1 Tuesday, 30 July 2024 2 (10.00 am) 3 SIR WYN WILLIAMS: Morning, everyone. 4 Mr Blake? 5 MR BLAKE: Morning, sir. This morning we're going to hear 6 from Ms Storey. 7 SUSANNAH JEMIMA STOREY (affirmed) 8 Questioned by MR BLAKE 9 MR BLAKE: Thank you very much. Can you give your full name 10 please. 11 A. Susannah Jemima story. 12 Q. Ms Storey, you should have in front of you a witness 13 statement dated 23 May this year? 14 A. Yes. 15 Q. Can I ask you to turn to the final substantive page, 16 that's page 102. Can you confirm that that is your 17 signature? 18 A. That is my signature. 19 Q. Thank you, is that statement true to the best of your 20 knowledge and belief? 21 A. It is, although, as we discussed, there are some small 22 changes I wanted to make. 23 Q. Thank you very much. Perhaps we could bring the 24 statement on to screen. It's WITN00920100. 25 SIR WYN WILLIAMS: Can everyone hear because I'm actually 1 1 slightly struggling, whether it's just me, I don't know. 2 But is the system working properly? Fine it's just me, 3 obviously. 4 MR BLAKE: Perhaps if you could sit slightly further 5 forward, it would assist. 6 FROM THE FLOOR: It's not just you. 7 SIR WYN WILLIAMS: Right. Good. 8 THE WITNESS: Let me know, is that better? Maybe I was 9 a bit too far from the microphone, my apologies. 10 MR BLAKE: There are a few changes you would like to make. 11 Can we start with the first. Which paragraph? 12 A. Paragraph 21. 13 Q. Paragraph 21 is page 10. 14 A. Page 10, yes. In the sentence "I do not recall any 15 significant concerns", which is about halfway down that 16 paragraph, two lines down, it says, "My tenure as 17 Director" I would like to insert "RMPS" before 18 "Director" to make clear I wasn't a director of the Post 19 Office at that time. That was a title in my Civil 20 Service role. 21 Q. Thank you very much. 22 A. The next one is paragraph 110, page 49. In the first 23 line, I would like to delete "single issue". 24 Q. Thank you. 25 A. Then over the page in paragraph 111, I'd like to insert 2 1 "substantial" after the "only" so it would read "the 2 only substantial item of business". 3 Q. Thank you very much. 4 A. And, sorry, lastly, paragraph 201 I realised was missing 5 a word. 6 Q. That's page 90. 7 A. Page 90, yes. In the final sentence of the paragraph, 8 it says, "I obtained significant relating". I think it 9 needs to read "I obtained significant information 10 relating". 11 Q. Thank you. Subject to those changes, is the statement 12 true to the best of your knowledge and belief? 13 A. It is. 14 Q. Thank you very much. That witness statement will be 15 uploaded onto the Inquiry's website in due course. 16 Ms Storey, you're currently Permanent Secretary of 17 the Department for Culture, Media and Sport; is that 18 correct? 19 A. That is correct. 20 Q. You started life as an investment banker between 1995 21 and 2006? 22 A. That's right. 23 Q. Relevant for today's purpose, you worked at ShEx between 24 2006 and 2013, initially on a secondment; is that 25 correct? 3 1 A. That's correct. 2 Q. Between March 2011 and March 2012, you were Director of 3 ShEx's Royal Mail and Postal Services team -- 4 A. Yes. 5 Q. -- and I think that's the correction you just made in 6 that paragraph? 7 A. (The witness nodded) 8 Q. You were then the first Shareholder Non-Executive of the 9 Post Office between April 2012 and March 2014; is that 10 correct? 11 A. That is correct. 12 Q. That was upon separation from Royal Mail Group? 13 A. Yes. 14 Q. Can you assist us with how you were selected for that 15 role as Non-Executive Director? 16 A. So the Shareholder Executive looked after a number of 17 different government-owned entities and, in some 18 instances, there would be a Board member from the 19 relevant team. I was most recently, as you were just 20 saying, from March 2011 the Director of the Royal Mail 21 and Postal Services team, and once the Government 22 decided it wanted to have a representative on the Board 23 of the Post Office on separation, it was the working 24 assumption, I think, that, as the Director, that would 25 be me. 4 1 I've set out in my statement some of the further 2 background in case helpful, so I obviously knew the 3 Postal Services space well, having worked for a number 4 of years on the Royal Mail side as a civil servant and 5 I'd also experience working with boards when I was 6 an investment banker. 7 Q. Did you have any prior experience of being on a board? 8 A. No, I hadn't been on a board before. 9 Q. Were you provided with any training before you took up 10 the post, specific to that role of Non-Executive 11 Director? 12 A. No. 13 Q. I want to ask you about your location and also the 14 support that was provided to you during your time as 15 Non-Executive Director. You became a Non-Executive 16 Director when on maternity leave, which was between 17 March 2012 and March 2013. When you came back, you were 18 based at the Department for Energy and Climate Change, 19 at that time an entirely separate department; is that 20 correct? 21 A. That's correct. So when -- could I give a couple of 22 moments for context is that's okay? 23 Q. Absolutely. 24 A. So during 2011 the Government had a hugely ambitious 25 agenda for these two companies, which including the 5 1 separation, the Postal Services Act 2011 was passed to 2 enable all of that, we were tying to help stabilise the 3 pension scheme, change the regulation, and so on. And 4 so I -- during the course of that process, as I was just 5 saying, it became clear that we wanted a shareholder 6 representative. 7 I was pregnant during that year and, by the time 8 I started on the Board, which was the April Board 9 meeting, 2012, I had started my maternity leave, which 10 began on 14 March 2012. When you go on maternity leave, 11 you don't generally know how long you're going to go 12 for, and my expectation at that time was that I would 13 have come back to the Shareholder Executive but, during 14 the course of the year, I ended up getting a different 15 role at the Department of Energy and Climate Change. 16 So I just want to be clear, for the record, I don't 17 think it was envisaged in 2012 that this was exactly how 18 it would play out. In the end, it was how it played 19 out. 20 Q. Absolutely. So throughout that period, from really the 21 beginning to the end, you weren't physically present at 22 what we know as ShEx; is that correct? 23 A. My last day in the office was 14 March 2012, and I was 24 never sitting at desks with those people, I was never in 25 that team again. And as I've said in my statement, 6 1 I also was required by the Department to hand back all 2 of my IT, so my phone and my computer, which is why, in 3 a lot of the disclosed documents, you'll see me using 4 a personal email address. 5 Q. Thank you. The role itself wasn't a paid role or 6 separately paid role in any way; is that correct? 7 A. No, I received no remuneration for being the shareholder 8 representative Board member, although of course I was 9 getting a salary and, during maternity leave, you're 10 paid for some months. And then when I was at the 11 Department of Energy and Climate Change from March 2013, 12 I was being paid a salary by them to do that job. So in 13 a sense, as a civil servant, I was getting remuneration. 14 There was no additional remuneration, nor would I have 15 expected it. 16 Q. When you were at the Department for Energy and Climate 17 Change, you were managing an entirely different 18 portfolio? 19 A. That's right. I was Strategy Director there, thinking 20 about the Climate Change Act and all of the things we 21 needed to do to decarbonise the country. 22 Q. Were those logistical issues discussed with you before 23 you took on the position? 24 A. Not particularly. I mean, I think, as I was saying, the 25 sort of set of things we were doing through 2011 to 7 1 March 2012 -- I mean, in the course of my career, 2 I think that's one of the single-most complex set of 3 transactions that I've ever done, and I had a career as 4 an investment banker doing transactions, so the critical 5 path to March 2012 was highly complex and I don't think 6 we were getting into the weeds of my personal logistics 7 at that time. 8 Q. Not just personal logistics but in fact, actually, 9 physical location and relationship with the Shareholder 10 Executive team, for example? 11 A. The relationship with the Shareholder Executive team we 12 did discuss because, obviously, before I joined the 13 Board, I was getting up to speed on aspects of the Post 14 Office with the Post Office team within the shareholder 15 team. So we absolutely discussed that. Sorry, I had 16 thought you meant physical logistics. 17 Q. In terms of the role of Non-Executive Director, it has 18 been described by some witnesses as having a dual 19 function: one of those functions being exercising 20 governance over the assets, so the normal Non-Executive 21 Director role; but also communicating the day-to-day 22 Government perspective. I think that's how Patrick 23 O'Sullivan has described it. Is that a description that 24 you would agree with? 25 A. I didn't particularly think of it as an asset. My view 8 1 of the Non-Executive Director role is as set out in the 2 Companies Act 2006. As a shareholder representative, 3 I had some additional things I needed to do, which the 4 others didn't need to do. That was the way I thought 5 about it. 6 Q. Was that additional role communicating the day-to-day 7 Government perspective or some other witnesses have said 8 that it involved communicating the Post Office's 9 perspective to Government, so the other way round. 10 Which, if either of those, did you see it as? 11 A. My view was that the Secretary of State, in his letter 12 to the Chairman in January 2012, set out very clearly 13 what he thought the objectives for the Post Office were, 14 on separation, and I thought it was my role to make 15 sure, on top of the ordinary Non-Executive Director 16 responsibilities, that whenever the appropriate moment 17 arose at the Board table, you know, I could help make 18 sure those things were happening. 19 And that was my real priority when I went on to that 20 Board: to really focus on areas like the financial 21 stability, the mutualisation, the pension separation and 22 the sustainability of that company because, as I think 23 many people have said, at the time that was far from 24 certain. 