1 Tuesday, 18 June 2024 2 (9.45 am) 3 MR BEER: Good morning, sir, can you see and hear us? 4 SIR WYN WILLIAMS: Yes, I can, thank you. 5 MR BEER: May I call Ian Henderson, please. 6 IAN RUTHERFORD HENDERSON (sworn) 7 Questioned by MR BEER 8 MR BEER: Good morning, Mr Henderson. 9 A. Good morning, Mr Beer. 10 Q. You know that my name is Jason Beer and I ask questions 11 on behalf of the Inquiry can you give us your full name 12 please? 13 A. My name is Ian Rutherford Henderson. 14 Q. Thank you for giving evidence today and for previously 15 providing a long and detailed witness statement; it's 16 60 pages long and is dated 20 May. The URN is 17 WITN00420100. Can we turn, please, to page 60, of that 18 witness statement. 19 A. Yes. 20 Q. Is that your signature? 21 A. Yes, it is. 22 Q. Can we just go back to page 59, and paragraph 163, which 23 is at the bottom. 24 A. Yes. 25 Q. You say: 1 1 "In the course of our work, I increasingly felt that 2 your overriding duty was, in a phrase attributed to Alan 3 Bates, to help 'the skint little people' who didn't have 4 a voice and who had been so badly treated by 'the Post 5 Office'." 6 Is there an amendment that you wish to make to that 7 paragraph? 8 A. Yes, there is. 9 Q. Can you tell us what it is? 10 A. I'm delighted to say that Sir Alan Bates has recently -- 11 and I have not updated my witness statement, so I'd like 12 to change Alan Bates to Sir Alan Bates. 13 Q. Thank you. If we go over the page, please, to page 60. 14 You've told us that that's your signature. Are the 15 contents of the witness statement true to the best of 16 your knowledge and belief? 17 A. Yes, they are. 18 Q. Thank you very much. That can be put to one side. In 19 terms of your background, I'm going to take this shortly 20 Mr Henderson, if I may. You served in the British Army 21 for nine years and then, in 1980, qualified as 22 a chartered accountant; is that right? 23 A. Yes, it is. 24 Q. You're now, I think, a Fellow of the Institute of 25 Chartered Accountants of England and Wales? 2 1 A. Correct. 2 Q. In terms of your prior career before Second Sight, you 3 were Manager of the Investigations Division at Lloyd's 4 of London, with responsibility for investigating fraud 5 worldwide; is that correct? 6 A. Correct. 7 Q. You were subsequently Head of Investigations at what was 8 then the country's largest financial services regulator? 9 A. That's correct as well. 10 Q. You worked on a part-time basis for the Criminal Cases 11 Review Commission, the CCRC, for four years; is that 12 right? 13 A. Yes. 14 Q. You subsequently joined Second Sight Support Services 15 Limited and Second Sight Investigations Limited; is that 16 right? 17 A. Yes, it is. 18 Q. In broad terms, in the year 2020, what did those -- 19 sorry, 2012 -- what did those companies do? 20 A. A variety of professional services. My appointment was 21 as a contractor, consultant, and I was assisting Ron 22 Warmington in the -- in various, sort of, projects that 23 the company was involved with. 24 Q. Was one of those projects the Horizon project for the 25 Post Office? 3 1 A. Yes, it was. 2 Q. I think in 2012, you were a member of the International 3 Society of Forensic Computer Examiners -- 4 A. That's correct as well. 5 Q. -- and a certified computer examiner? 6 A. Correct. 7 Q. As you tell us in your witness statement, they're all 8 listed in your witness statement, you have provided 9 written and oral evidence in a large number of civil and 10 criminal cases and regulatory cases as an expert 11 witness? 12 A. Correct. 13 Q. Thank you. Can I turn, then, to the appointment of 14 Second Sight. I think it's right that Second Sight was 15 approached by the Post Office in mid-2012 with 16 a business proposal to undertake some investigatory work 17 for it; is that right? 18 A. Yes. 19 Q. In your witness statement -- no need to turn it up -- 20 it's paragraph 22, you state that: 21 "Ron Warmington prepared a business proposal dated 22 1 June 2012 and Susan Crichton produced a document 23 describing the objectives of the investigation." 24 A. Yes. 25 Q. Can we look at that document, please. It's POL00096575 4 1 and it'll come up on the screen for you. 2 A. Thank you. 3 Q. You'll see from the top that this from Susan Crichton to 4 Alice and Paula Vennells and it's dated 6 June 2012. Is 5 this a document you would have seen at the time or is it 6 an internal Post Office document? 7 A. I'm pretty sure this is an internal Post Office document 8 and we wouldn't have seen it but it does reflect the 9 proposal prepared by Ron Warmington. 10 Q. It states in the first paragraph that: 11 "Post Office has decided to conduct an independent 12 review of a number of closed and possibly some open 13 fraud and theft cases." 14 If we scroll down, please, under "Objectives & 15 Scope": 16 "The Post Office has instructed an independent third 17 party organisation, Second Sight Limited to provide 18 a proposal to conduct a review which would include the 19 following tasks: 20 "[1] Select a representative sample of cases that 21 have led to prosecutions/court-appointed [resolutions]. 22 The sample needs to cover cases [and they're listed]. 23 "[2] Carefully review all company-held documentation 24 [et cetera]. 25 "[3] Interview company investigators ... 5 1 "[4] Review defence submissions focusing on evidence 2 of innocence ..." 3 If we keep scrolling down, please, the penultimate 4 bullet point provides that Second Sight would be 5 instructed to: 6 "Study and selectively test the 'Horizon' system in 7 order to find any 'Black Hole', Program Bug; etc that 8 might have caused mysterious shortages." 9 So was it correct that, at this point in time, and 10 we're here at 6 June, envisaged that the investigation 11 carried out by Second Sight would involve to study and 12 selectively test the system itself? 13 A. My understanding was that we'd look at inputs and 14 outputs. We'd look at how the Horizon system actually 15 worked in practice, we would not be doing a technical 16 code review of the software. 17 Q. I see. So you wouldn't have read this, if you'd seen it 18 at the time, as referring or inferring to a code 19 examination? 20 A. Correct. 21 Q. Can we move on, please, to JARB0000022. This is a month 22 later, on 4 July, and it's a meeting between you, 23 Mr Warmington and some MPs. I suspect you remember 24 attending that meeting? 25 A. Yes, I do. 6 1 Q. You were essentially being interviewed for the position 2 of investigators of Horizon, correct -- 3 A. Yes. 4 Q. -- ie the MPs wanted to see whether you were suitably 5 skilled and independently minded? 6 A. Correct. 7 Q. If we scroll down, please, and just go over the page 8 please, if you look five paragraphs from the bottom -- 9 have you got that? It'll be marked for us. "IH", 10 that's a reference to you, I think? 11 A. Yes. 12 Q. "[Ian Henderson] said that a systems-based approach 13 (code review etc) would take over 6 months and cost over 14 £500,000. This [is] further complicated by the fact 15 that Horizon is now in a new iteration, and is [the] old 16 code available?" 17 Is that an accurate record of what you said or the 18 kind of things that you said? 19 A. Yes, I think so. I mean, we were not qualified to do 20 a code-level review but we wanted the MPs to be aware 21 that that was always an option. However, we felt that 22 the costs were probably disproportionate and wouldn't 23 necessarily represent value for money. 24 Q. You say you weren't qualified to do a code review 25 because you were, essentially, forensic accountants, 7 1 rather than -- 2 A. Software engineers. 3 Q. -- software engineers, correct? 4 A. Yes. 5 Q. There was the additional point about whether the code 6 from Legacy Horizon was, in fact, available for review; 7 is that right? 8 A. Yes, I mean, Horizon was constantly changing and, as we 9 got into this, we realised that, in fact, throughout the 10 country, there were various versions of Horizon in 11 operation, which would make any code review virtually 12 impossible. 13 Q. Can we turn, then, to POL00180832, please, and scroll 14 down. Sorry, if we just scroll up, please, to the top 15 of the page, you'll see this is an email of 4 July, so 16 I think the same day as that meeting that we've just 17 looked at, from Mr Warmington to Susan Crichton, Simon 18 Baker and copied to you. It's about "Today's Meeting"; 19 do you see that? 20 A. Yes. 21 Q. If we go to page 2, please, and about eight lines down, 22 you'll see the words "We carried", that will be marked 23 for you. Mr Warmington said: 24 "We carried out a reality check here, saying that 25 we'd NOT been asked to dig deep into Horizon looking for 8 1 deeply-embedded bugs at the code level ... indeed, we'd 2 not recommend that course of action (certainly not at 3 this stage)." 4 Again, does that accurately reflect what went on in 5 the meeting between you and the MPs? 6 A. Yes, it does. 7 Q. It continues: 8 "Rather, we trust our instincts and experience that 9 a deep review of a sample of cases, focusing not on 10 whether there had been False Accounting but on 11 IDENTIFYING THE UNDERLYING ROOT CAUSE OF THE 12 DISCREPANCY, would without doubt help us to formulate 13 a recommendation as to whether some such deep digging 14 would, later, be worthwhile." 15 Again, does that accurately reflect, firstly, what 16 you told the MPs? 17 A. Yes. I mean, with one qualification: I mean, false 18 accounting was a potentially relevant issue, so we 19 wouldn't have ignored that, but we were concerned at 20 identifying the best evidence without doing a code 21 review, and that was going to be looking at a sample of 22 cases. 23 Q. So drawing these threads together, it's right that you 24 didn't recommend, and in fact recommended against, 25 a systems-based or code-based review at this time; is 9 1 that right? 2 A. Yes, it is. 3 Q. Did there come a time later in your work that you ever 4 recommended or Second Sight ever recommended 5 a systems-based or code-based review -- 6 A. We were always open to that possibility. I don't think 7 we ever made a formal recommendation that it should 8 happen. I mean, after the termination of our 9 appointment, I'm aware that some sort of code review was 10 considered but it was possibly a bit inconclusive. 11 Q. Considered by who? 12 A. By Post Office. 13 Q. Do you know why that wasn't taken forwards? 14 A. No, I don't. 15 Q. Thank you. That can come down. Can we go back to your 16 witness statement, please, and if we do pull this up on 17 the screen it's paragraph 23, which is on page 8. You 18 say in paragraph 23, if we scroll down, please: 19 "Our appointment was not straightforward. Alan 20 Bates [as he then was] and the Justice for 21 Subpostmasters Alliance (JFSA) were concerned that we 22 would not be truly independent and would say whatever 23 Post Office wanted us to say. Post Office needed to be 24 assured that we had the necessary skills for the task. 25 MPs did not want to support something that wasn't going 10 1 to work." 2 In describing your appointment as not being 3 straightforward, are you there referring to the things 4 that follow in that paragraph; are they the reasons why 5 it wasn't straightforward? 6 A. I think the main reason -- and in my experience, it was 7 unique -- we work being appointed to do a task by one 8 group of people but it was actually Post Office who was 9 going to be paying the bill but didn't have any direct 10 control over the scope of work that we were doing or the 11 length of time it was going to take. That, as I say, 12 was an unusual situation. 13 Q. I'm going to come to that in a second. 14 A. Okay. 15 Q. What impression did you gain, if any, from the Post 16 Office, as to why the Post Office appointed Second Sight 17 over other forensic accountants? 18 A. I don't know. I mean, I suspect it was because we were 19 relatively cheap, compared with the big professional 20 firms, but, of course, they had to be satisfied that we 21 would do a competent job, which I believe we 22 demonstrated, both at the time and subsequently. 23 Q. From the outset, were you and Second Sight alive to the 24 possibility that the Post Office may have had 25 an ulterior motive for commissioning this investigation 11 1 or this review? 2 A. Well, it was clear throughout that Post Office didn't 3 want to commission a review and it was only through the 4 efforts of people like the MPs, James Arbuthnot in 5 particular, that they were forced to agree to it. I do 6 recall hearing -- I don't know whether this is true -- 7 that Post Office was told, if they didn't agree to it, 8 it was going to be raised in the House and a review 9 would be forced upon them, so it would be better to at 10 least agree to it in the way that they subsequently did, 11 even though somewhat reluctantly. 12 Q. That can come down. Thank you. 13 You tell us in your witness statement -- this is 14 picking up a point that you made a moment ago -- that 15 you came deeply to regret that, although Second Sight's 16 clients comprised the MPs and the JFSA, as well as the 17 Post Office, the contract was between Second Sight and 18 the Post Office. 19 A. Um -- 20 Q. What was the problem there? 21 A. I'm not sure the contract was between Second Sight and 22 the Post Office. I mean, I always regarded that our 23 terms of reference were set by the MPs. However, we 24 were being -- our professional fees were being paid by 25 the Post Office and we had to sign confidentiality 12 1 agreements and non-disclosure agreements with the Post 2 Office. So that element was a contract but I regarded 3 throughout, and still do, that our ultimate duty lay on 4 behalf of the MPs and what they were asking us to do. 5 Q. Did you, in fact, sign a contract with the Post Office? 6 A. We signed various bits of paper that probably did 7 represent a contract but they were principally dealing 8 with non-disclosure and confidentiality issues. 9 Q. Was there a contract between Second Sight and the Post 10 Office that set the terms of reference for the 11 investigation? 12 A. Yes, I believe there was and, of course, it changed over 13 time. I think Post Office somewhere referred to Job 1 14 and Job 2, and so on, and certainly, once we got into 15 the Mediation Scheme, that was a separate set of work. 16 Q. So it was the fact that you were appointed by MPs at the 17 request of subpostmasters but your professional fees 18 were paid by the Post Office -- was that the concern? 19 A. It wasn't so much a concern. I recognised that was 20 a very unusual situation and had to be handled quite 21 sensitively. 22 Q. Did it, in fact, cause problems subsequently? 23 A. Certainly, the issues of non-disclosure, 24 confidentiality, and so on, were raised by Post Office 25 subsequently. They were very concerned about us 13 1 disclosing, you know, confidential information without 2 their authority and they still are. 3 Q. To this day? 4 A. To this day, as far as I'm aware. 5 Q. You tell us in your witness statement that, over the 6 course of three years, Second Sight investigated about 7 140 individual cases? 8 A. Yes. 9 Q. Did those cases include cases in Scotland and Northern 10 Ireland as well as those in England and Wales? 11 A. No, they were principally England and Wales. 12 Q. Was that deliberate or were your doors open to the 13 referral of any cases? 14 A. I think it reflected the geographical sort of structure 15 within Post Office and also reflected the way that cases 16 were referred to MPs. There was a small group of MPs 17 who exclusively, I think, were representing English 18 constituencies, it just so happened that we didn't get 19 any cases from either Northern Ireland or Scotland at 20 that stage. 21 Q. Thank you. Can we turn to the remit of the 22 investigation and you refer to this in your witness 23 statement. It's page 17, paragraph 55, if that can be 24 brought up, please. The remit of the Inquiry, you say, 25 was described as: 14 1 "... to consider and to advise on whether there were 2 any systemic issues and/or concerns with the 'Horizon' 3 system, including training and support processes, giving 4 evidence and reasons for the conclusions reached." 5 Just stopping there, "to consider and to advise on 6 whether there were any systemic issues and/or concerns 7 with the 'Horizon' system". It's right, therefore, that 8 the issue of a consideration of whether there were 9 systemic issues was part of your terms of reference from 10 the very start; is that right? 11 A. Yes. 12 Q. Looking back now, would you consider that that remit was 13 too broad? 14 A. I don't know whether it was too broad in itself, it was 15 certainly widely misunderstood and I regret the fact 16 that the word "systemic" had ever been used in this 17 context. "Systemic", of course, means system-wide and 18 the main focus of our review was going to be on 19 individual cases not a code review, not an in-depth 20 review of the entire system. So there was some 21 difficulty with the word or term "systemic", which, 22 I think, was first used by Susan Crichton, General 23 Counsel for Post Office, rather than us. 24 Q. You said that the term "systemic" was widely 25 misunderstood; misunderstood, in your view, by who? 15 1 A. Well, again, no criticism of Sir Alan Bates but I was 2 using the Oxford English Dictionary of systemic, in 3 other words of the whole system, system wide. Alan, 4 I think, saw "systemic" as caused by the system, which 5 is a much narrower definition and it certainly had the 6 potential to cause confusion. 7 Q. At this point, at the beginning of the investigation, 8 rather than at the end, was there any attempt made to 9 define what "systemic" meant? 10 A. Not that I can recall. 11 Q. What was the Post Office's attitude to the use of the 12 word "systemic" in your dealings with it? 13 A. I don't recall having any detailed sort of discussion, 14 so it's not something that I really considered in any 15 detail. I just felt it was an unfortunate sort of term 16 that -- not one that we had adopted. 17 Q. You do use it in your Interim Report of 8 July 2013 -- 18 A. Yes. 19 Q. -- albeit in brackets, after the word, you say 20 "system-wide". 21 A. Yes. 22 Q. Was the effect of the use of word "systemic" or the 23 phrase "systemic issues", both here and subsequently, to 24 allow the focus to be on the fact that there were no 25 system-wide issues with Horizon, thus diverting 16 1 attention or focus away from bugs, errors and defects 2 which did exist? 3 A. I think that was how it was used by Post Office. I do 4 recall various press releases, and so on, that trumpeted 5 the fact that Post Office claimed that we had said that 6 we had found no systemic or system-wide issues with the 7 Horizon system, which was, of course, not what we said 8 at all. 9 Q. You tell us in your witness statement -- I'm moving 10 forwards now, if we go to page 26 and paragraph 78, 11 we're going to come back to the detail in a moment but 12 I'm just looking at the use of language at the moment -- 13 you say that your overall conclusion at this stage, July 14 '13 -- that's the month of publication of the Interim 15 Report -- was that: 16 "... Post Office Horizon was not the robust, 17 error-free system claimed by [Post Office]. I was also 18 concerned about the potential loss of integrity caused 19 by working practices within Fujitsu, such as remote 20 access without the knowledge or consent of individual 21 subpostmasters. I was beginning to form the view that 22 no prosecution relying on Horizon evidence could be 23 safe." 24 Do you make it clear, or did Second Sight make it 25 clear, at the time of publication of the Interim Report, 17 1 that you or Second Sight were forming the view that no 2 prosecution relying on Horizon evidence could be safe? 3 A. Bear in mind it was an Interim Report and that any 4 conclusions were preliminary and needed to be -- you 5 know, further work needed to be performed. That was 6 certainly the view that I had formed at that stage. 7 Whether we expressed that as clearly as perhaps we 8 should have done I think is arguable. 9 Q. You've spoken about the messaging of the Post Office and 10 its reuse of the phrase "no systemic issues". Were you 11 frustrated, at the point of publication, with that 12 messaging? 13 A. I felt it was probably somewhat misleading. It was not 14 a phrase that we would have chosen, even though we did 15 adopt it and use it in our report. It was widely 16 misunderstood and was not clear communication. 17 Q. Thank you. That can come down. 18 Can I go back to the beginning, then, to the start 19 of your work in mid-2012 with the Post Office. I think 20 it's right that you worked physically close to the Post 21 Office Legal team during your investigation? 22 A. Yes. I spent most of my time actually based in the 23 Legal Department, which was an open-plan office, sitting 24 next to Jarnail Singh and immediately outside Susan 25 Crichton's office, who was the Post Office Head of 18 1 Legal. 2 Q. So you were physically in the office. Which office was 3 this? 4 A. This was in the Old Street office, their previous 5 headquarters. 6 Q. Was this is an open-plan office? 7 A. The main office area was open plan. Some of the senior 8 executives did have their own offices but I was sitting 9 in the open plan area and, therefore, could see what was 10 going on, had access to case files, and so on. 11 Q. I think you just said that you sat near to or closest to 12 Jarnail Singh; is that right? 13 A. Yes, it is. 14 Q. How were files stored in the Legal Department, so far as 15 you could see? 16 A. Somewhat shambolically and haphazardly. I think 17 I described it as a rather old-fashioned office, where 18 the focus was on paper files rather than electronic. 19 Whilst they -- you know, they obviously used IT 20 technology, they tended to print everything out and put 21 a paper copy on a file and it was the paper files that 22 were the master copies. When I first started work in 23 the Legal Department, I seem to remember there was only 24 a very small number of files available and this 25 reflected the somewhat decentralised sort of nature of 19 1 the way that they operated. 2 Bear in mind also that they had only recently 3 divested from Royal Mail Group and it was a subset of 4 much larger Legal Department of Royal Mail Group that 5 travelled with the Post Office part of the organisation. 6 So the department was relatively small. They had 7 a policy of outsourcing many of the prosecutions to 8 regional firms of solicitors who maintained their own 9 files so that, when I started work, there was only about 10 10 or 12 legal case files available to me. 11 Q. You say in your witness statement -- no need to turn it 12 up, it's paragraph 36 -- you were surprised at the small 13 size of the Legal Department within Post Office? 14 A. Yes. Now -- 15 Q. Why were you surprised? 16 A. Well, bear in mind the size of the Post Office, you 17 know, at that time probably 11,500 branches; we now know 18 over 700 prosecutions. The visibility of the Legal 19 Department, that I could see anyway -- and it might have 20 been, you know, the tip of the iceberg, I just don't 21 know -- but I only met probably a maximum of about ten 22 lawyers and that seemed to me to be relatively small, 23 bearing in mind the size and the importance of the 24 organisation. 25 Q. You also say in that paragraph that you noticed the 20 1 difficulties that the Legal Department had in getting 2 case files under control. What did you mean by that, 3 please? 4 A. Again, I'm probably referring to the decentralised way 5 of operating. The fact that, you know, if there was 6 a prosecution in the north of England that would be 7 handled sort of locally and the file would probably be 8 held locally, and it was only when I asked for all of 9 the relevant prosecution files to be moved to a central 10 location that it actually happened. 11 Q. You tell us in your witness statement, at paragraphs 32 12 and 36, that you noted at the time that Susan Crichton 13 relied on Jarnail Singh for criminal law matters; is 14 that right? 15 A. Yes, it is. 16 Q. Did you witness that? 17 A. Yes. I mean, I had conversations with Susan. I had met 18 Susan Crichton in her previous role when she was working 19 for -- I think it was General Electric and I knew her as 20 a civil or commercial lawyer not a criminal practitioner 21 and, therefore, she'd have to rely very heavily on 22 a specialist criminal practitioner for advice on 23 prosecutions and that was Jarnail Singh. 24 Q. He was your main day-to-day contact within the Post 25 Office Legal Department; is that right? 21 1 A. As far as prosecution matters were concerned, yes. 2 Q. As your main day-to-day contact, did you form a view of 3 Mr Singh? 4 A. Yes, I did. 5 Q. What was that? 6 A. He didn't strike me as a lawyer. He struck me more as 7 an administrator that was dealing with farming out of 8 potential cases, dealing with administrative matters, 9 chasing progress by third-party solicitors around the 10 country. His level of knowledge of prosecutions 11 actually seemed, in my mind, to be quite limited. I was 12 having to do, you know, my homework and look at the Code 13 of Conduct for Crown Prosecutors, for example. I was 14 putting technical legal questions to him and he often 15 didn't -- wasn't able to answer me, which found 16 surprising. 17 Q. How long did you spend embedded in the Legal Department? 18 A. I can't recall precisely but it was a number of weeks. 19 Q. Can we turn up, please, page 25 of your witness 20 statement. Page 25, at the foot of the page, please, 21 paragraph 77. Again, we're moving forwards here but 22 I want to pick up something that you say. You say: 23 "The 'Receipts and Payments Mismatch Problem' and 24 'Local Suspense Account Problem' were disclosed to us by 25 [the Post Office] in June 2013, just a few days before 22 1 we published our report." 2 Then this: 3 "I subsequently noticed that a copy of the 'Receipts 4 and Payments Mismatch Problem' was included [in] the 5 hard copy file relating to the Seema Misra prosecution. 6 In 2024, as a result of seeing the evidence of Simon 7 Clarke to the Inquiry, I realised that this document was 8 not disclosed at her trial and had been subject to 9 a [PII] certificate exemption." 10 Breaking those things down first, if we go to the 11 foot of the page, page 25, first, last sentence, you 12 say: 13 "I subsequently noticed that a copy of [and then you 14 describe something] was in the hard copy file ..." 15 "Subsequently", does that mean after June 2013? 16 A. I can't remember precisely when I first became aware of 17 that. It was certainly disclosed to us by someone 18 called Simon Baker who worked for Post Office. But it 19 was when I was listening to the evidence of Simon Clarke 20 to this Inquiry that I realised that it had not been 21 disclosed to Seema Misra. 22 Q. So is it the case that you can't remember now when you 23 saw that it was included in the hard copy file? 24 A. I can't remember precisely, no. 25 Q. Okay. In what circumstances did you come to see it on 23 1 the hard copy file? 2 A. I think it was when I was in the Legal Department at 3 Post Office and we were looking at -- I mean, the two 4 files I recall in particular were Jo Hamilton and Seema 5 Misra. Out of the relatively small number of files that 6 were made available to us, those were certainly the most 7 important. 8 Q. Just stopping there, Mr Henderson, so you saw the file 9 in Old Street -- 10 A. Yes. 11 Q. -- in the Legal Department -- 12 A. Yes. 13 Q. -- and a document that you describe there was on the 14 file? Were the files bound in any way? 15 A. They were the old-fashioned spring binders where you 16 could file individual sort of documents. Do you 17 remember those spring things that used to go through 18 punched holes? 19 Q. I'm too young -- 20 A. (The witness laughed) 21 Q. -- for that. Do you mean a paper file? 22 A. It was a hard copy paper file, yes. Not a ring binder. 23 Q. There were two sprigs that came out of it, maybe 24 plastic -- 25 A. Yes. 24 1 Q. -- or metal, and you would add documents to it -- 2 A. Yes. 3 Q. -- and then put a clip over the top of it -- 4 A. Well done, yes. 5 Q. -- is that right? 6 A. Yes. 7 Q. Okay. Was this bound, the document you're talking 8 about, or can't you remember? 9 A. No, it was a working file and, again, the working style 10 of Post Office was to produce individual documents, 11 letters, memorandum, and file them on these hard copy 12 files. 13 Q. I see. Was there a filing cabinet within the Legal 14 Department for these files to be kept? 15 A. I assume so. I mean, they were produced to me -- in 16 terms of files, I had a desk about this size and I do 17 recall that I had, you know, about ten hard copy files 18 piled up on that desk and I was working through those. 19 Q. In terms of the document that you say that you saw, you 20 say that "a copy of the 'Receipts and Payments Mismatch 21 Problem' was included". Are you referring there to the 22 not of the meeting about the receipts and payments 23 mismatch problem? 24 A. The document I recall was one, I think, that I discussed 25 with Gareth Jenkins and it was a filenote prepared by 25 1 him, I think it was dated 2010, so it was, you know, 2 well before I had access to the files. 3 Q. Okay, so it was a Gareth Jenkins authored document? 4 A. That's my recollection. 5 Q. Okay, we've got that. We can look at that. It's 6 September, 29 September 2010. That's the document 7 you're referring to; is that right? 8 A. Yes. 9 Q. You say, in the last sentence there, that that had been 10 the subject of a Public Interest Immunity certificate 11 exemption. From whom did you learn that? 12 A. The Inquiry and the evidence of Simon Clarke. 13 Q. In the Inquiry, we haven't called any evidence about 14 a PII application in the Misra case about that document. 15 A. Right, well, I may have misunderstood Simon's evidence 16 but I thought he said it had not been disclosed to Seema 17 Misra because of a PII immunity. 18 Q. Okay but that sentence is based on what you've 19 subsequently heard -- 20 A. Yes. 21 Q. -- in the Inquiry, is it, rather than something at the 22 time? 23 A. Correct. 24 Q. Thank you very much. That can come down. 25 SIR WYN WILLIAMS: Before we leave it there, Mr Beer, can 26 1 I just it get the sequencing right with you, 2 Mr Henderson. I'm just reading your paragraph 77, so 3 the bottom of page 25. You say: 4 "The 'Receipts and Payments Mismatch Problem' and 5 'Local Suspense ... Problem' were disclosed to us by POL 6 in June 2013, just a few days before we published our 7 Interim Report." 