1 Wednesday, 22 May 2024 2 (9.45 am) 3 MR BEER: Good morning, sir. May Ms Vennells be sworn, 4 please. 5 PAULA ANNE VENNELLS (sworn) 6 Questioned by MR BEER 7 SIR WYN WILLIAMS: Before Mr Beer begins to ask you 8 questions, Ms Vennells, I think it appropriate to give 9 you a direction about self-incrimination. You may know 10 or may have heard that I've given this direction on 11 a number of occasions and, although I'm sure with the 12 legal advice you've had it's been explained to you, it's 13 only right that should do it publicly, all right? 14 So under our law, a witness at a public inquiry has 15 the right to decline to answer a question put to her by 16 Counsel to the Inquiry, by any legal representative or 17 by me, if there's a risk that the answer to that 18 question would incriminate the witness. 19 In shorthand form, this legal principle is known as 20 the privilege against self-incrimination. I consider 21 that fairness demands that I remind you of that 22 principle before you begin your evidence. I should tell 23 you that it is for you to make it clear to me, in 24 respect of any question put to you, that it is your wish 25 to rely upon the privilege against self-incrimination. 1 1 If, therefore, questions are put to you by any of the 2 lawyers or by me which you do not wish to answer, you 3 must tell me immediately after such question is put. At 4 that point, I will consider your objection and, 5 thereafter, rule upon whether your objection should be 6 upheld. 7 I know that you are represented by experienced 8 lawyers here today. No doubt, if the issue relating to 9 self-incrimination arises, they will assist you, if you 10 need their assistance. So if at any stage during the 11 questioning you wish to consult your lawyers about 12 privilege against self-criminal incrimination, you must 13 tell me so that I can consider what appropriate action 14 to take. 15 Do you understand all that? 16 THE WITNESS: Thank you, Sir Wyn, and I plan to answer all 17 the questions. 18 SIR WYN WILLIAMS: Right, fine, over to you, Mr Beer. 19 MR BEER: Thank you. 20 My name is Mr Beer. Can you give us your full name, 21 please? 22 A. Paula Anne Vennells. 23 Q. Thank you for providing two witness statements to the 24 Inquiry and for attending today. Can we deal with your 25 witness statements, please. The first of them is dated 2 1 8 March 2024 and the URN for it is WITN01020100. 2 I wonder whether we could have that on the screen, 3 please. It's 775 pages long and I think there are three 4 corrections that you wish to make to it. Can we deal 5 with those first. 6 Page 15, please. It will be brought up on the 7 screen for you. 8 A. Ah, thank you. 9 Q. At paragraph 34, in the second line, it says: 10 "If this included personal relations issues, the 11 Marketing Director would be consulted." 12 Should that read "public relations issues"? 13 A. It should. 14 Q. Thank you. 15 Secondly, page 130. Do you see in third line, where 16 it says, "Questions 53 and 54 omitted as general 17 questions", should that read "Questions 53 and 54 are 18 dealt with elsewhere in the statement"? 19 A. It should. 20 Q. Thank you. Then, thirdly, page 194, (b) at the top, 21 which is part of paragraph 405, it reads, in the second 22 line: 23 "... too much reliance on the recollection of the 24 Mediation Scheme's applicants ..." 25 Instead of Mediation Scheme's applicants", should 3 1 that read "of subpostmasters"? 2 A. It should. 3 Q. Thank you. Can we turn to page 775, please. That's the 4 statement of truth page. Did you sign that via Docusign 5 or some other electronic means? 6 A. I did. 7 Q. Were the contents true to the best of your knowledge and 8 belief? 9 A. Yes, they were. 10 Q. Thank you. Can we turn to your second witness 11 statement, please. WITN01020200. This is your second 12 witness statement, it's dated 8 April 2024. It's 13 23 pages long. Again, can we turn to page 23, please, 14 and scroll down. Did you sign this witness statement 15 using Docusign or a similar electronic means? 16 A. I did. 17 Q. Are the contents of that witness statement true to the 18 best of your knowledge and belief? 19 A. They are. 20 Q. Thank you, they can be put to one side. Those witness 21 statements are going to be uploaded to the Inquiry's 22 website. I'm not going to ask you questions about the 23 contents of either of them in detail, in particular your 24 first witness statement, because it's a very long 25 witness statement, 775 pages, and, in large measure, 4 1 narrates a number of documents that we have sent to you, 2 and I'm interested in your personal recollection, rather 3 than what the documents show, if you understand. 4 Before we address the issues of substance, which I'm 5 going to do thematically, rather than chronologically, 6 I'd like, if I may, to address some overarching themes 7 with you, and there are seven of them. 8 A. Mr Beer, I did want to make a short statement first, if 9 I could; is that all right? 10 Q. Absolutely. You go ahead. 11 A. I would just like to say -- and I'm grateful for the 12 opportunity to do this in person -- how sorry I am for 13 all that subpostmasters and their families and others 14 have suffered as a result of all of the matters that the 15 Inquiry has been looking into for so long. I followed 16 and listened to all of the Human Impact statements, and 17 I was very affected by them. I remember listening to 18 one postmaster, whose name I noted, who said that he 19 would like somebody to go and stand outside his old post 20 office with him so he could tell them exactly what he'd 21 been through. I would do that. I am very, very sorry. 22 I would also like to repeat the apology which is in 23 my witness statement to Alan Bates, to Ron Warmington 24 and Ian Henderson from Second Sight, and to 25 Lord Arbuthnot. I and those I worked with made their 5 1 work so much harder and I'm very, very sorry for that. 2 My third apology is really about today because 3 I will answer the questions truthfully and I'm very 4 aware that they will be difficult to listen to, for you 5 and for me, and I ask your understanding in advance of 6 that. Thank you. 7 Q. Thank you. I should say there's going to be a fire 8 alarm at 10.00 and we're just going to sit here all 9 together and listen to it, and then carry on afterwards. 10 So some general issues, if I may. 11 Ms Vennells, in the light of the information that 12 you tell us in your witness statement you weren't given, 13 in the light of the documents that you tell us in you 14 witness statement that you didn't see and in the light 15 of the assurances that you tell us about in your witness 16 statement that you were given by Post Office staff, do 17 you think you're the unluckiest CEO in the United 18 Kingdom? 19 A. I was given much information and, as the Inquiry has 20 heard, there was information that I wasn't given and 21 others didn't receive, as well. One of my reflections 22 on all of this is that I was too trusting. I did probe 23 and I did ask questions and I'm disappointed where 24 information wasn't shared and it has been a very 25 important time for me, as I've gone through all of the 6 1 documentation that I've seen since, to plug some of 2 those gaps and to remind me what I did see and perhaps 3 hadn't remembered. 4 Q. Can I run through with you -- I don't want to display 5 them on the screen in the interests of time but take it 6 from me that these are accurate short summaries of what 7 you say in your witness statement -- the things that you 8 say that you weren't told, and that you didn't see. 9 Paragraph 104 on page 39. Nobody at the Post Office 10 told you that there were bugs, errors or defects in 11 Horizon or that it lacked integrity, or even that there 12 were allegations to that effect, when you joined the 13 Post Office in January 2007. Yes? 14 A. Yes. 15 Q. Paragraph 109 on page 41. When you joined, you weren't 16 briefed on the contract with Fujitsu. Correct? 17 A. Correct. 18 Q. Paragraph 114 on page 43. When Computer Weekly 19 published its article in May 2009, you were told by Mike 20 Young, the then Operations Director, that the magazine 21 didn't know what it was talking about in relation to 22 Horizon and assured you that there was nothing wrong 23 with the Horizon system. Correct? 24 A. Yes. 25 Q. Paragraph 129 on page 50. You did not know, at the time 7 1 of the Computer Weekly article in May 2009, of the 2 Callendar Square bug, you didn't know of the remming out 3 bug, you didn't know about the reversals bug, the data 4 tree failure bug the phantom transactions bug, the 5 concurrent logins bug or the Bureau de Change bug 6 because nobody had told you about them. Correct? 7 A. Correct. 8 Q. Paragraph 133 on page 52. You were not made aware of 9 the receipts and payments mismatch bug when it was 10 discovered in September or October 2010; the first that 11 you knew about it was in May 2013. Correct? 12 A. Correct. 13 Q. Paragraph 154 on page 61. You were not aware of the 14 remming-in bug, the local suspense account bug, the 15 recovery bug, the withdrawn discrepancies bug or the 16 Lyca top-up bug when you became Managing Director in 17 October 2010 because nobody told you about them? 18 A. Correct. 19 Q. Paragraphs 180 and 181 on page 75. You had no 20 understanding of how suspense accounts operated during 21 your time as Network Director or Managing Director and, 22 if there were issues with suspense accounts, then you 23 weren't made aware of them. Correct? 24 A. Correct. 25 Q. Paragraph 309 on page 143. You were not made aware of 8 1 Richard Morgan KC's advice that, if an independent 2 expert examined Horizon and found faults with it, then 3 that would open the floodgates to damages claims by 4 convicted subpostmasters -- 5 A. Correct. 6 Q. -- you weren't told about that. 7 Paragraph 388 on page 183. Your understanding until 8 May 2013 was that no bugs had been found in Horizon 9 because that is what you had been told by a series of 10 senior IT managers over the years? 11 A. Correct. 12 Q. Paragraph 502 on page 246. Your incorrect understanding 13 of the operation of the "settle centrally" function, in 14 particular that it operated like a suspense account, 15 allowing time for disputes to be resolved, came from 16 reliance on incorrect information that you had been 17 given by others in the Post Office? 18 A. Yes. 19 Q. Page 563 on page 271. You did not see Simon Clarke's 20 Advice of 15 July 2013 until after you left the Post 21 Office, indeed not until it was made public until 2021? 22 A. Yes. 23 Q. Paragraph 564 on page 271. You did not see Simon 24 Clarke's Advice of 2 August 2013 about the Head of 25 Security's instructions to shred documents relevant to 9 1 Horizon bugs until after you had left the Post Office -- 2 A. That's -- 3 Q. -- indeed, again, not until it was made public in 2021? 4 A. That's right. 5 Q. Paragraph 568, page 273. 6 (Pause for fire alarm test) 7 Paragraph 568, on page 273. You did not see, nor 8 were you briefed about, Brian Altman KC's advice of 9 2 August 2013. 10 A. Correct. 11 Q. Paragraph 686 on page 321. You did not read Brian 12 Altman KC's general review of 15 October 2013, until you 13 were provided with a copy of it in the course of this 14 Inquiry by the Inquiry? 15 A. That's right. 16 Q. Paragraph 842, page 376. You were involved, only to 17 a limited extent, in commissioning and reviewing advice 18 from Linklaters Solicitors? 19 A. Sorry, could you say that again? 20 Q. Yes. You were involved, only to a limited extent, in 21 commissioning and then reviewing advice from Linklaters 22 Solicitors? 23 A. I think that depends on which you're referring to. 24 There was a report produced by Linklaters which came to 25 the Board which was discussed and, in the preparation 10 1 for that, I worked with a small group of colleagues from 2 the ExCo and chased down a list of questions from the 3 Board but my involvement in the formulation of the 4 instructions -- I had no involvement in the final 5 formulation of the instructions. 6 Q. Thank you. Paragraph 896, page 400. You say that, 7 although the failure to discuss the impact of Deloitte's 8 2014 report seems surprising now, you trusted Chris 9 Aujard, Rod Williams and Linklaters to have advised you 10 about the impact on criminal convictions, and they did 11 not. 12 A. I'm so sorry, could you say that one again, please, 13 because that was quite an important -- 14 Q. Yes. You say that, although the failure to discuss the 15 impact of Deloitte's 2014 report on criminal convictions 16 seemed surprising to you, you trusted Chris Aujard, Rod 17 Williams and Linklaters to have advised you about this, 18 that it was necessary to do so -- 19 A. In that respect, yes, yes. 20 Q. -- and they did not do so? 21 A. Yes. 22 Q. Paragraph 1155, you say that you did not see Brian 23 Altman KC's advice of the 8 March 2015? 24 A. I didn't see any advices, so I assume that's correct. 25 I can't remember that one specifically. 11 1 Q. Paragraph 1251, page 533. You did not see Jonathan 2 Swift's written review of the 8 February 2016 -- 3 A. That's correct. 4 Q. -- at the time. 5 Paragraph 1341, page 579. You were not on the 6 steering group for the Group Litigation and Jane MacLeod 7 was instead responsible for briefing the Board about it? 8 A. That's correct. I was on the Board subcommittee. 9 Q. If all of the facts and matters that I've just described 10 are true and if what you say is reliable, was there 11 a conspiracy at the Post Office which lasted for nearly 12 12 years involving a wide range of people, differing 13 over time, to deny you information and to deny you 14 documents, and to falsely give you reassurance? 15 A. No, I don't believe that was the case. You've covered 16 a range of different issues. I have been disappointed, 17 particularly more recently, listening to evidence at the 18 Inquiry, where I think I have learnt that people knew 19 more than perhaps either they remembered at the time or 20 I knew of at the time. I have no sense that there was 21 any conspiracy at all. 22 My deep sorrow in this is that I think that 23 individuals, myself included, made mistakes, didn't see 24 things, didn't hear things. I may be wrong but that 25 wasn't the impression that I had at the time. I have 12 1 more questions now, but "conspiracy" feels too far 2 fetched. 3 Q. There wouldn't be a motive for such people to deny you 4 information, deny you documents and falsely to give you 5 reassurance where it wasn't warranted, would there? 6 A. I think you conflate too many different things, if 7 I may, because you've covered bugs and IT, you've 8 covered legal advices, the chairman's report by Jonathan 9 Swift. I can't see that over that period of time that 10 individuals working on all of those documents could have 11 conspired or had a reason to withhold them. 12 The Inquiry heard from Susan Crichton -- and this is 13 a serious governance lesson -- that it was not the 14 practice in the Post Office and the Legal team, and in 15 Royal Mail Group previously, to share legal advices. 16 They may have had very good reasons for that, some of 17 which I'm sure were related to legal privilege, but they 18 were not shared and, as Susan explained, the outcomes 19 were discussed. So, as we go through some of those 20 documents which we may do, I'm sure that I will 21 recognise some of the recommendations. 22 I have to say, having read some of them, 23 particularly one of the Brian Altman advices, where he 24 was -- as he was reviewing Prosecution Policy, he was 25 hugely critical of, prior to 2012/13, the documentation, 13 1 the policies in place, the approach. That advice was 2 never shared with me, with the Group Executive, with the 3 Board. Had we seen it, we may well have asked very, 4 very different questions. What was shared was the 5 outcome of that advice and different policies and 6 procedures were put in place. But I think there is too 7 much reliance or there was too much reliance on the lead 8 General Counsels in that case -- and I'm not 9 particularly making a point about General Counsels -- 10 but to take a decision as to what was shared from those 11 reports because what happened is they were then -- as 12 the Inquiry has seen, they were then reproduced into 13 Board documents, which were shared, but the original 14 advice would have been so much more useful. 15 And one of the biggest lessons for me in this is 16 that advices should be -- that Boards, Chief Executives 17 and Group Executives should know when advices are 18 commissioned, they should know when they are received -- 19 because some were received that were not commissioned -- 20 and they should see them. 21 Q. You focused on legal advice. I've asked you about 22 a range of things -- 23 A. Yes. 24 Q. -- including the contract with Fujitsu, the information 25 about bugs, errors and defects. If there isn't 14 1 a conspiracy operative to deny you this information, 2 what's the reason that so much of it didn't reach you? 3 A. The contract with Fujitsu would not have been -- the 4 contract with Fujitsu -- sorry, let me start again -- 5 existed over a very, very long period of time, as the 6 Inquiry knows. I was involved with reviewing the 7 strategy and some of the content of the contract with 8 Fujitsu, as we prepared to re-tender the Horizon system 9 in -- up and during 2015. The original contract with 10 Fujitsu and versions before that would not have crossed 11 my desk as Network Director or as Managing Director. 12 What should have happened is the service level 13 agreements within that contract should have been 14 reported on differently than they were, and that also 15 might point to some your points about bugs, errors and 16 defects because, if I turn to those, the reporting that 17 the Group Executive, the Chief Executive, and the Board 18 received -- and the Inquiry heard this from Lesley 19 Sewell as well -- was at different levels. 20 So I think we had a level 0 and a level 1 that came 21 to my level and to the Board. Issues that cropped up 22 below that were not reported. One of the biggest 23 challenges, as I have been going through all of this 24 documentation, is realising how much went on at 25 an individual postmaster level. So when a bug affected 15 1 large numbers of post offices or there was an outage 2 which affect large number of post offices or a network 3 failure, they were raised. But if a single 4 subpostmaster made a call X number of times to a service 5 centre, it wouldn't have been picked up and I think, 6 from a governance point of view, there is -- and the 7 point has been made previously -- a very important 8 lesson around the issue of the institution and the 9 individual. 10 How does somebody, as a Chief Executive of 11 an institution this large and complex, have sight to 12 what happens to an individual, if they are affected by 13 a bug? 14 The only thing I can think about is that it ought to 15 be possible to have data which reports the number of 16 times a postmaster may complain about something, the 17 number of disputes that have not been resolved, age 18 disputes, disputes where postmasters have challenged 19 them -- 20 Q. Isn't all this really obvious? 21 A. It is and it wasn't in place, and it should have been. 22 Q. If it was really obvious, why wasn't it in place? 23 A. I think because of the way that the reporting had been 24 planned. Management information across many areas of 25 a business tends to be written in layers of escalation 16 1 and the layers of escalation that were selected around 2 IT and Fujitsu were such that it didn't -- and I think 3 this probably happens in many, many other large 4 institutions too -- it didn't give you, on a Board, 5 a line of sight to what happened to an individual and we 6 are seeing the terrible impact of that today. 7 Q. So is the overall answer to my question that you don't 8 believe that there was a conspiracy to deny you 9 information and documents; the reason such information 10 and documents didn't reach you was the way that the 11 company was organised and structured? 12 A. I think, in the majority of cases, yes. That is true. 13 Q. Who was responsible for organising and structuring the 14 company? 15 A. Sorry, if I may just say, the other point is that I have 16 seen documents and I have heard evidence where I think 17 colleagues did know more information than was shared 18 and, in those cases, either mistakes were made or they 19 decided it wasn't appropriate to do so. 20 To your first point, in terms of -- sorry, could you 21 say that again? 22 Q. Yes. If it was the organisation and structure of the 23 company that prevented this information and these 24 documents from reaching you, who was responsible for 25 organising and structuring the company, after you became 17 1 CEO? 2 A. I was responsible for -- as CEO, you're accountable for 3 everything. You have experts who report to you. So the 4 decision on what would have been reported on IT, for 5 instance, would have been decided by the IT Director. 6 When I was Chief Executive, in an attempt to get more on 7 top of some of the issues that were reported, I asked 8 Alisdair Cameron, for instance, to put in place 9 an Operations Board, where it began to review some of 10 those things that were raised. But, in terms of what 11 you put in a report, the IT reports the Post Office had 12 were not that different from ones I've seen in other big 13 corporate companies. 14 The difference for the Post Office, as a result of 15 what we're discussing here today, is that it somehow -- 16 it was -- at the time, it did not see what was happening 17 in an individual post office, if that was -- it was just 18 at a level that didn't reach it, and that was wrong, and 19 there needs to be different sort of reporting that would 20 have flagged that. 21 Q. In a note that Alice Perkins wrote before the departure 22 of Susan Crichton, to you, she said: 23 "It's the fact that she [that's Susan] sees so much 24 as beyond her control. That's the problem. It's her 25 alibi." 18 1 Do you think the same could be said of you? 2 A. No, definitely not. I asked questions, I oversaw the 3 strategy which would have introduced changes where we 4 felt it was appropriate to the organisation. I probed, 5 I worked in a structured way and an informal way. 6 I would walk around the desks in the organisation and 7 talk to people just to find out what was going on. 8 I was sometimes criticised in team development events 9 for being too curious and stepping too much into 10 people's territory. I don't think that's a criticism 11 that could have been levelled at me. 12 Q. You tell us that you always enjoyed a good relationship 13 with Moya Greene, the Chief Executive of Royal Mail 14 Group, in your witness statement. 15 A. Yeah, we had a good working relationship. 16 Q. You say -- no need to turn it up -- paragraph 259 on 17 page 114: 18 "I got on very well with Moya." 19 A. I got on very well with most of the people I work with, 20 yeah. 21 Q. I'm focusing on Moya Greene at the moment? 22 A. Oh, sorry. 23 Q. She overlapped very extensively as Chief Executive of 24 Royal Mail Group with your holding the most senior 25 positions in the Post Office, yes? 19 1 A. Yes. 2 Q. She became CEO of Royal Mail Group in July 2010; you 3 became MD of Post Office in October 2010? 4 A. Yes. 5 Q. She left in 2018 and you left in early 2019? 6 A. Yes. 7 Q. So a very substantial period of overlap. Can we look, 8 please, at PVEN00000532. This is a new document for the 9 Inquiry, having been properly disclosed by you recently. 10 It's an iMessage exchange with Moya Greene, and I think 11 you'll be familiar with it. 12 SIR WYN WILLIAMS: What was the reference again, Mr Beer? 13 Sorry. 14 MR BEER: PVEN00000532. 15 SIR WYN WILLIAMS: Thank you. 16 MR BEER: Can you help us to date it, please? 17 A. I think this is January this year. 18 Q. You'll see that the way you've screenshot it includes 19 the words "Yesterday at [6.46]" -- that doesn't 20 literally mean yesterday from the day that you disclosed 21 it to us. That captures -- 22 A. I think Moya had been away, she had come back to the UK. 23 I have a sense this is around January time because 24 I think it was at the time of the ITV drama. 25 Q. That would make sense because in the third paragraph it 20 1 says: 2 "Nick was a poor witness. 3 "Chairman gone." 4 That's a reference to Mr Staunton, yes? 5 A. I believe so. 6 Q. He resigned, I think, or was required to resign, on 7 27 January 2024. 8 A. Yes. 9 Q. Let's just read through it. 10 "Paula, 11 "Am just back in the UK. 12 "What I have learned from the Inquiry/Parliamentary 13 committee questions is very damaging. 14 "Nick ..." 15 That's Nick Read, yes? 16 A. Yes. 17 Q. "Nick [Read] was a poor witness. 18 "Chairman ..." 19 As we've established, that's Mr Henry Staunton, 20 correct, yes? 21 A. Yes. 22 Q. "... [has] gone. He will be next. 23 "When it was clear the system was at fault, the 24 [Post Office] should have raised a red flag, stopped all 25 proceedings, given people back their money and then 21 1 tried to compensate them for the ruin this caused in 2 their lives. 3 "[Moya]." 4 Then if we go down, please the next page. Keep 5 going. You say in reply: 6 "Yes, I agree. This has/is taking too long Moya. 7 The toll on everyone affected is dreadful. I hope you 8 had a good break and are well. 9 "[Best wishes] Paula." 10 Moya Greene: 11 "I don't know what to say. 12 "I think you knew. 13 "[Moya]." 14 You reply: 15 "No Moya, that isn't the case." 16 She replies: 17 "I want to believe you. 18 I asked you twice. I suggested you get 19 an independent review reporting to you. I was afraid 20 you were being lied to. You said [the] system had 21 already been reviewed multiple times. How could you not 22 have known?" 23 Over the page, and scroll down: 24 "Moya, the mechanism for getting to the bottom of 25 this is the Inquiry. I've made it my priority to 22 1 support it fully." 2 Moya Greene: 3 "The Post Office did not. They dragged their heels, 4 they did not deliver [documents], they did not 5 compensate people. 6 "Paula, you appealed the judge's decision!" 7 "I am sorry. I can't now support you. 8 "I have supported you all these years to my own 9 detriment. I can't support you now after what I have 10 learned. 11 "[Moya]." 12 You'll see, in the course of that exchange, Moya 13 Greene accuses you of knowing. 14 A. Yes. 15 Q. Did you understand that to be an accusation that you 16 knew about bugs, errors and defects in Horizon? 17 A. No, I understood this to be Moya -- and there is 18 a further series of exchanges of texts where Moya steps 19 back a little bit from the challenges that she's putting 20 here. I understood that Moya had returned to the 21 country earlier this year, that she had been listening 22 to all of the information in the Inquiry and she was 23 trying to square her memory with what she was hearing. 24 I -- yeah, that's my -- 25 Q. If we go up a page, please. She says in the second text 23 1 down there: 2 "I think you knew." 3 You say: 4 "... that isn't the case." 5 What did you think you were denying? 6 A. I think Moya was possibly suggesting there that there 7 was some conspiracy, as you mentioned earlier, and, as 8 I said, I didn't believe that was the case. She may 9 have been saying that I -- no, I think it's the same 10 thing. I was going to say about a cover-up but the same 11 thing. 12 Q. At the text at the foot of the page she asks you the 13 question: 14 "How could you not have known?" 15 Your reply, if we scroll down -- you don't answer 16 that question, do you? 17 A. No, and I didn't not answer that question; I was very 18 concerned, because I was aware that it is not good 19 practice to be exchanging texts in the middle of 20 an inquiry, and so I simply wanted to say to her that 21 the place for resolving all of this was the Inquiry. It 22 wasn't that I should or shouldn't have answered her 23 question because this is -- 24 Q. Ms Vennells we've got a lot of your text messages. 25 A. Yes. 24 1 Q. You've been exchanging texts messages with a lot of 2 people, including in the currency of this Inquiry, 3 haven't you? 4 A. Not since the Inquiry became a public inquiry. 5 I exchanged texts in relation to the Select Committee in 6 2020 and -- 7 Q. The setting up of the Inquiry? 8 A. -- and when the Inquiry was non-statutory, and then 9 I understood -- and the reason I exchanged those texts 10 was to try to help to give good information to the 11 Select Committee and to the Inquiry. The intention of 12 all of those texts that were exchanged was entirely 13 positive. 14 Q. You don't answer the question, "How could you not have 15 known?" What's the answer to that question that the 16 Chief Executive of Royal Mail Group is asking you: how 17 could you not have known? 18 A. This is a situation that is so complex, it's a question 19 I have asked myself as well. I have learned some things 20 that I didn't know, as a result of the Inquiry and 21 I imagine that we will go into some of the detail of 22 that. I wished I had known. 23 Q. That's not the issue. The question is: how come you 24 didn't? 25 A. I think the question then is which question am I trying 25 1 to answer? The Inquiry -- that there were two trials. 2 There was the Common Issues trial and there was the 3 Horizon Issues trial. If I take the Common Issues 4 trial, I did know a number of aspects that came up 5 during that trial and, where Judge Fraser found that the 6 Post Office needed to change its practices and its 7 contract. 8 In terms of the onerous nature of the contract, 9 I was in the Board meeting where the Board reviewed that 10 contract, as a result of the Linklaters advice which we 11 touched on previously and we were given very 12 straightforward advice that the contract was 13 an acceptable contract. 14 One of my regrets, and it's in my statement, is that 15 during that meeting a relational contract was mentioned 16 and I remember thinking: that is the nature of the way 17 I would like the Post Office to work with its 18 subpostmasters and I believed that that was what we were 19 doing and, therefore, the legal advice, with continuing 20 with the agency contract, could be followed. 