- sorry, the Business and 6 Industry Department, as it was then -- Business and 7 Industrial Strategy, as I think as it was then, 8 Department -- would have contacted us, and they would 9 have probably done it through Richard and his team, as 10 the Shareholder Executive, and we would work with them 11 as appropriate. 12 Q. Throughout the period that we've been talking about 13 today, so 2013/2014/2015, right through the litigation, 14 did you work with UKGI or BIS on briefings for the 15 Minister? 16 A. On a fairly regular basis. I mean, not -- I wouldn't 17 say it was a sort of monthly occurrence but, you know, 18 if a minister requested a brief, obviously BIS would 19 come and ask us for support and help and we would 20 obviously do so. 21 Q. Still on relationship with Government and ministers, 22 could we please look at POL00101610. I realise that 23 these emails are broadly in chronological order but they 24 don't really relate to each other. 25 A. Sure. 191 1 Q. I am just asking you a number of questions to cover off 2 a number of issues for the Inquiry. 3 This is an email that relates to the meeting with 4 James Arbuthnot in December 2014. If we go down to 5 page 2, the bottom of page 2, please, an email from 6 Alice Perkins, "Subject: [James Arbuthnot]": 7 "I initiated a conversation with him on Saturday 8 evening which was cut off ... Despite the opportunity 9 for him to pick it up again yesterday, he chose not to 10 do so." 11 Over the page, please: 12 "We moved quickly on to the substance. The main 13 thrust of his argument seemed to be that there big 14 wrongs which we were not acknowledging; in other words 15 the position he held when he first approached me about 16 this in early 2012." 17 If we, please, could go to page 1, the bottom of 18 page 1, 1 December 2014, Gavin Lambert says: 19 "Thank you -- yes, I'll pick up with the team 20 tomorrow. 21 "I think Mark has also contacted Oliver Letwin which 22 needs to be factored into our plan." 23 Then Paula Vennells says: 24 "Yes in fact spookily I had just opened my emails to 25 ask Mark ... where we were on that. In view of James' 192 1 reaction, it becomes even more important that [Oliver 2 Letwin] understands we are also trying to brief him 3 personally, otherwise we are just seen to be referring 4 to him in my letter to [James Arbuthnot]." 5 If we scroll up, please, you say: 6 "Hi both. I am in touch with Oliver and he has 7 agreed to meet me in Westminster. We after just working 8 through diaries." 9 Why Oliver Letwin, in particular? 10 A. I think he'd raised issues on behalf of a constituent, 11 I think, at the beginning of -- well, certainly at the 12 beginning of my time at Post Office, and was at one of 13 the meetings, I think, that I'd attended earlier in 14 the -- before this email, obviously. He was obviously 15 also a senior -- I think, at the time, a Cabinet 16 Minister and we were keen to make sure we did everything 17 we could to brief him and keep him updated. 18 Q. Was there an attempt here to, effectively, divide and 19 conquer, briefing Oliver Letwin, trying to keep him on 20 side, because you were falling out with James Arbuthnot? 21 A. No, no, no. It was much more simply about making sure 22 that Mr Letwin -- that we briefed him. 23 Q. Can we turn to POL00352596, please. I'm just skipping 24 out a few documents because of the time. 25 The second email on the page. It's from you to Tom 193 1 Wechsler and you say: 2 "We will have to answer the question: will you make 3 the Part 2 report [the Second Sight Report] available to 4 the select committee and I think we should say yes we 5 will", and you ask for views. 6 Then, if we look above, Patrick Bourke says: 7 "As to the report, I am not persuaded we should -- 8 they are not entitled to it and, while it may play well 9 on a transparency point, the downstream consequences for 10 endless correspondence about the report's detail and the 11 decision we've taken to be robust I think outweighs what 12 benefit there may be in doing so." 13 Do you recall this correspondence? 14 A. Well, I recall it from having seen it -- having been 15 disclosed, for sure. 16 Q. Do you recall Patrick Bourke taking a different line to 17 you? 18 A. Oh, yes, I do. 19 Q. Was there tension there for some reason? 20 A. Oh, not at all, no. 21 Q. Perhaps we could look at POL00352632. If we could 22 scroll down, please, Melanie Corfield says: 23 "Inevitably [Radio 5 Live] are asking, on the back 24 of our statement -- are we saying Mr Arbuthnot is wrong? 25 Since he's standing down I am tempted to just go back 194 1 with 'yes' but I guess that's unacceptable! Also it's 2 semantics re the word 'sacking'." 3 This is about the sacking or alleged sacking of 4 Second Sight, and she is going to say: 5 "'Mr Arbuthnot's question could create a very 6 inaccurate impression because we are not suppressing 7 Second Sight's report or destroying documents', or 8 something like that." 9 If you scroll up, please, it says, from you: 10 "I suggest we say -- we have made the position clear 11 in our report and in our statement. We have published 12 very detailed update. It is regrettable that 13 a misleading impression is being created." 14 Do you recall being of the opinion that Lord 15 Arbuthnot was creating a misleading impression, as is 16 suggested in this email? 