8 But then you say: 9 "I subsequently noticed that a copy of the 'Receipts 10 [et cetera]' was included in the hard copy file relating 11 to the Seema Misra prosecution." 12 So my reading of that was that you were told about 13 the mismatch problem shortly before your report was 14 disclosed and that, some time later, though you didn't 15 specify precisely when, you actually saw a copy of the 16 document. My impression from your evidence this morning 17 is that you say you saw the document when you were 18 embedded in Old Street, which, of course, as 19 I understand it, would have been before June 2013. Now, 20 am I making a mountain out of a molehill, or what, 21 Mr Henderson? 22 A. Sir, you're not and I think the missing link here is 23 that, as part of my research prior to giving evidence 24 today, I revisited the file listing that I think I have 25 referred to in my witness statement, that was a list of 27 1 some 34,000 documents that I had held at one point and 2 had returned to Post Office. When I checked that file 3 listing, which was provided both to the Inquiry and to 4 the Metropolitan Police, I could see that there was 5 reference to this receipts and payments mismatch 6 document. 7 So it was definitely included in the documents that 8 we did hold, at some point previously, but then returned 9 to the Post Office, in 2015. 10 SIR WYN WILLIAMS: Yes, sure. I'm not for a minute doubting 11 that you saw these documents; I simply wanted to get the 12 sequence correct, if you see what I mean. So was it you 13 saw the document and then some time later, in June 2013, 14 just before the publication of your Interim Report, POL 15 formally disclosed it to you, or is it that they 16 formally disclosed it to you and then you actually saw 17 it in the file? I'm not asking you for dates or 18 anything, just the sequence. 19 A. I can't be precise about the sequence. I do recall 20 seeing it before we finalised our Interim Report. 21 SIR WYN WILLIAMS: All right, fine. Thank you. 22 MR BEER: Thank you. That can come down. 23 You mention that you focused on two specific files, 24 the other one being Jo Hamilton; is that right? 25 A. Yes. 28 1 Q. Was that a focus of yours in the course of the initial 2 investigation? 3 A. Yes. It was. I mean, purely by happenchance, I mean 4 the first file that I came across when I was in the Post 5 Office Legal Department was Jo Hamilton's file, so that 6 was the first file that I looked at in any detail. 7 Q. I want to -- again, I'm taking things out of order -- 8 turn to an issue involving Josephine Hamilton's case 9 that arose in the Mediation Scheme. So this is much 10 later. This is post-8 July 2013. Indeed, it's into -- 11 A. 2014. 12 Q. -- 2014 -- 13 A. Yes. 14 Q. -- and, indeed, '15 and just use it as an example or 15 an exploration of the kind of issues that you faced. 16 A. Okay. 17 Q. In the Mediation Scheme, did parts of the process 18 include the Post Office sending a report to Second Sight 19 called the Post Office Investigation Report? 20 A. The POIR, yes. 21 Q. Then Second Sight would create a Case Review Report, 22 a CRR; is that right? 23 A. Yes, it is. 24 Q. Then that would go to the applicant, the subpostmaster, 25 to the Post Office and to the Working Group; is that 29 1 right? 2 A. Yes. 3 Q. Can we look, please, at the Post Office Investigation 4 Report in Ms Hamilton's case. POL00034551. We will see 5 that it's headed at the top "Initial Complaint Review 6 and Mediation Scheme, Post Office Investigation Report". 7 The applicant's name on the left-hand side "Josephine 8 Hamilton" and then the case number M035. Was each 9 applicant given a unique reference number like that? 10 A. Yes, they were. 11 Q. Then you'll see that there's an executive summary and 12 then a narrative account, if we scroll down, of the Post 13 Office's views and the investigations that it had 14 conducted. Keep scrolling, please, across page 2 and on 15 to page 3. Thank you, stop. That all culminates in 16 a "Conclusion" by the Post Office. In this case, it 17 reads: 18 "In conclusion the evidence examined provides no 19 support for the Applicant's claim that the Horizon 20 System caused a shortfall in the branch. Given that no 21 systemic error has been identified in Horizon, the more 22 likely reason for the shortfall is user error or fraud 23 which could be due to the lack of poor controls in 24 place, eg sharing of usernames and passwords." 25 Was that the usual format: a narrative account of 30 1 the applicant's complaints; the Post Office's 2 investigations into them; and then the Post Office's 3 conclusion about them? 4 A. This is fairly typical of many of the reports produced 5 by Post Office. I mean, they often said errors made at 6 the counter was, you know, the explanation for any 7 discrepancy. I think I felt that they -- this 8 demonstrated a lack of in-depth investigation and didn't 9 match the findings on the file that I subsequently 10 reviewed. 11 Q. If we turn to page 8, please, and if we scroll down, so 12 we can see all of that -- thank you -- is there a list 13 of documents that were provided to Second Sight? 14 A. Yes. 15 Q. Was, again, this the common approach, that there would 16 be a list of documents that the Post Office would 17 provide along with this report, the POIR, to Second 18 Sight? 19 A. Yes, and if you look at the left-hand column, it's all 20 pre-fixed by M035, which was the case number, and then 21 the description of the document. So it was following 22 a consistent pattern across many of the cases that we 23 were looking at. 24 Q. You'll see that they're sequentially numbered M035 25 underscore something and then ending in 01, 02, 03, 31 1 et cetera, yes? 2 A. Yes. 3 Q. If we scroll down, please, we'll see that fifth from the 4 bottom is M035_POL_Security Report_PT_012, and that's 5 described as a "Copy of the Security team report", yes? 6 A. That's correct. 7 Q. So this was a document provided with this POIR? 8 A. This particular POIR, yes. 9 Q. Yes. Can we look that document, please, the Security 10 Team Report provided with this POIR. It's POL00430943. 11 If we can just look at the top left-hand side of the 12 document, can we see that it's marked in that way? 13 A. Yes. 14 Q. Is this what happened: that printed onto, or marked 15 onto, each of the documents that accompanied a POIR was 16 a copy of the document, but then it was branded with 17 the -- I'm going to call it an exhibit number? 18 A. Yes. Exactly how that all happened, I'm not clear. 19 But, certainly, the "M035" was the Second Sight 20 reference to Jo Hamilton's case. 21 Q. So we can see from that marking that this is the 22 document that was being referred to, five lines from the 23 bottom on page 8 of the report, and so this is the 24 document that would have been sent by Post Office to 25 Second Sight, correct? 32 1 A. With one qualification. I do recall -- I mean, this 2 became known as the "Brander report". The author was 3 a Post Office Investigator called Brander. I do recall 4 there were various versions of this report, which we 5 never got to the bottom of as to why there were 6 different versions -- 7 Q. I'm going to try to explore that with you in the next 8 ten minutes or so. 9 A. Okay. 10 Q. If we just scroll down, we're quite familiar with these. 11 This is the original Security Department report prepared 12 in Ms Hamilton's case. If we go to page 9 and scroll 13 down, we'll see that it's dated 17 May 2006, by Graham 14 Brander, the Investigation Manager, yes? 15 A. Yes. 16 Q. If we look at the top, the page, we can see again, it's 17 marked with that -- I'm going to call it an exhibit 18 number, yes -- 19 A. Yes. 20 Q. -- and every page is marked in that way? So this is the 21 original Security Department, Security Team report, with 22 the purposes of the proposed prosecution of Ms Hamilton. 23 Can we look, please, at page 4, and the second 24 paragraph from the bottom. This is in a part of the 25 report that the Investigator, Mr Brander, is setting out 33 1 the investigations that he conducted and the results of 2 them. Can you see the second paragraph from the bottom, 3 the second part of it: 4 "Having analysed the Horizon printouts and 5 accounting documentation I was unable to find any 6 evidence of theft or that the cash figures had been 7 deliberately inflated." 8 Now, you tell us had this was, in your statement, 9 this was an important statement from the Investigator, 10 agreed? 11 A. Correct. 12 Q. Was it important to you because you knew that 13 Ms Hamilton was, in fact, charged with theft? 14 A. Yes. I found it quite an astonishing statement in the 15 context of what she was charged with. 16 Q. This was something that I think you spotted at the time? 17 A. Yes. 18 Q. Now, if we look at the top and the bottom of each page, 19 and go back to page 1, and look at the front page and 20 look at the foot of the front page, thank you, we can 21 see that document, the report, is not marked as "Legally 22 Privileged" or "Subject to legal professional privilege" 23 or otherwise referred as to being a privileged document, 24 correct? 25 A. That's correct. 34 1 Q. We know that you subsequently referred to the contents 2 of this report in your Case Review Report for 3 Ms Hamilton? 4 A. Yes. 5 Q. Did you know that the purpose of these reports was to 6 seek legal advice from the Criminal Law Team? 7 A. It's a difficult question to answer. I mean, these were 8 reports prepared by an experienced Post Office 9 Investigator. In many cases, no further action was 10 taken; in other cases, prosecutions were considered. 11 So, in this particular case, I was not aware that this 12 report was addressed -- was prepared on the instructions 13 of a lawyer or intended to be passed on to a lawyer. 14 Q. Did you feel inhibited in any way, in the circumstances 15 it was given to you and in the light of any markings on 16 it, in referring to the contents of it in your Case 17 Review Report? 18 A. No, I didn't. 19 Q. Can we see what you did with this important information, 20 then, please. POL00063517. Is this a copy of your Case 21 Review Report in the case of M035, Josephine Hamilton? 22 A. Yes, it is. 23 Q. We can see it's dated 24 March 2015. If we just scroll 24 through the first couple of pages, we can see there's 25 an introduction setting out the terms of reference. 35 1 Scroll on, please. The documents you have been provided 2 with -- just stop there. 3 At the top of the page, one of the documents that 4 you had been provided with was the Post Office 5 Investigation Report. That's what we've just looked at, 6 correct? 7 A. Yes. 8 Q. If we can scroll forwards to page 6, please, and read 9 paragraph 4.10. 10 "The documents submitted by the Post Office include 11 a Post Office Investigator's report, dated 17 May 2006 12 ..." 13 That's the Brander report we've just read, you've 14 got the correct date. 15 A. Yes. 16 Q. "... (see Post Office Document 012) ..." 17 That's the right number because that's the suffix of 18 the document we've just looked at: 19 "... that includes the following statements: 20 "'Having analysed the Horizon printouts and 21 accounting documentation I was unable to find any 22 evidence of theft or that cash figures had been 23 deliberately inflated'." 24 If we skip over two paragraphs, thank you, you say: 25 "In our opinion, the fact that the Post Office's own 36 1 Investigator had found no evidence of theft as well as 2 the endemic User ID and password sharing in the branch 3 ... would have been relevant to the applicant's defence. 4 No more detailed investigation was carried out by Post 5 Office until it was preparing its [Post Office 6 Investigation Report]." 7 Then in 4.11: 8 "As described ... below, we have not been provided 9 with the complete legal files, which would enable us to 10 investigate this matter in more detail. However, on the 11 basis of the limited documents made available to us, we 12 consider it to be possible (though it is clear to us 13 that Post Office does not) that. 14 "a) the Prosecution realised that there may have 15 been insufficient evidence to support a charge of Theft, 16 but proceeded with it nonetheless; 17 "b) the offer by the prosecution to remove the 18 charge of Theft may have been used to put pressure on 19 the applicant to plead guilty to the False Accounting 20 charges, even though the prosecution may have realised 21 that a charge of Theft was likely to fail unless further 22 evidence was ... discovered to support that charge; 23 "c) the threat of proceeding with the charge of 24 Theft may have been used to put pressure on the 25 applicant to agree to repay the losses and to avoid the 37 1 custodial sentence normally associated with a conviction 2 for Theft; 3 "d) the purpose of proceeding with a charge of Theft 4 may have been intended primarily to assist in the 5 recovery of losses, rather than in the interests of 6 Justice; and 7 "e) part of the agreement to remove the Theft charge 8 included a demand that no mention would be made in court 9 of alleged problems with the Horizon computer system." 10 Now, there's a wide range of conclusions reached 11 there but are they founded, in part, on the inclusion in 12 the Brander report of a recognition by him that there 13 was no evidence to support a charge of theft? 14 A. Yes, they are. 15 Q. Was that very significant information for you, 16 therefore? 17 A. Yes, it struck me that it was exculpatory evidence that 18 had not been disclosed to Mrs Hamilton or her Legal 19 Team. 20 Q. You were pointing it out to the Post Office in clear 21 terms in this, your Case Review Report? 22 A. Yes. 23 Q. Can we see what happened next, please. POL00025188. So 24 this is a letter of 2 June 2015, so it's about two 25 months after you prepared your report in Ms Hamilton's 38 1 case. 2 A. Correct. 3 Q. Let's read it in full. We should look at the second 4 page first. We'll see that it's signed by Rodric 5 Williams, although we know from other evidence that this 6 was drafted for Rodric Williams by Andrew Parsons. If 7 we go up, please: 8 "We refer to the above applicant [that's 9 Ms Hamilton] and, in particular, to your Case Review 10 Report dated 24 March [that's what we've just looked 11 at]. 12 "At paragraph 4.10 of the [Case Review Report], you 13 quote from a 'Post Office Investigators Report dated 14 17 May' (the 'Security Report'). At paragraph 4.11 of 15 the [Case Review Report], you speculate about the impact 16 the Security Report may have had on the criminal 17 prosecution brought against the Applicant. 18 "The Security Report was not appended to the final 19 version of the [Post Office Investigation Report] 20 because it is protected from disclosure by legal 21 professional privilege. That privilege belongs to the 22 Post Office and does not extent to anyone beyond Post 23 Office and its professional advisers. Post Office 24 continues to assert privilege over the Security Report. 25 "As a consequence of your disclosure, on 6 May 2015 39 1 we received a request from the applicant for a copy of 2 the Security Report which noted that the document quoted 3 in the final CRR at paragraph 4.10 was not present in 4 the pack of documents appended to the POIR." 5 Just stopping there, unpacking what that sentence 6 means, your Case Review Report gets disclosed to the 7 applicant, correct? 8 A. Yes. 9 Q. Your Case Review Report included extracts from the 10 original Brander report? 11 A. Correct. 12 Q. And it seems that, on 6 may, the Post Office received 13 a request for disclosure of that Security Report from 14 Ms Hamilton? 15 A. Yes. 16 Q. "We have responded refusing the applicant's request on 17 the basis the document is privileged ..." 18 It seems like they attached a copy of the letter to 19 Josephine Hamilton: 20 "We nevertheless remain concerned about your 21 disclosure of the Security Report. Please therefore 22 explain to us in writing why: 23 "1. You considered its disclosure to be consistent 24 with the undertaking provided on 19 October 2012, a copy 25 of which is appended to this letter, confirming that 40 1 certain documents provided by Post Office are 2 privileged, [and] the benefit of that privilege shall at 3 all times belong to Post Office, and that the documents 4 and their contents 'will be held in complete confidence 5 and will not be closed to any other party or used for 6 any other purpose whatsoever without the prior written 7 consent of the Post Office'; 8 "2. [You need to explain I writing why] you 9 referred to it when it was not appended to the POIR; 10 "3. [You need to explain in writing why] you 11 referred to it in your final report only, and not in the 12 draft CRRs on which Post Office was able to provide 13 comment; 14 "4. You commented on it as you have when you are 15 not in possession of all material information and when 16 matters of criminal law and procedure are outside of 17 your scope of expertise." 18 They look forward to hearing from you in seven days 19 and they reserve their position in the meantime. 20 Can we see what your reply was, please, to this 21 letter. POL00065542. You reply the next day, so the 22 letter was dated 2 June and you replied on 3 June and 23 you say that you're replying on behalf of both you and 24 Mr Warmington. It's to Rod Williams, copied to Patrick 25 Bourke, Jane MacLeod, to Mr Warmington, to Chris 41 1 Holyoak, who was one of your investigators, is that 2 right -- 3 A. Yes. 4 Q. -- and to Mark Underwood? 5 A. He was Post Office, I think. 6 Q. Yes: 7 "Thank you for your letter ... 8 "The main premise of your letter is not correct. 9 The document in question, (the 'Security Report'), 10 was quite properly disclosed to Second Sight and the 11 Working Group via Huddle around March 2014. I attach 12 a copy of the document that was disclosed to us. I am 13 sure that the Huddle audit logs will provide further 14 information about this disclosure"? 15 Huddle was an e-disclosure platform? 16 A. Document sharing system that we were using, that was 17 managed by Post Office. 18 Q. You continue: 19 "The document was not marked as being subject to 20 [LPP] and a careful reading of the document does not 21 find any mention of legal advice, the normal basis upon 22 which [LPP] is claimed. 23 "I would be grateful if you would explain in detail 24 why you now consider this document to be subject to 25 [LPP] and therefore protected from disclosure. I am 42 1 obviously concerned that other misclassified documents 2 may have been improperly withheld from disclosure. 3 "Dealing with the specific questions ... 4 "1. The undertaking ... is not relevant as the 5 'Security Report' was disclosed to the Working Group, 6 including Second Sight, in accordance with the terms of 7 reference of the Working Group; 8 "2. It formed part of number of documents disclosed 9 to the Working Group that were considered within the 10 [Post Office Investigation Report]; 11 "3. Second Sight considered number of 12 representations and other matters after disclosure of 13 the draft CRR. This resulted in the CRR being updated 14 and finalised; 15 "4. We have requested access to the complete legal 16 files held by Post Office relating to this and other 17 cases. However, this access has not been provided, 18 which we regard as regrettable. [This] limitation [of] 19 scope was made clear in the final CRR." 20 You explain, just taking the facts to their final 21 conclusion at the moment, in your witness statement, 22 that the Post Office's solution to this was to create 23 a new investigation report, POIR, which deleted any 24 mention of the original Security Report, correct? 25 A. Yes. 43 1 Q. Let's look at POL00034782, page 7, please. If we can 2 look at that alongside POL00034551, at page 8. If we 3 scroll down on the left-hand side to the bottom, we can 4 see it there, document number 12, a copy of Security 5 Team Report. So this is in their original POIR. Then 6 on the right-hand side, please, if we scroll down, 7 you'll see it's gone. 8 A. Can I just clarify: it is gone, however, the partial 9 document reference has remained much the same. It's 10 still POL_012 but it's now described as a "Security 11 Interview", not the Security Team report. 12 Q. No, in fact what they've done, Mr Henderson, is they've 13 just renumbered them. If you look on the left-hand side 14 at what was 13, 14, 15 and 16 -- 15 A. It's gone up from 13 to 12. 16 Q. -- it's gone up from 13 to 12. 17 A. Yes. 18 Q. So the document, the Security Team report, that 19 contained the passage that said that the Investigator 20 found no evidence of theft or deliberately inflated 21 figures, has been removed? 22 A. Yes. 23 Q. Is this a fair summary of what we've seen, then? 24 Firstly, the Post Office had set up a mediation scheme 25 saying that it wanted to get to the bottom of complaints 44 1 and concerns of subpostmasters? 2 A. Yes. 3 Q. The Post Office said that, in some cases, it wished to 4 get to the bottom of the complaints that they made, that 5 there had been miscarriages of justice? 6 A. Yes. 7 Q. The Post Office had disclosed a document to you that 8 contained important information that went to the 9 propriety of charging Josephine Hamilton with theft? 10 A. Yes. 11 Q. That document wasn't marked as privileged? 12 A. Correct. 13 Q. You referred to it in your report? 14 A. Correct. 15 Q. The Post Office took a legal professional privilege 16 point to seek to prevent the disclosure of information 17 that was harmful to its interests? 18 A. Yes. 19 Q. Josephine Hamilton asked for the original document, the 20 Post Office took the privileged point against her too? 21 A. Correct. 22 Q. You got a written telling off? 23 A. Yes. 24 Q. The Post Office provided a subsequent version of its 25 report, in which the offending Security Team report was 45 1 airbrushed out? 2 A. Correct. 3 Q. You tell us in your witness statement that, when 4 Mr Williams asserted privilege over this document, you 5 found his assertion to be absurd? 6 A. Correct. 7 Q. You found it to be immensely worrying and that, to you, 8 this began to look more like a cover-up than a genuine 9 concern about legal professional privilege? 10 A. Yes. 11 Q. This sequence of events that we've just gone through in 12 Josephine Hamilton's case, looking at these documents, 13 was this one-off conduct by the Post Office? 14 A. I suspect not. 15 Q. Was the type of correspondence that we've seen, looking 16 at these documents and your reply to the correspondence, 17 the type of correspondence you were engaged in with the 18 Post Office on a regular basis? 19 A. Yes. 20 Q. Did that approach of the Post Office occur throughout 21 your initial investigation and the Mediation Scheme that 22 followed it? 23 A. I think, to be fair to Post Office, their attitude 24 changed over time. When we were first appointed, 25 I formed the view that there was a shared commitment to 46 1 seek the truth, irrespective of the consequences, and 2 that very much reflected Susan Crichton's view. 3 However, as things progressed, the attitude of Post 4 Office changed. They became much more adversarial. 5 I felt that they were protecting the brand, they didn't 6 want difficult information to see the light of day and 7 we were having to fight constantly for access to 8 documents that we felt were relevant to our work. 9 Q. You said in your correspondence that you wanted access 10 to legal files but you never got them? 11 A. We were initially provided with access to the legal 12 files. I was based in the Legal Department. The 13 problem was, out of 700-odd prosecutions, they only held 14 about a dozen files. So there was a lot that we weren't 15 able to have access to. Fortunately, one of those files 16 was Jo Hamilton and it was that that enabled us to find 17 these documents. 18 Q. When reading the correspondence, it doesn't look so much 19 as if it was by happenstance that you saw this 20 originally in the Post Office Legal files that you 21 examined from mid-2012 onwards; it was more that the 22 Post Office, in their view, accidentally disclosed 23 a copy of the Brander report, either on Huddle or as 24 an annex to their POIR? 25 A. I think what actually happened was that there was 47 1 a small number of files available to us in the Legal 2 Department. We were dealing with Jarnail Singh, Susan 3 Crichton. As far as I'm aware, external lawyers weren't 4 involved in the time -- at that time. Certainly 5 I didn't meet Andy Parsons until the Mediation Scheme 6 kicked off. And I think that's when Post Office started 7 getting very concerned about disclosing documents to us. 8 Q. Can we turn, just before the break, to your witness 9 statement, please, at page 12, and paragraph 39 at the 10 foot of the page. Having dealt in paragraph 38 with 11 that extract from the Security Report you say in 39: 12 "I could also see that Jo Hamilton had been charged 13 with theft and false accounting which did not seem to be 14 supported by the internal [Post Office] Security 15 report." 16 Over the page: 17 "I raised this apparent inconsistency with Susan 18 Crichton and was told to speak to Jarnail Singh, which 19 I did. Jarnail told me that everything that needed to 20 be disclosed had been disclosed and there was nothing to 21 worry about." 22 First of all, can you help us as to when these 23 conversations with Susan Crichton and then Jarnail Singh 24 happened? 25 A. It was when I was based in the Post Office Legal 48 1 Department in Old Street. The exact date, I can't 2 recall, I'm afraid. 3 Q. So that would be in the early stages of the initial 4 investigation -- 5 A. Yes. 6 Q. -- from sort of June -- 7 A. 2012 -- 8 Q. -- 2012? 9 A. Yeah. 10 Q. So this wasn't approximate to the production of your CRR 11 as part of the Mediation Scheme that we've just looked 12 at? 13 A. No, this was when we first had, or when I first had, 14 access to the files in the Legal Department. 15 Q. So you spotted it then as well? 16 A. Yes. I spotted it as an apparent inconsistency, which 17 concerned me. 18 Q. When Mr Singh said that everything that needed to be 19 disclosed had been disclosed, was he referring to the 20 criminal proceedings then, ie had been disclosed to the 21 defence in the criminal proceedings? 22 A. It was -- that was certainly the context. So I assume 23 that that's what he had in mind. 24 Q. Were you concerned about what he said? 25 A. I was very concerned. It seemed to be a breach of the 49 1 Code of Conduct of Crown Prosecutors, which he had 2 a duty to comply with. 3 Q. Did you have any concerns about Ms Crichton's reliance 4 on Jarnail Singh? 5 A. Yes. In the sense that she was a commercial lawyer, he 6 was a criminal lawyer, she was supervising a department 7 in charge of criminal prosecutions and that was not her 8 area of expertise, and she recognised that and relied 9 heavily on Jarnail Singh. 10 Q. At the time, in mid-2012, was anything done about this? 11 A. Well, I raised it both with Susan and Jarnail. I don't 12 know what happened internally within Post Office. 13 Q. This came back again, in the way that we've just seen, 14 in the Mediation Scheme, through the production of your 15 CRR? 16 A. Yeah. 17 MR BEER: Thank you. 18 Sir, it's 11.00 and therefore time for the morning 19 break. Can we break until 11.10, please? 20 SIR WYN WILLIAMS: Certainly. 21 MR BEER: Thank you very much. 22 (11.01 am) 23 (A short break) 24 (11.11 am) 25 MR BEER: Good morning, sir. Can you continue to see and 50 1 hear us? 2 SIR WYN WILLIAMS: Yes, thank you. 3 MR BEER: Mr Henderson, can we go back to September 2012 -- 4 do you remember we jumped forwards -- by looking at 5 POL00181574. This is an email exchange internal to the 6 Post Office. Not something that you were copied into 7 but it relates to a meeting, at which I think you were 8 present, of 7 September 2012. Mr Baker says: 9 "Quick note from today's meeting with Second Sight." 10 At (1), he says: 11 "The number 1 issue is documentation, or lack of it. 12 They are beginning increasingly frustrated." 13 Firstly, is that right: that by this comparatively 14 early stage, September 2012, you were becoming 15 increasingly frustrated with the lack of documentation 16 being provided by the Post Office? 17 A. Yes, we were. 18 Q. He, Mr Baker, says: 19 "Hopefully, things should start to get better as 20 Angela has kindly nominated someone in her team to help 21 us, and with Jarnail back next week we should be able to 22 get our hands on the prosecution files." 23 Then at (4): 24 "Second Sight have expressed an interest in viewing, 25 at a distance, how we approach a couple of live cases. 51 1 They are forming a view that we are poor at 2 investigations but before they put it into their report 3 would like to see how we now approach investigations as 4 they believe we may have improved." 5 Firstly, had you, by this time, early September 6 2012, formed the view that the Post Office was poor at 7 investigations? 8 A. We had, but in -- that view needs to be qualified 9 because it was solely on the basis of looking at some of 10 their case files: we hadn't spoken to any of their 11 Investigators; we hadn't had a discussion with them as 12 to how they approached investigations from a practical 13 point of view. 14 Q. Did you express a desire to view at a distance some live 15 cases? 16 A. Yes. 17 Q. The 10 or 12 -- I think those are the numbers you've 18 mentioned, case files that you saw at this early stage, 19 did they include the legal advice that the Post Office 20 was giving to its investigators? 21 A. Yes, as far as I can recall. 22 Q. So they were the full prosecution files, in the sense 23 that they were the internal POL file that included 24 communication from Investigator to lawyer, and 25 communication from lawyer back to Investigator? 52 1 A. Yes, and just to put this in context, my access to those 2 files was approved by Susan Crichton, who is the Head of 3 Legal. I was sitting outside her office. She was 4 entirely happy that we were given access to everything. 5 The only limitation was that there was a relatively 6 small number of files held by Post Office in their Legal 7 Department in London at the time. 8 Q. Did that openness or facility to look at legal files 9 continue throughout the initial investigation -- 10 A. No, it didn't, it didn't, and I think it changed, 11 certainly after a few months when Post Office perhaps 12 realised that we were becoming quite critical of the way 13 that they conducted investigations and some of the 14 prosecution decisions that were being made. 15 Q. So do I take from that that, in your mind, there was 16 a link between the view on the merits that you were 17 taking and the access to legal files that you were 18 given? 