25 Q. So you have the letter from the Secretary of State that 9 1 sets out an annual objective? 2 A. The letter to the Chairman. 3 Q. The letter to the Chairman. 4 A. Yeah. 5 Q. Outside of pursuing that, did you see your role as in 6 any way involving liaison with the Civil Service, with 7 ShEx, with Government? 8 A. Absolutely, absolutely, yes. So I saw my role at the 9 Board table in the way I've just described it, and 10 perhaps we'll come on to it, but I was always clear 11 which hat I was wearing, in terms of being the 12 shareholder representative or the Post Office 13 Non-Executive Director. But, in addition, there'd been 14 quite a complicated history with these companies with 15 the Government and I think there was a strong sense that 16 we wanted a reset at separation. 17 So part of what I was there for was to get in that 18 room and understand what they were actually doing. We'd 19 found it very difficult to get information from them 20 before, and so, as you'll see in my witness statement 21 and from many of the disclosed documents, a lot of the 22 time I was then, before and after Board meetings, 23 liaising with the shareholder team to say, "Well this is 24 my take on what happened, what's your sense of where 25 things are?" So it was a really, really strong two-way 10 1 dialogue all the way through. 2 Q. Paragraph 50 of your witness statement, you say: 3 "I was also conscious of the fact that my position 4 as a newly appointed Shareholder NED was a novel one, 5 and there was some uncertainty as to the nature and 6 extent of my remit at the outset." 7 Can you assist us with what you mean by that? 8 A. Yes, so as I said, there hadn't been a Shareholder 9 Non-Executive Director, shareholder representative on 10 the Board of either of these companies and, from April 11 2012 when they were separated, you had two sister 12 companies, the Royal Mail Group and the Post Office: one 13 had a shareholder representative and one didn't. There 14 was no blueprint for that, these companies had never had 15 a shareholder representative before, so what I was 16 trying to do was kind of get my foot in the door, start 17 this process but, also, critically, really critically, 18 build trust with that Board of Directors. So they were 19 all new, relatively new, at the non-executive level. 20 I didn't know any of them. I felt they didn't trust 21 me, so part of what I was doing at that May 2012 Board 22 meeting was explaining my role as a Shareholder 23 Non-Executive Director. 24 Q. So we'll get to the May Board meeting but I'm going to 25 take you back in time and the first document I'd like to 11 1 take you to is actually a 2010 document. That is 2 UKGI00000062. This is a ministerial submission from 3 Mike Whitehead. It's before your time. Was Mike 4 Whitehead somebody who you worked with? 5 A. Yes, absolutely. He was in the Shareholder Post Office 6 Team for a long time. 7 Q. The purpose is set out there. It's a: 8 "... meeting with Alan Bates on Thursday, 7 October 9 at his request to discuss the Justice for Subpostmasters 10 claims that endemic flaws in [the Post Office] Horizon 11 system have resulted in a number of subpostmasters 12 having their contracts wrongly terminated by [the Post 13 Office] and in many cases prosecuted for false 14 accounting." 15 Were these kinds of concerns matters that you were 16 aware of when you became Non-Executive Director, or 17 prior to becoming Non-Executive Director? 18 A. So in October 2010, I was in the Royal Mail team, and 19 I wasn't doing anything to do with Post Office. So I'm 20 not sure I would have known about this at that time. By 21 the time I became a Director in April 2012, I did have 22 a kind of background awareness, I would call it, and 23 I had been, for example, copied, in later 2011, on 24 a document in relation to the BBC's Inside Out 25 programme. But I don't recall -- if you had asked me in 12 1 April 2012, "What are the top ten issues on your mind?", 2 unfortunately, I don't think this would have been one of 3 them at the time. 4 Q. Broadly speaking, you were aware of the issues raised by 5 the Justice for Subpostmasters Alliance? 6 A. Not in October 2010, I don't recall that, but yes, 7 broadly speaking, broadly speaking. 8 Q. By April 2012? 9 A. I'm not sure if I would have, at the time, have thought 10 of it as Sir Alan Bates and the JFSA, per se. I think 11 I would have had a general awareness. 12 Q. Thank you could we turn now to UKGI00048174. This is 13 a document that's been prepared by UKGI, it's a "looking 14 back" exercise. I'm just going to read to you a few 15 passages. The "Purpose" is described there at 1.1, it 16 says: 17 "The purpose of this document is to provide 18 a preliminary view of the key facts relating to the 19 involvement of the Shareholder Executive and UK 20 Government Investments Limited in matters relating to 21 the Post Office Limited's Horizon IT system, and in 22 particular the events leading to the commencement of the 23 subpostmasters' litigation which was settled in 24 December 2019." 25 There's a passage, it's at page 7, that addresses 13 1 your role, paragraph 2.16. It describes it as follows: 2 "In April 2012, the first Shareholder [Non-Executive 3 Director], Susannah Storey, was appointed to the [Post 4 Office] Board (and in contrast to the position today, 5 was not on the Audit and Risk or Remuneration 6 Committees)." 7 Is that right? 8 A. That's incorrect. 9 Q. Because I think you were I think on the Audit and Risk 10 Committee initially? 11 A. I was, I had never seen this document until a couple of 12 weeks ago. 13 Q. It then says: 14 "Unlike the subsequent Shareholder [Non-Executives] 15 (from 2014 onwards), Susannah was, by design, not part 16 of the Shareholder Team ..." 17 Can you assist us with that? Is that correct, that 18 there was an intentional design that you weren't part of 19 the Shareholder Team? 20 A. I'm not sure I would phrase it like that but I'm 21 assuming it's getting at the point that you were making 22 earlier: that, structurally, I was separate, initially 23 because I was on maternity leave and then because I was 24 undertaking the role from a different Department, and 25 when I did -- when I went on the Board from April 2012, 14 1 the whole Shareholder Team was refilled. So my role was 2 backfilled by Roger Lowe and the team beneath were 3 there. So in a way, I was kind of bonus person on that 4 Board. The team existed as a whole without me. 5 So the essence, I think, of what I was saying, 6 I would agree with. I don't particularly recall it 7 being deliberately designed that way. 8 Q. So the suggestion here, as we'll read on, is not that it 9 was anything personal to you and your circumstances but, 10 in fact, they intentionally wanted somebody who wasn't 11 part of the Shareholder Team. It continues there: 12 "... at the time of the appointment in 2012, the 13 Shareholder Team was in the process of negotiating the 14 Funding Agreement with [Post Office] and we understand 15 that there was, therefore, resistance from [the Post 16 Office] to having a member of the Shareholder Team also 17 sitting on the [Post Office] Board (where [the Post 18 Office's] approach to those negotiations would be 19 discussed). This meant that the Shareholder 20 [Non-Executive Director], while a representative of ShEx 21 and performing a key role in terms of bringing 22 Government experience and perspective to the [Post 23 Office] Board, was purposely detached from the 24 Shareholder Team; a clear illustration of this being the 25 fact that Board papers received by the Shareholder 15 1 [Non-Executive Director] were not shared with the 2 Shareholder Team." 3 We will come on to look at what was and wasn't 4 shared but certainly from this document -- and you can 5 assist us whether that's right or wrong -- it seems to 6 suggest that, in fact, the very role was designed so 7 that it was separate from those people who were, for 8 example, carrying out funding negotiations? 9 A. There was a real nervousness on the part of the company 10 and the Chair, which I think you're saying we're going 11 to come on to, about having a Shareholder Non-Executive 12 Director and the kind of concern area, in particular, 13 was the funding because, whilst the Government had put 14 in £1.34 billion in 2010, plus the debt agreement, at 15 the time I arrived on the Board, the Post Office was 16 trying to agree a new funding agreement with the 17 shareholder. 18 So that certainly is true that there was concern 19 about that and the kind of conflict of interest concern 20 was, to my recollection, one of the reasons why I didn't 21 share the Board papers. 22 So I think paragraph 2.16 here is broadly correct. 23 Of course, when it concerns you, you often want to make 24 fine detail changes. 25 Q. Who did the Shareholder Team report to within the 16 1 Department? 2 A. Within the Department, the Shareholder Team was led at 3 Director, so after I'd gone on maternity leave, that was 4 Roger Lowe, he reported in to Mark Russell, the Director 5 General -- well, Stephen Lovegrove, actually, in 2012 6 and then Mark Russell, and they reported -- that role 7 reported into the Permanent Secretary of the Department 8 for -- what's now the Department for Business, it's had 9 a number of names. 10 Q. How about yourself? 11 A. I reported into the DG of ShEx, so Stephen Lovegrove and 12 then Mark Russell in terms of this role. Obviously, 13 when I was at the Energy and Climate Change Department 14 I had a separate line for my day job. 15 Q. So you had two lines of reporting? 16 A. Absolutely. 17 Q. Can I take you to paragraph 54 of your witness 18 statement, please. Perhaps we could bring it up on to 19 screen it's WITN00920100., it's paragraph 54. Just 20 whilst we wait for that to come up, did the reporting 21 lines change when Richard Callard took over from you as 22 Non-Executive Director? 23 A. Richard Callard was -- my recollection is -- obviously 24 I wasn't in the team, but my recollection is that 25 Richard replaced Will Gibson, so he would have been 17 1 reporting into Anthony Odgers, who was then the Director 2 of the Royal Mail and Postal Services team, and then 3 into Mark Russell because that was later in 2013. 