1 Wednesday, 17 July 2024 2 (10.05 am) 3 MR STEVENS: Good morning, sir. Hopefully you can see and 4 hear us? 5 SIR WYN WILLIAMS: Yes, I can, thank you. 6 MR STEVENS: Thank you. You will be hearing from Mr McCall 7 this morning. 8 KENNETH MCCALL (sworn) 9 Questioned by MR STEVENS 10 MR STEVENS: Please could you state your full name? 11 A. Kenneth McCall. 12 Q. Mr McCall, in front of you there should be a witness 13 statement; do you have that? 14 A. I do, thank you. 15 Q. Firstly, can I thank you for providing that written 16 statement and for attending the Inquiry today to answer 17 questions about it. 18 Before I ask you to turn to your signature, 19 I understand there's one small correction to be made. 20 Please could we have on the screen page 30, paragraph 65 21 of the statement. In that paragraph, you say, at the 22 start, that you received Mr Cooper's call at around 23 8.00, and we'll come to this section in the course of 24 your questions. Just for the purposes of the 25 correction, midway down the paragraph it says, "Shortly 1 1 after the call with Mr Parker I rang Ms Stent", and 2 I understand you wish to change that to "Shortly after 3 the call with Mr Cooper"; is that correct? 4 A. Yes. 5 Q. Thank you. That can come down from the screen. Thank 6 you. Mr McCall, can I ask you, please, to turn to 7 page 35 of your statement; do you see a signature? 8 A. I do. 9 Q. Is that your signature? 10 A. It is. 11 Q. Subject to the one correction we've just made, are the 12 contents of that statement true to the best of your 13 knowledge and belief? 14 A. They are. 15 Q. Thank you. That stands as your evidence in the Inquiry. 16 It will be published on the website shortly and, for the 17 purpose of the record, the Unique Reference Number is 18 WITN10020100. I'm going to ask you some questions about 19 I but not all aspects of it. I'll start with your 20 background or, actually, your role at Post Office 21 Limited. You were the Senior Independent Director of 22 Post Office Limited from January 2016 to January 2022; 23 is that right? 24 A. That's correct. 25 Q. Looking at your background, you spent the first part of 2 1 your career at TNT; is that right? 2 A. That's correct. 3 Q. You became the CEO for Asia and then CEO for China at 4 TNT? 5 A. I did. 6 Q. You joined DHL in 2007? 7 A. Correct. 8 Q. You then joined the Europcar group becoming Deputy CEO 9 in 2016? 10 A. That's correct. 11 Q. Was that an executive position at Europcar? 12 A. Europcar was an executive position. 13 Q. What was the time commitment for that role? 14 A. I was a full-time executive at Europcar on a normal 15 basis, five days a week, or as required. 16 Q. In practice, was it a five day a week job or did it 17 involve weekend work as well? 18 A. It involved weekend work as well. 19 Q. You had been a Non-Executive Director of Superdry; is 20 that right? 21 A. That's correct. 22 Q. When did you begin that role? 23 A. From my witness statement, it would be six years prior 24 to then, I recall, so I served two terms at Superdry and 25 joined the Post Office in 2016, so it would be 2010. 3 1 Q. Was there any overlap between your Superdry appointment 2 and your appointment as Senior Independent Director at 3 Post Office? 4 A. No, I don't recall there being so. 5 Q. Did you have any other non-executive roles whilst you 6 were at the Post Office? 7 A. I did not. 8 Q. I understand that your contractual time commitment as 9 Senior Independent Director was two days per month 10 whilst at Post Office? 11 A. That's correct. 12 Q. Did you have sufficient time to meet your commitment to 13 the Post Office, given your executive commitments to 14 Europcar? 15 A. Yes, I did. 16 Q. You say in your statement at paragraph 9 -- we don't 17 need to bring it up on the screen -- that Tim Parker 18 thought you would be a good fit at Post Office and you 19 refer to your experience in parcels and mails, yes? 20 A. Yes. 21 Q. Later in your statement, you also refer to having some 22 experience of dealing with IT issues at an executive 23 level; is that right? 24 A. Yes. 25 Q. Could you briefly just summarise what that IT experience 4 1 was? 2 A. My IT experience, I was responsible at Europcar Group 3 for the business priorities of the IT function, which 4 was headquartered in Paris. So I would decide exactly 5 what the business required of the IT Department and 6 liaise with them. 7 Q. Did you find that experience assisted you in your role 8 as a Senior Independent Director at the Post Office? 9 A. From a business perspective, yes; from a technical 10 perspective, not necessarily. 11 Q. Why not from a technical perspective? 12 A. I'm sorry, I beg your pardon? 13 Q. Why not, from a technical perspective? 14 A. Because my role at Europcar wasn't a technical role. It 15 wasn't deciding systems or otherwise, it was purely: 16 what does the business require; what do our customers 17 want? 18 Q. When you were a Senior Independent Director at Post 19 Office, do you think its Board had sufficient technical 20 IT experience to handle the issues before it? 21 A. Yes, I do. We had an excellent CIO, Mr Houghton. We 22 had -- I had two fellow non-executive Board colleagues 23 who came from the IT and technology sectors, and 24 therefore, at least two of the Board, to my knowledge, 25 were very IT savvy and knowledgeable. 5 1 Q. You say in your statement that, to the best of your 2 knowledge, the companies you had worked for prior to the 3 Post Office did not pursue private prosecutions? 4 A. That's correct. 5 Q. Was there anyone on the Board with legal experience or 6 qualifications? 7 A. Latterly, I believe, if I recall correctly, a year 8 before the end of my second term, we had a Non-Executive 9 Director join, who's still there, I believe, at the 10 present time, who is from the legal profession. 11 Q. Can you name that person, if you can remember the name? 12 A. I don't immediately recall -- yes, I do now: 13 Mr Tidswell. 14 Q. Do you think the Post Office Board would have been 15 assisted by having a member of the Board who had legal 16 experience or qualifications, considering the matters 17 you were dealing with during your time there? 18 A. I believe that, latterly, the assistance of Mr Tidswell 19 was extremely helpful in guiding the Board through some 20 of the processes. So, yes, I -- 21 Q. Let me pause you there. When you say some of the 22 processes, what processes are you referring -- 23 A. I think understanding what decisions we're required to 24 make and why, and how to maybe understand a bit better 25 the details. 6 1 Q. The details of what? 2 A. The details of the options we had. 3 Q. I'll ask it in another way. Are you referring to legal 4 issues to which this Inquiry relates, such as 5 compensation and criminal appeals? 6 A. Yes. 7 Q. Do you think it would have assisted the Post Office 8 Board, then, to have experience such as that on the 9 Board when you were dealing with the Group Litigation? 10 A. At the time when I joined the Post Office Board, I did 11 not know anything about the Group Litigation, so 12 therefore, in joining, I wouldn't have had an opinion 13 that said we would benefit from having legal expertise. 14 Having then gone through the Group Litigation, I would 15 say, yes, it would have benefited the Board. 16 Q. I want to look at your role as Senior Non-Executive 17 Director. The Inquiry has heard evidence, and is well 18 aware, that both the Shareholder Executive and then UKGI 19 appointed a Shareholder Non-Executive Director to 20 represent its shareholding interest at the Board. 21 Correct? 22 A. Yes. 23 Q. As a Non-Executive Director, in whose interests did you 24 act? 25 A. In the interests of the shareholder. 7 1 Q. How did you determine what those interests were? 2 A. In a company that's either a listed company or certainly 3 multi-shareholding, you're acting on behalf of that as 4 a shareholder. In this case, in the Government company, 5 I was acting on behalf of the Government Shareholder to 6 bring my expertise and experience to bear on a Post 7 Office Board. 8 Q. The Government shareholding interest in Post Office 9 Limited wasn't simply to see Post Office making 10 a profit; would you agree with that? 11 A. That statement was never something that was in my terms 12 of reference or was never made to me specifically. My 13 view was that my role was to try and ensure 14 a sustainable business model for Post Office looking 15 forward. 16 Q. Can you summarise, in your view, what distinguished your 17 role as Senior Independent Director from that of the 18 other Non-Executive Directors? 19 A. I was responsible for reviewing the performance of the 20 chairman. I was the conduit for the other Non-Executive 21 Directors, if they needed any help or advice. In some 22 ways, I was the go-between also to the Chairman, where 23 I would advise the Chairman if there were any concerns 24 of the Non-Executive Directors. So, in simple terms, 25 I would say at a high level I was eyes and ears. 8 1 Q. The responsibility you referred to of evaluating the 2 Chair's performance, in one way, that was carried out 3 through yearly evaluations; is that right? 4 A. That's correct. 5 Q. Would you see your responsibility for evaluating the 6 Chair's performance as an ongoing matter, though: you 7 that to keep on top of the Chair's conduct and 8 effectiveness? 9 A. Yes, in principle. I think through the Covid period, 10 where we were meeting remotely, I don't recall exactly 11 the process we went through but through the Covid period 12 it was extremely difficult. It was about survival and 13 it was about trying to keep a business together, so 14 I don't recall specifically the Chairman's performance 15 review. When it was done face-to-face, I recall it 16 quite specifically. 17 Q. In your role as Non-Executive Director and protecting or 18 acting in the interests of the shareholder, to what 19 extent did you have meetings with the Minister with 20 responsibility for Post Office in your role as Senior 21 Independent Director? 22 A. I don't recall how many meetings I had with the Postal 23 Minister. Possibly one or two, nothing more. And, 24 again, please bear in mind that, through the period we 25 had three years of Covid as a part of that exercise, so 9 1 therefore, no one was meeting anyone face to face. 2 I met the Chairman of BEIS at that time, I think -- 3 I believe now BIS, and I met the possibly one other 4 minister as a part of that exercise. So I didn't 5 regularly meet a Postal Minister. 6 Q. Before the hand-down of the Common Issues judgment in 7 March 2019, had you had any conversation with the Postal 8 Minister or indeed the Secretary of State about the 9 allegations concerning the robustness of the Horizon IT 10 System or the Group Litigation? 11 A. No, I don't recall I did. 12 Q. To what extent would you meet representatives of the 13 Shareholder Executive -- sorry, UKGI -- outside of 14 meeting Tom Cooper in Board meetings? 15 A. I would meet possibly Richard Callard, who first -- was 16 the prior to Tom Cooper. Tom Cooper, afterwards, either 17 for a coffee beforehand or after a Board meeting. 18 I don't recall any formal meetings at their offices, as 19 a part of that. I had a conference call once with the 20 Permanent Secretary but, other than those, I don't 21 recall any. 22 Q. The conference call with the Permanent Secretary, do you 23 recall when that was? 24 A. I don't recall the specific date. 25 Q. Did you discuss issues relating to the allegations of 10 1 a lack of robustness in Horizon or the Group Litigation? 2 A. No, I did not. 3 Q. Do you recall what you discussed? 4 A. Frankly, I can't remember the date, I can't recall the 5 date, so I think I would just be hypothesising so no, 6 I don't remember. 7 Q. Please can we bring up your statement at page 5, 8 paragraph 14. You're referring to your roles and 9 responsibilities as Non-Executive Director and, at the 10 end of paragraph 14, you say: 11 "At a high level, my role as a [Non-Executive 12 Director] was to be part of a board developing [Post 13 Office's] strategy to achieve financial 14 self-sustainability and to work with the management team 15 to deliver that." 16 Then over the page at paragraph 16, just go down, 17 please. Towards the bottom half of that paragraph you 18 say: 19 "Our role as non-executives on the Board is to help 20 determine the company's future direction and strategy. 21 In other words, we are focused on what the company might 22 look like in several years' time and how we can create 23 a sustainable and future-proof business." 24 So strategy is forward looking. Would you accept 25 that, to be able to advise on strategy, a non-executive 11 1 has to consider risk to the business arising from past 2 liabilities or current operations? 3 A. From a strategic point of view, the focus of the 4 non-exec will be looking at the marketplace that the 5 business operates in, the business model that it's using 6 in that marketplace and how we might improve that 7 business model to ensure that, in this case, the Post 8 Office remained a leading player in the mails, parcels 9 and logistics market, and that was the focus of 10 sustainability as a business. 11 Q. Do you think that, following the hand-down of Common 12 Issues, the Post Office's future strategy and its 13 sustainability changed as a result of that judgment? 14 A. After the Common Issues judgment there was, I believe, 15 about eight or nine workstreams that were started as 16 a result of the Common Issues judgment, looking at the 17 remarks and comments made by Justice Fraser and 18 requirement for the Post Office to substantially change 19 its way of operating and its relationship with the 20 subpostmasters. 21 Q. I think you're agreeing with me that things changed 22 significantly during the Common Issues trial. 23 A. There had to be significant change. 24 Q. The Common Issues judgment considered and made findings 25 on matters that happened in the past; would you agree? 12 1 A. Predominantly, yes. 2 Q. So was it not the role of the Board, including the 3 non-executives, to look at the past as well, to 4 determine what risks in future, or assess what risk in 5 future, may be on the Horizon? 6 A. As a non-executive I'm always looking forward, not 7 looking back, and looking at our business model, and in 8 this case, after the Common Issues judgment, we were 9 looking at what changes required to be made that was the 10 result of the judgment. And so that was really the 11 focus, as opposed to looking historically. 12 Q. Do you think the Executive Team had a role in 13 identifying, analysing and mitigating risks for things 14 that happened in the past? 15 A. The Executive Team from the outcome of the Common Issues 16 judgment was -- 17 Q. No, I'll stop you there, sorry. I'm not talking about 18 from the Common Issues judgment here. As a matter of 19 generality, when you joined the Post Office in 2016, did 20 the Executive Team have a responsible to identify, 21 analyse and mitigate risks that the Post Office Limited 22 faced? 23 A. Yes, as a general principle, yes. 24 Q. Did the Non-Executive Directors have a role in 25 overseeing that aspect of risk management? 13 1 A. Yes, mainly through the Audit and Risk Committee. 2 Q. What did you see as the Non-Executive Director's role in 3 challenging the Executive Team's delivery of its 4 operations? 5 A. The robustness of the strategy, the business operating 6 model, the product evaluation, the Customer Service 7 requirements. The detailed operating requirements of 8 running a business and what we had to change and what 9 the Executive Team were focused on day to day. 10 Q. So did the Non-Executive Directors, including yourself, 11 from 2016 onwards, have a role in overseeing the 12 Executive Team's analysis of the risk posed by the 13 Horizon allegations? 14 A. When I joined the Board in January 2016, I was 15 completely unaware of the Horizon issues, bugs and 16 historical problems and, therefore, in my mind, when 17 I joined in 2016, my focus was on building a sustainable 18 business model and future. It wasn't focused on looking 19 back. I was completely unawares of the history and what 20 had recently happened. I then became aware, in April 21 '16. 22 Q. Thank you. Well, I'm going to cover that shortly so 23 we'll come back to that topic but, before I do, I want 24 to ask you a couple of questions on materiality which 25 appears in your statement at a few places. Please could 14 1 we have up page 6, paragraph 17 of the statement. Thank 2 you. 3 You say at the bottom there that: 4 "The Board will not consider the specifics of 5 individual bugs or defects, which is generally the 6 responsibility of the specialists in the IT Team, save 7 to the extent that those bugs or defects have a material 8 impact on the day-to-day running of the company." 9 Then at paragraph 18, you say: 10 "Typically a non-executive board would have 11 high-level oversight of the conduct of any civil 12 litigation brought by or against the company but only if 13 and when it became material. Each company will have its 14 own materiality threshold and unless a civil claim met 15 that threshold, I would not necessarily expect the Board 16 to be made aware of it or updated on its progress." 17 How was the threshold of materiality determined at 18 the Post Office Board in 2016 to 2019? 19 A. In my witness statement comments, I refer to materiality 20 as if it would be determined by the auditors. So the 21 statement would be based on normally, if I recall 22 correctly, a percentage of turnover. So in this case, 23 my use of the term "materiality" would be a percentage 24 of turnover of the Post Office, and that's the reference 25 that I make by "materiality". So in the case, if 15 1 I recall correctly, then it would be many millions. But 2 that's the use of the word "materiality". 3 Q. We've heard this before in the Inquiry, exactly the 4 definition you describe, and would you accept that the 5 materiality, from the perspective of the Post Office 6 Limited Board, would be different from materiality to 7 an individual subpostmaster? 8 A. Yes, I would. 9 Q. In terms of the allegations that -- 10 Sorry, before I ask that question: did the Board, 11 when you were there, ever consider the subpostmasters' 12 perspective of materiality? 13 A. The comment on materiality was driven by the auditor 14 definition or from an annual accounts perspective. We 15 didn't look at it, as I recall, from a subpostmaster 16 perspective. 17 Q. In terms of the allegations that were made that Post 18 Office had secured unsafe convictions using data 19 generated by the Horizon IT System, so the allegation of 20 an unsafe conviction, is that a matter that should be 21 considered at Board level or is there a test of 22 materiality for unsafe convictions? 23 A. When I joined the Board in January 2016, to the best of 24 my knowledge, there was no convictions and none of the 25 existing Board members at that time had sat on the Board 16 1 previously and so, therefore, I find it hard to comment 2 on your question. 3 Q. Can I just clarify with you what you mean by "no 4 convictions" there. Do you mean that when you were 5 a Senior Independent Director, you believe Post Office 6 didn't pursue prosecutions that led to convictions in 7 that time? 8 A. That is my understanding. 9 Q. Let's look at your appointment letter, please. It's 10 POL00362996. So we see it's dated 2 December 2015. If 11 we could turn to page 8, please. It refers to 12 an induction, saying: 13 "After the commencement of your appointment, the 14 Company will provide a comprehensive, formal and 15 tailored induction. We will arrange for site visits and 16 meetings with senior and middle management." 17 What induction did you actually receive by Post 18 Office? 19 A. I met most of the Senior Executive Team face to face at 20 Post Office offices. 21 Q. Just so we can be clear, when you say the Senior 22 Executive Team, most of, who are you referring to? 23 A. I'm referring to the person that was in charge of the 24 banking business or the person that was in charge of the 25 mails business, so the people that were leading the 17 1 various business units of Post Office. I met the Chief 2 Financial Officer. I -- in addition to that, I met the 3 Chief Executive. So, I mean, the sort of top-line 4 Executive Team. I don't recall how many of the people 5 I met, but I met number of the top-line team. 6 After that, I then did some external site visits and 7 I visited some sub post offices in the network: if 8 I recall correctly, probably four or five subpostmaster 9 network offices. 10 Q. Did you meet anyone from the Legal Department as part of 11 your induction? 12 A. No, I did not. 13 Q. So, for example, Jane MacLeod, you didn't meet her as 14 part of your injunction? 15 A. No. 16 Q. Please can we bring up your statement, page 33, 17 paragraph 73. You're giving your reflections here and 18 you say: 19 "When I joined [Post Office], the Board was still 20 relatively new and, to my knowledge, none of the 21 [Non-Executive Directors] had been in post at the time 22 when the 'Legacy' Horizon system was in operation and 23 the private criminal prosecutions were still ongoing. 24 I can recall feeling as though we had been left holding 25 the baby and we had to decide what to do with it based 18 1 on our limited background knowledge." 2 What, in particular, left you feeling as though you 3 were holding the baby? 4 A. Not having a non-executive on the Board who understand 5 (sic) what had happened in the previous one, two, three, 6 four years, and not having that knowledge. 7 Q. When did you get this feeling? 8 A. My comments were quite general when I started to find 9 out about the Horizon issues, which was between April 10 and September 2016, that there was no one, when I looked 11 at my colleagues, who was in position prior to that. 12 Q. So reading this, you say in the first sentence "When 13 I joined Post Office Limited", the second statement -- 14 I say a sentence, sorry -- "I can recall feeling as 15 though we had been left holding the baby", your evidence 16 is that that happened later in April 2016 onwards, 17 rather than when you joined Post Office Limited? 18 A. That's correct. 19 Q. That document can come down, thank you. You refer, we 20 don't need to turn it up but in your witness statement 21 you refer to having an interview with Baroness 22 Neville-Rolfe, prior to your appointment as Senior 23 Independent Director. 24 A. Yes, that's correct. 25 Q. Your evidence is that she didn't discuss with you 19 1 matters such as the allegations regarding Horizon or Tim 2 Parker's review? 3 A. That's correct. 4 Q. How confident are you now, looking back, that she made 5 no reference to the Parker Review in that interview? 6 A. Very confident. 7 Q. Why? 8 A. Because I would have remembered something as 9 significant, if there was a major issue that had been 10 identified to me at the time before I was likely to join 11 a new Board. So I'm as confident as I can be, bear in 12 mind I'm talking eight years ago, that I recall that 13 nothing was mentioned about the historical issues. 14 Q. Do you remember what briefing material, written 15 material, was provided to you as part of your induction? 16 A. No, I don't. 17 Q. As part of your Rule 9 Request, the Inquiry sent you 18 number of documents and asked you when you first had 19 knowledge of them. Can we turn, please, to page 18 of 20 your statement, paragraph 41. You say, towards the 21 bottom of that paragraph: 22 "I now realise that, by this time [and you're 23 referring to 30 October 2018, we see, at the top], 24 several reports had been commissioned by [Post Office] 25 into possible issues with Horizon and I have been 20 1 provided with copies of certain reports dating back to 2 2013. Except as set out in this statement, I had no 3 knowledge of any of those reports until they were 4 provided by the Inquiry." 5 In that sentence, are you referring to documents 6 such as the Second Sight Interim Report in 2013, which 7 commented on the Horizon system itself? 8 A. Yes, the first that I've seen of any reports on the 9 Horizon system were in documentation provided by the 10 Inquiry. 11 Q. Please can we turn to POL00006357. This document very 12 well known to the Inquiry, it's Simon Clarke's Advice of 13 15 July 2013, it was sent with the Rule 9 Request to you 14 and was one of the documents that the Inquiry asked you 15 about. Did you read it when preparing for this 16 statement? 17 A. No, I did not, because I wasn't in position in 2013. 18 Q. So are you aware of what this document says? 19 A. No, I'm not. 20 Q. Firstly, before I ask what it says, when did you first 21 see this document? 22 A. Only when it was presented to me as part of the papers 23 from the Inquiry. 24 Q. Why did you not refer to it in your witness statement? 25 A. I didn't believe that it was relevant to me on the basis 21 1 that I wasn't in position and didn't know anything about 2 it and so, therefore, I'd struggle to comment on it. 3 Q. If we turn, please, to page 13, we see, under 4 "Conclusions", it says: 5 "What does this all mean? In short, it means that 6 ..." 7 It says "Dr Jennings", which refers to Gareth 8 Jenkins. Presumably now you know who Gareth Jenkins is? 9 A. Yes, I do. 10 Q. "... [Gareth Jenkins] has not complied with his duties 11 to the court, the prosecution or the defence." 12 If we go down, at 38, we don't need to go through it 13 all, but it says: 14 "Dr Jenkins failed to disclose material known to him 15 but which undermines his expert opinion. This failure 16 is in plain breach of his duty as an expert witness", 17 and continues. 18 Were you provided any information regarding Gareth 19 Jenkins when you joined the Post Office? 20 A. I was not. 21 Q. When was the first time you heard of Gareth Jenkins? 22 A. The first time I'd heard about Horizon issues was 23 between April and September 2016, after I joined in 24 January 2016. I don't recall exactly when I found out 25 about Gareth Jenkins. I don't have a date of 22 1 recollection in my mind. 2 Q. Do you recall when you found out about the allegation 3 that Mr Jenkins had failed to comply with his duties as 4 an expert? 5 A. I don't know about duties as an expert but, in terms of 6 ability to access the system, I believe that was in 7 November/December 2019. 8 Q. When you say "ability to access the system", do you mean 9 what we now refer to as remote access? 10 A. Yes, I believe so, yes. 11 Q. Can you assist us with whether you were aware of 12 concerns about Mr Jenkins before, say, the Common Issues 13 judgment? 14 A. No, I was absolutely not. 15 Q. Again, I'll phrase it slightly wider: do you recall when 16 the first time you became aware of concerns with 17 Mr Jenkins within Post Office? 18 A. I don't recall an exact date. 19 Q. Can you give us a brief time, a time period? 20 A. Only when -- I go back to my November/December 2019, 21 when I heard the system could be remotely accessed. 22 That's probably the first time. I don't remember 23 anything prior to that. 24 Q. Did you discuss concerns about Mr Jenkins with anyone 25 else on the Board? 23 1 A. No, I did not. 2 Q. Could we look at the monitoring, please, of the Group 3 Litigation. We don't need to -- actually, no, let's 4 bring it up, please, your statement, page 16, 5 paragraph 37. You say: 6 "Initially, Ms MacLeod delivered updates to the full 7 Board on the status of the G proceedings, which soon 8 became a standing agenda item. These updates were 9 necessarily limited to high-level news and 'headlines': 10 how many claimants had joined the claim; whether there 11 was going to be a class action; and similar key issues 12 and milestones. From a very early stage there was 13 a huge amount of detail in the GLO proceedings that the 14 Board would not have time to review, and it was not the 15 Board's role to do so. Looking at the Board minutes 16 I have been provided with by the Inquiry, the notes of 17 Ms MacLeod's updates appear quite light. It's not clear 18 to me now why the Chairman did not request more detail 19 in the minutes." 20 You refer to Ms MacLeod's preoccupation with 21 preserving privilege. 