19 A. Yes. 20 Q. At the very outset of your investigation, did the Post 21 Office tell you about the classes of documentation that 22 it held, for example, concerning the functioning of, or 23 deficiencies in, the Horizon system? 24 A. I don't recall that they explicitly referred to it in 25 that sense. The impression I formed at this stage, 53 1 which was sort of September/October 2012, was that Post 2 Office didn't really understand Horizon. They weren't 3 particularly interested in it. As far as they were 4 concerned, it was a black box that worked reasonably 5 well most of the time and they didn't take it any 6 further than that. 7 Q. Did they tell you whether there was a central repository 8 of material held about issues concerning the functioning 9 of, or deficiencies in, Horizon? 10 A. Well, that was certainly a question that we asked and 11 I think the answer was, "No, we don't hold a single case 12 file sort of summarising those reports". 13 Q. Did they inform you about the existence of release notes 14 that documented bug fixes or attempted bug fixes? 15 A. No. 16 Q. Did they inform you of the existence of major incident 17 reports? 18 A. We certainly didn't see any major incident reports. 19 I think -- and I don't recall any discussions about 20 them. 21 Q. Did they inform you about the existence of Service 22 Management documents? 23 A. No. 24 Q. At the outset of the investigation, did the Post Office 25 provide you with documentation including, for example, 54 1 emails, reports and the minutes of meetings regarding 2 bugs, of which the Post Office was already aware? 3 A. I can't recall the relevant or the relative timing of 4 that. I mean, we eventually got some limited disclosure 5 but that, I think, occurred much later on in the overall 6 process and certainly after I'd met with Gareth Jenkins 7 at Fujitsu. 8 Q. Yes. So I'm talking about the initial stages: you're 9 brought in; you're sat next to Jarnail Singh, outside 10 Susan Crichton's office; you're looking into problems 11 with Horizon, the suggestion by subpostmasters that it 12 is faulty in its operation. 13 A. Yeah. 14 Q. I'm looking to understand whether the Post Office said, 15 "We already know these things. Have a look at this 16 suite of documents which tell you about the bugs that we 17 already know about"? 18 A. No, there was nothing like that at that stage at all. 19 Q. "We've known about the Falkirk bug since 2006, we've 20 known about the receipts and payments mismatch bug since 21 at least September/October 2010" -- 22 A. No. 23 Q. -- "this is what happened"? 24 A. None of that was disclosed at that stage? 25 Q. At the outset of the investigation, did the Post Office 55 1 provide you with any expert reports regarding Horizon, 2 that the Post Office itself had commissioned in past 3 court cases? 4 A. Not that I can recall. 5 Q. For example, the Jason Coyne report prepared in the case 6 involving Julie Wolstenholme in 2004? 7 A. No. 8 Q. The BDO report in the Lee Castleton case in 2006? 9 A. No. 10 Q. Did the Post Office provide you with witness statements 11 in past Post Office prosecution cases, which set out the 12 categories of documents that would be relevant to your 13 investigation, for example, the existence of a species 14 of documents known as PinICLs or PEAKs, and a species of 15 documents called KELs, Known Error Logs? 16 A. No, they weren't disclosed at that stage or mentioned. 17 Q. Did the Post Office tell you about previous acquittals 18 of subpostmasters, each of whom had raised, as part of 19 their defence, the faulty operation of the Horizon 20 system? 21 A. No, they did not. 22 Q. At the outset of the investigation, did the Post Office 23 provide you with operational change proposal records 24 which set out the existence of a facility for remote 25 access? 56 1 A. No, they did not. 2 Q. What did they give you? 3 A. The position of Post Office -- and this was the senior 4 people that we were dealing with, principally Alwen 5 Lyons, Susan Crichton, Angela van den Bogerd -- was that 6 Horizon was working perfectly and there were no known 7 problems. That was consistently the Post Office 8 position at that stage. 9 Q. So you were told, "Here are some files", and you were 10 given access to some prosecution files? 11 A. Yes. 12 Q. Were you told or given the names of individuals that had 13 been acquitted: Nichola Arch, Suzanne Palmer, Maureen 14 McKelvey? 15 A. Not at that stage, no. 16 Q. In your witness statement -- perhaps we'd better turn it 17 up. It's paragraph 53, which is on page 16. 18 Paragraph 53, you say: 19 "Within days of being provided with CD1 ..." 20 Do you just want to remind us what CD1 was? 21 A. Right, I need to step back slightly. September/October, 22 I was based in the Legal Department. We'd realised that 23 we needed to preserve and control the legal files that 24 were being made available to us, relatively small 25 number, and I think my suggestion was to make them more 57 1 useful to us -- because these were, obviously, hard-copy 2 files not electronic files, in the main -- we asked that 3 they all be sent off to a scanning bureau and converted 4 into searchable pdfs, so that they could be used more 5 effectively, and that happened in October 2012. 6 By that stage, I'd conducted a manual review of 7 about a dozen files and realised that there were 8 significant, or potentially significant, numbers of 9 non-disclosure of information by Post Office that could 10 give rise to miscarriages of justice. 11 Q. So you say: 12 "... we realised that we may be looking at 13 a significant number of miscarriages of justice. There 14 was a lack of effective investigation, multiple 15 disclosure failures and conduct by prosecutors that 16 needed to be considered by experts in criminal law and 17 prosecutions." 18 A. Yes. 19 Q. At this stage, late October 2012, did you share any of 20 those initial views with the Post Office? 21 A. Yes. 22 Q. With whom did you share them? 23 A. Certainly Susan Crichton and Jarnail Singh, and Susan 24 felt that it was outside her area of expertise. She was 25 relying on advice from Jarnail. Jarnail's position was, 58 1 "We've done everything that we need to do, there's 2 nothing to worry about". 3 Q. So what happened to the concern that you were raising: 4 that you, Second Sight, may be looking at a significant 5 number of miscarriages of justice? 6 A. To a certain extent, we parked it at that point, because 7 we were still pressing for access to further files. We 8 knew that there were a much larger number of 9 prosecutions. What we didn't know was whether we'd get 10 access to other files, other than the ones held or 11 immediately made available to us. 12 Q. Did you consider at this stage sharing your views with 13 the Crown Office and Procurator Fiscal Service in 14 Scotland? 15 A. No, we didn't consider that. I don't recall looking at 16 any Scottish cases at that stage. 17 Q. Did you know that they were continuing with Scottish 18 Post Office prosecutions at this time? 19 A. No, I didn't. 20 Q. I just want to test, if I may, this point that, in late 21 October 2012, you realised that you may be looking at 22 a significant number of miscarriages of justice, by 23 again looking forwards at POL00144687. Can we start on 24 page 2, please? 25 A. This, of course, is much later. This is May 2013, 59 1 I think. 2 Q. Exactly. If we look at page 2 and scroll down. There's 3 an email from Mr Baker to Mr Warmington copied to you 4 and Alwen Lyons, and says: 5 "Ron 6 "Just to ensure we are on the same page, Paula would 7 like to say we have agreed the following with Second 8 Sight, can you confirm you agree." 9 Then: 10 "1. The investigation reports on 2-3 MPs cases by 11 summer Recess ..." 12 Then: 13 "2. By using the 2-3 cases you will answer the 14 question: have systemic defects in the Horizon system 15 resulted in the wrongful conviction or suspension of 16 subpostmasters?" 17 Then: 18 "4. From the investigation work done to date, if 19 question 2 was posed to you today, you would answer 20 'no'." 21 If you'd already raised your concerns with the Post 22 Office about possible miscarriages of justice, can you 23 help as to why the Post Office were asking you to 24 confirm that your investigation work to date had not 25 revealed any wrongful convictions or suspensions? 60 1 A. Well, I think if you look at point 2, it needs to be 2 broken down. There's two separate questions there. One 3 relates to were there systemic defects and, at that 4 stage, we weren't aware of any. But we were aware of 5 evidence that raised concerns about miscarriages of 6 justice, therefore the wrongful conviction of 7 subpostmasters. 8 Q. Can we just look at what Mr Warmington replied, then, by 9 going back to page 1. He replies the next day, 22 May, 10 and says to Mr Baker: 11 "I'm surprised at the questions you have raised as 12 these include matters that are outside our scope of 13 work." 14 Then skip over 1, and then answer to question 2, he 15 sets out the question that Mr Baker posed and replies: 16 "Our role is to establish the facts relating to 17 specific MP or JFSA nominated cases. We are not 18 qualified to answer a legal question about what may or 19 may not be an unsafe conviction or suspension." 20 Then (4), he says: 21 "Please see my response to question 2 above." 22 Again, if you had already raised your concerns with 23 Post Office about possible miscarriages of justice 24 wouldn't this have been the opportunity to include in 25 a reply "But as you already know, we have concerns about 61 1 miscarriages of justice, because of ineffective 2 investigations disclosure failings, or prosecutorial 3 misconduct that we've suggested ought to be looked at by 4 an expert in criminal law?" 5 A. Yes, and I think that is the correct way to do it. 6 Second Sight was not an expert in criminal procedure 7 prosecutions. We, I think, quite rightly could be 8 regard as an expert in relevant evidence and it was the 9 evidential element that we had sort of concerns about, 10 and I think we certainly felt, at this stage, that those 11 matters needed to be considered by experts in criminal 12 procedure. 13 Q. What I'm testing with you, Mr Henderson, is if, by 14 October 2012, you'd formed the view that there may be 15 miscarriages of justice because of poor investigations, 16 disclosure failings and other prosecutorial misconduct, 17 why we don't see it here in this email exchange or 18 indeed in your report of 8 July 2013. 19 A. I think we were concerned we didn't want to step outside 20 what Post Office regard as our terms of reference and 21 not to stray into areas where we didn't have the 22 relevant expertise, and that included these views on 23 criminal prosecutions. We were concerned about 24 non-disclosure of evidence that appeared to be relevant, 25 and that was our -- probably our main focus. 62 1 Q. You could, nonetheless, still make the point by saying, 2 "We are inexpert in this field but we've spotted things 3 that require to be investigated by an expert or assessed 4 by an expert" -- 5 A. Yes. 6 Q. -- or would that be outside your terms of reference -- 7 A. No, I -- 8 Q. -- as you understood it? 9 A. I think we perhaps should have done more to highlight 10 the apparent sort of deficiencies in the prosecution 11 process that we'd identified. But we were equally 12 conscious that we were getting pushed back by Post 13 Office not to stray outside our terms of reference and 14 not to stray into areas of criminal law and procedure. 15 Q. Was that a constant refrain from the Post Office? 16 A. It was certainly an attitude that we were very -- we 17 were well aware of and knew that, if we strayed into 18 that area, we would be challenged, I think quite 19 rightly. 20 Q. Thank you. Can I turn to the issue of remote access, 21 please, and start by looking at a document, POL00029846. 22 To start with, can you help us what this is? 23 A. This looks as if it was one of the reports that Second 24 Sight produced. 25 Q. Can we look, please, at paragraph 14.10 on page 2. You 63 1 refer to a document called "Receipts/Payments Mismatch 2 issue notes", which appears to be a minute of a joint 3 Post Office meeting probably held in August 2010: 4 "The document refers to the impact of the bug as 5 being ..." 6 Now, we're very familiar with that document. If we 7 go over the page, Solutions One, Two and Three are set 8 out. 9 Now, in this document that we're looking at, at the 10 moment, which is essentially a briefing note -- 11 A. I think produced by Fujitsu; is that right? 12 Q. Hold on, the document we're looking at is produced by 13 Second Sight. You're referring to a meeting note. Can 14 you recall how it was that you came to see the meeting 15 notes referring to Solutions One, Two and Three? 16 A. I think it was a document that was disclosed to Second 17 Sight by Simon Baker, who was the project manager within 18 Post Office, who was our main liaison, particularly 19 between us and Fujitsu. 20 Q. Can you recall when you came to see these meeting notes. 21 We, at the moment, have not been able to see documentary 22 evidence of you being provided with them and, therefore, 23 able to date the provision of them to you, and where 24 they came from, albeit it is plain from this document 25 that you had got them? 64 1 A. I think it was very shortly before one of our reports. 2 Exactly which report, I'm not sure. This, I think, was 3 the Part 2 report. 4 Q. Yes. 5 A. But the exact date that it was first disclosed to us, 6 I can't recall. 7 Q. But you remember it being handed to you or sent to you 8 by Simon Baker; is that right? 9 A. Yes. 10 Q. Thank you. Okay, that can come down. 11 Can we go back to your witness statement, then, 12 please, and look at paragraph 43, which is at the foot 13 of page 13. Page 13, paragraph 43, you say: 14 "In September 2012 I met with Gareth Jenkins, the 15 lead engineer for Post Office Horizon, at the Head 16 Office in Bracknell. He told me that approximately 10 17 members of staff from Post Office were permanently based 18 in Bracknell, dealing with various issues including 19 bugs, errors and defects." 20 Then 44: 21 "Gareth Jenkins told me that Fujitsu routinely used 22 remote access to branch terminals for various purposes. 23 This was often without the knowledge or specific consent 24 of individual subpostmasters. He also told me that 25 members of his team could connect remotely to branch 65 1 terminals and generate keystrokes that were 2 indistinguishable from a subpostmaster accessing the 3 terminal directly. They did this for various purposes, 4 including collecting log files directly from branch 5 terminals. 6 "In my opinion, this facility (if confirmed) had 7 major implications for the safety of criminal 8 convictions, as it meant that the subpostmaster was no 9 longer in sole charge of data entries being input on his 10 terminal." 11 At 46, you say you: 12 "... subsequently shared the information with Alwyn 13 Lyons ... and Lesley Sewell ... and was told quite 14 firmly that [you] were mistaken and that [Post Office] 15 had received assurances about this in various audit 16 reports. This point was made very firmly to me [you 17 continue], and I recall telling Ron Warmington shortly 18 afterwards that I felt that if I made an issue of it 19 there was a significant risk of Second Sight being 20 sacked." 21 Then 47: 22 "I also discussed the issue of [Post Office] 23 employees working at Bracknell with Simon Baker. He 24 told me that he had researched the issue and was 25 surprised to find that he in fact was their line 66 1 manager, something that he had previously been unaware." 2 You tell us in 48 that, about this point, you 3 decided that: 4 "... the best way to resolve the issue was to 5 request the full email archives for the [Post Office] 6 employees at Bracknell, as this would shed light on what 7 they were actually doing." 8 By this time, had Michael Rudkin made an allegation 9 that, during a visit to the basement of the Fujitsu 10 office in Bracknell in August 2008, an individual had 11 demonstrated their ability to alter branch accounts 12 remotely? 13 A. I think so and that was one of the reasons why we wanted 14 to visit Bracknell and see what was actually happening 15 on the ground. 16 Q. Rather than requesting full email archives to 17 investigate the issue, could you not have asked 18 Mr Jenkins to provide written confirmation supporting 19 what he had told you rather straightforwardly in the 20 meeting? 21 A. Yes, we could have done and, with hindsight, we probably 22 should have done. Bear in mind that the meeting with 23 Gareth Jenkins I'd always seen as a preliminary meeting 24 to have, you know, some contact, to hear directly from 25 the Horizon lead engineer, the architect of the system, 67 1 what was available, what wasn't available, and so on, 2 and, even though I only had one meeting with Gareth 3 Jenkins, we did have quite extensive follow-up 4 correspondence where he sent me various internal reports 5 and documents. 6 Q. Can I just attempt to nail down with precision exactly 7 what was said, by looking at a witness statement that 8 you provided in the Horizon Issues trial. That's 9 POL00091426. This is your witness statement in the 10 Horizon Issues trial. You'll see it's dated 11 28 September 2018. 12 A. Yes. 13 Q. Can we turn to page 3, please, and look at 14 paragraph 2.2. You say: 15 "On 13 September 2012, I met with senior 16 representatives of Fujitsu at their Bracknell office. 17 One of the people who attended was Gareth Jenkins, who 18 I believe was the Fujitsu lead engineer on the [Post 19 Office] contract. He subsequently provided me with 20 a number of technical reports describing the Horizon 21 system and architecture and, as would be expected, he 22 was obviously knowledgeable about its operation. At the 23 meeting on 13 September 2012, one of the matters 24 discussed in the meeting was remote access to terminals 25 locate in branches. Gareth Jenkins confirmed to me that 68 1 this capability existed and was occasionally used to 2 troubleshoot problems in the branch." 3 Just stopping there, I'm not going to look at it at 4 the same time but in your current witness statement you 5 say, paragraph 44: 6 "Gareth Jenkins told me that Fujitsu routinely used 7 remote access to branch terminals for various purposes." 8 That seems to be slightly different, a routine use 9 of it for various purposes, whereas, in this earlier 10 statement, you said that he told you that it was 11 occasionally used to troubleshoot problems. Which do 12 you think is more likely to be accurate: your earlier 13 statement or the one you've made now? 14 A. I think you need to drill into the detail because, on 15 reflection, I realised that Gareth Jenkins was talking 16 about a number of different things. At one level, he 17 was talking about direct access to physical sort of 18 terminals, using things like remote desktop protocol, 19 where he was troubleshooting, it might be hardware 20 failures, connecting to a terminal in a subpostmaster's 21 branch. But I'm also now aware that remote access also 22 extended to include back-end databases, and so on. 23 At the time that both these statements were made, 24 I was probably unaware of that level of detail. 25 Q. You say in your Inquiry statement that Mr Jenkins told 69 1 you that the capability was often used without the 2 knowledge of subpostmasters. In this account of the 3 meeting, you don't say one way or the other whether he 4 said that or not. 5 A. Well, we were talking about the technical sort of 6 capability. What he did tell me was that, in order for 7 this remote access to take place: (a) it was often done 8 out of hours, (b) he would often ask the subpostmaster 9 to leave the terminal switched on overnight to 10 facilitate that access. I apologise for not going into 11 that level of detail but I do recall that's what he told 12 me. 13 Q. Thank you. Then, thirdly, in your Inquiry witness 14 statement, you say that he told you that he and his team 15 could remotely access branch terminals and generate 16 keystrokes that were indistinguishable from those 17 keystrokes of subpostmasters. That's not something 18 mentioned in this account of the meeting. 19 A. No, it's not. But I do recall -- and, again, I was 20 trying to strike a balance between getting into some of 21 the sort of the technical detail that perhaps would not 22 be understood generally, such as the exact mechanics of 23 how he did it, using, as I mentioned, remote desktop 24 protocol and the wider sort of capability of what he was 25 describing. 70 1 Q. Do you think there's a possibility that that was 2 something -- ie the ability to generate keystrokes that 3 are indistinguishable from those of the subpostmaster -- 4 which you have later learned? 5 A. No. Again, I do recall that the exact technical method 6 of accessing a branch terminal was described to me in 7 September 2012. 8 Q. That can come down. Thank you. Irrespective of the 9 frequency of remote access and the nature and purpose of 10 the remote access, would you agree that Mr Jenkins was 11 being quite open with you in your 13 September 2012 12 meeting that Fujitsu had the capability to use, and in 13 fact had used, remote access in a way that affected data 14 in branch accounts? 15 A. Yes, I felt he was being very open. If there was any 16 sort of deficiency in our discussions, it was my failure 17 to ask further questions. I mean, for example, at that 18 stage, I was unaware that he'd given expert witness 19 statements in relation to his work. 20 Q. Did it appear to you that Mr Jenkins understood the 21 implications of the facility remotely to access branch 22 accounts for criminal investigations and criminal 23 proceedings? 24 A. I think I probably felt at the stage, at that time, that 25 he did not appreciate that. As far as I was aware, he'd 71 1 never been trained in expert witness evidence, and 2 evidence generally: he was a lead technical architect, 3 that was his area of expertise. 4 Q. Did, in this meeting, Mr Jenkins disclose the existence 5 of any bugs, errors or defects to you? 6 A. Well, firstly, I don't think that was a term that he 7 used. He was probably -- you know, the preferred term 8 tended to be "anomaly" or "error". We certainly sort of 9 discussed that but we didn't explore that in any great 10 deal. He did offer to provide me with various reports 11 subsequently, which he did do. 12 Q. You say that you raised this with Alwen Lyons and Lesley 13 Sewell. Did you receive any assurances or indications 14 from either of them that they would pursue the matter 15 with Gareth Jenkins? 16 A. No, in fact, almost the contrary. I was told in very 17 clear terms that I was mistaken, I must have 18 misunderstood what Gareth Jenkins had told me and that 19 they had third-party independent reports confirming the 20 reliable of Horizon, and that I was quite wrong in what 21 I'd reported to them. 22 Q. So it wasn't the case that, in your conversations with 23 each of them, you formed the impression that the Post 24 Office knew already the substance of what Gareth Jenkins 25 was telling you directly; it was, instead, they denied 72 1 its truth and accuracy? 2 A. Correct. 3 Q. Did they mention from whom any reports had been received 4 or investigations conducted, the third parties? 5 A. I recall certainly the suggestion was third-party audit 6 reports, maybe Ernst & Young, something like that. But 7 again, I can't recall at this stage. 8 Q. Were you at all insistent with them that they should 9 speak to somebody who was one of the principal 10 architects of the Horizon system and viewed by the Post 11 Office as the person from Fujitsu who could speak most 12 knowledgeably about the operation of Horizon, that they 13 needed to pursue this matter with him, given there was 14 a plain conflict in what you were being told? 15 A. I certainly agree that there was a conflict of evidence. 16 I felt at this stage that there was such a gap between 17 what I had reported and what I was being told by Alwen 18 Lyons, Lesley Sewell, in particular, was that it was not 19 appropriate to pursue it further at that stage. It was 20 then something that I took back and discussed with Ron 21 Warmington. 22 Q. You, I think, formed the view that this did have some 23 implications for the propriety or reliability of 24 prosecutions or the evidence relied upon in 25 prosecutions? 73 1 A. Yes. 2 Q. Were you concerned about a failure by the Post Office to 3 disclose in prosecutions what you had been told by 4 Mr Jenkins? 5 A. I think I was concerned but I was -- I had not been told 6 by Gareth Jenkins or anyone else at that stage that 7 Gareth Jenkins had provided expert witness statements in 8 terms of the matters that he dealt with. 9 Q. Irrespective of his personal position and whether he was 10 under an obligation to disclose it when he gave 11 evidence, whether written or oral, more generally, you 12 had got somebody with significant knowledge of the 13 operation of Horizon telling you this information, which 14 you've summarised for us. Whether Post Office needed to 15 be disclosing that in current prosecutions or ought to 16 have disclosed it in past prosecutions, was that not 17 a concern? 18 A. I think it probably was but it was quite difficult to 19 deal with because, on the one hand, I was very clear in 20 terms of what the lead engineer from Fujitsu had told 21 me. But I was also very clear as to the position being 22 taken by Post Office, which was that Horizon was -- did 23 not have problems and there were -- you know, and these 24 matters did not need to be disclosed. It was a conflict 25 of evidence and I was struggling to reconcile the two 74 1 positions. 2 Q. Can you explain in any more detail what Alwen Lyons or 3 Lesley Sewell said to you? 4 A. I recall very clearly what they said to me: I must be 5 mistaken. I told them about my conversation and they 6 told me that they had been assured by various 7 independent audit reports that what I had described 8 could not happen. 9 Q. Why did you think that, if you made an issue of the 10 issue, there was a significant risk of Second Sight 11 being sacked? 12 A. The ferocity at which the strength of feeling was put to 13 me led me to think that. It was more a response at 14 an emotional level, perhaps, but it was made very clear 15 to me that it was not something that Post Office would 16 welcome being pursued. 17 Q. Did you, in fact, not pursue it further? 18 A. I certainly discussed it in detail with Ron Warmington. 19 I think our position was we're dealing with a potential 20 conflict of evidence, rather than make a major fuss at 21 this stage, let's sort of tuck it away, see what further 22 corroboration we can get as our work continued. 23 Q. I think you had been a party to -- or you knew about 24 a telephone conference and, in fact, joined it earlier 25 than this meeting with Gareth Jenkins -- involving 75 1 Gareth Jenkins; is that right, back in July? 2 A. I can't recall the relevant positioning but I'm happy to 3 accept that. 4 Q. Okay, let's look at a document to help you out, 5 FUJ00232048. I don't think this is a note you would 6 have seen at the time but you have subsequently seen it. 7 It's a telephone conference note of 27 July 2012 and 8 you'll see that you're listed as present on the call, 9 along with Simon Baker and Jane Owens from the Post 10 Office, and Penny Thomas and Gareth Jenkins from 11 Fujitsu. Would this have been the first contact that 12 you had with Mr Jenkins? 13 A. Simon Baker acted as a liaison sort of point. So 14 I think the first time I had any contact with Gareth 15 Jenkins was when I visited Fujitsu, I think, in 16 September 2012. So, um ... yeah. 17 Q. Can you see in the second paragraph: 18 "Gareth explained the audit of the activities of the 19 counter system which is retained for 7 years. We can 20 provide transaction records for 31 days per outlet which 21 equals 1 ARQ." 22 Then, if we scroll on, and then three paragraphs 23 from the bottom, now four paragraphs from the bottom: 24 "Gareth suggested a workshop to discuss the system 25 architecture. [Post Office]/AF ..." 76 1 Not sure what "AF" means. 2 A. "AF" was Advanced Forensics, which was the trading name 3 of my business at the time. 4 Q. Thank you. So: 5 "[Post Office/Second Sight] thought that this was 6 a good idea." 7 Is that what led to the meeting of 13 September 8 2012, that we've just referred to? 9 A. Yes, it is. 10 Q. That was essentially a workshop that you've described in 11 paragraph 43 onwards of your witness statement? 12 A. Yeah, we had various sort of discussions about the best 13 way to move this forward. I recall also there was 14 a suggestion that we used the model office, which was 15 a facility within Old Street that was a demonstration 16 branch, Post Office branch terminal, that we were 17 offered as a facility. But we felt that, in the first 18 instance, a face-to-face meeting with Fujitsu was the 19 best way forward. 20 Q. Now, the next paragraph: 21 "Raw data is not part of this service although we 22 may be able to provide." 23 In context, is that Fujitsu speaking there? 24 A. Yes. 25 Q. "Raw data is converted to XML." 77 1 There's a commercial discussion to be had there too, 2 it is said. 3 Do you understand this now, or remembering back to 4 the day, that this was a proposal for a workshop and 5 that Second Sight should receive raw data in XML format? 6 A. Yes, I recall this. There were basically two main data 7 formats that were potentially sort of relevant: ARQ 8 data, Audit Request Query data; and XML data, which 9 stands for Extensible Markup Language, which was 10 a technical term for another type of computer data. 11 Q. In this meeting was Mr Jenkins taking, on the face of 12 it, a constructive approach to the engagement with 13 Second Sight? 14 A. Yes, but also a commercial approach, in as much that 15 there'd be a cost of producing this data. I recall at 16 some point -- now whether it was at this stage or 17 subsequently, I can't remember -- that I was told that 18 Post Office had an entitlement to, I think from memory, 19 12 ARQ reports per month but, under the Service Level 20 Agreement between Fujitsu and Post Office, they were not 21 entitled to XML data and that there would be a charge 22 for any XML reports, and Post Office were very reluctant 23 to incur further expenditure. 24 Q. Did you take a view, in your dealings with Mr Jenkins, 25 as to the extent to which he wished to help? 78 1 A. I did and he was very helpful throughout. I've got no 2 criticism of him in terms of answering my questions and 3 providing support. 