4 Q. Thank you. Paragraph 54, it says as follows: 5 "As I was not part of the Shareholder Team directly 6 and was not involved in the day-to-day interaction 7 between Shareholder Team and ministers in this period, 8 I did not routinely take part in the drafting of 9 submissions to ministers on [Post Office] related issues 10 or their sign-off; nor did I assist with the preparation 11 of ministerial statements or answers to Parliamentary 12 questions." 13 We will see here a number of ministerial 14 submissions. Am I right in saying that they weren't 15 shared with you? 16 A. No, my recollection is I wasn't on the IT system. Had 17 I been on the IT system, I'm sure I would have been cc'd 18 on a lot of things. But because I was separate outside 19 the building, outside the office, I didn't routinely see 20 any of these interactions with ministers, nor was I part 21 of them. 22 Q. So, in your view, it was intended that you would see 23 them but, as it happened, due to the technical issues 24 and your location, et cetera, it didn't happen or -- 25 A. No, I wouldn't put it like that. I think that once it 18 1 was clear that I would be taking this role on my 2 maternity leave, then I was in a separate system, as it 3 were, and my role was backfilled. So that was the team 4 in the Shareholder Executive advising ministers, and 5 I was in a separate swim lane, if I could put it like 6 that. 7 Q. I want to move on to your initial period as 8 Non-Executive Director, and could we please turn to 9 POL00046944. This is a letter you didn't see at the 10 time. Again, this is going back in time to August 2011, 11 but it may assist in matters that we will be shortly 12 turning to. This is one of the letters from Shoosmiths 13 on behalf of Julian Wilson that was sent to the Post 14 Office. If we scroll down, we can see the way that his 15 claim has been described, about halfway down that large 16 paragraph, it says: 17 "However, like other [subpostmasters] he found the 18 Horizon system extremely difficult in operation. He had 19 no effective way of monitoring or correcting 20 transactions that were input ed incorrectly. He 21 observed regularly discrepancies in the reports which he 22 considered were caused by the system itself. He kept 23 records of the discrepancies. He noted a number of 24 occasions when the extent of discrepancies would 25 actually change whilst the store was closed." 19 1 It follows on to refer to a concern about remote 2 access. 3 If we scroll over the page, please, we see there 4 that they say that it is denied, at (c), that the Post 5 Office had grounds to prosecute Mr Wilson. 6 It goes on to describe various breaches of 7 obligations, if we scroll over the page, please, the 8 letter explains, over the page again. So there: 9 "The Horizon system suffers with inherent defects 10 and/or an unfair system of operation", and it goes on to 11 set that out. 12 I'm drawing that to your attention because we'll 13 move on shortly to the way the Shoosmiths litigation was 14 brought to the attention of the Board. Can we turn 15 first to your first Board meeting, and that is 16 POL00021506. Your first Board meeting was 18 April 17 2012. We see there that you are listed. At that time 18 there are only two Non-Executive Directors; is that 19 correct? 20 A. That's not correct. There was also Neil McCausland, 21 who'd already joined but Virginia and I were, in effect, 22 getting appointed at roughly the same time. So, by 23 then, you had three Non-Executive Directors and 24 a Non-Executive Chairman. 25 Q. Thank you very much. If we scroll down, we can see 20 1 there at POLB12/44 the Chairman welcomed Virginia Holmes 2 and you to the Board. 3 If we scroll over the page, please, to page 4, 4 halfway down page 4, it there notes your appointment. 5 Slightly up, sorry. Thank you very much. 6 Then over the page, we can see a number of noting 7 papers and one of them is the Significant Litigation 8 Report. 9 A. Yes. 10 Q. Does anything stand out for you in terms of this initial 11 meeting? I mean, it looks from the papers to be 12 relatively brief, quite straightforward; is that a fair 13 summary or is it more complicated? 14 A. I've got quite clear memories of this meeting because it 15 was my first one. So we were obviously in the Post 16 Office offices. It was the first meeting after 17 separation, which was a fairly significant moment in the 18 company's history. In terms of the Board itself, no, 19 I think it was orderly. Obviously, I was both trying to 20 contribute but also trying to navigate the environment. 21 I wanted to see how Alice chaired it. I'd never met 22 these other Non-Executive Directors before, I wanted to 23 see how the Executive performed. So no, to my 24 recollection, it was fairly orderly. 25 Q. Let's have a look at that Significant Litigation Report. 21 1 That can be found at UKGI00018251. 2 This is the first Significant Litigation Report that 3 you will have received. There's a section there for 4 claims over £500,000 or those of a sensitive nature. 5 It's here that it addresses the Shoosmiths claim. It 6 says: 7 "The Post Office has received notification of 8 a total of five claims from former subpostmasters. 9 "Each alleges wrongful termination of contract 10 (based on (a) alleged defects in Post Office's internal 11 processes and (b) alleged defects with Horizon). Each 12 are seeking damages in the sum of circa £150,000. 13 "Four of the five claims remain at the pre-action 14 stage ..." 15 A fifth has been struck the out. It says: 16 "Shoosmiths assert that they have consulted on 17 a further 85 cases, which are likely to raise similar 18 legal issues." 19 We saw that was a noting paper. Was there any 20 discussion whatsoever about that at that stage? 21 A. I don't recall any discussion of this paper at that 22 meeting and just, if it's helpful to give colour, Board 23 papers in those days were hard copy so we would have 24 a lever arch file with all of them in and they'd follow 25 the chronological order of the meeting and these noting 22 1 papers were right at the back. We obviously would have 2 read them all before but, to my memory at this meeting, 3 this paper was in amongst some others around health and 4 safety at work, those kinds of issues. I don't recall 5 it being discussed at that meeting, I'm sorry to say. 6 Q. Having noted that it was at the back, is that -- are we 7 to understand that it was quite low down the list of 8 priorities? 9 A. I think noting papers by their nature come after the 10 papers that are for discussion. 11 Q. Being at the back of the noting papers, is there 12 anything we can read into that or is that just how it 13 occurred? 14 A. I -- I mean, I didn't mean it like that per se. I think 15 the Chairman and the Company Secretary would have 16 ordered the papers. I'm simply saying that was how 17 I received it. 18 Q. Thank you. Can we please turn to POL000 -- 19 SIR WYN WILLIAMS: Before we do, is that it, one page, or 20 can I just see the whole document? 21 MR BLAKE: Absolutely. If we scroll over the page, there is 22 one other entry that is redacted and, if we scroll over, 23 we can see there's nothing else. 24 SIR WYN WILLIAMS: Right. Okay, thank you. Yeah. 25 MR BLAKE: If we turn to POL00021507, this is a 23 May 2012 23 1 Board meeting. By now, Alasdair Marnoch is actually 2 named there as present and I know that you said that at 3 the earlier meeting, he had already been appointed, 4 or -- 5 A. I was referring to Neil McCausland. 6 Q. Ah, sorry. 7 A. Yeah, who actually joined, I think in Q4-2011, alongside 8 Alice. I think perhaps you didn't pick him up because 9 he's down as Senior Independent Director but, obviously, 10 he's a Non-Executive Director. 11 Q. Yes, well, now we have another Non-Executive Director, 12 Alasdair Marnoch. If we scroll down, we can see the 13 Chairman welcomed Alasdair Marnoch to the Board as 14 Non-Executive Director and the Chairman of the Audit, 15 Risk and Compliance Subcommittee. 16 Could we please turn to page 4, and I think this is 17 the section that you referred to earlier about concerns 18 about the role of the ShEx Non-Executive Director. It 19 says there: 20 "Susannah Storey outlined the reasons for 21 representation of ShEx on the Board of [the Post 22 Office]. She confirmed that ShEx representatives would 23 have exactly the same legal responsibilities as other 24 directors and, like all members of the Board, would be 25 acting to promote the success of [the Post Office]. She 24 1 clarified that she would not be sharing the Board papers 2 with colleagues in ShEx." 3 Whose decision was that, not to share Board papers; 4 was that yours or somebody else's? 5 A. I covered this in my witness statement and I tried to be 6 as fulsome there as I could recollect. The documents 7 unfortunately don't really help me with exactly when 8 this was discussed and how it was decided but my sort of 9 reflection now, I guess, is that, given the nervousness 10 of the Chairman about having a shareholder 11 representative at all and about the conflict of interest 12 around the funding review, I would have been mindful of 13 that, and I think I was -- and again, I'm overlaying 14 this now, I can't recall exactly how it happened but 15 I think I would have been very keen to ensure that we 16 didn't end up with a sort of two-tier Board. 17 So my worry was that, because they were so nervous 18 about documents and interfaces with the shareholder, the 19 worst of all worlds for this new April 2012 moment would 20 have been if the Board had sort of had two rooms, one 21 where they discussed all the contentious things and then 22 a very vanilla Board that I was, such that they felt the 23 papers could be shared. 24 So I think it must have been an agreement between 25 Alice and I that I wouldn't share and I guess I was also 25 1 mindful of the fact, in practical terms, I wasn't quite 2 sure how I would share those hard copy papers at that 3 time. 4 Q. Thank you. You've said concerns from the Chairman. Was 5 it just Alice Perkins that had a concern about the role 6 of the Non-Executive Director representing ShEx, or were 7 there others? 