22 So just clarifying this, is your evidence that, 23 actually, as a matter of fact, Ms MacLeod provided more 24 substantial briefings to the Board orally than is 25 reflected in the minutes? 24 1 A. Mrs MacLeod provided updates to the Board that were 2 almost, almost verbal, that I recall. 3 Q. Yes, and when she provided those verbal updates is your 4 evidence that what she actually said to you when you 5 were in the Board room was more substantive or provided 6 more information than is reflected in the Board minutes? 7 A. No, I don't recall specifically because everything was 8 verbal. I find it harder to recall whether it was more 9 detailed or less detailed, I just recall it was a verbal 10 update and the minutes reflected that update being quite 11 light. I don't know why but Mrs MacLeod wouldn't 12 present for one hour or otherwise, it was a short 13 session that I recall verbally updated on the high-level 14 points of the litigation. 15 Q. What did you mean then by "It is not clear to me now why 16 the Chairman did not request more detail in the 17 minutes"? Are you saying that the Chairman should have 18 requested there to be more detail written down as to 19 what Ms MacLeod actually said or that the Chairman 20 should have requested that Ms MacLeod provide more 21 detail to the Board? 22 A. I'm saying that the Chairman should have requested more 23 detail in the minutes. 24 Q. From saying that, what do you think is missing: what 25 sort of information is missing from the minutes that has 25 1 led you to make that statement? 2 A. The basis of my comments relate to receiving information 3 from the Inquiry. If I was able to read it now, it 4 would give me a better understanding of what was said 5 and what happened during those meetings, if the minutes 6 were more detailed. So my comments are really driven by 7 recollection of memory, as opposed to anything else. 8 Q. Why didn't you raise any concerns about the minutes at 9 the time? 10 A. In hindsight, I should have done. 11 Q. Please can we bring up POL00024270. So we know and have 12 heard evidence that there was initially a steering group 13 for the GLO and then the Board created a subcommittee in 14 early 2018. In fact, we see at paragraph 2.1, it says 15 it's following the meeting of 29 January 2018. In your 16 witness statement, you refer to one of the purposes of 17 the committee to be to receive legal advice. Was it 18 also to provide oversight for how the litigation was 19 being conducted? 20 A. If I recall correctly, there is terms of reference -- 21 there were a terms of reference of the subcommittee in 22 documents. I haven't seen it as part of my papers but, 23 if I recall, there was terms of reference, and the 24 day-to-day management of the subcommittee and working 25 with the legal officers representing Post Office was the 26 1 duty of the Company Secretary or Legal Team, Jane 2 MacLeod, and the Executive. 3 Then, after that, if there was anything required to 4 be escalated, then that would be escalated to the 5 subcommittee. 6 Q. That can come down for the time being. Thank you. 7 Leaving aside what the formal terms of reference 8 said, as a matter of practice, what did you see your 9 role to be on the subcommittee? 10 A. The Group Litigation, as I first found out about in 11 between April and September 2016, started to snowball 12 very quickly. There was approximately 90 claims, and 13 that snowballed very quickly into 550 or 560 claimants, 14 so things were moving very fast. 15 And the role of the subcommittee was to be able to 16 try and quickly react, if there was any decisions or any 17 advice that was required, because it was happening so 18 fast. Decisions had to be made and so, therefore, the 19 purpose, as much as anything, of the subcommittee, was 20 to try and assist the Board in understanding what was 21 happening and to be available if the Executive or 22 Mrs MacLeod had to escalate anything that required 23 further discussion. 24 Q. Can you give us a summary of what types of things were 25 escalated to the subcommittee? 27 1 A. I don't recall specific documents or items at the moment 2 and, in my papers provided by the Inquiry, there wasn't 3 any documents that I can give as an example but it was 4 more about the frequency and the feed of information 5 that was coming very quickly. 6 Q. I want to look at a different topic, please, and that's 7 what we now call the Swift Review or Tim Parker's 8 review. When did you first become aware of Tim Parker's 9 review as commissioned by Baroness Neville-Rolfe? 10 A. I never was aware of the Swift Review until the papers 11 and I saw the documents provided by the Inquiry. 12 Q. So I want to try to delineate two things here. Firstly, 13 when were you aware that Tim Parker was carrying out 14 a review at the request of Baroness Neville-Rolfe? 15 A. I wasn't aware at all and I was never informed of that 16 at all. 17 Q. The second question I was going to ask was: when did you 18 become aware of Sir Jonathan Swift's involvement? Your 19 evidence is you didn't see the report, the advice, until 20 it was sent to you by the Inquiry? 21 A. That's correct. 22 Q. Apologies if I misheard you but just so I can be clear, 23 that's when you saw the advice produced by Sir Jonathan 24 Swift; when did you become aware of his actual 25 involvement? 28 1 A. "His" being? Can you just clarify? 2 Q. I'm very sorry, yes. Sir Jonathan Swift's involvement? 3 A. The name Swift, I was not aware of. It's not a name 4 that I was aware of. I believe when I looked through 5 the papers provided by the Inquiry, there's a comment 6 from Tom Cooper which says "I attach" -- and I don't 7 believe he names anything but he attaches a document. 8 I don't recall ever receiving that or seeing that 9 document but I've read the papers provided by the 10 Inquiry but, to the best of my recollection, it doesn't 11 mention a name, and I don't remember seeing it. So 12 physically seeing what was the Swift Report and the 13 letter to Baroness Neville-Rolfe, I didn't see it until 14 it was provided by the Inquiry. 15 Q. I want to bring up, please, Jane MacLeod's witness 16 statement. It's WITN10010100. This is a witness 17 statement provided to the Inquiry by Jane MacLeod dated 18 30 April 2024, which has been read into the record. 19 Can we please turn to page 101, and if we could go 20 down, please. Sorry, it should be starting at page 100, 21 paragraph 184. So we see at the top there, it's 22 referring to -- 183 -- Sir Jonathan, that's Sir Jonathan 23 Swift, providing a draft version of his findings to 24 Mr Parker. 25 At 184, Jane MacLeod says that: 29 1 "I have not been provided with the minutes of any 2 Board meetings or Group Executive meetings in which the 3 Chairman's Review or the findings from it were 4 discussed, although it is clear that the Board were 5 aware that it had been commissioned as the CEO informed 6 the Board its meeting on 22 September 2015 ..." 7 Pausing there, that's before you joined the Post 8 Office: 9 "... that 'the Minister had asked the Chairman for 10 his independent review of Sparrow'." 11 It then goes on, if you see further down, it refers 12 to Mr Parker's comments in open source material. She 13 says: 14 "My recollection is different to Mr Parker's, 15 although I agree that I discussed privilege and 16 confidentiality with him when I met him. My 17 recollection is that the Senior Independent Director, 18 Mr McCall, asked a question at a Board meeting as to 19 whether the Board would be briefed on the findings of 20 the Chairman's review, although I do not now recall the 21 exact timing, but it was after the further work 22 recommended by the Chairman's Review had commenced. 23 Pausing there, do you recall asking such a question, 24 as indicated by Ms MacLeod here? 25 A. No, I don't. 30 1 Q. So, in your evidence, where we saw you refer to feeling 2 being left holding the baby, you weren't referring to 3 learning of the Chairman's review? 4 A. I have not seen that document nor have I questioned it, 5 nor have I said I have a totally different recollection, 6 otherwise I would have -- not have made the comments in 7 my witness Statement. 8 Q. I'm just going to continue with what she says, in 9 fairness to you, so it's put to you: 10 "I believe that, as a result of that question [this 11 is Jane MacLeod speaking], I provided an oral briefing 12 to the Board (although I do not recall if this was at 13 the same meeting or subsequently), as to the scope and 14 findings of the Chairman's review as well as a summary 15 of the further work being undertaken following the 16 Chairman's review." 17 Again, I'll put it to you: do you disagree, then, 18 with Ms MacLeod's recollection? 19 A. I have absolutely an alternative view on that, I have 20 never -- and I stress again -- I have never seen that 21 report nor do I recall in any way that I made those 22 statements or that word. 23 Q. Finally, she says: 24 "Although I have not seen any documents which 25 indicate the full report was circulated to the Board, my 31 1 recollection is that I advised the Board that the full 2 report was available on request." 3 Do you agree with that? 4 A. No, I do not. 5 Q. That can come down. Thank you. Can we please bring up 6 POL00024913. It's a letter from Tim Parker to Baroness 7 Neville-Rolfe regarding his review. It's dated 4 March 8 2016. I think you've already referred to it but for 9 clarity I will ask: did you see this at the time? 10 A. No, I did not. 11 Q. When was the first time you became aware of this letter? 12 A. In the papers provide to me by the Inquiry. 13 Q. Could we turn, please, to page 2, and if we go down to 14 the "Criminal Prosecutions" section -- we don't need to 15 read it all -- it sets out some information on the 16 review, and the criminal prosecutions element of it, and 17 above (1) minute it says: 18 "As a result of the review I have decided to take 19 the following steps." 20 It says: 21 "I will take advice from specialist criminal counsel 22 as to whether the decision to charge theft and false 23 accounting could undermine the safety of any conviction 24 for false accounting if (a) the conviction was on the 25 basis of a guilty plea following which, and/or in return 32 1 for which, the theft charge was dropped, and (b) there 2 had not been sufficient evidential basis to bring the 3 theft charge." 4 Were you aware of that work described there having 5 been commissioned? 6 A. No, I was not. 7 Q. Do you think you should have been made aware of that? 8 A. My first Board meeting was in February '16 and I notice, 9 from seeing the letter again, it's March. But yes, 10 naturally in the course of events, I believe I should 11 have been aware of it but I was not aware of the letter, 12 at all. 13 Q. If we turn the page, please, page 3, there's information 14 on Horizon and it refers to, firstly, various bugs, 15 errors and defects. We don't need to go to that. It's 16 the second two paragraphs I want to refer to: 17 "Nevertheless, the ... report suggested that 18 consideration should be given to whether it would be 19 possible, by analysis of the transaction logs of 20 subpostmasters who made complaints, to determine more 21 comprehensively whether or not the matters complained of 22 by each subpostmaster could show the existence of some 23 other generic bug within the system. Work is now 24 underway to assess if such testing is possible and, if 25 so, to scope the work that would need to be done." 33 1 Then it goes on to say: 2 "Further work is also under way to address 3 suggestions that branch accounts might have been 4 remotely altered without complainants' knowledge." 5 Were you aware of one or either of those 6 recommendations or work being carried out further to 7 them? 8 A. No, I was not. 9 Q. That can come down, thank you. Can we bring up 10 UKGI00012703. It's an email from Tom Cooper on 11 16 November 2020. We see in the distribution list and 12 the cc list there are various senior figures at UKGI and 13 then what was BEIS, the Permanent Secretary included. 14 It says: 15 "Ahead of our call this afternoon, this is just to 16 update you that Ken McCall, the [Senior Independent 17 Director], has confirmed that, having spoken to other 18 members of the Board as he deemed appropriate, he does 19 not think it appropriate to take any action in relation 20 to Tim Parker's decision making around the QC's review 21 in 2015 [referring to the Swift Review] of [Post 22 Office's] handling of the Horizon complaints. 23 "His rationale is the same as reported previously. 24 Ken believes Tim made a significant error of judgement 25 in accepting legal advice that the QC's report and, as 34 1 a consequence the follow-up work, should not be shared 2 with the Board." 3 Does that fairly summarise any work you carried out 4 following your discovery of the Chairman's review? 5 A. The Chairman's review, and you're talking of the 6 Chairman's -- just for clarity, you're talking of the 7 Chairman's review of performance? 8 Q. Initially, I'm saying: once you were asked to conduct 9 a -- no, let's pause here. 10 This says that "he does not think it appropriate to 11 take any action in relation to Tim Parker's 12 decision-making around the QC's review in 2015 of [Post 13 Office Limited's] handling of the Horizon complaints", 14 and then it goes on to say that you believe that he made 15 a significant error of judgement in accepting legal 16 advice that the QC's report, namely Jonathan Swift's 17 report -- and, as a consequence, the follow-up work -- 18 should not be shared with the Board. 19 Well, this suggests that by September 2020 you were 20 aware of the Swift Review? 21 A. No, because by name, I wasn't aware of what anything was 22 called. Just for clarity, I don't recall the term 23 "Swift" and I don't see it in this document, and I've 24 not seen it in anything that's been provided to me that 25 would indicate, better than my recollection, that I have 35 1 seen. And this refers to the Swift Report, so I was -- 2 my understanding is that the Chairman conducted 3 a review. I did not know what it was called or what it 4 was and it wasn't shared with the Board but the name of 5 Swift was not known to me. 6 Q. Were you aware that he had instructed a barrister to 7 assist with the review? 8 A. No, I was not. 9 Q. So is your evidence that Tom Cooper here, when saying, 10 "Ken believes Tim made a significant error of judgement 11 in accepting legal advice that the QC's report and, as 12 a consequence, the follow-up work, should not be shared 13 with the Board", your evidence is that's inaccurate? 14 A. My evidence is that if there was something as serious as 15 that, having taken place, then I believe the Chairman 16 should have shared it with the Board. 17 Q. That's a separate question. I'm asking, on this email 18 from Tom Cooper, the suggestion is that you had 19 evaluated Mr Parker's performance and determined he'd 20 made a significant error of judgement in failing to 21 share legal advice in the form of what's described as 22 the QC's report, and failing to share that with the 23 Board; is that wrong? 24 A. My conversation with Tom Cooper, to the best of my 25 recollection, there wasn't a reference in our 36 1 conversation to "QC", so, therefore, I just recall Tom 2 saying "Tim Parker has carried out a review, it's not 3 been shared by the Board". I don't recall there being 4 a name given to that document, or QC's document, and the 5 email here is much more direct than the conversation 6 that we had. So my conversation with Tom Cooper was, 7 "Apparently there's been a document that Tim has 8 commissioned and it's not been shared by the Board". It 9 was as general a recollection as that I have. 10 So here it's very specific. It says, "In this 11 email", which obviously I'm not a party to and didn't 12 see. Then, you know, it's a much more strongly worded 13 than the phone conversation with Tom Cooper with me was. 14 Q. Did you say to Tom Cooper that you thought, on the 15 information you had, that Tim Parker had made 16 a significant error of judgement? 17 A. If there's a major report, that the Chairman should have 18 shared with the Board, then that's why I would refer to 19 it as a significant error of judgement. 20 Q. So in saying you would have referred to it as 21 a significant error of judgement, you said "if there was 22 a major report". What were you told for you to believe 23 there was a major report that he'd failed to share with 24 the Board? 25 A. Verbally from Tom Cooper. 37 1 Q. What did he say specifically about the report? 2 A. I mean we're talking four years ago or thereabouts. 3 I don't specifically recall the exact conversation, but 4 the Chairman had commissioned a report, and it's not 5 been shared with the Board. That is the essence of the 6 conversation. There was no reference to "Swift", there 7 was no reference to "QC". So I don't understand how Tom 8 knows those factors or QC's report. I certainly didn't 9 know those factors. 10 SIR WYN WILLIAMS: Have I got this right, Mr McCall: that 11 you accept that there was a conversation with Mr Cooper 12 either shortly before or on the date of this email. In 13 that conversation, he told you that Mr Parker had 14 received a report which had not been shared with the 15 Board. You were told enough to consider that that was 16 a significant error of judgement on the part of 17 Mr Parker but, given his overall record, you did not 18 think that any action should be taken against him in 19 respect of that error of judgement. 20 You, however, dispute the fact that you were aware 21 either of the name "Swift" or that the report was 22 carried out by a barrister. Now, is that a fair summary 23 of what you've been debating with Mr Stevens? 24 A. Yes, sir. That's correct, sir. 25 SIR WYN WILLIAMS: Fine. Thank you. 38 1 MR STEVENS: Please can we bring up UKGI00012155. I think 2 this is a document you were referring to earlier. We 3 see it says, "From: Tom Cooper" at the top, "To" 4 includes Tim Parker, and then you're there as well, Ken 5 McCall. "Subject: Chairman's review report". 6 Attachment, "QC Post Office review", 7 February 2016, 7 and then also the letter to Baroness Neville-Rolfe, 8 dated 4 March 2016: 9 "As promised yesterday, please finding attached 10 a copy of the QC's report prepared for Tim in 2016. The 11 recommendations are at the back. 12 "Also attaching a copy of Tim's letter to the 13 Minister." 14 Do you accept you did receive this Swift Review? 15 A. No, I do not. I accept I saw in the documents provided 16 to me that this is exactly what it says but I have no 17 recollection of actually having seen that report. 18 Q. Is it not the case that you, on 30 July 2020, received 19 the Swift Review and then later, in the email we just 20 went to, gave Tom Cooper your views on it, namely having 21 read the report, you thought that it should have been 22 disclosed to the Board? 23 A. I don't believe so. To the best of my recollection, 24 I would -- I believe I would remember or have remembered 25 if I saw a document such as this. 39 1 MR STEVENS: Sir, that's probably a good time to take our 2 break and I wonder if we could come back at 11.25. 3 SIR WYN WILLIAMS: Yes, that's fine, Mr Stevens. I was just 4 checking the time. 5 MR STEVENS: Thank you, sir. 6 (11.15 am) 7 (A short break) 8 (11.26 am) 9 MR STEVENS: Sir, can you still see and hear us? 10 SIR WYN WILLIAMS: Yes, thank you. 11 MR STEVENS: Please could we bring up POL00104107. 12 We see this is an email from you to Veronica Branton 13 and others on the Board on 22 April 2020. We'll come to 14 it in a moment. You say: 15 "I would appreciate seeing a redraft of the minutes 16 to include the points raised by Tom." 17 That's an email from Tom Cooper to which we'll turn 18 in a moment. Before we do, you say: 19 "I must say at this stage I do not feel comfortable 20 that the minutes truly reflect the complete unawareness 21 of the Board to the existence of a Deloitte report, whom 22 it was commissioned by and the contents therein, and 23 that the minutes reflect the complete shock at finding 24 out that Fujitsu had remote access." 25 Pausing there, the Inquiry has set you several 40 1 reports from Deloitte but in two sets, broadly one 2 Project Zebra from 2014 and one Project Bramble from 3 2016 onwards. When you say "the existence of a Deloitte 4 report", to what are you referring? 5 A. I wasn't aware, if I recall correctly, that there was 6 more than one, so I don't have a name or a badge that 7 I can give to that report. I didn't know that there was 8 multiple Deloitte reports, only in the papers that were 9 sent to me by the Inquiry was I aware that there was 10 multiple Deloitte documents. 11 Q. So is your evidence, at this point, you were aware of no 12 Deloitte reports regarding remote access? 13 A. That's correct. 14 Q. When you say things like "complete shock" and "complete 15 unawareness", do we take from that that you think the 16 Deloitte report should have been before the Board? 17 A. That was my perception, that someone had commissioned 18 a report and the Board hasn't seen it. 19 Q. Did you think it was an important report? 20 A. That was my perception at the time, that there was 21 a report, and that the Board should have seen it, and so 22 my words used then are complete unawareness by the Board 23 and I believe myself and my fellow colleagues on the 24 Board -- specifically I refer to the non-executives -- 25 would have felt the same way. 41 1 Q. So if you'd known earlier that there was a report by 2 Deloitte that dealt with remote access, would you have 3 wanted to know more about it? 4 A. Yes, I would. 5 Q. Could we go, before we move on to look at that in more 6 detail, I want to look at Tom Cooper's email, which you 7 refer to there. As I say, you say: 8 "I would appreciate seeing a redraft of the minutes 9 to include the points raised by Tom." 10 If we go to the bottom of the page, you see that is 11 the email from Tom Cooper, you are sent it, we see, on 12 the right side. Then if we go to see the meeting, it 13 says: 14 "Veronica 15 "I've got a few points on the minutes from the last 16 meeting." 17 Something at paragraph 7 about the Deloitte report. 18 He says: 19 "I'd like to clarify that the 'who knew about' 20 question should apply to the various pieces of work 21 commissioned ..." 22 You see the third one is "following the Jonathan 23 Swift QC report". 24 So you were aware that it was Jonathan Swift QC who 25 prepared a report by at least 22 April 2020; would you 42 1 accept that? 2 A. I accept it when I see it here in email, but day to day, 3 I don't have any recollection of that specific email and 4 I don't have a recollection of the name, but there is 5 an email here which I read the title and I see it and 6 I accept. But it's not something that I had any 7 retention for. 8 Q. Well, looking back now then, would you accept that, 9 firstly, you knew Jonathan Swift had commissioned 10 a report, it was later sent to you, and you told Tom 11 Cooper that Tim Parker should have disclosed it to the 12 Board? 13 A. I see the paper trail and the email trail. I have no 14 recollection of receiving the Jonathan Swift Report. 15 I have none at all. 16 Q. So there are two options, really: one is your 17 recollection is inaccurate and you did receive it and 18 read it; or, secondly, an obvious important report that 19 you were sent, you didn't open? 20 A. The former, in that I have no recollection of receiving 21 the Swift Report. 22 Q. Actually, the former thing I said is that your 23 recollection is incorrect. 24 A. Yes. 25 Q. Are you accepting your recollection is incorrect? 43 1 A. When I see the paper trail, you would have to say yes, 2 that's potentially the case. 3 Q. That document can come down, please. Could we please 4 look at your statement, page 29, paragraph 63. You say: 5 "At some point during the Board's review of CCRC 6 cases ... I received a telephone call from Mr Cooper 7 regarding a Deloitte report that Mr Parker appeared to 8 have commissioned but had not shared with the Board." 9 You go on in that paragraph to say you believe now 10 that he was referring to Project Bramble, which, as 11 I said earlier, was the post-2016 work. 12 If you can turn the page, please, to paragraph 66, 13 you say: 14 "During the CCRC review meeting, which Mr Parker 15 attended, the Board raised the subject of the Deloitte 16 [review] and why it had not been shared. The tone of 17 the meeting was not one of anger but definitely 18 puzzlement. Mr Parker's explanation was that he had 19 been advised that the report was legally privileged and 20 should not be shared with the Board ..." 21 So your evidence appears to be you were told of the 22 Deloitte review, the report, and you attended a Board 23 meeting at which you asked Mr Parker why he didn't 24 provide that information earlier? 25 A. Yes, that's correct. 44 1 Q. Please could we look at POL00006753. These are minutes 2 of the Group Litigation subcommittee of Post Office, on 3 21 February 2019. We see Tim Parker attends by phone 4 and then, third down, you attend by phone as well. Yes? 5 A. Yes. 6 Q. We also see that Anthony de Garr Robinson QC, as he then 7 was, gave -- if we go down please -- at the upcoming 8 Horizon trial, gave a briefing or advice in conference 9 on his views. If we turn the page, please, number 4 10 says: 11 "Remote access risk. The claimants have posited the 12 theory that Fujitsu had interfered with branch data in 13 secret. [Post Office] Limited and Fujitsu's case on 14 remote access had changed over time. Initially Fujitsu 15 had said that remote access was not possible. The 16 Deloitte audit had found that it was. The claimants' 17 expert was arguing that the scope for remote access was 18 even greater than now stated", and goes on to say what 19 the court would do. 20 So let's take it in stages. Firstly, you were aware 21 at this stage, weren't you, that remote access by 22 Fujitsu was possible? 23 A. My recollection was some time between November and 24 December 2019 -- 25 Q. That's your recollection but this is a minute from 45 1 February 2019, at which remote access is discussed. So 2 do you accept that you were aware of remote access by at 3 least this date in February 2019? 4 A. From the minute that's in here, I have to accept that 5 that's the case and my recollection is wrong. 6 Q. Secondly, it refers to the Deloitte audit. So you were 7 aware of Deloitte's involvement in an issue relating to 8 remote access; would you accept that? 9 A. Yes, I do. 10 Q. If we look further down, please, we see "Questions", and 11 the first one is about optimism on the claim; the second 12 a note about "limit of planning that we could do before 13 we had the judgment in the Common Issues trial"; 14 a discussion there about risk mitigation. 15 If we turn the page, please, it says there, in this 16 paragraph: 17 "Whether an accusation was being made that [Post 18 Office Limited] had been involved in instructing Fujitsu 19 to change transactions? It was noted that only Fujitsu 20 could change data and there was no suggestion that [Post 21 Office] had operated a policy to get Fujitsu to 22 manipulate the branch data. The claim was that we had 23 lied about Fujitsu's ability to change branch data. It 24 was noted that it was hard to capture the number of 25 instances in which the data had been changed, especially 46 1 in the Horizon system because of the way that data was 2 captured. We could not distinguish easily between 3 maintenance access and making changes to branch data. 4 However, Fujitsu had been clear that branch data had 5 only been changed on very rare occasions." 6 Then we see it goes on to say about a line between 7 bugs and systemic system errors and appeals. 8 So from these minutes, it firstly doesn't appear 9 that any surprise was raised at this information that 10 Fujitsu could remotely access data; do you accept that? 11 A. I do. 12 Q. Secondly, there's no question raised, such as what is 13 the Deloitte audit? Would you agree with that? 14 A. I don't see anything of that in the minutes. 15 Q. From that, can we infer that members of this committee 16 were aware of the Deloitte audit before this meeting? 