21 In terms of the IT side, that I think is much more 22 difficult. I wish I had known more on that. I did not 23 know until 2018, when Mr Coyne submitted his evidence on 24 the numbers of bugs in the system, and the serious 25 numbers of bugs in the system and the interventions 26 1 going on, and I should have known about that. 2 Q. But why didn't you? That's what I'm asking, not whether 3 you wish you had known; it's why didn't you? 4 A. That goes back to my earlier point, I believe, around 5 management information, around possibly Fujitsu not 6 sharing as much as it could or should have done, around 7 possibly people knowing that the system itself lacked 8 integrity, around corporate memory. One of the biggest 9 lessons for governance in this was, when I joined the 10 Post Office in 2007, there was absolutely no corporate 11 memory, alive, at least, of the inception of the Horizon 12 system. I had no idea that it was a system that had 13 been designed for a completely different purpose, that 14 the Post Office had had to struggle to take it on, that 15 the decisions -- 16 Q. How come we've been able to find it out, just by asking 17 for the documents? Thousands of documents about the 18 birth of Horizon, the involvement of the DWP and the 19 Benefits Agency, the splitting off, the contract, the 20 Acceptance Incidents. You say that corporate memory 21 didn't exist: all of the documents are there, we've got 22 them, we've looked at them, we spent five months looking 23 at them? 24 A. You're right and I didn't. There is an issue of unknown 25 unknowns. If you don't know something exists, it's 27 1 difficult to ask questions about it. That is why the 2 importance of governance, particularly around corporate 3 memory on bad things, rather than good things -- there 4 was plenty of good corporate memory in the Post 5 Office -- is important to have. I simply didn't have 6 that information. 7 Q. Cutting through this, this exchange reveals that, even 8 the Chief Executive of the Royal Mail Group, who 9 supported you over all those years, doesn't believe you, 10 does she? 11 A. That's what this particular text says. Whether Moya 12 still feels the same, I'm not sure, and you would have 13 to ask her. 14 Q. You point in this exchange to the importance of the 15 Inquiry, and can I turn to that now as the second 16 general topic. Can we look at pages 2 and 3 of your 17 witness statement, please, paragraph 5, which is at the 18 bottom. You say: 19 "I would like to offer my genuine and unreserved 20 apologies to all of those affected by the matters giving 21 rise to this Inquiry. I apologise that I and those 22 working for me and with me failed the subpostmasters and 23 their families. I am deeply sorry they have suffered in 24 such a distressing way. I watched the Inquiry's Human 25 Impact evidence and heard the subpostmasters describe 28 1 what they had been through, how isolated they felt, and 2 how they had been unsupported by [the Post Office]. 3 They described the life changing experiences they and 4 their families have endured for so many years. I am so 5 very sorry that so much of this happened while I was 6 a member of the senior management team and then CEO. 7 "I also offer my apologies to Alan Bates, Ian 8 Henderson, Ron Warmington, Lord Arbuthnot and all those 9 who worked with them to secure justice for the 10 subpostmasters. They had the right insights. They were 11 right to persevere and I am sorry for where I made their 12 task harder." 13 Some of which you said first thing this morning. 14 Then can we go forward, please, to page 774 and 15 paragraph 1800. You say: 16 "I have been asked to reflect on my time at [the 17 Post Office] and to set out whether there is anything 18 I would have handled differently, with hindsight." 19 Then 1801: 20 "As a result of my commitment to this statement and 21 to the work of the Inquiry, which has been my priority, 22 I have had much to consider. With the benefit of 23 hindsight, there are many things I and the Post Office 24 should have done differently. I am now reflecting with 25 care on these matters and I will expand upon them and 29 1 answer them as fully as possible when I give my evidence 2 to the Inquiry ... Those reflections will demonstrate my 3 deep remorse." 4 So our request, which was made in August 2023, so 5 seven months before you provided this witness statement, 6 was for you to "reflect on your time at the Post Office" 7 and set out whether there was anything you would have 8 handled differently, with hindsight, yes. 9 A. Yes. 10 Q. You explain in paragraph 1801 that there are many things 11 that you should have had done differently and the Post 12 Office should have done differently, and you will expand 13 upon them and answer them fully when you give your 14 evidence in May, ie today. 15 Given you provided a 775-page witness statement that 16 took seven months to write, could you not have reflected 17 on what you should have done fully and differently 18 within the witness statement? 19 A. Yes, I could have put more into it and I'm sorry if that 20 isn't -- wasn't helpful. I read so many documents and 21 worked a long time to try and prepare this and 22 disclosures -- disclosures are coming out all the 23 time -- 24 Q. I'm sure that's true -- 25 A. I would be very happy to tell the Inquiry, now I have 30 1 a list of things in my head and I hoped that I would be 2 able to bring them out as we went through this 3 statement. Equally, I will be more than happy to submit 4 a further statement to set that out. 5 Q. Given that you took 775 pages and seven months to write 6 this, why didn't you do so then, given that we'd asked 7 you that direct question? Were you adopting a 'wait and 8 see' approach: let's see what comes out in evidence, see 9 what I've got to admit and then I'll admit that? 10 A. No, not at all, Mr Beer. That's not the way I work. 11 Q. So why didn't you assist us by setting out in this 12 document what your reflections were? 13 A. It was simply a matter of time. The Inquiry asked me, 14 I think, over 600 questions, 200 or 300 with 15 subquestions in each. I went through probably hundreds 16 of thousands of documents and my memory was not very 17 good at the beginning of this process. It has improved 18 as I've gone through the documentation and that was 19 important. And, by the time I got to December last year 20 when the draft went in, I had simply run out of time to 21 answer these questions properly. They are very serious 22 questions. I can -- questions 189 and 190, in the list 23 that the Inquiry sent to me. I would be happy to write 24 them up in much more detail or I would be happy to share 25 with you now, or as we go through, those reflections. 31 1 It was absolute not a 'wait and see'. 2 Q. Can I turn to the third topic, please, which is what you 3 think went wrong. 4 Can we go back to paragraph 4 of your witness 5 statement, please, which I think is on page 2. If we 6 scroll down, please, you say you have been shown and 7 read thousands of documents from the Inquiry's 8 disclosure when you were writing this witness statement, 9 yes? 10 A. Yes. 11 Q. You've done your best to refer to all relevant documents 12 and answer all questions fully. 13 A. Yes. 14 Q. But you're sure you may have missed some or overlooked 15 some inadvertently. 16 A. Yes. 17 Q. Then can we go forwards, please, to page 774 and 18 paragraph 1802. Thank you. In the second line, you 19 say: 20 "I am genuinely sorry ... I finish this statement by 21 repeating my apologies to the subpostmasters and their 22 families and to all who have suffered so much from this 23 terrible miscarriage of justice." 24 Then this: 25 "Their lives were torn apart by being wrongly 32 1 accused and wrongly prosecuted as a result of the 2 Horizon system." 3 I just want to focus on the words "as a result of 4 the Horizon system". Even after all the Inquiry has 5 revealed and after all of the documents, thousands, that 6 you've read, do you continue to think that the issue was 7 with the computer system, the Horizon system, as opposed 8 to the conduct, competence and ethics of those within 9 the Post Office? 10 A. No, not at all and apologies that that's not clear. 11 There were numbers of debates about what the Horizon 12 system meant. No, what I meant to say or what I should 13 have said is "as a result of all of the matters relating 14 to Horizon and all of the issues that were discussed 15 that the Inquiry is looking at". 16 Q. This suggests that you think that the issue was with the 17 system not the people: the people that were responsible 18 for the conduct of prosecutions, the people that were 19 responsible for the conduct of investigations and, 20 indeed, those responsible for their supervision, 21 oversight and governance, doesn't it? 22 A. That was not what I intended to convey at all. 23 Q. Is this a perpetuation, what we see in this simple 24 sentence here, of a culture that ran through the Post 25 Office of failing to take responsibility for the use of 33 1 powers that it elected to use and, indeed, use robustly 2 and, instead, blame the IT? 3 A. No, it isn't that at all and I completely agree with 4 what is contained in your question. The tragedy that 5 we're dealing with today is the result of something 6 much, much broader than an IT system. Yes, that 7 underpinned some of it but the issues were much, much 8 broader. 9 Q. The words that you finished the statement with here, 10 these last two sentences, are exactly the same words 11 that you used -- they're a cut and paste -- when you 12 were announcing that you were returning your CBE to the 13 King, correct? 14 A. I don't recall that but, if you say so, yes. 15 Q. Yes, they're a cut and paste. 16 A. Right. 17 Q. I've looked online to see the words that you delivered 18 when apologising and explaining the return of the CBE. 19 Is that how you thought then: that it's the computer 20 system that was the problem, not the people? 21 A. No, Mr Beer, I didn't. I've just explained. It was 22 a poor use of words. This was far more complicated than 23 just the Horizon system. 24 Q. Does it reflect a fundamental failure to understand how 25 profound a power the Post Office chose to exercise when 34 1 it prosecuted people at scale, and how serious and broad 2 the use of that power was? 3 A. No, because I wrote this in hindsight. I think, at the 4 time, your question is valid. The Post Office didn't 5 realise all of that. 6 Q. Can I turn to the fourth topic, please, which is whether 7 your priority in your time at the Post Office was to 8 protect the business. Can we turn up, please, 9 POL00102438. Can you see an email exchange between you 10 and Jane MacLeod, Mark Davies and Alisdair Cameron, with 11 other people copied in -- 12 A. Yes. 13 Q. -- of 3 August 2015. You say: 14 "I've listed below some questions and requests." 15 Then, in the second paragraph, you say this: 16 "As [presumably 'per'] my earlier note our priority 17 is to protect the business and the thousands who 18 operated under the same rules and didn't get into 19 difficulties ..." 20 Can you see that? 21 A. Yes, I can. 22 Q. By this stage, as I think we're going to see, August 23 2015, the Post Office and you personally were aware of 24 at least three bugs that had impacted on subpostmaster 25 balances in different ways, correct? 35 1 A. Yes. 2 Q. Why were you still happy to identify as a priority, to 3 wheel out the message again, that, because many branches 4 had not complained, that supported the Post Office 5 position that those who were complaining, their 6 complaints shouldn't really be attributed to Horizon? 7 A. I'm sorry, first of all, because this reads badly today. 8 At this is point in time, my recollection is that the 9 Post Office team working on the cases of the 10 subpostmasters -- there were 136, I think, that went 11 into the scheme and were being investigated -- I had -- 12 and the Board had been given the information that no 13 issue had been found that had caused the problems for 14 those subpostmasters, either as a result of the Horizon 15 system or -- and I'm sure in some cases they had found 16 something that the Post Office itself had not done 17 correctly but, in my mind, I was of the understanding 18 that the cases we were looking at were a minority, and 19 the vast majority of those operating in the business had 20 not encountered the same issues, I wasn't -- 21 Q. Can I just -- I'm sorry -- test to you on your logic 22 there? 23 A. Yes. 24 Q. Why does that logic follow: "There are lots of 25 subpostmasters for whom Horizon is working, we should 36 1 concentrate on them, they're our priority, not the 2 people for whom it's not working, who complain about 3 a bug, error or defect"? 4 A. Two responses to that, if I may. The latter one is we 5 were concentrating on those who had raised issues 6 individually and that was part of the scheme and the -- 7 Q. That's not your priority, according to this. 8 A. Then this is badly worded because the -- 9 Q. Why is it badly worded? 10 A. I'm juggling two priorities and I'm only talking about 11 one here. 12 Q. You don't say that here. That would be a more 13 acceptable way to say -- 14 A. It would have been a more acceptable thing to say -- 15 Q. No doubt you wish you had but you didn't? 16 A. No, I didn't -- 17 Q. You said our priority is to protect the people that 18 aren't complaining? 19 A. That wasn't how I intended it to be read. We had just 20 spent three years investigating with Second Sight, and 21 I accept all of the things that went wrong through that 22 process which I'm sure we will come to, but we had 23 prioritised more than any other time in the Post Office, 24 looking into issues raised by individuals. I had been 25 told, and the Inquiry has heard other people say the 37 1 same, that nothing had been found and so my 2 understanding at this time was that the way the business 3 was operating was an acceptable way, and what I was 4 trying to say here is that we needed to make sure that 5 the business, as it was operating, remained a priority 6 for us. I wasn't excluding the other but it can be read 7 that way, and I accept it. 8 Q. Was this a message that was also disseminated within the 9 business and, in particular, to those who worked the 10 Helpdesks, when they responded to calls from distressed 11 subpostmasters: the system works for everyone else, it's 12 just you that's the problem, not the system? 13 A. Oh, no. There's no way that the organisation would have 14 disseminated something like that. The people who worked 15 in the call centres -- and I visited on a number of 16 occasions and listened in to calls -- were very keen to 17 make sure they gave the help to the people who phoned 18 in. But I'm very sorry because I'm very aware that so 19 many subpostmasters phoned in so many times and didn't 20 -- and we're talking over a 20-year period -- but phoned 21 in so many times and were not given the help they 22 needed. 23 Q. Or worse than that, they were told that "You're the 24 problem, subpostmaster"? 25 A. Yes, I've heard that. 38 1 Q. "You're the only person that's complaining about this." 2 A. I have heard that. I can't comment on individual cases 3 and I'm very sorry that was the case. 4 Q. Separately, by this time, August '15, you hadn't seen 5 the Clarke Advice of 15 July -- 6 A. No. 7 Q. -- about Gareth Jenkins, 2013, but you had, I think, 8 been made aware that there was a problem with the 9 Fujitsu expert, which problem could create a duty of 10 further disclosure that might undermine past criminal 11 convictions. I'm summarising what you say in your 12 statement. 13 A. Yes, yes. 14 Q. Was that not a cause for concern, when there were 15 repeated complaints in respect of Horizon, ie I've been 16 told that there has been an issue raised about the 17 evidence given by the Fujitsu expert which may create 18 a duty of further disclosure? Why would your priority 19 still be on protecting the business, in the light of 20 that? 21 A. My priority -- I had a number of priorities as Chief 22 Executive. To your question about the Simon Clarke 23 Advice and Gareth Jenkins, the way that had been 24 explained to me was that Gareth Jenkins had not 25 disclosed -- and I can't remember whether it was one or 39 1 two -- bugs, which were not relevant to the case that he 2 had been giving evidence on, and I can remember 3 a conversation with Lesley Sewell very clearly because 4 she was incredibly frustrated that he was now going to 5 be stood down as what we understood at the time to be 6 an expert witness, having shared -- having not shared 7 information which was not relevant to a case, and the 8 logic didn't seem to be -- didn't seem to stand 9 scrutiny, but what was explained by the lawyers is that, 10 because he had done that, he then had to be stood down. 11 I don't think that had any -- 12 Q. Sorry, we're just going to come back to that in detail 13 whilst you're on it. 14 A. Right, okay. 15 Q. Is that your memory of it -- 16 A. Yes. 17 Q. -- of what you were told -- 18 A. Yes. 19 Q. -- that this was completely illogical: why are we 20 standing down this Fujitsu man? 21 A. Yes, I had two conversations. I don't know if you want 22 to cover that now or later. 23 Q. Well, just briefly now, to get your evidence. Neither 24 of these conversations are documented, correct? 25 A. I think they're in my statement, actually, yes, so -- 40 1 Q. So what you have said now -- 2 A. There's no further documentation of them, no. So the 3 first I learnt was I bumped into Lesley Sewell in the 4 corridor, she was looking particularly grumpy and 5 I said, "What's the matter", and she said, "I just found 6 out that" -- and I didn't remember the name and there's 7 documentation that shows that I didn't but she would 8 probably have said that the Fujitsu expert had been 9 stood down because he hadn't disclosed two bugs which 10 were not relevant in a case where he had given evidence. 11 Q. Okay. 12 A. I then had a further conversation with Susan Crichton to 13 say "This doesn't quite make sense to me, why is he 14 being stood down?", and she explained that there was 15 a duty of disclosure now, that what we had to do was to 16 go back over the cases where he had given evidence and 17 inform them of this event. 18 Q. Just again capturing things, we know that there was 19 a written advice -- 20 A. Yes. 21 Q. -- from an independent barrister? 22 A. Yes. 23 Q. Do you know why neither of them said, "Paula, it's all 24 explained here", which would have told you a very 25 different story? 41 1 A. I have no idea, I have absolutely no idea and I find it 2 unacceptable. I should have seen it -- 3 Q. Do you think they were trying to protect you from 4 information that you would find difficult to hear? 5 A. No. 6 Q. "We best not tell the boss." 7 A. No. No, absolutely not. 8 Q. Because the account that you've given is very different 9 from what the documents reveal. 10 A. Yes, I agree. I should have seen and the Board should 11 have seen them. Susan Crichton explained to the Inquiry 12 that it was not the way of working in the Post Office to 13 disclose legal advices. They should have been and, to 14 your point about me -- people hiding bad news from me: 15 no. 16 On the contrary: I put in place a campaign at one 17 stage which was called "Bad News Is Good News" to 18 encourage people to come -- to produce -- to share 19 difficult information because it's very important when 20 you're running an organisation, particularly at the 21 level of Chief Executive, that that sort of information 22 is shared with you. 23 Q. Can I move to my fifth topic, then, please. 24 You knew and worked very closely with Alisdair 25 Cameron for a number of years, didn't you -- 42 1 A. Yes. 2 Q. -- and presumably you trusted him? 3 A. Yes. 4 Q. He told us last week, from the time that he joined the 5 business, that's January '15, until the time that you 6 left, that's April 2019 -- 7 A. Mm-hm. 8 Q. -- that you did not believe that there had been any 9 miscarriages of justice. In his words you "could not 10 get there emotionally". Did you believe, right up until 11 the point at which you left the business, that there had 12 been no miscarriages of justice? 13 A. I was told multiple times -- and I'm very aware of the 14 questions that have been asked around the Select 15 Committee in 2015 -- that there had been no evidence 16 found, the Inquiry heard from Patrick Bourke, I think, 17 last week or the week before, where Fujitsu records had 18 been checked to see if there was a scar and everything 19 was golden. I was told that there had been -- that 20 nothing had been found. 21 Q. So is the answer that you did believe, right until you 22 left the business in April 2019, that there had been no 23 miscarriages of justice? 24 A. I think that's right. 25 Q. Was that because you could not, at an emotional level, 43 1 reach the opposite view? 2 A. No, you will see there are two or three examples in 3 documentation where, even in 2016, I asked -- I received 4 a communication from Tim McCormack, who I did speak to 5 or communicate with, and Tim pointed out that the -- 6 that Mrs Misra's case had now been referred, I think -- 7 or the police had been brought in to look at whether 8 Post Office Investigators had not operated correctly in 9 her case. I don't remember the detail and I don't think 10 there were matters of detail in his email. 11 I immediately reacted to that by asking Tom Wechsler 12 to look into it and, in the email, I say "I want you to 13 suspend any" -- these may not be the right words -- but 14 "I want you to suspend any judgement around Sparrow and 15 that we will take whatever conclusion comes from this". 16 What actually happened is that Mrs Misra's case had 17 gone to the CCRC and so it was left with the CCRC to 18 look through. But, no, absolutely not. 19 Q. So Mr Cameron is wrong to suggest that you believed 20 there had been no miscarriages of justice because you 21 could not reach the opposite view at an emotional level? 22 A. You can't be a Chief Executive and rely solely on your 23 emotions, no. 24 Q. Mr Cameron told us that you were clear in your 25 conviction, from the day he joined until the day that 44 1 you left, that nothing had gone wrong; is that correct, 2 was that your belief? 3 A. I don't think he's right in that view. 4 Q. Were you clear in your convictions that nothing had gone 5 wrong in your time at the Post Office, so far as Horizon 6 was concerned and the prosecution of subpostmasters was 7 concerned? 8 A. No, not at all. There were problems with Horizon all 9 the way through my tenure. 10 Q. Mr Cameron told us that you never deviated from or 11 seemed to doubt that. Is that right, that you never 12 deviated from your path? 13 A. No, he's completely wrong. 14 Q. Can we turn, please, to JARB0000001. These are the 15 notes of a meeting between you -- we can just see you at 16 the foot of the screen there -- other Post Office 17 personnel and a group of MPs, including Lord Arbuthnot, 18 yes? 19 A. Yes. 20 Q. It's dated 18 June 2012 and can we look, please, at 21 page 2, where you're recorded as saying: 22 "Paula Vennells continued. She said that temptation 23 is an issue, but that trust in the Post Office ... brand 24 is absolutely paramount. The Post Office needs 25 competent, trustworthy people on staff, and its 45 1 processes and systems must be transparent and must work 2 well. 3 "Of the [1,800] subpostmasters and mistresses 4 currently employed, only a tiny number are presenting 5 ... cases where there is an issue of alleged fraud 6 involving the Horizon system. The problem therefore is 7 relatively ... small." 8 SIR WYN WILLIAMS: I think you actually said "1,800" but 9 it's 11,800. 10 MR BEER: Thank you, sir: 11 "The problem is therefore relatively ... small. 12 "The Horizon is very secure. Every keystroke used 13 by anyone using the system is recorded and auditable. 14 When things go wrong in a sub post office, there is 15 a helpline which staff can call 7 days per week during 16 office hours and back-up staff who will help further if 17 things go wrong. It is here that issues are normally 18 resolved. 19 "It appears that some subpostmasters have been 20 borrowing money from the Post Office Account/till in the 21 same way they might do in a retail business, but this is 22 not how the Post Office works. Post Office cash is 23 public money, and the Post Office must recover it if any 24 goes missing." 25 Then this: 46 1 "Every case taken to prosecution that involves the 2 Horizon system thus far has found in favour of the Post 3 Office." 4 A similar line, if we can remember that one, to go 5 over to page 3, just at the foot of the screen there, 6 you are recorded as saying: 7 "... going back to Andrew Bridgen's question, there 8 had not been a case investigated where the Horizon 9 system had been found to be at fault." 10 Is what we read here, "Every case taken to 11 prosecution ... has found in favour of the Post Office", 12 "there has not been a case investigated where the 13 Horizon system has been found to be at fault", 14 a reflection of the unwavering belief that Mr Cameron 15 spoke about that nothing had gone wrong, there had been 16 no miscarriages of justice and you refused to deviate 17 from those lines? 18 A. It isn't a representation of that. It is, though, 19 a representation of the information that I was given. 20 In, I think, January 2012, the General Counsel told the 21 Board exactly this and the Inquiry has seen this 22 statement, I think, made by other colleagues. It was 23 a -- an understanding in the organisation, which was -- 24 which I now know is completely incorrect. 25 Q. You know it's incorrect because you know that, by the 47 1 time you were speaking here, Nichola Arch, the branch 2 manager at Chalford Hill Post Office in Stroud, 3 Gloucestershire, having been accused of stealing 4 £24,000, had been acquitted by jury in April 2012, 5 having blamed Horizon for the alleged shortfalls at her 6 branch, don't you? 7 A. I didn't know that information. 8 Q. You know now? 9 A. I know now, yes. 10 Q. You know now that Maureen McKelvey, the subpostmistress 11 at Clanabogan in Omagh, accused of stealing £30,000, had 12 been acquitted by a jury, having blamed Horizon for the 13 cause of losses of money of which she was accused of 14 stealing; you know that now? 15 A. I know that now. 16 Q. You know now that Suzanne Palmer, the subpostmistress at 17 Grange Post Office in Rayleigh, had been acquitted by 18 a jury in January 2007, Mrs Palmer having blamed Horizon 19 at trial for the losses said to have been attributable 20 to her? 21 Why were you telling these Parlimentarians that 22 every prosecution involving the Horizon system had been 23 successful and had found in favour of the Post Office. 24 A. I fully accept now that the Post Office -- excuse me. 25 The Post Office knew that, I completely accepted. 48 1 Personally, I didn't know that and I'm incredibly sorry 2 that that happened to those people and to so many 3 others. 4 Q. You'd received a detailed briefing for the purposes of 5 this meeting, hadn't you? 6 A. Yes, I had. 7 Q. There had been successive drafts of a briefing pack 8 prepared for you and it was about 20 pages long, the 9 briefing pack? 10 A. Yes, I can remember it. 11 Q. Can we look, please, at POL00096640. This is the final 12 version of the briefing pack for this very meeting. 13 We're familiar with it. If we go to page 2, we can see 14 the agenda and how the meeting was chunked up, who was 15 going to speak to which issue. 16 A. Yes. 17 Q. You were going to speak at point 3 to the background. 18 A. Yeah. 19 Q. Then if we go over the page to page 3, we can see what 20 Alice Perkins was going to deliver as key messages. 21 Then over the page to page 4. We can see your section, 22 yes? 23 A. Yeah. 24 Q. Topic 3, "Background", and we can see all of the bullet 25 points in detail on that page, yes? 49 1 A. Yes. 2 Q. Where does it say there that every case taken to 3 prosecution that involves the Horizon system has been 4 found in favour of the Post Office? 5 A. I'm not sure that it does, does it? 6 Q. It doesn't. 7 A. No. 8 Q. Where does it say there that there had not been a case 9 investigated where the Horizon system had been found to 10 be at fault? 11 A. I don't see it. 12 Q. Where does it say there anything about temptation and 13 subpostmasters having their hands in the till, treating 14 it like a retail business? 15 A. That, I remember, was discussed in the meeting. 16 Q. Yes. Where does it say it here? 17 A. If it isn't here, Mr Beer, then I take your word for it. 18 Q. Where does it say here that every keystroke is recorded? 19 A. I believe that was picked up by Lesley Sewell. 20 Q. Yes, where does it say here? 21 A. If it isn't there, it isn't there. 22 Q. No. So why are the things that "postmasters have been 23 led into temptation", that "every case that has been 24 prosecuted, we've won" not appear in your briefing of 25 this meeting but are the very things that you've said to 50 1 this group of Parlimentarians? 2 A. When you're in a meeting you take the briefing in with 3 you and then you supplement it or raise things that you 4 consider also appropriate in the meeting. I -- 5 Q. Isn't the purpose of a briefing that it's gone through 6 a process, that the right people have been involved in 7 it? I mean, we've seen the back issues of this, the 8 email exchanges -- 9 A. Yes. 10 Q. -- between the relevant people -- 11 A. Yeah. 12 Q. -- IT and Legal, to get the key messages recorded right. 13 Are you saying that you put this to one side and you 14 freestyled in the meeting? 