8 A. There are papers noting a meeting between Alice Perkins 9 and Martin Donnelly, who was the Permanent Secretary at 10 the Department for Business in the autumn of 2011, where 11 she is reported to have set out her concerns, and, in 12 those papers, she says that one of the other 13 non-executives wouldn't serve on a Board with 14 a shareholder representative. I knew that, I knew that 15 had been reported, because there was a bit of a debate 16 with the ministers and, obviously, Vince Cable ended up 17 sending his Chairman's letters to her in January 2012 to 18 make clear that the Government would require 19 a shareholder representative. 20 But I didn't know whether those concerns were more 21 widely held or exactly who held them. I did discuss it 22 with Alice and, actually, you know, going forward in the 23 chronology, even after I'd said this, there was still 24 some serious concern that carried on for a long time. 25 In May 2012, she proposes a separate funding 26 1 conversation of a subcommittee of the Board that 2 I wouldn't be on, and I pushed back on that. In 3 November 2012, she expressed discontent that I was 4 talking to Will Gibson about what was happening at the 5 Board meeting, and I note that, even when Richard 6 Callard became the shareholder representative in April 7 2014, the whole Shareholder Team, I understand, was 8 required to sign non-disclosure agreements to receive 9 those papers. 10 So there was a deep-seated concern from this company 11 about the shareholder and access to information. 12 Q. You said "she, she, she" but then you said "the 13 company". Was it in particular the Chairman or was it 14 more broadly? 15 A. I think the reason I described it like that was because 16 my conversations would have been the Chairman at the 17 time, and all the way thorough on this issue. I don't 18 think it was only her but, if you were to ask me exactly 19 who else, I don't have particular basis to say a list of 20 people. I do know from my work with the Royal Mail 21 before that there was a sort of institutional concern 22 about the shareholder on some matters. 23 Q. It then says: 24 "The Board discussed possible conflicts. Susannah 25 Storey believed that the areas of possible conflict 27 1 should be easy to anticipate, funding being a good 2 example. 3 "The Chairman thanked Susannah Storey for clarifying 4 the role of the Director appointed to represent ShEx and 5 asked members of the Board to flag up any concerns, 6 either at the time of the meeting or to her separately 7 if they were more comfortable." 8 Could we now turn to the bottom of page 7 and into 9 page 8. I think this is the first mention in the 10 substantive Board minutes, at the bottom of this page 11 and over to the next, of matters relating to the Horizon 12 issues, as we know them, and it's a section there under 13 "Any Other Business" and it says: 14 "Paula Vennells and the Chairman updated the Board 15 on the meeting with James Arbuthnot MP and Oliver Letwin 16 MP, taking them through their constituency cases which, 17 they believed, that challenged the integrity of the 18 Horizon system. The meeting had been a success and 19 James Arbuthnot had now agreed to facilitate another 20 meeting with the other MPs who also had cases in their 21 constituencies. The business had also agreed to use 22 forensic accountant to investigate the system and give 23 further comfort to those concerned about these cases." 24 This is under "Any Other Business". Was it a matter 25 of discussion, do you recall? 28 1 A. It's obviously very difficult to separate out hindsight 2 and all the other documents that I've now read and, you 3 know, all of the awful things that have happened when 4 I look back at this but I do reflect that there was 5 a conversation about this, even though it was under "Any 6 Other Business". It was quite unusual for -- well, it 7 was only the second Board, so -- but it was, I guess, 8 interesting that the Chairman and Paula were updating us 9 together. So I would have noted it, yeah, and I think 10 there was a bit of a discussion but I can't recall all 11 of the ins and outs of what were debated. 12 Q. What did you mean by "interesting"? 13 A. Interesting in relation to the Chairman and the Chief 14 Executive? 15 Q. Yes. 16 A. Well, because mostly papers were presented by Executive 17 Directors or members of the Executive Team and, in this 18 instance, it is both the Chairman and the Chief 19 Executive who had met these two MPs and then were 20 proposing the forensic accountant to be brought in to 21 investigate the system. 22 Q. Is it something that you would have expected a paper to 23 have been produced beforehand, or is it appropriate, in 24 your view, for that to have been raised under "Any Other 25 Business"? 29 1 A. Well, clearly now I would have a very strong preference 2 for a whole set of different events on this issue. 3 I think at the time, as my second Board meeting, I was 4 still navigating this company and this environment. 5 I don't particularly recall thinking that at that time. 6 But it obviously is, as we all know now, a very 7 significant thing that they were telling us about. So, 8 yes, perhaps not best placed in "Any Other Business". 9 Q. Could we please turn to UKGI00000065. This is another 10 ministerial submission, new minister, from Mr Whitehead. 11 It says as follows: 12 "Meeting with Alan Bates [so this is another meeting 13 with Mr Bates, Sir Alan now] at his request to discuss 14 the JFSA's claims its members are victims of endemic 15 flaws in Post Office's Horizon system which, over the 16 last 10 years or so have resulted in a number of 17 subpostmasters having their contracts wrongly terminated 18 by [the Post Office], with many also prosecuted for 19 false accounting." 20 Then it lists the attendees. We have Sir Alan 21 Bates, and then we have Issy Hogg: 22 "... a partner at Coomber Rich (Basingstoke based 23 solicitors who have defended a number of subpostmasters 24 who have been prosecuted by [the Post Office] in recent 25 years)." 30 1 This submission details the various background to 2 the meeting. If we scroll down, we can see the 3 penultimate paragraph: 4 "A further development of which we have become aware 5 since this meeting was fixed is that Shoosmiths, the 6 solicitors acting for a number of JFSA ex-subpostmaster 7 members in current legal action against [the Post 8 Office] submitted written evidence to the BIS Select 9 Committee purportedly in the context of Network 10 Transformation, but which is solely focused on Horizon 11 and related contractual and training issues." 12 It then says: 13 "Following previous lobbying of BERR/BIS ministers 14 over an extended period, Alan Bates met with Ed Davey in 15 autumn 2010 [and that was the letter that we saw]. This 16 was in the context of reports that Channel 4 were 17 planning to run a news item ... The JFSA had also 18 mounted a substantial lobbying campaign with MPs, 19 several of whom ... wrote ... on behalf of constituents 20 ..." 21 Then if we scroll over to page 7, we have the letter 22 from Sir Alan Bates. Were you aware of these issues at 23 this time being raised within the Department in which 24 you were formerly based? 25 A. I wouldn't routinely have known about the meeting 31 1 between whatever meeting Norman Lamb -- whatever 2 meetings he was doing nor particularly about this one. 3 But it is possible it would have come up in my 4 conversations with Will Gibson, either before and (sic) 5 after the May meeting. The reason why I say that also 6 is because this submission references, I think, the 7 Select Committee -- 8 Q. Yes. 9 A. -- that had happened in May 2012, which was also 10 referenced in those Board minutes because -- I think the 11 chairman drew to our attention because Paula herself -- 12 Paula Vennells had given evidence at that. So 13 I wouldn't routinely have known but I can't rule out the 14 fact Will would have mentioned this to me. 15 Q. We discussed earlier the issue of ministerial 16 submissions and I think it was your evidence that you 17 didn't see them -- 18 A. No. 19 Q. -- so you wouldn't have seen this particular document? 20 A. No, sorry, I more meant would I have been aware that the 21 Minister for Postal Services was meeting Sir Alan Bates, 22 possibly. I certainly wouldn't have seen this 23 submission. 24 Q. So you had side conversations with, or meetings with, 25 was it the head of the relevant team in ShEx -- 32 1 A. That's right. 2 Q. -- prior to Board meetings, regularly, occasionally? 3 A. All of the above. So I would have reached out to him 4 before and after Board meetings. If there was anything 5 ad hoc that occurred to him or occurred to me that we 6 thought was relevant to the other, we would have 7 absolutely passed it on. We had a very regular dialogue 8 and, in a way, that was the corollary of the fact that 9 I was out of the office. So it was to seek to ensure 10 that what I understood to be happening at the Board and 11 what he understood to be going on in the Government's 12 mind about Post Office we could, to the best extent 13 possible, noting the structural obstacles, we could 14 share that information. 15 Q. Were there any formal chance set up or any formal 16 processes set up for the sharing of information with 17 you? 18 A. Do you mean formally from the Shareholder Team or the 19 Government to -- 20 Q. From -- exactly, both. Either. 21 A. No, not formal per se, in the way of saying right on 22 a Monday this will happen but it was regular, the 23 conversations between us. So I didn't feel at the 24 beginning that I wasn't clear about what was going on. 25 I think it's fair to say that, over time, that did 33 1 become more difficult, not least because obviously I was 2 less current in terms of the information and obviously, 3 by this stage, the Postal Services Minister was Norman 4 Lamb, then when it changed to Jo Swinson, I didn't know 5 her and I hadn't worked with her. 6 Q. Thank you. Can we please turn to POL0002158, taking you 7 to another Board meeting, this time 4 July 2012. We can 8 see that you were present at that meeting. If we turn, 9 please, to page 6, we can see there reference to James 10 Arbuthnot and it says: 11 "The Chairman updated the Board on the meeting 12 taking place on 4 July between James Arbuthnot and 13 Second Sight, Forensic Accountants. She promised to 14 keep them informed." 15 Do you recall at this Board meeting there being any 16 significant discussion of that issue? 17 A. I recall this Board meeting because it was at the 18 Gatwick Mail Centre, which was unusual. So that was 19 one -- we used to try to go to different places to do 20 the Board meeting. I don't recall this particularly. 