17 A. According to the minutes, I would have to agree with you 18 but, as I say, the dates were not my recollection. But 19 I'm obviously incorrect. 20 Q. So you can't assist us, then -- you've said in your 21 evidence it's November 2019 or maybe December 2019. 22 Looking at this document, you can't assist with when, 23 before February 2019, you may have found out about this 24 information? 25 A. It's -- in my witness statement, I've honestly, to the 47 1 best of my recollection, said this is the date 2 I believed I found out about remote access, and that's 3 what's in my statement. That's what I believe. But 4 you've obviously shown me something that -- where my 5 recollection is incorrect. 6 Q. Do you recall reading any of the reports into the 7 Bramble Deloitte reports? 8 A. No. 9 Q. Given what we said earlier about the significance of 10 this and you would have asked about the Deloitte 11 reports, if you were aware of the Deloitte reports at 12 this time, would you have asked to read them? 13 A. Yes. I believe it was an error, certainly on my behalf. 14 Q. Sorry, you say you believe it was an error. What are 15 you referring to there? 16 A. I believe, if I had been aware of the Deloitte reports, 17 I should have asked to see them. 18 Q. Can we look, please, at a different topic. It's your 19 approach to litigation. POL00006380, please. Now, this 20 is a paper for the steering group on the 11 September 21 2017, the Group Litigation steering group. You weren't 22 a member of that steering group, were you? 23 A. I was not. 24 Q. You only became involved when it was the Board 25 subcommittee? 48 1 A. That's correct. 2 Q. We see the title is "Does Post Office support the 3 general strategy set out below?" Do you recall whether 4 you saw this document as part of your role as a Senior 5 Independent Director at the time? 6 A. No, I have not seen the document. 7 Q. If we turn, please, to page 2, paragraph 4.3, we see the 8 heading is "Overall Post Office Strategy", and there's 9 some discussion on that, and then we get to 4.3, which 10 says: 11 "We believe the better solution is to try to force 12 the claimants into a collective position where they will 13 either abandon the claims or seek a reasonable 14 settlement." 15 It goes on to refer to the litigation funder, and at 16 the end says: 17 "Our target audience is therefore Freeths, the 18 funder and the insurers who will adopt a cold, logical 19 assessment of whether they will get a payout, rather 20 than the claimants who may wish to fight on principle 21 regardless of merit." 22 It says: 23 "To try to force the claimants into a position where 24 they give up or settle, we recommend a three-pronged, 25 approach", which we don't need to turn to. 49 1 Were you aware of that broad strategy of trying to 2 force the claimants into a position where they give up 3 or settle, and focusing on the solicitors, funders and 4 insurers? 5 A. No, I was not. 6 Q. In your witness statement at paragraph 36 -- we don't 7 need to bring it up -- you say that you recall the Board 8 being advised that the claim was funded by a litigation 9 funder and that their model would be to move quickly to 10 get other claimants involved? 11 A. Yes, that's correct. 12 Q. Can you recall the context in which you were told that 13 there was a litigation funder involved and the purpose 14 for why you were told that? 15 A. It was just a matter of fact when the discussion came 16 forward about who was representing the claimants. So it 17 was only used as a matter of fact, a matter of 18 information. 19 Q. Can we look, please, at POL00258369. Please can we go 20 to page 2, and further down, please, to Jane MacLeod's 21 email. Thank you. It refers to the "Case Management 22 Conference last week", and the decision of then 23 Mr Justice Fraser on the strikeout application, striking 24 out parts of the witness evidence that the claimants had 25 filed. At the bottom we see it says: 50 1 "However in deciding the application, the Managing 2 Judge was very critical of our conduct of the case 3 intimating that we were not acting cooperatively and 4 constructively in trying to resolve this litigation 5 (which criticism was levelled equally between the 6 parties); and that we had impugned the court and its 7 processes by making the application for improper 8 purposes. This response is extremely disappointing as 9 this has not been our intention, and his challenge as to 10 the purpose for which we had applied for strikeout is at 11 odds with comments he had made during various procedural 12 hearings over the past year." 13 If we go up, please, to page 2 to see Mr McCall's 14 response. You say: 15 "Jane 16 "Many thanks for your note. 17 "Disappointing indeed. 18 "I would like to suggest we have a full update the 19 next time we are all together." 20 You say you'll leave it to Tim for thoughts on the 21 discussion. 22 What, if any, action did you take in response to 23 learning about Mr Justice Fraser's criticisms of the way 24 the Post Office had handled the litigation? 25 A. I believe, if my recollection is correct, that that's 51 1 when we changed QCs -- now KC -- 2 Q. No, this is before the Common Issues trial. 3 A. Oh, I see. Then my view would be the tone and the 4 approach that we took. 5 Q. What did you do to address the tone and the approach? 6 A. I personally don't recall, you know, I don't recall 7 specific conversations, other than I've said, "Look, 8 I think we need to discuss this, and I think we need the 9 Chairman to lead a discussion on what actions we should 10 take". That was the purpose of my note. 11 Q. That can come down. Thank you. 12 I want to go to a different topic, please, on 13 contingency planning in the run-up to the Common Issues 14 trial. Please can we bring up page 20 of your 15 statement, paragraph 43. You say: 16 "I can recall being shocked at losing so badly when 17 the advice from [Post Office's] barristers had 18 consistently been that we had the better of the 19 arguments on most of the 23 separate issues under 20 consideration. Against that very clear and confident 21 advice, it was almost inconceivable that we had lost on 22 all material points. I also did not appreciate and I do 23 not believe the Board as a whole appreciated, how great 24 an impact the [Common Issues Trial] could have on [Post 25 Office's] day-to-day operations." 52 1 The words you use there, "better of the arguments", 2 is taken from, or at least it's in, minutes recording 3 legal advice was given. When you hear the words "better 4 of the arguments", how much confidence do you think the 5 legal professionals had in the case, if using the term 6 "better of the arguments"? 7 A. It's very difficult for me to comment on the legal 8 professionals. My perception on the receiving end of 9 those comments would be that we were in a strong 10 position. 11 Q. When you say a strong position, if you were to put 12 a percentage on it, what were you thinking of your 13 chance of success? 14 A. Better than 50 per cent. 15 Q. As in anywhere from 51 per cent upwards, or? 16 A. I think it's quite subjective to put a figure on it but 17 I would say consistently our legal advice had been our 18 arguments were strong and that, based on those 19 arguments, my perception, and hence the use of my words 20 that I was shocked, I was shocked. I completely didn't 21 expect what had happened and so, on that basis, I said 22 "Well, how can we have got it so wrong? How can that be 23 so wrong? How could this have happened, based on our 24 legal advice?", and that's what I depended upon. 25 Q. But from what you're saying, is it fair to say that you 53 1 hadn't considered this to be a certain victory or had 2 you considered it to be a certain victory? 3 A. No, I don't think you can ever say anything is a certain 4 victory but I certainly believed that there would be 5 a better outcome than there ended up being. 6 Q. Can we look, please, at POL00006754. So this is 7 a minute of the meeting of the Subpostmaster Litigation 8 Subcommittee, we see it's on 15 May 2018. At the 9 bottom, we see you've given your apologies. Would you 10 have read the minutes of the meeting that were prepared 11 when you were -- in readiness for the next meeting? 12 A. I think you would have to assume normally, yes. But 13 it's difficult to recall, back in 2018. 14 Q. We see Anthony de Garr Robinson QC and David Cavender QC 15 are listed as in attendance and, page 1, if we go down, 16 please, it gives an overview of the litigation. It 17 says, "Work out in Common Issues ['trial', it should be 18 trial] what the contract means. Phase 2 work out how 19 the computer [it should be 'system'] worked." 20 The next paragraph down: 21 "CI trial [Common Issues trial] -- what king of 22 relationship those documents in the round constitute. 23 We say business to business but could be interpreted 24 differently. Not straightforward because of the 25 drafting [it should be 'of'] the contracts [especially] 54 1 the older ones." 2 I say "what king", it should be "what kind", 3 I think: 4 "Idea of good fait into contracts, [especially] 5 relational contracts ..." 6 I assume that's "especially long-term arrangements": 7 "New law. Unclear what a general duty of good faith 8 would mean." 9 It's there on the screen, sorry: 10 "Overall view is that the [Post Office] has the 11 better of [the arguments] in most 23 [arguments]. Don't 12 think it likely that the good faith claim will be upheld 13 but is material there for him to do so (bit of 14 a one-sided contract, etc) but in that case would advise 15 [Post Office] to appeal." 16 Then, if we go to page 4, please. It says: 17 "Any view on how many of the 23 claims they're 18 likely to win? 5 or 6 significant issues where it's not 19 straightforward (go away and provide a summary?). Need 20 to manage the comms angle and work out the implications. 21 "Do a piece of work on impact of losing any of the 22 23 terms. Aiming to bring this back in July. Looking 23 at mitigations and what we could do now in addition to 24 wait ['what', I think] we do if we did lose. 25 Interesting to hear QCs' views on most contentious of 55 1 the 23 issues." 2 Do you recall discussing the advice with anyone at 3 who attended this meeting afterwards? 4 A. No, I do not. 5 Q. Would you accept that it appears that the barristers 6 were advising that some of the issues were not 7 straightforward? 8 A. When I read this document, even though the quality of 9 the English is extremely poor, I'd have to say yes, 10 there are obviously issues that are not straightforward. 11 Q. And that the Post Office may lose some of them? 12 A. Yes. 13 Q. It appears that the committee asked for more work to be 14 done to analyse the impact of a negative outcome? 15 A. Yes. 16 Q. Can we look, please, at POL00006763. This is the 17 meeting of the Litigation Subcommittee on 10 July 2018. 18 We see that you're in attendance on the third line. If 19 you go to page 2, please, towards the bottom, we've got 20 "Contingency Planning": 21 "It was noted that the QCs had presented their 22 opinion on the merits of the case at the last meeting, 23 and had concluded that, based on the information 24 available to them at the time, on balance Post Office 25 had the better arguments. 56 1 "In order to understand the potential impact of 2 an adverse outcome, the various terms sought by the 3 claimants to be implied into the postmaster contract had 4 been assessed from both a legal (likelihood) and 5 an operational (impact) perspective, and had been 6 prioritised using a simple 'RAG' approach. These were 7 discussed with the Committee and it was noted that, in 8 general, those terms which had been assessed as the most 9 likely, in fact had a low operational impact; and 10 conversely, those with the greatest potential impact 11 were less likely to be successful." 12 It goes on to say, over the page, that: 13 "The Committee noted that the assessment was very 14 helpful." 15 If we look at that assessment now, it's POL00025908, 16 please. We can see it says "DRAFT Contingency Planning: 17 Risk Assessment Table", and do you see the date is 18 9 July 2018, at the bottom left? Do you remember 19 reviewing this document? 20 A. No, I don't recall seeing the document. 21 Q. Do you accept would likely have been the document that 22 was before the Committee? 23 A. It's very hard to say, I don't recall seeing the 24 document and my solicitors, actually, asked from my 25 feedback of reading the document, could we please have 57 1 some more information on the document: when, who sent 2 it, what was it produced for, who was it from, who was 3 it to, who was it circulated to? And, without that, 4 it's very hard for me to understand, but reading it now, 5 I don't recall seeing the document. 6 Q. Well, I'm going to ask you some questions on it and just 7 assist us as best as you can. We see at the top, it 8 says: 9 "This document summarises in Counsel's Opinion on 10 the Common Issues. By its very nature, it is simplistic 11 and should not be relied upon in lieu of a careful 12 reading of Counsel's Opinion. 13 "Where we have offered a view on the impact on Post 14 Office, this is an initial view based on our current 15 knowledge and we have not sought to set out 16 an exhaustive list of impacts." 17 Then we see below that there's a RAG analysis or 18 a grading table. We see on the left it's likelihood, 19 Red 5 being "very likely to lose", right through to 1, 20 "Post Office is very likely to win the issue". On 21 Impact, 5, "A significant adverse impact on the 22 business", right through to "There will be negligible 23 impact on the business". 24 If we just go through that, for example, page 3 -- 25 if we go further down, please, thank you -- we see there 58 1 an implied term with a high likelihood 5 because it's 2 been admitted, but low operational impact of 2 for 3 cooperation. 4 Over the page, please. Similar on exercise of 5 powers. But, if we go, please, to page 7, we see there 6 at 11 there's an implied term about the relationship 7 and, for example, Post Office would not take steps which 8 would undermine the relationship of trust and confidence 9 between it and the subpostmasters, and the operational 10 impact has been listed as 4. 11 Over the page, shortfalls, implied term: 12 "Post Office would: 13 "A) produce, keep and maintain accurate records of 14 all transactions carried out using Horizon; 15 "B) be able to explain all relevant transactions; 16 "and 17 "C) use the records to explain any shortfalls." 18 It's an example of 5 on the operational impact. 19 Looking at that table again, do you agree you were 20 made aware, as a member of the Postmaster Litigation 21 Board subcommittee, that there were a number of 22 substantial adverse impacts on Post Office's day-to-day 23 business operations, in the event that the court 24 disagreed with Post Office's interpretation of the 25 contractual clauses? 59 1 A. In reading the document, yes, I understand that but my 2 response to you would be that I hadn't seen and I don't 3 recall having seen the document, because I've seen no 4 information that I've seen it or circulated to me, and 5 I have no recollection of it. 6 Q. I want to then move to your reaction to the judgment in 7 Common Issues, please. It's POL00392634. This is 8 an email from you to Tim Parker on 13 March 2019, so 9 shortly after the judgment in Common Issues. It says: 10 "Tim 11 "Apologies I was not able to stay on the call longer 12 ... 13 "Anyway I understand we have a further call week of 14 18th to be scheduled. 15 "Outside of the call I [I assume that's 'would'] 16 appreciate a private conversation on you on this topic 17 ..." 18 Pausing there, we see the subject is "GLO Call": 19 "... and it would be great if you could let me know 20 what might suit." 21 Firstly, can you recall if you had a private 22 conversation with Tim Parker following this email? 23 A. I don't recall specifically, no. 24 Q. Well, do you recall what type of things you discussed 25 with Tim Parker in private conversations following the 60 1 GLO judgment in Common Issues? 2 A. I have no recollection. I mean, we're talking March 3 '19. I think to remember a conversation is extremely 4 hard. So I don't have a recollection of it. 5 Q. This was a pretty significant moment, wasn't it, for the 6 Post Office? 7 A. Yes, indeed. 8 Q. Is it fair to say you can remember your reaction to 9 learning of the decision in Common Issues? 10 A. Yes. 11 Q. So is your evidence you can't remember discussions you 12 had in private with Tim Parker about that very issue? 13 A. I don't remember having a discussion in private with Tim 14 Parker. 15 Q. I want to briefly touch on the recusal application, 16 please. Can we bring up your statement, page 24, 17 paragraph 50. You refer to a debate and the Board 18 unanimously supported the recusal application, including 19 Tim Franklin. You say no one on the Board, to your 20 knowledge, had been in that situation before. The final 21 sentence is: 22 "Given the rock-solid advice given Lord Neuberger 23 and Lord Grabiner that [Post Office] had 'no 24 alternative' other than applying to recuse Judge Fraser, 25 recusal appeared to be the only logical way forward." 61 1 Can you explain what you mean when you say "no 2 alternative"? Why did you think there was no 3 alternative? 4 A. Those were -- because this was such a dramatic 5 situation, I personally, and I believe my colleagues, 6 had never been in a situation like this before, and the 7 reason I remember those words is because those were the 8 specific words that Lord Grabiner used and that's why 9 I remember it. I remember those words specifically. If 10 there's anything I remember, it's those words: we had no 11 alternative but to ask to recuse Justice Fraser. 12 Q. When saying there was no alternative, can you recall 13 what Lord Grabiner said as to the reasons why there was 14 no alternative? 15 A. There was a number of reasons in the discussion. There 16 wasn't any alternative put forward but there were 17 a number of reasons: reliability/credibility of Post 18 Office witnesses; the accusation of inadmissible 19 evidence; small issues being spread across the whole of 20 Post Office, et cetera. There was number of reasons and 21 rationale why, apparently, according to our legal 22 advice, amounted to apparent bias and, on that basis, 23 that was the legal advice we were given. 24 Q. So those are reasons why the application may or may not 25 be strong or may or may not have merit. Slightly 62 1 different question is the reasons given for why there 2 was no alternative to make the application? 3 A. I don't specifically remember a discussion taking place 4 that pointed out "Here are three alternatives" or "Here 5 is an approach". I don't believe there was that 6 discussion. I believe there was a discussion about the 7 rationale, as I've just explained but, other than that, 8 there wasn't presented a case that said "There's 9 option A, option B, option C"; we weren't given that. 10 Q. Presumably, you knew there was option A, make the 11 application; option B, don't make the application? 12 A. That's correct. 13 Q. So in those circumstances, can you recall what was said 14 or the reasons Lord Grabiner gave for saying there was 15 no alternative but to go for option A, to make the 16 application? 17 A. I can't remember his specific words but, as a layman, 18 it's very difficult when we've got some of the strongest 19 possible legal advice, when we have some of the most 20 senior people in the legal profession giving us that 21 advice and none of the Board had the experience of 22 having been through this before, then it was our opinion 23 that we had to follow our legal advice. In hindsight, 24 maybe we should have been far more questioning and said, 25 "What are our alternatives?" but I don't remember being 63 1 presented with any at the time. 2 Q. In your statement, you refer to Tom Cooper recusing 3 himself from the vote on the recusal application. Now, 4 in the Board meetings can you remember Tom Cooper 5 expressing a view on the application? 6 A. I remember that, in speaking -- I remember first of all 7 the Chairman recused himself because of an existing 8 accountability and then, I don't remember the exact 9 time, either just before or the day before, Tom Cooper 10 recused himself. But it was my clear understanding that 11 there was a unanimous opinion that we should proceed 12 with recusal. I don't recall in any way any -- I have 13 no recollection of any dissenting word that said no. 14 Q. Did you have a view on Mr Cooper's decision not to 15 participate in the vote? 16 A. I had to respect his opinion. 17 Q. You can respect someone's opinion and agree or disagree 18 with it; did you have a view on whether you agreed or 19 disagreed with his decision to recuse himself? 20 A. I understood his position but I was a little bit 21 surprised. 22 Q. Why? 23 A. I understood our Chairman had a conflict, which was very 24 evident, but I wasn't sure what the conflict was in the 25 case of Mr Cooper. 64 1 Q. Can we look at your statement, please, page 25, 2 paragraph 52. Turning now to the preparation for the 3 Horizon Issues trial. 4 Sorry, I'm not sure what I said, but it's page 25, 5 please. Speaking, actually, post-Horizon Issues trial, 6 you say: 7 "I do not recall that losing the [Horizon Issues 8 trial] came as a surprise to myself or the Board. In 9 contrast to the [Common Issues trial] judgment the, 10 legal advice we received before the [Horizon Issues 11 trial] judgment was much more pessimistic given that we 12 had lost the recusal application. It was clear Judge 13 Fraser had a strong view and, for the same reasons we 14 applied to recuse him, such as his criticism of POL's 15 witnesses, we did not expect his findings in the 16 [Horizon Issues trial] to be favourable to us." 17 So I think what you're saying is the legal advice 18 changed after the recusal application failed on Horizon 19 issues; is that right? 20 A. I would say the legal advice we were given became far 21 more balanced, as opposed to convincing, that Post 22 Office had a strong case. 23 Q. So you refer to losing the recusal application and you 24 say about Judge Fraser's strong view. Are you saying 25 that before Horizon issues but after the recusal 65 1 judgment you thought that Mr Justice Fraser would find 2 against Post Office because you believed he'd developed 3 strongly critical views of the Post Office? 4 A. One of the key points put forward in our advice on 5 recusal was his strong criticism of Post Office's 6 witnesses and, on that basis, if those same witnesses 7 were the witnesses in the Horizon trial, there was 8 a strong belief that the arguments of Post Office would 9 not be favourable to securing a judgment. 10 Q. At this point, did you think that you were predicting 11 losing the Horizon Issues trial because of the judge's 12 approach to the Post Office witnesses, rather than the 13 substance of the matters themselves? 14 A. I think it's very difficult to talk about the substance 15 of the matters itself because, obviously, myself and 16 none of my non-executive colleagues were employed by 17 Post Office at the time, the historical or the Legacy 18 Horizon systems were in place. So my knowledge of those 19 Legacy systems is very limited indeed. My position here 20 is that I said our inability to have Judge Fraser recuse 21 himself was, in simple terms, due to three or four 22 factors which would not stand us in good stead in the 23 Horizon judgment. 24 Q. Well, let's take one of those factors. You said the 25 views he took of the Post Office witnesses, that was one 66 1 of the grounds I understand, you took into account when 2 deciding to issue an application to recuse Mr Justice 3 Fraser, yes? 4 A. Yes. 5 Q. So you presumably believed that the strong view 6 Mr Justice Fraser had taken on some of the witnesses was 7 a ground for arguing that he was apparently biased 8 against the Post Office? 9 A. That was our legal advice. 10 Q. Well, did you believe it? 11 A. I believed the legal advice. 12 Q. Did you believe or did you agree with the underlying 13 proposition? 14 A. I believed -- I believed that that was a factor but it 15 was based on the legal advice that we had been given. 16 Q. So when you're now thinking about the Horizon Issues 17 trial and saying, "Well, we think our prospects of 18 success are low because of the strong views Mr Justice 19 Fraser had taken", what did you think of the fairness of 20 that? 21 A. I find it very hard to comment on the fairness. What 22 I feel more comfortable commenting on was our legal 23 advice gave a number of reasons which amounted to -- 24 according to our barristers was apparent bias. So -- 25 Q. Yes, but -- sorry, I interrupted you -- 67 1 A. Sorry. And, on that basis, given a collection of 2 issues, as opposed to just one issue on its own, we 3 voted unanimously to proceed with the recusal 4 application. 5 Q. Mr McCall, the point I'm trying to get at is whether 6 you, as the Senior Independent Director and your view of 7 the outcome of the Horizon Issues trial, whether you 8 thought or believed that it was there was a lack of 9 robustness with Legacy Horizon, as a matter of fact, or 10 whether it was because you thought that the judge had 11 taken strongly against your witnesses and it was just 12 the outcome of the trial? 13 A. I think my knowledge, as I said earlier -- my knowledge 14 of the robustness of a Legacy Horizon system was very 15 limited. I wasn't at Post Office. I had no knowledge 16 of that system whatsoever. But the judgment that you're 17 asking me on, I would -- I believed that the judgment 18 was given on the basis of that the Legacy Horizon system 19 was not robust. 20 Q. I want to look at, now, some of the issues after the 21 judgment and the steps that Post Office took in 22 response. Could we look at, please, POL00021586. It's 23 a Post Office Board meeting on 30 June 2020, and we see 24 you're there on the third line down. 25 Can we please turn to page 5. We have "Postmaster 68 1 Engagement/Representation". It says: 2 "Nick Read explained that we were trying to 3 rebalance the relationship between [Post Office] and 4 postmasters recognising the historical position and the 5 GLO. The partnership during the Covid-19 situation had 6 been very positive and built up trust. We wanted to 7 forge a proper partnership and make running a Post 8 Office an attractive proposition." 9 It goes on to describe some roadshows. The second 10 paragraph says: 11 "Amanda Jones noted that the position had been 12 moving quickly and the conversations with the 13 Non-Executive Directors and UKGI had been very helpful. 14 We had taken on the suggestion to extend the 15 consultation period", et cetera. 16 Do you remember the conversations you had with 17 Amanda Jones at this stage, regarding postmaster 18 engagement? 19 A. Not the specific conversations. I remember that -- Nick 20 Read carrying out roadshows to try and rebuild trust, to 21 listen to subpostmasters, to try and connect exactly 22 with those people that were part of our network and that 23 were running the most important part of our Nationwide. 24 And so I remember the roadshows, I remember that the 25 attendance was very good. I don't remember specific 69 1 details. I think there was four or five, or maybe half 2 a dozen roadshows, and the information that came back 3 was that they were welcome, they were very positive and 4 they provided good feedback. 5 Q. If we look at the bottom of the page, please. There's 6 a bullet point that says: 7 "Tom Cooper noted that it was important to establish 8 that the ... Board was comfortable with the proposals to 9 include one or more postmasters on the Board. All of 10 the Directors confirmed that they were comfortable with 11 the proposal and would prefer that two postmasters were 12 appointed to the Board." 13 It goes on to say they should be Non-Executive 14 Directors and remunerated as such. 15 Then at the bottom, it says: 16 "As noted, we would need to think carefully about 17 the selection process and also the credibility of the 18 appointees with their constituency." 19 Can you recall the discussion on the selection 20 process and credibility of appointees at this Board 21 meeting? 