17 A. I recall the fact that he, I think, had been on the 18 radio and we felt that the words that he'd used had been 19 misleading, yes. 20 Q. I mean, I think, reading this chain, it's about him 21 using the word "sacked", or Second Sight being sacked; 22 second Sight were sacked, weren't they? 23 A. Well, we ended Second Sight's contract, although they 24 continued to work on all of the mediations. As the 25 Mediation Scheme came to an end, they were asked to 195 1 produce reports on all of the cases. 2 Q. Lord Arbuthnot referring to them as having been 3 "sacked", though, that's not a misleading impression? 4 A. It's not really, no. I accept that. 5 Q. Do you think, by this time -- and we've been over this 6 period -- there was a feeling within the Post Office 7 that Second Sight, Lord Arbuthnot -- we've seen your 8 emails about conspiracies -- did you think that they 9 were all up against you? 10 A. I wouldn't say all up against us but it certainly felt 11 as though Second Sight by this point were, you know, 12 they were interviewed by Panorama, et cetera, et cetera. 13 It certainly didn't feel that they were necessarily 14 acting independently. 15 Q. POL00102387. This is a memorandum you've prepared for 16 the Group Executive, called "Influencing The New 17 Government", and you say as follows, paragraph 2: 18 "Following the general election a new Government 19 will be formed. This is a critical period in the life 20 of a new Parliament, where ministers are both at their 21 most powerful and seeking to develop and shape new 22 policy positions. This therefore presents the Post 23 Office with a window of opportunity within which to set 24 out our position and to influence ministers." 25 If we scroll over to page 10, please, it says at the 196 1 top: 2 "These considerations are ranked in order of 3 importance in an assessment by the Government Relations 4 Steering Group." 5 Were you on that group? 6 A. Yes. 7 Q. You were, yes: 8 "They cover the issues on which we will need to 9 influence Government proactively to support our 10 position, and those which we will wish to seek to shape 11 Government policy into supportive positions 12 (eg Sparrow)." 13 If we scroll down, we can see there a section on 14 Sparrow. Page 11, please: 15 "There is likely to be continued, though limited, 16 interest in Sparrow. The recent Select Committee 17 Inquiry concluded with a letter to the Secretary of 18 State and the response was as helpful as we could have 19 hoped for, drawing a line under that particular angle of 20 interest. Any continued interest will be driven by 21 a small group of MPs with constituents in the Scheme. 22 The leaking of Second Sight's Part Two Report could act 23 as a catalyst for continued media and political 24 interest. 25 "So while we have had some success in removing 197 1 Sparrow from the spotlight, there is no guarantee that 2 a new minister won't seek to win some early political 3 points by revisiting the issue or he or she will 4 undoubtedly come under pressure to do so. We should 5 warn about the risks of this course of action." 6 To what extent was it right to seek to remove 7 Horizon issues from the spotlight when that spotlight is 8 being shone by the company's sole shareholder, the 9 Government? 10 A. Sorry, can you repeat the question? Sorry. 11 Q. To what extent was it right to remove or seek to remove 12 Horizon issues from the spotlight, when that very 13 spotlight was being shone by the Government, who are 14 Post Office's sole shareholder? 15 A. Well, I think, as Communications Team with 16 responsibility for managing reputational risk for the 17 business, it was understandable that I and the team were 18 looking to ways to reduce the way in which this issue, 19 as it was then understood, was in the headlines. 20 Q. The Government, though, is your shareholder. It's not 21 a public statement; it's somebody who has actually 22 a financial interest in the business. Do you think that 23 it's appropriate to seek to minimise Sparrow issues to 24 a new Government? 25 A. I think the right thing to do was to explain and to talk 198 1 to the ministers and to talk to the Government about the 2 situation, and to do so in line with the business's 3 overall strategy. 4 MR BLAKE: Sir, I think those are all of the questions 5 I have. There are a number of topics I have struck 6 through and I'm sure that people will -- 7 SIR WYN WILLIAMS: Well, Mr Blake, I have run out of steam. 8 So I am calling it a halt, full stop, so to speak. 9 MR BLAKE: Sir, there are just three minutes from Mr Moloney 10 and five minutes from Mr Henry -- 11 SIR WYN WILLIAMS: No, they are never three or five minutes, 12 with the best will in the world and, putting it bluntly, 13 if they are only three minutes and five minutes, we can 14 probably do without them. 15 So, as I say, I think we've heard enough from 16 Mr Davies. 17 So thank you, Mr Davies, for making your witness 18 statement and for attending to answer many questions 19 today. I am grateful to you. 20 THE WITNESS: Thank you, sir. 21 SIR WYN WILLIAMS: We'll adjourn until tomorrow. 22 MR BLAKE: Thank you, sir. 23 (4.15 pm) 24 (The hearing adjourned until 9.45 am the following day) 25 199 I N D E X MARK RICHARD HANSELL DAVIES (affirmed) ........1 Questioned by MR BLAKE ........................1 200