21 I note now, of course, that it was the Chairman updating 22 it -- us, as a Board. 23 Q. What's the significance of it being from the Chairman? 24 A. It's the point I was making that, if you look through 25 the papers, the way it would normally work would be the 34 1 Chief Executive would be telling us. So I would have, 2 I think, been reassured that this was being taken 3 seriously and the Chairman herself was engaging in the 4 meetings with Mr Arbuthnot. 5 Q. If we turn, please, over the page, we can see that 6 there's another Significant Litigation Report being 7 noted and we can see, again, that Significant Litigation 8 Report at POL00096747. Similar information to that 9 first report but now updated. I think it says: 10 "A third party fraud investigator is to be appointed 11 (following consultation with various MPs) to review up 12 to 10 cases where Horizon is alleged to have caused the 13 losses. It is anticipated that no further court action 14 will be taken, pending the outcome of that 15 investigation." 16 Then there is one other matter noted on that 17 Significant Litigation Report. Am I to take it again 18 that that was simply noted, rather than something that 19 was discussed? 20 A. That's my recollection, yes. 21 Q. Could we please turn to POL00295498. Moving now to 22 August 2012. This is a meeting between Paula Vennells 23 and Will Gibson, who was the ShEx Royal Mail Postal 24 Services team lead. There's a number of matters being 25 discussed and, over the page, please, the bottom of 35 1 page 2, there's a section on what's described as 2 "Arbuthnot activity": 3 "... arrangements have been made with James 4 Arbuthnot's office to refer through cases suggested by 5 MPs for review to him -- which would then be sent to 6 Second Sight. It is not yet clear how many cases will 7 be involved but we believe that it currently remains in 8 single figures (although it may yet grow)." 9 Do you recall having any discussions with Mr Gibson 10 or either before or after this meeting? 11 A. I don't particularly recall exactly when I would have 12 spoken to him but, as I was saying, I would have spoken 13 to him regularly. If he had meetings with Paula, that 14 might have been the sort of thing he would update me on 15 and this -- based on this note of the meeting, it 16 obviously covers a wide range of areas. I'm not quite 17 sure why the "Arbuthnot activity", as described here, is 18 under the Select Committee heading, but no. 19 So I don't particularly recall this but I think it 20 is interesting, for me reading this now, that Paula was 21 giving presumably fairly regular updates to the 22 Shareholder Team. 23 Q. Yes. But there was no formal structure for you, for 24 example, to have a prior meeting with Mr Gibson before 25 he met with Ms Vennells or afterwards? 36 1 A. No, not necessarily. I mean, the Shareholder Team would 2 be meeting the Post Office team all the time, very, very 3 regularly. Sometimes they'd be going to their offices, 4 they'd be meeting on a whole range of things. So that 5 in itself wouldn't have triggered a specific meeting but 6 the way I tried to manage my time was to meet him before 7 or after Boards, or before or after some committee or 8 other meeting I was having with the Post Office. He 9 would have been in a very regular interaction, I would 10 have thought, with the Post Office. 11 Q. Was it always verbal briefings between himself and 12 yourself or did they produce, for example, packs of 13 information for you, updating you, from time to time? 14 A. No, I don't remember any packs of information coming 15 from them. I think it was -- it would always have been 16 us speaking on the telephone or meeting to discuss. We 17 did have some emails but often that was logistics, 18 setting up a meeting. 19 Q. Could we please turn to POL00103348. Moving on to the 20 19 September 2012 Board meeting. Can we please turn to 21 page 90. This is a whole pack. This is something that 22 you've addressed in your witness statement. It's the 23 Significant Litigation Report, as at September 2012. So 24 this is now separated out between Part (A), which is 25 "Civil Claims", and Part (B), which is on page 93, which 37 1 is "Criminal Cases". Thank you. It says, "Criminal 2 Cases Brought by Post Office Limited". 3 First of all, it looks as though these reports are 4 slightly more sophisticated than the earlier ones. Was 5 that your recollection? 6 A. They were getting slightly longer and more detailed, 7 yes. 8 Q. Do you recall any discussion about the reasons for that? 9 A. No, I don't recall a discussion. I mean, obviously by 10 September 2012, the forensic accountants had been 11 appointed and were undertaking their work, so my 12 assumption was that was the vehicle through which we 13 would hopefully learn more about this. 14 Q. Although Part (B) describes it as "Principal ... Cases 15 Brought by Post Office Limited", I think you've said in 16 your witness statement that you weren't aware that Post 17 Office Limited was itself bringing prosecutions? 18 A. That's right. I had a sort of layman's understanding, 19 I suppose. I didn't fully appreciate until the July 20 2013 conversations exactly what the Post Office was 21 doing. My experience, generally, is companies do things 22 sometimes with bespoke statutory obligations that enable 23 them to do these kinds of things. I didn't have any 24 recollection of this prosecution issue coming up when we 25 were doing the Postal Services 2011 Act work. I didn't 38 1 recall it particularly being an issue from the 2 separation work because my team had led a lot of that. 3 So no, at this stage, I didn't read it like that. 4 Q. Again, am I right to say that this was simply a paper 5 for noting at the Board? 6 A. Yes. 7 Q. Yes. Looking at it now, do you think that there was 8 a lack of curiosity at Board level when it came to these 9 Significant Litigation Reports: the fact, for example, 10 that they are just noting papers? 11 A. Looking at all of this now, and I've tried to be very 12 reflective in my witness statement, I think there's lots 13 of things that could have been done differently and, of 14 course, you know, when you see these words on the page 15 now, and you know what happened, absolutely. I wish 16 they'd been the first item on the agenda. And I think, 17 when you go through chronology, once we had the Second 18 Sight Interim Report, every single Board after that, 19 there was a discussion of these issues. But at this 20 time, in the autumn of 2012, unfortunately that wasn't 21 the case. 22 Q. If we draw the threads together from all of the 23 documents that we've just been looking at this morning, 24 we started with the Shoosmiths Letter of Claim relating 25 to Horizon issues mentioning prosecutions. We then have 39 1 the Significant Litigation Reports that refer to the 2 Shoosmiths claim, although not in that level of detail, 3 and refer to, for example, 85 potential cases. You then 4 now have a litigation report that, in fact, mentions 5 criminal cases being brought by the Post Office. We 6 have reports of meetings with James Arbuthnot and we saw 7 a letter to the Minister that referred to the attendance 8 of a solicitor who represented people in Post Office 9 prosecutions. 10 Why do you think it is that nobody at Board level 11 was drawing those various dots together? 12 A. I think it is -- by way of explanation, I think it is 13 important to put yourselves in the shoes of us in April 14 2012 onwards. So the Shoosmiths letter of the autumn of 15 2011, presumably that came to somebody in the Executive 16 Team of the Post Office, the Board was not constituted 17 then, that I was on, we didn't see it. The meeting with 18 Norman Lamb and Sir Alan Bates, the Shareholder Team 19 would have seen it but we, the Board, didn't see it. 20 And I think the Board felt -- speaking for myself, 21 I felt that from May 2012, when we knew the Second Sight 22 work was happening, that was the kind of frontline of 23 this issue. 24 I think when you look at this issue now, with 25 everything we know, you can see these jigsaw pieces and 40 1 wonder why you didn't see the picture on the front of 2 the box. But, at the time, from what we saw, we'd seen 3 a much smaller set of information than even the 4 documents you're just outlining. 5 Q. Was it ever suggested to you that you should, for 6 example, meet with Second Sight or meet with James 7 Arbuthnot? 8 A. No, unfortunately not and, as I've set out in my 9 reflections to my statement, that is one of the things 10 that I regret. Sir Alan Bates and James Arbuthnot were 11 meeting really quite a few MPs, they were meeting our 12 ministers and they were meeting the Chairman and the 13 Chief Executive. We, the Board, didn't meet them and 14 I guess, as I was saying, because Alice Perkins and 15 Paula Vennells were giving us updates, we took some 16 comfort from that. 17 Q. I think in your witness statement you've said that you 18 received an unequivocal message that the Executive had 19 complete confidence in the accuracy, integrity and 20 robustness of the Horizon system. Was that at this 21 stage? 22 A. That was really all the way thorough. I mean, I mention 23 in my statement that, even attached to the lines around 24 the BBC Inside Out programme in 2011, there was a kind 25 of press notice or public comments from the Post Office 41 1 very unequivocal. My recollection of really all the 2 conversations at this stage were "robust system, nothing 3 to see here", that kind of sentiment. Yes, absolutely. 4 Q. As the person on the Board who had a link to the 5 Government or a link to the Civil Service, do you think 6 that, at that point in time, you should have been 7 probing more on those issues? 8 A. I think -- I suspect all of the NEDs feel, whatever the 9 hats they were wearing, and I certainly feel now, on 10 reflection, of course, I wish that we had, from the 11 beginning, done a series of things in a different way. 12 I did expect, and I've now seen documents to illustrate, 13 that the Shareholder Team from 2010, when Ed Davey was 14 asking, 2011, they were going back and forth to the Post 15 Office on this issue, and they were continuing to get 16 those unequivocal messages and they were getting more 17 detail that the Post Office was saying supported those 18 things. 