4 Q. I think you went a little further, we're going to see, 5 in a call that you had with Simon Baker. If we can look 6 at that, please. SSL0000103. This is a transcript of 7 a call that I think you recorded; is that right? 8 A. No, I think it was recorded by Ron Warmington. 9 Q. I see. It's undated. I've no doubt if we went through 10 all 17 pages you could approximate its date -- 11 A. The context puts it, I would have thought, September 12 2012, or thereabouts. 13 Q. Can we just turn to page 6, please, halfway down. 14 Mr Baker says: 15 "Okay, so I'm going to take your advice. I'm not 16 going to pick up SR05." 17 That's Spot Review number 5, that concerns Michael 18 Rudkin's allegations; is that right? 19 A. Yes. 20 Q. "I am going to, sort of, continue to dig around, I think 21 ... just for my own benefit, and also I think I want to 22 keep Alwyn and Susan informed of what I've come up with, 23 because for them... you know, of what's going on. 24 Because they are not aware of any of this by the way. 25 "Okay. 79 1 "Because I've told them that I've just found out 2 from Fujitsu that there is a mechanism, and their faces 3 dropped. 4 "Ian Henderson: And by the way, I mean, one of the 5 key emails, you know, has Gareth Jenkins' name all over 6 it. So it was absolutely clear that this was a widely 7 understood capability within the system. 8 "Simon Baker: Well, Gareth did -- Gareth is the one 9 that told me yesterday, and he didn't make any effort to 10 hide it." 11 You: 12 "No, I'm not surprised. Gareth Jenkins has always 13 struck me as, you know, straight as a die." 14 Mr Warmington: 15 "Yeah." 16 You: 17 "And, you know, I'm very happy to sort of deal with 18 him. So what you've identified is pretty much what we 19 found going through the emails, or certainly one aspect 20 of them." 21 Can you help us. What was it in your dealings with 22 Mr Jenkins that struck you and allowed you to say that 23 he was straight? 24 A. He was not being evasive; he was happy to help; he was 25 answering my questions; he provided promptly with 80 1 follow-up material that I requested; I mean, there was 2 no hesitation in his willingness to answer our questions 3 and to provide assistance. 4 Q. So he was willing to discuss remote access when the Post 5 Office was not? 6 A. Yes. 7 Q. Can we look at a second example of you expressing a view 8 on Mr Jenkins. SSL0000108. You are part of a call here 9 with Paula Vennells, Mark Davies, Alwen Lyons, Susan 10 Crichton, James Arbuthnot and Mr Warmington. This one 11 is dated. This is 22 July 2013. Can we just go forward 12 to page 11, please. Mr Warmington says: 13 "Ian, one other point supporting what you just said, 14 we've had incredibly high quality material put together 15 by Gareth Jenkins of Fujitsu, who obviously knows the 16 system like the back of his hand, and do I get the sense 17 that he's coming up to retirement? That could be quite 18 a problem for us, if he's about to leave. Did you get 19 this? 20 "Susan: to be honest, Ron -- 21 "Ron Warmington: I got that from Ian. Ian, did 22 I imagine that or did you mention that to me at some 23 point. 24 "Susan: let's take that offline, I think." 25 You: 81 1 "Yeah. 2 "Mr Warmington: ... He is a particularly high 3 quality individual and has done -- what he writes is 4 really good. So, you know, if that were to be the case 5 Fujitsu would need to field somebody nearly as good." 6 Ms Vennells intervenes. Then, at the foot of the 7 page, you say: 8 "He's superb and he's sufficiently sort of mature to 9 actually almost be independent, you know, even though he 10 is a Fujitsu", and I think you meant employee. 11 Can you explain us to what in your contact with 12 Mr Jenkins gave rise to this observation about 13 independence and maturity? 14 A. I saw him as a technical expert and that he approached 15 things from a technology perspective almost exclusively. 16 He didn't strike me as a company person or feeling that 17 he had to stick to a particular party line, in terms of 18 supporting Fujitsu. He was dealing with things at 19 a technical level, as a technical expert, and I found 20 that rather refreshing. 21 Q. Was he taking the defensive position that the Post 22 Office was, which you describe in your witness 23 statement? 24 A. No, I think he was taking the view that he was providing 25 various reports to Post Office. I probably had 82 1 a sensation that he felt that Post Office maybe didn't 2 take them particularly seriously, or didn't understand 3 them, or weren't that interested in them. Looking back 4 on it, that's a feeling that I've got. I'd be hard 5 pressed to sort of pin it down any more than that. 6 MR BEER: Thank you, Mr Henderson. 7 Sir, it's 12.05. Can we take our second break until 8 12.15? That's the end of a topic. 9 SIR WYN WILLIAMS: Yes, of course. 10 MR BEER: Thank you, sir. 11 (12.05 pm) 12 (A short break) 13 (12.15 pm) 14 MR BEER: Good afternoon, sir, can you see and hear us? 15 SIR WYN WILLIAMS: Yes, thank you. 16 MR BEER: Good afternoon, Mr Henderson. 17 In your witness statement at paragraph 30 -- no need 18 to turn it up -- you refer to the agreed goal between 19 the Post Office and Second Sight, at the outset of your 20 investigations, to be "to seek the truth irrespective of 21 the consequences". Was that the shared goal as 22 articulated to you by the Post Office at the beginning 23 of the enterprise? 24 A. I think that was articulated more by James Arbuthnot and 25 MPs, which Post Office agreed to at the outset. So that 83 1 was the phrase that I associate with the very early 2 stages of our work, or our contact with Post Office. 3 Q. You tell us in your witness statement -- no need to turn 4 it up, it's paragraph 45 and we've discussed it 5 already -- of instances where you sought to query the 6 safety of criminal convictions but your queries were 7 disregarded. How is that consistent with a shared 8 desire to seek the truth, irrespective of consequences? 9 A. I think that comes back to a strongly held view by Post 10 Office, which we agreed with: we were not experts in 11 criminal law, we were perhaps experts in evidence, and 12 I think the inconsistency is explained by the two stages 13 in that process. We might find evidence that we think 14 needs to be reviewed by experts in criminal law but that 15 would not be done by ourselves. 16 Q. You tell us -- we should turn it up, please -- at 17 paragraph 88 of your witness statement, which is on 18 page 28, which is at the foot of the page, that: 19 "[You] remember that at the conclusion of one of the 20 [Working Group] meetings, the acting [Post Office] Head 21 of Legal (Chris Aujard) warned me to be careful about 22 what I said. He told me that if I said anything that 23 harmed [Post Office], [Post Office] would not hesitate 24 to take legal action against me under the terms of my 25 Non-Disclosure Agreement and that I would not be able to 84 1 afford the legal fees. I took this as a thinly veiled 2 threat to bankrupt me if I continued causing trouble." 3 Can you remember the circumstances in which that 4 veiled threat was made? 5 A. Not in any great detail, other than it was in the 6 context of the mediation's Working Group. I mean, the 7 Inquiry has heard evidence from Chris Aujard. He came 8 across as an ambitious and, frankly, somewhat aggressive 9 lawyer and that was reflected in the way that he dealt 10 with Second Sight, to a certain extent. He was 11 obviously concerned about some of the things that I was 12 saying or raising in Working Group meetings and, yeah, 13 I mean, I remember this conversation. I thought it was 14 inappropriate and, to a certain degree somewhat 15 surprising but -- 16 Q. What had happened to the shared desire to seek the truth 17 irrespective of the consequences? 18 A. I think we'd moved on from that! 19 I'd formed the view that, quite early on in the 20 process, Post Office was getting advice from external 21 lawyers about the financial consequences of what we were 22 finding. The fact that they might be looking at very 23 material amounts of compensation. I remember doing 24 a back of a cigarette packet calculation and I felt 25 that, if all of the claims being raised by 85 1 subpostmasters in -- through the Mediation Working Group 2 materialised, we were looking at, at least, £300 million 3 in compensation. That was a huge underestimate but 4 those were the sort of numbers I had in mind at the 5 stage. 6 I think that worried Post Office. They saw it as 7 an existential threat to their business model. They 8 were looking at further funding from the Government, 9 they were very concerned about the PR aspects of their 10 business model. PR was driving a lot of the decisions 11 in Post Office at this stage. 12 Q. How did you know that? 13 A. Through contact with Mark Davies, who was the head of 14 PR. It was very clear that Post Office senior 15 management were very concerned about the public 16 perception, the brand image. I mean, Paula Vennells in 17 meetings was very open about it. She was determined to 18 promote the brand of Post Office. 19 Q. You tell us in your witness statement -- no need to turn 20 it up -- that protecting the brand was the priority, not 21 supporting the subpostmasters; you felt that Post Office 22 had lost its way. 23 A. Yes, very much so. 24 Q. When did this become evident to you? 25 A. Not to start with but probably within the first 86 1 12 months of starting our work and as we started 2 uncovering more and more evidence and we were identified 3 as a potential threat to the Post Office business model. 4 Q. Can we turn to page 21 of your witness statement, 5 please, the paragraph at the top. You say: 6 "Whilst this [that's a Post Office document dated 7 April 2013, you're talking about there] accurately 8 describes what MPs wanted, Paula Vennells was 9 increasingly attempting to steer us away from 10 considering the safety of convictions." 11 Firstly, what did Paula Vennells do to attempt to 12 steer you away from considering the safety of 13 convictions? 14 A. I can't remember precisely but I do recall that the 15 Mediation Working Group, she didn't want criminal -- 16 cases involving criminal convictions even to go to the 17 Mediation Working Group. The terms of the Mediation 18 Working Group specifically allowed that to happen -- 19 I don't know how hard Post Office fought behind the 20 scenes to prevent that -- and we followed the terms of 21 reference of the Mediation Working Group but we were 22 aware, from Paula's public comments and feedback from 23 other Post Office employees, that they would not support 24 mediation involving criminal convictions, or were very 25 reluctant to do that. 87 1 Q. Can we turn to page 53 of your witness statement, 2 please. At paragraph 142, you pick up this theme. You 3 say: 4 "[She] frequently and consistently attempted to 5 steer Second Sight away from investigating potential 6 miscarriages of justice. Another example was Post 7 Office's attitude towards criminal convictions and the 8 Mediation Scheme. 9 "The Scheme documentation made it quite clear that 10 an applicant with a criminal conviction was potentially 11 eligible for the Scheme. [Post Office] seemed to 12 disagree with this view and often challenged these 13 applications. 14 "When I first met Paula Vennells, she told me that 15 [the Post Office] was the nation's most trusted brand 16 with a history of over 400 years. As our work 17 continued, I increasingly formed the view that because 18 of this history, [Post Office] somehow felt it was above 19 the law and didn't need to comply with eg the Criminal 20 Procedure and Investigations Act 1996, which set out the 21 disclosure requirements for prosecutors (including those 22 conducting private prosecutions) as was the case with 23 [the Post Office]." 24 In what context did Ms Vennells frequently and 25 consistently attempt to steer Second Sight away from 88 1 investigating potential miscarriages of justice? 2 A. The first thing I'd say is we had relatively little 3 direct contact with Paula. I mean, she certainly took 4 part in some of the telephone calls, conference calls. 5 The words that I'd quoted were made in evidence to the 6 Select Committee but, through Angela van den Bogerd, and 7 so on, and through their actions, in terms of making 8 documents available, there was clearly a problem in Post 9 Office's mind with the mediation of criminal 10 convictions. 11 Q. In your witness statement, at paragraphs 159 onwards, if 12 we can turn those up please, from page 58 -- so 13 paragraph 159 -- you say: 14 "I have been asked [by the Inquiry] to reflect on 15 what I would have done differently ..." 16 You say: 17 "... a significant weakness in our relationship with 18 [the Post Office] (and the Scheme) was the lack of 19 independent oversight. Despite being owned by the 20 Government, [the Post Office] is treated as 21 an autonomous 'arm's length body'. There was little or 22 no external scrutiny of the Board or its decision 23 making. The Government appointed the Chairman of [Post 24 Office] and also two Non-Executive Directors. It 25 probably would have been better if Second Sight had had 89 1 a direct reporting line to the [Post Office] Chairman 2 and the [Post Office] Non-Executive Directors." 3 I take it that that's something that didn't occur to 4 you or Second Sight at the time? 5 A. Correct. 6 Q. Were you ever asked, when conducting either the initial 7 investigation or your work in the production of reports 8 and contributions towards the Mediation Scheme, to 9 attend upon the Post Office Board? 10 A. No, we weren't and I think that was a mistake, a mistake 11 both by Post Office and also a mistake by Second Sight. 12 It's probably something we should have insisted on. We 13 did have a meeting with the Chairman of Post Office 14 towards the end of our -- or, in fact, after we'd been 15 sacked but that was the only time that we met anybody 16 from the Board. 17 Q. You say in 160: 18 "There was one other matter that I wish to bring to 19 the attention of the Inquiry. That is the provision of 20 a whistleblowing facility. If I had been an employee of 21 [the Post Office], various protections would have been 22 available to me. However, as a contractor operating 23 under a draconian [NDA], no equivalent protections were 24 available to me. I regard this as regrettable, and I do 25 hope that the Government considers legislation to 90 1 address this omission." 2 Firstly, can you explain what you would have wished 3 to have blown the whistle on? 4 A. I think I was concerned, as our work proceeded, that we 5 were coming across evidence of misconduct by 6 prosecutors. We raised those issues internally within 7 Post Office but we couldn't take it any further forward. 8 As you've referred to, we were threatened -- and I mean 9 that quite sort of sincerely -- with sanctions if we 10 breached confidentiality, if we breached non-disclosure. 11 I feel that in some circumstances there should be 12 an alternative option available to companies like Second 13 Sight, if we followed everything that was available to 14 us and still felt that matters needed to reach a wider 15 audience. 16 Q. You make a comment about accountability in 161, which 17 I'm going to skip over, and in 162 and 163 you say: 18 "[You'd] like to say something about to whom we owed 19 a duty. [You] tried to go to where the evidence took 20 [you], but increasingly we were facing evidence of 21 questionable conduct by [Post Office], some of which, in 22 my opinion, was probably criminal. 23 "In the course of our work, I increasingly felt that 24 our overriding duty was, in a phrase attributed to Alan 25 Bates, to help 'the skint little people' who didn't have 91 1 a voice and had been so badly treated by [Post Office]." 2 Can I look, please, at an email, POL00102280. This 3 an email towards the end of your engagement with the 4 Post Office. It's from Mr Warmington to, ostensibly, 5 you but also to Lord Arbuthnot's Chief of Staff, Janet 6 Walker. You say, second sentence: 7 "... fear not, we'll not let the [subpostmasters], 8 JFSA, James and his colleagues (and you) down. But the 9 situation has become ludicrously untenable. It's clear 10 that the Legal Team in Post Office no longer accepts (if 11 indeed it ever did) that its employer (as regards its 12 in-house lawyers) or its client (as regards Bond Pearce) 13 is one of the SUBJECTS of this investigation. It is 14 equally clear that the Post Office Legal Team does not 15 accept that any influence that it exerts on us should 16 be, as it were, 'light touch' unless ratified by the 17 Working Group and by the other stakeholders (including, 18 of course, James). Instead, it is clear to us that Post 19 Office's attitude has hardened (from the Crichton era) 20 to one where we (Second Sight) are viewed as being under 21 contract/introductions to obediently follow our client's 22 (ie Post Office's) instructions as to what we are to 23 do -- or what we are to refrain from doing. It remains 24 unclear -- certainly to me -- whether the 'lawyer tail 25 is wagging the Post Office dog' here or whether the 92 1 in-house and external legal teams are doing the bidding 2 of the Board/Chairman/CEO. It may even be a combination 3 of the two. In either case, it has resulted in a wholly 4 inappropriate 'Defend the brand at all costs' stance 5 ..." 6 Just stopping there, do you agree with what 7 Mr Warmington there wrote? 8 A. Yes, I do. 9 MR BEER: Thank you. 10 Sir, those are only the questions that I ask 11 Mr Henderson. I know that there are questions from one 12 group of subpostmasters, which is through Mr Stein. 13 SIR WYN WILLIAMS: Yes. 14 Questioned by MR STEIN 15 MR STEIN: Good afternoon, Mr Henderson. As you may be 16 aware, I represent a large group of 17 subpostmasters/mistresses and people that worked in 18 branches of the Post Office. 19 I've got some questions to ask you about suspense 20 accounts, okay. 21 Now, you smiled, perhaps because this is an area 22 that we have been pursuing in questions for other 23 witnesses and it's an area whereby some of the answers 24 have been a little opaque; do you agree? 25 A. It's also an area where I believe we were sacked because 93 1 of our interests in suspense accounts. I think we've 2 got a mutual interest in this topic. 3 Q. Can we take you, please, therefore, to a document which 4 is POL00021762 and I'm going to take you to your -- it's 5 an email from your good self, at page 3, going into the 6 top of page 4. So if we scroll down a little bit 7 further we'll see, therefore, your email in its 8 entirety. 9 So let's concentrate on what we have here. You can 10 see that this is an email from you and the date is 11 30 July 2014, in the afternoon at 1.25. It is to 12 Belinda Crowe, copied to Mr Warmington, Angela van den 13 Bogerd, Mr Parsons, Chris Aujard, and the subject matter 14 is "Suspense account paper Second Sight". Okay? 15 A. Yeah. 16 Q. So you say this: 17 "In the light of the disclosure of rolling 3-year 18 suspense account can we have details of month end 19 balances for this account for the last 3 years together 20 with details of amounts released to P&L", that's profit 21 and loss. 22 Okay? 23 That's the question being asked by you. Can you 24 help us understand why you were interested in this 25 particular point at that particular time? 94 1 A. Well, the reason we were interested in suspense accounts 2 was we needed to know to whom did the money belong? 3 Post Office was not printing money, it wasn't creating 4 money out of thin air. If there are any funds in the 5 suspense account, it was either going to belong to 6 subpostmasters or it was going to belong to clients of 7 Post Office, or at least those are the most likely 8 explanations. And I felt that we had -- we were aware 9 that there were substantial balances in suspense 10 accounts that were being taken to the credit of the 11 profit and loss account for Post Office and, therefore, 12 ultimately used to pay dividends, bonuses and everything 13 else. 14 I felt that there was at least a possibility, if not 15 more than that, that those funds belonged to 16 subpostmasters and may represent balances that -- and 17 losses that had been allocated to subpostmasters. 18 I felt we needed to get to the bottom of that and we 19 weren't able to. 20 Q. Can we go further up the page, please, and we'll see 21 then a draft response that was being considered. So if 22 we go up the page, we'll see that there's an email, if 23 we look at the date for this, we'll see it at -- you'll 24 see the bottom of page 2. We'll see it's from Andrew 25 Parsons, the date has moved on to 31 July, 2.47, and 95 1 then we see the body of the email at page 3, at the top. 2 Okay? 3 A. Yes. 4 Q. So, again, this is Mr Parsons, recipients that are set 5 out here, Belinda Crowe, Angela van den Bogerd: 6 "Belinda, Angela ..." 7 What's being said there by Mr Parsons is that he 8 suspects that: 9 "... the information requested by Ian [that's you] 10 below is highly commercial sensitive. 11 "It may also be that the figures in question are 12 quite high and this may then be portrayed as if there 13 are significant sums each month that cannot be 14 reconciled within [the Post Office's] accounts. The 15 inference from this is that [the Post Office's] 16 processes/accounting systems are flawed given the volume 17 of discrepancies. Whether or not this is correct, it is 18 an easy leap to make." 19 Then he sets out he's penned out a short response to 20 you below. You can see there that he's suggesting that 21 this may be a way of dealing with your question and the 22 proposal was to tell you: 23 "The information you are seeking is highly 24 commercially sensitive and therefore would only be made 25 available in exceptional circumstances. 96 1 "As described in the Suspense Account Note provided 2 to you, sums in POL's suspense account do not impact on 3 branch accounting but reflect unresolved matters between 4 POL and its clients." 5 Now, as far as we know, this particular draft 6 response was never sent to you. Can you just help us 7 and see whether you agree with what was being written by 8 Mr Parsons: 9 "... sums in POL's suspense account do not impact on 10 branch accounting but reflect unresolved matters between 11 POL and its clients." 12 Do you accept that would be right or not? 13 A. It may be right but, equally, it may be wrong. I felt 14 the most likely explanation -- bearing in mind that 15 losses were being allocated to subpostmasters, I felt 16 that the most likely explanation was that, ultimately, 17 those suspense account balances were connected with 18 losses that were being allocated to subpostmasters. 19 Q. Following on from that, if we can work out what the 20 effect might be of being able to analyse shortfall money 21 going into suspense account, would it also be a way of 22 looking at the overall integrity or operation of the 23 Horizon system, in other words a kind of canary in the 24 coalmine? 25 A. It's possible but, equally, I mean, suspense accounts 97 1 are a feature of modern commercial practice. Most 2 companies will operate suspense accounts. However, most 3 organisations will ensure that those balances are 4 reconciled and resolved within a very short period, 5 typically one to two days. What we were finding was 6 that very substantial amounts -- and I think I'd set out 7 a table in my witness statement that showed that, in 8 some cases, hundreds of thousands of pounds were being 9 held in suspense accounts for periods in excess of six 10 months. I mean, that is very poor accounting practice 11 and, as I said, I was concerned that at least those -- 12 part of those funds should have been reallocated to 13 individual branch accounts. 14 Q. What would be the alternative, if there was -- let's 15 say, using a figure you've just mentioned, maybe 16 £100,000 or so in a suspense account, what would be the 17 alternative or better alternative to putting it in 18 profit and loss account? 19 A. Analysing it properly and making sure that you didn't 20 carry forward balances in a suspense account more than 21 two or three days, which, as I said, is normal 22 commercial practice by most organisations. It was very 23 poor accounting, at the end of the day. 24 Q. From what you're saying it also carries with it the 25 danger that, essentially, the Post Office is taking 98 1 subpostmasters' money -- 2 A. Yes, to the credit of their profit and loss account and 3 being used to pay bonuses and dividends. 4 Q. Now, if we just continue with the email chain, we'll see 5 this is carried on in discussion within the Post Office. 6 If we go up to page 2, please, you'll see there that, 7 from the top, from Belinda Crowe, 1 August, to Charles 8 Colquhoun, Rod Ismay, Belinda Crowe, Angela van den 9 Bogerd, Rodric Williams, "Suspense account paper Second 10 Sight". The first part is: 11 "Second Sight have now come back on the paper and 12 asked for information on the suspense account." 13 It goes on to say this: 14 "Charles had previously suggested providing 15 a ballpark figure, but if we do that we would have to 16 wrap a significant amount of information around that as 17 context. However, Andy Parsons has sketched out 18 a suggested response below [and you and I have just gone 19 through that, Mr Henderson]. I do not know whether the 20 published accounts give any details or whether we do 21 ever make this information otherwise available but 22 I would be grateful for advice on how best to respond." 23 Going on to say: 24 "I think that we should consider this through the 25 lens of an FOI request and how we would respond to that. 99 1 Anyone could ask the question (and may have done so in 2 the past) therefore we need to be sure that whatever 3 response we give would not result in less information 4 being released than if they requested the information 5 under FOIA." 6 Then it refers to Second Sight producing a draft 7 report. 8 This discussion then continues and, if we go to 9 page 1, we'll see as far as we get to by 5 August 2014. 10 You'll see that, in fact, at the very top, it's 6 August 11 but let's go to the one on 5 August, just at the top 12 two-thirds of the page. 13 From Belinda Crowe, date 5 August 2014 to Charles 14 Colquhoun, Belinda Crowe, copied to herself, it looks 15 like, probably another email address: 16 "Charles 17 "As discussed. Here's Rod's email [probably Rodric 18 Williams]. 19 "If you could send it to Rod and get an answer." 20 Then we see what's being said there: 21 "Belinda I agree with Andy -- I'd like to avoid 22 giving anything if at all possible (less is more), but 23 if we do, rather than give them the data they've asked 24 for, we should provide MI which gives context ..." 25 "MI"? 100 1 A. Management information. 2 Q. "... including: 3 "rather than raw three-year data, give the monthly 4 average over the past 3/5 years; 5 "what that figure is as a proportion of total month 6 ending transactions; and 7 "average time to clear sums in suspense." 8 Then gives: 9 "eg something along these lines: 'The amount held in 10 suspense accounts across the Post Office network 11 averages £XX per Trading Period", so it then sets out 12 the potential draft response. 13 So just going through what was being discussed at 14 that stage within the Post Office, "I'd like to avoid 15 giving anything if at all possible (less is more), but 16 if we do, we can provide the information which includes, 17 rather than raw three-year data giving the monthly 18 average over the past three to five years"; would that 19 have helped answer your question? 20 A. No, I don't think so. I mean, we wanted to know the 21 detailed breakdown of the balances held by the suspense 22 account down to individual transactions and what they 23 are proposing here is not that. I don't think we would 24 have been able to tell whether or not we could link it 25 to individual branch accounts. 101 1 Q. Then "what that figure is as a proportion of total month 2 end transactions and average time to clear sums in 3 suspense", again? 4 A. Again, that's taking it away from the level of detail 5 that we'd asked for. It's a cover-up, again. 6 Q. Now, I'm going to take you forward in time, please, to 7 another email, an internal email, from Mr Aujard who you 8 have discussed already with Mr Beer. This is an email 9 from Mr Aujard to Alisdair Cameron, dated 16 January 10 2015, it is POL00040805. Page 3 of 4. So POL00040805. 11 SIR WYN WILLIAMS: Mr Stein, while that's being put up, was 12 there a reply to Mr Henderson's or Mr Warmington's 13 request in the email chain at all? 14 MR STEIN: Not that we're aware of, sir. 15 SIR WYN WILLIAMS: Fine. Okay. Thank you. 16 MR STEIN: Mr Henderson, can you clarify the answer to 17 Sir Wyn's question? 18 A. Not that we saw, I don't think. 19 SIR WYN WILLIAMS: Right, thanks. 20 MR STEIN: Thank you, sir. 21 So we should have on the screen a document I've just 22 been discussing, page 3 and 4. You see at the top there 23 from Mr Aujard, date 16 January 2015, to Mr Cameron? 24 The request from Mr Aujard to Mr Cameron is this, 25 I'll read the second paragraph: 102 1 "As you will see, I really need someone from your 2 team who is technically switched on re suspense 3 accounts, and can handle themselves in front of 4 an adversarial audience. 5 "As you can imagine, I am concerned that we give 6 Second Sight no more information than is necessary to 7 address the narrow proposition that money that is 8 'missing' from [a subpostmaster] account is somehow 9 taken into our suspense account and then appropriated to 10 our [profit and loss]." 11 Now, this is not an email that you would have seen 12 at the time. Can you help us with your view on what's 13 going on here and the way that this is being discussed? 14 A. Well, Chris Aujard, as we've previously discussed, had 15 protection of Post Office at the centre of most of his 16 activity. Al Cameron was the newly appointed Finance 17 Director in January 2015, who I think, perhaps, shared 18 our view that we had asked an interesting question and 19 could see perhaps some merit in getting an explanation. 20 But that was being resisted by, certainly, the Legal 21 Team within Post Office. 22 Q. To this date, today, where have we got to with suspense 23 accounts and the answer to your questions; have we got 24 answers? 25 A. We never got a detailed answer. I mean, we know that 103 1 hundreds of thousands of pounds were taken into the 2 profit of Post Office that could have been related to 3 individual branch accounts and losses that were paid by 4 subpostmasters. I felt it was a huge mistake that it 5 was not investigated at the time when we first raised it 6 and, of course, investigating events that took place, 7 you know, 10 years ago is much harder now than it would 8 have been at the time. 9 MR STEIN: Excuse me one moment, Mr Henderson. 