22 A. Not that -- I can't recall the specific discussion. 23 What I do recall is that we were very keen to ensure 24 that the subpostmasters joining the Board were recruited 25 and independent. So, therefore, it wasn't the Post 70 1 Office choosing two people; it was actually the 2 postmasters themselves choosing who the representatives 3 would be. I remember that that was the principle of 4 independence and the subpostmasters should have the 5 ability to do that. That's my recollection. 6 Q. Were you involved in establishing or advising on 7 establishing how the appointees would be selected? 8 A. I don't recall that I was. 9 Q. That can come down. Thank you. 10 I want to ask you some broader questions, which 11 touch on the next phase that the Inquiry is going into, 12 Phase 7. Aside from what we've just referred to there, 13 the subpostmasters on the Board, what other steps had 14 the Post Office Board taken, following Horizon Issues, 15 to try to address the culture of the organisation and 16 the criticisms made by Mr Justice Fraser? 17 A. There were a number of workstreams instituted to try and 18 improve the relationship; there was technology, such as 19 the branch hub system, which was to try and address the 20 speed, the feedback, the ability of subpostmasters to go 21 online and address any challenges or queries they had 22 themselves; the ability of Post Office, through that 23 branch hub network, to be able to communicate far faster 24 and far more quickly to subpostmasters; there was 25 a strong push to try and improve the communication, in 71 1 addition to having two subpostmasters on the Board to 2 help advise, guide and give the Board confidence that 3 the subpostmasters were being represented in terms of 4 strategy, communication and support. 5 So there was a much stronger push to get a lot 6 closer to the network and the people through some of 7 these initiatives. 8 Q. As at the time you left, which was January 2022, what 9 did you think of the adequacy of those measures in 10 practice? 11 A. My recollection is that we had high 80s, maybe 12 90 per cent of the branch network connected and working 13 with branch hub. The two subpostmasters were 14 an excellent addition to the Board and gave really good, 15 strong at times and honest communication and feedback, 16 and I thought they were doing an exceptionally good job 17 in representing the subpostmasters. 18 And I felt Nick Read was really strongly trying to 19 get as close as possible to the subpostmasters and 20 improve the relationship between Post Office Executive 21 and the network. So I felt that the moves that were 22 made were very positive. 23 Q. What was the culture of the Board like at the time you 24 left? 25 A. I left in January '22. The -- myself and my colleagues 72 1 who were there tried our hardest to address the 2 historical issues and to, in some small ways, try to put 3 right what had gone wrong, as we were -- none of us had 4 been in position at the time. And so the culture was 5 one of trying to help, trying to assist, trying to 6 address the historical issues and trying to work hard to 7 build the credibility. And there were some very 8 talented non-executives that were still on the Board of 9 the Post Office, and so I would say the Board culture 10 was very positive indeed, and Mr Parker was a good 11 Chairman that was very inclusive in trying to make sure 12 the Board was very focused indeed. 13 Q. You've mentioned already Nick Read. What was your view 14 of him as Chief Executive in dealing with the issues 15 that arose from the GLO judgments? 16 A. He was a strong communicator. He tried to get round the 17 network as much as possible. He would welcome feedback. 18 His style was open and engaging and he was also 19 detailed, and so, therefore, I was very positive about 20 his approach to rebuilding trust between the Post Office 21 and the subpostmasters. 22 Q. What about the relationship between Nick Read and 23 Alisdair Cameron; did you have any views on that? 24 A. In what terms? 25 Q. Well, I'm just asking if you had any comments to make on 73 1 if it was an effective working relationship? 2 A. I never saw that it wasn't an effective working 3 relationship. 4 Q. Do you have any other views on that matter? 5 A. No, sir. 6 Q. What are your views on the composition of the Board when 7 it left, in terms of did it have sufficient expertise to 8 deal with the matters before it? 9 A. As I said earlier, I believe it was the year before 10 I finished my second term and stepped down, and Ben 11 Tidswell, who joined the Board from a legal professional 12 background, was a great addition to the Board and I felt 13 that was very positive indeed. 14 The Chair of the Audit Committee was extremely 15 competent and an experienced Executive, and as was one 16 or two of the others. A replacement had started for me, 17 but that was his first Board meeting, so it's impossible 18 for me to comment. 19 But I was certainly very positive, although it was 20 going through a period of change with me leaving and 21 with the Chairman going to leave later in '22. 22 Q. The Inquiry will be considering issues of corporate 23 governance and the role of Non-Executive Directors when 24 it considers matters. Do you have any thoughts or 25 recommendations, having reflected on matters, for any 74 1 changes or proposals you would make to corporate 2 governance or the role of the Non-Execs to avoid 3 something like this happening again? 4 A. I think I'd have to reflect on that and take a bit more 5 time to answer the question in any sort of level of 6 detail. It's very hard, when you are attending as 7 a non-executive one or two days per month, to get -- 8 other than the agenda and what is on a Board or 9 a subcommittee agenda, it's very hard to get a much 10 stronger feeling throughout the organisation on the 11 culture or the effectiveness. I certainly feel that the 12 induction could be strengthened, both in Post Office and 13 on the Government's expectation of a non-executive in 14 that company. 15 But I viewed Post Office as a trusted institution 16 that had been around for hundreds of years and I felt no 17 requirement to do strong investigations or due diligence 18 before joining. It's something I regret now and 19 I should have paid more attention to. But I think the 20 training and induction and the expectation of the major 21 shareholder -- and I think also the complication of the 22 business because, at the time, you know, this was 23 a Financial Services banking joint venture. It was 24 a broking business, it was a payments business, it was 25 a mails business, it's a parcels business. It is -- it 75 1 was a complex business and I think making sure that any 2 induction in process takes account of all those 3 businesses would be more preferential. 4 Q. Finally, just picking up on one thing you said earlier, 5 do you think that two days per month for a non-executive 6 at Post Office is insufficient time to carry out the 7 role effectively? 8 A. I think two days per month under normal circumstances, 9 and I caveat that because most of the non-executive 10 appointments, leaving aside Post Office itself, most of 11 the non-executive appointments are two to three days per 12 month. That's a common figure and should be sufficient. 13 In the case of what has happened here, patently it would 14 have been, and we ended up spending a lot more and 15 allocating a lot more time to Post Office, but normally 16 it should be sufficient. 17 MR STEVENS: Thank you, those are all the questions I ask. 18 Sir, I'm just going to check if there are any Core 19 Participant questions and if there are or if there 20 aren't, then we can take a view on whether it's an early 21 lunch or a break. 22 SIR WYN WILLIAMS: Yes. 23 MR STEVENS: It's just Ms Patrick who would seek five or ten 24 minutes. I am just looking at the transcriber -- 25 The transcriber is happy to continue and then we can 76 1 take an early lunch. 2 SIR WYN WILLIAMS: Yes, by all means. Over to you, 3 Ms Patrick. 4 Questioned by MS PATRICK 5 MS PATRICK: Thank you, sir. 6 Mr McCall, my name is Angela Patrick and I ask 7 questions on behalf of number of subpostmasters, who 8 were prosecuted and convicted and have since had their 9 convictions overturned, and you see two of my clients 10 are sitting next to me: Ms Hamilton, on the left, and 11 Ms Hall, on my right. 12 You'll be glad to hear I've got one issue and one 13 document I want to go to and ask you about. 14 But before we go back to that, I just want to set 15 the scene. You can recall, I think, Mr Stevens took you 16 this morning to a minute from February 2019, where the 17 issue of the Deloitte reports were discussed. He asked 18 you. 19 "So your evidence appears to be that you were told 20 of the Deloitte review, the report, you attended a Board 21 meeting at which you asked Mr Parker why he didn't 22 provide the information earlier." 23 Then you replied: 24 "Yes, that's correct", having seen the minute. 25 He also took you to a minute of 21 February and 77 1 I think, if you can recall, that's the one where you and 2 Mr Parker attended by phone and, again, Deloitte and 3 remote access were discussed. Can you recall that 4 exchange with Mr Stevens this morning? 5 A. Yes, I do. 6 Q. Of course. That just sets the scene for the document. 7 Can we look at POL00111699, please. If we can 8 scroll to the last page, which is page 3, I'd be very 9 grateful. If we can scroll a little way further down, 10 please. Do you see there at the bottom, you can see 11 there's a dial-in detail for that meeting, GLO 12 subcommittee, 21 February 2019, you see the meeting was 13 to be 11.00 to 12.00, and the various dial-in details, 14 including your name there; do you see that, Mr McCall? 15 A. Yes, I do, thank you. 16 Q. Can we scroll up a little and we can see where this 17 email goes. If you scroll a bit further, I can see that 18 first message. You see there's a message there from Tom 19 Cooper, and it isn't copied to you but, just to set the 20 scene, he says: 21 "Jane 22 "One follow-up from the call." 23 Presumably that was the meeting earlier that morning 24 because the timing on this is 12.47. If we read it 25 together, he is asking: 78 1 "To what extent can the court protect POL against 2 journalists overstating the evidence re Horizon? If 3 a journalist writes that there's evidence of systematic 4 problems with Horizon when in fact no evidence exists, 5 will the court help us [at all]? 6 "Seems to me it's extremely important to have 7 a press strategy that seeks to stop misrepresentation by 8 journalists and seeks to protect POL's business today 9 against the implication that the current system doesn't 10 work properly." 11 That's to Jane MacLeod, I think. There's no other 12 Jane on the message. 13 Now, this is after the meeting, where there's 14 a discussion with Mr de Garr Robinson and there's 15 a conversation about the Deloitte report and remote 16 access. Now, here Mr Cooper is asking about how to 17 protect the position of the Post Office and in press 18 reporting during the GLO, isn't he? 19 A. Yes, that's what's written there. 20 Q. Was that a concern that was shared more widely on the 21 Board or on the Subcommittee? 22 A. Not particularly. 23 Q. But the subcommittee we see here, could be involved in 24 strategy for the Post Office during the GLO, including, 25 on communications and interaction with the press; is 79 1 that right? 2 A. No, I think the subcommittee was involved in the -- in 3 items that were escalated by the day-to-day executive 4 who was managing the litigation. 5 Q. It would be open to you, as a member of the 6 subcommittee, in the way that Mr Cooper is here, to ask 7 questions about anything around the strategy on the 8 litigation; is that fair? 9 A. That's fair but, as you can see from this email, I'm not 10 copied on the email, so -- 11 Q. I'll stop you there, Mr McCall. If we can scroll up so 12 we can see the next message in the thread. Stop there. 13 We see Ms Vennells replies, very shortly thereafter at 14 1.21, and she does copy you in; can you see that there, 15 Mr McCall? 16 A. Yes, I can. 17 Q. So you're copied in, and you see Mr Cooper's question to 18 the other members -- to the members of staff but also 19 copied to his fellow subcommittee members. So you did 20 receive that message, didn't you? 21 A. It says there's an email, and I'm sure I then received 22 it. 23 Q. Okay. I just want to have a quick look at what 24 Ms Vennells is telling you about the strategy in 25 response to Mr Cooper's enquiry. She says: 80 1 "Yes we defend robustly but we avoid adding extra 2 coverage." 3 If you recall, this is after the meeting where we 4 know that you've had a conversation about remote access 5 and Deloitte: 6 "As before we hold the ground: the system is robust. 7 And not comment any further during the trial. So 8 'aggressive' no, robust -- absolutely no question." 9 If we scroll down a little bit further we see she's 10 talking a little bit about the strategy and how it's 11 gone so far: 12 "The strategy has worked well so far, which is to 13 minimise coverage in mainstream media. Therefore, we 14 don't engage in any public debates, we have strong lines 15 but we add no oxygen by commenting or engaging. This is 16 not new news despite how the claimants will present it 17 as that; our approach is to curtail interest as much as 18 possible." 19 Then she goes down to sort of talk about the 20 question about legal options that Mr Cooper has raised: 21 "Your questions re how far we can go 'legally' are 22 important. We have used injunctions and demanded 23 apologies in the past. They are both to be used but 24 with caution. They gain more coverage, which is not 25 always balanced. But there are tools in the box 81 1 (Portland are very experienced about this too ...)" 2 Portland, was that an external PR agency that the 3 Board was consulting? 4 A. That would be the responsibility of the Executive. 5 I don't know the name Portland specifically, and I never 6 met anyone from Portland. So I'm presuming, in the 7 circumstances of what I see written, it would be managed 8 by the Executive and that's who they are. 9 Q. So here, Ms Vennells is writing to the whole 10 subcommittee, updating you on the approach they're 11 planning to take to the strategy around the GLO. She's 12 saying, "Maintain the position that the system is 13 robust", strategy is to be "aggressive, no, robust -- 14 absolutely no question". 15 Was this the strategy towards press engagement on 16 which the subcommittee was essentially agreed? 17 A. Well, the subcommittee weren't responsible for the press 18 engagement. There was a communications director working 19 with the CEO, and the General Counsel, and they were 20 responsible for all the day-to-day strategy around 21 communication and what was said by the company in 22 addition to shareholder inputs or the subcommittee 23 wasn't on a day-to-day basis involved in this. 24 Q. Okay. Can we just scroll up a little to see the last in 25 the line of communications. On the first page, I think 82 1 we should see Mr Davies' response to Ms Vennells' 2 outlining of the strategy and, again, copies you in. 3 We'll take this very briefly because it's, essentially, 4 repeating the message but with some greater detail: 5 "Our external communications strategy is to minimise 6 negative coverage by holding the robust line we have 7 deployed throughout. In doing so we have succeeded in 8 minimising coverage in the mainstream media." 9 I want to cover this in great detail because he goes 10 over how different approaches have been taken in the 11 press. But he says: 12 "There is a group of journalists who have staked 13 their professional representations on campaigning on 14 behalf of those who have now taken us to court. They -- 15 and one in particular -- drive most of the periodic 16 increases in external coverage. We have sought to 17 engage with this group but there is an unwillingness to 18 engage with our side of the story." 19 If we skip down a little further: 20 "Private Eye has also featured the issue regularly, 21 claiming Post Office has knowingly covered up evidence 22 of what it calls the 'deeply dodgy' Horizon system. We 23 believe the content in Private Eye is almost certainly 24 provided to it by one of the 'campaigning' journalists 25 who have staked their reputation on proving that Post 83 1 Office has conspired to see otherwise innocent people 2 jailed or penalised." 3 Now, first, Mr McCall, can I ask you: how closely 4 did Mr Davies work with the subcommittee at this time 5 during the development of strategy on the GLO? 6 A. As I said -- and let me repeat again -- Mr Davies, the 7 General Counsel and the Chief Executive were responsible 8 for the communications strategy and anything that was 9 responded to by Post Office. The subcommittee wasn't 10 day-to-day responsible at all. 11 Q. I'll just stop you there, I've got one last question for 12 you, Mr McCall. This is February 2019. This message 13 which goes to the whole subcommittee talks about the 14 campaign. There's been a campaign by this stage for 15 a very long time, in which my clients, including 16 Mrs Hamilton and others, were deeply engaged. They've 17 managed to get their case into court, there was 18 a subcommittee of the Board set up to lead the strategy 19 on that litigation. 20 You are the Senior Independent Non-Executive 21 Director, you've agreed today that part of your role was 22 to represent the interests of the shareholder, who is 23 the taxpayer, the Government. Are you really suggesting 24 at this point -- and if I can remind you, you've 25 accepted the Board would have been aware that the 84 1 picture on remote access was very different from that 2 which may have been presented at an earlier stage -- are 3 you really suggesting that, if you thought that the 4 strategy that was being presented by the Executive Team 5 was out of step or might be causing some risk to the 6 business, that you could not step in and say something? 7 A. I'm suggesting to you and I'm answering to you quite 8 firmly: the subcommittee is not responsible for the 9 communications strategy. There was a document produced 10 earlier today talking about the strategy of the 11 litigation. I didn't sit on the subcommittee of that. 12 I had never seen that document before and I'm copied in 13 here on an email, but I'm not responsible for the 14 communications strategy. I was the Senior Independent 15 Director, and I accept that, and I received the email, 16 I'm absolutely certain. But I wasn't responsible for 17 the strategy. 18 MS PATRICK: Thank you very much, Mr McCall. I don't have 19 any other questions for you. 20 SIR WYN WILLIAMS: Is that it, Mr Stevens? 21 MR STEVENS: That's it, sir. Yes, that's all the questions. 22 SIR WYN WILLIAMS: Fine. 23 Well, thank you, Mr McCall, for making a witness 24 statement, as the Inquiry requested of you, and thank 25 you too for giving evidence this morning before me. I'm 85 1 very grateful to you. 2 THE WITNESS: Thank you, sir. 3 SIR WYN WILLIAMS: So what time shall we resume, Mr Stevens? 4 MR STEVENS: I wonder if we could resume at 1.35 and then, 5 because it will be a longer session, take two breaks but 6 that should give us sufficient time, I think, to cover 7 the evidence. 8 SIR WYN WILLIAMS: All right. 1.35. 9 MR STEVENS: Thank you, sir. 10 (12.44 pm) 11 (The Short Adjournment) 12 (1.35 pm) 13 MS PRICE: Good afternoon, sir, can you see and hear us? 14 SIR WYN WILLIAMS: I can indeed, thank you. 15 MS PRICE: May we please call Kelly Tolhurst. 16 THE RIGHT HONOURABLE KELLY JANE TOLHURST (sworn) 17 Questioned by MS PRICE 18 MS PRICE: Can you confirm your full name, please, 19 Ms Tolhurst? 20 A. Yes, Kelly Jane Tolhurst. 21 Q. As you know, my name is Emma Price and I will be asking 22 you questions on behalf of the Inquiry. Thank you for 23 coming to the Inquiry to assist it in its work and for 24 providing the statement which you have. You should have 25 a hard copy of that statement on the desk in front of 86 1 you; do you have that? 2 A. I do. 3 Q. It is dated 19 June 2024. If you could turn to page 73 4 of that, please. Do you have a copy with a visible 5 signature? 6 A. I do, yes. 7 Q. Is that your signature? 8 A. It is. 9 Q. For the purposes of the transcript the reference for 10 Ms Tolhurst's statement is WITN10930100. Ms Tolhurst, 11 your witness statement is now in evidence and will be 12 published on the Inquiry's website in due course. As 13 such, I will not be asking you about every part of your 14 statement, just certain specific issues which are 15 addressed in it? 16 A. Okay. 17 Q. I'd like to start, please, with an overview of your 18 professional background and career in Government to date 19 you explain in your statement that you, before taking up 20 an elected role, ran a marine business for 17 years -- 21 A. That's right. 22 Q. -- training as a marine surveyor during this time? 23 A. Correct. 24 Q. You were elected to Medway Council in 2011, representing 25 the Rochester West ward? 87 1 A. Correct. 2 Q. You were elected as an MP in May 2015. 3 A. Yes, correct. 4 Q. You served as Assistant Whip to the Treasury from 5 9 January 2018 to 19 July 2018? 6 A. Correct. 7 Q. Following that, you served as Parliamentary 8 Under-Secretary of State for the Department for 9 Business, Energy and Industrial Strategy from 19 July 10 2018 to 13 February 2020, where you were responsible for 11 small businesses, consumers and corporate 12 responsibility? 13 A. Correct. 14 Q. This was your first ministerial appointment? 15 A. Yes. 16 Q. Was it in this role that you became involved in some of 17 the matters which the Inquiry is concerned with? 18 A. That's correct. 19 Q. You went on to serve for a little over six months as 20 Parliamentary Under-Secretary in the Department of 21 Transport? 22 A. That's right. 23 Q. Followed by serving as Parliamentary Under-Secretary at 24 the Ministry of Housing, Communities and Local 25 Government between September 2020 and January 2021? 88 1 A. Correct. 2 Q. You were Deputy Chief Whip in the Commons from July 2020 3 to September 2022? 4 A. (No audible answer) 5 Q. You then served as Minister of State at the Department 6 for Education for a short time, before serving at the 7 backbenches until the recent election? 8 A. Correct. 9 Q. Is it right that the only time you have had involvement 10 in matters relevant to this Inquiry was when you were 11 Parliamentary Under-Secretary of State for the 12 Department for Business, Energy and Industrial Strategy? 13 A. Yes, that's right. 14 Q. Moving then, please, to the civil servants who assisted 15 you when you were Parliamentary Under-Secretary at BEIS, 16 if I have understood your evidence in your statement 17 correctly, there were, broadly speaking, three pools of 18 civil servants who provided you with assistance on Post 19 Office matters. First, Private Secretaries from the 20 Department's private office? 21 A. Yes. 22 Q. Second, officials who were subject matter experts in 23 particular policy areas -- 24 A. (The witness nodded) 25 Q. -- who, for the part of your role which related to the 89 1 Post Office, worked for UK Government Investments? 2 A. Yes, that's correct. 3 Q. The third category, from August 2018, when it was 4 established, were officials from the Post Office Policy 5 Team within BEIS; is that right? 6 A. That's right. 7 Q. So far as your Private Secretaries were concerned, is it 8 right that they dealt mainly with managing your diary, 9 preparing paperwork for your ministerial box and 10 managing correspondence? 11 A. Correct. 12 Q. In terms of advice you received from officials, you 13 addressed this at paragraph 12 of your statement. Could 14 we have that on screen, please it's page 4. Towards the 15 bottom of page 4, please. You say here at paragraph 12: 16 "The breadth of a Minister's portfolio is such that 17 they have to, to a greater or lesser extent, rely on the 18 advice of officials and make decisions on the basis of 19 it. Ministers expect the advice given to be competent, 20 accurate and reliable, honestly given and on the basis 21 that objectivity has been applied in the analysis of the 22 facts." 23 Why was the application of objectivity in the 24 analysis of the facts important? 25 A. In my -- so, in my view, when you're coming in as 90 1 a Minister, as potentially an amateur in the space in 2 which you're operating -- for example, in this 3 particular instance I didn't have any particular 4 experience within the Post Office or that kind of 5 structure -- so for example, the objectivity would be 6 important because, obviously, you would want to be given 7 advice where you feel that they weighed up both sides of 8 things, so you would be confident in the fact that you 9 were taking a decision or had information that was sound 10 and also had been looked at from a number of different 11 points of view. 12 So I think, when they're giving you that advice, 13 it's important that you have that range of the 14 objectivity, so that you can make decent judgements 15 based on what's put in front of you. 16 Q. Turning, then, to the information you were given about 17 the Post Office, in the early period when you took up 18 your role as Parliamentary Under-Secretary at BEIS, you 19 explain at paragraph 9 of your statement that you had 20 a broad policy portfolio covering a range of sectors and 21 it was just a busy portfolio that it was, in fact, split 22 into two after you left BEIS; is that right? 23 A. That's correct, yes. 24 Q. So there was a lot to get on top of? 25 A. Yeah. 91 1 Q. You were given an entire portfolio briefing to start 2 when you arrived in post; is that right? 3 A. Yes, sorry. Yeah. 4 Q. You also received a briefing on postal affairs, 5 specifically? 6 A. Yes. For the whole of the brief, it's quite common for 7 new ministers to be given sort of a day 1 briefing on 8 all of the different elements that are included within 9 the brief because, within the brief of a minister, there 10 may be things that you would have more sight of than 11 others. 12 Q. If we could have paragraph 13 of Ms Tolhurst's statement 13 on screen, please. That's page 5. In referring to that 14 briefing on postal affairs specifically, you say in the 15 last line: 16 "I was provided with some outline information 17 regarding the Horizon IT system issues." 18 At paragraph 14, is that your assessment of what you 19 understood those issues to be at the time, at 20 paragraph 14, there. 21 A. Yes. It was my assessment of what -- you know, the 22 information that I had at the time, yes. 23 Q. You say: 24 "I understood at that time that a civil claim was 25 being brought by a number of SPMs in relation to 92 1 accounting losses suffered in branch as a result of the 2 Horizon IT System. I understood that SPMs were alleging 3 that there were widespread problems with the system and 4 that [Post Office Limited] denied this. I knew that 5 several SPMs had been convicted for accounting losses." 6 You refer at paragraph 15 of your statement to 7 briefing documents which you received on 16 August 2018. 8 A. Yeah. 9 Q. Looking first, please, at how these briefing documents 10 came to you, could we have on screen, please, 11 UKGI00008342. Starting, please, with the original email 12 dated 10 August 2018, which starts about two-thirds of 13 the way down the page. This is from Stephen Clarke, 14 from the Post Office Shareholder Team at UK Government 15 Investments. Going over the page, please, Mr Clarke 16 says: 17 "Please find attached" -- 18 Actually, apologies, if we can just go back, please, 19 to who this was sent to. This was initially from 20 Mr Clarke to the Permanent Secretary's private office; 21 is that right? 22 A. Yes. 23 Q. Going back over the page: 24 "Please find attached an update submission (with 25 5 annexes) on the Post Office Horizon litigation case. 93 1 This is an info sub to (i) bring Alex up to speed on the 2 case ..." 3 Was that Alex Chisholm who was the Permanent 4 Secretary? 5 A. Correct. 6 Q. " ...