19 Q. By March 2013, you had returned full time to your day 20 job at the Department for Energy and Climate Change, 21 your new role. I think you've described it in your 22 witness statement as a demanding role; is that fair? 23 A. I think anybody finishing maternity leave finds their 24 new jobs reasonably demanding but, yes, it was 25 a demanding job. I was doing a job share, we were 42 1 Strategy Director at that Department. 2 Q. Was it at that time that you stepped back from the Audit 3 and Risk Committee? 4 A. Yes, that's my recollection, yes. So in March 2013. 5 Q. Looking back at it now, do you think that that was 6 a particularly important committee for somebody with 7 those Government links or ShEx links to have been 8 sitting on? 9 A. Well, the -- if we go back to that 2012 letter to the 10 Chairman, the pensions issue was really very front of 11 mind, so when we separated the company and the 12 Government had taken on these huge liabilities, we were 13 worried to ensure that the pension remained sustainable. 14 So I personally was quite worried about that issue 15 because I knew it was in the Government's mind. In 16 a general sense, yeah, I think Audit and Risk is 17 an important Board committee. 18 Q. Did anybody step in to fill that role? 19 A. The Audit and Risk Committee was Chaired by Alasdair 20 Marnoch and had other non-executive members and 21 obviously the Finance Director. Nobody from the 22 Shareholder Team would have done that but, 23 constitutionally, I'm not sure how that could have 24 worked. 25 SIR WYN WILLIAMS: Before we move on, could we have that 43 1 litigation report back on the screen, so that I can see 2 the next page. 3 MR BLAKE: Absolutely, sir. It's POL00103348, page 90. The 4 section with the criminal cases is page 93. 5 SIR WYN WILLIAMS: Yes, just the next page, please. So 6 we've got four criminal cases under Part (B) on that, 7 and then it goes on. That's what I wanted to see. Yes. 8 MR BLAKE: I think that's the final page of -- 9 SIR WYN WILLIAMS: Yes. I understand that this paper was 10 for noting but, for the first time, as I understand it, 11 the Board is being given information about completed and 12 ongoing criminal cases, yes? Just glancing at them, 13 some of them are very significant. Someone has pleaded 14 guilty to stealing over £100,000 on the page we are 15 looking at; two brothers are accused of fraudulently 16 obtaining or stealing over £200,000. 17 Forgive me if I'm a little surprised that nobody 18 thought to discuss these things but that appears to be 19 the case. 20 A. Well, I agree with you and, you know, when you look at 21 this page now, absolutely. I can't recall the 22 discussion but it's actually hard for me to recall -- 23 SIR WYN WILLIAMS: I'm not for a minute suggesting you 24 should remember the words spoken but the impression 25 I get from you -- so now is your chance to correct it -- 44 1 that because this paper was to be noted, there was 2 literally no discussion of it and, you know, I'm not 3 hiding it, I'm expressing my surprise that a Board, for 4 the first time confronted with this sort of detail, 5 doesn't discuss it at all. 6 A. Yeah, and I mean I agree with you and I don't recall 7 a discussion. I also don't recall anybody highlighting 8 it to us either. But I totally take your point. 9 SIR WYN WILLIAMS: Yes, sorry, Mr Blake. 10 MR BLAKE: Sir, that might be an appropriate moment to take 11 our first break of the morning. 12 SIR WYN WILLIAMS: Very good. 13 MR BLAKE: Can we come back at 11.15? 14 SIR WYN WILLIAMS: Yes. 15 MR BLAKE: Thank you. 16 (11.06 am) 17 (A short break) 18 (11.18 am) 19 SIR WYN WILLIAMS: Yes, Mr Blake? 20 MR BLAKE: Sticking with the agenda for 19 September 2012, 21 that's POL00103348, we see there, for example, item 11 22 is discussion of the British Postal Museum and archive 23 funding. Is it odd that something like the Postal 24 Museum might be an item for discussion but the 25 prosecution that led to, for example, imprisonment for 45 1 two years, sentencing to 20 months, et cetera, that's 2 outlined in the Significant Litigation Report, wasn't 3 more of a discussion at Board level. 4 A. Of course, and I think it would be impossible not to 5 take that few now, looking at this. At the time, as 6 I think I said in my witness statement and is normal 7 with all corporate governance, the agendas, the rhythm 8 of meetings would be set by the Chairman and we as the 9 Non-Executive Directors, would follow that. 10 Q. Did you ever have the opportunity to input into what 11 would be on the agenda? 12 A. Not routinely. I think, if -- for example, I am 13 assuming if one of the committee chairs, say Alasdair 14 Marnoch, who Chaired the Audit and Risk Committee, or 15 Virginia Holmes, who chaired the Pension Committee, if 16 they felt there was an issue of sufficient materiality, 17 it would -- they could put it as an item on a future 18 meeting. 19 And we would look at the forward look, perhaps, for 20 a year ahead but not -- I don't remember shaping the 21 agenda myself. 22 Q. Moving now to June 2013, could we please turn to 23 POL00167917. The June/July period 2013 was 24 a particularly busy time in matters relating to the 25 Horizon system, and I think that was also a particularly 46 1 busy time for you in your ordinary day job; is that 2 correct? 3 A. Not June and July no, in my day job. That was only 4 a particular issue in October/November 2013. So this 5 period, it was just ordinary day job. 6 Q. Thank you. If we scroll down, we can see an email there 7 from Martin Edwards, the Chief of Staff to Paula 8 Vennells, emailing the ShEx team to arrange a meeting 9 for Alwen and I think either Martin Edwards or possibly 10 Paula Vennells, with Will, Mike and Peter, and the topic 11 being the "[Post Office]/BIS meeting on Second Sight 12 investigation". 13 Is that something you would have been updated on by 14 the ShEx team? 15 A. I don't recall being updated on this issue on 28 June 16 because on 1 July, when we did have that Board call, 17 that was a surprise to us as a Board. 1 July was 18 a Monday, so it's possible this was late the previous 19 week and, therefore, I hadn't had a chance to talk to 20 Will Gibson. Also this is setting up a meeting, isn't 21 it, rather than actually discussing the issue. 22 Q. And if we please turn to UKGI00001656, we see another 23 email from Mr Edwards in the middle of that page, 24 please, emailing, again, the ShEx team in relation to 25 the James Arbuthnot meeting: 47 1 "We thought it might be helpful for you to see this 2 brief which we prepared for the meeting with Arbuthnot 3 this morning, to give you a clearer picture of both the 4 facts and handling issues at play ... 5 "Obviously strictly [private and confidential] but 6 happy for you to share some or all of it with Jo 7 [I think that's Jo Swinson, the then Minister] if you 8 believe that would be helpful -- I'll let you judge 9 (useful to know ahead of Paula's call with her so she 10 knows what she's sighted on)." 11 If we scroll over the page, we can see a copy of the 12 briefing. Perhaps we could look at page 4 and 5 13 quickly. We have looked at this with other witnesses. 14 This is a briefing note on -- prior to the meeting with 15 now Lord Arbuthnot. We can see at the bottom of page 4, 16 "Additional point if needed": 17 "Depending on the note of the meeting, it may be 18 appropriate to address head on [James Arbuthnot's] 19 apparent annoyance at the issues around prosecutions and 20 systems 'exceptions'." 21 Just pausing there on the word "exceptions"; were 22 you aware around this time of the use of terminology 23 within the Post Office referring to, for example, bugs 24 as "exceptions" or "anomalies"? 25 A. No, I wasn't familiar with any of that and I don't 48 1 think, as a Board, we had even particularly focused on 2 this issue of bugs that obviously came out in the Second 3 Sight Interim Report. 4 Q. If we scroll down, there's a section there on "Current 5 prosecutions". If we scroll down, we can see a further 6 entry on "Historical convictions", and it is there we've 7 addressed with other witnesses. It says: 8 "Nothing has emerged from the interim findings given 9 to us by [Second Sight] which would point to specific 10 convictions being unsafe." 11 Then it addresses "System exceptions". 12 So we've seen that this briefing has been copied to 13 ShEx but was that the kind of thing that would be shared 14 with you? 15 A. No, and I mean this particular week from Monday, 1 July 16 2013, onwards, was obviously very intense in a number of 17 layers but, having now seen a lot more of the 18 information, my perspective is that the least informed 19 group at this point were the Board. So we had had 20 a call on 1 July. This is, I think, a briefing for 21 Paula Vennells to meet Lord Arbuthnot, which is then 22 being shared with the Shareholder Team, and the Post 23 Office team are sharing quite a lot of information with 24 the Shareholder Team that week. 25 We, the Board, at this stage, hadn't had this -- 49 1 well, we never got this document, as far as I know. 2 Q. Is this an example where it might have been better for 3 you in your role to have been based at the Department, 4 or within ShEx, or within the broader Department? 5 A. I have set out in my statement that one of the reasons, 6 when I decided to resign a year early from the Board, in 7 part it was because I thought it was actually difficult 8 to do the job of Shareholder Non-Executive Director and 9 not be in the team, and I thought it was better that my 10 successor, there was just one line, that individual was 11 in the Board and they were completely immersed in the 12 Shareholder Team, the advice to ministers, and all of 13 those things. And this is an example to where the 14 Shareholder Team knew more than the Board. 15 Q. Thank you. Moving to the Second Sight Report and 16 receipt of the report, can we please turn to 17 POL00145185. We're now on 4 July. Paula Vennells does 18 send the Board an update, and I'm going to read to you 19 just a few passages from this update. It begins: 20 "I wanted to send you a brief email to update you on 21 where we are with the Second Sight investigation." 