10 Thank you, Mr Henderson. 11 SIR WYN WILLIAMS: Is that it, Mr Beer? 12 MR BEER: It is, subject to one thing, and I've realised 13 that I omitted to ask Mr Henderson something. 14 SIR WYN WILLIAMS: Yes, by all means. 15 Further questioned by MR BEER 16 MR BEER: Thank you. 17 It was something I was going to ask Mr Warmington 18 and, just for completeness sake, I think I should ask 19 you too, Mr Henderson. It's an issue which the Inquiry 20 has been pursuing and is of interest, in particular, to 21 the counsel team and to the Chairman. 22 It's the Jenkins advice, Simon Clarke's Jenkins 23 Advice of 15 July 2013. Can we look, please, at 24 POL00006357. You've been provided a copy of this 25 document in order properly to prepare for your evidence 104 1 session today, Mr Henderson. If we look at the last 2 page of the document, which is page 14, and just scroll 3 to the bottom, we can see this is signed off by 4 Mr Clarke on 15 July 2013, he being a barrister at 5 Cartwright King Solicitors. This advice addresses the 6 position of Gareth Jenkins and his reliability as 7 a witness. 8 When did you first see this document? 9 A. I think only very recently. I don't recall seeing this 10 at the time that we were working for Post Office. 11 Q. Gareth Jenkins was providing evidence to you and 12 information to you in the course of your 13 investigations -- 14 A. Yes. 15 Q. -- and you were in part relying on what he was saying? 16 A. Yes. 17 Q. You told us earlier that you didn't know that he had 18 previously been used as a witness to give evidence about 19 Horizon in criminal prosecutions? 20 A. As an expert witness, yes. 21 Q. Yes. As a witness at all, I think, is that right? You 22 didn't know -- 23 A. I think both are true. Yes. 24 Q. Yes. I think it must, therefore, follow that you were 25 not shown a copy of this advice at the time because this 105 1 would have revealed that he had given evidence before as 2 a witness? 3 A. Correct. 4 Q. You were, I think, looking at files that included the 5 Seema Misra case; is that right? 6 A. Yes. 7 Q. This advice specifically addresses the evidence given by 8 Mr Jenkins in the Seema Misra case. Do you think you 9 ought to have been shown the advice? 10 A. When I was looking at the files held by Post Office, 11 I expected those files to be a complete record of the 12 documents that were relevant to the matter. So I would 13 expect the Clarke Advice to form part of that case, yes. 14 Q. Aside from being shown the document itself, did anyone 15 from the Post Office convey the substance of the Advice 16 to you, ie that Mr Jenkins was described as 17 a discredited witness who couldn't be relied on in any 18 criminal proceedings? 19 A. Well, I think we need to look at the timing quite 20 carefully. At the time that I was dealing with Post 21 Office and Simon Baker, Gareth Jenkins was being 22 represented as the Fujitsu expert and the go-to person 23 that Post Office routinely dealt with. That's why Post 24 Office introduced me to him and facilitated that 25 meeting. It was obviously after that time that Post 106 1 Office's attitude towards him changed. 2 Q. So that was in, we saw, the first telephone conference 3 in July 2012 -- 4 A. Yes. 5 Q. -- and then your meeting with him in September -- 6 A. September, yeah. 7 Q. -- 2012. 8 A. So, at that time, he was not a discredited witness, as 9 far as I'm aware. 10 Q. Did you have any subsequent meetings with Mr Jenkins? 11 A. We had email contact. We didn't have any further 12 meetings. We may have had the odd phone call. 13 Q. In any event, you were raising your concerns with the 14 Post Office about possible miscarriages of justice -- 15 A. Yes. 16 Q. -- and the Post Office were in possession of this 17 document but didn't describe the substance of it to you? 18 A. Correct. 19 MR BEER: Thank you. 20 Sir, I think that is all of the questions. 21 Questioned by SIR WYN WILLIAMS 22 SIR WYN WILLIAMS: Just one from me, really, and, again, 23 it's just to see if you do know anything. In the 24 Interim Report which Second Sight produced, I believe, 25 on 8 July 2013, there is reference to what I will call 107 1 bugs. Can you tell me, Mr Henderson, how it came to be 2 that you got that information? 3 A. I do recall that, shortly before we published our 4 Interim Report, Simon Baker, again on behalf of Post 5 Office, did disclose some late information to us that -- 6 of certainly two, if not three, types of bug that we 7 were previously unaware of. 8 SIR WYN WILLIAMS: Was that disclosure by Mr Baker done 9 orally or did he send you a document setting it out, so 10 to speak? 11 A. He sent us -- I mean, it was both. We had a lot of 12 telephone contact with him but he also disclosed those 13 documents to us and we referred to them in our report. 14 SIR WYN WILLIAMS: All right. Thank you very much. 15 So I think that concludes your evidence, 16 Mr Henderson. I'm very grateful to you for 17 participating in the Inquiry by both providing 18 a detailed witness statement and by giving oral evidence 19 this morning and into this afternoon. Thank you very 20 much. 21 THE WITNESS: Thank you, sir. 22 SIR WYN WILLIAMS: So what time shall we resume, Mr Beer? 23 MR BEER: 1.55, please. 24 SIR WYN WILLIAMS: Fine. 25 MR BEER: Thank you. 108 1 (12.54 pm) 2 (The Short Adjournment) 3 (1.55 pm) 4 MR BEER: Good afternoon, sir, can you see and hear us. 5 SIR WYN WILLIAMS: Yes, thank you. 6 MR BEER: May I call Ron Warmington, please. 7 RONALD JOHN WARMINGTON (affirmed) 8 Questioned by MR BEER 9 MR BEER: Good afternoon, Mr Warmington. My name is Jason 10 Beer and I ask questions on behalf of the Inquiry. Can 11 you give us your full name, please? 12 A. Ronald John Warmington. 13 Q. Thank you, you've made two statements to the Inquiry, 14 the first 54 pages long and the second 12 pages long. 15 Can we look at the first, please, it's dated 20 16 May 2024, WITN01050100, and I think there's a correction 17 you'd like to make on page 20; is that right? 18 A. That's right, Mr Beer. There's a sentence, the very 19 first sentence at the top of page 20, which starts with 20 "not only" and finishes with the word "integrity". I'd 21 like to remove that. It was mistaken. 22 Q. Thank you. Then if we go to the last page, please, 23 which is page 54 -- 24 A. Yes. 25 Q. -- is that your signature? 109 1 A. It is. 2 Q. Including the correction you've just made, are the 3 contents of that statement true to the best of your 4 knowledge and belief? 5 A. They are. 6 Q. Thank you. Can we turn to your second witness 7 statement, please, which is dated 10 June 2024, 8 WITN01050200. Is that your signature on page 12? 9 A. Sorry, it's here. It is. 10 Q. Are the contents of that witness statement true to the 11 best of your knowledge and belief? 12 A. They are. 13 Q. Thank you very much. Can we look at your background to 14 start with, please. I think you became a chartered 15 accountant in 1971; is that right? 16 A. That's right. 17 Q. In 1979, you became a Fellow of the Institute; is that 18 right? 19 A. Yes. 20 Q. In terms of your work career, you worked as an external 21 auditor between 1968 and 1975, for a company that was 22 subsequently acquired by Ernst & Young; is that right? 23 A. I think it was from 1966. September '66 onwards. Have 24 I made a mistake somewhere? 25 Q. I don't think it matters. I've got in my notes '68, 110 1 which I would have taken from your witness statement. 2 A. Right, my -- 3 Q. Oh, you're quite right. '66. My fat fingers! In any 4 event, it was a company that was subsequently acquired 5 by Ernst & Young? 6 A. That's right. 7 Q. Between 1975 and 2002 you worked for Citibank; is that 8 right? 9 A. Yes. 10 Q. Variously as a Regional Head of Internal Audit, Chairman 11 of the Audit and Risk Committee, CFO, Head of 12 Investigations for Europe, the Middle East and Africa, 13 and then Global Head of Investigations? 14 A. That's right. 15 Q. Between 2000 and 2010, you were a Director of GE Capital 16 as Head of Fraud Management in Europe, the Middle East 17 and Africa? 18 A. Yes. 19 Q. In 2009 and 2010 you became part of, and then a director 20 of, Second Sight Support Services Limited? 21 A. Yes. 22 Q. Thank you. Before we get into some of the detail, can 23 I seek to explore with you at a higher level the issues 24 that are raised in your witness statement, so a summary? 25 A. Mm-hm. 111 1 Q. To summarise, is this right, you were an independent 2 forensic accountant contracted by the Post Office to 3 conduct an investigation into, broadly speaking, 4 Horizon? 5 A. Yes. 6 Q. You had the backing of MPs, who were trying to get the 7 Post Office to address their concerns, ie the concerns 8 of MPs raised on behalf of constituents? 9 A. Yes. 10 Q. In the course of your work, you had access to senior 11 people within the Post Office, who either themselves had 12 access, or could access, information concerning issues 13 with Horizon -- 14 A. Yes. 15 Q. -- and could access information about criminal, civil 16 and disciplinary action taken against subpostmasters? 17 A. That's correct. 18 Q. According to your statement -- no need to turn it up, 19 it's paragraph 22 -- you initially received clear 20 promises of cooperation, assistance and unrestricted 21 access to whatever documents you might call for? 22 A. Yes. 23 Q. Those promises were made by Susan Crighton, Paula 24 Vennells and Alice Perkins? 25 A. That's right. 112 1 Q. Despite this, you tell us in your witness statement, you 2 found that the Post Office reneged on those promises? 3 A. Yes. 4 Q. By withholding documentation and information from you? 5 A. Yes. 6 Q. By failing to provide proper answers? 7 A. Yes. 8 Q. And you eventually formed the view that the Post Office 9 considered that Second Sight was "entirely under its 10 control and could be ordered to do or could be 11 disallowed from doing whatever it, the Post Office, 12 wanted"? 13 A. Yes, that was clearly their position and view; it wasn't 14 my position and view. 15 Q. You say in your witness statement that you experienced 16 the Post Office's strategy of denying problems that it, 17 the Post Office, knew of? 18 A. Yes. 19 Q. Of trying to remove oversight or investigation which may 20 have led to adverse conclusions about Horizon in 21 particular? 22 A. Yes. 23 Q. At the time you were doing the work, did those thoughts 24 occur to you? 25 A. Oh, yes. 113 1 Q. This isn't after the event? 2 A. Oh, most certainly not. 3 Q. At the time you were doing the work, why did you think, 4 it, the Post Office, was conducting itself in this way? 5 A. Well, very much along the lines of what Mr Henderson 6 said: that it was very clear that Post Office knew -- 7 insofar as a corporation can know anything -- the people 8 at the top knew that they were dealing with 9 an existential issue, that, if it turned out that 10 Horizon was generating spurious shortfalls, that they 11 had a lousy investigation function, that they had 12 wrongfully prosecuted people. That would be 13 existential. 14 Q. In what sense would it be existential and why? What 15 were the stepping stones? 16 A. Well, the need to rely on the integrity of Horizon in 17 order to be able to, if you like, control the network of 18 subpostmasters, their agents. To be able to exercise or 19 to carry out that sort of level of control, to have it 20 known that the Horizon system was unreliable, or that 21 the supplier of the Horizon system, Fujitsu, or that the 22 user of it, the purchaser of it, Post Office, was -- it 23 could not be relied upon, would mean that all hell would 24 break loose in the branch network. 25 Q. Was this a view that you formed in the course of your 114 1 two, or so, years' work? 2 A. I'd say right from the very outset. I warned Post 3 Office top brass of that possibility from day zero. 4 Q. In terms of what you say in your witness statement about 5 the promises of cooperation, assistance and unrestricted 6 access being reneged on, when did that start to occur? 7 A. Difficult to put an exact date on it. It must have been 8 probably about February 2013. As early as that, within 9 months of us starting work. 10 Q. The Inquiry has seen a number of internal Post Office 11 documents that show that, at least in 2013, individuals 12 within the Post Office were contemplating minimising the 13 role of Second Sight or ending the role of Second Sight 14 completely. You've described in your witness statement 15 a "ferocious pushback from the Post Office" during your 16 investigation. Do you think there was ever a time when 17 the Post Office staff were cooperating with your 18 investigation fully? 19 A. Oh, yes. Initially. The response from Susan Crichton 20 and from Simon Baker, the young IT expert that was 21 assigned to help us to get access to data attitudinally, 22 had exactly the right -- they definitely shared or 23 appeared to share our objective of seeking the truth 24 regardless of consequences. 25 Q. What caused the ferocious pushback? 115 1 A. I think when they started lawyering up. It was pretty 2 clear that, as soon as Ian came to me and said, "Look 3 what I've found, I'm finding some really odd stuff in 4 these legal files and we" -- 5 Q. Stopping there, when was that? 6 A. It was very early on. Again, I would say it was during 7 August 2012. I may be mistaken but it was very early 8 on. 9 Q. What was the "odd stuff" that Ian was finding? 10 A. Well, you've looked at it earlier today, the Brander 11 report, and considering he was only looking at a dozen 12 or so files, and we knew there were cases behind that, 13 it was giving very clear evidence of what I saw or we 14 saw as wholly inadequate investigation work. 15 Q. One of the accusations that is levied against Second 16 Sight very frequently in the internal Post Office 17 material, and it sometimes breaks out into things said, 18 for example, to James Arbuthnot and then subsequently to 19 Sir Anthony Hooper, is that one of the chief problems 20 with your investigation was the slow pace at which it 21 was proceeding. Was that a view that was expressed to 22 you at the time? 23 A. Yes, it was. 24 Q. Was there substance in the view? 25 A. Yes. It was taking longer, particularly in the -- 116 1 during the Mediation Scheme, with 150 applicants, each 2 with a very detailed story, and the need to wait for 3 evidence to be produced by Post Office, which was taking 4 much longer than we that ever expected it to. 5 Q. What was the cause of the delay, firstly in the initial 6 investigation, ie up until the Interim Report of 8 July 7 2013? 8 A. Well, part of it, I think, Mr Beer, was because Post 9 Office -- this is not unusual in big companies -- Post 10 Office seemed to be excessively siloed with different 11 departments, each of which would have some but not all 12 of the information and so, gathering in the information, 13 which Simon Baker was helping us to do, just proved to 14 be like swimming up a waterfall. It was really, really 15 difficult to get the information, and that slowed -- 16 that was -- I'm not trying to shoulder duck the issue or 17 pass off blame, but getting the data to us to be able to 18 reach any conclusions was taking an inordinate amount of 19 time. 20 Q. If we turn up paragraph 41 of your witness statement, 21 please, which is at page 18, it'll come up on the screen 22 for you. 23 A. Yeah, sure. 24 Q. Page 18, foot of the page. You're here in the Mediation 25 Scheme, and you say: 117 1 "Where we couldn't resolve a point of a conflict 2 within a report, we would flag it in the relevant place. 3 An example of a conflict within a report would be the 4 issue regarding Fujitsu's Bracknell office (ie [the Post 5 Office] denying that Michael Rudkin had ever arrived at 6 the meeting that he said he had been invited to). 7 I encouraged Michael to search through his emails to 8 locate the original invitation which, fortunately, he 9 found. I had requested this email from [Post Office] 10 multiple times, but they said they could not find it. 11 It was this kind of pushback that meant that our CRRs 12 [Case Review Reports] went through multiple drafts, 13 sometimes five or more. I had never before encountered 14 such ferocious and determined pushback from a business 15 or client. I was very used to dealing with conflict in 16 my profession but had never encountered such ferocious 17 resistance to almost every sentence used in every 18 report. Every point we raised, that we knew to be true, 19 received monstrous and illogical pushback. Their 20 approach was, in my experience, unprecedented, 21 particularly during the drafting of our final report and 22 many of the [Case Review Reports]." 23 You've given one example there of Mr Rudkin seeking 24 an email that might have confirmed his presence on 25 Fujitsu's premises in Bracknell, as he said. Can you 118 1 help us with, without specific examples, but what you're 2 talking about there "monstrous pushback" and "illogical 3 pushback" on sentences used in your reports? 4 A. Yes, I mean, it was constant. So -- and much of it 5 revolved around what Post Office was asserting, with 6 some justification, was inadequately evidenced remarks 7 that we were making. A good example of that would be in 8 connection with the contention by many of the 9 subpostmasters that they'd never seen a copy of their 10 114-page contract prior to sort of running into the 11 barbed wire fence in legal action some years later. And 12 Post Office was saying, "Well, hang on a minute, you 13 can't -- you're just spouting anecdotal evidence given 14 to you by a few postmasters", and my reaction was, 15 "Well, hang on a minute. I can't provide evidence of 16 that because I have yet to see a contract that has been 17 signed and dated by a subpostmaster". And then we were 18 getting the -- what became almost like a mantra of the 19 Post Office's position is that "We would have, our 20 procedures would have ensured that this had happened". 21 Similarly, when I was trying to get across the 22 point, this -- this is one of scores of points -- that 23 the postmaster -- that risk had been transferred on to 24 the postmasters' shoulders without their acknowledgement 25 or, for that matter, knowledge, on matters like the 119 1 doing away with paying-in slips, or the fact that they 2 no longer had any local record of cheques that had been 3 sent in for processing and might turn out to be mangled 4 and totally shredded in the cheque-clearing machines, 5 the cheque-processing machines -- matters that 6 ordinarily I would have had zero difficulty in 7 communicating in conversations like this, just seemed to 8 be beyond the ken of people in the Post Office. 9 And at first I was taken in by that; later, 10 I wasn't. 11 Q. When you say you were "taken in" by it, what do you 12 mean? 13 A. I took it at face value. I took it that I was pretty 14 pathetic at explaining points and had lost the knack of 15 explaining things simply. But, eventually, I twigged 16 that, in my judgement -- I may be wrong -- it was 17 feigned ignorance, not real. 18 Q. Did the Post Office seek to influence the drafting of 19 your final CRR reports? 20 A. Oh, yes. 21 Q. How did they do that? 22 A. Well, by examining every word, every phrase, every full 23 stop and comma. Again, I -- I mean, we made a point, my 24 entire team made a point of writing things with extreme 25 clarity. We checked for that. So it was unusual to 120 1 have any report that wasn't completely clear and, yet, 2 Post Office seemed to find reason to challenge just 3 about everything we said. 4 Q. Did you adapt the words used, the language used, in the 5 reports, the CRRs, as a result? 6 A. To a degree. You probably realise that Mr Henderson and 7 I, and in fact our colleagues, are not easily -- not 8 necessarily for turning. So there were some pretty 9 intense scraps but we obviously listened to and tried to 10 accommodate the changes they were requesting and 11 certainly, where we'd made mistakes, we corrected them. 12 Q. In his witness statement, Mr Henderson said at page 22, 13 paragraph 71, said: 14 "To the credit of the Post Office, they [the Post 15 Office] did not try to directly to interfere with or 16 influence Second Sight's reports other than by 17 withholding potentially relevant documents." 18 That's slightly different from what you're saying 19 now, that there was an attempt to interfere with or 20 influence the language used. 21 A. Yes, there is a little bit of difference there. I mean, 22 I was involved in a lot more of what Ian himself would 23 have referred to having been down in the weeds and 24 dealing with a lot of the accounting issues in minute 25 detail, and so I probably encountered a lot more 121 1 pushback than he did, although he was encountering 2 pushback on matters to do with the evidential quality. 3 Q. I was going to ask you: what was the division of 4 responsibilities between you and Mr Henderson? 5 A. Well, he's better than I am, so, I mean, he got the 6 difficult stuff to deal with. Essentially, it was 7 pretty obvious. Ian is a specialist in documentation, 8 computers, evidence handling and also he was living in 9 London, I wasn't. It made sense for him to be onsite at 10 Old Street, whereas I was haring around the country 11 making face-to-face contact with the subpostmasters, 12 which, of course, I'd been asked to do by James 13 Arbuthnot and his colleagues. 14 So it was very clear that -- and I omitted to 15 mention that, of course, Ian had had that very valuable 16 experience with the CCRC. So I had far less knowledge 17 of criminal procedure than he did but neither of us put 18 ourselves forward as lawyers. 19 Q. Can we move -- 20 A. I hope I answered the question adequately? 21 Q. Yes, you have. Can we move forward, please, to 22 paragraph 58 of your witness statement, which is on 23 page 28, the foot of page 28. You're here dealing 24 with -- at about the point of publication time of the 25 Interim Report, and you say: 122 1 "We in Second Sight, held the view that those 2 concerns, that had been so clearly expressed by the MPs, 3 and their equally clear expectation we would be 4 investigating them, had certainly not gone away but that 5 our Interim Report was to focus, in the main, on the 6 narrower issue of 'systemic flaws in Horizon'. The 7 inference -- and our understanding -- was that the 8 original, far wider, scope had never simply vaporised, 9 and that we were still expected (by the MPs and by the 10 JFSA) to address them. On reflection, it would have 11 been helpful had we included words to that effect in our 12 Interim Report, although it seems now to be pretty 13 obvious that [the Post Office] would have fought hard to 14 avoid conceding that. It is now clear that the Post 15 Office really had hoped that, after Second Sight's 16 Interim Report, that wider scope investigation would 17 simply never happen." 18 A. Mm-hm. 19 Q. Can we just look at your Interim Report, please. 20 POL00099063. This is the Interim Report of 8 July. Can 21 we look at page 8, please. Paragraph 8.1: 22 "This is an Interim Report and there is much work 23 still to be done." 24 At this point, what in your mind was still to be 25 done? 123 1 A. Well, Ian referred to this earlier. We -- colloquially, 2 we had come to regard the work that we were doing as 3 what we called Job 1 and Job 2. In fact, that 4 terminology was accepted by Post Office. Job 1 was the 5 broader investigation that definitely included 6 consideration of the conduct of investigations and 7 prosecutions but this -- this was narrower and, as we 8 went into the Mediation Scheme, that became a more 9 narrowly defined piece of work, which we referred to as 10 Job 2. The reason we called it the Interim Report was 11 because it was an Interim Report. 12 Q. In your witness statement, you describe things the other 13 way round: that the narrower piece of work was Job 1, it 14 focused, in the main, on the narrower issue of systemic 15 flaws in Horizon. Why was the narrower issue the issue 16 of systemic flaws in Horizon? 17 A. If that's what I've said, Mr Beer, I've got it the wrong 18 way round because Job 1 was, unsurprisingly, the first 19 piece of work which the MPs had asked us to do. The 20 narrower job was -- manifested itself principally in the 21 Mediation Scheme, which was under way at this point. 22 Q. Let's look at your witness statement alongside this 23 then, please. 24 A. Yeah, I -- may have got it wrong. 25 Q. It's page 28 of the witness statement. 124 1 A. You may have caught me out. 2 Q. Page 28, paragraph 58 at the bottom. I'll read the 3 whole sentence: 4 "We, in Second Sight, held the view that those 5 concerns, that had been so clearly expressed by MPs ... 6 had certainly not gone away but that our Interim Report 7 was to focus, in the main, on the narrower issue of 8 'systemic flaws in Horizon'." 9 A. Well, I have expressed that the way I intended to, but 10 I think the confusion which I've allowed to creep in 11 here, for which I apologise, is that the Post Office's 12 understanding of the Mediation Scheme was that that, in 13 a sense, displaced/vaporised the original work that we'd 14 been asked to carry out, and we did not share that view. 15 We, as far as we were concerned, the initial request by 16 the MPs, which involved "taking the JFSA along with us", 17 had definitely not gone away but Post Office completely 18 disagreed with that position. 19 Q. So without reference to the documents, then, if I can 20 just try and get an understanding of it, it was your 21 view that there were always going to be two pieces of 22 work: Job 1 and Job 2? 23 A. Yes. 24 Q. That the first of those, which is reflected in the 25 Interim Report, focused on the existence or 125 1 non-existence of system-wide or systemic problems with 2 Horizon? 3 A. Yes, Mr Beer, but I think the point that has been 4 confusing everybody is that Job 1 was actually very 5 broad but that the Interim Report was not -- it probably 6 should have been but it was not an attempt to answer all 7 of those broad questions that had been posed by the MPs. 8 At that point, we'd been asked to just produce a report, 9 the Interim Report, on these narrow issues -- 10 Q. Okay. 11 A. -- which was, you know, probably absurd and we should 12 have said no. 13 Q. I was about to ask. Was it a request of the Post Office 14 that led to the production of the Interim Report? 15 A. Yes. 16 Q. Why did Second Sight agree to it? 17 A. Well, because it wasn't just the Post Office that was 18 communicating that. The MPs were getting quite -- 19 "irritated" wouldn't be too strong a word, that the 20 investigation had been chuntering along for a year at 21 that point and there didn't seem to be much output from 22 it. So at least we should produce a report that said 23 something, and so this narrow request was agreed upon. 24 Q. I see. In your mind, putting aside the events which 25 happened, namely the development of the initial 126 1 Complaint and Mediation Scheme, what was still left 2 after the production of the Interim Report? 3 A. Well, had the Mediation Scheme not fired up and diverted 4 our attention onto the 150 applicants' is it cases, we 5 would have continued to do the work that the MPs had 6 asked us to do and which had been covered in my original 7 proposal of work, which had never been other than 8 acknowledged. There that never had been an initial 9 letter of engagement. 10 Q. So all of the other issues raised by the MPs on behalf 11 of their constituents still fell to be addressed? 12 A. Yes. 13 Q. The Post Office determined that that should be done 14 through the Mediation Scheme? 15 A. Yes. 16 Q. At the time, was it your view that that was 17 an appropriate means of addressing those issues? 18 A. Yes, seemed like a good idea. 19 Q. Why did it seem like a good idea? 20 A. Well, I think it was -- I mean, at that point Susan 21 Crichton was still involved and still -- there still 22 seemed to be this persuasive search for the truth, and 23 it involved seeking applications from the entire 24 network, and we wanted to get cases that could be 25 efficiently or even at all investigated and, getting 127 1 newer cases, where the data was more likely to be 2 available still, was clearly going to be a good thing. 3 Q. This conclusion at 8.2(a), on the right-hand side: 4 "Our preliminary conclusions are: 5 "We have so far found no evidence of system-wide 6 (systemic) problems with the Horizon software ..." 7 On the investigation of how many cases was that 8 preliminary conclusion formed? 9 A. I think it was about 50/49, something like that. We 10 had, I think, 29 cases from the MPs, 18 from the JFSA, 11 that's 47 by my counting. So I think it was based on 12 those. But, of course, we'd narrowed that down. We had 13 to, because we -- investigating 49 cases right across 14 the detail wasn't feasible, so that's where I think Ian 15 came up with the good idea of spot -- what we called 16 spot reviews: just focus on events within a case and dig 17 into those. 18 Q. Is it right, therefore, that that conclusion is based 19 ultimately on the examination of four cases? 20 A. I think, by that point, we had about -- we had 21 20-something spot reviews but only four of them had 22 really been bottomed out and, even then, one of them was 23 Spot Review 5, the Rudkin matter, which hadn't been 24 bottomed out. So there were still lots of unanswered 25 questions as we wrote this. 128 1 Q. So that preliminary conclusion was reached on the basis 2 of the four cases that had been investigated the most -- 3 A. Yes. 4 Q. -- one of which was still incomplete? 5 A. Yes. 6 Q. Do you think, on reflection, that ought to have been 7 made clearer in paragraph 8.2(a), so that it might not 8 be misused or misappropriated by others for a different 9 purpose? 10 A. Well, with the benefits of hindsight, absolutely. 11 I wish we'd said that. I think Ian mentioned earlier, 12 it would have been probably better if we'd spelled out 13 exactly what we meant by "systemic". We didn't use the 14 word by accident and a considerable amount of thought 15 and discussion went into the word we used there. But, 16 with the benefit of hindsight, Post Office pounced on it 17 and, as Ian said, trumpeted it from the rooftops, and 18 Alan had warned us that that would happen. 19 Q. Before you wrote it or afterwards? 