(ii) brief Alex on safeguards for handling [Post 7 Office Limited's] legally privileged information under 8 the Disclosure Protocol and (iii) focus on plans for the 9 oral briefing on 10 September by [Post Office Limited's] 10 Legal Counsel. Please note that [Post Office Limited] 11 have password-protected their background briefing 12 (Annex 3) as an extra safeguard; the password will 13 follow ... 14 "For the benefit of copy addressees who saw this sub 15 in draft a few weeks back, I should explain that the sub 16 was put on hold while we collected the required 17 signatures for recipients on the disclosed description 18 list." 19 Then there is a request not to share the submission 20 beyond the closed distribution list. 21 This email was then forwarded to your private 22 office, going back to the first page, please, on the 23 16 August 2018. So if we scroll from the top, we can 24 see from Stephen Clarke to -- we can't see the full 25 email address but that is to your private office, isn't 94 1 it? 2 A. Yes. 3 Q. Just scrolling down a bit, please. It says: 4 "Hi Sam ..." 5 Was Sam your Private Secretary? 6 A. Yes, she was. One of them. 7 Q. One of them? 8 A. Yeah, one of them. 9 Q. "As discussed, here is the info submission that went to 10 the Perm Sec on the Post Office Horizon Litigation. I'm 11 sending this now for information as we won't be getting 12 any comments back from Alex before the Minister goes 13 away again. 14 "The recipients list in Annex 2 has been updated 15 ..." 16 There's a reference to getting the new SpAd on 17 board. 18 We can see from the list of attachments with the 19 updates submission, just looking there under "Subject", 20 the first attachment is the submission itself, and then 21 we have five annexes listed. So it appears from this, 22 doesn't it, that both the submission itself and all five 23 annexes were sent to your private office on 16 August? 24 A. (The witness nodded) Yes, sorry, yes. 25 Q. The transcriber has to get your words. 95 1 A. Apologies. 2 Q. Thank you. It appears from your statement that you read 3 the submission dated 10 August 2018, which was the first 4 attachment to this email, because you refer, at 5 paragraph 23, to background information which you 6 derived from the documents provided to you on 16 August, 7 making specific reference to a paragraph of that 8 submission. Is that right, that you read the submission 9 itself at the time? 10 A. In regards -- I believe I did read the submission at the 11 time. Being a new minister, I had quite a lot to get 12 through and I would have read it because I did try and 13 read everything that was put in front of me, which 14 sometimes was a frustration to some. 15 Q. Was this the first briefing that you had received 16 specific to the Group Litigation since becoming 17 Parliamentary Under-Secretary? 18 A. I believe so. 19 Q. I'd like to explore, please, whether you read any of the 20 annexes which were sent to you, which were discussed in 21 the submission. 22 If I can stop you there, in your statement it's not 23 entirely clear which of the annexes you think you would 24 have read at the time. So if we can just take that in 25 stages. But, forgive me, you wanted to say something? 96 1 A. No, apologies, I was sort of pre-empting what you were 2 going to say. In relation to the annexes, I remember 3 obviously reading the briefing. The protocol was 4 something that I obviously remembered -- remember, 5 obviously, being put in front of me because obviously it 6 was subject to me being given further information. And, 7 yeah, I don't remember what I was feeling at the time in 8 August when I would have read those, and I may have read 9 them sort of later than -- it might not have been on the 10 10 August, it might have been sort of later on when I -- 11 when the documents may have been shared with me. 12 Q. They were sent to your private office on 16 August? 13 A. 16th, sorry, yeah. 14 Q. I think it would have been after that date, if you did. 15 A. Yeah. 16 Q. But let's just take it in stages. If we can have on 17 screen, please, paragraph 20 of Ms Tolhurst's statement, 18 that's page 7. So you say here: 19 "As to the other annexes, Annex 1 was the 20 Information Sharing Protocol [which you'd referred to 21 just now] and Annex 2 was the On-Boarding Protocol. 22 I do recall receiving those documents at the time, but 23 I do not remember reflecting on them." 24 Did you read those two annexes? 25 A. I believe I did. 97 1 Q. You would have been aware, from those documents and in 2 fact from the submission, that Post Office Limited, BEIS 3 and UKGI had by this time established a disclosure 4 protocol which governed the flow of legally privileged 5 and confidential information in respect of the Horizon 6 litigation from Post Office Limited to UKGI and BEIS; do 7 you recall that? 8 A. Yes, I do recall that. 9 Q. Can we have on screen, please, paragraph 17 of 10 Ms Tolhurst's statement. That's page 6. You say this 11 of Annex 3: 12 "At paragraph 8 of that submission, it is recorded 13 that 'following the agreement of the protocol, [Post 14 Office Limited's] Legal Counsel provided an initial 15 background briefing on the litigation (Annex 3), 16 including their QC's view on the merits of the case'." 17 You say here: 18 "I did not receive this Annex 3 at the time and have 19 not seen it since." 20 Just to clarify, Annex 3 was sent to your office 21 under cover of the email of 16 August. We've seen that 22 from the email. Albeit that it appears in the original 23 email sent, it was password protected. Can you help 24 with why you say here that you did not receive it? 25 A. Well, I don't remember receiving it and I hadn't seen 98 1 it -- well, as I've said in the statement. But I don't 2 remember being given the QC's views on the merits of the 3 case. So that's all I can sort of, you know, genuinely 4 sort of -- with what I can remember from the time and 5 sort of looking back now. 6 Q. Looking, please, to the 10 August submission itself, 7 could we have that on screen, please. The reference is 8 UKGI00018266. We can see there at the top the date, and 9 the submission title, "Post Office Limited -- Horizon 10 Litigation Update". Towards the bottom of page 2, 11 please, there is a heading "Litigation background 12 briefing and updates", and paragraph 8, underneath that, 13 contains this: 14 "Following the agreement of the Protocol, [Post 15 Office Limited's] Legal Counsel provided an initial 16 background briefing on the litigation (Annex 3) 17 including their QC's view on the merits of the case, and 18 has since provided a further update (Annex 4) following 19 discussion of the case at [Post Office Limited's] last 20 Board meeting on 31 July. For ease of reference, in 21 Annex 4, UKGI has highlighted in yellow any information 22 that is new and worthy of note." 23 So this was in the submission itself flagging the 24 existence of both Annex 3, which contained the QC's view 25 on the merits, and a further update from Post Office 99 1 Limited's Legal Counsel at Annex 4, with anything that 2 was new and worthy of note highlighted. Did you ask to 3 see either of those documents when you read this 4 submission? 5 A. I genuinely don't remember. All I would say is that at 6 the time it would have been over the recess period, so 7 I don't remember specifically asking for that. So 8 I would be wrong to say anything else other than that, 9 really. But it would have been a period where we 10 weren't -- I wasn't necessarily in the Department, so 11 I may have been in the constituency, so it might have 12 been something that I maybe didn't request. 13 Q. Looking, please, to paragraph 11 of the submission, 14 a little further down the page. This explains the 15 purpose of the oral briefing from Post Office Limited's 16 legal counsel, which was scheduled and which you were 17 going to be attending, for 10 September. Is it right 18 that you think this, in fact, occurred on 17 October? 19 A. Yes. I believe it did. I've sort of checked my diary, 20 and I actually had -- I think I had another what they 21 call a statutory instrument debate at the time it was 22 originally proposed. So I think that may have been the 23 reason why it didn't take place. 24 Q. This is the explanation given of the meeting: 25 "The briefing is confirmed in your diary and the 100 1 Minister's diary for 10 September. A proposed agenda 2 and list of attendees drawn up between UKGI and [Post 3 Office Limited] is attached [at Annex 5]. [Post Office 4 Limited's] Legal Counsel, Jane MacLeod, Chair Tim 5 Parker, and CEO Paula Vennells (via telephone/video 6 link) will brief you on the key issues at stake, as well 7 as on the financial, reputational and operational 8 implications (which could be considerable) of an adverse 9 ruling at November's 'Common Issues trial' and/or at the 10 'Horizon trial' in March 2019 and [Post Office 11 Limited's] contingency plans for dealing with these 12 risks. This will be an excellent opportunity for you 13 and the Minister to exercise Shareholder scrutiny and 14 seek reassurance on any issues of concern." 15 So this was flagging up, was it not, that there were 16 financial, reputational and operational implications, 17 potentially considerable ones, if there were adverse 18 findings for Post Office Limited at either Common Issues 19 or the Horizon Issues trials -- 20 A. Yes. 21 Q. -- and that contingency plans for dealing with these 22 risks were in train? 23 A. Yes. 24 Q. It was also flagging what was expected of the Permanent 25 Secretary and you at the meeting, which was an exercise 101 1 of shareholder scrutiny -- 2 A. Mm-hm. 3 Q. -- as well as it being an opportunity to seek 4 reassurance on issues of concern. When you read this, 5 did it make you think to ask for Annex 3 or Annex 4: the 6 QC's views and the new and noteworthy information? 7 A. Genuinely, I can't say if it did or not at that 8 particular time. So I can't honestly tell you whether 9 or not -- what I thought about in relation to those 10 annexes you've outlined. 11 Q. Could we have on screen, please, paragraph 24 of 12 Ms Tolhurst's statement, that's page 8. Your comments 13 in this paragraph are made in the context of the 14 documents sent to your office on 16 August, including 15 the submission itself, and in the first half of the 16 paragraph you say this: 17 "I do not recall any advice being given at the time 18 regarding the risks of the litigation. I was not given 19 the impression that [Post Office Limited] were anxious 20 about the litigation, or that there was any particular 21 risk involved with the litigation over and above the 22 inherent risk associated with any legal dispute." 23 Can you help, please, with why you took from the 24 submission -- and paragraph 11 in particular -- that 25 there was no particular risk involved in the litigation, 102 1 over and above the inherent risk of any legal dispute? 2 A. Well, in relation to -- I'm just looking at -- I mean, 3 ultimately, I think, at that particular time, all the 4 informal -- the briefing that I'd been given, sort of 5 didn't suggest at that particular time that there was 6 anything particularly that I should be aware of or that 7 would mean that there would be sort of more -- well, as 8 big as it obviously -- what we now know the risks and 9 the troubles relating to the litigation. 10 So I hadn't been given the impression new into the 11 post that there was anything particularly to worry about 12 and, obviously, that sort of -- that was my 13 understanding sort of going into that meeting. At the 14 time, I suppose I was more concerned with actually any 15 kind of litigation, what that would mean for the Post 16 Office, what it would mean for the Government. But that 17 was sort of the limits of my sort of thinking at that 18 time. 19 Q. You say in the paragraph above, paragraph 23, that: 20 "The only background information [you] derived from 21 the documents ... was that 'the independent 22 investigations by Second Sight ... found no evidence of 23 flaws in the Horizon IT System'." 24 That is taken from paragraph 12 of the submission 25 itself. 103 1 Given that this was background information which you 2 derived from documents at the time, did you ask to see 3 Second Sight's Report? 4 A. No, I didn't ask to see Second Sight's Report. 5 Q. At paragraph 25 of your statement, you say that it was 6 obvious, notwithstanding your comments at paragraph 24 7 about what you appreciated in terms of risk, that the 8 litigation was going to be an important part of the 9 postal affairs brief, and you say that you did not think 10 that the information provided in August 2018 had given 11 you the information necessary to provide effective 12 leadership from within BEIS in respect of the 13 litigation. 14 You go on at paragraph 26 to say that you are 15 someone who is interested in the detail and concerned to 16 have all of the relevant information before taking 17 a decision. 18 Over again, please, at 27, you say this: 19 "For that reason, I requested further information, 20 and I was provided with the short further document 21 entitled 'Briefing for Kelly Tolhurst MP, Postmaster 22 Litigation'. The document itself is undated. I do not 23 recall exactly when I received it but I am sure it was 24 provided after 16 August 2018 and before the meeting 25 with [Post Office Limited] took place on 17 October 104 1 2018. It is a top-level summary document drafted by 2 UKGI. I return to it below." 3 That document was a one-page high-level briefing, as 4 you say, but you were provided with two further 5 briefings between August 2018 and the meeting which was 6 discussed in the August submission, that of 17 October 7 2018. The first of these was a briefing ahead of 8 a meeting you had with Paula Vennells on 3 September 9 2018 and you address that briefing at paragraph 28 of 10 your statement, and you quote the section which raises 11 concerns -- well, there were concerns which were raised 12 by UKGI that Post Office Limited had not done enough to 13 prepare for potential business, reputational and 14 financial implications of losing the litigation. 15 Do you recall discussing this with Paula Vennells at 16 your meeting with her? 17 A. I remember -- obviously I remember meeting with Paula 18 Vennells. I remember touching on it but I would say 19 that it was a touching on the litigation. It was very 20 much an intro meeting and, obviously, one of the things 21 that -- there were other sort of postal or Post Office 22 issues that were relevant as well, and my interest was 23 obviously, as a minister, how could I affect and be 24 helpful to the Post Office in relation to some of those 25 other duties and responsibilities? So I do remember 105 1 speaking with her. I remember the meeting, but 2 I remembered it only being sort of touched on, as 3 opposed gone into in any great depth at that particular 4 time. 5 Q. Indeed in your statement you indicate that only five 6 minutes of the meeting was allocated to the litigation, 7 as opposed to those other issues; is that right? 8 A. Yes, approximately. 9 Q. But this was, again, flagging up that there were 10 business, reputational and financial implications of 11 looking the litigation, this briefing, ahead of your 12 Paula Vennells meeting, wasn't it? 13 A. Yes. 14 Q. At paragraph 29 of your statement, starting five lines 15 down, you say this: 16 "I note Mr Aldred recorded that Ms Vennells had 17 passed on the advice of [Post Office Limited's] leading 18 counsel that, in summary, '[Post Office Limited] will 19 likely lose on some contract clauses but not on the 20 highest impact ones'. Whilst I do not now recall the 21 detail of the point made, that fits with my 22 understanding at the time. I remember having the 23 general impression that the [Post Office Limited] had 24 confidence in its overall defence to the claim." 25 There are two parts of the note of the meeting with 106 1 Paula Vennells, on which you comment in your statement, 2 at paragraphs 30 and 31. At paragraph 30, you say this: 3 "I do agree with Mr Aldred's note that I 'emphasised 4 the need to provide plenty of detail and [Paula 5 Vennells] said [Post Office Limited] would be in a much 6 better position to do so after further briefings from 7 their QCs and hopefully more information on the claims'. 8 This fits with my memory of dealings with [Post Office 9 Limited] during my time at BEIS. [Post Office Limited] 10 always seemed willing to answer questions when asked, 11 but I did find that they were sometimes difficult about 12 what information they would volunteer. There was never 13 a refusal to provide information if it was requested, 14 but I did feel that details were not always forthcoming 15 in a proactive way." 16 Even at this early stage, your first meeting with 17 Paula Vennells, was this the impression you formed or 18 did that impression come later? 19 A. I think it -- the impression would have come later, as 20 I say, as I said in my statement, I was new to the brief 21 I wanted to understand as much as I possibly could. It 22 would be usual for me to ask for further information or 23 as much detail as I could, so it would have been normal 24 for me to have said to Paula, you know, "Provide me with 25 as much information as possible". But, as I sort of 107 1 said in the statement, there was never any -- I never 2 ever detected any sort of resistance to giving me that 3 information directly from Post Office but, obviously, 4 I felt, and when I reflect back, looking at obviously 5 the documents and reflect back on that time, you know, 6 I was -- I did feel that I was asking for information 7 all the time, or wanting further information. So 8 obviously that's what's sort of formulated my view on 9 this. 10 Q. Was this is an impression you formed when you were 11 Parliamentary Under-Secretary at BEIS or is this what 12 you formed on reflection? 13 A. No, it was what was happening when I was actually in the 14 Department but, obviously, at this particular time -- so 15 that meeting with Paula was on 3 September, I'd only 16 just recently been appointed and, at that particular 17 time, there were a number of -- just to sort of set the 18 context, there were a number of big areas within my 19 portfolio at BEIS that required me to sort of get up to 20 speed on pretty quickly, and so it was -- and, actually, 21 this was the sort of first intro meeting. 22 So that's why I was pleased, actually, when she 23 suggested that, you know, sharing information, you know, 24 wasn't going to be a problem but, obviously, as time 25 went on, it was me asking for that information. 108 1 Q. At paragraph 31 you say this: 2 "I also note what Nick Parker writes international 3 first paragraph, 'Paula frequently confirmed that 4 challenge from [Her Majesty's Government] is good but 5 also asks that HMG ensures the positive developments in 6 Post Office are made clear and that HMG continues to 7 stress the important role that Post Office plays in 8 communities up and down the country'. Reading this 9 comment now, I do feel that [Post Office Limited] was 10 more interested in the Department challenging [Post 11 Office] for the 'appearance' of challenge rather than 12 sincerely listening and changing course in response. 13 I got the impression that [Post Office Limited] expected 14 the Department to be positive about [Post Office 15 Limited] regardless of the scrutiny that the Minister or 16 Department wished to apply." 17 Again, is this an impression you formed at this 18 point in September 2018 or one which came later? 19 A. It would have -- it came later. Yeah. 20 Q. As far as you are aware, was this approach and attitude 21 from Post Office Limited ever challenged by BEIS or 22 raised with the Post Office Limited Board members at the 23 time? 24 A. Sorry, at the time? At the time of the further 25 September -- 109 1 Q. At the time that you had that impression and you had 2 that concern? 3 A. Sorry, yes, yeah. 4 Q. Was that approach and attitude that you describe there 5 ever challenged by the Department with Post Office Board 6 members? 7 A. So, I'm not sure -- I don't know if it was challenged by 8 anyone within the Department. I know that I had 9 expressed frustrations over that period, particularly on 10 this point of not feeling that maybe I was getting the 11 information that I needed or that should be coming my 12 way. I can't say that I -- you know, it would be wrong 13 for me to say that I directly challenged Post Office 14 Limited on that particular point. But I think that my 15 feelings and frustration of that was understood by the 16 team at BEIS and the UKGI members that I spoke to and 17 interacted with. 18 Q. In general, did you feel restricted in your ability to 19 change this attitude or approach or to ensure that Post 20 Office Limited acted upon suggestions made by BEIS? 21 A. I would say that -- you know, I'm generally somebody who 22 would -- if I have an opinion and I'm not happy with 23 something, I would generally make that clear, and 24 I would, you know, I would have thought that -- I mean, 25 I'm just sort of making, you know, I'm just trying to 110 1 think what would have -- what I may have done sort of 2 looking at it now, rather than sort of giving you any 3 solid -- you know, solid sort of factual -- or answer to 4 what actually would have happened at the time. 5 But I think that, you know, it was understood that 6 I was -- you know, I felt frustrated at that 7 particular -- you know, after that period of time. 8 I sort of -- the reactions and information that was 9 coming through or that sort of appearance. So, yeah. 10 Q. The second written briefing you received further to the 11 August submission and ahead of the 17 October 2018 12 meeting, was the detailed paper you address at 13 paragraph 35 of your statement. Going over the page to 14 that, please -- and again, please -- here you say: 15 "On 11 October 2018 I received a briefing authored 16 by [Post Office Limited] for the 17 October meeting. 17 The briefing was extensive, although section 2 setting 18 out the background to the litigation was relatively 19 short. I did not understand this to be a meeting about 20 litigation strategy or the merits of the claim. It was 21 really just a meeting about what was happening in the 22 litigation." 23 Just picking up there on your understanding of the 24 purpose of the 17 October 2018 meeting, this was, you 25 think, the adjourned meeting, which was addressed in the 111 1 10 August submission and, in that submission, the 2 meeting was described in paragraph 11, which we looked 3 at, as an excellent opportunity for you and the Minister 4 to exercise shareholder scrutiny and seek reassurance on 5 any issues of concern. 6 It was also envisaged that there would be some 7 scrutiny of Post Office Limited's contingency planning 8 at the meeting, wasn't it, because that was why you were 9 briefed ahead of the Paula Vennells meeting, to request 10 sight of the contingency plan in advance of the meeting; 11 do you recall that, from the documents? 12 A. Yes, I do recall it from the documents. 13 Q. Can you help, therefore, with why you viewed the meeting 14 as really just a meeting about what was happening in the 15 litigation? 16 A. Yes. So, again, this would have been the first sort of 17 major meeting that I would have had around the 18 litigation in relation to the Post Office and it was 19 an -- and whilst the contingency plan was an element, 20 this was an opportunity for them to brief me about what 21 was happening with the litigation, and an opportunity 22 for me to discuss and ask questions. So for me, I felt 23 that it was very much about the whole litigation, not 24 just about the contingency planning. 25 And, obviously, I had limited knowledge. I'd only 112 1 had what I'd read prior to that or, you know, informal 2 conversations. So it was an opportunity for me to meet 3 with all of the people involved and ask questions, and 4 listen to what they had to say. 5 Q. But you're saying by "it was just about what was 6 happening in the litigation", that you didn't have the 7 opportunity to apply that shareholder scrutiny at that 8 meeting, because that was the stated intention, wasn't 9 it, in the submission from August? 10 A. Yeah, I mean I -- at that particular meeting, I was 11 concerned about the -- you know, to have more 12 information about the litigation. I remember being able 13 to ask questions. I asked questions about the, you 14 know, I did ask questions of the merit. I asked 15 questions about the liability, what it would mean, what 16 the Post Office felt about the outcome or potential 17 outcomes of the litigation. So I think, from my 18 perspective, I wanted to use the meeting as a better 19 understanding of what was -- what the current state of 20 play was. 21 I was very much aware that this had been going on 22 for a long period of time and, you know, I wanted to be 23 able to perform correctly as a minister, in the best way 24 I could, and the only way I would, you know, I believe, 25 is to understand what's going on and the detail. 113 1 So whilst contingency planning was a part of it, 2 I think, from my perspective, you know, it was very 3 important that, you know, it was an opportunity for me 4 to ask questions. 5 Q. Can we have on screen, please, POL00022976. This is the 6 briefing paper for the 17 October 2018 meeting. 7 Starting, please, with page 2, we can see a table of 8 contents and there were sections listed as 1 to 7, the 9 "Executive Summary"; "Background to the Litigation"; 10 "Key Issues at Trial in November"; "Operational 11 Improvements already Underway"; "Contingency Planning"; 12 "Communications Strategy"; and "Settlement Options". 13 You've said in your statement that you were 14 interested in the detail as a general rule. 15 A. Mm. 16 Q. Did you read all of the sections of this briefing when 17 it was provided to you? 18 A. Yes, I would have done, ahead of that meeting. 19 Q. Going to the executive summary over the page please, at 20 paragraph 1.2, under the heading "What is the case 21 about?", it says: 22 "The case represents the culmination of a series of 23 campaigns by disaffected postmasters and others 24 (including a number of MPs on both sides) who believe 25 that Post Office wrongly attributed branch losses to 114 1 those postmasters and that as a result, they suffered 2 financial and reputational harm. A theme of these 3 campaigns is that flaws in Horizon (the in-branch point 4 of sale system) were the cause of these losses." 5 Going over the page again, please, at 1.8, the 6 number of claimants is identified there, as the group of 7 561 claimants. Then going to page 6, please, this is 8 the second section, the background to the litigation. 9 At 2.2 there is this: 10 "In 2012 a small number of (mostly former) 11 postmasters, under the banner of 'Justice for 12 Subpostmasters Alliance' and with support from some MPs 13 led by then MP (now Lord) James Arbuthnot, claimed Post 14 Office's Horizon IT System had caused losses (shortfalls 15 in physical cash against cash holdings recorded on 16 Horizon) which they had had to make good. In some cases 17 they had been prosecuted for these losses) usually for 18 false accounting, theft or both) while, in other cases, 19 they claim that it led to their contracts with Post 20 Office being terminated causing them financial loss and 21 other personal harm including bankruptcy, divorce and 22 emotional distress including suicide." 23 So this briefing was informing you that 24 subpostmasters had alleged that the IT system had caused 25 losses which they'd had to make good, yes? 115 1 A. Yes. 2 Q. This had led to some people being prosecuted for false 3 accounting, theft or both? 4 A. Yes. 5 Q. Others having their contracts terminated with the 6 consequences we see there? 7 A. Yes. 8 Q. And they had had support from some MPs, led by Lord 9 Arbuthnot? 10 A. Yes. 11 Q. Did the nature of the allegations being described here 12 cause you any alarm by their very nature? 13 A. Yes, of course. Anyone sort of being accused of 14 breaking the law or doing something regarded as illegal 15 and the consequences of that, of course, you know -- and 16 for me, absolutely, that's why, you know, I was keen to 17 understand more about what had gone on and what the 18 current situation was with the Post Office. 