15 A. No, not at all. I would have used the briefing and 16 I would have added in, as anybody does, I think, giving 17 a briefing, to further information that I thought was 18 relevant. What I did want to say, because I can see 19 Mrs Hamilton sitting there, is that I did not realise at 20 the time, when the details of her case were presented in 21 this meeting, that the Post Office had more detail on 22 the prosecution file than was shared with us at the 23 time, and I'm very sorry about that. 24 SIR WYN WILLIAMS: Very slowly I'm being attacked by drips, 25 and I mean drips in the proper sense of the word. 51 1 MR BEER: Yes. 2 SIR WYN WILLIAMS: I notice that something landed on my 3 face, then my hand, now my book. But please carry on 4 until the break add then we'll see if I can avoid the 5 drips. 6 MR BEER: Sir, I don't think that's tolerable for you, 7 a form of Chinese water torture. 8 SIR WYN WILLIAMS: How far away are we -- 9 MR BEER: Let's take a break now, sir, and we'll see whether 10 we can get that sorted. Can we say until 11.15, please? 11 SIR WYN WILLIAMS: Fine. You go with the usher, 12 Ms Vennells, and I'll follow you. 13 (11.03 am) 14 (A short break) 15 (11.20 am) 16 SIR WYN WILLIAMS: Yes, Mr Beer. 17 MR BEER: I hope that -- 18 SIR WYN WILLIAMS: We're about to start now. Thank you, 19 Mr Beer. 20 MR BEER: I hope that issue has resolved itself, sir, or 21 somebody has resolved it for you. 22 SIR WYN WILLIAMS: I'm drip free, apparently. 23 MR BEER: Ms Vennells can we return to where we were, which 24 was what you told a group of Parlimentarians on 18 June 25 2012 about postmasters and mistresses having been 52 1 tempted to put their hands in the till and treat it like 2 a lending facility, as some retail businesses did, that 3 the Post Office had never lost a case and that, whenever 4 Horizon had been investigated, it was found not to have 5 been at fault. We established that none of those three 6 things were in the briefing prepared specifically for 7 the purposes of this meeting, and I think you said that 8 you drew these things from other sources; is that right? 9 A. Yes, that's right, yes. 10 Q. One of them, I think you said that you drew from a Board 11 meeting in January of that year, January 2012. 12 A. I believe that's right, yes. 13 Q. Can we look at that, please. POL00021503. This is 14 a Board meeting of 12 January that year. We can see 15 that you're present, as is, amongst other people, Susan 16 Crichton. 17 A. Yes. 18 Q. Can we go forward, please, to page 6, and the foot of 19 the page, "Significant Litigation Report". In the 20 second paragraph, it is recorded that: 21 "Susan Crichton explained that the subpostmasters 22 were challenging the integrity of the Horizon system. 23 However the system had been audited by [Royal Mail 24 Group] Internal Audit for the reports reviewed by 25 Deloittes. The audit report was very positive." 53 1 I'm not going to examine at the moment whether any 2 of that is true but then this: 3 "The Business had also won every criminal 4 prosecution in which it had used evidence based on the 5 Horizon system's integrity." 6 Is that the occasion that you're referring to? 7 A. It is, as I said earlier, and that view was understood 8 in the Post Office generally. 9 Q. What do you mean: that view was understood in the Post 10 Office generally? 11 A. That Susan had -- well, my recollection was that, from 12 seeing the documentation, it wasn't a memory, that Susan 13 had said that in that Board meeting, and I don't think 14 it was a surprise when she said it because it was 15 an assumption -- it was an understanding in the 16 organisation that this was the case -- 17 Q. That -- 18 A. -- and, clearly -- 19 Q. -- Post Office had a 100 per cent hit rate? 20 A. I don't think it was mentioned in that way but, yes, in 21 terms of the way that it's described here and, clearly, 22 that was completely inaccurate in many different ways, 23 as you drew attention before the break. 24 Q. When she was asked about this paragraph, Susan Crichton 25 said that she had relied on what Jarnail Singh had told 54 1 her? 2 A. Yes, I heard her say that. 3 Q. From your perspective, however, you would say that 4 you're entitled to rely on what the General Counsel said 5 in the formal surroundings of a Board meeting? 6 A. Absolutely. 7 Q. Were you aware of any system in place for cases, which 8 did not result in a conviction or, in civil cases, did 9 not result in the subpostmaster being found liable, to 10 be reported back to the Board or a subcommittee of the 11 Board? 12 A. No. 13 Q. That there was a system in place for a report to be 14 written -- I suspect in the business it would have been 15 called a lessons learned report -- which it found out 16 what had gone wrong? 17 A. Are you telling me there was or are you asking me if 18 I -- right. 19 Q. Some people have told us that there was, that, in every 20 case that we didn't succeed in, counsel was asked to 21 write, essentially -- 22 A. Ah, I remember, yes. 23 Q. -- a report about what went wrong. We found none of 24 them. 25 A. No, that never came to Board level or to Group Executive 55 1 level. 2 Q. Was there a system in place that you're aware of where 3 that would have happened if the Post Office had lost any 4 of its cases? 5 A. I don't believe there was and there should have been. 6 Q. Do you know how it is that you were being given false 7 information at the Board meeting and you'd, on your 8 account, deployed that six months later to 9 Parlimentarians? 10 A. Sorry, can you repeat of the question? 11 Q. Yes, how did it come about, in your view, that false 12 information was perpetuated, regurgitated, deployed in 13 this way? 14 A. It's important to state, first of all, that I didn't 15 believe it was false information and I don't suppose any 16 board colleague did either. If you're given 17 information -- and this is another governance lesson -- 18 but if you're given information by the highest lawyer in 19 the organisation, you take it completely as the truth 20 because you assume that lawyers -- and I must be clear 21 I'm not implying anything here at all in terms of Susan 22 Crichton -- but one assumes that lawyers work to 23 a professional code and one -- and the Post Office 24 didn't, I think with hindsight, have sufficient 25 oversight to check whether that was or wasn't the case. 56 1 So if that statement was made at a Board meeting -- 2 if any statement was made at a Board meeting -- the 3 Board would take it as fact and truth. 4 Q. When you got to the meeting of the 18 June, you were 5 essentially deploying your memory, were you, of what had 6 been said at this Board meeting six months earlier? 7 A. I'm sure that was the case. 8 Q. What about "the postmasters had been led into 9 temptation"? 10 A. That's a more difficult one to talk about. The first 11 thing I would say on that is to apologise because I'm 12 very aware that that was not the case and it was 13 an assumption that I made. That assumption was based on 14 two things: examples of cases where I was told -- and 15 the Inquiry has seen this in documentation -- that, in 16 theory at least, that took place. 17 But my second evidence base for that was, during the 18 rollout of the Horizon Online pilot, every branch had to 19 be audited in terms of its cash position and we were 20 dealing with 11,000 post offices. The audit process 21 would not normally be announced because to do audits -- 22 the premise was that you went to audit a branch at 23 a particular moment in time and you found it as it was. 24 As we went into the Horizon Online rollout, I was in 25 a meeting with George Thomson from the NFSP and assumed 57 1 we would be doing audits in the same way, which is that 2 Auditors would turn up to the branches, do an audit 3 unannounced, as they normally were. 4 He suggested that would be a very foolish thing to 5 do because there may be any number of branches where the 6 cash might be short. George explained that it wasn't 7 a frequent practice but, infrequently, a postmaster may 8 need to nip down to the wholesaler and may borrow cash 9 from the Post Office Account and put it back the next 10 day. There was no suggestion by George that that was 11 done in terms of theft or fraud, or anything like that, 12 but that there was an understanding, he led me to 13 believe, that that was a possibility and so what the 14 Post Office should do would be to let -- and I thought 15 it was sensible, I was shocked when he explained why but 16 I thought it was sensible that we should at least let 17 people know that Auditors were going. 18 So I had that also as an evidence base, that there 19 was -- perhaps "temptation" is too strong a word in some 20 of the cases he was describing -- but there might 21 occasionally be circumstances where postmasters had 22 borrowed cash with the very honest intention of putting 23 it back and it might not have been there. 24 Q. Is there a written record of what you've just said? 25 A. I don't believe so but it was in a meeting with George 58 1 Thomson and Kevin Gilliland at the time. 2 Q. Can we turn to the related topic of this theme of 3 whether your intention was to protect -- whether your 4 priority was to protect the business. You were involved 5 in correspondence and decision making following the 6 death of Martin Griffiths, weren't you? 7 A. Yes, I was. 8 Q. By way of background, Mr Griffiths, is this right, had 9 worked for the Post Office in Ellesmere Port in Cheshire 10 for about 20 years, and he was accused of taking/ 11 misappropriating/losing some £61,000 after the Horizon 12 system had shown a shortfall; do you remember? 13 A. I understand that's right. 14 Q. Separately, some £50,000 was stolen from his Post Office 15 in the course of an armed robbery, yes? 16 A. Yes. 17 Q. You remember that? 18 A. I should say I wasn't aware of that at the time but 19 there was an email which detailed some of that, that 20 I was copied into. 21 Q. He was alleged by the Post Office to be responsible for 22 that loss, sustained in the course of the armed 23 robbery -- 24 A. Yeah. 25 Q. -- and was required to repay some of it to the Post 59 1 Office? 2 A. I understand and he shouldn't have been. 3 Q. And shortly afterwards he took his own life. 4 A. (The witness nodded) 5 Q. Can we look, please, at POL00301440. Look at the last 6 page, please. If we just scroll to the foot of the 7 page. In fact, it's not signed off. If we scroll up 8 a little bit, please, a little bit more, we can see the 9 beginning of this chain from Alan Bates, at 4.02 on 10 Monday, 23 September, and it's to you and others. 11 A. Yes. 12 Q. Mr Bates says: 13 "This afternoon I received the following email, it 14 is a prime example of the thuggery being exerted on 15 defenceless subpostmasters (as [the Post Office] deny 16 legal representation) by arrogant and uncontrolled Post 17 Office personnel. Despite assurances from on high that 18 this type of thing is in the past, it is clear from [the 19 Post Office's] actions, it is still alive and active 20 through the ranks." 21 Then there's the email: 22 "Hello Alan 23 "I am writing on behalf of my son-in-law Martin 24 Griffiths who has recently been in touch with you about 25 the treatment doled out to him by the hierarchy at the 60 1 Crown Office in Chester. He had an armed raid in May, 2 and the faceless wonders at the Crown Office have 3 intimated he was culpable. Had him at the kangaroo 4 court where he was not allowed any representation of his 5 own, he was a broken man then. 6 "However, he was sent for last Friday to attend 7 a meeting with the Crown Post Office personnel again, 8 and all weekend he has clearly not been himself. 9 "This morning he drove off to work, got out of his 10 car and walked in front of a bus. 11 "He is dangerously ill in hospital in Liverpool, the 12 Post Office had driven him to suicide. 13 "All the family are at the hospital, I am alone 14 waiting by the phone for further news of him. 15 "I would urge you to publicise this, another 16 incident that has been caused by the Bully Boys at the 17 Crown Office. 18 "May god forgive them." 19 Mr Bates continued: 20 "I am aware of Martin's case, and I know he was 21 terrified to raise his shortages with [the Post Office] 22 because of just this type of thing happening to him, but 23 [the Post Office] got him in the end. Regardless of 24 what may or may not have occurred with him, why did [the 25 Post Office] have to hound him to the point of trying to 61 1 take his own life? Why? 2 "Despite numerous warnings of never to attend any 3 discussion with [the Post Office] without legal 4 representation, Martin, trying to be helpful, didn't 5 take anyone with him as per the conditions [the Post 6 Office] demand. If [the Post Office] cannot control 7 their personnel then the very least they can do is 8 authorise and insist on a subpostmaster taking legal 9 representation with them to any meeting with [the Post 10 Office]. 11 "I am very, very angry about this, and as per the 12 misses of the family I will be contacting many of the 13 media contacts we have built up over the years." 14 Can we look, please, at POL00116133, please. This 15 is an email chain between you and Susan Crichton that 16 begins on that evening, the evening of 23 September. 17 Can we look at the bottom of page 1, please. Susan 18 Crichton at 9.38 says: 19 "... confirm I have spoken to Alan Bates, explained 20 that the family have been in touch today and asked for 21 help in branch as the subpostmaster had been involved in 22 a car accident. I explained Angela is looking into this 23 and we will catch up with him tomorrow. 24 "Alan has ... rung back to say the message re car 25 accident was a miscommunication from a family member and 62 1 that it was definitely a suicide attempt. 2 "Angela and I will agree how to handle this 3 tomorrow, as the facts re the subpostmaster are not as 4 represented by the email." 5 Then if we scroll up please we see your reply at 6 10.12 that night: 7 "[Thank you]. Two points for me tonight: 8 "Firstly, but most importantly, in the exchanges, 9 I haven't seen anything re how Martin Griffiths is? Do 10 we know/are we in the loop?" 11 Then: 12 "And if it is an attempted suicide, as we sadly 13 know, there are usually several contributory factors. 14 Are the police involved? And are we in direct contact 15 with the family?" 16 At this stage, why were you raising the fact that 17 there were usually several contributory factors 18 involved? 19 A. The first thing to say is, as I say in my statement, 20 I am very sorry about this and that just sounds too 21 shallow. Every email you will see from me about 22 Mr Griffiths I start with him and how he was or how his 23 family are. The Post Office took far too long to deal 24 with it and, to answer your question about contributory 25 factors, one of the other things that I had to do as 63 1 Chief Executive was to understand, if there were details 2 to understand, how this -- I would have to communicate 3 something so serious as this to the Board and I think 4 I was trying to find out whether there was anything else 5 behind it. 6 I had a personal experience of a previous Post 7 Office colleague who had -- took their own lives, and 8 I phoned ... I phoned the family and I spoke to the 9 father, who explained to me that there were other issues 10 involved and I imagine that -- I'm sorry. I imagine 11 that I was probably -- 12 Q. Ms Vennells, just rather than trying to talk through 13 your -- 14 A. I beg your pardon. 15 Q. Just pause. 16 A. Yes, okay. 17 Q. Try to compose yourself, if you can, and then continue 18 your evidence, please. 19 A. Thank you. 20 In this particular case, I had spoken to the 21 subpostmaster's father, who had said to me that there 22 were other contributory factors in his son's death and 23 they were very grateful for the call that I had made. 24 In Mr Griffiths' case, I also offered to do the same 25 and I was told by the General Manager of the Crown 64 1 Offices that that wasn't needed and other people were in 2 the loop. I imagine that what I was doing here in this 3 email was recalling that previous incident but what you 4 will see is that in every email that I wrote on this, my 5 first concern was for Mr Griffiths and his family and, 6 as I've said in my statement, I am -- sorry is 7 an inadequate word. I'm just so sorry that Mr Griffiths 8 isn't here today and -- 9 Q. You say: 10 "Secondly, and very definitely in that order, Alan 11 Bates' email is worrying; especially as we hoped we had 12 a working relationship. He clearly doesn't (or doesn't 13 want to) trust us. Who is closest to him do you think? 14 "It would be unfortunate if we 'lost' him at this 15 stage but equally we need to be straight about how 16 unhelpful this kind of exchange is ..." 17 A. What I was trying to say there is that Alan was rightly 18 very, very angry about this. His language about Post 19 Office colleagues was extreme, as we've seen. I knew 20 those Post Office colleagues, or at least some of them, 21 and didn't believe they were capable of the behaviours 22 that he was suggesting and so, as Chief Executive, 23 secondly, and very differently -- definitely in that 24 order, I wanted to both understand about care for Post 25 Office colleagues but also the relationship with Alan 65 1 because we had -- we were in the process of trying to 2 work with Alan and Second Sight on some of the issues, 3 and so what I was trying to do here was to balance 4 a number of things. 5 But, as I say, in every single case, the most 6 important focus was on Mr Griffiths and his family. 7 Q. You say in your statement -- no need to turn it up -- 8 that: 9 "This was a time of great distress for Mr Griffiths' 10 family and I felt that accusations of blame were 11 unhelpful", in explaining these lines here. 12 Is that right? That you felt that Mr Bates' 13 accusations of blame were unhelpful? 14 A. I think at this stage and something as tragic as this, 15 accusations of blame were unhelpful, yes, because the 16 Post Office needed to respond to this properly and, at 17 that stage, I didn't -- I had no understanding as to 18 what had gone on. 19 Q. Were you, in that third paragraph there, "there are 20 usually several contributory factors", trying to sow 21 a seed that there may be factors other than those 22 identified by Mr Bates, ie the Post Office being to 23 blame, that require to be investigated? 24 A. No, I don't think I was making that connection at all. 25 Q. Can we have POL00027757 on the screen, please. Look at 66 1 page 2 at the bottom, please. Thank you. 2 There's an email from Mr Breeden to Angela van den 3 Bogerd and Mr Chester. We'll see later that you get 4 copied in on this chain; you're not at the moment. This 5 is 11 October now, at 7.31 in the evening: 6 "To confirm our conversation, Glenn [he was the 7 local manager] has spoken to Mr Griffiths' sister to 8 offer condolences following the very sad news of 9 Mr Griffiths having passed away this afternoon. 10 "Glenn received notification of Mr Griffiths' death 11 by text earlier this evening from his sister Jane ... 12 "The text was worded -- Sadly my brother Martin 13 passed away this afternoon after being in a coma for 14 18 days. The family is devastated as such a waste of 15 life and feel the Post Office has ruined yet another 16 life. Thought you should know as you liked my brother." 17 If we scroll up, please, we see that's passed on to 18 you at 8.43: 19 "Sadly Martin Griffiths has passed away this 20 afternoon." 21 Yes? 22 A. Yes. 23 Q. Then scroll up, please, to your reply, if we keep going, 24 please. At 9.28 that night, you say: 25 "... thank you for sending over this news. I am so 67 1 sorry. Martin's family must be devastated. 2 "I know (sadly from experience in business and 3 personally) that there is rarely a simple explanation 4 for such deaths; even though it is often easier for 5 those so closely affected to look for one. 6 "Three requests: firstly if I can help in any way, 7 that you or the team dealing with it ask me. I would be 8 happy to speak to or to meet the family if we thought 9 that would help." 10 I think that's what you were referring to a moment 11 ago. 12 A. Yes. 13 Q. "Secondly, that we look after them as much as we can and 14 as they will allow; thirdly, that we look after Glenn: 15 he will be feeling very bad because he knew Martin and 16 was the person closest to him from the [Post Office]." 17 Then scrolling down: 18 "And then, we need to look to the business: to help 19 me brief this properly to the Board, can you let me know 20 what background we have on Martin and how/why this might 21 have happened." 22 Then you say this: 23 "I had heard but have yet to see a formal report, 24 that there were previous mental health issues and 25 potential family issues." 68 1 Can you see that? 2 A. Yes. 3 Q. Were you asking your team here to dig into Mr Griffiths' 4 records to look for information or evidence that he took 5 his life because of mental health issues or family 6 issues? 7 A. I had -- so, first of all, I'm so sorry, because ... 8 I had, as Chief Executive, to pass this information on 9 to Group Executive and to Board colleagues. If -- and 10 what I would have expected were the questions that 11 I think I was trying to anticipate here, that Mr Bates 12 had said that the Post Office was to blame and I did 13 know, from previous examples and other information, 14 that -- 15 It doesn't matter. I simply should not have said 16 it. I shouldn't have used these words. 17 Q. Who did you hear? You say, "I have heard" or "I had 18 heard"; from whom did you hear that there were previous 19 mental health issues and potential family issues? 20 A. I don't recall. I believed I had also seen something in 21 an email somewhere but I don't recall. 22 Q. Was it rumour at this stage, if you hadn't seen a formal 23 report? 24 A. No, I don't believe so. 25 Q. Can you help us any more? 69 1 A. No, I can't. The only clear memory I have about this is 2 that the people I was dealing with at the Post Office 3 were very, very sad about this and one of my roles as 4 their boss was to try to help them through it as well. 5 But I can't -- "rumour" would be a very inappropriate 6 word. 7 Q. Can we look, please, bearing that sentence in mind 8 there, at POL00393535. This is the next day, Saturday, 9 the 12th, and it's 9.01 in the morning and you are 10 emailing a group of people. I'm not going to read the 11 chain but, in the third bullet point under "some 12 questions", you say: 13 "I possibly heard (but may be confusing with 14 a previous case) that Martin had some mental health 15 issues?" 16 How do you "possibly" hear something? 17 A. I think I'm simply stating an uncertainty. 18 Q. You say you might be confusing it with a previous case. 19 Why were you saying this at all, if you might be 20 confusing Mr Griffiths' case with another case? 21 A. I'm trying to make sure, I believe, that there isn't 22 confusion. I shared with you earlier that I spoke to 23 the father of a previous colleague and it may be that 24 I was recalling that. 25 Q. In your witness statement -- there's no need to turn it 70 1 up, it's paragraph 675 on page 317 -- you say: 2 "I was very aware of the background to suicide. It 3 can be complex and is sometimes not apparent until long 4 after the fact, and there's often a desire by those 5 closely affected by such a death to look for 6 an explanation." 7 By telling us that, is your evidence that you were 8 looking to explain Mr Griffiths' death for the benefit 9 of his family and that's why you were asking these 10 questions? 11 A. No, I was simply trying to get to understand whether 12 what Mr Bates had suggested, which is that the Post 13 Office, ie colleagues in the Post Office, had been 14 responsible for Mr Griffiths' death -- 15 Q. And his sister -- 16 A. -- and -- 17 Q. -- had said the same? 18 A. And his sister had said the same, yes. 19 Q. You knew it was the family's view that Mr Griffiths had 20 taken his own life because it had been ruined by the 21 Post Office, didn't you? 22 A. I did see that, yes. 23 Q. You had just been told about his death and you were 24 trying to get on the front foot here, weren't you? 25 A. No. No, Mr Beer, that was not the case. 71 1 Q. You were trying to find out information, you were 2 tasking the team with finding out information to counter 3 any narrative that the Post Office was to blame, weren't 4 you? 5 A. No, Mr Beer. I have said that -- and you've seen that 6 I asked about the family and as -- there are other 7 emails which go through trying to find some payment for 8 Mrs Griffiths as well. What I was trying to do, quite 9 simply, was to get the wider picture and not to be -- 10 and to understand particularly the very difficult 11 challenges that Mr Bates had levelled at some Post 12 Office colleagues. 13 Q. Thank you. That can come down. 14 Lastly, by way of general questions, I just want to 15 ask you briefly about recollection and failures in 16 recollection. Without turning them up, you say, at 17 paragraph 358 of your witness statement, in relation to 18 correspondence with Simon Baker and Alwen Lyons, I'm 19 just picking some examples here: 20 "If the conversation was told about the bugs, I do 21 not know if I was told about them on that date or 22 later." 23 Paragraph 424, you say you cannot recall what steps 24 were taken to ensure that Second Sight had been informed 25 what Post Office knew about the bug. 72 1 Paragraph 773, you say: 2 "I do not recall the Simon Clarke Advices being 3 discussed or provided to the Board." 4 They're examples where you say, throughout your 5 statement, that you lack recollection in relation to 6 facts that might be damaging to the Post Office, yes? 7 A. (No audible answer) 8 Q. In your witness statement, however, would this be right: 9 you have no problem remembering things that put 10 responsibility or attribute blame to others? So in 11 paragraph 192, you say: 12 "There was a further conversation [that isn't noted] 13 I remember that this reassured me that [the issue had 14 been resolved]." 15 Paragraph 566: 16 "I recall telling Susan this was a stupid thing for 17 John Scott to have done." 18 This was in relation to the statement that weekly 19 meetings should not be recorded or that the minutes 20 should be shredded. 21 Paragraph 571: 22 "I asked Susan a number of questions about the 23 removal of the Fujitsu expert witness." 24 Why is it that you can remember things that are 25 exculpatory of you, that tend to diminish your 73 1 blameworthiness? 2 A. No, I don't believe that's the way I approached my 3 statement at all or any of the work to the Inquiry. 4 I have approached it with the intention of integrity and 5 truth and honesty. 6 Q. Why is it that in your witness statement, when you refer 7 to a recollection of a conversation that's unminuted, 8 undocumented, not referred to in any email, there are 9 always things that exculpate you, that reduce your 10 blameworthiness? 11 A. That isn't the approach I've taken. 12 Q. Some might say that that has been an approach by others 13 who have given evidence in the Inquiry: they have great 14 difficulty in remembering things unless it paints them 15 in a favourable light. Was there an issue, a systemic 16 issue, in the Post Office that people only looked to the 17 good and forgot the bad? 18 A. No, I've -- I can't comment on other people, and I give 19 you my word, as I've said earlier today, that I will 20 respond in complete truth to this Inquiry and have done 21 in my statement. So my approach to this is, I hope, 22 with integrity. Within the Post Office itself, I don't 23 recollect that and you've already mentioned that there 24 was a positive culture in the organisation of lessons 25 learned. We -- I introduced something -- 74 1 Q. I don't think I've said that. 2 A. No, no, sorry, you didn't say "positive culture"; you 3 mentioned lessons learned. 4 Q. Yes? 5 A. I'm explaining that that was a culture in the Post 6 Office and there was a positive intention behind that, 7 which was to learn lessons all of the time. I mentioned 8 that I encouraged "Bad News Is Good News" and you will 9 see in Inquiry documentation that the word "pre-mortem" 10 is used very often, and that was an attempt to both -- 11 from lessons learned, to read into actions going 12 forwards where things might go wrong. So there was 13 an intention, from my leadership certainly, and 14 I believe the people I worked with, to look for and 15 learn from mistakes. 16 Q. Thank you. 17 Can I turn, then, to your background and general 18 knowledge of issues at the Post Office. I think you 19 worked for the Post Office for 12 years in total; is 20 that right? 21 A. That's right. 22 Q. You joined in January 2007? 23 A. Yes. 24 Q. You were made Managing Director in October 2010? 25 A. Yes. 75 1 Q. And you left as CEO in April 2019? 2 A. I did. 3 Q. On a point of detail, whilst we're dealing with that 4 chronologically, when Alan Cook gave evidence last 5 month, he suggested that you may have signed off on the 6 Post Office spending some £300,000 in costs pursuing 7 a £26,000 debt said to be owed by Lee Castleton. The 8 main hearing in Mr Castleton's case took place between 9 6 and 13 January 2006, with the judgment being handed 10 down on 13 January 2007. I think you joined the Post 11 Office in the same month, January 2007 -- 12 A. I did and so I couldn't possibly -- I wasn't there to 13 sign off that money, I hadn't joined the organisation. 14 His recollection is incorrect. 15 Q. So it follows, I think, that you were not responsible 16 for signing off the very substantial legal spend in that 17 case? 18 A. No. 19 Q. Thank you. In terms of your previous career before 20 joining the Post Office, is it right that noticeable 21 features of it are that you had no experience of 22 managing a large IT Team -- 23 A. That's correct. 24 Q. -- and you had no experience of an organisation which 25 investigated or prosecuted its staff? 76 1 A. That's correct. 2 Q. You say in your witness statement, on a number of 3 occasions, that you put to the fore the suffering of the 4 subpostmasters, and you say, by comparison, the Post 5 Office's own reputation was of small import or 6 importance compared to protecting the trust built up 7 daily by colleagues working in post offices across the 8 country? 