20 A. Oh, before, because of course he was entitled to and was 21 seeing the drafts of these documents. I think he saw 22 the draft of this. Certainly, he'd -- Sir Alan, as we 23 all know, pretty astute, and I think he was -- he 24 foresaw better than I did the danger of this. 25 Q. Can I look at something that you later said a year and 129 1 a half later about this in a call that you had with Tim 2 McCormack, just to explore what was meant here and what 3 you thought this conclusion was meant to represent. Can 4 we look, please, at SSL0000126. 5 This was a recording or a transcript of a recording 6 that I think you made with Mr McCormack on 26 October 7 2015. 8 A. Yes. 9 Q. If we go to page 3, please, and scroll down, please. 10 It's that section there. You say: 11 "You know, should [anyone] be surprised? Of course 12 there are bugs in the system. Now, we were at pains, 13 you probably are aware, in that, when we released that 14 Interim Report, we studiously avoided using the term 15 that there had been 'systemic errors', even though there 16 had been some disclosed to us. We steered [clear] from 17 that. We have now -- I've made it clear in emails to 18 Cameron, Freeman, the Minister herself, we are now of 19 the view that, not any did systemic bugs exist during 20 the time of these cases arising, but that systemic bugs 21 in all likelihood definitely still exist." 22 Then you carry on. The point there "we studiously 23 avoided using that term 'systemic errors', even though 24 some had been disclosed to us", why did you avoid using 25 the term "systemic errors" in the Interim Report if, as 130 1 you say here, systemic errors had been disclosed to you 2 by that time? 3 A. Mm, it is contradictory, I see the point, and probably 4 not very wise wording at the time. Let me clarify. 5 "Systemic", to us, meant that this was something that 6 was occurring right through the network of the 7 12,000-odd branches, and, had there been such systemic 8 bugs, they would have been glaringly obvious to at least 9 some of -- quite a lot of the people. That was the 10 opposite of what we'd found. 11 What we found was that the -- whether it was bugs or 12 other forms of error and defect that were manifesting 13 themselves were unusual, were rare, but had 14 life-changing impact on those that the bugs hit, but 15 were inconsequential in the context of the entirety of 16 the system. 17 So Mr Cameron -- Al Cameron, was one of the few 18 witnesses that's referred to the comparative impact, the 19 materiality of events that, in Post Office's world, are 20 immaterial but, in the individual cases, are hugely 21 material. And so I guess I'm still, in this transcript, 22 probably still being a little bit muddle headed into the 23 use of the word "systemic". I wish we'd never used it, 24 you know. We did, we used it advisedly, we gave it 25 a lot of thought but it led to such abuse that I wish 131 1 we'd used a different form of words. 2 Q. Thank you. That can come down. Can I go right back to 3 the beginning, then, the initial instruction of Second 4 Sight. You describe this in your witness statement, if 5 we can turn it up, please, at paragraphs 15 and 16, 6 which is on page 8. You're here referring to 7 a PowerPoint proposal that we've seen many times, I'm 8 not going to go into it, but you say, by reference to 9 that PowerPoint proposal: 10 "I suggest that no reasonable person could possibly 11 have failed to understand that the review envisaged in 12 my proposal was intended to address the possibility of 13 prosecutorial misconduct." 14 Just stopping there, you're saying that a matter of 15 plain language and fair reading of the document? 16 A. Oh, yes. 17 Q. You go on to say: 18 "Indeed, we had been informed that this was the 19 primary focus of the MPs who had brought pressure to 20 bear on [the] Chairman and CEO to carry out a review." 21 Stopping there, does that sentence reflect the fact 22 that the MPs were not concerned with whether there were 23 intricate or arcane coding problems in the Horizon 24 system; they were concerned that some of their 25 constituents had been wrongfully prosecuted? 132 1 A. Yes. The simple answer to that is yes. The one or two 2 of the MPs expressed, as the Inquiry has already heard, 3 a desire to sort of carry out some sort of deep code 4 review and we'd said it's going to be difficult to do 5 that. You need to find exactly which piece of software 6 existed on a particular date but the short answer to 7 that question was that -- it was crystal clear that all 8 of the MPs, their primary concern was that there'd been 9 prosecutorial misconduct. 10 Q. You say: 11 "In due course, as we met [them], it became crystal 12 clear that this indeed was their primary concern." 13 A. Yes. 14 Q. In 16, you say: 15 "I have subsequently learned, on reading a two-page 16 email [of] 6 June 2012 [you hadn't previously seen it], 17 that Susan Crichton had summarised [your] PowerPoint for 18 Paula Vennells. [It] is largely a cut and paste from 19 [your] PowerPoint, with relatively few changes. Having 20 now read that email, I am even more shocked than I was 21 when, as early as May 2013 and thereafter, Paula 22 Vennells contended that Second Sight had never been 23 invited to look for any evidence of unsafe 24 prosecutions." 25 Was that something that was emphasised to you by 133 1 Paula Vennells? 2 A. Um -- 3 Q. That it wasn't part of Second Sight's brief, its terms 4 of reference, to look for evidence of unsafe 5 prosecutions? 6 A. Well, as a matter of huge regret -- and not only myself 7 but my colleagues at Second Sight -- that we had far 8 less face-to-face contact with Paula Vennells than 9 I would ordinarily have expected us to have, and that, 10 therefore, we'd been shunted down to the second level 11 of, as I say -- I think they called themselves conduits, 12 who were, as far as we were at first aware, were 13 conveying to us what Paula wanted and didn't want. So 14 I'm using a sort of shorthand there. 15 I now see from the material that I've read that 16 I hadn't seen before, that it's pretty clear that she 17 was pushing that, but we were getting messages from 18 Paula of Paula's intentions and desires through the 19 conduit of people like Aujard, Alwen Lyons, and others. 20 Q. Can we look, then, at what her initial reaction was to 21 your proposals by looking at POL00180779. This is 22 an email you wouldn't have seen at the time. It's from 23 Paula Vennells, one of her staff, in fact, is sending it 24 to Susan Crichton, copied to Alice Perkins and Alwen 25 Lyons: 134 1 "I have just met Ron Warmington and want to put on 2 record that he would do an excellent job for us: exactly 3 the right quality level of engagement, etc, we're 4 looking for. I made it very clear to Ron that our 5 primary objective of this exercise is to be transparent 6 and to deal with whatever outcomes and conclusions he 7 comes to." 8 Does that fairly reflect the meeting that you had 9 with her in June 2021 (sic)? 10 A. Yes, it's a bit of an abbreviation of it, but yes. 11 Q. An abbreviation in what sense? I mean, obviously this 12 is a minute of the meeting, it's the -- a summary of the 13 outcome? 14 A. As best I recall, she's probably referring to the 15 meeting where I sort of laid it on the line that there 16 were extraordinary risks associated with this search for 17 the truth and I might, although she might think me to be 18 a good choice, I might not be. That she might be better 19 off with somebody that would do things differently. 20 Q. Did you receive any formal feedback on the PowerPoint 21 proposal that you presented? 22 A. Well, strangely enough, and I kick myself on this, 23 I don't think we did. It was just we said, "Look, we'll 24 work on" -- initially, it was a very small job, seemed 25 to be a very small job. So we said we'll just proceed 135 1 on a time and materials basis, and these days, of 2 course, we would have insisted on a proper contract and 3 a proper letter of engagement, and so on, otherwise, you 4 know, we'd be missing out. But it was just sort of "Go 5 ahead". I now know that, behind the scenes, there was 6 a considerable amount of debate on a sort of putting 7 together a letter of engagement but it was never 8 communicated to us. 9 Q. After the meeting with Ms Vennells did you believe that 10 she meant what she said, rather -- namely what's 11 recorded in this email, namely the Post Office's 12 objective, primary objective, was to be transparent and 13 deal with whatever outcomes and conclusions Second Sight 14 reaches? 15 A. Now, call me stupid, but I believed that and I later 16 learned that probably wasn't the case. Well, I think it 17 probably was the case at that point. That was what she 18 conveyed, convincingly, and I accepted it. 19 Q. Do you know why, or did you know why, the Post Office 20 appointed Second Sight over other forensic accountants? 21 A. Haha! As Ian said this morning, we were cheap. We were 22 certainly, with fewer overheads and less greed. We had 23 a pretty good value for money proposition but I think 24 the driving factor was that Susan Crichton -- with whom 25 I've never played tennis, incidentally -- held a view 136 1 that I had form for pursuing evidence of innocence when 2 people looked guilty and very, often finding that the 3 innocent had been or would have otherwise been fired or 4 worse for acts that they had not carried out themselves. 5 Q. Was that in Citibank or at GE Capital? 6 A. Principally in Citibank. My role at GE Capital was more 7 sort of fraud management with an occasional 8 investigation thrown in, whereas in Citibank it was pure 9 investigations, often into the conduct of employees at 10 all sorts of levels right up to the top brass. 11 Q. If we go back to your witness statement at page 9, 12 please, and look at paragraph 19 on page 9, you say: 13 "In due course, Second Sight was approved by all the 14 parties and a decision was made, which we later came 15 deeply to regret, that although Second Sight's 'clients' 16 comprised the MPs and the JFSA as well ... the contract 17 would be between Second Sight and [the Post Office], 18 with no oversight by the MPs and only some 'mild' 19 oversight on behalf of the JFSA, by Kay Linnell." 20 Why were you concerned when you learnt that Second 21 Sight was to be contractually engaged only with Post 22 Office, rather than all of the interested persons? 23 A. Well, it was very clear from the outset that the 24 subject, the principal subject -- or subjects of the 25 investigation were to be the postmasters, who may well 137 1 have had their hands in the till, and Post Office. They 2 were the two parties involved, and perhaps Fujitsu. To 3 have the subject -- the principal subject of 4 an investigation also be the paymaster is absurd, and it 5 was Andrew Bridgen, as I say in paragraph 20, who was 6 the most outspoken on that point. He spotted that 7 problem right upfront and was very angry about it. 8 I mean, I -- we accepted that, the Treasury 9 apparently said, "We haven't got any money and, 10 therefore, Post Office is going to have to pay for it" 11 but it was a daft decision. 12 Q. Was that explored at the time: the Treasury being the 13 paying client rather than the Post Office itself? 14 A. I don't think it was. I don't think it was -- Oliver 15 Letwin was representing the Treasury at that point and 16 his view was it's out of the question, Post Office is 17 going to have to pay for this. But they could have paid 18 for it through a conduit of the Treasury. 19 Q. Thank you. That can come down. You say that it was 20 obvious from very early on that the number of cases that 21 you were expected to investigate was increasing and you 22 would, therefore, need to hire in additional 23 investigators, yes? 24 A. Yes. 25 Q. You say that you and Mr Henderson had no difficulty in 138 1 coming up with suitable candidates -- 2 A. Yes. 3 Q. -- because of your years of work in this field; is that 4 right? 5 A. Yes. 6 Q. You brought in three further investigators; is that 7 right? 8 A. Yes. 9 Q. Are those, or were those three investigators, Chris 10 Holyoak? 11 A. Yes. 12 Q. Did he join the investigation in about February 2014? 13 A. Yes, I think shortly after he retired from his bank that 14 he was -- 15 Q. We've got a confidentiality agreement with him -- 16 A. Yes. 17 Q. -- dated 8 February 2014 -- 18 A. Yes. 19 Q. -- which would tend to indicate, if things were working 20 well, that would be the beginning of his engagement? 21 A. Yes, that was when we were realise that the two of us 22 wasn't going to cut the mustard. 23 Q. Did Kim Evans join the investigation in about July 2014? 24 A. Yes. 25 Q. Again, we've got a confidentiality agreement of 30 July 139 1 2014? 2 A. Yes. 3 Q. Lastly, Niall Young. Did he join the investigation in 4 about August 2014? 5 A. Yes. 6 Q. So does that mean that, for the time up until the 7 publication of the Interim Report, there were the three 8 of you? 9 A. Yes. 10 Q. Were there any attempts made to bolster your resources 11 in that time? 12 A. Not by us. I think the answer is no because, by then, 13 we knew how much had been invested in acquiring the 14 knowledge of what had been going on, and we recognised 15 that bringing anybody in, no matter how good they were 16 as an investigator would divert attention by Ian and 17 myself onto bringing that person up the curve. It was 18 a bit of a Catch-22 situation. 19 Q. The number of cases, I think, increased sharply from 20 around 10 in June 2012, at start-up -- 21 A. Yup. 22 Q. -- to 49 or so by February 2013; is that right? 23 A. Yes, that's right. 24 Q. Did that pose resourcing problems? 25 A. Yes. Broadly. 140 1 Q. When you started the investigation, I think you were 2 struck by the lack of what you call a general file, is 3 that right -- 4 A. Yes. 5 Q. -- to deal with already reported Horizon-related events; 6 is that a fair description? 7 A. It most certainly is. 8 Q. What were you expecting to find? 9 A. Well, my experience as a corporate investigator meant 10 that, whenever broadly similar events occurred, whether 11 it was ATM shortfalls or fraud by customers, or 12 whatever, the Investigation Team would draw those cases 13 together, look for linkages, and help -- in order to 14 help its investigators get to grips with what 15 systemically had gone wrong to allow that fraud or that 16 event to occur. So you would normally have, you know, 17 a case management system that would draw things together 18 and then be searchable to say "What other cases have we 19 had involving motor vehicle licences or, for that 20 matter, that involved remittances in or out that have 21 gone adrift?" Ordinarily, you'd be able to say, "Yeah, 22 we've had 25 of those cases, let's have a lock if there 23 are any similarities", and that was completely absent. 24 Q. It may sound a bit of a noddy question but why would you 25 expect an organisation in receipt of a series of 141 1 complaints or grievances or suggestions or allegations 2 to draw them together in a central repository for the 3 purposes of investigation and analysis? 4 A. Well, quite frankly, Mr Beer, it's hard to see how 5 an Investigation Team could deliver an effective service 6 to its employer without having that. So, you know, 7 being able to answer questions like, in the extreme, how 8 many people have committed suicide or attempted it, you 9 would expect that sort of answer to be available and, 10 less seriously, how many instances have we had of 11 customers who have said, "I got lucky, I got a windfall, 12 there's something gone wrong, I've had something for 13 nothing, I'd like to tell you about it"? There was 14 no -- you would expect there to be scores of those sort 15 of cases but to be told that there haven't been any is 16 just -- it's ludicrous. I hope that's an adequate 17 answer. 18 Q. Yes, you're referring to a compendium, whether written 19 or electronic, that would bring together -- would I be 20 right -- letters from subpostmasters, reports, via line 21 managers or similar; am I right? 22 A. Yes, very much so. 23 Q. Any court judgments -- 24 A. Yes. 25 Q. -- whether in favour or against the subpostmaster? 142 1 A. Yes. 2 Q. News pieces, articles in The Grocer, Computer Weekly? 3 A. Yes. 4 Q. Letters to the Sunday Times saying, "I have wrongly been 5 gifted £2,500 worth of Premium Bonds", that kind of 6 thing? 7 A. Most specifically including that kind of thing, yes. 8 Q. Would it also include matters that had come up through 9 any form of Helpdesk that the Post Office or Fujitsu 10 operated? 11 A. Yes, that's a subject in itself, isn't it? The answer 12 to the question is yes. 13 Q. Would it include reports on any bugs, errors or defects, 14 however they are described, that were found to have 15 caused or potentially caused balancing or other data 16 integrity issues? 17 A. In any company I've ever worked for, yes. Those sort of 18 things, all of the above, would be included. 19 Q. When you were instructed, and in the absence of such 20 a compendium of material, were you, in fact, made aware 21 by the Post Office that there had been acquittals in 22 criminal trials of subpostmasters who had alleged that 23 Horizon was responsible for the shortfall of which they 24 were accused of either stealing or falsely accounting? 25 A. No. 143 1 Q. Were the names Nichola Arch, Maureen McKelvey, Suzanne 2 Palmer mentioned to you? 3 A. No, not at that stage. 4 Q. Did the Post Office draw to your attention right at the 5 beginning any suites of documents held by the Post 6 Office concerning the functioning of, or deficiencies 7 in, the Horizon system, including release notes 8 documenting bug fixes? 9 A. No. 10 Q. Major incident reports? 11 A. No. 12 Q. Service Management documents? 13 A. No. 14 Q. Did they, the Post Office, present you with 15 documentation -- and I include in that phrase memoranda 16 reports, emails, minutes of meetings -- concerning bugs 17 of which the Post Office was already aware, in 18 particular, the Callendar Square bug and the receipts 19 and payments mismatch bug? 20 A. No. First we heard of that was from Simon Baker in, 21 I think, May 2013. 22 Q. Did the Post Office provide you with Jason Coyne's 23 report, prepared for the purposes of the case involving 24 Julie Wolstenholme in 2004? 25 A. No. I wish they had. 144 1 Q. Did the Post Office provide you with the BDO Stoy 2 Hayward report prepared for the purposes of the Lee 3 Castleton case in 2006? 4 A. No. 5 Q. Did the Post Office provide you with any witness 6 statements that had been prepared in past cases of the 7 Post Office in criminal proceedings which set out 8 categories of documents including PinICLs, PEAKs and 9 KELs, that may be relevant to your investigation? 10 A. No. 11 Q. Same question in relation to civil proceedings brought 12 by or against the Post Office? 13 A. No. The first we heard of civil proceedings was the Lee 14 Castleton case, which came up quite a bit later. 15 Q. Did the Post Office provide you with any operational 16 change proposal records which set out the existence of 17 a facility for remote access and email correspondence in 18 which the Post Office approved Fujitsu remotely 19 inserting messages at a branch level? 20 A. No. First we heard of that was Ian's discovery of the 21 Gareth Jenkins document while he was sitting next to 22 Susan Crichton and Jarnail Singh. 23 Q. Did you discuss with anyone within Post Office "Why 24 haven't you got a general file, a compendium or a case 25 management system"? 145 1 A. Absolutely, with Susan Crichton. 2 Q. What was the answer? 3 A. Well, she was as exasperated as I was. She knew full 4 well how efficient companies would not even need to ask 5 about that sort of thing, just be there. So I was 6 pushing on an open door, as far as that was concerned. 7 Q. Can you help us a bit more with what she explained to 8 you? 9 A. Yes. I mean, I said, literally, "Susan, okay, where's 10 the general file on this that will help to give Ian and 11 myself an efficient briefing on what has been going 12 on?", and she said, "There isn't one". I mean, I think 13 I probably used an expletive. And she was, you know, 14 I can't fault Susan. She just knew there wasn't 15 anything there. 16 Q. Can we look, please, at POL00344051. 17 A. Ah. 18 Q. You recognise this document? 19 A. Oh, yes. 20 Q. Is this a document that you drafted or Mr Henderson? 21 A. I did. 22 Q. What was its purpose? 23 A. Well, Susan had said to me, as best I recall, and 24 I recall things pretty well, she said something along 25 the lines of "I've been asked to take over the POID -- 146 1 the Post Office Investigation Department -- John Scott's 2 department. I'd like your views on more or less how 3 sensible that would be for me to do that. What are your 4 views on -- you know, can you write me a little report 5 outside of the main piece of work that you're doing, on 6 your observations about the Investigation Department?" 7 Q. When was this prepared, roughly? 8 A. Ooh, oh, now you've got me on that. I think it was -- 9 it must have been -- I would have thought it was like 10 August 2012. But it -- I might be wrong on that. Is 11 there no date on this? 12 Q. No. 13 A. Oops. Sorry. 14 Q. Well, it's a draft, in fairness to you. 15 A. And it remained a draft. It was just really almost 16 a personal memo between myself and Susan, with caveats 17 as to its reliability. But it was pretty well straight 18 away. I remember she'd almost immediately been asked to 19 take over the department, and she was in some -- almost 20 trepidation might not be too strong a word about that. 21 Q. "DRAFT Observations on the Investigations Function. 22 "What have we found out about [the Post Office's] 23 Investigation Function in reviewing the Case Files 24 during the Horizon Investigation? 25 "In reviewing [the Post Office's] documentation 147 1 relating to the 29 MP-referred cases, and the 20 cases 2 referred by the JFSA, Second Sight has gained an insight 3 into the workings of [the Post Office's] Investigation 4 Team." 5 That might help you to date it -- 6 A. Yeah, on reflection, this was a little later than end of 7 2012. This was sometime early in 2013. 8 Q. Thank you. 9 "The following observations are based solely on what 10 we have seen in those case files. We have not 11 interviewed any of the members of the Investigation 12 Team, nor its senior management. We have not reviewed 13 its mandate, manpower or workload. We have also not 14 researched the legal basis on which [Post Office] 15 conducts either investigations or prosecutions. With 16 that proviso, we make the following interim 17 observations: 18 "1. [Post Office] Investigators and investigations 19 are overwhelmingly focused on obtaining an admission of 20 False Accounting from the interviewed [subpostmaster]." 21 Did you form that view based on reading the file and 22 in particular the interviews? 23 A. Yes. 24 Q. "2. [Post Office] Investigators often appear to have 25 paid scant attention to the interviewee's assertions of 148 1 innocence or his/her reference to specific transaction 2 anomalies. They seem to have shown little or no 3 willingness to establish the underlying root cause of 4 any given shortfall. 5 "This disinterest seems to be driven by the desire 6 to 'get the money back' from the [subpostmaster], 7 knowing that a False Accounting conviction will provide 8 a relatively inexpensive pathway to that goal. In the 9 event that [a subpostmaster] has not committed any 10 criminal offence, then clause 12 of the standard 11 contract provides an equivalent pathway to asset recover 12 using civil law. 13 "In either event ... since [Post Office] doesn't 14 need to show where the money has gone, investigators see 15 no business benefit in trying to establish the 16 underlying root cause(s) of the loss. 17 "Under the contract ... the burden of proof (that 18 they are not responsible for the loss) falls on the 19 shoulders of each [subpostmaster] even though none of 20 them (in the cases reviewed) had any investigative 21 skills and their requests for assistance and provision 22 of underlying data were routinely denied, mostly on cost 23 grounds. This meant that the accused had neither the 24 expertise, the external support, nor the data to 25 establish the true reason for the loss and thereby 149 1 either prove their own innocence or realise that they 2 really were responsible for the loss." 3 Was that on a reading of the 49 case files? 4 A. Yes. 5 Q. Your third provisional view or conclusion was: 6 "In none of the cases examined so far did any 7 Investigator record anything that indicated that there 8 might be any widespread systemic problem worthy of 9 investigation, despite similar allegations being made by 10 different, unconnected, postmasters [subpostmasters]." 11 Then if we go on to 4: 12 "We saw a repeated failure to reach consensus or 13 closure with the interviewees. Where the 14 [subpostmaster] was wrong in his or her assertions, one 15 would expect that to be convincingly articulated and 16 proved by the Investigator. Time and again, however, 17 the Investigator and the [subpostmaster] got close to 18 consensus but failed to arrive at it." 19 Then 5: 20 "The overwhelming impression gained from reviewing 21 the transcripts of investigative interviews is that the 22 [subpostmaster] was viewed as an enemy of the business. 23 The culture within the Investigation Team appears to be 24 one of a 'presumption of guilt' when conducting 25 an investigation, rather than the aim of 'seeking the 150 1 truth' (See comments on the consequences of 'Tunnel 2 Vision' at the foot of this report)." 3 I am not going to read the rest of the report. It 4 will be there for anyone else to read. You then go on 5 to make some recommendations and why those five problems 6 that you have identified are indeed problems. 7 A. Yes. 8 Q. This report is headed up as "Draft"; was it ever 9 finalised? 10 A. No, I'm afraid not. I think that -- it served its 11 purpose. Susan, I think, was foisted off -- I think she 12 had to take over the department in the end, and so -- 13 and it was just done as a kind of an aside. So I'm 14 afraid I never did see the need to finalise it. But 15 I stand by everything in it. 16 Q. Can we look at what some other documents tell us as to 17 what happened with the report. POL00245685. This is 18 an email of much later from Amanda Peacock (sic) of the 19 CCRC -- 20 A. Pearce. 21 Q. -- to Rodric Williams, you're not copied in. She says: 22 "I've managed to find a bit more information about 23 the report which Ron ... apparently wrote." 24 That's the document we've just looked at. 25 "Ron tells me that", and then there is a quote 151 1 attributed to you. 2 Did you engage in email correspondence with the CCRC 3 or is that a quote from you saying something over the 4 phone? 5 A. I suspect this is a quote from the meeting that I had in 6 Birmingham with the CCRC, at their request. 7 Q. I see. So you are said to have said: 8 "I wrote the report on The Investigations Function 9 in 2013 at the specific verbal request of ... Susan 10 Crichton ..." 11 A. Yes. 12 Q. That's accurate, yes? 13 A. Yes. 14 Q. "... who later shared with me her concerns about [the 15 Post Office's] Investigations Department ('POID')." 16 A. Yes. 17 Q. Is that accurate? 18 A. Yes, when I said "shared her concerns", she said, 19 "I think you've nailed it", or words to that effect. 20 Q. "Later, in the latter part of January 2014 as I recall, 21 my colleague Ian Henderson sent a copy of the report 22 (still marked as 'Draft' as far as I recall) to Chris 23 Aujard, who at that time was Post Office's General 24 Counsel, copying Belinda Crowe at [Post Office]." 25 Is that accurate -- 152 1 A. Yes. 2 Q. -- ie both that you said that and that the facts 3 themselves are true? 4 A. Yes. 5 Q. "[Mr] Aujard had asked to see a copy of the report after 6 its existence was mentioned at a meeting of the 7 Mediation Working Group. [Post Office] ought to be able 8 to locate a copy of that email -- to which the report 9 was attached. As mentioned, it was sent by Ian to those 10 two [Post Office] employees, copying also myself." 11 Is that accurate that that's what you said but also 12 the underlying facts, that Mr Aujard had asked to see 13 a copy of the report and it was sent over to him? 14 A. Yeah, I think it was Ian, Mr Henderson, that relayed to 15 me that Mr Aujard had asked him in. So I don't think 16 Mr Aujard asked me. I think he asked Ian. But I'm 17 a little bit hazy on that. But I know the request came 18 from Mr Aujard and that's why an old copy of the thing 19 was dusted off and produced. 20 Q. Okay. He accepted when he gave evidence that he 21 received the report from Second Sight? 22 A. Yes. 23 Q. Do you know why it was being sent to him? 24 A. Well, as it says here, it had been mentioned and -- 25 I recall it being mentioned in the Working Group 153 1 meeting, and us being -- Ian and I being surprised that, 2 yet again, a key document had not been handed over from 3 one General Counsel to the next and, therefore, it was 4 obviously something that, although I'd produced it for 5 Susan, I'd produced it for her in her capacity as 6 a General Counsel and, therefore, he was entitled to see 7 it. 8 Q. Was anything done about what you found in your five 9 points or your recommendations second time around, 10 ie when it was produced to Mr Aujard? 11 A. Not to my knowledge. 12 MR BEER: Thank you. 13 Sir, it's just gone 2.05 (sic). I wonder whether we 14 might take the afternoon break now until say 2.20 15 (sic) -- 3, rather, 3.20. 16 SIR WYN WILLIAMS: Yes, I was beginning to wonder if there 17 was something wrong with my clock! 18 MR BEER: Time slows down when you're standing here, sir! 19 SIR WYN WILLIAMS: In any event, we will take the break for 20 the period you mentioned. 21 MR BEER: 3.20, sir. 22 (3.08 pm) 23 (A short break) 24 (3.21 pm) 25 MR BEER: Good afternoon, sir, can you see and hear us? 154 1 SIR WYN WILLIAMS: Yes, I can. 2 MR BEER: Thank you. 3 Good afternoon, Mr Warmington. Can we turn up, 4 please, page 21 of your witness statement. 