19 Q. Did this paragraph cause you to ask yourself whether you 20 needed to test what you were being told by the Post 21 Office about its position on the allegations? 22 A. At this particular time, at this particular meeting, no. 23 And the answer to that is, again, this was the first big 24 meeting that I had had with the Post Office to talk 25 about the litigation in any kind of detail, and I was 116 1 just formulating my views. I didn't have any developed 2 views, really, prior to taking on the role as 3 a minister. 4 So, you know, of course, reading it, it's really 5 concerning but it didn't sort of -- that particular 6 paragraph in that briefing didn't -- you know, 7 I didn't -- as you say, I didn't make any further 8 decisions based on that. 9 Q. Did you understand, when you read this briefing, that it 10 was the Post Office which had been doing the 11 prosecuting? 12 A. Yes. 13 Q. Did that aspect of it cause you any concern, taken with 14 the information here in paragraph 2.2? 15 A. Yes. Of course, any kind of private prosecution is of 16 a concern, and especially when it's being done by 17 an organisation. This, I think -- I think I mention 18 further in my statement, but this is where I sort of 19 asked the question about, you know, what the Post Office 20 really, you know, what the situation was with regards to 21 the litigation because I did feel that this was 22 a situation where you had a very large organisation 23 taking private prosecutions against, you know -- excuse 24 the phrase -- small businesses or individuals, in some 25 cases and so, for a large organisation to take that kind 117 1 of action against, you know, relatively small players -- 2 excuse the expression-- you know, they must have been 3 pretty sure or confident in their position to move that 4 forward. 5 So obviously, you know, that was how I was feeling 6 at the time and obviously I was getting to know what was 7 going on and developing my views and thoughts and trying 8 to suck up as much information as was being given to me. 9 Q. At paragraph 2.3 there was this: 10 "In response to these assertions, Post Office 11 appointed independent forensic accountants Second Sight 12 to perform a 'top-down' examination of Horizon. Second 13 Sight issued a report in July 2013 which concluded there 14 was no evidence of system-wide (systemic) problems with 15 the Horizon software but identified some areas where 16 Post Office could have done more to support individual 17 postmasters." 18 This was the second reference to Second Sight that 19 you'd had. When you read this, did you ask to see 20 Second Sight's Report? 21 A. No, I didn't ask to see Second Sight's Report. 22 Q. Why not? 23 A. It wasn't -- at the time, I can't really give you 24 an answer as to why I didn't ask to see their report. 25 I was taking the -- making a judgement on the advice 118 1 that was in front of me. I would have expected the 2 briefing to have given me sort of factual and 3 relatively, you know, truthful information, but I didn't 4 ask to see that, and I would have taken what I was given 5 here on face value. 6 Q. Could we have on screen, please, paragraph 36 of 7 Ms Tolhurst's statement. That's page 12. You refer, 8 here, to paragraph 2.3 of the briefing document. So 9 that's the paragraph we've just looked at, referencing 10 Second Sight, and you say in the last two sentences: 11 "I remember being reassured by this. I understood 12 'no evidence of system-wide (systemic) problems' to mean 13 that there were no fundamental flaws in the system that 14 could SPMs more widely, although there may have been 15 one-off issues arising from user error or occasional 16 bugs." 17 Going back a page to paragraph 33, please. You say: 18 "In my general impression at this point in time was 19 that [Post Office Limited] did not consider there was 20 a serious problem with the Horizon system, albeit there 21 may have been occasional bugs or errors in the system 22 affecting individual SPMs. I understood [Post Office 23 Limited] thought there was a possibility that the court 24 may find against them on various contractual points or 25 in respect of those occasional bugs or errors, but did 119 1 not think they would lose on anything significant." 2 So the reference here to occasional bugs or errors 3 in the system affecting individual SPMs, did you at the 4 time question whether this system, which you understood 5 to have bugs or errors affecting individual SPMs, even 6 occasional ones, could be described as robust? The 7 language which was being used by Post Office. 8 A. So at that particular meeting, you know, the sort of 9 terms "occasional bugs or errors", I'm not a -- you 10 know, I'm not a technical expert, particularly with 11 computers and computer systems. So I wouldn't have -- 12 you know, I wouldn't have sort of -- wouldn't sort of 13 maybe have asked that question. But I think, for me, it 14 was very much about I was sort of at that particular 15 meeting given assurances that, you know, the 16 representatives themselves and people in the room were 17 telling me that there was no systematic issue, it was 18 played down in the sense that it was only very minor. 19 So, again, I took what I was told on face value at 20 that early meeting, without sort of probing further what 21 bugs or errors could potentially be. 22 However, I'm not an expert in tech or computers, so 23 even if I had of, I'm not sure what information they 24 would have given me to maybe lead me to take different 25 views or ask for something further, if that sort of 120 1 makes sense. 2 Q. Taking it fairly simply, did you understand these 3 occasional bugs or errors to be material, that is they 4 were affecting SPMs in the way they claimed, causing 5 accounting difficulties? 6 A. Yes, yes, I would say so. 7 Q. Did you question whether these occasional bugs or errors 8 were visible to subpostmasters when they occurred or 9 whether illusory losses caused by bugs could be told 10 apart from genuine losses by the Post Office? 11 A. So in relation to the bugs or errors in the system, you 12 know, I didn't ask and I didn't have information about 13 those specific bugs or errors and, potentially, how they 14 were affecting postmasters. I definitely was looking at 15 it from more of a global level, more of a top level 16 issue, rather than the individual specific points, which 17 is a -- you know, that's an honest sort of position of 18 what I was thinking at the time. 19 Q. Do you recognise now that, absent bugs or errors being 20 visible to SPMs or distinguishable from genuine losses, 21 wrongful action might be taken against someone, whether 22 a subpostmaster, their staff or a Post Office employee, 23 on the basis of unreliable data, without anyone knowing? 24 A. Yes, and it's terrible. 25 Q. Did you recognise that at the time? 121 1 A. No, I -- you know, I can -- my -- as I say, at that 2 particular time, I wasn't particularly -- I wasn't 3 thinking about the particular bugs and the errors and 4 the specific impacts that that might have had. But 5 absolutely, I mean, having been led to believe that -- 6 or been told by Post Office that there were no 7 systematical errors with Horizon, I suppose in some 8 respects gave me some confidence and some comfort that 9 the only errors were incredibly minor and maybe didn't 10 have the impact that I now know had on the postmasters. 11 That's the best I can, you know -- yeah, that's my view 12 on that. Yeah. 13 Q. Do you think you should have recognised this risk at the 14 time? 15 A. Um, you know, do you think I should have recognised? 16 Absolutely. I mean, I'm sure there's things that, you 17 know, in hindsight, that I may have been able to 18 recognise at the time -- at the time I was -- yeah, it, 19 you know, I honestly didn't recognise that those -- that 20 issue or those issues were, you know, problematic in 21 that sense. 22 Yes, I mean, there's lots of things I would wish 23 I had done or said, or done differently. I can't make 24 any sort of excuses for that. 25 MS PRICE: Sir, is that a convenient moment for our first 122 1 short afternoon break? 2 SIR WYN WILLIAMS: Yes. 3 MS PRICE: So ten minutes, please, sir, which I think brings 4 us back at just after 2.45. 5 SIR WYN WILLIAMS: I make it 2.38, so shall we give 6 ourselves 2.50? Yes, fine. 7 MS PRICE: Yes, sir, thank you. 8 (2.38 pm) 9 (A short break) 10 (2.50 pm) 11 MS PRICE: Hello, sir. 12 SIR WYN WILLIAMS: Yes. 13 MS PRICE: Could we have back on screen, please, the 14 briefing document for the 17 October meeting, the 15 reference is POL00022976. There is just one last 16 section of this briefing I'd like to go to, please, and 17 that is the contingency planning appendices towards the 18 end of the document, starting at page 32. If we can 19 zoom in a little more, please, so we can see the table 20 on page 32. That's the page above. We can see here 21 what is colour-coding -- albeit that this is black and 22 white -- of five different numbers in the left-hand 23 column for likelihood of Post Office losing a common 24 issue or an implied term being found against the Post 25 Office. 123 1 Just scrolling down a little, please, so we can see. 2 In the right-hand column, there is a 1 to 5 assessment 3 mechanism for impact, so impact on the Post Office if 4 a common issue is decided in favour of the claimants, 5 and that is defined as a significant adverse impact on 6 the business that could threaten existence, as a 5, so 7 the top level in the right-hand column. 8 On the left-hand column, on likelihood of 5 is "Post 9 Office is very likely to lose the case, the proposed 10 term is very likely to be implied". 11 Scrolling up, please, just to the top introduction 12 section there, this is the bit of the document relating 13 to high likelihood areas so that's the likelihood column 14 on the left and, beneath that, is a table detailing the 15 four Common Issues assessed as having a high likelihood 16 of Post Office losing the issue or having the implied 17 term found against them. 18 Going to page 37. This is the start of the table 19 relating to high impact areas, so those things in the 20 right-hand column, and the introductory section explains 21 that the table details the three Common Issues assessed 22 as having a significant adverse impact on the business, 23 if the issue or implied term were to go against the Post 24 Office. So it's saying there were three of the issues 25 that would have that impact. 124 1 Did you read these appendices at the time? They're 2 not part of the main sections, in fairness to you. 3 A. I expect I would have read them at the time. I don't 4 recall -- to be absolutely straightforward, I don't 5 recall but I expect I would have. 6 Q. Seeing the issues which were assessed as being 5s or 7 likely to lose on points, and the three in having a high 8 impact, were they to be lost, albeit that the likelihood 9 on those was lower, did that cause you any concern in 10 terms of the risks of the litigation? 11 A. I think that the -- you know, I was concerned about all 12 of the risks in relation to litigation. Going back to 13 the point that I made around the fact -- you know, I was 14 concerned of the large corporation against the small 15 individual. I was concerned that -- you know, I was 16 concerned that actually looking at the information that 17 I'd had, I was being given all these assurances. So 18 I think that, for me, that's definitely, in that 19 17 October meeting, I felt that the people briefing me 20 were relatively confident of their position, and -- but 21 that worries me just because of my sort of concern over 22 the length of time this had been going on and some of 23 the issues, obviously in greater detail. 24 So I think, in general, I was concerned, without 25 being able to draw out sort of specific, you know, 125 1 particular parts on different particular clauses. 2 I think I had a genuine, overall concern, which I think 3 would have been -- it would have been right for any kind 4 of minister to have an overall concern about any 5 litigation that any sort of Government subsidiary would 6 have been -- would be. So I think I had concern but 7 obviously none on those particular points, if that makes 8 sense. 9 Q. That document can come down now. At paragraph 34 of 10 your statement, you refer to this concern, the general 11 concern you had, and you say that you remember at this 12 early stage being concerned that Post Office Limited 13 were perhaps over-confident. 14 A. Mm. 15 Q. Can you explain what in particular let you to form the 16 view that they were over-confident? 17 A. Well, I think at that particular meeting, you know, 18 I don't remember at any time there was any sort of 19 suggestion or acceptance that there was a potential for 20 losing any kind of litigation, and I suppose, in some 21 respects, that's what also concerned me, because the 22 objective approach would be obviously to look at the 23 worst-case scenario, if you were looking at it. But 24 I -- at all these stages, I suppose, these individuals 25 in the room who had obviously spent a lot of time on it 126 1 and had been working on this for a long period of time 2 gave me reassurance, and I didn't have any evidence or 3 any particular information in order to challenge what 4 was being put in front of me at that particular time. 5 So that's the sort of best way I can articulate it. 6 Q. Could we go, please, to paragraph 38 of Ms Tolhurst's 7 statement, that's page 13. At paragraph 38, you say 8 this: 9 "My overwhelming concern at that time [this is at 10 the point of the October 2018 meeting] was that 11 a judgment against [Post Office Limited] or settlement 12 of the claim would not cause [Post Office Limited] 13 a financial crisis. I was very focused on keeping Post 14 Office going as a valued service. This is why it was so 15 important to me that I was provided with information on 16 [Post Office Limited's] financial position so that 17 proper planning could take place." 18 At 39, you go on to say this: 19 "Frustratingly, [Post Office Limited] were not 20 willing or perhaps not able to provide any concrete 21 advice on their liability at the meeting. I was 22 informed by way of a post-meeting note that for 'for any 23 settlement up to around £50 million the cost could be 24 borne by the company. Above that they would need to 25 consider whether it could be funded by [Post Office 127 1 Limited] or request additional support from HMG'. 2 I wanted more information about the arrangements that 3 would be put in place for [Post Office Limited's] 4 financial liability, and this is something that 5 I followed up the following month. My understanding was 6 that [Post Office Limited] were not giving me 7 an estimate of its potential liability because then it 8 would become a known liability disclosable to [Post 9 Office Limited's] auditors which may expose it to a risk 10 of trading when potentially insolvent. Whilst 11 I understood that, I would expect [Post Office Limited] 12 to be able to give me some clear information, even if it 13 was not an official figure." 14 A. Yeah. 15 Q. You also refer at paragraph 126 of your statement to 16 being told, in a June 2019 submission, that Post Office 17 Limited's auditors had previously had concerns that no 18 figures were included in the accounts on Post Office 19 Limited's potential liability. From whom did you gain 20 the understanding that the reason Post Office Limited 21 was unwilling to be open about the likely quantum in the 22 claims related to the need to declare the risk to the 23 auditor which could, in turn, endanger Post Office 24 Limited's position as a going concern? 25 A. Well, I believe, actually, this was discussed in the 128 1 meeting of 17 October because I do believe, asking the 2 question directly, you know, give -- I mean, my question 3 to the Post Office was, you know, what do you think the 4 liable, potentially, could be to the Post Office? 5 I needed -- I wanted to understand what that looked 6 like, and they couldn't give me a figure and that was 7 a major frustration to me, because -- and, I have to 8 say, one of the things that frustrated me about it was 9 that, you know, I was questioning senior executives of 10 the Post Office about what the potential liability was 11 and, you know, okay, I hadn't been a senior director of 12 a large organisation like the Post Office but I couldn't 13 understand why nobody could articulate that to me as the 14 Minister. 15 And I thought, at this point in the process, they 16 would have had a better understanding of what that 17 figure was but, actually, they couldn't give me a -- 18 they couldn't even give me an informal figure. 19 So until after that meeting, I had no idea what 20 their potential -- what the potential liability could 21 be. 22 Q. We do actually have a draft note of that meeting, if we 23 can have that up on the screen, it's UKGI00008554. It's 24 page 2 of that document, towards the bottom. There's 25 a comment halfway down the page, which is the first one 129 1 from you. You say, "Kelly Tolhurst (KT)", and then 2 a little further down we have "KT": 3 "Additional funding requirements? 4 "Would [Post Office] have enough to cover? 5 Important that [department] is aware as could be 6 significant? 7 "Potential liability." 8 Is that what you're referring to in terms of what 9 you asked? 10 A. Yes, I mean, this note obviously was a note that 11 I hadn't seen but that's what I -- you know, I do 12 remember that particular conversation at that meeting. 13 So it characterises, in some form, my question. 14 Q. That document can come down now. Did the lack of 15 figures being provided at that stage mean that no 16 account was being taken by the Government of the overall 17 value of the claims for the purposes of assessing 18 litigation risk? 19 A. Well, at that particular time, my understanding was that 20 Post Office had an ability to make financial 21 transactions up to £50 million. Anything over that 22 would need Government Minister sign-off. 23 My -- again, I'm not a legal expert. I have no idea 24 what sort of quantums of claims there could potentially 25 be but when I was told and when I understood that 130 1 potentially 561 postmasters could potentially have had 2 a claim on the Post Office, I was concerned that that 3 could equate to more than, obviously, the £50 million. 4 So I understood that any negative judgment against the 5 Post Office would have had a massive impact on the 6 finances and the taxpayer, and I was trying to be 7 diligent into trying to push the Post Office into giving 8 me some idea of what potentially that figure could be 9 and if it would have an impact on the Post Office -- the 10 functioning of the Post Office. 11 Because one of the things that, you know, it seems 12 sort of reflecting now, looking back, you know, I was 13 actually really pleased to have the Post Office as part 14 of my portfolio because I thought it was a great 15 business and I thought it was an interesting part of 16 Government. So it was something that obviously, as 17 an individual, I very much wanted to make sure that the 18 Post Office could continue with its function of public 19 service. You know, obviously separate to the litigation 20 and obviously what I now know. 21 Q. Could we have on screen, please, UKGI00021096. This is 22 a Shareholder Executive Risk Register, dated 29 June 23 2018. It's a little difficult to see because we need to 24 click into the cells in order to see the text, so when 25 I ask the lady to click in a box, the text will appear 131 1 in full, in the bar across the top. 2 A. Oh, okay. Yeah. 3 Q. If we are looking at this first tab "Guidance" and cell 4 C6, please, we can see the text here explains that: 5 "This will be used as a graphical representation of 6 TOP RISKS [in capitals] each team faces and also allows 7 for different assets'/projects' risks, to be compared 8 easily." 9 In big capital letters towards the end: 10 "PLEASE ONLY INCLUDE YOUR TOP RISKS." 11 Then if we go to tab 2 of this please, which relates 12 to the Post Office, so this was a Shareholder Executive 13 Risk Register, which had that guidance and had this 14 specific risk register relating to Post Office. Have 15 you ever seen a Shareholder Executive Risk Register like 16 this before? 17 A. So I don't believe I had until obviously the documents 18 were shared with me, I think, a few days previous. 19 Q. So these weren't shared with you at the time you were 20 Parliamentary Under-Secretary? 21 A. I don't believe they were. 22 Q. If we go to row 38, which is item 11. We can see here 23 possible civil litigation against Post Office Limited, 24 and then in column D, which is "Risk overview", we have: 25 "Civil litigation and/or Court of Appeal processes 132 1 judge that [Post Office] has acted inappropriately, or 2 illegally. Even in the absence of such a finding, 3 ongoing risk that they are perceived to have acted in 4 that way." 5 Then if we look at column E, "Impact of risk", on 6 that same line: 7 "Potential for significant compensation claims if 8 civil or criminal courts rule against Post Office 9 Limited. More likely, however, and certainly in the 10 short-term, is that this continues to be a significant 11 distraction (and cost) to the business as they defend 12 their actions." 13 Then column H. We can see that the civil litigation 14 has been given an impact rating of 4 out of 5 -- 15 a probability rating of 4 out of 5, and then we can see 16 an impact rating there. 17 Forgive me, if we can just scroll up so we can see 18 the column heading. It seems to be current and 19 previous, so referring to two different times of that 20 being assessed. 21 Scrolling down, please. So probability at 4 out of 22 5 and impact at 5 out of 5. 23 Pausing there, was the scale of the risk ever 24 articulated to you in those terms? 25 A. I don't believe that was. 133 1 Q. If we look at column K, mitigation overview, it states: 2 "[Post Office Limited] have external legal advisers 3 employed on the civil litigation including a QC. They 4 continue to update UKGI through the Board where UKGI's 5 NED sits and directly to UKGI's Legal Counsel under 6 a Disclosure Protocol that protects legally privileged 7 information." 8 Then at column P "Further mitigating actions": 9 "UKGI have briefed Minister (Andrew Griffiths) and 10 will keep ministers, SpAds and [Permanent Secretary] 11 update at key points through the new Disclosure 12 Protocol, with POL's Legal Counsel to provide an oral 13 briefing on 10 September." 14 So that's the meeting which was adjourned to 15 17 October: 16 "BEIS Legal are also up to speed and contributing to 17 any advice to ministers. Maintaining a position that 18 Government will not comment on an ongoing legal issue." 19 Were you aware that UKGI considered the civil 20 litigation against Post Office Limited to be one of 21 POL's top rated risk on its asset register? 22 A. No, I can't say that I knew that. 23 Q. That document can come down now. In terms of your 24 experience of information flow from Post Office Limited, 25 could we have on screen, please, UKGI00021771. Going to 134 1 page 4 of that document, please, the email towards the 2 bottom of the page. You explain at paragraph 48 of your 3 statement that you met with Tosin Adegun and Tom Cooper 4 of UKGI on 19 November 2018. This email is sent next 5 day on 20 November and it's from Oluwatosin Adegun to 6 Sam White, who was one of your Private Secretaries, and 7 it says this: 8 "Hi Sam, 9 "Thanks to the Minister for her time yesterday, 10 detailed below are the follow-on actions (both Sams, 11 please let me know if I have missed anything)." 12 That first bullet point: 13 "Weekly briefings as the litigation case progresses 14 (verbal and written updates) (UKGI to action)." 15 Did you request those briefings? 16 A. Yes, I believe I did ask to be briefed. That was sort 17 of normal for me to -- I would rather have more 18 information than I needed. So, you know, you're better 19 off having more information. So weekly briefings, 20 I would have requested that at the meeting or as 21 a consequence of the meeting. However, I can't 22 guarantee that they -- I did receive weekly briefings or 23 verbal updates. 24 Q. Did you request those because, as a matter of your 25 general practice, you liked to have regular updates or 135 1 was there a particular concern -- 2 A. No, I think it was more to do with my general practice. 3 I knew obviously it was a big issue. It was something 4 that was -- that it was important that I did have access 5 to any new information or information as quickly as 6 possible. So it would have been normal for me to have 7 asked for regular updates. 8 Q. Some emails follow above about how frequently the 9 updates should be sent to your Private Secretary and 10 then, towards the bottom of the page, I think the bottom 11 of the first page, there is an email dated 23 November 12 2018, from Stephen Clarke to Richard Watson and Tom 13 Aldred, which says this: 14 "Richard, 15 "To see further clarification below from the 16 Minister's office on the Minister's request for trial 17 updates." 18 "... we'll submit once a week ..." 19 Then that included a round-up of the week's news 20 coverage and also at the second bullet point an update 21 from Post Office Limited's Legal Team on trial 22 developments over the past week. 23 So the second bullet point here was referring to the 24 fact that you wished to have updates from Post Office 25 Limited's Legal Team in particular; is that right? 136 1 A. So that would have been something that would have been 2 formulated via the team or with my private office. 3 I don't remember being specific about what I was 4 requesting. I would have just asked for weekly updates 5 and, you know, relevant information, not sort of giving 6 me information that had no consequence or was 7 irrelevant. So these would have been ideas that would 8 have been put forward by -- yeah, as I say, I'm unsure 9 of who would have sort of made those three particular 10 requests. 11 Q. Okay. Then the reply from Richard Watson is above. It 12 says: 13 "Stephen 14 "Thanks. I have had no reply from [Post Office 15 Limited] Legal. I will chase them about it. I have not 16 said to them that the Minister wants the update, partly 17 because I rather feared that would cause the update to 18 be less useful or perhaps even be met with a refusal to 19 provide one." 20 Then Stephen Clarke's email above: 21 "Thanks Richard, I hadn't thought of that risk but 22 probably very wise based on past dealings!" 23 Were you aware that this was what was expected by 24 UKGI: that a request for an update having come from 25 a Minister might result in a less useful update or 137 1 a refusal to provide one? 2 A. No, I wasn't and, actually, you know, I would have -- if 3 I had have been, I would have been rather annoyed by it 4 because, quite frankly, you know, they would have -- you 5 know, I would have -- yeah. A refusal to give an update 6 to the Minister, I would have thought would have been 7 absolutely outrageous. So if I'd known about that at 8 the time or that there was concern that that might not 9 be the case, I probably would have raised that directly 10 with them, if they were actually refusing to give me 11 updates. 12 Q. It may follow from your answer but was this something 13 you ever experienced directly at any point? 14 A. A refusal to give me information? No, I can't say that 15 they refused to give me information. As far as I am 16 aware, should I say, because actually, that was just 17 from my direct contact with the Post Office. For what 18 may or may not have been said to UKGI or officials 19 within the team that I am not aware of, that may have 20 occurred, but with my direct communication, no. 21 Q. Could we have on screen, please, UKGI00009455. This is 22 an email from Tom Aldred of UKGI to others from UKGI 23 dated 5 April 2019. The first paragraph of the email 24 says this: 25 "On Wednesday, Kelly met with Tim Parker. We also 138 1 had a good chat with Kelly after Tim had to leave, where 2 I was able to make a few points to her. I also walked 3 over to the meeting with Carl, the new BEIS director, 4 who seemed very nice." 5 Then under "Litigation and recusal", the second 6 bullet point reads: 7 "Kelly complained that she wasn't seeing enough 8 information flow about the trial. We discussed as 9 officials afterwards and it seems the block is somewhere 10 between her private office and her. Regardless, we 11 should make sure that we are providing updates to her as 12 soon as they are relevant." 