9 A. That's correct -- 10 Q. That's -- 11 A. -- the two were connected. 12 Q. That's paragraph 47. In your statement, you refer 13 numerous times to the importance of protecting public 14 money? 15 A. Yes. 16 Q. That's paragraph 40, 48(b), 265(b), 270, 383 and 736. 17 Were you preoccupied with the notion of protecting 18 public money? 19 A. Not preoccupied with it no but, as part of the 20 governance of working for a public sector organisation, 21 there is a document called Managing Public Money and, 22 when I joined the Royal Mail in 2007, I remember being 23 surprised at how often that misspoken about but, of 24 course, it's because it was important because all public 25 organisations are funded through public money. 77 1 Q. In your statement you refer on numerous occasions to the 2 importance of the Post Office's reputation and brand, 3 paragraphs 47, 270, 293, 416(b), 437, 454, 455, 456, 4 458, 460(d), 467(c) and 470(d). 5 Were you preoccupied with the need to protect the 6 Post Office's reputation and brand? 7 A. Yes, but not to the extent of putting that over and 8 above the suffering of the subpostmasters and I -- 9 Q. Did you know they were suffering? 10 A. I understood -- that's a difficult question to answer, 11 because the answer is yes and no. I understood from -- 12 clearly, if people were being prosecuted, that was 13 a very difficult thing and the reason that we put in 14 place the review with Second Sight and the Complaint and 15 Mediation Scheme was to look into that. I wasn't 16 personally aware at the time because wasn't involved in 17 the prosecutions, but I would like to say that -- and 18 I do say this in my statement -- whenever I spoke about 19 the Post Office brand, it was a brand that was only ever 20 built up through post offices, and it was a very strong 21 belief of mine, which I mentioned at conferences and 22 meetings, that Post Office Limited, as a corporate 23 entity, there was no reason to build that as a brand. 24 The reason customers came to the Post Office and 25 people chose to work for it was because of the wonderful 78 1 work that was done in post offices across the country 2 and still is, every day, and that was the brand I was 3 talking about. In fact, when I became Chief Executive 4 people used to call the corporate entity they worked for 5 "POL", and I said "No, we work for the Post Office. The 6 post offices are why we are here". So brand was 7 absolutely important but in the sense of the local post 8 offices. 9 Q. You just said that you did not put brand and reputation 10 above the postmasters' suffering. What suffering were 11 they undergoing? 12 A. We have heard through the Inquiry -- I sat through the 13 Human Impact statements -- 14 Q. No, no, no, no. 15 A. I'm sorry? 16 Q. You were telling us that, at the time, you did not put 17 the Post Office's brand or reputation above the 18 postmasters' suffering. 19 A. In terms of a personal approach, I don't ever recall 20 that being a motivation. I can see, with hindsight, 21 that there will be many examples of where that is 22 clearly the case because the Post Office got this very 23 wrong. 24 Q. You tell us in paragraph 49 of your witness statement 25 that, when you joined the Post Office, you had no 79 1 understanding of the Board's responsibility for the 2 oversight of criminal investigations or prosecutions. 3 A. I'm sorry, say the beginning of that again? 4 Q. Yes. When you joined the Post Office in 2007, you had 5 no understanding of the Board's responsibility for the 6 oversight of criminal investigations or prosecutions? 7 A. That's correct. 8 Q. And nor did, in fact, you appreciate, you say, even that 9 it brought its on prosecutions -- 10 A. That's right. 11 Q. -- is that right? 12 A. Yes. 13 Q. What was your understanding when you joined of the Post 14 Office's geographical remit in respect of investigations 15 and criminal cases involving subpostmasters? 16 A. When I joined the Post Office, I was not aware that 17 there were differences in terms of the different nations 18 in the UK having different approaches to that. So my -- 19 my assumption would have been that the investigations 20 and the prosecutions, which I now know were conducted -- 21 sorry, which were conducted through Royal Mail Group, 22 would have been across the UK. 23 Q. When you became Managing Director in October 2010, did 24 you know by then that the Post Office conducted its own 25 criminal investigations and pursued its own 80 1 prosecutions? 2 A. No, I say in my statement I don't believe I became aware 3 of that until 2012. 4 Q. Can we look, please, at POL00021422. This is an RCC, 5 a Risk and Compliance Committee meeting of 28 March 6 2008, so four or so years before the date that you've 7 given us and we can see that you're present, yes? 8 A. Yes. 9 Q. You were, I think, a member of the Risk and Compliance 10 Committee at this time -- 11 A. I was. 12 Q. -- as Network Director? 13 A. Yes. 14 Q. Can we look, please, at page 9, halfway down the page. 15 Thank you. "Crime Risk", at paragraph 2.5: 16 "John Scott presented the Crime Risk elements of the 17 revised back. An overview of Supply Chain and Network 18 burglary and robbery incidences were presented and John 19 explained that Supply Chain losses were just in excess 20 of the 2006/07 performance. This was indicative of 21 losing more money per attack and work was ongoing to 22 establish if this 'spike' was indicative of pre-funding 23 over the IA period or whether ATM location was a factor. 24 Turning to Network, then year on year performance 25 continued to improve with 2007/08 figures some 22.7% 81 1 below the same time the previous year. 2 "John went on to comment over investment programmes 3 introduced by competitors ... and their apparent 4 successes in reducing attacks. However, as [Post 5 Office] continued to invest in a variety of initiatives, 6 then it was unlikely that we would be unduly hit by way 7 of displacement. 8 "A fraud update was detailed which showed [year to 9 date] fraud figures of £4.6 million captured within 292 10 raised cases. John advised the Committee that a Fraud 11 Strand restructure had seen greater focus placed on the 12 identification and drive of proactive fraud initiatives, 13 as opposed to simply delivering investigative case 14 work." 15 What would you have understood to have been 16 traditional investigative casework? 17 A. I don't recall, I'm afraid. I imagine -- I don't 18 recall. I may well have asked in the meeting but 19 I don't recall. 20 Q. Would that not tend to suggest that, at this meeting, 21 there was a discussion about investigative casework 22 conducted by the Post Office? 23 A. There could have been. I was -- are there any minutes 24 of the meeting? I'm sorry, I don't -- 25 Q. That's what we're looking at. 82 1 A. Oh, that's what the -- no, in which case, I don't 2 recall, I'm sorry. 3 Q. Can we go over to page 10, please. Sorry, we're on 4 page 10, if we scroll down: 5 "John Scott then outlined the asset recovery 6 position [year to date]; in summary, £1.6 million had 7 been recovered against closed cases and the two trainee 8 Financial Investigators were performing solidly." 9 Moving on: 10 "The 2008/09 Crown loss initiative would see 11 Security Team personnel target Crown estate losses with 12 a view to reducing by at least 25%." 13 Isn't this indicative of a discussion about the Post 14 Office investigating itself, its own fraud? 15 A. Yes, it looks as though it is. I'm not sure that 16 I would have taken anything untoward from that. That 17 would be a sensible thing to do across the size of the 18 Post Office estate. 19 Q. So by at least March 2008, you would have appreciated 20 that Post Office conducted criminal investigations in 21 its own name? 22 A. I don't know that I took that from this but -- 23 Q. Who did you think was doing the investigating: two 24 trainee Financial Investigators, for example? 25 A. Yes, I can see that. I don't think I would have read 83 1 anything more into -- I can't recall the conversation, 2 I'm very sorry, but two Financial Investigators would 3 seem to be -- or however many -- a sensible resource for 4 an organisation to have, if it is managing money and 5 it's looking into whether there are examples of fraud. 6 But I -- 7 Q. But isn't the whole context of this discussion that the 8 Post Office is investigating; it has its own 9 Investigators? 10 A. It is, yes. I -- 11 Q. So you would have known by March 2008 at least that the 12 Post Office investigated crime itself? 13 A. No, I don't believe I would have taken that from this at 14 all. 15 Q. Why not? 16 A. Because, as I read it, it doesn't say that. 17 Q. Who would the trainee Investigators work for? 18 A. I imagine they worked for John Scott, for Head of 19 Security. 20 Q. And he works for the Post Office? 21 A. At the time he worked for Tony Marsh and Royal Mail 22 Group, yes. 23 Q. They worked for him and he works for the Post Office? 24 A. Yes, yes. 25 Q. So they would be investigating fraud, yes; post Office 84 1 people would be investigating fraud? 2 A. Yes, that's how it reads. 3 Q. Therefore, you would have been aware, listening to this 4 discussion, that the Post Office itself investigated 5 criminal offences? 6 A. No, I didn't take that. I'm very sorry if I should have 7 understood that from this conversation but I didn't take 8 that. My understanding would be -- I did not know 9 and -- certainly not at this stage, and the Inquiry has 10 heard Alan Cook and David Smith, as well, both 11 predecessors, didn't either. I didn't understand that 12 the Post Office was bringing its own criminal 13 investigations. I don't think I would have thought 14 anything unusual of the fact -- because investigation 15 can be taken at all sorts of different levels. 16 I certainly didn't read into this that Post Office 17 was conducting criminal investigations to the level that 18 I later understood, where these colleagues were then 19 producing evidence to a particular standard in terms 20 of -- I think it was called the Police and Criminal 21 Evidence Act or the Code for Crown Prosecutors. 22 I didn't understand that, I didn't make that association 23 at the time. 24 Q. Mr Scott is recorded as saying that the asset recovery 25 position in the year to date was that £1.6 million had 85 1 been recovered against closed cases. Doesn't that 2 presume that the Post Office is doing the recovering? 3 A. Not necessarily. 4 Q. Who did you think would be doing the recovering? 5 A. I don't recall the meeting from 2008. It's very 6 difficult -- and I am not trying to be disingenuous in 7 any way on this. I simply don't recall the meeting. 8 I don't know whether more information was discussed in 9 the meeting. I could speculate that I might have 10 thought that it -- if I didn't ask questions -- that it 11 was a combination of internal or external recovery. I'm 12 very sorry but I simply don't remember, and don't know. 13 Q. I wouldn't expect you to remember what was discussed at 14 a meeting so long ago but would you agree that, from 15 this record of the meeting, it's reasonable to infer 16 that the position was that it was openly discussed that 17 the Post Office was conducting investigations of its own 18 staff and recovering money from them? 19 A. Yes, I think that's a reasonable inference to draw. 20 Q. So why is it that you say that it was not until 2012 21 that you appreciated that? 22 A. Because the inference that I may have drawn in that 23 meeting is not the same as that which I learned in 2012, 24 which is we were doing a very different level of 25 investigation in terms of professional codes and 86 1 criminal investigations. The only acceptable answer to 2 the questions you're giving me on this is that I should 3 have known and I should have asked more questions, and 4 I and others who also didn't know should have dug much 5 more deeply into this. 6 When I joined Royal Mail in 2007 -- and this is 7 a year later -- there was a -- it was an organisation in 8 which postmen and women, subpostmasters, were 9 investigated and, I now know, prosecuted by the 10 organisation. It was -- it had been going on for many 11 years, it was a historic reality and it became 12 a continuing reality, and I simply joined that. And it 13 was a serious mistake that I didn't understand before 14 2012 the extent of what this meant, and I didn't -- and 15 I am really sorry. 16 Q. You're telling us that for five years, as Network 17 Director and then as MD, so between 2007 and 2012, you 18 did not know that there was a department called POID, 19 the Post Office Investigation Division, that it employed 20 up to 100 people and that their job was to conduct 21 criminal investigations around the country into your 22 staff. 23 A. I certainly didn't know the size of the team, that's for 24 sure. I understood that there were Investigators and 25 that John Scott led a Security Team but I did not 87 1 understand the extent of what it was until 2012, and I'm 2 very sorry for that. 3 Q. When and in what circumstances did you become aware that 4 the Post Office conducted its own criminal 5 investigations? That document can come down, thank you. 6 A. I understood that -- well, as I say, postmen, postwomen 7 and postmasters were prosecuted. My understanding was 8 that that was done through external authorities. It was 9 in 2012 when I believe that we started to look in much 10 more detail, when the challenges were raised by Lord 11 Arbuthnot and Sir Oliver Letwin, and I think it was in 12 the time before that meeting with both those MPs that, 13 either before or during a Board discussion, I and others 14 were made aware that this was the case. 15 Q. When did you first become aware that the Post Office 16 brought its own private prosecutions? 17 A. I believe in 2012, around about that time. 18 Q. At the same time? 19 A. Yes, yes. 20 Q. And again in the same circumstances? 21 A. Yes. 22 Q. Were you surprised, "I've been working for this company 23 for five years, I didn't know we, rather unusually, 24 prosecute our own staff"? 25 A. Yes, I think a number of us were surprised. 88 1 Q. Was there any discussion of that in all of the years 2 that you served on the Risk and Compliance Committee? 3 A. Not that I can recall. 4 Q. Was there any discussion, so far as you can recall, 5 before 2012, amongst the Post Office Board or the 6 Executive Team, concerning the discharge of the Post 7 Office's prosecutorial function? 8 A. No. 9 Q. Do you know how that is, that this backwater of activity 10 was going on -- 11 A. My -- 12 Q. -- without anyone at a senior level seemingly knowing 13 about it? 14 A. That's the point I was trying to explain earlier: is 15 that it -- my -- so it's completely unacceptable that 16 that was the case and that people did, including 17 myself -- that I didn't know. And my only explanation 18 for that it is that it had been going on for so long, 19 that it was an accepted reality. It was a status quo 20 that I joined and accepted -- I shouldn't have done. 21 SIR WYN WILLIAMS: Isn't accepting in the reality 22 an acknowledgement of an awareness of the reality? 23 Mr Beer is pressing you on how it could possibly be that 24 you weren't aware of the use of a function which was 25 highly unusual for a private company. When I say 89 1 "private", you know what I mean -- 2 A. Yes, yes I do. 3 SIR WYN WILLIAMS: -- not the CPS. 4 A. I agree, Sir Wyn. The way Mr Beer describes it is that 5 it was a function that one didn't hear about. We knew 6 about cases being prosecuted and I believe -- I can't 7 remember -- the Post Office Board met infrequently -- 8 whether there were Significant Litigation Reports that 9 came to the Post Office Board before I came Chief 10 Executive, I can't remember. But I think everybody's 11 understanding, mine included, was that where 12 prosecutions were conducted, they were conducted by 13 external authorities. 14 SIR WYN WILLIAMS: Well, that's what I've been told 15 repeatedly. Just two other stepping stones to this and 16 then I'll let Mr Beer carry on, but there was at least 17 one case two years before 2012, Mrs Misra's case, which 18 attracted a great deal of publicity. I mean, it does 19 seem extremely surprising that it didn't filter through 20 at that point, that it was actually the Post Office who 21 was prosecuting, not the CPS. 22 A. I agree. I haven't seen anything in the documentation 23 that points to the fact that one would have known that 24 and -- 25 SIR WYN WILLIAMS: Well, if I may interrupt -- 90 1 A. And, actually, if I may -- 2 SIR WYN WILLIAMS: I don't think I need documentation to 3 infer -- 4 A. No, I'm sorry I was -- 5 SIR WYN WILLIAMS: -- that this might be a point of 6 discussion amongst senior people. 7 A. I apologise. My point about documentation was whether 8 there was anything that would have prompted my memory. 9 I have no recollection of -- well, I have no 10 recollection of being involved in conversations about 11 Mrs Misra's case, which we may come on to. I do have 12 two separate recollections on that. There were not, as 13 far as I know, discussions about the fact that it was 14 Post Office who had investigated and had brought the 15 prosecution. The assumption was that it was brought -- 16 it's -- yeah. The assumption is that it was brought by 17 external authorities. 18 SIR WYN WILLIAMS: What about -- sorry, Mr Beer, and then 19 I'll be quiet -- but what about the discussions relating 20 to separation? The Royal Mail and the Post Office were 21 separating but virtually all the lawyers were Royal Mail 22 employees, weren't they? 23 A. Yes, that's right. Yes, they were. 24 SIR WYN WILLIAMS: So there had to surely be some discussion 25 about what was going to happen when the prosecutorial 91 1 function was going to be conducted not by Royal Mail 2 employees but by Post Office employees. 3 A. There was no discussion at Board level about that. 4 There was a huge programme of change. The IT separation 5 stream itself had over 200 different projects in it. So 6 this was a massive, massive undertaking and I know that 7 Susan Crichton had asked Hugh Flemington to look into 8 this but I can only -- I only know that from what I've 9 read in disclosure. There was clearly discussion going 10 on, the project itself was led by Mike Young, who was 11 the Chief Operating Officer at the time. But I don't 12 believe there was any discussion about the fact that it 13 was Post Office bringing prosecutions. 14 For all of the separation projects, and some carried 15 on into 2014, actually, but for all of the projects, we 16 almost lifted and shifted, because the timescale was so 17 tight. So the investigation, the Security Team the 18 Legal, the IT, et cetera, anything HR, anything -- 19 Company Secretary -- anything that was done within Royal 20 Mail Group was moved almost unchanged into Post Office 21 and then, in some cases, was reviewed later. Where they 22 could make changes, if they did it, that was taken -- 23 that took place, but my understanding on the legal side 24 is that it was literally -- that the service was taken 25 into Post Office, in the same way that it ran in the 92 1 Royal Mail Group. 2 SIR WYN WILLIAMS: Sorry, Mr Beer. 3 MR BEER: Did you know of the fearsome reputation of the 4 Post Office Investigation Division amongst 5 subpostmasters? 6 A. Not at the time. There were -- when we got into the 7 feedback from Second Sight and the Complaint and 8 Mediation Scheme, yes, there were complaints made by 9 postmasters and those were picked up straightaway. Part 10 of the Branch Support Programme, but also Susan 11 Crichton, commissioned a piece of work which I don't 12 know what happened to it but looked into the 13 Investigation Team. I, at the time, was sponsoring 14 a culture change programme in the post office and so, 15 when I heard about that feedback, I personally spoke to 16 John Scott and was involved with him in a couple of 17 workshops on the culture change. The response I got 18 back, as the Inquiry has heard, is that he was surprised 19 at the feedback but -- 20 Q. When you spoke to John Scott about this, did you say, 21 "John, I've been in the organisation five or six years 22 now. I didn't know you had a team of 100 people that 23 were investigating up and down the country 24 subpostmasters and sending them to prison. How come 25 I didn't know?" 93 1 A. I spoke to John Scott about this, I think, in 2014, 2 I don't know his team was that size at the time and 3 I spoke to him very seriously about the culture and the 4 behaviours and the fact that subpostmasters and 5 colleagues that worked in post offices were really 6 important to us. John understood that, I thought -- 7 Q. I'm concentrating -- sorry, to speak over you -- I'm 8 concentrating on how this thing was going on that dozens 9 of prosecutions occurred when you were Network Director, 10 dozens of prosecutions occurred when you were Managing 11 Director, collectively, hundreds of prosecutions went on 12 conducted by the Post Office, having been investigated 13 by the Post Office, and you didn't know about it until 14 2012. 15 So when you spoke to John Scott, did you not say, 16 "How has this all been going on? Who is managing you? 17 Why doesn't the Board know about this?" 18 A. At the time I spoke to John Scott all that had changed. 19 We had stop prosecutions, his team had been 20 substantially reduced in number and we were looking into 21 the complaints made by the subpostmasters. 22 MR BEER: Sir, thank you. Can we take our second break. It 23 means we're going to go into the traditional lunch hour 24 a bit and I hope that's -- 25 SIR WYN WILLIAMS: I think we'll manage that, Mr Beer. 94 1 MR BEER: Thank you, sir. So until 12.40, I think. 2 SIR WYN WILLIAMS: Can I just say that when I come back in 3 we'll be starting whether you're here or not all right? 4 (12.25 pm) 5 (A short break) 6 (12.43 pm) 7 MR BEER: Ms Vennells, can I ask one further set of 8 questions about the issue that I was focusing on before 9 the break, namely whether this backwater activity of 10 investigating and prosecuting hundreds of subpostmasters 11 was something that everyone senior in Post Office didn't 12 know was going on. 13 Can we look at POL00158368, please, and look at 14 page 22, please. Over the page, please, at the bottom 15 of the page, please. Thank you. Just for context, if 16 we scroll up a little bit, thank you, an email from 17 Michael Rudkin to Alan Cook of 15 October 2009. By this 18 time, there had been the Computer Weekly article of May 19 2009, the JFSA had been formed and complaints had 20 started to come in from the JFSA, and Mr Rudkin is 21 saying to Mr Cook: 22 "I presume you have already seen the article in the 23 convenience store magazine ... 24 "Is this article likely to have any impact on the 25 contracts we already have with our existing banking 95 1 partners", et cetera. 2 Next paragraph: 3 "... a Horizon pressure group has formed and they 4 are to meet ... at Fenny Compton Hall in the Midlands." 5 If we scroll up, please, we see Mr Cook's reply. 6 Mr Cook's reply, 15 October. This to Mary Fagan, do you 7 remember who she was? 8 A. I do. 9 Q. What function did she perform at this time, October 10 2009? 11 A. She was the Group Communications Director for Royal 12 Mail. 13 Q. "I know you are busy right now but in Richard's absence 14 can you get someone to see what we can about this 15 developing situation outlined below? 16 "... there is a steadily building nervousness about 17 the accuracy of the Horizon system and the press are on 18 it as well now. 19 "It is the more strange in that the system has been 20 stable and reliable for many years now in and there is 21 absolutely no logical reason why these fears should 22 develop now. 23 "My instincts tell that in a recession, subbies with 24 their hand in till choose to blame the technology when 25 they are found to be short of cash." 96 1 Then: 2 "Bizarrely the author of the email below was a very 3 senior postmaster in the Fed who I know well but whose 4 wife was found to be defrauding us and we have 5 prosecuted." 6 Do you see that? 7 A. Yes. 8 Q. If we scroll up the page, please. We can see that this 9 email chain was sent to you, yes? 10 A. Yes. 11 Q. What would you have understood in reading an email which 12 said, "We have prosecuted the subpostmaster's wife"? 13 A. The same as I mentioned before, which -- I beg your 14 pardon, which was that a subpostmaster was prosecuted by 15 external authorities and the case was made by the Post 16 Office. I wouldn't have read into that that the Post 17 Office was a prosecuting authority. 18 Q. Wasn't it the case that it was commonly understood by 19 the senior management that the Post Office investigated 20 its own cases and prosecuted its own cases and that's 21 why this is being spoken about openly here, "we 22 prosecuted her"? 23 A. No, that isn't the understanding I would have had about 24 that at all. 25 Q. If we scroll back down to Mr Cook's email, he says that 97 1 his instincts are that, "in a recession, subbies with 2 their hands in the till blame the technology when they 3 are found to be short of cash". Was that a sentiment 4 that you agreed with? 5 A. No, I never used the word "subbies". I thought it was 6 completely the wrong word. 7 Q. What about the more important thing about them having 8 their hands in the till? 9 A. I beg your pardon. I wasn't avoiding that question. 10 Neither, either calling them subbies or people with 11 their hands in the till. As I explained earlier, the 12 only understanding I had had was from that conversation 13 with George Thomson in 2010. 14 Q. Okay, that can come down, thank you. 15 Can I turn to the issue of complaints about bugs, 16 errors and defects. In your witness statement -- 17 there's no need to turn it up -- you say at 18 paragraph 104, page 39: 19 "I had no knowledge of the Horizon system when 20 I joined the Post Office. I had not heard of any 21 problems with the system before I joined nor was 22 I briefed of any during my induction. No one at the 23 Post Office told me that there were bugs, errors or 24 defects or that the system lacked integrity, or that 25 there had been allegations or concerns about bugs, 98 1 errors or defects in the system." 2 Can we look, please, at -- and we have this on the 3 screen, please -- your first witness statement, 4 page 300, paragraph 634. 5 Page 300, 634. Then, if we go over the page, 6 please. Yes, just at the foot of the previous page. 7 Thank you. 8 You're talking here about Second Sight and, in the 9 second line from the bottom on the page, you say: 10 "Reflecting on this now, if they [that's Second 11 Sight] had completed those individual cases then we 12 might have got closer to the real problem -- the large 13 numbers (600+) of unknown bugs and defects being 14 corrected by Fujitsu without [the Post Office's] (as 15 I believed at the time) or my knowledge." 16 Can you explain, please, where the figure of 17 600 plus bugs and defects comes from. 18 A. I thought -- I may have misremembered that. I thought 19 that was raised in the Horizon Issues trial and the -- 20 I can't remember where I have that figure from there, 21 but it was, I think, from the Horizon Issues trial or 22 work that was done right at the very end, in terms of 23 numbers of interventions in the system. 24 Q. That's essentially what I'm asking you: where you got 25 the number of 600 plus bugs and defects in Horizon from? 99 1 A. I can't remember now. I'm very sorry but it's a recent 2 understanding of a number, not one that I had at the 3 time. 4 Q. When did you get the understanding, then? 5 A. I think, after -- either from reading something in the 6 Horizon Issues judgment or in documentation very late 7 on, before that trial took place. 8 Q. So you think it's whilst you were still in the Post 9 Office? 10 A. I can't remember. I'm really sorry, I can't remember 11 that. 12 Q. There's a briefing note prepared by Womble Bond 13 Dickinson for the litigation steering group in November 14 2018, which says that statistical analysis conducted by 15 Robert Worden, the defence expert, calculates that at 16 the absolute worst there had been 672 bugs in Horizon 17 over the last 18 years. Do you think that's what you're 18 referring to? 19 A. Possibly, and not from the time because I didn't see 20 steering group papers. I don't believe so, anyway. 21 Q. Are you aware of any documents produced in, for example, 22 2013 or in the years that followed, which demonstrate or 23 suggest that there were 600 plus bugs and defects in 24 Horizon? 25 A. I don't believe so, no. 100 1 Q. When you refer to 600 plus bugs here, are you referring 2 to bugs of any and all types -- 3 A. Yes. 4 Q. -- or just bugs that have caused or could have caused 5 balanced shortfalls in sub post offices? 6 A. I imagine that I'm referring to any and all sorts. 7 I think the two experts agreed on a list of -- I can't 8 remember whether it was 21 or 29 that could potentially 9 have affected branch accounts. 10 Q. Thank you. So this, essentially, is referring to after 11 acquired knowledge -- 12 A. Yes. 13 Q. -- essentially something that you're saying, "I've read 14 a document now" -- 15 A. Yes. 16 Q. -- "that I didn't know about at the time" -- 17 A. Absolutely. 18 Q. -- "if Second Sight had carried on with its work, it may 19 have established this"? 20 A. Very possibly. Yes. 21 Q. Thank you. That can come down. Can I turn to a series 22 of issues raised with you by subpostmasters by Detica 23 and by Second Sight, about the existence of bugs, errors 24 and defects in Horizon. Can I start with the Detica 25 report. You know that on 1 October 2013 Detica produced 101 1 a report on fraud and non-conformance in the Post 2 Office? 3 A. I don't have any recall of this document or the report. 