5 A. Yeah. 6 Q. Paragraph 46, which is in the bottom half of the page. 7 You say: 8 "After discussions with Ian Henderson as to the 9 seriousness of his findings of probable prosecutorial 10 misconduct from his review of the small number of legal 11 files to which he had been given unrestricted access 12 (only seven as [you] recall it), [you] decided to speak 13 directly with Susan Crichton about that very important 14 matter. I believe this discussion took place in August 15 or September 2012. During a meeting with her I said 16 that, whereas I was confident that Second Sight had the 17 ability to assess the adequacy of evidence in cases of 18 suspected fraud and financial theft, we were forensic 19 accountants, not lawyers experienced in criminal 20 prosecutions or defence, so it was essential that our 21 findings be quickly, thoroughly and independently either 22 ratified or refuted by a competent barrister experienced 23 in criminal cases. Susan who, like practically every 24 other General Counsel that I had ever met, claimed no 25 expertise herself in matters of criminal prosecution, 155 1 said that she would take the matter to Cartwright King." 2 So, firstly, this was a face-to-face meeting, was 3 it? 4 A. Yes. 5 Q. Was it just you and Susan Crichton present? 6 A. Yes. 7 Q. You drew to her attention matters of prosecutorial 8 misconduct that your colleague, Mr Henderson, had 9 uncovered in a small number of files to which he had had 10 access? 11 A. Yes. 12 Q. Can you recall, in general terms, what the type or 13 species of that prosecutorial misconduct was? 14 A. Yes. In every case, inattention to the underlying root 15 causes of the shortfalls that were being pursued civilly 16 or criminally but, also, as Ian has mentioned, the 17 failure to disclose, as far as he could detect -- 18 because I was relying on his input on this and it was 19 entirely credible to me -- not disclosing exculpatory 20 evidence, evidence of innocence, if you like, or 21 evidence that would undermine the prosecution or civil 22 case. 23 So this -- I had, and still have, less experience 24 than does Ian on matters of prosecutorial conduct but it 25 was pretty compelling to me and so I thought that 156 1 I needed to share those views with Susan. 2 Q. Did any of the five things that you were subsequently to 3 mention in the first part of 2013, in that draft 4 document that we looked at before the break, form part 5 of your briefing to Susan Crichton? 6 A. Yes, and I think all of them but, as is my nature, 7 I probably put it in rather coarse language. 8 Q. What did you envisage needed to happen as a result of 9 the provision of this information? 10 A. Oh, it was very clear. I said, "Don't rely on us, you 11 need to deal with this urgently and go and either 12 rubbish what we've said, or confirm it, and if, God 13 forbid, an expert in criminal law says that Mr Henderson 14 and I -- more Mr Henderson -- is right, you're going to 15 have to review a whole load more cases, not just the 16 ones that we've looked at. But, if it turns out that 17 we're wrong, have the decency to come back to us and 18 tell us 'you're talking nonsense' and we will 19 recalibrate". And that's about the sum of it. 20 Q. Now, none of is ultimately finds its way into the 21 Interim Report of July 2013? 22 A. No. 23 Q. Is that because you saw this as going down a different 24 route or I should ask the broader open question: why? 25 A. Ooh, I think it's what we were referring to earlier, 157 1 Mr Beer: this Interim Report was produced in order to 2 just come out with something that evidenced the work 3 that was going on, and had gone on, and it wasn't 4 intended to cover all of the issues that were still 5 open. My view on this was: Toddle off, get the 6 independent view and have the decency to share it with 7 us. 8 So, yes, with the benefit of hindsight, some of 9 these embryonic or as yet unconcluded thoughts could 10 have been dumped out in the Interim Report but we 11 didn't. 12 Q. Because you've explained to us already that the primary 13 concern of the MPs on behalf of their constituents was 14 possible prosecutorial misconduct and here you were 15 potentially uncovering some? 16 A. Yes, but, to be fair to Post Office and to Mr Henderson, 17 I had to consider the possibility that we were wrong. 18 I didn't think we were, I don't think that Ian was, and 19 Ian never has been, but we had to give the benefit of 20 the doubt and say, "Go off and get a second opinion on 21 this", but not the second opinion that they eventually 22 sought. 23 Q. Moving to that, you say at the foot of that paragraph, 24 she said, Susan Crichton, she would take the matter to 25 Cartwright King. 158 1 Then you tell us over the page that you: 2 "... laughed out loud at that ... simply 3 preposterous suggestion and responded by saying that 4 Cartwright King would [be] entirely unsuitable ... 5 because they could not ever be viewed as independent and 6 they would ... then be 'marking their own homework'." 7 A. Yes. 8 Q. You suggested going to a higher ranking firm and 9 suggested some names. You were astonished at her reply, 10 which was along the lines of: 11 "... 'that won't work, the Board won't approve that 12 sort of expense'. I responded with words along the 13 lines of 'Well then, you're all", and then there's 14 an expletive, I suspect. 15 A. I'm afraid so. 16 Q. Which has been caught by -- 17 A. Sadly. 18 Q. -- our data protection machine: 19 "... this is an extraordinarily important issue, why 20 is cost in any way relevant?" 21 This was a very serious issue, wasn't it? 22 A. Oh, yes, at that point it was the most serious issue 23 that we'd come across and it kind of remained so for 24 years afterwards. 25 Q. Because the MPs had said that they were interested on 159 1 behalf of their constituents in the cases that had gone 2 to prosecution? 3 A. Well, let's face it, the -- Lord Arbuthnot was -- he 4 had, I think, three constituents, one of which was Jo, 5 and this was central to the reason he was pushing for 6 the investigation to be carried out. So it was central 7 in his mind and, if it was central in his mind, you can 8 bet that it was central in the minds of his group of 9 MPs. 10 Q. Did you find out what, in fact, happened at this time, 11 or shortly thereafter, namely in August or September 12 2012, whether or not your suggestion of referring this 13 to a competent barrister experienced in criminal cases 14 or, as Susan Crichton said she was going to do, refer it 15 to Cartwright King, in fact happened? 16 A. No, we didn't find out until much later what actually 17 happened. 18 Q. Is it your understanding that what actually happened was 19 a result of your suggestion in August or September 2012, 20 or was prompted by something entirely different, namely 21 the Simon Clarke Advice of July 2013? 22 A. Simply to say, I don't know. My ego would like to think 23 that we precipitated the action that was taken but 24 I doubt it. Whether the Clarke Advice was sought 25 because of what we'd raised or just because they thought 160 1 it was a good idea anyway, I don't know. 2 Q. Okay, that wasn't fed back, that wasn't a communication 3 that you were a party to, ie the motivating cause for 4 going off to Cartwright King? 5 A. No, I regret not sort of chasing the point more 6 vigorously. I mean, I probably should have gone back 7 and said, "Where the devil have you got to on this 8 point?" But I think that coincided with -- I can't for 9 the moment remember why -- I'm afraid, why I didn't go 10 back and kick Susan's door down on this. I'm not 11 sure -- she left at some point, so I think -- 12 Q. September 2013, I think. 13 A. Yes, so quite a bit later than this, yeah. 14 Q. Can we look at an exchange that I showed Mr Henderson 15 this morning of May 2013 between you and Simon Baker. 16 A. Mm-hm. 17 Q. POL00144687, and look at page 2, please, and scroll 18 down. There's an email to you from Simon Baker of May 19 2013, so a couple of months before publication of the 20 Interim Report. 21 A. Yeah. 22 Q. It looks like it's in readiness for a meeting that 23 you're to have with Paula Vennells. He, Mr Baker, says: 24 "Just to ensure we are on the same page, Paula would 25 like to say we have agreed the following with Second 161 1 Sight, can you confirm you agree ..." 2 Then 2: 3 "By using the 2-3 cases you will answer the 4 question: have systemic defects in the Horizon system 5 resulted in the wrongful conviction or suspension of 6 subpostmasters?" 7 Now, can you see that that question is mixing two 8 things: defects in the Horizon system, which are 9 systemic; and the conviction, wrongfully, of 10 subpostmasters? 11 A. It may well be combining two things but I think it's 12 very carefully crafted to be -- ask us to agree to 13 something that is ludicrous. 14 Q. Then at 4: 15 "... if question 2 was posting to you today, you 16 would answer it 'no'." 17 Then can we see your reply on page 1. You say at 18 the top of the page: 19 "I'm surprised at the questions you have raised as 20 these include matters that are outside our scope of 21 work." 22 Then scroll down to 2, you reprint his question and 23 say: 24 "Our role is to establish the facts relating to 25 specific MP or JFSA nominated cases. We are not 162 1 qualified to answer a legal question about what may or 2 may not be an unsafe conviction or suspension." 3 Just three points on that, firstly. You had, in the 4 earlier August or September, been told quite a lot by 5 Mr Henderson about prosecutorial misconduct and you had 6 yourself told Susan Crichton about prosecutorial 7 conduct. We don't see that reflected here. 8 A. Mm. 9 Q. "This was going to be dealt with by a different route, 10 this was going to be at my suggestion taken up by 11 an experienced criminal law barrister to see whether 12 we're right or wrong"? 13 A. Mm-hm. 14 Q. Instead, you essentially bat it back and say, "This 15 isn't within our sphere of expertise"; why is that? 16 A. You know, when I looked at this earlier today, 17 I couldn't quite work out why I worded it this way. I'm 18 sort of hovering around the thought that I was actually 19 being facetious. I was being -- I was -- I was so 20 irritated by the daft question that I've answered it in 21 a rather daft way. What I meant was, I think by that 22 point, we had made it abundantly clear -- I say "we" -- 23 Ian and I had made it clear -- that we weren't going to 24 use the term "systemic defects". It follows that, if we 25 weren't going to define -- say there had been any 163 1 systemic defects, how on earth could there be systemic 2 defects that had resulted in a wrongful conviction or 3 suspension of the tiny volume of subpostmasters whose 4 cases we'd looked at, at that point? It was just 5 patently absurd, the -- and I probably should have said 6 that and not answered it as narrowly as I did. 7 I wish now I'd actually sort of given them both 8 barrels in terms of the suspicion that there was 9 wrongful prosecutions but I don't -- I can't recall 10 exactly why I worded it that way, I'm afraid, Mr Beer. 11 Q. Okay. Ie "Hold on, we told your General Counsel about 12 this back in August or September 2012, we found, on 13 a preliminary basis, some probable prosecutorial 14 misconduct. We explained then that we didn't have the 15 experience and we suggested a way forward for the Post 16 Office. It hasn't taken that up"? 17 A. Yes, that's in abeyance: where's the blasted answer to 18 that? But, certainly in terms of this narrow question, 19 of course, we'd be stark raving mad if we had agreed to 20 that. You know, it just wouldn't be a reliable 21 statement if we had made it. 22 Q. Again, I think you may have answered this already: do 23 you think, on reflection, this episode, ie picking up 24 probable misconduct of prosecutions as early as August 25 and September 2012, raising that with the Post Office 164 1 suggested in a solution, them not taking it up, 2 seemingly, but then asking you to use a two or 3 three-case sample size to (a) answer the question 4 whether there are systemic defects and (b) to say that 5 has not resulted in the wrongful conviction of any 6 subpostmasters is absurd, should have been included in 7 the Interim Report? 8 A. Yes, we were somewhat inured to receiving absurd 9 responses from Post Office already at that point. It 10 would have been nice if we had been less constrained and 11 less professional in expanding on that, perhaps, in the 12 Interim Report. You know, we didn't, and I suppose -- 13 I'm not inventing this but I think that, at that point, 14 I still was naive enough to be thinking that my 15 suggestion to Susan was underway and that there would be 16 an educational input to us, which would have said, "Hang 17 on, boys, thank you for alerting us to this but you're 18 completely wrong on that. Here is the words of, you 19 know, a Mr Atkinson or whoever", somebody of that 20 stature, that would have said "You're barking up the 21 wrong tree, you two", and I was ready to receive that 22 input but it never came. 23 Q. Thank you. That can come down. 24 You tell us in your witness statement that you need 25 to correct something that you heard in Ms Crichton's 165 1 evidence and the thing that -- 2 A. Yes. 3 Q. -- you need to correct is she said that you were 4 impressed by Mr Jenkins as an expert witness. You say 5 that, to the best of your knowledge, neither you nor 6 Mr Henderson said that you were impressed by Mr Jenkins 7 as an expert witness but, instead, impressed by him as 8 a computer or systems expert; is that right? 9 A. Yes, exactly. 10 Q. Was it you or Mr Henderson that said that to Susan 11 Crichton? 12 A. Probably both but it would have come more credibly from 13 Mr Henderson, who had more contact with Gareth Jenkins 14 than I did. 15 Q. In your witness statement, we ought to turn it up, at 16 page 49, paragraph 106 -- page 49 at the top, second 17 line in, you say: 18 "What we did say, as I remember it, is that we were 19 impressed by him as a systems/computer 'expert'. The 20 distinction was clear to us, we did not think (from what 21 we had seen) that he could have been aware of the duties 22 that an expert witness would owe to the court and so was 23 partisan in his views concerning Horizon. It is 24 possible that we failed to make that distinction clear 25 to Susan, such that she misunderstood on that point." 166 1 The first point is that you say "we did not think 2 (from what we had seen) that [Mr Jenkins] could have 3 been aware of the duties that an expert ... would owe to 4 the court"; is that a view that you formed 5 contemporaneously, ie back in 2012/2013? 6 A. I find it difficult to think that we could have been as 7 crisp or -- 8 Q. Prescient? 9 A. Yes, prescient as it turned out to be. But having said 10 that, Ian is and has served as an expert witness -- 11 I have never chosen to do that work -- and I know, in 12 that sense, what an expert witness looks like and how 13 they conduct themselves, and the form and format of 14 expert witness reports, I've seen enough of them. And 15 I didn't think -- I recognised as early as that, without 16 the benefit of second sight -- haha -- that we would 17 later learn what we have later learned in regard to his 18 briefing and the modifications of his witness 19 statements, and so on. 20 He was just an expert in the Horizon system and Ian 21 and I knew enough about it to say, "Well, how on earth 22 could the courts accept that this was -- this person who 23 had, if you like, never" -- we didn't know at the time 24 he'd never before acted as a expert witness but he just, 25 he didn't come across as an expert witness. He came 167 1 across as an expert. So I don't think we -- we weren't 2 prescient but I know that we would not have described 3 him as -- to Susan, as "a very good expert witness". 4 That would have been silly of us to do that. We didn't 5 do something like that. 6 Q. Were you made aware of the existence of the Simon Clarke 7 Advice of 15 July 2013 in either 2013, '14 or '15? 8 A. No. 9 Q. Therefore, you weren't shown a copy of it at that time? 10 A. That's correct. 11 Q. When did you first become aware of the existence of the 12 document? 13 A. Well, actually, it was -- it came out with a fanfare of 14 trumpets, didn't it, at the Court of Appeal, when the 15 Clarke Advice was first -- in the Hamilton -- 16 Q. Okay, so in November 2020? 17 A. Yes. I had not seen it, neither, as far as I'm aware, 18 had Mr Henderson, seen it before that date. 19 Q. Had you been made aware by the Post Office of the 20 substance of the conclusions reached in relation to 21 Mr Jenkins? 22 A. No. 23 Q. There's evidence that the Inquiry has that, in autumn 24 2013, specifically September, the Post Office lawyers 25 knew that there was at least a serious issue as to 168 1 whether it, the Post Office, had properly instructed 2 Mr Jenkins as to his expert duties. Did anyone within 3 the Post Office ever reveal that to you? 4 A. No. 5 Q. Did you know that Mr Jenkins had given evidence, on one 6 view, as an expert in court proceedings? 7 A. Yes, I think the first I knew of that, to be precise, 8 would have been when I looked at the Seema Misra, Lee 9 Castleton and other cases, where he'd submitted written 10 witness statements, and I think only in one case did he 11 give -- did he follow that up with oral evidence. 12 Q. Had the Post Office confirmed to you that it had relied 13 on Mr Jenkins as an expert witness in a series of 14 criminal cases -- I think 15 in total -- but that it had 15 not instructed him as an expert witness properly or had 16 failed to explain the duties owed by an expert? Would 17 that have added to your concerns about the conduct of 18 criminal prosecutions by Post Office? 19 A. Well, the first part of the question is no they didn't 20 tell us. And would it have added? It most certainly 21 would have. 22 Q. But would it have made you question still further the 23 competency and ethics of the Post Office prosecutors? 24 A. Yes. 25 Q. If you had had revealed to you the substance of the 169 1 Simon Clarke Advice of 15 July 2013, what effect would 2 that have had upon you as to the propriety of certain 3 criminal proceedings conducted by the Post Office? 4 A. Well, it would have heightened our suspicions that it 5 had been a complete and utter mess. 6 Q. You said that one of the cases you were considering was 7 Seema Misra. 8 A. Yes. 9 Q. Did you read a Seema Misra file? 10 A. I think Ian had looked at the file. We had the scanned, 11 searchable images of those files on what we call CD1, 12 and I reviewed those. So I came to that stuff after Ian 13 had already looked at the paper documents. 14 Q. To the best of your memory, the Seema Misra file, was 15 that the disclosed documents, ie the documents that 16 would have been disclosed to the defence or was it the 17 prosecution case file? 18 A. I'm not sure I know the answer to that. It comprised 19 a lot of documents. I did not, I think, establish which 20 among those documents had been disclosed to the defence 21 and which hadn't. That would be more the sort of work 22 that Ian was doing. I was -- I looked at every document 23 that was produced to us and so I had reviewed those 24 documents electronically, and -- but to me, at that 25 point, it was just another case. 170 1 Q. Thank you. 2 Can I turn to your concluding thoughts, which you 3 set out from paragraph 107 onwards in your witness 4 statement. In answering our question, "Would you have 5 done anything differently", you say this: firstly, you 6 wish you'd refused to allow your firm to be contracted 7 with the subject of the investigation. That's a very 8 big hindsight point, isn't it? 9 A. Yes. 10 Q. But more particularly, you say: 11 "I wish I had demanded, rather than asked, to more 12 frequently see Paula Vennells, but also, when I was 13 doubting whether the truth was penetrating through to 14 her and the Board, I should have demanded to address 15 [the Post Office's] full Board ..." 16 Did you ever receive an invitation to address the 17 Board? 18 A. No, other than as has been mentioned earlier today, the 19 post-firing December 2015 invitation to speak to 20 Mr Parker. 21 Q. Did you ever ask to see the Board? 22 A. No, I'm afraid not. I think it's fair to say I didn't 23 and I wish I had. 24 Q. You say in (c) that you wish you had flatly refused to 25 communicate with the Post Office's CEO and its Board 171 1 through the conduit of Chris Aujard, Belinda Crowe, 2 Patrick Bourke and Angela van den Bogerd. Were they the 3 four principal actors who performed the function of 4 conduit? 5 A. Yes, there might have been others. I think Rodric 6 Williams was in that sort of central team but those are 7 the main ones -- and, of course, later, after Chris 8 Aujard left, Jane MacLeod, the absent witness. 9 Q. Why do you, on reflection, wish that you hadn't used 10 them as conduits? 11 A. Well, as is immediately obvious to anybody reviewing the 12 transcripts or, better still, listening to any of the 13 tapes, it was awful, just dealing with people who were 14 not just seemingly failing to understand just about 15 everything we said, but were, we now know -- but it was 16 apparent at the time, we suspected at the time -- were 17 in a sort of cabal that was colluding to or conspiring 18 to thwart every move that we made, and to -- forgive the 19 language or not, as you see fit, Mr Beer -- but I felt 20 that I was -- if you like, I accepted that I should be 21 talking to the monkeys instead of the organ grinder. 22 And I felt -- I now -- with retrospective, with 23 hindsight, I feel ashamed that I allowed myself to fall 24 into that trap. 25 Q. You tell us in paragraph 108, in answer to the question 172 1 "Any other matters that you wish to bring to Sir Wyn's 2 attention?", if you had to select one document, it would 3 be an email that you sent on 3 March 2015, which, in 4 fact, I looked at with Mr Henderson this morning. 5 Can we look, please, rather than repeat that 6 exercise, we've got that on the transcript, look at 7 SSL0000109. Thank you. This is in relation to the case 8 of case M018, Alun Jones. Was he a subpostmaster? 9 A. Yes. 10 Q. I don't think we've got a date on this one, but is this 11 a transcript of a call that you recorded? 12 A. Yes. 13 Q. Can we go to page 8, please. You say to him in the 14 third paragraph: 15 "... I know. It's absolutely -- well, I tell you 16 what. I've been an investigator for -- off and on for 17 about 40 years. I've done other jobs at some point but, 18 you know, I've been Global Head of Fraud Investigation 19 for two of the world's largest companies, and so I've 20 investigated frauds in 110 countries around the world, 21 thousands of fraud cases." 22 Skipping a paragraph: 23 "I have never come across anything as bad as this. 24 This is the worst corporate behaviour I've ever come 25 across." 173 1 He says: 2 "But they're bullies ..." 3 You say: "Yes." 4 Then the conversation continues. 5 Is what you said to Mr Jones there an accurate view 6 of your engagement with the Post Office or does it 7 contain hyperbole because you were speaking to 8 a subpostmaster? 9 A. That's a very good way of expressing the question 10 because one does encourage and develop rapport with 11 whoever one is speaking to, it doesn't mean you become 12 chameleon like. But, no, it's exactly what I felt then 13 and I still feel it now. 14 MR BEER: Mr Warmington, they are the questions I ask you. 15 I know that there are some questions on behalf of one 16 subpostmaster group -- in fact, two subpostmaster 17 groups, I think it's -- 18 SIR WYN WILLIAMS: Before the questions are asked, the date 19 of that conversation with Mr Jones, can you give me any 20 idea of the year we are talking about? 21 A. I'm not sure, sir, I suspect it was 2014, probably 22 towards the end of 2014, because my view was quite 23 negative at that point, it became more negative as time 24 went by. It wouldn't have been 2015. I would guess -- 25 and the recording will have a date on it, so the Inquiry 174 1 will be able to find that, but I suspect it was -- I'm 2 kind of making an educated guess here, I'd say sort of 3 August 2014. 4 SIR WYN WILLIAMS: That's fine. It was in the context, 5 then, was it, of you gathering information in terms of 6 your role in the Mediation Scheme? 7 A. Yes, I mean, I mentioned in my witness statement, sir, 8 that there was, in a sense, two sorts of recordings: 9 there were the recordings that any investigator would 10 routinely make when dealing with a -- when interviewing 11 a subject. I wouldn't call them a suspect, a subject, 12 ie one of the subpostmasters. I would routinely record 13 those, seeking their permission to do so, with a view to 14 later going back and checking what they'd -- exactly 15 what they'd said because it wouldn't always mean 16 immediately what I would later learn that it did mean. 17 It was one of those conversations, that one. It 18 wasn't one of the sort of covertly recorded calls that 19 I felt pressed to make later on in the -- when dealing 20 with Post Office Management. 21 SIR WYN WILLIAMS: All right, thank you. I may have another 22 question but I'll wait to see if any of the counsel on 23 behalf of the CPs ask it. 24 THE WITNESS: Thank you, sir. 25 MR BEER: Sir, just on the issue of dates, where we can see 175 1 a date, either because of the recording description 2 that's given as RJW261015, we've put that on there. 3 Where we can't see a date, the transcribers have not put 4 a date on there. 5 SIR WYN WILLIAMS: Right. Anyway, I simply wanted to be 6 clear in my mind that it was a conversation while 7 Mr Warmington was still investigating, so to speak. 8 A. Yes, it was. Yeah. 9 MR BEER: Thank you, sir. I think Mr Stein. 10 SIR WYN WILLIAMS: Yes. 11 Questioned by MR STEIN 12 MR STEIN: Mr Warmington, a few areas to just deal with 13 briefly, or three, I think, to deal with briefly and one 14 slightly more lengthy about suspense accounts, okay? 15 A. Mm-hm. 16 Q. All right. You've answered some questions from Mr Beer 17 regarding the possibility of the Post Office keeping 18 a general file. 19 A. Mm. 20 Q. Did you find out from Ms Crichton whether there was 21 anything similar to a general file that might have been 22 kept by Fujitsu? 23 A. Ooh, no, and I didn't -- I don't remember asking that. 24 It would have been a good question to ask but I don't 25 remember doing that. 176 1 Q. Moving, then, on to just a couple of other small areas. 2 There was an NDA, non-disclosure agreement, that was 3 signed by Second Sight. 4 A. Yeah. 5 Q. We've heard today the evidence of Mr Henderson about how 6 he viewed the fact that he wished that there'd been 7 an agreement -- essentially a whistleblowing agreement 8 part of the contract? 9 A. Mm. 10 Q. I note that you refer in your first statement at 11 paragraph 102 to the fact that both you and 12 Mr Henderson, you offered your assistance to Freeths to 13 provide assistance and support for subpostmasters, 14 presumably in the GLO process; is that right? 15 A. Yes, that's correct, yeah. 16 Q. But the severe restraints of your contract and its 17 confidentiality undertakings ensured that did not 18 happen? 19 A. Yes, with the exception of two meetings. One with 20 Patrick Green, very briefly, when we were essentially 21 told "There's not much you can tell us", or, you know, 22 "I don't want you to tell, thank you very much, we'll 23 find out things ourselves", and, more importantly, 24 I think, in a much longer meeting with Jason Coyne and 25 Dr Worden, when we were helping them to arrive at their 177 1 witness statement. I think they produced a combined 2 witness statement in the end. 3 Q. If you hadn't had the restriction of the NDA, do you 4 feel that would have enabled you and Mr Henderson to 5 come forward with more information at perhaps an earlier 6 stage? 7 A. Oh, yes. 8 Q. Learning lessons for the future, in relation to anyone 9 else that engages in work with a corporation such as 10 POL, or any other company, do you think there should be 11 a different way of handling those questions, an NDA that 12 allows for an exception in relation to whistleblowing? 13 How would you regard that process for learning lessons? 14 A. Thank you, Mr Stein. I think it stems -- one goes back 15 to the underlying problem. To try and patch the 16 situation by having an escape clause in the NDA 17 circumvents the -- or ignores the original problem, 18 which we've referred to. If you make the investigator 19 a vassal of the subject of the investigation, nobody 20 should be surprised that there's tears before bedtime. 21 You know, this was a daft way of carrying on 22 an investigation and I only hope that one of the 23 recommendations from this Inquiry is that that is not 24 a particularly clever way to go about conducting 25 an independent investigation because the pressure it put 178 1 on us -- I'd go so -- without bragging, I'd go so far as 2 to say very, very few other firms would have withstood 3 that. 4 If it hadn't been for the courage of Mr Henderson 5 and maybe my, you know, not telling my wife what all the 6 risks were, I would have pulled stumps on the whole 7 thing. 8 Q. Talking of courage and dedication, Ms Linnell, Kay 9 Linnell, is someone who has provided, over now many, 10 many years, superb support to Sir Alan; do you agree? 11 A. I hold Kay in the very highest regard. She flew at me 12 like a tigress in the original meeting, which wasn't 13 amusing until about ten minutes later. I mean, she 14 obviously suspected that we were incompetent or those 15 that were going to be -- produced a whitewash, or both. 16 But, as the case evolved, for very little recompense -- 17 and I know what she was paid -- she was required to keep 18 an eye on us to make sure that we weren't producing 19 a whitewash and that we were conducting ourselves 20 properly, and she did a super job. 21 Q. Over the many years, she has also provided, with 22 a business partner, Mrs Jeremiah, hours and hours, days, 23 weeks, months of support annually to subpostmasters with 24 their business affairs so badly affected by the Post 25 Office; do you agree? 179 1 A. I not only agree but I think she's one of the few people 2 that hasn't been sitting in the dining car of the 3 Horizon gravy train. I mean, she has contributed to my 4 knowledge massively to this case without being paid. 5 Q. Thank you. 6 Now, let's turn to suspense accounts. 7 A. Yeah. 8 Q. All right. Your statement, second statement, 9 WITN01050200, we can go to that, please, and go to the 10 subheading, paragraph 3, "Suspense Accounts". I wonder 11 whether that paragraph can go up on the screen, please, 12 WITN01050200, paragraph 3, which is at page 2. 13 Grateful. 14 Now, here you've made the point that you've: 15 "... heard the Inquiry many times seeking 16 clarification in respect of concerns that were first 17 expressed by Second Sight [and] repeated by others." 18 A. Mm. 19 Q. So, obviously, we know this was dealt with in relation 20 to the Working Group, Sir Anthony Hooper was raising 21 this. This was a matter of clear discussion; is that 22 correct? 