13 At this point in April 2019, what information about 14 the trial were you expecting but not receiving; can you 15 recall? 16 A. I can't say -- I don't know what I was expecting. 17 I just wanted to have good information, you know, 18 regular information and, obviously, rather than getting 19 confused on the months again, I was -- I know we haven't 20 spoken yet about the recusal but, obviously, I was 21 frustrated and angry about that. So I was expecting to 22 get more timely and better information because, 23 ultimately, you know, I -- as the -- as the Minister who 24 that the responsibility to answer the House of Commons 25 or anyone that asked the questions, it was right that 139 1 the information flow should be there and -- but I don't 2 quite know what I was expecting to see because obviously 3 I didn't know what I didn't know. But I just wanted 4 that -- you know, if I was getting a regular flow, 5 hopefully there'd be information in there that would be 6 useful to me in my role as the Minister. 7 SIR WYN WILLIAMS: Can I just ask you in general, so that 8 perhaps we can shortcut some of this, in November 2018, 9 that was when the Common Issues trial started. Are you 10 telling me that, during the course of that trial, so 11 that in the weeks, effectively, of November and 12 December, you felt that you didn't get enough 13 information of how that trial was progressing? That's 14 point 1. 15 Then coming to this point in time, which is April 16 2019, we've now got the judgment in the Common Issues 17 trial. Everybody knows that the Post Office lost, and 18 so we're talking about the information you want to get 19 in the Horizon Issues trial. 20 So with those two staging posts in mind, so to 21 speak, first of all, going back to question number 1, 22 did you feel you were properly kept up to date with what 23 was happening in the Common Issues trial? 24 A. Thank you, Sir Wyn. I felt that I was getting some 25 information and, at the time, I would say that -- 140 1 I couldn't -- at the time, I couldn't make a judgement 2 on the reliability or the level of information I thought 3 that I was getting. I suppose my big issue was, 4 obviously after the judgment was made, it absolutely was 5 clear that I wasn't getting the updates or the 6 information that I felt I needed to know, if that makes 7 sense. If it answers your question. 8 SIR WYN WILLIAMS: Well, it answers my question about the 9 Common Issues trial and then, once you knew that the 10 Post Office had lost that trial, to what extent, if at 11 all, were you demanding greater discipline, if I can put 12 it in that way, in keeping you up-to-date with what was 13 happening in the Horizon Issues trial? We'll leave 14 recusal as a separate topic for Ms Price to deal with 15 but, so far as the Horizon Issues trial is concerned, 16 were you kept up to date in a more disciplined 17 fashion -- I can't think of putting it in any other 18 way -- during the course of that trial? 19 A. I'm not -- I was given more information from -- 20 obviously, we had the policy team within BEIS and my 21 private office and we were all sort of trying to keep 22 abreast of what was happening, but I don't think that 23 I was kept updated in a more disciplined way, hence why 24 I was -- you know, I felt like I was continuously sort 25 of asking for more info, more info, more detail, more 141 1 detail. Because, clearly, the judgment, there were 2 issues. You know, I -- there were clearly issues with 3 what the Post Office was saying and what was happening, 4 based on that judgment. 5 So I didn't want to be blindsided, as well, if that 6 makes sense. So my determination to keep asking for 7 information, asking for more detail, meant that, you 8 know, in my view, I thought that I wouldn't -- you know, 9 I would know what's coming, if that makes sense. 10 SIR WYN WILLIAMS: All right. Then one last question before 11 I hand back to Ms Price. When you were saying more 12 info, more info, were you directing your requests to 13 officials in UKGI or officials in the Department or to 14 both? 15 A. To both, to both. 16 SIR WYN WILLIAMS: All right. Fine. 17 Ms Price. 18 MR BEER: Not at all, sir. 19 Ms Tolhurst -- that document can come down now -- 20 a number of times in your statement you touch on the 21 relationship and engagement you had with UKGI 22 specifically, to follow up on the point made by the 23 Chair as to who you were encountering difficulties with. 24 If we could have on screen, please, paragraph 88 of 25 Ms Tolhurst's statement. That's page 31. You deal here 142 1 with April 2019, your private office saying that Tom 2 Cooper wanted to meet you to update you on the 3 litigation, and you saying you'd rather the updates were 4 formalised. Then just going over the page, please, at 5 89, you say: 6 "I suspected by this time that Tom Cooper had gone 7 native. My feeling was that he had lost his 8 independence from [Post Office Limited] and was not 9 providing effective challenge or scrutiny." 10 What did you mean when you said Mr Cooper had "gone 11 native"? 12 A. Well, I meant that his objectivity had been lost, 13 I suppose, in regards to -- you know, whether that's 14 a fair characterisation or not of his approach, but that 15 was my feeling at the time. That's all I can sort of 16 say, and I think that had been borne out -- well, as 17 I think I've said in my statement, actually, that, you 18 know -- and I know we want to come on to it, so -- but 19 what happened around that recusal obviously gave me 20 cause for concern, and the reason I made a fuss about 21 not wanting to meet the people informally is that, you 22 know, this was very -- you know, I wasn't ignorant 23 enough to know -- not to know how serious the whole 24 litigation was, and because I had become frustrated with 25 the information flow, I didn't want informal 143 1 information. I wanted information that was recorded and 2 on the record, hence why I didn't want to have a random 3 communication, as I characterised it. 4 Q. In relation to Mr Cooper's request for a meeting, 5 Mr Cooper's evidence to the Inquiry was that he would 6 have benefited from a lot more in-person contact with 7 the Department but, in particular, you, and his evidence 8 was that the Department had received briefings but no 9 questions came back. How would you respond to that? 10 A. Well, so, even as a junior Minister, I had a wide 11 portfolio and I had lots of responsibilities. At this 12 particular time, we had a number of other challenges 13 within my portfolio, not just the Horizon litigation. 14 Absolutely, I want to meet with all stakeholders but, as 15 one individual, there is a limit on some of the personal 16 contact that you can have with those stakeholders. 17 However, he had open and unfettered access to the 18 BEIS team. He also had the ability to speak with the 19 Permanent Secretary and any kind of severe concerns, in 20 my view, shouldn't have been just purely reliant on 21 having a face-to-face meeting with me. 22 If he had had those serious concerns or he had 23 something that was important to the Department, you 24 know, I would have imagined and I would have hoped that 25 anyone working in that environment would have raised it 144 1 with a number of other people, rather than only speaking 2 to me, unless it, you know, it was something like a -- 3 I don't know, a whistleblowing or something like that. 4 So I would say that, yeah, absolutely, as 5 a minister, I was always willing to meet with whoever 6 I could, within reason, particularly where it affected 7 by portfolio. But, you know, I recognise as well, it 8 wasn't possible with just the other pressures at that 9 particular time, to meet with -- you know, I wouldn't 10 have been able to meet with him on a weekly basis. But 11 that's a rather long answer, but I just wanted to give 12 you the context of that. 13 So I would say that's slightly unfair to suggest 14 that, because he didn't have as many face-to-face 15 meetings with me, that there was no sort of feedback 16 from my office, so to speak. 17 Q. Coming, then, to your reaction to the Common Issues 18 judgment and the recusal application. Can we have on 19 screen, please, paragraph 58 of the statement, that's 20 page 21, this you being made aware of the judgment and 21 at 59, your immediate reaction was one of embarrassment. 22 A. Mm. 23 Q. You were appalled that the judge had found Post Office 24 Limited to have behaved so reprehensibly and you felt 25 usher shame on behalf of Post Office Limited in respect 145 1 of what the SPMs had been through. 2 You say you had a call with UKGI the next day about 3 the judgment and then, going over the page, please, 4 a call with Tim Parker, Alisdair Cameron and Jane 5 MacLeod, and you set out some of the speaking points for 6 that call which reflects your immediate concerns. 7 Then over the page, please. At the next paragraph, 8 you describe the handing down of the Common Issues 9 judgment as a lightbulb moment for you. And you also 10 say that your concern was what was going to change, in 11 terms of how the litigation was approached. 12 A "Dear colleagues" letter was sent to all members 13 of the House of Commons after this judgment, wasn't it? 14 A. Yes. 15 Q. You explain at paragraph 65 to 68 that you had 16 originally recommended that some wording be included 17 which was subject to some amendments after comment from 18 UKGI but this wording was removed after input from Post 19 Office Limited; is that right? 20 A. Yes. 21 Q. The wording you originally proposed is set out at 22 paragraph 66. That wording was that: 23 "... the judgment 'represents a significant step 24 forward, delivering justice for those postmasters who 25 have been wronged'." 146 1 You provide your reflections on this at 2 paragraph 69, over the page, please, and you say: 3 "Looking back now this is probably one of the areas 4 where I should have pushed back and insisted on the 5 original wording." 6 Why do you consider that the original wording should 7 have been kept? 8 A. Because I believe that, actually, it was the true 9 characterisation of how, you know, I felt as the 10 Minister at the time. But, you know, looking -- you 11 know, looking back, I wish I had pushed harder on that 12 wording. 13 Q. Coming, then, to the recusal decision, you say you were, 14 at this stage -- the drafting on the "Dear Colleagues 15 letter" stage -- unaware of any suggestion that Post 16 Office Limited might seek for the judge to recuse 17 himself, and that you became so aware on the 19 March 18 2019, when UKGI informed your office of this; is that 19 right? 20 A. Yes. 21 Q. You say at paragraph 71 that your view and your 22 officials' view was that the application should not be 23 made and that you had very grave concerns about it. 24 Three lines down you say this: 25 "I believe that the Permanent Secretary, Alex 147 1 Chisholm, took this forward and tried to discourage 2 [Post Office Limited] from making the application. At 3 no time was anyone at POL given reassurance that 4 Government would be happy with POL making this 5 application; quite the contrary." 6 By "quite the contrary", is it your evidence that 7 you told Post Office Limited not to make the recusal 8 application, or not? 9 A. So I did not have any discussions with Post Office 10 Limited directly about the recusal. But, as far as 11 I can remember, I don't remember having that direct 12 conversation with them. However, what I do remember is 13 that, you know, my reaction and that of the others -- 14 you know, other people within the Department, that this 15 was something that, you know, was not something that 16 I -- you know, I wouldn't support it and I thought it 17 was rather -- you know, madness, really, but that 18 I don't believe was directly articulated directly to 19 Post Office Limited. 20 Q. You deal at paragraph 73 with what you were told about 21 whether Government could or should be involved in the 22 decision, and you say: 23 "It was apparently not, however, within the 24 Department's gift to stop [Post Office Limited] from 25 making the application." 148 1 If it had been within your gift, would you have 2 stopped the application, despite the legal advice to the 3 contrary? 4 A. Well, I believe I would have, because I -- and again, 5 it's easy to say -- it's easy for me to say that in 6 hindsight, with what we know now. But my view, as 7 a complete layperson in this area, my feeling at the 8 time was you've had a judge that's made this incredibly 9 damning position about the Post Office, so I was very 10 surprised how the Post Office's first thought was to try 11 and then recuse that judge. I, as a layperson, 12 I thought it was, you know, something that was madness. 13 Even what, you know, depending on what that legal advice 14 had been and, actually, you know, I think that we wanted 15 to, you know, we wanted to make sure that this came to 16 a resolution, and that it was moved forward, and, you 17 know, we were -- I was definitely concerned that 18 anything like this could delay any further, you know, 19 the progression of the case to draw a line under it for 20 the individuals involved. 21 Q. Could we have on screen, please, WBON0001756. This is 22 an email from Jane MacLeod to Tom Beezer and Andrew 23 Parsons, copied to others, dated 16 March 2019, and it 24 says: 25 "Many thanks -- I have a call at 12.15 with our 149 1 Chairman, Al Cameron and Minister Kelly Tolhurst (and 2 others), although I don't believe recusal will be part 3 of the discussion. I have been advised by the UKGI GC 4 that 'government' will not express an opinion on recusal 5 as they will not want the 'executive' to be seen to be 6 criticising the' judiciary'." 7 Was recusal discussed on the call on 16 March? That 8 was three days prior to the date you give in your 9 statement, you saying you were aware of it? 10 A. I genuinely -- I can't remember the exact details of the 11 call. 12 Q. The suggestion that the reason Government would not 13 opine on the recusal application was said that it did 14 not want the Executive to be seen as criticising the 15 judiciary. Did you personally receive advice to that 16 effect? 17 A. I don't remember receiving -- you know, I don't remember 18 receiving advice to that effect and, actually, that's 19 not how I was thinking. So my objection to the recusal 20 was not worrying about whether or not the Government 21 would be seen to be criticising the judiciary. You 22 know, from my layperson's point of view, was that 23 I thought it was absolutely the wrong thing for the Post 24 Office to be doing, just because they had had a judge 25 who had made a scathing judgment against them. 150 1 So therefore, I couldn't understand how that would 2 help in any way the Post Office -- Post Office's case 3 going forward, with any future judgments. 4 So whilst that may have been the Department's view, 5 which I don't disagree with, I'm just saying that my 6 thoughts at the time were very much in that place, as 7 opposed to particularly concerned with what the 8 judiciary may or may not have thought. 9 Q. Having seen the documents which have been sent to you 10 more recently, are you aware that BEIS Legal and the 11 Permanent Secretary had taken the view that the 12 Department should not involve itself directly in the 13 recusal decision? 14 A. Yes. 15 Q. We needn't turn it up unless you'd like to see it but 16 there was an advice from BEIS Legal to Mr Cooper that he 17 should not take part in the decision on recusal, on 18 15 March 2019. Were you aware of that at the time? 19 A. So I don't think I was -- no, I wasn't aware that he -- 20 that the advice he had been given was to not take part 21 in that discussion, as far as I think I am correct in 22 saying. However, I think this represents one of the 23 concerns and one of the issues for me because, having 24 the shareholder representative on the Board not taking 25 part in a significant decision that had the impact on 151 1 the organisation of which we were the shareholder, and 2 on a position that, you know, I didn't agree with, 3 I suppose was a concern -- you know, is a concern, and 4 is a concern, you know, how were we able to -- you know, 5 we -- I mean, I -- whether the -- the advice was correct 6 or not, you know, I'm disappointed, and I disagree with 7 it. 8 You know, because I believe that, if you are 9 a shareholder, if you are a Board member, unless you 10 have a very clear conflict, you should be taking part of 11 those decisions and, you know, it's a frustration to me. 12 Q. Could we have on screen, please, UKGI00009321. Going to 13 page 2 of that document, please, about halfway down 14 there's an email from your Private Secretary, or one of 15 them, it seems, to Tom Cooper, which refers to brief 16 discussion of this with Kelly over the phone and "as 17 expected she has concerns" and this relates to the 18 recusal application being considered: 19 "Immediately she said she would raise with 20 [Secretary of State] ..." 21 This is 19 March at 17.15: 22 "... I have flagged this to his office and I believe 23 she has already contacted him. 24 "She has agreed that they shouldn't do anything 25 until after the decision has been made at the board 152 1 meeting/call tomorrow ..." 2 That's the Post Office Limited Board meeting to 3 decide whether the application should be made; is that 4 right? 5 A. I think so. 6 Q. "... and it is likely she will want another call with 7 Tim Parker and Al Cameron after this to ask them to 8 explain their reasoning behind their change of mind." 9 So it would appear from this that there was a plan 10 for you to have a discussion with the Secretary of State 11 but you had decided not to contact Post Office Limited 12 to intervene in the decision before it was made; is that 13 right? 14 A. I don't believe I made a decision not to intervene and 15 speak with the Post Office to -- I don't believe that 16 that correctly articulates -- articulated what that note 17 meant at the time because I was very clear on my -- 18 I was very clear on my position, hence whilst I had 19 spoken to Secretary of State -- it may have been -- 20 I can't -- I don't -- I wouldn't have seen this message, 21 I don't remember refusing or not agreeing to speak with 22 the Post Office Limited on this issue. 23 Q. Well, did you make any attempt to speak to Post Office 24 Limited on this issue before the Board meeting decision? 25 A. So my belief was that my -- my understanding -- if 153 1 I correct correctly, that Alex Chisholm, who was the 2 then Permanent Secretary, was going to speak with the 3 Board -- or not necessarily speak with the Board, but it 4 was left with him. But I -- but I think, you know, very 5 clear, that I definitely didn't try and avoid or refuse 6 to speak to Post Office Limited on this because, if 7 I had felt that I had had an opportunity to influence 8 it, I would have taken it. 9 Q. That document can come down now. You received 10 a submission on 11 June 2019 about the Post Office 11 litigation. Can we have that on screen, please, it's 12 BEIS0000075. If it helps, you address this submission 13 at paragraphs 124 to 128 of your statement if you want 14 to refer to them. So this submission, you are one of 15 the recipients? 16 A. Mm-hm. 17 Q. Under "Summary": 18 "At the industry meeting on 4 June you ([Secretary 19 of State]) [so being the top recipient] asked for advice 20 on how the ongoing Post Office Limited litigation could 21 be brought to a swift and satisfactory conclusion, 22 ensuring postmasters who had been treated unfairly were 23 appropriately compensated." 24 Does that reflect your wishes at the time as well? 25 A. Yeah, absolutely. 154 1 Q. The potential options which were available to you are 2 set out on page 4 of this document. Can we go to that, 3 please, and it refers you to a table at Annex A with a 4 range of options and they were said to range from 5 challenging the existing Post Office Limited Board to 6 change their litigation strategy, to more fundamental 7 changes, such as replacing the Post Office Limited Board 8 or BEIS assuming control of the litigation strategy. 9 Then the risks are explained at 18, of more rigorous 10 action and those included: 11 "Forcing further changes to the leadership team risk 12 disrupting the progress POL have been making in other 13 areas of operation of the business ... Making public 14 statements or directing POL to take certain action could 15 weaken their negotiating position in relation to 16 settlement and make it harder to stick to the existing 17 BEIS line that this was an operational matter for POL." 18 Then the recommendation was that you choose from 19 options 1 to 7, and options 1 to 7 were the less 20 fundamental changes of the options; is that right? 21 A. Correct, yeah. 22 Q. I won't go to them for the sake of time but they're the 23 ones that you set out at paragraph 125 of your 24 statement? 25 A. Mm. 155 1 Q. Looking at the points made in paragraph 18, was there 2 pressure to maintain POL's financial success as 3 a priority over the concerns and interests of 4 subpostmasters? 5 A. I don't believe so. That was definitely not something 6 that was my approach. I would say it was never about 7 protecting the Post Office over subpostmasters; it was 8 about making sure that, you know, as the people -- as 9 a taxpayer responsible body, we had confidence in the 10 leadership and the processes and that the right 11 decisions were being taken. 12 Q. In respect of the line referred to here, that the 13 litigation is an operational matter for Post Office 14 Limited, did you agree with that? 15 A. I did agree with it because -- at that particular time 16 because obviously we -- there was an Executive Team 17 running the Post Office and they were responsible for 18 the operations and delivery of the Post Office as 19 an organisation and, you know, as far as I was aware, 20 none of the officials within BEIS, notwithstanding 21 whatever the officials in UKGI had been informed of, 22 that it was something that they were leading on and that 23 it was their responsibility to resolve, as well. 24 Q. Wasn't this a classic example of an operation -- or 25 operational or contractual matter, which was concerning 156 1 ministers at a policy level, such that simply leaving 2 matters to Post Office Limited, on the basis that they 3 were operational, was not a defensible position? 4 A. I think, in -- you know, looking at it from hindsight, 5 yeah, we could say that, absolutely, you know, 6 actually -- I mean, I think -- you know, we can go on -- 7 I'm sure you'll pick up with me about the -- you know, 8 the future and, you know, potentially what is wrong but 9 I think that, at the time, all I can talk about is at 10 the time and when I was involved, and, you know, I did 11 think it was an operational matter. Yes, I was 12 concerned in relation to policy and how that would 13 affect policy, how that would affect future decision 14 making. But I didn't believe that we could take 15 operational responsibility for it because, obviously, we 16 weren't appraised or, you know, we weren't -- well, 17 I definitely wasn't directing the legal advice or, you 18 know, have -- you know, I don't even know what the 19 questions were asked of the legal representatives, when 20 this legal advice was given to the Post Office. 21 So I think that, absolutely, it's -- what we know 22 now and it absolutely -- you know, it was a mistake that 23 it -- it shouldn't have been, you know -- Government 24 should have had better oversight of what was going on at 25 that time. 157 1 Q. Why, ultimately, did you choose not to make radical 2 changes to the left and right of the Board, so the 3 harder options that were in the submission? 4 A. So I've thought about this obviously since writing the 5 statement and I don't remember exactly, other than -- 6 I don't remember exactly why I went from being very 7 determined in my views to move on the Chairman and 8 change the board, that we didn't end up doing that other 9 than that, I would imagine, that, you know, there was no 10 appetite for that within the Department or the advice 11 that I was being given by the Permanent Secretary and, 12 you know, the team at the time. 13 You know, it would have been seen as a very sort 14 of -- you know, I think I described it in my statement 15 as a nuclear option and, you know, as this was my first 16 ministerial role, I was really keen to make sure that 17 I acted appropriately, and obviously I was -- I did take 18 note of advice and -- that I was given. 19 However, I will caveat that in the sense that, 20 whilst I take note of the advice, if I thought that 21 I had an opportunity to do it, I would have taken it. 22 So I -- but I can't explain exactly why I didn't go for 23 the -- for that particular option. 24 Q. I'd like to come finally to your reflections, and 25 starting with paragraph 194 on page 70 of the statement, 158 1 please. 2 SIR WYN WILLIAMS: Before you do that, Ms Price, could 3 I just check with you, are we having a sort of second 4 break or are we going to the end now? 5 MS PRICE: Sir, I think we are going to have another short 6 break, after which there will be some questions from 7 Core Participants. I will only be a couple of minutes 8 further with my questions at which point I was going to 9 suggest at 3.55 we take a break until 4.05. 10 SIR WYN WILLIAMS: Fine; okay. 11 MS PRICE: So page 70 of the statement, please. In the 12 interests of time, I won't read out all of paragraph 194 13 but that is the paragraph that essentially deals with 14 what you think was inadequate information being provided 15 to you. 16 Then on 71, we have 198 and 199, where you make some 17 observations in respect of the governance structure in 18 this instance. 19 In sum, is it correct that your position is that, 20 first, the Government was not given sufficient 21 information to act appropriately; and, second, the 22 structures in place tied the Government's hands as it 23 had no directing power? 24 A. Mm. 25 Q. Is that a fair summary? 159 1 A. Yes, it is. 2 Q. Is it right though, that, in terms of access to 3 information, the Government had a representative on the 4 Post Office Limited Board and you were in a different 5 position, in terms of knowledge of matters after the 6 Common Issues judgment, as compared with before? 7 A. Yeah. 8 Q. The Government also had that nuclear option of removing 9 the Chair -- 10 A. Yeah. 11 Q. -- in extremis. Was there any conversation about the 12 responsibility of Government and collective Cabinet 13 responsibility in the context of litigation being 14 defended in a way which it appears you believed was 15 increasingly indefensible? 16 A. I can't speak for -- I don't know whether that was 17 discussed, and I definitely, you know, I genuinely can't 18 answer the question about the Cabinet's involvement or 19 whether that was discussed at that particular point. 20 I think for -- you know, I remain concerned about -- at 21 the time, I would have loved to have had -- I would have 22 loved to have had powers of direction over the Post 23 Office, actually, because, you know, if I am furnished 24 -- you know, I was, you know, more than happy to take 25 decisions, so I think that, fundamentally, the structure 160 1 of the Post Office and the way it's been set up, and 2 also even that connection between UKGI and the 3 Department, so for example, you know, the UKGI 4 shareholder representative wasn't a member of the 5 Department so it wasn't someone that was directly blank 6 to me, for example, or the Secretary of State. 