4 Q. That's what I'm going to ask about: why it didn't make 5 its way to you. 6 A. Yes. 7 Q. Can we start by looking at the report, please, the 8 Detica report. POL00004408. Can you see that it's 9 dated 1 October 2013. 10 A. Yes. 11 Q. It's 51 pages long and it's produced by Detica. Now, 12 this report -- I'm not going to turn up the email, in 13 the interests of time -- was widely disseminated in the 14 upper echelons of the Post Office, including to Lesley 15 Sewell, Chris Aujard and Angela van den Bogerd. The 16 cross-reference for that is POL00342987. 17 Now, the report is very familiar to the Inquiry. It 18 highlighted a wide range of deficiencies across the IT 19 estate of the Post Office and its systems and processes. 20 I just want to highlight a couple of parts to you. 21 Page 11, please, and paragraph 3.2.3. Detica record: 22 "The initial findings of Second Sight were published 23 during the Pilot." 24 The "Pilot" refers to an initial exercise conducted 25 by Detica: 102 1 "The review was prompted by a public campaign by 2 [subpostmasters] who felt they had been wrongly traduced 3 by the Post Office following losses at their branches. 4 Several of Second Sight's observations resonate 5 strongly, notably the disjointed response by the Post 6 Office and the habitual desire to assign responsibility 7 to an individual rather than to conduct root cause 8 analysis to close gaps persisting across the branch 9 network. In order to have a consistent approach across 10 the [subpostmaster] estate, it is vital that the Post 11 Office has the ability to robustly identify and monitor 12 anomalous behave, so that the appropriate corrective 13 action can be taken (whether this is tactical education, 14 enhanced training, process or system redesign or 15 audit/investigation)." 16 The sentence that, "Several of Second Sight's 17 observations resonate strongly, [namely] a disjointed 18 response by the Post Office and [a] habitual desire to 19 assign responsibility to an individual rather than to 20 conduct root cause analysis", is that something that was 21 drawn to your attention? 22 A. No. 23 Q. Ought it to have been? 24 A. Yes. 25 Q. If this was distributed to Lesley Sewell, Chris Aujard 103 1 and Angela van den Bogerd, which one or more of them 2 ought to have drawn it to your attention? 3 A. I would have said all three. 4 Q. This is essentially marking some of Second Sight's 5 homework and agreeing with it, isn't it? 6 A. It is, yes. 7 Q. That's an important fact for you, isn't it: that 8 independent consultants, Detica, have been brought in, 9 and they essentially agree with Second Sight on the 10 points identified there? 11 A. Yes. 12 Q. Do you know why Lesley Sewell, Chris Aujard or Angela 13 van den Bogerd would keep this kind of information from 14 you? 15 A. I don't know. I've since read the Detica report and 16 some of the recommendations in it were picked up through 17 other work. Whether they thought -- I don't know, 18 I can't speak for them. I was not under the impression 19 that people were intentionally withholding information 20 from me but this is a -- 21 Q. I'm so sorry -- 22 A. This is a report that should have gone, not just to 23 me -- because the Chief Executive doesn't take every 24 decision in the business -- it should have gone to the 25 Group Executive and discussions had about it as to what 104 1 could have been implemented or not. 2 Q. Would it have affected your approach to Second Sight, 3 that, rather than them being slow, not sticking to their 4 brief, producing unevidenced conclusions and taking the 5 side of subpostmasters, which is what we are going to 6 see was the view ascribed by you to them, that, instead, 7 the Post Office's own consultants believed that their 8 observations were correct? 9 A. Yes, and it would have drawn my attention to the fact 10 that other consultants are saying that the Post Office 11 did not conduct root cause analysis and I didn't believe 12 that to be the case. I assumed that Post Office was 13 conducting root cause analysis. 14 Q. So that would be an independent red flag as well, apart 15 from marking some of Second Sight's homework rather 16 well -- 17 A. Yes, it would, yes. 18 Q. -- it would be a second red flag? 19 A. Yes. 20 Q. Can we go forward to page 37, please, at the foot of the 21 page. Sorry, if we just look at the top of the page to 22 get the context, "Conclusions and recommendations". 23 Then at the foot of the page, 7.2.2 under "Complex and 24 fragmented systems", Detica concluded: 25 "Post Office systems are not fit for purpose in 105 1 a modern retail and financial environment." 2 Was that conclusion drawn to your attention? 3 A. No, I mean, none of the conclusions from this report 4 were drawn to my attention because I didn't see the 5 report. That wouldn't have surprised me, as 6 a conclusion, that Post Office -- what was the date of 7 this report, please? 8 Q. 1 October 2013? 9 A. Yes, we were beginning to look at restructuring a lot of 10 the IT provision because one of the additional 11 challenges, as well as the points that are raised in 12 this, was the IT needed to be much more fit for purpose 13 in terms of a digital world. Many of the products and 14 services we were selling were digital, or trying to 15 sell. 16 Q. Thank you, that document can come down. 17 So you didn't read Detica's report at the time, 18 because it wasn't passed to you? 19 A. Yeah. 20 Q. You knew they were conducting a study? 21 A. I don't know that I did. 22 Q. Were you informed of either the fact of the pilot study 23 or any of the findings? 24 A. I don't believe so. 25 Q. Looking at it now, this is a detailed report by 106 1 independent third party contractors, expressing serious 2 concerns about Horizon, Post Office IT systems, more 3 broadly, and the Post Office's processes and 4 procedures -- 5 A. (The witness nodded) 6 Q. -- ought that to have been drawn to your attention? 7 A. Yes. 8 Q. Was that a serious failing of Ms Sewell, Mr Aujard and 9 Angela van den Bogerd? 10 A. I find it strange that it wasn't brought to -- and it 11 isn't just to my attention, it's the attention of 12 everybody else who had responsibilities in terms of the 13 running of the Post Office. There's information in here 14 that would have been incredibly useful to the Network 15 Director, for instance, in terms of conformance. 16 Q. Have you any clue why they would want to keep you and 17 the Executive and the Board out of this information. 18 A. No, and -- no, I don't. I don't recall either that they 19 were colleagues that I would have suspected were 20 withholding something from the Board, or myself, or the 21 Group Executive. I don't understand why the report 22 didn't progress. 23 Q. Can I turn more broadly to concerns raised by 24 subpostmasters, as opposed to contractors. 25 Would this be a fair summary: from at least February 107 1 2012 you received a series of correspondence directly 2 from subpostmasters raising concerns about problems they 3 were experiencing at their branches with Horizon? 4 A. Yes. 5 Q. Can we look at some of them, please, and I'm going to 6 try to deal with these at some speed, POL00140629. 7 Page 3, please, the foot of the page, an email from 8 Pervez Nakvi, dated 4 February 2012 directly to you: 9 "I am sure you were expecting my email but I have 10 been quite busy in court hence did not get time. 11 "On Wednesday before I left for court I turned down 12 7 customers who wanted to withdraw the £600 limit and 13 then ... I was informed by my wife that she and the 14 staff also turned down another 8 during besides the 15 other usual withdrawals during the period when the 16 Horizon went on its usual mood swings. 17 "I am sure there should be a clause in the contract 18 to penalise Horizon for these constant breakdowns, as 19 such these can be passed on to the subpostmasters to 20 offset their losses and frustration when this happens. 21 "by the law of probability, I am sure it will happen 22 again at peak periods especially at Christmas." 23 If we go to the top of the page and scroll a little 24 further down, that's it, we can see this is your reply 25 the next day, directly in response, copying in Mike 108 1 Young, George Thomson and Lesley Sewell. You say: 2 "Mike/Lesley, [Pervez] is a respected subpostmaster 3 (who also happens to be a Magistrate I think -- hence 4 the court references). 5 "I'd be grateful if you would reply. It is very 6 frustrating to receive mails like this. [He] is right 7 to raise it. It is my understanding that Horizon is 8 reliable and we are within the tolerances. But if 9 trusted individuals like Pervez are now not feeling that 10 is the case, are we monitoring the right metrics? And 11 if we think we are, might it be possible for you to get 12 a direct link to Pervez so that we can monitor 13 accurately what is happening in his branch. (Pervez -- 14 it may be that perception is worse than reality, as any 15 outage is not acceptable to staff and customers; but it 16 is possible that it is within accepted tolerances." 17 Was it relevant to you that the person raising the 18 complaint was a trusted individual? 19 A. I responded to all complaints in exactly the same way. 20 I happened to know Pervez well, so that was 21 an additional piece of information but it wouldn't have 22 made any difference whether I knew the subpostmaster or 23 not. 24 Q. So all complaints raised by subpostmasters and 25 mistresses, whether they were Magistrates or not, or 109 1 held other trusted positions, should have caused you to 2 investigate or caused to be investigated potential 3 Horizon issues? 4 A. I would hope so. I'm sure there are cases where that 5 was not the case but I would have tried to have 6 approached them in the same way. 7 Q. You personally responded to this complaint and, as we'll 8 see, not to a series of others? 9 A. I responded when I could. There's another example the 10 Inquiry has, a postmaster I didn't know, who -- gosh, 11 the name has just gone -- 12 Q. We might come to it later. 13 A. Okay, okay. But when I could, I would. This had come 14 in an email. Sometimes when -- when complaints came in 15 letters, they went through a particular process. So -- 16 but when I got an email, if I could, I would reply 17 personally. 18 Q. So the fact that you personally responded to this one is 19 not due to the fact that Pervez was respected? 20 A. Not at all. 21 Q. Can we look, please, at POL00117090. Moving forward to 22 the next year, to September 2013. You can see the date 23 there. It's a handwritten letter from a subpostmaster, 24 William Banville; can you see that? 25 A. Yes. 110 1 Q. I'm going to cut through it by going to page 2. He has 2 complained on page 1 about losses incurred due to 3 Horizon and he says, third paragraph in, if we just 4 scroll down a little bit, that's it: 5 "Can I ask if management at the [Post Office] is now 6 aware of the unexplained problems which we have 7 suffered. It's not just the money which I have repaid 8 for these 'losses' which in my opinion were not of this 9 office's doing but the personal attack on me and my 10 staff, plus the ongoing thousands in costs incurred to 11 cross and double check our tills since 2008." 12 Then, at the foot of the page, just above his 13 signature: 14 "I am not a thief or fraudster, but like a terrier 15 I'll never let go until it's sorted." 16 This letter would have come directly to you, would 17 it? 18 A. No, I imagine it would have gone through to the 19 Executive Correspondence Team. 20 Q. If we look at page 1 and see the stamp at the top of the 21 page, can you see "Chief Executive's Office"? 22 A. Yes, so the process is that it would have come into my 23 office, my PA would have sent it to the Executive 24 Correspondence Team, there would then have been -- they 25 would have gone out to different specialists across the 111 1 organisation, depending on the content of the letter, 2 and I would then have had a reply back to me with a file 3 behind that reply, that might detail the issues that 4 were raised in the letter. 5 Q. So would you just get the draft reply or would you get 6 some primary evidence of the investigative steps that 7 had been taken to substantiate what was said in the 8 reply? 9 A. I am sure there were cases where it didn't happen but 10 I remember -- I remember when I first took on the role 11 and had letters like this, about many different things, 12 and I was given a draft or a reply to sign, and 13 I refused to sign it until I was given some of the 14 primary evidence. So, after that, I was then presented 15 with a letter to sign and a file behind it that carried 16 the details from the people within the organisation as 17 to how the answer had -- the reply had been compiled. 18 Q. So you wouldn't just sign off draft letters? 19 A. No -- I'm sure -- 20 Q. You -- 21 A. -- you will find something where I did. I mean, I had 22 hundreds to do and other priorities as well as these to 23 deal with but I remember asking to see files. 24 I wouldn't just take something and sign it -- 25 Q. Thank you. 112 1 A. -- and I would always read the letter. 2 Q. Can we move on, please, to POL00116166. I'm dealing 3 with these chronologically, as you will have seen. We 4 started in February 2012 and we're now in October 2013. 5 Can we look at page 2, please, and an email to you from 6 Mr Warmington of 2 October 2013, and he says: 7 "Paula: 8 "As promised in today's call, here are eight 9 examples of the incoming applications." 10 Just to put this in context, Second Sight has 11 produced its Interim Report on 8 July 2013 and now the 12 mediation and complaint scheme was starting up -- 13 A. Yes. 14 Q. -- and he is saying: 15 "... here are eight examples of incoming 16 applications. I've selected those that are more clearly 17 expressed than most of the others that we've been 18 receiving ... 19 "I'm also enclosing a spreadsheet which shows which 20 'Thematic Issues' each applicant has reported to us. 21 It's probably not worth you looking at that before your 22 meeting with Angela and her team tomorrow ..." 23 Then: 24 "In some cases the mediation applicants are already 25 on the spreadsheet so are cross-referenced ..." 113 1 We needn't read the rest. If we go up, please -- if 2 we just look, before we do that, yes, it doesn't show 3 the attachments there but, if we go to the very first 4 page, it says, "Example Applications", and I think we 5 know that there were eight attachments to this email. 6 A. Yes. 7 Q. They were the initial complaints of subpostmasters or 8 former subpostmasters and they included -- I'm just 9 going to list them for the transcript and for future 10 reference, there's no need to display any of these -- 11 Lee Castleton, POL00099683; Keith Jones, POL00099684; 12 Jane Brewer(?) POL00099685; Alan Lloyd Jones(?), 13 POL00099686; Pamela Stubbs, POL00099687; Noel Thomas, 14 POL00099688; Jacqueline McDonald, POL00099689; and 15 Caroline Jack(?), POL00099690. 16 If we scroll back down, please. He says -- thank 17 you: 18 "As promised ... here are eight examples ..." 19 So those eight examples were attached. 20 If we scroll back up, please -- keep going -- you 21 say: 22 "Dear Ron, 23 "It was good to talk to you earlier. Thank you for 24 being available. 25 "I have just read through the attachments. Apart 114 1 from finding them very disturbing (I defy anyone not 2 to), I am now even better informed." 3 Then there's some administrative detail. 4 Why did you find the attachments very disturbing? 5 A. They explained in clear detail what the subpostmasters 6 were asking the Post Office and Second Sight to look 7 into. So some of them referred to, as we discussed 8 earlier, the approach and the style of Investigators. 9 Some of them referred to issues with the Horizon system 10 and, in a number of cases, they spoke about the impacts 11 on them and their families that -- financially, the 12 dreadful impacts on some people and, as I think I said 13 here, the clarity of the form, really, it was very 14 disturbing and upsetting reading. 15 And what I wanted to do, having read these, was to 16 share them with colleagues, just so that everybody knew 17 the seriousness of what we were dealing with. This was 18 at the very beginning stage of the Mediation Scheme, so 19 these were the applications before any of the reviews 20 had taken place but I just wanted people to understand 21 the impact on people's lives. 22 Q. They referred to a very wide range of issues, including 23 a series of faults with Horizon, didn't they -- 24 A. Yes, I can't remember the detail now but, yes. 25 Q. -- problems with misbalancing and shortfalls being 115 1 wrongly attributed to subpostmasters; civil proceedings 2 being taken against subpostmasters, including Lee 3 Castleton, resulting in his bankruptcy; consequent 4 impacts upon family and children -- 5 A. Yes. 6 Q. -- some complaining, in particular Noel Thomas, about 7 his wrongful conviction and the impact that had had on 8 him add his family; complaints about training; 9 complaints about the helpline; essentially, all of the 10 things that were subsequently established by the two 11 judgments of Mr Justice Fraser. 12 A. Yes, and all of the things that the Complaint and 13 Mediation Scheme was going to look into. And the other 14 thing, if I may, that I would like to say, because I've 15 heard very recently that subpostmasters saw the use of 16 numbers -- so these cases were anonymised, because of 17 the sensitivity of all of that information. The Post 18 Office was very concerned that it didn't share it and 19 there were -- I think there was a team of 20 or so -- 20 an investigation team looking into this as part of the 21 scheme, and so names were removed. But I am really 22 sorry, there was no intention at all for subpostmasters 23 to become numbers in this case, it was actually the 24 opposite but I appreciate the points that have been made 25 recently on that. 116 1 Q. You said that you found these very disturbing and that 2 you defied anyone not to. 3 A. Yes. 4 Q. What happened between you finding these eight cases very 5 disturbing and you shutting down the Mediation Scheme? 6 When did they cease to become very disturbing? 7 A. All the cases that came into the Mediation Scheme were, 8 by their nature, disturbing. My purpose in circulating 9 these was from a ... it was from a point of view of 10 compassion -- 11 Q. What systems -- 12 A. -- that the -- 13 Q. Sorry. 14 A. -- sorry, that the colleagues working on them and those 15 who -- there were many questions in the -- sorry, not 16 many. There were questions in the organisation, at 17 a Board and Group Executive level, about whether -- and 18 this is in documentation -- this was a distraction of 19 management time. When I read these reports, it seemed 20 to me that this was an important distraction of 21 management time and that any colleague who might think 22 that this was not a good use of money to be invested by 23 Post Office and time invested in investigating it was 24 clearly wrong, and I wanted to make sure that there was 25 no misunderstanding about that. 117 1 To your question about what happened between then 2 and standing down Second Sight, this was the ambition: 3 was to look at all of these cases in as much detail as 4 possible, and my understanding is this is what the team 5 were doing. Second Sight and the Post Office team went 6 through -- my understanding was they went through the 7 details of these cases, this is right at the very 8 beginning, where we're simply dealing with application 9 forms -- and, by the time Second Sight was stood down in 10 2015, I think, the view was that nothing had been found, 11 that where the Post Office had looked at each case, 12 there were explanations and we were still waiting, 13 I think, when Second Sight were initially stood down, 14 for them to finish some of the reports. 15 They then finished the reports and the responses 16 that I and the Board and other senior management had 17 back was that, in every case, there was an explanation 18 for what had happened and we would then go into 19 mediation, and where we were dealing with cases that had 20 been through the courts, they were going through the 21 Criminal Cases Review Commission and could then go 22 through a form of appeal, if postmasters felt that that 23 was an appropriate next step to do. 24 Q. Did the Post Office use a series of tactics and systems 25 to iron away these very disturbing complaints over the 118 1 next 18 months? 2 A. That was not my understanding. 3 Q. How was it that what struck you as very disturbing 4 complaints ended up as being without substance? 5 A. My understanding was that every complaint was looked at 6 in detail -- they were reinvestigated. Information from 7 Fujitsu was sought, data was looked at, Second Sight, 8 I know, on one or two occasions -- and this sounds very 9 hollow now, I am very, very sorry -- but complimented 10 the Post Office on the standard of the detail of the 11 investigation. 12 And it's completely unacceptable and deeply sad, and 13 I am very sorry that we didn't reach the right 14 conclusion on these cases. 15 MR BEER: Thank you. Sir, that might be an appropriate 16 moment. Might we break, please, until 2.15? 17 SIR WYN WILLIAMS: Yes. 18 MR BEER: Thank you, sir. 19 (1.23 pm) 20 (The Short Adjournment) 21 (2.15 pm) 22 SIR WYN WILLIAMS: Yes, Mr Beer. 23 MR BEER: Thank you. Good afternoon, sir. 24 Good afternoon, Ms Vennells. 25 A. Mr Beer. 119 1 Q. Can we pick up where we left off, which was looking at 2 that series of subpostmaster complaints about bugs, 3 errors and defects, by turning to POL00196815, please. 4 This is from a Mr Pennington, it's dated as having been 5 received on 13 September 2013 in your office. In the 6 second paragraph, having said, "Dear Paula", he says: 7 "First though may I explain my background. I worked 8 conscientiously and loyally for the Post Office for over 9 20 years. In this time it was very stressful due to the 10 economic environment. However at the same time customer 11 service was very satisfying." 12 Next paragraph: 13 "My 'complaint' is from when the Horizon system was 14 implemented. There was a loss from the system due to 15 incorrect procedures on the staff side, lack of 16 training? That resulted in a shown loss of over 17 £18,000. I was assured that it would all return. 18 However only £13,500 returned and I had to as the 19 expression was 'make good' the shortfall. At the time 20 I took my grievance to the Area Manager level, only to 21 be told that the contract stipulated all shortages must 22 be 'made good', and there was no appeal procedure." 23 Looking at that complaint, is this the kind of 24 letter that you describe before the break as one that 25 would have been sent down the Chief Executive Office 120 1 'correspondence to be dealt with' route. 2 A. Yes, it would. The route wasn't just for the Chief 3 Executive, it was for all executive correspondents, and 4 I imagine this would have gone through that particular 5 process. 6 Q. The thing that Mr Pennington complains about that he was 7 told that the contract stipulated that all shortages 8 must be made good, was that your understanding of the 9 contract at this time, September 2013? 10 A. Yes, it was my understanding of the contract. Once 11 a postmaster had gone through the various stages of -- 12 and I realise now, from all that we know, that this was 13 done in some cases very inadequately -- but the 14 complaint and the dispute would go through a particular 15 process and, if it wasn't resolved, then the contract 16 was to make good. My assumption, through this time, was 17 that that resolution process worked and, clearly, for 18 many cases, it didn't do that. 19 Q. Where did you get the understanding from that the 20 contract said that all losses must be made good, 21 irrespective of cause? 22 A. My understanding -- hmm. It was a fact within the 23 organisation. So Contract Managers would say that, Area 24 Managers, as we see here, would say that. It was known 25 that that was the requirement to the contract. 121 1 Q. You say it was known that it was the requirement of the 2 contract? 3 A. Yes. 4 Q. In fact, the contract didn't say that at all. 5 A. Oh, I'm sorry. No, I'm sure it didn't. In fact, I've 6 read the contract. The contract doesn't use the words 7 "make good" but that was the -- 8 Q. Nor does it say "all losses"? 9 A. Sorry? 10 Q. Nor does it say "all losses"? 11 A. No, I'm sorry, could you ask me the question again? 12 Q. Yes. 13 A. Thank you. 14 Q. Where did you get the understanding from that the 15 contract said that subpostmasters had to make good all 16 losses, ie irrespective of the cause of them? 17 A. I'm not sure that I had that understanding. 18 Q. What was your understanding by September 2013 of the 19 operation of the contract, so far as subpostmaster 20 losses was concerned? 21 A. I'm sorry, I don't know that I could recall -- I'm not 22 sure that I can recall now what I knew the contract said 23 at that time. I have read the contract a number of 24 times. What I can recall from that time is colleagues 25 saying that the Post Office could not, in all cases, 122 1 determine what had happened and so the contract held the 2 subpostmaster liable for losses in the office. My 3 understanding was that that was following a detailed 4 dispute resolution process but I can't recall the 5 details of that contract. 6 Q. If the contract said that the subpostmaster was 7 responsible for all losses, what was the point of 8 an investigation? 9 A. The point of the investigation would be to make sure 10 that -- would be to find the cause of the loss 11 because -- 12 Q. Why was the cause of the loss relevant if the 13 subpostmaster had to make good all losses? 14 A. Because it would be highly irresponsible for 15 an organisation to be -- as we will come on to discuss, 16 I'm sure -- to be prosecuting and finding people guilty 17 of things that they were not guilty of, and vice versa. 18 Q. For the moment -- 19 A. And any -- it's a -- there's a requirement to 20 investigate anything that is unsatisfactory and 21 shortfalls either way, where they're disputed, would 22 need to go through a proper process. 23 Q. At the moment, I'm not talking about prosecution at all; 24 I'm exploring at the moment your understanding of the 25 contract and the extent to which it permitted recovery 123 1 against the subpostmaster and in what circumstances. 2 Was it your understanding that it permitted recovery 3 of all losses, irrespective of cause, from 4 a subpostmaster? 5 A. I honestly can't remember what it was at the time. 6 I would have completely relied on the people whose job 7 it was to determine what the contract did or didn't say 8 and how it was applied. 9 Q. When you were Network Director, were you the ultimate 10 line manager of such people? 11 A. Yes, they reported through a general manager -- they 12 were Contract Managers and they reported through three 13 or four different levels through to me. 14 Q. You can't say now what your understanding of the 15 operation of the contract was; is that right? 16 A. I can't say now. What I'm saying is that I cannot 17 recall now what I understood the wording to be in the 18 contract, in the clause that applied to this. 19 Q. We've seen -- 20 A. But I trusted -- this was a process that had been in 21 place for many years and it was run by an experienced 22 team. The Inquiry has a witness statement from Lynn 23 Hobbs, who was the General Manager in charge of that 24 team, and she was -- I knew Lynn, she reported to me, 25 she was a very responsible and very assiduous General 124 1 Manager, so I had a number of different areas of 2 responsibility and I had to rely on the experts in those 3 different areas. 4 I wouldn't have trusted my own interpretation or 5 memory of a contract in an individual case. 6 Q. Thank you -- 7 A. I wasn't involved in that level. 8 Q. Can we move on. POL00101783, please. An email to you, 9 we're in late 2014 now, from Tim McCormack. If we 10 scroll down, please, thank you. 11 "Dear Paula ..." 12 So it's directly to you. 13 "Yet again today Mark Davies, speaking on behalf of 14 [the Post Office], relied on the dense that there are no 15 systemic errors in Horizon and this is proved because we 16 deal with so many customers per day in so many 17 branches." 18 Just stopping there, that was a frequent refrain of 19 the Post Office at this time, wasn't it? 20 A. It was and it was one that I used, and it was true and 21 it was completely unfair in these cases. 22 Q. "I think Mark and yourself might like to review the 23 periodic Message to Branches that are sent out via 24 Horizon. There are a catalogue of systemic errors that 25 arise from time to time and are fixed. Some involving 125 1 automatic transaction corrections. 2 "Paula, as I keep saying, you are surrounded by 3 people in your office that tell you all is well. You 4 have no personal knowledge of operating Horizon nor 5 probably any in-depth technical knowledge. What if the 6 people that are telling you all is well have the same 7 attributes? 8 "So forget systemic errors for the moment and 9 consider 'intermittent' errors which by and large are 10 caused by communication problems. 11 "I know of more than one but one in particular: 12 "It exists. 13 "It occurs at different times in different branches. 14 "It is noticed. 15 "They are reported to NBSC (I would really like to 16 see the number of times this has been reported ...) 17 "It causes financial loss to the [subpostmaster]. 18 "They are not fixed BUT the wise [subpostmaster] 19 knows how to get his money back so you don't hear many 20 complaints. You would hear from the Audit Team if they 21 caught someone doing it though. 22 "So why haven't these intermittent errors been 23 fixed. To put it simply -- because they are 24 intermittent. There is no known sequence of events that 25 can cause this error to reoccur in any particular 126 1 branch. How can you fix something if you don't know 2 what caused it in the first place? You have to throw 3 the whole thing out and start all over -- the only way. 4 "On our 'chat' forums, there are documented reports 5 over the years of the same error repeating itself 6 randomly in a wide number of branches ... 