22 Second paragraph, around halfway through, it says as 23 follows: 24 "In line with our discussion on Monday's Board call, 25 we understand that they have not found any evidence yet 50 1 of systemic issues with the Horizon system (and it 2 should be noted that this is based on a detailed review 3 of the four 'best' cases in terms of compelling 4 evidence). However, as expected, they do intend to draw 5 attention to wider failings in the training and support 6 provided to subpostmasters, with the implication that 7 this was the root cause of some of the problems related 8 to Horizon." 9 There's reference there to the "Monday Board call" 10 and also "on receipt of this". What was your 11 understanding at this point of the likely finding of the 12 Second Sight Report? 13 A. My recollection is, at this stage on 4 July, all I knew 14 was what we'd been told on 1 July. We hadn't seen any 15 draft document, we didn't actually see that until the 16 following week. So everything we knew was as reported 17 to us by Paula Vennells. 18 Q. What was your understanding? We see there, for example, 19 reference to "no evidence yet of systemic issues"; were 20 you aware that the Second Sight Report was an interim 21 report, for example? 22 A. Yeah, I think we did know that from the Monday night 23 call, although, as I say, we hadn't actually seen the 24 document itself at that point. On the Monday night 25 call, we had been, my recollection is, really quite 51 1 surprised that this forensic accountants' work, that had 2 been going on for over a year, was suddenly coming and 3 we hadn't seen it. But, in terms of the findings of 4 that Interim Report, all we knew was these kinds of 5 lines, which were what Paula Vennells was also saying on 6 Monday, no evidence of systemic issues. 7 But I'm assuming on 3 July the Executive also 8 wouldn't have seen the final Interim Report. 9 Q. If we look at the next paragraph, around halfway through 10 that paragraph, it says: 11 "They shared with us today the introductory sections 12 of the report, which gave some cause for concern in 13 relation to the overall professionalism of the drafting 14 and the widespread use of subjective (and at times 15 somewhat emotional) statements of opinion rather than 16 more neutral or evidence-based insights." 17 Second Sight had been appointed as independent 18 investigators. Did you have any view at this stage with 19 regard to the way that their report was being described? 20 A. No, we could only know what we were being told at that 21 point. They'd been doing this work, there'd obviously 22 been interfaces between them and the company and, on the 23 Monday night, Paula had updated us, and then here she's 24 sending us a further email. We didn't have any other 25 information and, as I'm sure we'll come on to, we were 52 1 quite irritated. 2 Q. We see in the next paragraph: 3 "We are focusing heavily on our media and 4 stakeholder handling strategy." 5 Were you aware of a particular strategy in respect 6 of the media and stakeholders that was being pursued at 7 that time? 8 A. Not particularly in relation to this issue, I would have 9 expected, if there was any report, information, action 10 the company was taking that it was going to have 11 a public face, somebody in the company would have been 12 thinking about this but I wouldn't have read this in 13 this email as particularly unusual. 14 Q. Can we please turn to POL00099121. If we start on the 15 second page, please, moving now to 6 July. The Board 16 are emailed again by Paula Vennells, "A quick further 17 update". She says: 18 "I have had two further very constructive telephone 19 conversations with Alan Bates of the JFSA, which 20 confirmed his willingness to work collaboratively with 21 us in taking forward our response to the review." 22 Second paragraph: 23 "It is worth emphasising that Alan Bates' main issue 24 is not 'the computer' but the human aspect: how in his 25 view Post Office failed to support and help vulnerable 53 1 and 'muddle headed' [subpostmasters]." 2 Next paragraph: 3 "He also raised the idea of setting up a new 4 independent third party that [subpostmasters] can 5 approach if they are facing issues with Horizon ..." 6 If we scroll down, please, it says: 7 "Alwen and I then had a further meeting with James 8 Arbuthnot yesterday afternoon which was also positive." 9 If we scroll over the page, please, I'm just going 10 to read to you those final two bullet points. It says: 11 "One of the main reputational and potentially 12 financial risks arising from the review relates to 13 possible attempts to reopen past prosecutions based on 14 the findings. James Arbuthnot was certainly focused on 15 this. We had a stronger exchange on this point. It is 16 not clear that any new evidence has emerged. If it 17 does, then as I pointed out to James, legal routes to 18 appeal already exist. Susan and the Legal Team are 19 working with our external lawyers to consider whether 20 there are any implications arising from the report for 21 past cases, and we can provide a further update on this 22 work next week." 23 Now, having looked at all those documents that we 24 saw this morning, in particular the updated version of 25 the Significant Litigation Report, which identified 54 1 a number of people being sentenced to significant terms 2 of imprisonment, did this paragraph strike you at all? 3 A. I think the whole email struck me. So on the Monday 4 night, we'd had this Board call, which had been 5 difficult, and we were being told about this Interim 6 Report coming. Then we'd had an update on Thursday, 7 this is now the Saturday morning. There's a whole load 8 of information in here that I think I would have been 9 very uncomfortable about. This -- can I just check, 10 this was the Saturday morning, the 6th, was it -- 11 Q. It was the 6th. 12 A. -- because I thought I saw at the top the 8th, but that 13 was -- it's just a forward document, was it? 14 Q. Yes, we'll go to the email of the 8th as well. 15 A. Okay. 16 Q. Perhaps let's turn to the first page and that is the 17 8th. I don't need to take anybody to it but we also 18 have a copy of this at POL00297468. But sticking with 19 this version, we then have an email from Sarah Paddison, 20 so presumably on behalf of Paula Vennells, which says: 21 "As promised in my previous email, here's a copy of 22 the final draft of the [Second Sight] Report ... They 23 took on board the majority of our comments over the 24 weekend, but not all of them. The second attachment is 25 an internal note detailing the remaining aspects of the 55 1 note which we believe are misleading or factually 2 inaccurate." 3 Is that something you recall receiving? 4 A. Yes, there was a whole series of emails, as I said, 5 through the previous week and then into this week and, 6 obviously, the Board was very keen to get its hands on 7 the Interim Report. 8 Q. Can we please turn to POL00297469, and this is 9 an attached statement. So this is the media statement 10 that was attached in that -- 11 Sorry, actually, if we go to the previous email 12 that's POL00099121. We see there, below that email that 13 I just took you to with the report, there is another 14 email from Paula Vennells of the same day and she 15 attaches a draft media statement. 16 A. This is Monday, the 8th? 17 Q. Yes, sorry, if we turn back to POL00099121, so we see 18 below that, if we scroll down, we can see that is 19 another email from Paula Vennells saying, "I'm attaching 20 the latest draft of our media statement", and that's the 21 document that I'm just going to be taking you to. 22 Sticking with this email, though, if we look at the 23 final paragraph, it says about halfway down that final 24 paragraph: 25 "The most significant remaining concern relates to 56 1 his continued determination for us to review past 2 prosecutions in light of the findings of the report ..." 3 That's a reference to James Arbuthnot being 4 concerned about those past prosecutions. 5 Did the issue of past prosecutions feature heavily 6 for you on 8 July? 7 A. As I say, I think, on 8 July, the first thing I would 8 have done when I received this email was read the Second 9 Sight Interim Report. So all of the issues I wanted to 10 try -- I would have wanted to try and understand and, in 11 the email that was sent to us the week before and also 12 in the call on 1 July, my recollection is it felt as if 13 we were being told a series of rather conflicting 14 things: there was this report coming, it was interim, it 15 had factual inaccuracies, the business was trying to 16 correct them, there were no systemic failures but there 17 were some very serious issues in it. 18 So this issue, they were all -- I think they would 19 all have been in my mind at the time and, obviously, as 20 we might come on to, the 16 July Board meeting attempted 21 to get the Board to draw together its sense of all of 22 these things and the very, very urgent actions it wanted 23 taken. 24 Q. If we scroll up to the top email, that's your receipt of 25 the final draft of the Second Sight Report, and you have 57 1 said you read that report. Can you recall when you read 2 that report? 3 A. I can't recall the time of day, if you mean that. But 4 I would have -- and I also can't tell from this redacted 5 document if that email address for me, it looks like it 6 was my Energy and Climate Change email address, so it 7 would have been coming to me at work. So I might have 8 read it really very quickly but I can't recall. The 9 other thing that would have been in my mind because, as 10 we have briefly discussed, the Shareholder Team was 11 getting information and, as we now know, the next day 12 the Minister ended up giving a statement in the House, 13 so I would have been very keen to understand what was 14 going on with Will Gibson, Roger Lowe and that team in 15 relation to the Minister. 16 Q. So as at 8 July, you would have read the Second Sight 17 Report? 18 A. I can't think why I wouldn't have. As I say, it is 19 difficult, 12 years ago, or whatever it is, 11 years 20 ago, to say the time of day when I would have read it. 21 Q. I would just like to take you to the attachments to 22 those emails. If we could first look at POL00297469. 