23 A. Yes. 24 Q. Now, at paragraph 5 you set out there -- and I'm just 25 going to ask you to explain, please, what you're saying 180 1 here -- paragraph 5, you describe the different types of 2 suspense accounts. The first one was affected by, 3 essentially, the closure off of the original suspense 4 accounts by the IMPACT Programme, that the Inquiry heard 5 from, I think, if I remember right, from Ms Harding, who 6 described her work in relation to that. So the first 7 type of suspense accounts, what were they? 8 A. Well, they were simply accounts within Horizon itself at 9 branch level which allowed shortfalls, or also, 10 theoretically, surpluses, to be parked while the 11 subpostmaster and his or her staff was investigating it 12 to find the root cause. They -- because the balances 13 that had been posted by the subpostmasters, those 14 accounts started to clock up quite seriously, and cause 15 concern in Post Office itself. The fantastic solution 16 that was evolved to do that was just to remove the 17 functionality, and it was replaced with the settle 18 centrally and dispute function, which was meant to be 19 a sort of an adequate replacement but it wasn't. 20 Q. You conclude in the final part of paragraph 5, in 21 relation to subpostmasters, the removal of the suspense 22 account at that time, leaving many of them with no 23 realistic alternative, which when faced with shortfalls, 24 that they could neither understand nor make good, but to 25 falsify branch books, in order to buy time. 181 1 A. Yes. 2 Q. Is that how you see it? 3 A. One of the -- I mean, I mentioned one of the incomplete 4 replacement -- functional replacement, one of the 5 restrictions of the settle centrally and dispute 6 function was that there was a value limit on how much 7 could be placed there. I think it was essentially based 8 on the subpostmaster's salary. So if you had 9 a subpostmaster on £18,000 a year and you tried to post 10 a shortfall of £19,000 a year, it wasn't going to work. 11 If it was 10,000, it wouldn't work, he couldn't do it. 12 If it was 5,000, he couldn't do it. 13 There was a limit to how much could be put in there 14 and that meant that all the big shortfalls that we were 15 seeing just couldn't be parked anywhere. They had to be 16 dealt with immediately on the final -- on the day that 17 that shortfall manifested itself in the books. 18 Q. Do you recall that, during the IMPACT Programme, the 19 double-whammy effect was the removal of the suspense 20 accounts and also the pressure, essentially, recognised 21 within the IMPACT Programme, on the subpostmasters? In 22 other words, they threw back upon subpostmasters the 23 need to prove that it wasn't their fault? 24 A. Yes, I think there was always an expectation that, even 25 something in the original pre-2006 suspense accounts, 182 1 there was -- the onus was on the subpostmaster to carry 2 the burden of proof and work things out. There was 3 always this point that "Don't worry, it'll sort itself 4 out; an incoming TC, a credit TC, in that case, will 5 sort out your problem", but never the promise as to how 6 long it would take for that to zero out the amount that 7 was in suspense account. 8 Q. I think you recognise -- well, I'll ask it as 9 a question: do you recognise that there was a very real 10 issue for subpostmasters trying to, in fact, find what's 11 gone wrong, see if they can look at the material that 12 they had, with huge limitations of access into the 13 Horizon system? 14 A. Well, that was the very point of course that Sir Alan 15 himself raised first. There was a person that 16 understood the Point of Sale systems and there he found 17 himself looking at this 8 centimetre wide piece of paper 18 that was across the room to try to find the reason for 19 a shortfall, simply not remotely feasible if you're 20 looking at -- at a whole month's transactions to try and 21 find out why you've got a shortfall of, you know, 22 £19,000, or whatever. 23 It was just not -- to say it wasn't user-friendly is 24 a raging understatement. It just wasn't a reasonable 25 expectation to expect the subpostmasters and mistresses 183 1 to be able to find the underlying root cause of 2 a problem using the material that they had in the 3 branch. 4 Q. Moving on, then, from the time of the pre-IMPACT project 5 suspense accounts, help us understand a little better 6 the suspense accounts that continued to exist after that 7 time? 8 A. Ah, right. Well, now we're talking of course -- I mean, 9 there's a lot been said about this, a whole -- I'll be 10 very brief, unless you want me to be otherwise -- and 11 that is that when I first -- in fact, it was Sir Anthony 12 Hooper that said -- asked the question, under the 13 umbrella heading of "Where the devil did the money go" 14 he said, "Is it possible that a shortfall in one branch 15 could be accounted for by a surplus in another?", you 16 know, what's happening here? And "Second Sight, find 17 out", and so I said something like "there'll be amounts 18 in suspense accounts", and the reach that I got was 19 "What are you talking about? Don't know what you're 20 talking about, we don't have any suspense accounts". 21 "Yes, you will, you'll have suspense accounts". 22 So we started to pursue that and, again, it was like 23 swimming up a waterfall, in terms of explaining what we 24 were talking about and why we were interested in that 25 and, eventually, we explained that you -- wherever there 184 1 is a difference between what one of your clients, like 2 Royal Mail, or National Savings and Investments, or 3 Camelot, or whatever, says is due to or from them, if 4 that is different from what your own books in Post 5 Office shows is due from or to them, there will be 6 entries in both parties' suspense accounts, and those 7 would expect -- as Mr Henderson has mentioned, ordinary 8 businesses would expect to clear those very quickly 9 indeed, otherwise they get out of hand. 10 Q. What does "very quickly" mean? 11 A. Well, in Citibank, they had to be cleared by 7.30 the 12 following morning and you'd expect them to be, because, 13 if Citibank does a $500 million foreign exchange deal 14 with Bank of America and one processes it at 500 million 15 and the other at 50 million, you'd better get to the 16 bottom of that damn quick. 17 Q. Does it make any difference that Post Office is dealing 18 with, say, 11,000 branches and the size of the system in 19 operation? 20 A. Oh, yes. 21 Q. Does that have any relation to the getting it done PDQ? 22 A. Yes, I'd be a cruel person to fail to acknowledge that. 23 It was a complicated process. 24 Q. Meaning what? Meaning that it should take longer than, 25 say, 24 hours? It should take any particular time? 185 1 What would be your estimate as to how -- 2 A. If it was auditing it, Mr Stein, I would be fairly 3 forgiving if it was taking a month or maybe even two to 4 clear some of those items but I would understand the 5 impact of the time delay in clearing those on the people 6 impacted by it, whether it was a customer -- not so much 7 the clients, they can live with that sort of time delay, 8 but if it was a customer or a subpostmaster that was 9 having to wait two months, three months, six months, to 10 sort out a problem that he or she had had to cover 11 financially during that interim period, you can bet your 12 life we would have given a lot of credibility or a lot 13 of emphasis to that point. 14 Q. So the driver from the auditor perspective would be to 15 get this sorted: it impacts real people, real families, 16 small businesses? 17 A. Yes, that's part and parcel of the reference earlier 18 that I made to materiality and, of course, Post Office 19 dined out on this sort of phraseology, that 20 contextually, the size and frequency of occurrence of 21 these tiny little amounts was so small and so 22 insignificant in their books as to be immaterial. But 23 to the people on the other end of the transaction you'd 24 bet it was material. 25 Q. Materiality is a term of art used within accountancy. 186 1 A. Yes. 2 Q. You are an accountant? 3 A. Yes. 4 Q. Materiality seems, if we understand it correctly, to 5 vary, depending upon, perhaps, the size of the business, 6 so if we look at something the size of, say, Lloyds 7 Bank, I use as an example, what they relate to a banking 8 business in relation to materiality, in concerning its 9 turnover and operations, £10,000 may not be material; is 10 that a fair way to look at it? 11 A. Yes. 12 Q. Regarding the question of materiality, where you've got 13 this complex mixture, so materiality to a subpostmaster 14 or mistress may be £5,000, £10,000 maybe a few hundred, 15 but to the overall Post Office business, it may be -- 16 may not be the same. Is that a fair description of the 17 problem? 18 A. Yes, it is, the only thing I'd add to that, Mr Stein, is 19 if we're dealing with -- there was a sort of uniqueness 20 about the Post Office business model, where the coalface 21 workers, the agents, the subpostmasters, were separate 22 businesses and they were held accountable for the debts. 23 We know all that stuff, don't we? There's nothing new 24 in what I've just said. That's radically different 25 from, shall we say, a big bank. If a shortfall, whether 187 1 ATM related or else, occurs in a bank branch of Lloyds 2 Bank and it's £12,000, it's immaterial, in their books 3 and it's actually immaterial in the branch's books 4 because nobody is being expected to pay it out of their 5 own pocket. 6 So the materiality issue is different in Post 7 Office's case because of the uniqueness of the business 8 model. I hope I haven't made that confusing. 9 Q. Should that have been considered by the accountants as 10 being a different way to look at materiality within the 11 Post Office? 12 A. Well, it would have, if I'd been doing the audit, yeah. 13 Q. Now, paragraph 11 of your second statement, you refer 14 then to the suspense accounts issue and the amounts that 15 remain sitting. If you can go to paragraph 11, top of 16 page 7, please -- thank you: 17 "It follows that any amount that remains sitting, as 18 a component of the balances in any of POL's client 19 suspense accounts, will always, in truth, properly be 20 owned by, and therefore be properly returnable to, one 21 of only four potential owners. Those four are: 22 "POL itself. 23 "One of POL's customers. 24 "One of POL's clients ... 25 "[Or a subpostmaster]." 188 1 Then at paragraph 12, you then set out that you and 2 your colleagues: 3 "... formed a hypothesis that [you] wished to test 4 (and hopefully to disprove) that some of the 5 UNRECONCILED net credits that POL had every year (after 6 three years) credited to its own [profit and loss] 7 account might that have included amounts that, had POL 8 been able to establish to whom they truly belonged, 9 ought to have been returned to [subpostmasters/ 10 mistresses and the branches]." 11 You go on to say this: 12 "We later learned from POL, when it wrote to us 13 about its Suspense Accounts, that it had released, 14 during the year 2010/2011, gross unresolved credits that 15 aggregated to £612,000." 16 Help us understand what that means and also help us 17 understand whether you had any other amounts for other 18 years going on through? 19 A. Yes, and I hope I haven't been too journalistic in 20 picking the largest amount that we told about because 21 they varied from 100,000, 212, and so on, and the last 22 figures that we had related to 2010/2011 and I believe 23 later there was perhaps a KPMG report that looked into 24 later years, and the figures went up even further. What 25 we were interested in was specifically point 4 there. 189 1 We knew that it was likely that some customers had been 2 shortchanged. But, callously, we didn't give two hoots 3 about that. We weren't concerned about that. 4 Similarly, we weren't concerned if Royal Mail or Camelot 5 or National Savings and Investments had been 6 shortchanged in some way. Why should we worry? And we 7 weren't worried if Post Office had trousered, as it 8 were, amounts that it should have had trousered. 9 We were concerned solely with those items that 10 were -- that remained -- not uninvestigated. I suspect 11 they were investigated but unresolved, that were then -- 12 that then found their way into the profit and loss 13 account. 14 It was deeply concerning that there existed the 15 possibility, I would go so far as, in my mind, to 16 a certainty, that some of that aggregate, 612,000, would 17 have been, had there been deeper and more thorough 18 investigation carried out, that would have included 19 amounts that would -- should rightly have been returned 20 to subpostmasters and there are enormous consequences 21 from that. 22 Q. Let me ask you the same last question I asked to 23 Mr Henderson: has the situation changed to date? In 24 other words, to the date of your evidence being given 25 now before this Inquiry, have you had a resolution to 190 1 these issues in relation to the suspense accounts, what 2 has happened to the money, being paid into balance 3 shortfalls that may have been due to a Horizon system 4 error, where has it gone? Have you got an answer to 5 that question? 6 A. Simple answer is no. The slightly longer answer is 7 I have read, in material that has been supplied to me by 8 the Inquiry, reports by KPMG and others that took place 9 as late as 2020, that seemingly give some reassurance 10 that everything currently is okay. 11 What they didn't do was go back and pick up the 12 specific items that we drew to Post Office's attention 13 that had come to the surface out of the 136 cases that 14 we looked at, where specific examples of subpostmasters 15 not being reimbursed with amounts that they'd had to 16 cough out, in relation to one-sided entries, and so on, 17 the specific cases that we brought to the attention of 18 the Chief Financial Officer were not, as far as I can 19 see, ever even looked at by the subsequent auditors 20 that -- and accountants that allegedly gave a clean bill 21 of health on suspense accounts. 22 MR STEIN: Thank you, Mr Warmington. 23 THE WITNESS: Thank you, sir. 24 MS PAGE: Sir, thank you. 25 I should be able to finish by 4.30. 191 1 SIR WYN WILLIAMS: Okay. 2 Questioned by MS PAGE 3 MS PAGE: Mr Warmington, picking up on the last point you 4 have been asked about, I actually would like to take you 5 to that KPMG report, so we'll bring up POL00030909, 6 please. Is this the document that you were referring to 7 when you were answering Mr Stein's questions? 8 A. It certainly is. 9 Q. We can see there that that's from 2020 and I believe 10 we'll be able to hear who commissioned that. Have you 11 had a chance to look at it properly? 12 A. I've looked at it pretty thoroughly, yes. 13 Q. So if we go to the first page, there's a sort of set of 14 what we might call caveats? 15 A. Yeah. 16 Q. Is there anything that you'd like to draw the Inquiry's 17 attention to about those? 18 A. Ooh, wait a minute. Um, let me see. Ooh, hang on. 19 I mean, it's a pretty draconian sort of set of caveats. 20 Hang on a second. Well, obviously, the second 21 paragraph, I've gone through it all but coming back to 22 the second paragraph, the sort of the terms of reference 23 to me is always a sort of danger signal. What exactly 24 did they get asked to look at and did they -- were they 25 let off the leash to follow investigative instincts or 192 1 were they set on a set of tramlines and the clockwork 2 wound up to just go where the client wanted them to go? 3 Q. Do you understand from that second paragraph, or indeed 4 from anywhere else, that they were let off the leash? 5 A. I got the sense that they weren't let off the leash 6 and -- because I mentioned in my second witness 7 statement that the obvious lines of inquiry that Ian and 8 I would have pursued, along with our fellow 9 investigators, just didn't appear here. They didn't 10 even mention the sort of things, which was to look at 11 the history of what had been cleared and find out 12 where -- what Post Office had learned about who really 13 did have to be repaid when they actually bothered to or 14 actually found out who the true owners of items in 15 suspense were. Were any of the amounts that they did 16 bottom out returned to subpostmasters and, if it was 17 none, then we were wrong in our hypothesis. So I didn't 18 see any evidence -- 19 Q. None of that is answered here, is it? 20 A. No, I don't think it is, no. 21 Q. What we get in the third paragraph is: 22 "The report should not therefore be regarded as 23 suitable to be used or relied upon by any person or any 24 purpose including any court or other investigatory 25 proceedings." 193 1 A. Yes. Like us here! 2 Q. Quite. Then we've got the paragraph on the right-hand 3 side, second down: 4 "KPMG does not provide any assurance on the 5 appropriateness or accuracy of sources of information 6 relied upon and KPMG does not accept any responsibility 7 for the underlying data used in this report." 8 A. Yes, this is the sort of wording, Ms Page, that you put 9 in when you're going to do what I think has elsewhere 10 been described as a "desk-based audit" that says, "We're 11 just going to ask some questions and we're going to 12 believe everything we're told and we're not going to 13 actually dig into the forensically dig into the detail". 14 Q. Yeah. 15 A. But I'm -- I hesitate to criticise a fine firm like 16 KPMG. 17 Q. But it's not the sort of job that -- 18 A. They're bigger than us and they'll beat me up! 19 Q. -- you would have done? 20 A. No, not the sort of thing that we would have done, no. 21 Q. All right, thank you very much. 22 Can I just ask you about -- we can take that 23 document down now. Can I ask you a little bit more, 24 though, about this, this subject of suspense accounts. 25 If it turns out, if it can ever be found out, that the 194 1 Post Office was absorbing sums into their profit and 2 loss, which rightfully should have been returned to 3 subpostmasters, who within Post Office would or should 4 have known that that was happening? 5 A. You want names? Well, it would have been the Chief 6 Financial Officer, Mr Cameron, who I think has been on 7 gardening leave, so he probably might not know that now, 8 and Mr Ismay, who was the functionary in Chesterfield, 9 whose department handled this stuff, and he was in the 10 meeting between myself, Mr Henderson and Mr Cameron, 11 just about two weeks before we were chopped. 12 Q. Do you think that there's any directors on the Board, 13 apart from Mr Cameron, who would or should have known 14 about this? 15 A. Well, they all should have had known about it but there 16 wasn't a lot of attention to detail, as far as we could 17 detect. 18 Q. Can I then also just ask you this about your 19 investigations: did you find that Horizon conducted true 20 double-entry bookkeeping? 21 A. Ooh, haha! I didn't ask you to raise that question but 22 I'm glad you did! I harbour a suspicion, and I've 23 mentioned it, I think, in my second witness statement, 24 that the assertion that Horizon is a double-entry 25 bookkeeping system is not safe. I think it is at 195 1 a branch level for some products. If you sell £100 2 worth of stamps -- Jo -- for cash, the double entry is 3 simple: less stock, more cash. £100, both sides. Not 4 a problem. 5 But if you're, as in Jo's case, if you have a £2,000 6 shortfall that, in a moment in time, becomes a £4,000 7 shortfall, that extra £2,000 has got to come from 8 somewhere and go to somewhere. There's no such thing as 9 an invented amount of money in a double-entry 10 bookkeeping system. It would have to go somewhere. 11 And when Jo pressed that button and her shortfall 12 doubled -- and she's not the only person that asserted 13 that -- if that truly happened, then the system invented 14 a one sided entry, and what it effectively did was said 15 to Jo, "You need to have £2,000 more in the till or in 16 the safe than you've actually got". But why? 17 So, in that context, it doesn't satisfy the test of 18 a double-entry bookkeeping system and also raised the 19 points about entries that were processed by other 20 bolted-on front-end systems, like the Forde 21 Moneychanger. 22 Q. I was just about to ask you that as my final question, 23 which is: was that exacerbated by those systems -- so, 24 obviously, we've got the Electronic Point of Sale 25 System -- 196 1 A. Yeah. 2 Q. -- which managed Post Office products like stamps, and 3 so forth, but then we've got these bolt-ons that fed 4 figures into Horizon, whether it be from Bank of Ireland 5 cashpoints, Lottery terminals, and I think you mentioned 6 Foreign Exchange, there may have been others. Did the 7 double-entry problem that you've described with the 8 2,000/4,000, was that made any worse from your 9 investigations when looking at those bolt-ons? 10 A. Well, the principle of double-entry bookkeeping -- I go 11 back to my training in 1966, a bit of a long time ago 12 but I can remember back that far -- is based on 13 transactional double entry. You don't enter batches of 14 transactions, as you do with Lottery, the following 15 morning, or ATMs, processed at 4.30 in the afternoon, or 16 Foreign Exchange transactions processed on a Wednesday 17 once a week. 18 You can't assert that to be Horizon double entry. 19 These are block entries that are passed. So to claim 20 the benefits of double-entry bookkeeping in relation to 21 those front-end, bolt-on systems, I think is unsafe. 22 Q. Do I understand this rightly: that, if they had been 23 being processed in realtime, they would have stood 24 a much better chance of being true double entry but, 25 because there was this once-every-period batch entry of, 197 1 say, Lottery transactions, that caused problems? 2 A. Well, yes, in theory. But, I mean, the issue on, for 3 example, foreign exchange transactions is -- when 4 I asked Post Office for a copy of the Forde Moneychanger 5 user manual to be able to work out how the accounting 6 was working, they said they hadn't got one. I had to 7 re-reverse engineer the foreign exchange accounting from 8 the 2,500 pages of documents supplied to me by one of 9 the subpostmasters' professional advisers, as opposed to 10 the three documents that Post Office had supplied in 11 that case. 12 MS PAGE: Well, thank you. Those are my questions, 13 Mr Warmington. 14 Thank you, sir. 15 Questioned by SIR WYN WILLIAMS 16 THE WITNESS: Thank you. 17 SIR WYN WILLIAMS: Mr Warmington, I think I should ask you 18 a few questions along the following lines, so please 19 bear with me. 20 Some of the senior executives and, I believe, 21 Ms Perkins, in particular, as Chair, were asked the 22 question -- or the suggestion was put to them, I think 23 is a better way of putting it -- that the Mediation 24 Scheme was a scam, all right? They denied that and, in 25 effect, told me that, so far as they were concerned, the 198 1 Mediation Scheme was a scheme which was operated by all 2 concerned in good faith. 3 You were very much part of the core of people 4 engaged in the operation of that scheme. Two questions, 5 really: first of all, is it right that the idea of the 6 Scheme came from the Post Office? 7 A. Yes. Yes. I think from Susan Crichton, my 8 understanding. 9 SIR WYN WILLIAMS: Right. Contemporaneously with your 10 operation of the Scheme, ie at the time, did you gain 11 any or did you have any idea about whether or not you 12 were engaged in a scheme which was being operated by all 13 concerned in good faith or whether Post Office were 14 engaged in a scam? 15 A. Well, call me naive, sir, but, I mean, we would not 16 have -- I would not have wasted the time of my team, my 17 own and my team's time, pursuing something that we'd 18 recognised from the outset was a waste of time. We 19 actually -- I now regard as pretty naive about this, 20 I kick myself, but it looked like a legitimate process 21 until, eventually, we realised that it wasn't. It was 22 just -- I mean, it was much later that we learned about 23 the phraseology of "only the expectation that token 24 payments would be made". 25 I think it was Sir Alan Bates that twigged that, in 199 1 the vernacular, and realised that it was a sham well 2 before I did. I apologise for my stupidity. 3 SIR WYN WILLIAMS: Well, I wasn't asking you the question, 4 really, to, in any sense, be critical of you but rather 5 to gain an insight into how you viewed things at the 6 time. All right? So is the answer to my question that, 7 for much of the time, during which you were involved in 8 the Mediation Scheme, you did think that it was being 9 operated in good faith but there came a point in time 10 when you began to doubt that; is that a fair summary of 11 what you're telling me? 12 A. Yes, it is, and when we realised -- as soon as we 13 realised the POIRs were taking an awful long time to get 14 to us and, when they arrived, none of them gave an inch 15 in regard to any improper conduct or poor behaviour or 16 mistakes made by Post Office itself, we sort of twigged, 17 we realised, that this was going through a filtering 18 process that was filtering out any admission by Post 19 Office. I think, at that point, we realised that we 20 were -- that it was a waste of time. 21 SIR WYN WILLIAMS: Just so that I can try and put things 22 into sequence, how, or rather when did you form that 23 view, say, in comparison with when the schemes ceased to 24 operate at all? 25 A. Well, by the time we got to round about October 2014, it 200 1 was just open warfare, so it was well before that. Go 2 back to sort of January/February 2013, it was running 3 quite well. On the departure of Susan, it took a marked 4 turn for the worse. So I would say by early -- 5 certainly by January -- by year-end 2013, we were 6 realising that it had become dysfunctional in the 7 extreme, so badly that I was prepared to pull stumps and 8 pull the team out but -- 9 SIR WYN WILLIAMS: I've heard about two issues, which were 10 clearly thorny issues to be grappled with. One was the 11 expectation gap, as it's been called, namely that, on 12 the one side, subpostmasters who suffered significant 13 losses expected to have proper compensation, whereas, on 14 the Post Office side, the expectation was that the 15 compensation would be much lower. So that was thorny 16 issue number 1. 17 Thorny issue number 2, as I see it -- so tell me if 18 I've got it wrong -- was the very significant debate 19 which took place as to whether or not convicted people 20 should be mediated with at all. Were those the two 21 major difficulties? 22 A. Well, they certainly were two major difficulties. Yes. 23 The second one, and dealing with that first, it was just 24 obvious -- it was obvious to everybody that the 25 principal driving force for the -- for calling us in and 201 1 carrying out an investigation, was -- had resulted from 2 a meeting between Lord Arbuthnot and Alice Perkins 3 before -- I think before she became Chairman and there 4 was this agreement to proceed, and it's absurd to think 5 that Lord Arbuthnot would have said, "Oh, and it's 6 perfectly okay if you leave Jo Hamilton and anybody else 7 out of this". 8 I mean, he'd made it completely clear that people 9 with convictions of any sort should be entitled to 10 benefit from the Mediation Scheme. But the corruption 11 of the Mediation Scheme, this expectation gap -- the 12 first point that you asked, sir -- when we started to 13 see the CQRs, the case questionnaire responses, the work 14 done by the professional advisers, including Howe+Co and 15 others, when we started to see those coming in with 16 pretty big numbers attached, it didn't surprise 17 Mr Henderson and myself at all. Some of the numbers 18 were quite big but it didn't surprise us but we, of 19 course, hadn't been told at that point that Post Office 20 was harbouring the view that they were only expecting to 21 make token payments. They never said that to us. If 22 they had, we'd have said, "Well, what are you smoking?" 23 SIR WYN WILLIAMS: So I've identified two major 24 difficulties. You say they were two of the major 25 difficulties. 202 1 A. Oh, yes. 2 SIR WYN WILLIAMS: Last question: what were the other major 3 difficulties which caused it, in the end, to founder? 4 A. It was the lawyering up, and the worst problem was the 5 lawyering up. This fact that I harboured the suspicion, 6 I think Mr Henderson probably shares this, that the two 7 teams of -- I'll call them investigators, they weren't 8 really -- the people that were preparing the POIRs on 9 a reporting line to Angela van den Bogerd, I met some of 10 those people: lovely people and they were empathetic 11 towards the postmasters' cases. 12 I strongly suspect that the reports they were 13 producing contained quite a few acknowledgements of 14 failings by Post Office and yet none of them that got 15 through to us had any such concessions and we would have 16 to be pretty thick not to notice that. We did, and my 17 suspicion -- and I think this is probably the case -- is 18 that it just went through a filtering process to remove 19 anything that was in any way an admission of failure, 20 let alone guilt, by Post Office. 21 So the work, the good work, that those people were 22 doing, I think, was filtered through Cartwright King and 23 Bond Pearce, and the offices of Rodric Williams and 24 Belinda, Aujard and others, into such an anodyne 25 response as to completely dismiss any assertions that 203 1 the professional advisers were making, or that we 2 ourselves were making. Sorry, that's a very long answer 3 to a short question. 4 SIR WYN WILLIAMS: No, that's very helpful, thank you. 5 That's it, Mr Warmington, I assume, since I usually 6 have the last word, if anybody is going to have the last 7 word. 8 So thank you very much for making two witness 9 statements. Thank you for giving oral evidence this 10 afternoon, I'm very grateful to you and I'm sorry 11 I prolonged your stay by about ten minutes, unusually 12 for me, by asking a number of questions. 13 So I think we'll adjourn now until tomorrow and 14 start again at 9.45, Mr Beer? 15 MR BEER: Yes. 16 THE WITNESS: Thank you, sir. 17 MR BEER: Thank you very much. 18 THE WITNESS: Thank you, Mr Beer. 19 (4.40 pm) 20 (The hearing adjourned until 9.45 am the following day) 21 22 23 24 25 204 I N D E X IAN RUTHERFORD HENDERSON (sworn) ..............1 Questioned by MR BEER .........................1 Questioned by MR STEIN .......................93 Further questioned by MR BEER ...............104 Questioned by SIR WYN WILLIAMS ..............107 RONALD JOHN WARMINGTON (affirmed) ...........109 Questioned by MR BEER .......................109 Questioned by MR STEIN ......................176 Questioned by MS PAGE .......................192 Questioned by SIR WYN WILLIAMS ..............198 205