7 "I am pretty sure I can arrange for the error to be 8 replicated", et cetera. 9 What steps did you personally take in response to 10 Mr McCormack's email? 11 A. I can't remember in terms of this particular email but 12 I am aware that there are others that I responded to, to 13 Tim personally -- I responded to Tim personally and then 14 asked for issues to be followed up. 15 Q. Were you advised to stay away from Mr McCormack by Mark 16 Davies -- 17 A. By Rodric Williams. 18 Q. -- or Rod Williams? 19 A. Rod Williams in 2016. 20 Q. Why was that? 21 A. I had had -- so, first of all, I am very sorry, because 22 Tim McCormack had an insight into what I said earlier, 23 which is the lesson of me being too trusting, I think. 24 The comments he makes in this, with hindsight, ring true 25 and are hard to see again. I had numbers of emails but, 127 1 over the years, probably half a dozen. So, when you add 2 them all together it looks to be quite a few. Over 3 a period of time, I don't know that I noticed it that 4 much. 5 But I replied to Tim, and he said this in his 6 statement, his emails became more extreme in their tone 7 to me, I understand today why that's the case -- 8 Q. Exasperated? 9 A. Yes, yes and I understand why that's the case. 10 Q. But what did you do -- 11 A. But the -- 12 Q. So sorry. 13 A. -- but the tone of the emails became difficult to deal 14 with and I was advised that the best way of responding 15 to this was to -- so, in every case, as far as I recall, 16 we picked up the issues that Mr McCormack raised, in 17 terms of -- 18 Q. And properly investigated them? 19 A. I beg your pardon? 20 Q. And properly investigated them? 21 A. The one I can remember clearly was, I think, around 22 2016, where a full investigation was put in place and 23 what I was told back was that we had found the 24 explanation for the issue that he was raising. I can't 25 remember in this particular case. 128 1 Q. Do you know in this incident whether you caused to be 2 reviewed the periodic message to branches or the 3 catalogue of systemic errors that he is raising with 4 you? 5 A. I can't remember, no. 6 Q. Can we move on -- 7 A. But, generally, I followed things through. So -- but 8 clearly, if I had, not sufficiently. 9 Q. Can we move on, please, to POL00150178. If we just look 10 at page 2., please, there's an email from Haydi O'Brien. 11 I'm not going to read it out now, it's long, it's two 12 pages long, I just want to see what you did with it on 13 page 1, please, and scroll up, please, to the top. Your 14 email to Kevin Gilliland and others, summarising what 15 Haydi O'Brien had said. She said there was a shortfall 16 of £33,000 at the Griffithstown sub post office being 17 attributed to her. 18 You email Mr Gilliland add others, saying: 19 "This may be more complex than it sounds and I know 20 that Angela will look into it properly. 21 "I want to be really sure -- not just on the 22 individual case but as much on the issues Haydi 23 identifies in the whole process around this. And 24 I would like you to sponsor the review of this case and 25 see if it raises any wider issues. You will need to 129 1 been in other SLT colleagues and ExCo. At this stage, 2 I am only flagging it to Chris A, in case you do uncover 3 more than meets the eye ..." 4 Then skipping a paragraph: 5 "Hopefully, this is a one off. It sounds unusual 6 (but we have said that before!). And hopefully, with 7 the emphasis on risk, Rod's team is completely up to 8 date." 9 Then, in the last sentence of the penultimate 10 paragraph: 11 "... I know I don't need to point out the 12 sensitivity of this, as we face yet more difficult times 13 over Sparrow." 14 What were the "more difficult times over Sparrow" 15 that you were referring to there? This is December -- 16 A. The date is -- 17 Q. -- 2014. 18 A. Thank you. So we were a year into the investigation 19 scheme. I'm not sure what I meant by "more difficult 20 times over Sparrow" but we were clearly dealing with 21 sensitive issues in Sparrow, Sparrow being the name 22 of -- the project name for the Complaint and Mediation 23 Scheme, and what I'm flagging here is to make sure that 24 we follow this through, it may be something that needs 25 to be brought into the Sparrow scheme, and that I'm 130 1 trying to, I imagine, keep a sense of proportionality 2 around this. 3 But I think it's also important to draw attention to 4 the paragraph you didn't read out, where I asked lots of 5 questions about it, so why didn't security get in touch? 6 How do we monitor situations like that? How many other 7 branches are in this situation? Is it monitored and 8 controlled? What is the regular review in place? So 9 I'm doing what I said before, is I had stepped into 10 asking the detail, probing and asking for something to 11 be looked at properly, and I'm also saying -- 12 Q. Why is this sent to Mr Gilliland? 13 A. Sorry? 14 Q. Why was this sent to Mr Gilliland? 15 A. Because he was the Network Director so he was 16 responsible for branches at the time. 17 Q. Was there an established procedure for dealing with 18 correspondence that raised complaints about Horizon? 19 A. By this stage there was the hub meeting which collated 20 issues relating to Horizon and, within the organisation, 21 Angela van den Bogerd was heading up the review and 22 complaints went in to her, and the Executive 23 Correspondence Team -- but this has come through me -- 24 would have picked it up as well. 25 Q. So far we have seen you reply to some direct? 131 1 A. Yes. 2 Q. Some not seemingly pass in front of you and go to the 3 Executive Correspondence Team, and then some deal with 4 on an ad hoc basis, like this one being sent to 5 a collection of people? 6 A. That sounds as though they're different, they're not. 7 Because the end person in all of this would, for 8 instance, have been Kevin Gilliland and Angela van den 9 Bogerd. When you spoke to -- I beg your pardon, when 10 Mr Blake spoke to Alisdair Cameron last week -- 11 Q. That was me. 12 A. -- Alisdair mentioned -- 13 Q. That was me. 14 A. I'm so sorry! Alisdair mentioned that he wasn't quite 15 sure why things always went to Angela. They went to 16 Angela because it was her job and so that's why she was 17 copied into this. Complaints and issues were raised in 18 a number of different places across the organisation. 19 What was important was that, in resolving them, they 20 went back to the technical teams and this would have 21 gone to IT, to Kevin, around the operational procedures, 22 and Angela. 23 Q. You said, "This sounds unusual but we've said that 24 before!" What were you referring to there? 25 A. I don't know that it's anything more complicated than 132 1 what I'm saying, which is that I may -- I presumably 2 have raised issues previously, which have been new news 3 to me and then found out that necessarily there wasn't. 4 I don't think I'm making any deeper observation than 5 that. 6 Q. Was there any system in place to collect together 7 correspondence of this kind, so far we've seen quite 8 a few letters coming to you, raising issues with 9 Horizon, to see whether there were trends or any links 10 between the complaints? 11 A. I don't think there was a good enough system in place, 12 if I'm honest. 13 Q. Was there any system in place? 14 A. Well, there was a system -- there were two systems in 15 place. One was the process through the Executive 16 Correspondence Team, which would have had a factfile and 17 they would have gone to, as part of that process, the 18 expert in the organisation, so in terms of Horizon they 19 would have gone to -- at this time, I think it would 20 still have been Lesley Sewell. And the other was the 21 hub, which was set up, I didn't realise, as a result of, 22 but as a result of the advice from Simon Clarke, in 23 2013. 24 Q. So this should have got sent to the hub, shouldn't it? 25 A. This should have been logged at the hub, yes. 133 1 Q. So anything from, essentially, mid-July or early July 2 onwards, 2013, should have been logged with the hub? 3 A. It should have and it went to Angela and she had 4 a colleague who sat on that group. 5 Q. So if in the Inquiry we've seen a series of individual 6 responses passed through the Executive Team, quite often 7 with Mark Davies' input to them, which say Horizon 8 conducts so many transactions a day, so many 9 transactions a week, it processes so many millions of 10 pounds a year, there isn't a problem with the system, 11 would that be the right process that's been undertaken? 12 A. Mark would have only added, as he said last week, the 13 Communications overlay to that. I wouldn't have 14 expected Mark to have got involved in the investigation 15 of what had gone wrong. That was in this -- that was 16 Angela's job. 17 Q. Can we move on, please, to POL00150182. Foot of this 18 page, please, it's the same chain of correspondence 19 involving the Griffithstown sub post office and, by now, 20 Kevin Gilliland has responded to you, and you say: 21 "Thanks ... 22 "Just watch that Angela doesn't jump to any defence, 23 or even worse assume she knows the answer (she did say 24 to me the woman's daughter had caused the problem). If 25 we have been negligent in following through, we should 134 1 think about how to manage it. It also begs the question 2 [of] how the business is now being run?" 3 Why did you ask Mr Gilliland to watch that Angela 4 van den Bogerd doesn't jump to a defence? 5 A. It was the right question to ask if I had a concern 6 about it. Angela had -- 7 Q. Did you have a concern about it? 8 A. I -- Angela had worked for the organisation a long time. 9 She had very deep understanding and had come across, 10 I think, most things. There is a danger and a risk with 11 that, which is people become too close to something. 12 Whether, at the time I sent this email, I had been 13 alerted to that in something else she had responded to 14 but my job is to call this out and to make sure people 15 don't get drawn into -- I hesitate to use the word 16 "pattern" or "complacency" but that's always a risk with 17 people who have done a -- who have worked in 18 an organisation for a long time. 19 They have a huge added benefit because of their 20 experience and their expertise but they don't 21 necessarily always see things afresh. 22 Q. Was it simply that she had worked for the organisation 23 for a very long time that caused you to write this or 24 was there anything more specific, which led you to think 25 that she may be, by default, a Horizon defender? 135 1 A. I don't believe so. 2 Q. So you would administer this warning for anyone that had 3 worked for the company for a long time, would you? 4 A. No. As I say, I can't place this in time and there were 5 many other things going on at the same time. If I had 6 bumped up against something where Angela had been 7 particularly defensive on something and I mention here 8 that she did say to me the woman's daughter had caused 9 the problem, we shouldn't be making assumptions, we 10 should be looking into things in detail. But I can't 11 remember the detail, whether there was something that 12 prompted the comment but I think it's a valid challenge. 13 It would have been worse if I had said nothing. 14 Q. Can we move on, please, POL00119559. This a letter to 15 you from Toby Perkins MP, the member for Chesterfield, 16 16 December 2014, about Mr Harjinder Singh Butoy. 17 You'll see in the first paragraph he says that he's been 18 contacted by Mr Butoy "re his conviction for theft". In 19 the second paragraph, it says that, following audit: 20 "... Mr Butoy was arrested and convicted of 10 21 counts of theft through false accounting totalling over 22 £200,000. [He] has always denied the allegations and 23 pleaded not guilty to all charges. He was ... sentenced 24 to three and a half years in prison. This [forced him] 25 into bankruptcy and having his reputation ruined. 136 1 "Mr Butoy asserts that, like the many other 2 subpostmasters wrongly accused of theft, if was errors 3 caused by the Horizon transactions processing system 4 that created the financial discrepancies that led to his 5 conviction." 6 Would you have seen this as a different angle, 7 namely a subpostmaster's constituency MP making the 8 suggestion on behalf of his constituent that the Horizon 9 system was responsible for losses that had led to 10 a man's wrongful conviction? 11 A. I'm sorry, I'm not sure I understand the question. 12 Would I see it as a different angle? 13 Q. To the emailed and letter complaints that had come 14 directly from subpostmasters versus a complaint on 15 behalf of an individual by an MP? 16 A. Not personally, I don't believe. 17 Q. So would this have been administered in the usual way 18 through the Executive Correspondence Team? 19 A. Yes, it would. I believe -- but I can't recall now, 20 that there was a -- no, I think it would have been the 21 same, actually. There was a flag process for MPs, 22 because I think the Post Office had a commitment to copy 23 it to bring other people into the loop, or something, 24 but, from a personal point of view, I wouldn't have seen 25 this as any different. 137 1 Q. Would you have even seen this letter? 2 A. I don't know. It wouldn't -- from memory, it wouldn't 3 have made a difference that it was from an MP or 4 a subpostmaster. I worked very long days and, very 5 often, my days were back-to-back meetings, sometimes 6 I would see letters as they came in. Sometimes I would 7 see something on my PA's desk and I would ask to look at 8 it. Other times, I wouldn't get them until they'd come 9 back from the Executive Correspondence Team. It would 10 really depend on the day in the diary. 11 Q. Was there a way of keeping you informed, essentially, of 12 the temperature of the business, in relation to this 13 issue, ie how many complaints from subpostmasters you 14 were getting about Horizon, or did it depend on you 15 spotting something on the edge of the desk? 16 A. No, there wasn't -- this could have been done much 17 better. There wasn't a regular report on it but, as 18 you're showing, this was over such a long period of 19 time, that I -- the challenge is the organisation didn't 20 keep, I think, a good enough record on this type of 21 matter. They were dealt with, they were followed 22 through, I believe, very thoroughly, and they were 23 looked at by the experts in the business. Fujitsu were 24 involved where they needed to be. I don't -- I did not 25 have a regular report on the numbers of these coming 138 1 through, but there may not have been -- in the context 2 of the timescale that this spans and the numbers coming 3 through, it may not have seemed to people that there 4 were that many. When you put them together like this, 5 it clearly paints a very different picture and one that 6 we should have been looking at, which I think goes back 7 to my earlier point about the institution versus the 8 individual and how you get the right type of data 9 reporting. 10 Q. Can we move forwards, please, to 2015, POL00102381, 11 page 2 at the foot, please. An email from you, if we 12 scroll down a bit further, to Angela van den Bogerd, 13 Harry Clarke, Rod Ismay and others in March 2015. It's 14 about a complaint raised by the subpostmaster at the 15 Ashton-on-Trent sub post office about scratchcards. You 16 say: 17 "I would really appreciate your help. This 18 complaint simply shouldn't have reached me -- it's my 19 understanding that the NBSC/Chesterfield are supposed to 20 be on the alert for any calls that relate to missing 21 money and especially any that relate to the Sparrow 22 themes, of which this is clearly one and ensure they are 23 dealt with. 24 "Ie, I understood there was an urgent/escalation 25 process in place, so that we avoided any unnecessary 139 1 additional noise or references to Horizon, as all the 2 investigations have so far shown problems to be mostly 3 branch operational issues rather than the system." 4 What was the basis of your understanding that there 5 was an urgent escalation process in place at the NBSC 6 and/or Chesterfield? 7 A. That this was part of the Branch Support Programme that 8 became the Business Improvement Programme, and there 9 were some changes that had been put in place, 10 I understood, in the NBSC, to look at or to deal with 11 some of the issues which Second Sight had raised, in 12 terms of training and support to subpostmasters. 13 One I can remember was the number of times that 14 a subpostmaster would call through to the NBSC, that 15 that was logged at flagged, and the NBSC -- and there 16 was a separate team in place who would then contact 17 subpostmasters proactively to see whether they could 18 help them find out. So this was falling out of the work 19 that was done on Horizon and that, I think, is what 20 I was flagging here. 21 I'm not very happy with my wording now about 22 avoiding "any unnecessary additional noise or references 23 to Horizon". 24 Q. You're not the only person that has said -- 25 A. No, I'm sure. 140 1 Q. -- they don't like their use of the word "noise". Is 2 that, in fact, how it was seen at the top end of the 3 Post Office; when subpostmasters complained, it's just 4 noise? 5 A. No, and I'm sorry, it's not a good word, but you've also 6 seen how I've responded personally to other -- to 7 individual matters too. No, it's a word I regret using. 8 Q. But why was it used? Does it, in fact, reflect the 9 workings of the minds of those at the top end of the 10 Post Office, that subpostmaster complaints about Horizon 11 are in fact just "noise"? 12 A. I think it reflects a wrong understanding, yes, that 13 people believed that Horizon worked and this is me 14 deploying a word that was unwise. It did not in any way 15 mean that I didn't personally take seriously issues when 16 they got to me. I regret this here, but there was 17 an understanding that the system worked and the word 18 just shouldn't have been used by me and other people. 19 Q. Can we turn forwards, please, to POL00355692, and look 20 at the bottom of page 1, please. The MP for Ashfield, 21 Gloria De Piero sent you an email of 28 August 2015 22 saying: 23 "I have been contacted by the above constituent ..." 24 That's William Banville in Eastwood, 25 Nottinghamshire. If we go over the page, please, you'll 141 1 see that the MP attached this text here and, if you just 2 scan the first couple of paragraphs, the first five or 3 six lines -- 4 A. Mm-hm. 5 Q. -- and then about ten lines in, it says: 6 "The entire losses had to be made good, which they 7 were. My initial questions are 1. 2007 to 2012, the 8 Post Office Management knew of many offices in a similar 9 position so was this a pre-arranged standard riposte 10 from the ASM (as most subpostmasters were told this) was 11 this to isolate us?" 12 You'll see that's a reference to, I think, the sixth 13 line quote, that he was told "We were the only office in 14 the country experiencing such problems". 15 So he's asking, or his MP is asking, the question: 16 was there a line deployed that you were the only office 17 in the country experiencing such problems? Was that 18 a standardised riposte? Was this to isolate us? 19 Do you know whether any investigation was carried 20 out as to whether that was true or not: that a standard 21 line was deployed by the Post Office? 22 A. I don't know that any investigation was carried out. 23 I had never heard it as a standard line. I -- ever. 24 I can't imagine why -- well, I can imagine but I didn't 25 come across it. When a colleague in a call centre may 142 1 have said that, when they're dealing with hundreds of 2 complaints, it is possible that it seemed to them that 3 it was the only one but I have no recollection or 4 understanding or appreciation that it was a company line 5 at all. 6 Q. I think here the complaint isn't about the call centre, 7 it's about the Area Sales Manager, the ASM -- 8 A. Yes, you're right. 9 Q. -- saying "You're the only office in the country" -- 10 A. Yes. 11 Q. -- "experiencing such problems". 12 A. Yes. 13 Q. Was there a strategy, to your knowledge, deployed to 14 divide and conquer subpostmasters in this way, to say, 15 "You're the only person who has got this problem, pay 16 up, it's in your contract"? 17 A. No, no, I never came across that at all. 18 Q. Can we move on please to later in 2015, POL00117614. 19 This is Mr McCormack again. If we start at page 3, 20 please, 14 October, Mr McCormack to you, subject, "It 21 had to happen sooner or later": 22 "This may be the last you hear from me directly. 23 "It is a last chance for you to accept what I have 24 been telling you these last few years is true. 25 "I have now have clear and unquestionable evidence 143 1 of an intermittent bug in Horizon that can and does 2 cause thousands of pounds [of] losses to 3 subpostmasters." 4 So it goes on, and he explains in the balance of his 5 email what the problem is. Then, if we go over the 6 page -- sorry, I should have dealt with the bottom of 7 page 1 -- sorry, the bottom of page 3: 8 "I have three options. 9 "a) this emails is the first option -- appeal to 10 your sense of decency and compassion to accept that many 11 of the claimants in the JFSA are honest and decent 12 citizens whose lives were destroyed by your 13 organisation. 14 "b) go to press and see what happens. 15 "or 16 "c) await the inevitable judicial review where you 17 will personally be exposed and perhaps leave useful open 18 to criminal charges. 19 "We can stop this farce now. You can wake up and 20 realise that the people you rely on to tell you the 21 truth about what's happening don't have the ability to 22 do so." 23 What did you do as a result of this? 24 A. I don't recall. Genuinely, I don't recall what I -- if 25 you have further emails, I'm happy to be taken to them. 144 1 Q. I mean, this is quite a direct form of communication, 2 isn't it? 3 A. Yes, it is, yeah. 4 Q. Would you take from that that this is a person to be put 5 to one side -- 6 A. No. 7 Q. -- and ignored or would you think, "The way he's 8 expressed himself means that I should take what he is 9 saying seriously"? 10 A. You will find an email from me -- I don't know if it's 11 in response to this -- where I say to my team, "We must 12 take Mr McCormack professionally and" -- I can't 13 remember the other word I used. No matter how rude 14 people were, and sometimes it felt like that, because he 15 would say other things, than are necessarily here. 16 First of all, in hindsight I think he was right, and 17 I regret that that the matters he was raising took too 18 long to address but I would always respond to people 19 courteously and I don't know genuinely what happened to 20 this email whether it was picked up by the team, whether 21 I sent it on to somebody, but I would never ignore 22 something. 23 Q. So if we look at the foot of page 2, we can see that 24 Ms O'Farrell, who I think was your PA -- 25 A. Yes. 145 1 Q. -- or Executive Assistant, sends that email on to Angela 2 van den Bogerd, the Executive Correspondence Team and 3 the "flag case advisor". What was the flag case 4 advisor? 5 A. That, I think, was what I was trying to remember 6 earlier: is that there were, I think, an accelerated 7 process around the executive Communications Team for 8 flagged cases and MPs would have gone into that, 9 I believe. 10 Q. Then, if we go to page 1, please, at the foot of the 11 page, this gets forwarded on to Rodric Williams by 12 Angela van den Bogerd and he says: 13 "Thanks Angela. I agree we should ask for the 14 information, but recommend we write to him in the same 15 terms that we have every other person who says they have 16 evidence of flaws [ie] (Kay Linnell, Second Sight, Nick 17 Wallis, Sandip Patel, Professor Button). 18 "I have sent those letters in the past and am happy 19 to do so again." 20 Was there a standard text letter that went back to 21 people who raised complaints? 22 A. Well, it sounds as though there was. I wasn't aware 23 what Rodric Williams had. 24 Q. "I'm also pretty sure I know about the JR he's referring 25 to, and I have already sent a holding to letter to that 146 1 former [postmaster] acknowledging receipt of his 2 complaint, so my name might be known to Tim already. 3 "If you agree, I'll circulate something shortly. 4 I'll want to sent it in hard copy rather than email, 5 with Avene sending a short email saying a response is in 6 the mail ... 7 "Generally, my view is that the guy is a bluffer, 8 who keeps expecting us to march to his tune. I don't 9 think we should do so but instead respond with 10 a straight bat." 11 Was it your view that Mr McCormack was a bluffer? 12 A. No, I -- as I say, when I responded to Mr McCormack, 13 I took his challenges seriously and, as I say, I can 14 remember one particular case where Angela went to meet 15 the -- I think it was a core and outreach branch that he 16 had raised a query on. 17 Q. In his email he said you, Chief Executive, are not 18 getting the right advice from the people you have 19 surrounded yourself with. This email gets forwarded to 20 the people that you've surrounded yourself with. Can 21 you see a problem? 22 A. I can, yes. 23 Q. Can we move on, please. Sorry, I should have said top 24 of page 1. Mark Davies, the PR guy, says: 25 "... wise advice with which I agree." 147 1 Can we move forwards, please, to POL00002749, and 2 look at page 2, please, at the top. This is mid-2016 3 from Mr McCormack directly to you. He says: 4 "A typical head in the sand reply from the team you 5 have placed too much trust in. 6 "Let me be very clear ... 7 "Once the police investigation is completed it is 8 HIGHLY likely, indeed probable, that members of your 9 staff will be sent to prison. A custodial sentence is 10 mandatory for this offence. 11 "Your role in this will not escape attention. 12 "This is Seema Misra's phone number ... 13 "Call her and apologise and ensure her suffering is 14 ended as soon as possible. 15 "I do wonder what kind of God you worship." 16 What happened as a result of this being sent to you? 17 A. I believe this is the one I referred to earlier where 18 I asked -- I forwarded, I think, to Tom Wechsler, and 19 asked him to suspend any preconceptions he may have as 20 a result of some of the Sparrow work that had been done, 21 meaning, although we have said that we haven't found any 22 issues, that we should look again. And I can't remember 23 what happened but I'm reasonably sure that Mrs Misra's 24 case, by this stage, had gone to the CCRC. 25 Q. Can we look, please, at page 1, and scroll down. Thank 148 1 you. A follow-up email from Mr McCormack: 2 "What I have heard today is frankly totally 3 unbelievable. 4 "By now you should have acquainted yourself with the 5 'Dalmellington Error' and its consequences. 6 "You should know that Fujitsu said they were going 7 to fix this earlier this year. 8 "You should know that I stated that it would be 9 highly unlikely that they managed to do this as they 10 didn't know what caused the error in the first place. 11 "You now know because I am about to tell you -- that 12 the same error has just reoccurred in another branch in 13 far more serious circumstances. 14 "If you want details on this I will be glad to help 15 as soon as you call Seema Misra and put her out of her 16 misery. 17 "You are a complete bunch of idiots playing havoc 18 with the lives of people you have little interest in." 19 Did you, after this time, refuse to engage with 20 Mr McCormack? 21 A. I don't believe so but I think at this stage -- I can't 22 remember. I think Rod Williams had taken on the 23 responses, which I'm very sorry about, on behalf of Post 24 Office but, honestly, I can't remember. This may have 25 been the one where Angela went to look into the details 149 1 of the bug. 2 Q. That can come down. Thank you. 3 Taking a step back, would you accept that you 4 routinely received correspondence from subpostmasters 5 and people speaking on behalf of subpostmasters raising 6 complaints or concerns regarding the operation of 7 Horizon at their branch? 8 A. Yes, I would. 9 Q. Did you see a pattern between them? 10 A. I saw the theme of Horizon coming up, yes. 11 Q. Was anything done by you to join the dots between them? 12 A. The dots, I believed, were being joined through the 13 investigation work in the Complaint and Mediation Scheme 14 and, in every case, I believed we had looked at it in 15 some detail and I regret today that, clearly, neither of 16 those exposed the issues that we came to find out about 17 through the Common Issues -- the Horizon Issues 18 judgment. 19 Q. Thank you. Can I turn to my next topic, which is your 20 knowledge of the facility for remote access. You 21 describe -- there's no need to turn them up -- in your 22 witness statement -- it's paragraphs 1262 to 1307 -- the 23 state of your knowledge across time, from 2007 onwards, 24 as to remote access, however defined. You refer to 25 documents provided to you by the Inquiry, which show 150 1 that the Post Office knew that a form of remote access 2 was possible from at least October 2008. I want to 3 explore some of that material, so far as it came to your 4 attention. 5 Can we start, please, with the Ernst & Young audit, 6 and the APPSUP issue of 2011. Can we look, please, at 7 WITN00740126. If we look at the foot of the page, 8 please, there's an email from Donald Brydon in September 9 2011. Can you remind the Inquiry the function that 10 Mr Brydon performed at that time? 11 A. At this time, he was the Group Chairman of Royal Mail, 12 which included Post Office. 13 Q. So he was Chair, RMG; would that be right? 14 A. Yeah. 15 Q. If you read, he says: 16 "I was a bit surprised to see the article in Private 17 Eye this week about a class action by subpostmasters. 