7 I think I was operating within the system that was 8 there and, whilst I accept that, you know, the structure 9 of the organisation, I had to work on those boundaries, 10 yes, it was a frustration and, you know, that's 11 something that I believe that maybe, if it hadn't have 12 been set up in that way, we would have -- well, 13 I hope -- I would like to think that this may have been 14 resolved early on, because ministers would have had that 15 ability to direct and take further decision. 16 I mean, I think even -- sorry to sort of labour the 17 point, but just going back even to the point where the 18 Minister had to sign a protocol for information sharing. 19 I mean, even me coming in as a layperson, I thought: 20 well, hang on a second, if I am the Minister 21 responsible, why do I have to sign a document to say 22 that I'm not going to share -- you know, so that I can 23 be given that information, when, actually, we are the 24 shareholder, we own the organisation? 25 So I think that -- and, you know, I -- yeah, I would 161 1 like -- yeah. I am also very keen to see the outcomes 2 of the Inquiry in relation to the recommendations that 3 are made because, obviously, it's something that, you 4 know, has caused me, you know, concern and a lot of 5 reflection since the process, since I was a Minister in 6 the Department. 7 MS PRICE: Sir, those are all my questions for Ms Tolhurst. 8 It is between 3.55 and 4.00. But I wonder if we could 9 come back between 4.05 and 4.10, if we're going to get 10 through the questions. 11 SIR WYN WILLIAMS: Yes, by all means. I'm prepared to 12 stretch 4.30 a little but, just so everybody knows, my 13 absolute limit today is 4.45. So either questions have 14 to be asked within that time frame or some other 15 arrangement has to be made, all right? 16 MS PRICE: Thank you, sir. Understood. 17 (3.57 pm) 18 (A short break) 19 (4.07 pm) 20 MS PRICE: Good afternoon, sir. 21 SIR WYN WILLIAMS: Good afternoon. 22 MS PRICE: We have questions from Mr Stein and Ms Patrick 23 I'm told they will be 12 minutes each. 24 SIR WYN WILLIAMS: The precision grows. All right. 25 Questioned by MR STEIN 162 1 MR STEIN: Sir, I'm grateful, I'll start my 12 minutes now. 2 Ms Tolhurst, my name is Sam Stein, I appear on 3 behalf of a very large group of subpostmasters, 4 subpostmasters' partners, mistresses and employees in 5 branch offices. 6 You said towards the end of your evidence when you 7 were being asked questions by Ms Price that you are 8 looking forward and you're very keen to see the outcome 9 of the Inquiry in relation to the recommendations that 10 are made. Okay? 11 A. Mm-hm. 12 Q. Now, if you like, the lens through which I'm going to 13 ask you a number of questions is that one -- 14 A. Okay. 15 Q. -- the recommendations: how can we improve, what is 16 going to be better in terms of Government, the way 17 Government operates? All right. 18 A. Okay, thank you. 19 Q. Now, to help with that and as a starting point, can 20 I take you, please, to paragraph 35 of your statement. 21 You'll see there at paragraph 35, that's page 12 of 22 Ms Tolhurst's statement, that you're referring there to 23 a briefing organised by POL for 17 October meeting: 24 "The briefing was extensive although section 2 25 setting out the background to litigation was relatively 163 1 short." 2 You go on to say: 3 "I did not understand this to be a meeting about 4 litigation strategy or the merits of the claim." 5 So I'm going to take you now to that briefing. 6 A. Okay. 7 Q. If we can go to that, that briefing is to be found at 8 POL00022976. If we look at page 1, and have that on the 9 screen, that would help. So this briefing paper, as 10 you'll see, and you had this in your pack, it's 11 a meeting on 17 October 2018, and it has a reference to 12 yourself, Ms Tolhurst, Parliamentary Under-Secretary for 13 the Department of BEIS, et cetera, okay? 14 A. Okay, so you'd joined and taken on this ministerial 15 post, I think, in July 2018, so you'd had some time to 16 get familiar with the role but not very much time. All 17 right? 18 So the particular paragraphs that I'd like to ask 19 you questions about at page 10, paragraph 3.3, please. 20 Thank you. Right. So 3.3: 21 "The most important common issues concern the 22 liability of agents for 'losses'." 23 Then it goes on to say this: 24 "The claimants argue that Post Office needs to show 25 that a postmaster's actions have caused Post Office to 164 1 suffer a net economic detriment, not just that the 2 branch's accounts ostensibly show a shortfall. Post 3 Office's position is that if a shortfall is shown in the 4 branch's accounts then, absent any cogent evidence to 5 the contrary, the postmaster is liable for that 6 shortfall, given that they are responsible for 7 conducting the transactions recorded in those accounts, 8 and for the Post Office cash and other assets used." 9 Paragraph 3.6, please, so over the page to page 11. 10 "Post Office's external Counsel believe that Post 11 Office has the stronger arguments on most of the Common 12 Issues." 13 Okay, so you're being given a pointer here within 14 the briefing document to what are strengths and 15 weaknesses, all right? 16 "However they also caution that areas likely to be 17 most problematic for Post Office are the clauses dealing 18 with suspending and terminating postmaster contracts 19 (including length of notice ...), withholding 20 remuneration during the periods of suspension, and 21 imposing liable for branch losses." 22 Okay? 23 So you're being given a steer as to areas of real 24 concern for the litigation and one of the steers that 25 you're getting, and an area of real weakness that's 165 1 being identified, is regarding this question of how 2 shortfalls are accounted for within branches. 3 So if we add up the pieces we've got so far: you've 4 been in post for a few months. One of the jobs that you 5 had to do is, essentially, look after areas that are 6 relating to the Post Office. Yes? 7 A. Mm-hm. 8 Q. You need to say, yes, or no. 9 A. Sorry, sorry, yeah. 10 Q. Thank you very much. You understood that the Horizon 11 system was essentially the working operating system for 12 branches, and that it was an accounting system, run by 13 the Post Office. Yes? 14 A. Yes, yes. 15 Q. You've lived -- I think you've lived and worked in Kent 16 for -- you were an MP in Kent. You're as familiar, as 17 we all are, with small branches of post offices up and 18 down the country. 19 A. Yes. 20 Q. You've said already in your evidence that you were aware 21 that these branches were small businesses, as against 22 a much larger corporation. 23 A. (The witness nodded) 24 Q. Okay. So what we've got here, it seems, in the 25 briefing, do you accept this, is you're being warned: 166 1 look, there's a real issue about this question of how we 2 impose liability on those small businesses. Do you 3 agree that's what it says? 4 A. Well, I agree with -- that that's what it says, because 5 obviously that was the nature of the litigation, and the 6 dispute, and it was obviously an update of the 7 litigation, hence the first sort of big brief I'd been 8 given since taking on the role. 9 Q. One of the things about this brief -- we've flicked 10 through it and we can see that it's something like 11 50 pages, it's quite dense stuff. So we can see that, 12 by being given this amount of material, without it 13 necessarily identifying "Look, Ms Tolhurst, this is the 14 hot topic, if we lose this then this could be curtains 15 for the Post Office", because the very identification of 16 who is responsible for paying these shortfalls is pretty 17 much an essential foundation of the litigation. 18 A. Mm. 19 Q. Now, that doesn't seem to have happened. It doesn't 20 seem to have got on to your operational radar as being 21 "Look at this, watch out for this problem"; do you 22 agree? 23 A. So yeah, I would agree. So for example -- I mean, one 24 of the ways I work anyway, and I had it number of times 25 in that portfolio, I had to get to grips with very large 167 1 documents, or points within Government that I had no 2 experience of before. So I'm absolutely fine with 3 reading documents, taking it in, obviously there may or 4 may not be some questions that I may or may not arrive 5 out of reading what's put in front of me, but you're 6 quite right. 7 So I don't remember or recall anyone, when I first 8 looked at this brief, saying, "This is going to be 9 a problem, this is something that the Post Office, you 10 know, will have such a bad judgment on", and the reason 11 I say that is because, obviously, I had this, going into 12 that meeting, and then having those assurances that 13 there was confidence from the Post Office that they were 14 right. And, obviously, whilst, you know -- and, you 15 know, I'm not a lawyer, I don't have any legal 16 experience, and I wouldn't -- and I'm sure the civil 17 servants wouldn't have liked it for a minister to have, 18 you know, to -- they would always caution against going 19 against sort of legal advice. 20 Q. But here, Ms Tolhurst, the legal advice actually is 21 "Look, we may well lose on these issues". So here's 22 an area whereby the owner of the Post Office could have 23 said, "Hang on, what does it mean if we lose on these 24 issues? How bad is that?" 25 A. Yeah. 168 1 Q. Now you say in your statement -- I don't want to go to 2 it because of time limitations -- paragraph 57, it was 3 probably -- this is March 2019: 4 "Probably at this time I was first told of the core 5 issues in the Horizon Issues trial." 6 Well, actually, when we go back to this briefing, 7 you are being told about these core issues quite a lot 8 earlier than that. Now, where has this gone wrong? 9 Should somebody and, if so, who, have said to you "Look, 10 if we lose this, this really is significant for the 11 entirety of the litigation. The company that we own." 12 Who should have pointed out to you, do you think? 13 A. Well, actually -- sorry, so I think that it was -- so 14 actually, there's not one person that is, you know, sort 15 of -- it's a failure of the whole system because, 16 actually, I think, as I said earlier in the evidence on 17 the answer to -- 18 Q. I said who. You may want to say role or position. 19 A. Yeah, sorry. 20 Q. No. My fault. 21 A. So in answer to Emma Price's questioning and I said, 22 actually, that, you know, severe -- I shouldn't have 23 been the first or the last person to -- or could have 24 been -- I shouldn't have been the only person to have 25 had that message. So that -- you know, if there was 169 1 a severe issue, I would have expected it to come through 2 the shareholder -- the Government Shareholder 3 representative on the Board because, ultimately, that's 4 their role but I would have -- but that should have been 5 something that had been discussed widely, it would have 6 been something that you would that have expected UKGI to 7 be over, a Permanent Secretary to be over. 8 It should be -- you know, you shouldn't have had 9 a junior Minister chasing around or sort of, you know, 10 working out what to -- what information or what not to 11 believe, and I think that's the fundamental issue. 12 Q. Okay. Can I tackle that? 13 A. Sorry. 14 Q. No, that's fine. Can I tackle that, paragraph 78 of 15 your statement, page 28. You're talking there, at the 16 beginning of that paragraph, about the arm's-length 17 model. You're talking there I think, if I recall 18 correctly, about recusal application and legal advice, 19 which I will, if I have time, just quickly go to in 20 a moment. 21 A. Mm-hm. 22 Q. But this point about a junior minister point that you've 23 just gone to, you say this at paragraph 78, the 24 situation at that time, arm's length, senior counsel 25 legal advice, and so on: 170 1 "This did not feel enough for me as a first time 2 junior minister to go against the advice. In my mind 3 also was that, in taking that sort of action ..." 4 Then you go on to talk about other issues that 5 you're saying are on your mind. 6 A. Mm. 7 Q. But it's not just in recent history that there's been 8 a churn of ministers. It is -- there is a frequency of 9 churn of ministers across our system. 10 A. Yeah. 11 Q. Indeed, you have occupied various -- 12 A. A number -- 13 Q. Various posts, quite short periods of time, so you're 14 quite a good person to ask about this. It's frankly 15 quite difficult to get a sense of Government from 16 ministers that are constantly changing, who are 17 constantly having to be briefed, worked up in terms of 18 knowledge and then start making decisions. 19 A. Mm. 20 Q. Because you end up in challenges like this, by being 21 told by senior legal people, X or Y. What do we do to 22 change that? How do we make sure that somebody actually 23 gets a grip on these things? 24 A. Well, I think specifically around the Post Office, 25 because I do agree with your point, you know, in regards 171 1 to churn of ministers, getting up to speed, being given 2 that information in order to make proper decisions, but 3 I think where the Post Office concern is slightly 4 different, because -- and this is where -- and it 5 goes -- I think I've said it in my statement but, excuse 6 me, I can't remember the paragraph without looking it 7 up. 8 And my only sadness is that Post Office Limited 9 wasn't what I would call a true arm's-length body of 10 Government, where, actually, as the junior minister, 11 I would have had powers of direction and absolutely the 12 position to be able to ask and demand information or 13 make a judgement. And, for me, as -- even though it was 14 my first time ministerial appointment, you know, I've 15 spent my whole life taking, you know, living with the 16 consequences of the decisions that I make in my work 17 life, so if I had been in a position where I could make 18 decisions, I would have -- and it's a phrase I've 19 used -- I live or die by my sword. And if I made the 20 wrong decision, I'll take responsible for that. If 21 I made the right decision, all very good. 22 And that's one of the things that this is -- and, 23 for me, this is the problem. The fact that it was 24 a limited company, not a true arm's-length body of the 25 Government and, therefore, I personally, if I can say, 172 1 you know, whatever -- you know, I -- I hope that the -- 2 one of the outcomes of this Inquiry is actually the Post 3 Office structure is completely changed. 4 Q. Let me briefly, and we'll finish on this, legal advice, 5 paragraph 73 of your statement. Now, paragraph 73, it's 6 an example of legal advice that's been given but you 7 refer generally in your statement, as you have in your 8 evidence, to strong legal advice that you've been given. 9 Effectively strong legal advice to stay out of it, 10 to not interfere with this particular body. 11 Now, for the people that I represent, that feels mad 12 because there you are, you own essentially, as the 13 Government -- 14 A. Yeah. 15 Q. -- you own the Post Office. Now, the legal advice that 16 you're being given if you look at what you have there at 17 paragraph 73, which is reasonably good as a reference to 18 the type of legal advice, it not legal advice that is 19 saying that there's legislation that says you've got to 20 keep out of this. It's not cases that say you've got to 21 keep out of it. This is more kind of we think it might 22 not be a bad idea if Government sort of keeps away from 23 it because we don't want to get burnt type legal advice. 24 This is barely legal advice if it's a legal advice 25 at all. Why did you feel that you had to follow stuff 173 1 that isn't actually rooted in law? 2 A. Well, because as someone who is not an expert and 3 particularly in regards to legal matters, and I -- you 4 know, I can't profess to be so -- when you are given -- 5 if you are given advice from trusted, experienced, 6 qualified -- or people that you perceive to be 7 qualified, you know, I had nothing to -- you know, 8 what -- you know, at that particular time, or especially 9 in short time, you've then got to rely on being able to 10 have other advice in order to challenge that, and 11 actually -- and one of the challenges, going back to 12 your earlier question, around, you know, the 13 responsible -- I'm not making excuses, please don't 14 think that that's the case. 15 But, you know, there is so much going on, there are 16 so many demands on your time. You only have a certain 17 amount of bandwidth. So you do have to rely or put some 18 trust in some of the information that you are given by 19 your advisers and that's not a get-out -- you know, I'm 20 not trying to negate any responsibility for not 21 challenging because, absolutely, that's the role of 22 a Minister: to challenge. 23 And, you know, others will judge, you know, whether 24 I was right or wrong. I just try to act in the best -- 25 the best that I could at that time. 174 1 Q. Do you agree that ministers in the future need to look 2 at the question, which is: is this actual legal advice? 3 Is this about the law saying something that can or can't 4 be done because that's a legal principle, or is this 5 other types of advice, which isn't necessarily from 6 anything other than coming from lawyers? 7 A. I agree, you know, I -- 8 MR STEIN: No further questions. Thank you, Ms Tolhurst. 9 SIR WYN WILLIAMS: All right. Thank you. 10 Just one follow-up on that before Ms Patrick. 11 It seems to me that your core complaint when you 12 talk about what frustrated you was your inability, in 13 effect, to direct the Post Office what to do in certain 14 circumstances. So I take it you want me to look at 15 powers of direction, if any, which currently exist and 16 whether they should be greater? 17 A. Thank you, Sir Wyn, yes -- 18 SIR WYN WILLIAMS: I've got the point. That's fine. 19 Yes, Ms Patrick? 20 Questioned by MS PATRICK 21 MS PATRICK: Thank you, sir. 22 Ms Tolhurst, my name is Angela Patrick, I represent 23 a number of subpostmasters who have been convicted but 24 since have had their convictions overturned. You see 25 Mrs Hamilton to my right and Ms Hall and Mrs Henderson 175 1 to my right. 2 I have two matters and I think I'll only take you to 3 one document, if I need to. The first I think I can 4 take quite quickly. Ms Price has asked you questions 5 about your concern that you had around the time of the 6 recusal, so spring 2019, that Mr Cooper had "gone 7 native", and that you're having problems getting 8 information through UKGI. She has also asked you 9 a general question about cabinet collective 10 responsibility. 11 Did you raise your concerns about Mr Cooper having 12 gone native or your concerns about blockages of 13 information coming through UKGI with any more senior 14 ministerial colleagues: your Secretary of State or 15 anybody at the Treasury? 16 A. So, yes, and absolutely, that's why we ended up with the 17 paper which gave us a number of options to -- on how 18 potentially we could move forward. One of the things 19 that I think I referred to in my statement is that, you 20 know, I was concerned about -- I was concerned about 21 what was happening at the Board for the shareholder 22 representative, and I was very annoyed about the 23 recusal. And, you know, my initial reaction was, you 24 know -- I know we didn't end up in that place but my 25 initial reaction was I wanted to change the Board and 176 1 I wanted -- and I did -- I wanted advice on how I could 2 remove the Chair. 3 So -- and do you know, if I look back, if I had 4 taken that decision or enforced -- or got that decision 5 made, what would have, you know, would that have 6 affected things? I don't know because I don't -- we 7 don't know, in hindsight. But that's -- I do believe 8 I raised concerns, and hence whilst I also mentioned in 9 my statement that I didn't want informal meetings, 10 I wanted it on record, you know, the information that 11 I was being given, because it wasn't until -- sorry. 12 Q. Can I stop you there. We've got your witness statement. 13 I just want to say you did escalate it. 14 A. Yeah. 15 Q. Now, we're going to hear from other ministers. 16 A. Mm-hm. 17 Q. That kind of communication, where you have concerns 18 about what briefings are happening, how they are, 19 whether the role is being performed properly, that's 20 something that any minister can do, they can share 21 concerns with other ministerial colleagues, they can 22 raise it, they can escalate it if they've got particular 23 concerns at any time. That's fair? 24 A. Mm-hm, yeah. 25 Q. Secondly, I just want to return, again in that general 177 1 sense, to what you say about the powers and 2 responsibilities of Government in respect of POL and 3 I won't take you to a document I was going to take you 4 to, just to save time. I will give the reference, 5 POL00259978. 6 It will have been very familiar to you. It's a long 7 also in list of PQs with your name on, where you 8 state -- most of them have answers which start with "POL 9 is wholly owned ... but POL is an independent commercial 10 business". That's a line that would have been very 11 familiar to you -- 12 A. Mm-hm. 13 Q. -- from the start of your role and it's reflected in the 14 evidence you've given to the Inquiry today about your 15 concerns about the arm's length role of the Post Office 16 and the limitations and responsibilities and the ability 17 of Government to direct. 18 Again, you've said about operational issues with 19 Ms Price and you've raised that with Mr Stein. 20 I just want to go back to taking hindsight out of 21 the picture, what you and other ministers would have 22 known at the time you were in post. You'd have known 23 that the Post Office was wholly publicly owned. 24 A. Correct. 25 Q. You, of course, have addressed the fact that the 178 1 Government would have had that nuclear option that all 2 shareholders have. They could have got rid of the 3 Chair, they could have got rid of the Board at any time. 4 A. Mm. 5 Q. You're nodding, I think you have to say yes. 6 A. Sorry, apologies yes, yes, yes. 7 Q. You've said repeatedly, like others have, that you would 8 have been deeply conscious about the important role the 9 Post Office played in the community? 10 A. Mm-hm. 11 Q. You would have known that the Post Office was a business 12 with public commitments that had to be discharged -- 13 A. Yes. 14 Q. -- commitments that the Government was very conscious 15 of. Now, you knew the Government had passed the 2011 16 Act and was working with a goal towards mutualisation 17 for the Post Office. You would have known that in your 18 role, wouldn't you? 19 A. Yes. 20 Q. Now, the Inquiry has seen repeated correspondence, 21 appointing repeated Post Office chairs, where ministers 22 write to those chairs and set the goals they see for the 23 business? 24 A. Mm-hm, yes. 25 Q. You would have known as Minister that Government was 179 1 essentially setting strategic goals for the business 2 that they were essentially working through the Chair to 3 achieve? 4 A. Yes. 5 Q. You knew that the Post Office continued to lie on 6 a really important public subsidy -- 7 A. Yes. 8 Q. -- and one of the goals was to reduce that public 9 subsidy? 10 A. Yes. 11 Q. This was no ordinary, independent commercial business, 12 was it? 13 A. No. 14 Q. No. So, was repeating that line, as Government often 15 did, including in PQs, really just a convenient way to 16 avoid the true picture, that the Government didn't want 17 to face up to the fact that the Post Office was 18 a state-owned body which had, or at least potentially 19 may have, unlawfully prosecuted hundreds of innocent men 20 and women for years? 21 A. So I -- so my response would be that I don't believe 22 that, you know, I definitely wasn't using it as 23 a convenient excuse not to get involved. 24 I fundamentally believed that I was unable to and hence 25 why I made the comment about what I believe that 180 1 really -- you know, if we're in a -- if the Government 2 are ever in a position where they own a -- you know, it 3 doesn't work, you know. Government can't be 4 a shareholder of an organisation without having fully 5 operational responsibility, as far as I'm concerned. 6 Q. Can I stop you there, I'm very conscious about time and 7 I just want to go back to that notion of the nuclear 8 option: that the only option the Government had was that 9 nuclear option to get rid of the Chair. That nuclear 10 option, whether its owned by the Government or any other 11 majority shareholder, that nuclear option gives you 12 leverage, doesn't it? 13 A. Yeah. 14 Q. You had serious concerns about the direction of 15 litigation, you had serious concerns about Tom Cooper 16 and about UKGI, and you say you did something about it. 17 Now, we'll look at that. But if you or any other 18 minister really wanted to do something about what the 19 Post Office was doing, whether in the litigation or in 20 its other conduct, you really did have options short of 21 the nuclear, didn't you? 22 A. Yes, I mean, it's highlighted. I've -- I have 23 absolutely been clear about that and, you know, I -- if 24 I had, you know, I don't -- I said in -- earlier on in 25 evidence that, you know, I don't know why -- I, you 181 1 know, I know there wasn't an appetite for it. However, 2 actually, I was someone who, you know, I -- you know, 3 I would have -- I would have fronted -- even if it had 4 been the wrong decision, I would have fronted that out. 5 And, you know, that's one of the -- I don't know what 6 would have happened if I had taken that decision and if 7 it had -- hadn't have sort of been discouraged not to. 8 I don't know if it would have had any -- an impact for 9 the postmasters and subsequent -- you know, subsequent 10 operations. 11 And that's something, you know, I can't answer. 12 I can only explain what I was thinking and where I was 13 at the time. But you're right. But, I mean, I can only 14 speak for myself. I can't speak for other ministers, 15 you know. I -- for me, it was definitely not an -- it 16 wasn't an excuse not to get involved because if I had -- 17 if I felt that I had justification and evidence to back 18 up a decision, I would have taken it. 19 Q. Just to bring it back to the very simple question, you 20 focused, in what you've said to Mr Stein and to the 21 Chair and in your witness statement, about the 22 Government being limited to that nuclear option. It 23 wasn't the only option Government had was it; there was 24 leverage? 25 A. Well, I think I've sort to explained that, you know, it 182 1 was leverage, you know, I asked questions. 2 Q. You did. 3 A. But it wasn't enough. 4 MS PATRICK: Thank you. That's all the questions I have, 5 Ms Tolhurst. 6 SIR WYN WILLIAMS: Ms Tolhurst, just so that I'm clear about 7 this, the so-called nuclear option, was that something 8 which you personally could have done, if you'd thought 9 that to be the appropriate course of action, or was that 10 for the Secretary of State? 11 A. Well, I think the -- it would have been for -- it would 12 have been under a direction of the Secretary of State, 13 Sir Wyn. 14 SIR WYN WILLIAMS: Ultimately, he or she would have had to 15 agree with that option? 16 A. Yeah, absolutely, and they were the options that were 17 presented to us. I mean, it's my characterisation of 18 nuclear option. 19 SIR WYN WILLIAMS: No, no, I follow that -- 20 A. That's my words -- 21 SIR WYN WILLIAMS: -- I just used the phrase to identify the 22 process. 23 A. Yes, sorry, it was -- 24 SIR WYN WILLIAMS: All right. Thank you very much. 25 Is that it, Ms Price? 183 1 MS PRICE: It is, sir. 2 SIR WYN WILLIAMS: Well, thank you, Ms Tolhurst, for making 3 a very detailed witness statement and for answering 4 a good many questions this afternoon. I'm very grateful 5 to you on behalf of the Inquiry. 6 THE WITNESS: Thank you. 7 SIR WYN WILLIAMS: So we'll resume again at 9.45, I take it, 8 tomorrow, with Mr McFadden; is that right? 9 MS PRICE: That's right, sir. 10 SIR WYN WILLIAMS: All right. Fine. 11 MS PRICE: Thank you. 12 (4.35 pm) 13 (The hearing adjourned until 9.45 am the following day) 14 15 16 17 18 19 20 21 22 23 24 25 184 I N D E X KENNETH MCCALL (sworn) ...........................1 Questioned by MR STEVENS .........................1 Questioned by MS PATRICK ........................77 THE RIGHT HONOURABLE KELLY JANE .................86 TOLHURST (sworn) Questioned by MS PRICE ..........................86 Questioned by MR STEIN .........................162 Questioned by MS PATRICK .......................175 185