18 It may be a bit after the horse has bolted but it may be 19 appropriate to have an explicit litigation/legal report 20 in the [Post Office] board papers for the future -- 21 obviously Alice's call." 22 She, amongst others, is copied in to this email: 23 "The article raises some questions about Horizon. 24 I suspect the [Audit and Risk Committee] ought to take 25 an interest. Have we ever had an independent audit of 151 1 Horizon?" 2 If we scroll up, please, you say in reply: 3 "... you may remember this has reared its head 4 before. I'll get a brief circulated for new Board 5 members. 6 "In summary, each time any cases have gone to court, 7 [the Post Office's] position has been upheld. And from 8 memory, in at least 2 cases fraud was proven with 9 subsequent imprisonment." 10 Just stopping there, this is obviously before the 11 January 2012 Board meeting, where we saw earlier on 12 page 6 -- 13 A. Yes. 14 Q. -- of the minute Susan Crichton hard said that, or words 15 to similar effect. Where were you getting your 16 information at this time, that each time a case has gone 17 to court, the Post Office's position has been upheld? 18 A. I can only imagine it would have still be Susan Crichton 19 because she was the either Head of Legal or -- I think 20 she was, at this time, Head of Legal. It may have been 21 Clare Wardle, I'm not sure. But it isn't something 22 I would have known about without either having heard 23 about it or spoken to someone who headed up Legal for 24 the Post Office. 25 SIR WYN WILLIAMS: I'm not sure I caught the surname of the 152 1 other person. 2 A. Clare Wardle. 3 SIR WYN WILLIAMS: Wardle, yes. 4 MR BEER: Was this kind of thing always said in 5 conversation: we always win or we have always won? 6 A. No, it's obviously a fact that I had either in my head, 7 because it had been discussed presumably in a meeting 8 somewhere, or I had gone to somebody -- I'm just looking 9 at the time when I -- yes, and it's possible I spoke to 10 somebody before I replied. I don't know. 11 Q. There are a series of statements or facts or pieces of 12 folklore that seem to have circulated within the Post 13 Office, including, "Every time we go to court, we've 14 won"; "Horizon has no faults in it, every time it has 15 been investigated, no faults have been found"; "The 16 contract with subpostmasters said they're responsible 17 for all losses"; "No remote access is possible for 18 either the Post Office or Fujitsu", each of which things 19 turn out to be false. 20 How is it that, on all of these critical issues, so 21 many false statements were circulating within the Post 22 Office? 23 A. At the time, they were not considered to be false 24 statements. I -- and the source of those statements 25 were -- it's unfair to say because I can't recall 153 1 clearly but, on something like this, the only possible 2 source of this statement would have been through the 3 Post Office Legal team. So the answer for all of them 4 would be to look for where the expertise sat within the 5 organisation as to the genesis of what we now know are 6 false statements. 7 Q. Would you agree that it's a serious issue, on those four 8 points that I've mentioned: what the contract said, 9 whether we win in court every time, whether Fujitsu has 10 remote access, and whether investigations into Horizon 11 have turned up faults? 12 A. Yes, very serious. 13 Q. It's a serious issue if folklore develops which, in 14 fact, has no foundation in fact? 15 A. I agree. 16 Q. Does it say something about the culture of the 17 organisation, if such folklore developed and was 18 perpetuated and nobody checks the real facts? 19 A. That's a difficult question to answer because, in 20 hindsight, it is completely valid. At the time, 21 certainly where I was concerned, I believed that I was 22 getting information from the people who were employed to 23 give me the best advice because of their expertise. 24 I didn't believe that any of it is statements were 25 folklore at all. 154 1 Q. You say in the last paragraph: 2 "However, to avoid future doubt, [the Post Office] 3 took a decision several months ago to have Horizon and 4 the newer [Horizon Online] independently verified by 5 an external systems auditor. This is currently in 6 process and we should have the results at the end of 7 next month." 8 Is that a reference to work recommended by Ernst & 9 Young in their 2011 audit letter? 10 A. I cannot remember at the moment, when I -- I've seen 11 this in the bundle and I can't remember what it's 12 a reference to. 13 Q. That can come down. 14 In your witness statement, it's paragraph 1276, at 15 page -- 16 A. Excuse me, I did see there is another document in the 17 bundle which refers to a piece of -- I go back to Mike 18 Young and Lesley Sewell and ask why a particular piece 19 of work is late, and I think I mention KPMG. I don't 20 know whether this referred to that or to a piece of work 21 by Ernst & Young. 22 Q. Can we look at your witness statement, page 546, 23 paragraph 1276. You say: 24 "[Ernst & Young's] management letter for the 2011 25 audit stated that they had reviewed privileged access to 155 1 IT functions and that there were inappropriate system 2 privileges assigned to the APPSUP role and 3 SYSTEM_MANAGER role at the Oracle Database level on the 4 Branch Database server supporting Horizon Online. The 5 risk identified by [Ernst & Young] was that unrestricted 6 access to privileged IT functions increased the risk of 7 unauthorised/inappropriate access which could lead to 8 the processing of unauthorised or erroneous 9 transactions." 10 Then you go forward to look at the 2012 audit. 11 Do you accept that what you were told in the 2011 12 Ernst & Young audit was that Fujitsu had an ability 13 remotely to access and make changes to the Horizon 14 Online live estate? 15 A. I don't believe that I took it -- that I understood that 16 degree of detail. What I did here in my witness 17 statement was to look at the EY document because 18 I couldn't remember it from the time. At the time, 19 I had been promoted to Managing Director just a few 20 months previously, and this was the first time I had 21 come across an IT audit, and I think this is the time 22 that I asked for a briefing document to explain to me 23 the issues that were being raised in the audit. 24 I accept fully that this is what the document said. How 25 much of that I really understood at the time, I'm not 156 1 sure. 2 What I did do was to make sure that Mike Young and 3 Lesley Sewell picked up the issues that were identified 4 and I think in my statement I go on to talk about that. 5 Q. "The risk identified by [Ernst & Young] was that 6 unrestricted access to privileged IT functions increased 7 the risk of unauthorised/inappropriate access which 8 could lead to the processing of unauthorised or 9 erroneous transactions." 10 It's implicit in that that a form of remote access 11 by Fujitsu is possible, isn't it? 12 A. Reading that today, with everything we know, yes, 13 absolutely. I'm not sure, at the time, that I would 14 have understood that. 15 Q. At the very least -- and you accept that you read this 16 Ernst & Young letter -- you were aware that unauthorised 17 or erroneous transactions could be processed on Horizon 18 that weren't carried out or approved by the 19 subpostmaster? 20 A. I don't want to challenge because I don't want to be 21 seen to be being defensive in any way about this. This 22 was my first audit that I was involved in of any kind, 23 actually, of an IT system and I fully accept what the 24 document said. At the time, the focus was on the fact 25 that the audit was late and that it had run dramatically 157 1 over budget, and the CIO, Mike Young, was very 2 frustrated about the challenge he had from the Board 3 because of those things, because it had happened during 4 the year that he had just completed the rollout of 5 Horizon Online. 6 I am fairly sure that -- it says this, I absolutely 7 wouldn't challenge that at all -- that I didn't pick 8 this up at the time as something that I was unduly 9 concerned about. It talks about a risk and the role of 10 business is to manage risk. 11 I asked for a briefing document to help me 12 understand the nature of the technicalities but I accept 13 the proposition that you're putting to me. 14 Q. Ie that there was a facility for unauthorised access, 15 and, therefore, the facility to carry out unauthorised 16 or erroneous transactions? 17 A. Yes, that's what it says, yes. 18 Q. Yes, it can't be read in any other way, can it? 19 A. I was -- no, that's right. 20 SIR WYN WILLIAMS: Just so that I understand, is the gloss 21 you're putting on it, can I summarise it in this way: 22 anyone with the relevant knowledge and/or expertise in 23 Post Office, reading that Ernst & Young report, would 24 have understood it as Mr Beer describes. 25 A. Yes, I -- 158 1 SIR WYN WILLIAMS: You are introducing, from your personal 2 point of view, in effect, a caveat as to whether you 3 understood it in that way at that time? 4 A. Yes, thank you. I wasn't meaning to put a gloss on it. 5 SIR WYN WILLIAMS: That's it, isn't it? 6 A. It's a -- it's a regret that I didn't understand it at 7 the time, yes. 8 MR BEER: Okay, so that's what I'm going to call remote 9 access 1, the Ernst & Young management letter. 10 Can we turn to Deloitte, Project Zebra and 2014. 11 Can we turn to paragraph 883 of your witness statement 12 which is on page 395. You refer us there to a Board 13 briefing prepared by Deloitte in draft. Yes? 14 A. Yes. 15 Q. Just by way of background, and if I can summarise what 16 has happened before, Deloitte's 2014 report was the 17 product of a request by the Board to determine if 18 Horizon was robust, fit for purpose and operated in 19 an appropriate control framework, agreed? That's the 20 genesis of the Deloitte 2013 report? 21 A. Yes, it was a desktop exercise to look at existing 22 documentation and assurance material. 23 Q. It was therefore an important piece of work? 24 A. Yes. 25 Q. Because the Board wanted to know whether Horizon was 159 1 robust, fit for purpose and operated within 2 an appropriate control framework? 3 A. Yes. 4 Q. Thank you. In addition to its main -- 5 A. I'm sorry but I should be clear, it wasn't a fresh piece 6 of work, it wasn't asking Deloitte to give their view on 7 those matters; it was asking Deloitte to review existing 8 documentation so, for example, the Ernst & Young audit 9 material, two or three other independent audits that 10 were done for regulatory requirements plus internal 11 documentation. 12 Q. Yes, we'll come to see the complaints, essentially, that 13 Deloitte made about the limitations of the exercise that 14 they were asked to perform -- 15 A. Yes. 16 Q. -- in a moment. But in addition to its main report, 17 Deloitte were asked to draft a board briefing weren't 18 they? 19 A. Yes. 20 Q. You accept in this paragraph here, 883, that you read 21 the draft board briefing of the 4 June 2014? 22 A. Yes. 23 Q. Then in paragraph 884, you say: 24 "My first impression was that this was a critical 25 report which raised serious concerns." 160 1 Yes? 2 A. Yes. 3 Q. "I needed to understand whether the caveats ..." 4 That's the caveats in their report: 5 "... could be addressed. If they could not, it 6 could have serious implications with whether we 7 continued to use the system." 8 That's the Horizon system? 9 A. That's right. 10 Q. "While I recognised the limitations in this thinking 11 now, I certainly felt at the time that I had some 12 contextual reassurance that the system was working 13 simply from the enormous number of successful 14 transactions which were completed each day. However, it 15 was clear we needed to understand the gaps and caveats 16 and whether they could be addressed." 17 Then you say: 18 "There were also parts of the report I did not 19 understand. For example, I do not think I understood 20 the reference to the exceptional balancing transaction 21 incident in 2010." 22 A. Yes. 23 Q. Then in paragraph 885, you say: 24 "I spoke to Lesley Sewell ..." 25 Just what follows here, this is one of those things 161 1 that isn't documented; is that correct? 2 A. Yes. 3 Q. This is from your recollection 10 years on? 4 A. Yes. 5 Q. "... my recollection is she assured me that [the Post 6 Office] had more background documents which had not been 7 taken into account, but which provided assurance with 8 respect to the caveats. On the balancing transaction 9 incident, I was told it was an emergency measure and had 10 only been used once, it was not about remote access, and 11 that [the Post Office] had documents showing that the 12 [subpostmaster] was aware of the incident. I trusted 13 what I was told and, on the basis of that reassurance, 14 felt able to put that issue aside." 15 Given that you'd received a Board briefing, which 16 you say was so serious that it caused you to think 17 whether you could continue to use Horizon, you then say, 18 "But I was told this by Lesley". Was this not 19 documented in any way? 20 A. I'm sorry, was what not documented, the conversation -- 21 Q. What we see in paragraph 885. 22 A. I -- what is really curious about this, is I recall that 23 I seem to be -- I can recall being concerned about this 24 report. It was a very difficult report to read. It was 25 full of caveats and you had to work quite hard to find 162 1 what conclusions there were within it. I am not an IT 2 expert and -- 3 Q. I'm sorry, I'm not asking you about the main report; I'm 4 asking you only about the short, 10-page Board briefing? 5 A. Yes. No, this wasn't about the main report, this was 6 about the Board -- the main report I think I looked at 7 after I saw the Board briefing and that was 70-odd pages 8 something incredibly -- much more technical than this. 9 But my recollection is that I was concerned about this 10 and others seemed to be less concerned. 11 There was reassurance taken that, if you could find 12 your way through the paragraphs in this report, it 13 said -- or perhaps it was in a covering email -- that 14 Deloitte had not found anything to show that the Horizon 15 system was not working as it should, but it flagged two 16 or three issues that needed to be looked at, and the 17 balancing transaction was one that I picked up, and 18 I spoke to Lesley Sewell about it. 19 And the reason I remember this clearly is because 20 I had to go back to her twice -- I spoke to her twice 21 about it, and I can talk to you about that if that's 22 helpful. But to your question about why there was 23 nothing documented on this, there isn't, and I find it 24 puzzling because it was discussed at a Board meeting 25 very briefly and I can remember that the Board, 163 1 essentially, were disappointed that this report could 2 not be used in the way that they had hoped it would, 3 which was alongside the Linklaters report, and so the 4 business was asked to pick up the details that were in 5 this and to progress it, which became the Project -- 6 some of it became the Project Zebra Action Report. 7 But I'm not sure that I would have documented my 8 conversation with Lesley Sewell because, by the time I'd 9 spoken to her twice on the balancing transaction, I came 10 away quite reassured as to what it was. 11 Q. This is one of the incidents that I referred to earlier 12 as exculpatory evidence for you, ie you received 13 something in writing that's very serious and warrants 14 attention. You say you spoke to somebody that reassured 15 and calmed you but there's no record of it? 16 A. No, because I'm not sure why I would have put the record 17 of a conversation. The reason -- to your challenge 18 earlier, about me only remembering elements that might 19 assist what I might like to say, the reason I can recall 20 this is because I had to go back twice, and the first 21 time Lesley explained it to me, which was that it was 22 similar to a transaction correction, I understood 23 transaction corrections were about remote access but 24 they had to be accepted by the branch. 25 This one was -- I didn't understand the technicality 164 1 of how it happened but it was a similar process but, for 2 whatever reason, this single incident, permission was 3 still sought from the subpostmaster because, for 4 whatever reason, it couldn't -- it didn't happen through 5 the normal process of automatic acknowledgement in 6 branch. 7 I took that information, I went away and then 8 I thought I actually want to know that what she has said 9 is right. So I went back to Lesley and I asked her to 10 check that this documentation was right, that we had got 11 it documented, and the Inquiry has that document in its 12 disclosure, which shows that the subpostmaster had 13 approved it, and this was what had happened, and it's 14 because I had to go back twice that I have that quite 15 clear recall in this example. 16 MR BEER: We'll look at the board briefing itself after the 17 break. 18 Sir, I wonder if we could break until 3.40. Thank 19 you, sir. 20 (3.26 pm) 21 (A short break) 22 (3.40 pm) 23 SIR WYN WILLIAMS: Mr Beer. 24 MR BEER: Thank you, sir. We were dealing, Ms Vennells, 25 with the Deloitte Board briefing of June 2014. 165 1 A. Yes. 2 Q. Can we look at it, please. POL00030159. You will see 3 it's a Board briefing in draft, dated 4 June 2014 with 4 the title: 5 "Document, further to our report 'Horizon: Desktop 6 review of assurances sources and key control features' 7 dated 23/5/14, responding to five specific matters 8 identified by [the Post Office] as critical to [the Post 9 Office's] legal position." 10 Then look at page 3. "Summary", if we just look at 11 that paragraph at the top, please, and blow that up. 12 First paragraph: 13 "The work we carry out to support our full report, 14 and thus this ... Briefing document, did not constitute 15 an audit or assurance engagement in accordance with UK 16 or international standards. In order to deliver 17 a formal assurance opinion, we would need to have 18 carried out testing to address the scope limitations. 19 Our conclusions and findings are therefore limited to 20 the design of Horizon. They are also subject to the 21 accuracy of the assumptions and limitations set out in 22 Section 3." 23 If we go to the foot of the page, "Limitations and 24 Assumptions": 25 "Our findings and conclusions are presented in the 166 1 context of the following limitations: 2 "[1] As a desktop exercise we have not validated 3 whether Horizon has been implemented or operated as 4 described in the documentation reviewed." 5 That's quite a significant limitation, isn't it, 6 would you agree? 7 A. Yes. 8 Q. We're just looking at pieces of paper about how the 9 system was designed, we haven't actually looked at 10 whether it does the things that the pieces of paper says 11 it does? 12 A. The issue that was faced from memory was that the -- the 13 software -- forgive me, because I'm not a technical 14 expert but my recollection is the software was 15 essentially the same and, as the Inquiry has heard from 16 the very beginning of the implementation, and I think 17 this was Mr Cipione's evidence, that fix upon fix had 18 been applied and documentation had not been kept, and 19 so, what Deloitte discovered -- and this had also been 20 discussed at the Board prior to this being 21 commissioned -- that it was going to be difficult to 22 find all of the documentation that could have confirmed 23 this. 24 So there was a -- there was always an outstanding 25 question as to whether one could go back and to validate 167 1 the implementation of Horizon back in the 1990s/early 2 2000s? 3 Q. They didn't, for example, look at PinICLs, PEAKs or 4 KELs? 5 A. I don't believe they did and they were not words that 6 I had, I think, ever come across. I believe the word 7 "KEL" may have been mentioned once in an email right 8 towards my end of my time at the Post Office but they 9 were not words that I had understood. I am sure that 10 there were people who were involved in this piece of 11 work and who were talking to Deloitte who did, but 12 I wouldn't have been able to point them to those 13 individuals because I didn't know. 14 Q. The second limitation or assumption: 15 "Our work was limited by significant gaps in the 16 information available, relating to both the granularity 17 of information and the existence of the Horizon features 18 over the entire timeline of operation of Horizon. The 19 effect of which is that there are gaps within what we 20 are able to comment upon over this timeline. Our 21 findings below are written in the context of the 22 information available, which relates to the current 23 system. 24 "An event occurred in 2010 which required the use of 25 the exceptional balancing transaction process in Horizon 168 1 to correct a subpostmaster's position from a technical 2 issue. Information has not been provided on the 3 circumstances that lead to this system issue and how the 4 issue was identified. It is assumed that verbal 5 assertions received from Fujitsu that this was the only 6 time this process had been used hold true." 7 A. If I may, that was one of the comments when I spoke to 8 Lesley Sewell that she challenged back -- when she said 9 that there was more information available, and there 10 was, on that. 11 Q. So, again, what you're telling us is that there is 12 a conversation unrecorded outside of the written 13 document formally produced by Deloitte, raising this as 14 a concern, which reassured you? 15 A. Yes. What I am telling you is that, in my statement, 16 I mention that when I spoke to Lesley, she was 17 frustrated because she knew that there was more 18 documentation and that would explain some of these 19 things, and this happened to be one of those. 20 Q. Fourth: 21 "We have not had any direct contact with any third 22 parties other than named contacts you have provided to 23 us." 24 Fifth: 25 "We have not validated or commented on the quality 169 1 of the documentation supplied to us." 2 The line in the third bullet point, last line, "It 3 is assumed that verbal assertions received from Fujitsu 4 that this was the only time this process has been used 5 holds true", is not much reassurance, is it? 6 A. It isn't at this stage and that is precisely one of the 7 points that Lesley was making and that I saw and that 8 the Inquiry has in its documents, that there was 9 documented evidence about this particular once-off use 10 of a balancing transaction, and I understand that the 11 Project Bramble work, which I was not involved in and 12 did not see, also validated that up to certain date, as 13 well, that that was the case. 14 Q. It refers in that fourth bullet point to the balancing 15 transaction process being used to correct 16 a subpostmaster's position. Did you understand this to 17 be a single subpostmaster? 18 A. Yes. 19 Q. Just one -- 20 A. Apostrophe "S", yes. 21 Q. If we go forward, please, to page 4, they say: 22 "Our work was also based on the following" -- 23 Sorry, page 5. 24 It says: 25 "These areas were reviewed in the context of five 170 1 Matters ..." 2 They are the five specific issues, I think, raised 3 by the Post Office as relevant to its legal position. 4 They say: 5 "... noting the limitations and assumptions 6 underpinning our work, overall findings are ..." 7 It's 5 that I'm interested in: 8 "Matter 5 -- 'Horizon provides visibility to 9 subpostmasters of all centrally generated transactions 10 processed to their Branch ledgers'." 11 That statement in quotation marks, that's what the 12 Post Office wished to be assured about; is that right? 13 A. I believe that's correct, yes. 14 Q. Then the answer comes back: 15 "From the documentation we have reviewed, it appears 16 that Horizon is designed such that the subpostmaster 17 that's visibility of all centrally generated 18 transactions to their branch ledgers in that accounting 19 period." 20 So that's reassuring, isn't it? 21 A. Yes. 22 Q. "Central transactions require subpostmaster approval to 23 be processed ..." 24 That's reassuring, as well, isn't it? 25 A. Yes. 171 1 Q. Then this: 2 "... except for balancing transaction postings." 3 That's saying, isn't it, that, for balancing 4 transaction postings, subpostmaster approval is not 5 required. 6 A. That's what it says and that was the conversation with 7 Lesley, and which Deloitte confirmed at this stage and 8 later, that there was one example where a balancing 9 transaction had taken place, but that it was incorrect 10 what is written here because a balancing transaction 11 could not take place without a subpostmaster approval. 12 It had only -- the protocol was such that the 13 subpostmaster had to approve it and that was what I went 14 back to double test, to check that that was the case. 15 Q. Why did you go back to it? Why were you so concerned 16 about it? Why this, amongst all of the pages? 17 A. There were couple of other things too in the report, so 18 risk registers and ability to edit and delete 19 transactions, but this was important, I think -- I can't 20 remember how the conversation with Lesley started, 21 whether she raised this with me or I raised it with her, 22 but the fact I had the conversation twice was clearly 23 something that was significant and -- 24 Q. Why were you focusing on remote access, which is what 25 this is about. 172 1 A. Because I think this is 2014. There had been in 2013 -- 2 and I understand on going, but I didn't know at the 3 time -- the challenge raised by Mr Rudkin via Second 4 Sight about remote access. 5 Q. So you're saying that the only thing that you mention in 6 your witness statement that you checked with Lesley was 7 about these paragraphs -- 8 A. Yes, yes. 9 Q. -- which are concerned with the facility for remote 10 access by Fujitsu. 11 A. Yes. 12 Q. You're saying that you checked those things with Lesley 13 in this undocumented conversation because of something 14 that had happened the year before, ie Mr Rudkin's 15 allegations? 16 A. No -- sorry. No, you asked me why I was talking about 17 remote access -- 18 Q. Yes. 19 A. -- and the only -- I can think the only -- so remote 20 access was raised by Mr Rudkin in relation to the 21 basement at Bracknell and it was also a challenge in the 22 cases that were going through Project Sparrow. So it 23 wasn't -- remote access wasn't a new news item; it was 24 a very, very important item. So to focus on that would 25 have been a sensible thing to do. 173 1 Q. You know that this issue that we're addressing now is 2 directly relevant to evidence that you were subsequently 3 to give to Parliament? 4 A. Yes, I do now, and I'm sure we'll come on to that but, 5 as I say in my witness statement, I don't know that I -- 6 once it had been explained to me, I accepted the 7 explanation and moved on, and the explanation I was 8 given remained valid, actually, for a number of years. 9 What I didn't understand at this stage, and I don't 10 think I understood until after I left the organisation, 11 was that the balancing transaction tool could be used 12 partially without -- and without permission of 13 subpostmasters -- to make interventions in the system, 14 and I may have not understood this properly but to, for 15 instance, reboot a stock unit, if it had crashed. 16 I don't think I ever understood that they could be used 17 in terms of remote access in the way I think they were, 18 but I didn't know that at the time, I think, until 19 I left the organisation. 20 Q. Would you agree that, on its face, this Board briefing 21 from Deloitte clearly states that Fujitsu could inject 22 or insert or make balancing transactions into a branch 23 account, a subpostmaster's branch account, without the 24 approval of the subpostmaster, hence except for 25 balancing transaction postings? 174 1 A. Yes, that's exactly what it says. 2 Q. Yes. Never mind -- 3 A. It wasn't just the -- 4 Q. -- about whether it was just exceptional, never mind 5 about how often it had been used, never mind whether 6 there was some assurance that the subpostmaster, in 7 fact, knew about it; just on the basic fact that this is 8 written evidence to you and the Board that Fujitsu could 9 alter branch transactions without the approval of the 10 subpostmaster? 11 A. I accept what you're saying; I think there's 12 an important distinction between what you're saying and 13 what I know now, to the way I -- and I can't speak for 14 the board -- understood it at the time, and I think 15 that's an important distinction. 16 Q. The distinction arises because of the conversation that 17 you had with Lesley Sewell -- conversations you had with 18 Lesley Sewell? 19 A. Yes, and there are also documents which I think refer to 20 that when I do go to the Select Committee in 2015, as 21 well. 22 Q. Quite aside from all of that, you agree that, on the 23 face of the Board briefing, you had no information at 24 all on which to conclude whether and to what extent 25 Fujitsu had used balancing transactions before 2008. 175 1 A. That's correct. 2 Q. The Board wanted to know that, didn't it? It wanted to 3 know the position from the inception of Horizon? 4 A. It did, and it had a conversation -- Lesley came to the 5 Board and I recall approximately the conversation, where 6 she explained what I stated previously, actually, that 7 it would be very difficult, if not impossible, to get 8 the data to look at some of the questions, for instance, 9 about this, because it didn't exist, either because it 10 had been destroyed because of data retention policies 11 but, more likely, because it simply wasn't there any 12 longer and there -- 13 Q. Do you know -- I'm so sorry. Do you know what 14 investigation was carried out to find that 15 documentation? Because we've got it. We've got the 16 documentation which shows -- one witness described it as 17 the Wild West, the extent to which Fujitsu could 18 inject/amend transactions pre-2010, completely before 19 2004, unregulated, unaudited and unauditable. We've got 20 those documents that show that. 21 A. Yes, and the Post Office -- I should have seen those 22 documents. I didn't know they existed. I don't know 23 whether my CIO at the time knew they existed but she was 24 very clear in her communication to the Board that it 25 would be very difficult. I can recall the chairman 176 1 asking the question and how much it might cost us to get 2 that data -- or it wouldn't be extracted but to recreate 3 that data, and it may even be in one of the minutes, 4 a six-figure sum was talked about to be able to do that, 5 which, in hindsight, would have been an incredibly wise 6 investment to make. 7 Q. So it wasn't -- 8 A. But, actually, it didn't need to be made, did it, 9 because, as you say, the information was there. 10 Q. So it wasn't that the documentation wasn't available; it 11 was that it would be costly to find it? 12 A. No, no, it would be costly to recreate it. 13 Q. Recreate in what sense? 14 A. What was explained was that the documentation was not 15 there in terms of whether the system -- it was the point 16 that Mr Cipione was making in his evidence statement, 17 which is that when the system went in, there were 18 multiple faults and fixes were applied and 19 documentation, which I understand is a frequent issue 20 with systems, documentation was not updated as each fix 21 was applied, and so it would be difficult to know how 22 well the system had been implemented. 23 Q. I'm talking about a different thing, Ms Vennells, I'm 24 told about documents from Fujitsu, some of which were 25 passed over to the Post Office, saying "We have got 177 1 a team of people, team support level 3, that have 2 privileged user rights that are unauditable and 3 unaudited that allow them access to the live estate to 4 insert or amend transactions"? 5 A. Yes, and that information wasn't shared, deeply 6 regrettably. 7 Q. Can we go on, please, to your evidence before the Select 8 Committee. At paragraphs 1000 to 1307, you refer to 9 your evidence before the Select Committee including an 10 email that you sent to Mark Davies and Lesley Sewell on 11 30 January 2015 requesting help in preparing for the 12 Committee hearing, and can we look at that now please. 13 It's POL00029812. Can we look at page 5, please, at the 14 foot of the page. 15 So just in context, the Committee hearing was on 16 3 February 2015 and we're now on 30 January 2015. To 17 Mark Davies and Lesley Sewell, "Urgent: Accessing 18 Horizon", and I think this is the first email in the 19 chain: 20 "Dear both, your help please in answers and in 21 phrasing those answers, in [preparation] for the [Select 22 Committee]: 23 "1) 'is it possible to access the system remotely? 24 We are told it is'." 25 So what you're doing there is you're attributing to 178 1 the Committee a statement or a challenge or a question; 2 is that right? 3 A. That's right, yes, I'm positing a question. 4 Q. Imagining that which they may ask you -- 5 A. Yes. 6 Q. -- and then asking for assistance with the answer? 7 A. Yes. 8 Q. You say: 9 "What is the true answer? I hope it is that we know 10 this is not possible and that we are able to explain why 11 that is. I need to say no it is not possible and that 12 we are sure of this because of xxx and that we know this 13 because we have had the system assured." 14 Can you see that? 15 A. Yes, I can. 16 Q. Then I should also read some of the balance of this 17 because some of it is relevant to the question that you 18 asked there: 19 "2) "You have said this is such a vital system to 20 the Post Office, what testing do you do and how often 21 [and when]?" 22 Then you say: 23 "Lesley, I need the facts on these -- I know we have 24 discussed before but I haven't got the answer front of 25 mind -- too many facts to hold in my head! But this is 179 1 an important one and I want to be sure I do have it. 2 And then Mark, to phrase the facts into answers, plus 3 a line to take the conversation back up a level -- ie to 4 one of our narrative boxes/rocks." 5 Why did you consider the issue of remote access to 6 be an important issue at that time? 7 A. As I said earlier, it was an ongoing question. It was 8 something that was raised by postmasters in the cases 9 that were being looked at. It was a question that 10 Mr Rudkin had raised. I may well have been reminded 11 that Second Sight were going to ask about it or would 12 have been asked about it. It was an important matter to 13 know about and to be able to answer honestly and 14 truthfully to the Select Committee. 15 Q. Hadn't Mr Rudkin's allegations been put to bed by the 16 30th -- 17 A. I thought they had, yes. 18 Q. -- that he was either lying or mistaken, according to 19 the Post Office: he either hadn't been to the building 20 or, if he had, he'd got it all wrong when he went there? 21 A. I think the Post Office had explained to him that the -- 22 there was a test rig in the basement and that it 23 wouldn't have been possible to access the system at that 24 stage. 25 Q. But you thought this was an obvious question you were 180 1 going to be asked? 2 A. Yes. 3 Q. Going back to the previous page, please, at the foot of 4 the page, you say: 5 "What is the true answer? I hope it is that we know 6 that this is not possible and that we are able to 7 explain why that is. I need to say no it is not 8 possible ..." 9 Why did you need to say publicly to evidence to 10 a Select Committee that remote access was not possible? 11 A. I expected that this might be a question, as you 12 explained before, that would come up, and my 13 understanding was that it was not possible, and so 14 I wanted to be able to say that but what I also wanted 15 to be able to do was to explain why I knew that was the 16 case, which is why I go on to say, "and that's because 17 of xxx". 18 Q. But why did you need to say no, it's not possible? 19 A. I phrased the -- phrased this point very specifically 20 and I can remember why I did this. Alice Perkins -- not 21 related to this particularly but I can remember Alice 22 Perkins saying to me at some stage, "Paula, if you want 23 to get the truth and a really clear answer from somebody 24 you should tell them what it is you want to say very 25 clearly and then ask for the information that backs that 181 1 up". That was why I phrased this that way. 2 Q. That's an odd way of going about things, isn't it? 3 A. I beg your pardon? 4 Q. That's an odd thing of going about things, isn't it? 5 A. It was a piece of advice -- 6 Q. I want to know the answer to the question; here's the 7 answer to the question; tell me I'm wrong. 8 A. Well, yes, I hoped they would do. This was a very 9 genuine attempt to be able to reassure the Select -- 10 I believed this was absolutely the case. I had 11 an obligation going before the Select Committee to be 12 able to share the information that I knew and to be able 13 to answer their questions correctly, and this is what 14 I was trying to ask for from the team. I was not, in 15 any way, if you are -- and forgive me, if you're 16 suggesting this -- trying to tell them what the answer 17 should be. It was worded -- 18 Q. I thought you said that's what Ms Perkins said you 19 should do in trying to get information out of people? 20 A. Yes, but it was not done because I necessarily knew this 21 was the answer. This was a -- 22 Q. I thought you said a moment ago that you believed it to 23 be the answer? 24 A. I did believe it to be the answer and so I wanted to be 25 able to say to the Select Committee, in complete truth 182 1 and sincerity, that this -- that it was not possible to 2 remotely access a branch account without the 3 subpostmasters knowing and I wanted to be able to 4 explain why that was the case. 5 Q. Wouldn't the honest and straightforward thing to have 6 done be to stop your reply to the question that you 7 asked with the question mark, after the word "answer"? 8 A. I wanted to be really -- I'm very sorry, I am giving you 9 completely the truthful answer on this. I remember why 10 I phrased this this way. Not because I was trying to 11 tell people what the answer was at all but because I was 12 trying to get them to phrase something in a way that 13 said, from my understanding, this is what it should be. 14 I had been told over all of the time that it was not 15 possible and I wanted to be able to explain to the 16 Select Committee that that was absolutely the case. 17 Q. You refer to a briefing that you received, a briefing 18 pack, and then an addendum to the briefing pack that you 19 received -- you refer to that in your witness 20 statement -- for the Select Committee hearing, and you 21 tell us in your witness statement that you have no 22 memory of seeing the addendum to the briefing pack, 23 which addresses remote access, at the time of the Select 24 Committee, yes? 25 A. I just -- I simply don't recall. I don't know whether 183 1 I did or I didn't. 2 Q. Well, in your witness statement, you say you have no 3 memory of seeing it. By that, do you mean 4 "I undoubtedly got it but I just can't recall its 5 contents now"? 6 A. Yes, I think so. 7 Q. Right. 8 A. Yes, I think so. 9 Q. Can we look at how you got it first. POL00117096. 10 We're now the day before the Select Committee hearing at 11 5.54 in the evening, so it's 2 February 2015, an email 12 from Jane Hill, the Head of Public Affairs, to you, with 13 an attachment, "addendum" document and a "Scheme Key 14 facts" document. It's only the first I'm interested in. 15 She says: 16 "Dear Paula 17 "Please find attached two final briefing documents: 18 "[1] Addendum to Friday's briefing pack. This 19 includes our position on claims, suspense accounts, 20 [Second Sight's] information requests and remote access 21 ... 22 "I will bring hard copies with me to breakfast 23 tomorrow. 24 "See you then." 25 Just looking at the distribution list on that, given 184 1 that the document is significantly about IT issues, do 2 you know why Lesley Sewell isn't one of the people 3 mentioned? 4 A. I don't. I assume that Lesley Sewell was involved in 5 the process but these are the -- no, I don't know why 6 Lesley is not copied, actually. I hadn't noticed that 7 before. 8 Q. You -- is this right -- wouldn't have known how the 9 document itself had been created, ie what work had gone 10 into it? 11 A. No, I do now but I didn't at the time. 12 Q. Let's look at that addendum, please. POL00117097. This 13 is the attachment, if we can display pages 1 and 2 side 14 by side. It looks like we can't display the whole of 15 page 1. It's a two-page document. 16 A. Yes. 17 Q. Yes, so it's quite a short document, quite pithy, yes -- 18 A. Yes. 19 Q. -- with bullet points, with headings "Mediation stats"; 20 "Claims"; "Suspense Accounts"; "Second Sight request for 21 information"; and then "Remote Tampering", as it's 22 called, yes? 23 A. Yes. 24 Q. So if we just look at the briefing you were having 25 before your appearance before Parliament on remote 185 1 tampering. If we just look at page 2 then, please. 2 Blow up a bit. Thank you very much. 3 This is essentially the answer to your email. 4 A. Yes. 5 Q. Just looking at way that it's arranged, would you agree 6 that the first four bullet points set out what you're to 7 say. If you're pushed, you can then say the next three 8 things and then, if injection of new transactions into 9 a branch account is raised, then you can say the next 10 things, yes? 11 A. Yes. 12 Q. So just looking at the scheme of the document, it 13 contains a top line, essentially, of what you're to 14 volunteer, then an account of what you're to say if 15 you're pushed and then what you're to say if you're 16 really pushed; is that right? 17 A. It's -- that is the way it appears, yes. 18 Q. Yes? 19 A. Yes, I don't suppose I would have taken it necessarily 20 that way but yeah. 21 Q. Let's look at what you're allowed to say before you're 22 pushed. The first four bullet points: 23 "transaction data in branch accounts can't be 24 changed remotely. 25 "[There is] No evidence of malicious tampering. 186 1 "[There is] No functionality in Horizon for [the 2 Post Office] or for Fujitsu to edit, manipulate or 3 remove transaction data once it has been recorded in 4 a branch's accounts. 5 "There is also no evidence at all of any malicious 6 remote tampering. 7 "If pushed: 8 "Stress again that there is no remote access that 9 enables branch transaction data to be edited, changed or 10 manipulated. 11 "As you would expect, support staff can review and 12 monitor the system -- part of standard service 13 contract -- but, as above, transaction data cannot be 14 manipulated. 15 "As part of day-to-day, business as usual process, 16 Post Office can post correcting transactions to 17 a branch's account -- these are transaction corrections 18 and transaction acknowledgements, visible to the 19 postmaster, which enable accounts to be brought into 20 balance. These have to be accepted by a user logged 21 into the branch Horizon terminal before they are 22 recorded in the branch accounts, so they are fully 23 visible to the branch." 24 Then: 25 "If injection of new transaction into a branch's 187 1 account is raised ..." 2 That's raised by the committee: 3 "There is functionality to add transactions -- this 4 the balancing transaction process and would only be used 5 in the event of an error that cannot be corrected by 6 a TA or a TC [transaction acknowledgement or transaction 7 correction]. 8 "It is good industry practice to have this 9 functionality but the use of the process is so rare it 10 would only take place after a full discussion with the 11 postmaster involved. 12 "These would be visible and also have a unique 13 identifier in the audit trail. It has only been used 14 once since March 2010 (Horizon Online Go Live). 15 "The overall system is tightly controlled via 16 industry standard protocols and it is assured 17 independently in [internal] audits or ISO 27001, Ernst & 18 Young for IAS 3402 and part of PCI audits. There are 19 numerous tests and checks -- including daily checks." 20 You accept that this addendum was prepared for you 21 and emailed to you, yes? 22 A. Yes. 23 Q. If we scroll up, please. It concerned an issue that you 24 had expressly requested to be addressed in a briefing -- 25 A. Yes. 188 1 Q. -- and which you regard as important? 2 A. Yes. 3 Q. It's a very short document, yes? 4 A. Yes. 5 Q. Your Public Affairs Director, Jane Hill, had said that 6 she was going to print the document and bring it for you 7 to read on the morning of the Select Committee hearing 8 at breakfast? 9 A. Yes. 10 Q. In those circumstances, do you accept you're very likely 11 to have read this addendum? 12 A. I'm sure. How much I read and how much I took in, 13 I have no idea because it was a -- the Inquiry has seen 14 there was a lot more documentation than just this but, 15 yes, I would have tried to prepare as best as I could. 16 Q. As we've discussed, the addendum includes a strategy to 17 hold four lines, the first four, give certain 18 information when pushed and further information, if 19 pushed further; did you agree with that strategy? 20 A. No, I -- as I said, I'm not sure that I would 21 necessarily have taken it this way. I didn't ask for 22 that strategy. I don't suppose I even considered it on 23 the morning of the Select Committee. 24 Q. Why did you think you wouldn't consider it, having 25 identified the topic as an important one and asked -- 189 1 A. No, I'm sorry, I -- 2 Q. -- specifically for a briefing about it and having been 3 given a briefing? 4 A. I meant I wouldn't have considered the strategy in the 5 way this is set out, in terms of three different ways of 6 approaching it, and the reason I wouldn't have 7 considered that is that I would respond to the questions 8 as they were asked and I would respond to the Select 9 Committee openly and honestly with what I knew and could 10 recall at the time under the pressure of the Select 11 Committee. But I wouldn't have gone in -- you can't do 12 that. 13 It's like sitting here today; you can't come into 14 these sorts of very high-pressure environments with 15 a strategy as to how you're going to handle it. 16 Q. Why would the Post Office adopt a strategy of 17 withholding information, in the first instance, unless 18 pushed, and, in the second instance, unless pushed or 19 asked directly? 20 A. You would have to ask Jane Hill. I had -- I don't know 21 that I've seen anything else. 22 Q. Would that be an appropriate strategy? 23 A. No, I've simply said that -- I've just said that I would 24 have approached the -- I did approach the Select 25 Committee with an intention to answer their questions as 190 1 openly and honestly as I knew. 2 Q. You say in your witness statement that this document 3 would have reinforced your belief that it was not 4 possible to change branch accounts without the 5 subpostmaster's consent, yes? 6 A. Yes, if you say so, yes. 7 Q. Where does it say in the document that it was not 8 possible without the subpostmaster's consent? 9 A. I'm -- the thing that I remember very clearly from this 10 was -- and I -- is the point about the function -- 11 "There is no functionality in Horizon", was a very 12 reassuring line to have read. The point that it made 13 further down about the balancing transaction process 14 would have reminded me what I knew from 2014, from the 15 conversation with Lesley from the Deloitte report. 16 Q. But if we just go to the top of the page, please, bullet 17 point 3, there is "no functionality", and if we scroll 18 down: 19 "If injection of new transaction ... is raised ..." 20 First bullet point: 21 "There is functionality ..." 22 What this is doing is it's saying: come out with the 23 clear, easy, straight denial first, say there's no 24 functionality, but then the more nuanced answer is only 25 if they really push you on it. 191 1 Is that the way the Post Office operate? 2 A. I agree that's what it's saying. No, that is certainly 3 not the way I operate or operated at the Select 4 Committee in 2015. I -- my retention of the branch 5 accounts can't be changed remotely and there is no 6 functionality in Horizon are statements that stayed with 7 me, and given this very short notice, either overnight 8 or that morning, I wouldn't have -- I wouldn't have had 9 time to take account of some sophisticated strategy 10 about how the message was going to be managed, and 11 I wouldn't do that. Whatever anybody asked me to do, 12 I would only tell the truth. 13 Q. Thank you. That can come down. 14 Now, because of rules concerning Parliamentary 15 privilege, I'm not permitted to ask you questions the 16 effect of which would be to impeach or to question the 17 evidence that you gave to Parliament on 3 February 2015; 18 do you understand? 19 A. I do, yes. 20 Q. We have asked you in a witness statement to tell us what 21 your state of mind was immediately before you gave 22 evidence to the Committee, you know that -- 23 A. Yes. 24 Q. -- asking questions on the basis of the evidence that 25 you subsequently gave to the committee? 192 1 A. Yes. 2 Q. Can we look, please, at WITN01020200, so second witness 3 statement. Can we look at page 9, please, question 27, 4 or paragraph 27. Thank you. 5 Just by way of context, we asked you to set out what 6 your state of mind was, what your belief was, at 10.00 7 on the morning of 3 February. 8 A. Yes. 9 Q. The issue we asked you to address was: 10 "There was no functionality in Horizon for either 11 branches, [Post Office] or Fujitsu to edit, manipulate 12 or remove transaction data once it had been recorded in 13 branch's accounts." 14 You say: 15 "At 10.00 on 3 February 2015, I believed it to be 16 true that there was no functionality in Horizon for 17 either branches, [the Post Office] or Fujitsu to edit, 18 manipulate or remove transaction data once it had been 19 recorded in a branch's accounts. My belief was based on 20 the material provided to me in advance of the Select 21 Committee, set out ... above." 22 A. Yes. 23 Q. That includes the addendum document that we've just 24 looked at. 25 A. Right. 193 1 Q. How could you believe that there was no functionality to 2 remove transaction data once it had been recorded in the 3 branch's accounts, in the light of the addendum briefing 4 that you received, which said that balancing 5 transactions could be undertaken, which involved 6 editing, manipulating or removing transaction data once 7 they had been recorded in a branch's accounts? 8 A. Because the information that I was given states exactly 9 that, I think. That there was no functionality -- 10 Q. Well, the top line does. 11 A. Yes. 12 Q. The first bullet point, the "If you're not pushed on 13 this issue" does? 14 A. Yes. 15 Q. But the bottom line says that it can be done through 16 balancing transactions. How could you only state the 17 former, only believe the former to be true, when you 18 knew that balancing transactions allowed precisely that 19 to be done by Fujitsu? 20 A. I knew that one balancing transaction -- and I didn't 21 understand the technicality behind it, which I, as 22 I explained earlier, I understood to be similar to 23 a transaction correction, and did need a subpostmaster's 24 permission and had been sought, so I -- 25 Q. Ms Vennells, that's a different issue, whether in fact, 194 1 on the occasion that it had been used, the permission of 2 the subpostmaster had been sought. This is whether the 3 facility is there and, on the basis of the briefing that 4 you were provided, the 'If pushed twice', at the bottom 5 of the page, revealed to you that the facility was 6 there? 7 A. Then, at the time, I didn't register that. This was -- 8 this was my understanding, that it was not possible to 9 access a branch's account remotely without the 10 subpostmaster being aware of it, and that was based on 11 my understanding of what was explained to me in 2014. 12 I accept what you say is that there is more information 13 in that brief further down, but I ... 14 Q. Ms Vennells, it goes further than that, doesn't it? 15 We've seen that in 2011 you were told by Ernst & Young 16 that unrestricted access to privileged IT functions 17 increases the risks of unauthorised and inappropriate 18 access, which might lead to the processing of 19 unauthorised transactions. 20 We've seen that in 2014, you had the Deloitte Board 21 summary, which said that subpostmaster approval is 22 required, except for balancing transaction postings, and 23 you'd received the addendum document that, in those 24 final bullet points, makes that point again. How could 25 you have believed that there was no facility for Fujitsu 195 1 to edit, manipulate or remove transaction data? 2 A. Because I imagine in the timescale that I'm looking 3 at -- as I explained, in 2011, I looked for a briefing 4 document to try to help me understand the wider issue 5 around the technology audit, which I had never 6 encountered before; in 2014, I was completely reassured 7 by the CIO who was the expert on this. I had no idea at 8 any time that a balancing transaction could have been 9 used in the multiple ways that it was, so, by the time 10 I get to the Select Committee and I get a brief on the 11 morning or overnight the -- and I'd been away the night 12 before, I didn't -- I did not reach a conclusion that 13 meant that I was giving inaccurate information to the 14 Select Committee. That is not something that I would 15 have done. 16 Q. Lastly on this topic, before we break for the evening, 17 can we look, please, at POL00041258. This is after 18 Parliament and it's after the Letter of Claim has been 19 received from Freeths, and it's a discussion about the 20 content of the letter of response. 21 If we look at the foot of the page, there's an email 22 from Jane MacLeod, then General Counsel, to you. She 23 says: 24 "As you will recall, Post Office has committed to 25 responding to the Letter of Claim received from Freeths, 196 1 by this Friday." 2 In the second paragraph: 3 "None of the underlying arguments set out [by 4 Freeths] are new. However as a result of the work 5 undertaken by Deloitte in relation to Horizon, we will 6 be flagging that within Fujitsu there are a number of 7 individuals who have super-user rights which can only be 8 used in very limited and controlled circumstances. We 9 do not believe this causes us any concerns from a legal 10 perspective, however it is a different positioning to 11 the public statements that we have previously made, and 12 therefore we should be prepared for adverse comments 13 from the usual commentators." 14 Then if we scroll up, it's on the page, you say: 15 "Thanks Jane. This is clear -- my only query 16 is ..." 17 I think that's "re"? 18 A. Re, yes. 19 Q. "... Fujitsu super-users. What did we say previously?" 20 Answer: 21 "We haven't previously addressed super-users and the 22 phrasing of some previous statements as to who can 23 access and edit branch data is quite narrow. We are 24 collating previous statements made, as well as 25 referencing what we have been provided by Fujitsu 197 1 historically, so we can assess the extent of the 2 communications gap. However it is clear this is an area 3 where we could face adverse media commentary." 4 Did you understand, at this point, that the issue 5 was about different positioning that the Post Office was 6 taking in relation to previous statements? 7 A. Yes, I think that's right. 8 Q. Was that because the existence of super-users was 9 already known to you? 10 A. I'm sorry, just ask the other question again? 11 Q. Yes. 12 A. I'm not sure I picked the link up. 13 Q. This was about Post Office's positioning. 14 A. Yes, this was about information Post Office was putting 15 into response to the Letter of Claim, I think; is that 16 right? 17 Q. Yes. You say: 18 "My only query is [re] super-users. What did we say 19 previously?" 20 A. Yes. 21 Q. What you don't say is, "What are super-users? I've 22 never heard of super-users before". 23 A. Right. I'm not sure ... 24 Q. Were you aware of so-called super-users before this, 25 July '16? 198 1 A. I don't think so. I'm assuming that the reason I asked 2 this question was that I wasn't. There was the 3 Deloitte -- the Ernst & Young audit, which talked about 4 privileged access and I think I'm asking here as to what 5 super-users are. I can't remember whether I had that in 6 mind or not. There was certainly privileged access that 7 had come up in the Ernst & Young reports. I think 8 APPSUP was something that was referred to. 9 Q. Ms MacLeod says, at the top of the page: 10 "We haven't addressed [...] the phrasing of some of 11 the previous statements as to who can access and edit 12 branch data is quite narrow." 13 Did you understand that to be a reference to the 14 evidence that you had given to Parliament? 15 A. I don't think I made any connection to what I'd given to 16 Parliament. 17 Q. What statements had the Post Office made previously, 18 publicly, as to who could and could not edit branch 19 data? 20 A. The Post Office -- well, I don't know what it had 21 done -- stated previously. Presumably, there was 22 a piece of work being produced to look at that. I can't 23 remember now and I clearly didn't know at the time what 24 the Post Office had said. 25 Q. But the short point is you didn't read this as 199 1 a reference back to what you had said to Parliament? 2 A. No. 3 MR BEER: Thank you. 4 Sir, those are all my questions for today. It has 5 just gone 4.30. 6 SIR WYN WILLIAMS: Yes, just before we break, can I just go 7 back to that additional briefing document that you got 8 the day before or during the morning of the Select 9 Committee hearing. Mr Beer asked you questions on the 10 basis of it was laying out a strategy for you, all 11 right -- 12 A. Yes. 13 SIR WYN WILLIAMS: -- and you had that debate. 14 A. Yes. 15 SIR WYN WILLIAMS: If I were to suggest to you that you were 16 being advised to be very precise, very circumspect and 17 very guarded about what you said, that was the effect of 18 that document, would you agree? 19 A. I would, Sir Wyn. I'm not sure I would have noticed 20 that on the morning of the day. 21 SIR WYN WILLIAMS: But -- you'll see the point in 22 a moment -- that was the effect that was trying to be 23 created by those who created that document? 24 A. It could have been, yes. 25 SIR WYN WILLIAMS: Right. 200 1 A. Yes. 2 SIR WYN WILLIAMS: Why? 3 A. (Pause) 4 With hindsight, because possibly -- 5 SIR WYN WILLIAMS: If you need time to think about it, you 6 can tell me in the morning. It's all right. 7 A. No, no, I don't -- 8 (Laughter from the audience) 9 SIR WYN WILLIAMS: No, no. That's enough now. 10 A. It's -- 11 SIR WYN WILLIAMS: It's a question that I have to pose for 12 myself, so I'd like your help with the answer. 13 A. Yes. I understand the question. At the time, I didn't 14 answer the question -- I didn't ask the question. It 15 didn't cross my mind at all, and this may be back to the 16 point I made at the beginning of the day that I could be 17 too trusting of people: I took the information that 18 I was given and went into a Select Committee. Why might 19 they have set it out that way? With what I know now, it 20 is -- but I find it very difficult because I knew the 21 people who were producing that document but, from what 22 I know now, maybe other people knew more than I did and 23 they were trying to direct me to answer in a certain 24 way. 25 SIR WYN WILLIAMS: All right. 201 1 So I think we'll adjourn at that point, then, 2 Mr Beer, until tomorrow morning. Is it 9.45? 3 MR BEER: Yes, please, sir. 4 SIR WYN WILLIAMS: Can I say to the members of the public 5 and the Core Participants who are present that it would 6 have been possible for there to have been a lot more 7 verbal intervention than there has been from the floor, 8 and I'm very grateful to you for your restrained 9 behaviour during the course of the day. But that's not 10 to encourage you to be less restrained; that is to 11 encourage you to be, if anything, even more restrained, 12 during the remainder of this week. So thank you very 13 much. 14 MR BEER: Thank you, sir. 15 (4.36 pm) 16 (The hearing adjourned until 9.45 am the following day) 17 18 19 20 21 22 23 24 25 202 I N D E X PAULA ANNE VENNELLS (sworn) ...................1 Questioned by MR BEER .........................1 203