23 This is the media statement that was attached to the 24 second email on that page. About halfway down, it says 25 there: 58 1 "The Post Office is committed to supporting its 2 people and improving the way we do so. The interim 3 review makes clear that the Horizon computer system and 4 its supporting processes function effectively across our 5 network. As the review notes, it is used by around 6 68,000 people in more than 11,500 branches, successfully 7 processing more than six million transactions every day. 8 The review underlines our cause for confidence in the 9 overall system. 10 "It does however raise questions about the training 11 outputs we have offered to some subpostmasters and we 12 are determined to address these issues." 13 Having read the Second Sight Report, do you consider 14 that to have been an accurate reflection of the report? 15 A. I don't know, at the time on that Monday, how much 16 I would have been looking at this press statement. 17 I think I would have been more likely to be reading the 18 Second Sight Interim Report to try to understand what it 19 was saying and I do have a memory of being concerned by 20 what it was saying and, in particular, thinking about 21 this point on training and support, and helplines. So 22 I don't think I would have particularly been thinking 23 does this draft press notice exactly accurately reflect 24 what was in the report on that day, but these -- 25 Q. But having read the ultimate press reports in the press 59 1 itself, did you have a view as to whether the Post 2 Office was being accurate in its summary of the Second 3 Sight Report? 4 A. I can't recall particularly thinking about the Post 5 Office's press reports at the time. I think the lines 6 we see here are reasonably consistent with what we had 7 often heard from the Post Office and then, even after 8 the Interim Report, what we continued to hear around, 9 you know, the sort of -- and I'm summarising -- but 10 broadly the system working, and then there being 11 questions and issues around training and support. 12 Q. Can we turn to POL00297470. This is another attachment. 13 This is the "Post Office Horizon [Question and 14 Answers]". Would you have read this attachment at the 15 time? Sorry, it's not on screen yet. Do you recall 16 this document? 17 A. Well, I've seen now it was attached to an email. 18 I don't particularly recall this and I'm not sure at the 19 time that I would have been most focused on Q&A and 20 press releases. I would have been much more likely to 21 be worrying about how the Board had been blindsided and 22 what this report said and what we were going to do about 23 it, and what was the Minister going to say. 24 Q. I'm just going to read to you a few passages from this 25 document. The second paragraph says: 60 1 "We cannot comment on any individual cases but of 2 course all cases were fully tested in court and no 3 evidence found to suggest the Horizon system is at 4 fault." 5 Another question posed is: 6 "Are you saying you are going to review all these 7 cases?" 8 It says: 9 "The review has raised some concerns regarding or 10 training and support processes. Of course it is only 11 right that a review should be undertaken of any cases 12 where we feel the findings of this interim review might 13 have any bearing." 14 If we scroll down, there's a question: 15 "I've heard there is evidence of faults with the 16 system?" 17 It says: 18 "As the review stresses, the Horizon system has 19 around 68,000 users and processes more than six million 20 transactions every day. While we take every case very 21 seriously, the total number of cases accepted by the 22 external reviewers for this review was 47, less than 23 0.1 per cent of the total number of users of the Horizon 24 system. 25 "With a system of this scale, of course there may be 61 1 exceptions whether this is as a result of a power cut or 2 through operator error. We have systems in place to 3 identify and rectify these as quickly as possible (check 4 against findings in report)." 5 Then: 6 "Whenever reconciliation issues arise in the system, 7 we contact branches to inform them that reconciliation 8 is required, either by Post Office or branch." 9 If we scroll over the page, there's a section there: 10 "Why have you destroyed documents relating to 11 criminal investigations?" 12 It says: 13 "In line with industry standards we operate 14 a seven-year document retention policy." 15 If we keep on turning over the page, please, to 16 page 7, penultimate page, "Why are you able to run your 17 own prosecutions? This can't be fair?" 18 It says: 19 "As with HMRC and other bodies which safeguard 20 public money (need to check the accuracy of this), the 21 Post Office has investigation and prosecuting 22 authorities in its own right." 23 Then there's a question: 24 "Will you reconsider investigating and prosecuting 25 cases yourself instead of handing these functions to the 62 1 police and Crown Prosecution Service?" 2 I know you said you don't recall paying much 3 attention to these particular attachments, rather than 4 the report itself but were you, at this time, aware of 5 public lines being taken by the Post Office that were 6 different to what you had read in the report? 7 A. I don't think I would have been on that day, Monday, 8 8 July, and I don't recall particularly seeing this Q&A 9 document. This looks like a draft but I'm assuming 10 there was a final one that was similar, so -- 11 Q. This was the attachment to -- 12 A. To that email. 13 Q. -- that email, the second email on that page, sent to 14 you by Sarah Paddison on behalf of Paula Vennells. 15 A. I think, if I -- I obviously appreciate why you're 16 asking it the way you're asking but, if you put yourself 17 in the shoes of an individual who has been, as a Board 18 member, waiting for this report, slightly surprised it's 19 coming in a rush, getting conflicting messages, I think 20 the thing that would have been on my mind would have 21 been what is in this report and what are we going to do 22 about it? I just don't think I would have been 23 comparing public lines and Q&A at that point. 24 Q. Do you recall at that point having any discussions with 25 anybody at ShEx about the report? 63 1 A. I can't, in my memory, recall the to and fro with ShEx 2 but I know that I would have because this was such 3 a significant issue. On my time, on the Board, I think 4 I'm right that the Minister only gave two oral 5 statements, and one ended up being on Tuesday, 9 July 6 2013. So that would have been a significant thing for 7 them and, as I've now been able to see, there was a lot 8 of to and fro between them and the Post Office getting 9 ready to brief Jo Swinson, and she also has been to this 10 Inquiry. 11 Q. Do you think that there was insufficient sharing of 12 information from the ShEx team to yourself on issues 13 relating to the Second Sight Report? 14 A. I mean, I haven't thought about it -- I didn't think 15 about it like that at the time. Now I've seen all of 16 the to and fro, I think one of my observations would be 17 that what was so unusual about this issue was that the 18 Chairman and Chief Executive were having the interface 19 with Sir Alan Bates and the JFSA and James Arbuthnot. 20 MPs were raising things with ministers through 21 Parliamentary Questions, correspondence. There was a to 22 and fro between the Post Office and the shareholder and 23 I think in this week, it seems to me now, with 24 everything I've seen, the Board were the least informed 25 of all. 64 1 Q. As the Government representative on the Board, was there 2 a problem there in the communication from those who were 3 working on behalf of the Government? 4 A. I didn't -- I wouldn't put if it like that but, and 5 I don't think there was a problem. I've described the 6 way in which we worked during this period. I think we 7 would have been very regularly discussing. I think, of 8 course, now when you look back, everybody would have 9 wished, and I certainly wished I had a whole load more 10 information at a number of points, and this one 11 included. 12 Q. Was it lines of communication, was it individual 13 personalities: what was it that interrupted the flow of 14 information relating to the Second Sight Report? 15 A. I don't think I did say that the flow was interrupted. 16 It was more that there was a set of events playing out 17 very fast in realtime and so I imagine the Shareholder 18 Team's priority, rightly, was to brief the Minister. My 19 priority was to get the information as a Board member, 20 and we would have been communicating between us. 21 Q. Let's turn to the Board meeting. Can we please look at 22 POL00021516. That's the 16 July 2013 Board meeting. 23 It's a meeting that the Inquiry has looked at on 24 a number of occasions. 25 We note there, in terms of those who are present, 65 1 that Susan Crichton was not present. Did you understand 2 why Susan Crichton wasn't present? 3 A. No, no. A lot of the issues around that that have been 4 brought out in this Inquiry, I was not aware of on that 5 day. 6 Q. Did you attend a pre-meeting to the Board meeting in 7 a restaurant? 8 A. There was a breakfast that morning. In fact, when 9 I wrote my statement I couldn't identify if it 10 definitely was that morning, but I think now it was that 11 morning, and that, my recollection is, was with the 12 Chairman and those Non-Executive Directors who were 13 there; Neil McCausland had given apologies that day. 14 But yeah, I do have a recollection of a conversation 15 of just the non-executives and the Chairman with a lot 16 of discontent being expressed about the way this set of 17 events had unfolded. 18 Q. Was that directed at a particular individual? 19 A. My own view was the Executive had mishandled the 20 interface between the Board and the whole of this Second 21 Sight Interim Report, and I held Paula Vennells 22 responsible for that, as the Chief Executive. 23 Q. That was your own view. What were the views of others, 24 just as expressed at that breakfast meeting? 25 A. Again, it's -- I can't recall the ins and outs of all of 66 1 the conversation but I think there was a kind of -- my 2 recollection is there was a sort of groundswell of 3 discontent. 4 Q. Aimed simply at the Executive Team or at others? 5 A. When you're a Non-Executive Director, your role really 6 is to provide oversight, but the Executive Team and, in 7 particular, the Executive Directors, are the engine room 8 of the business. They are the people who are 9 responsible for running that business, for undertaking 10 with appropriate care and diligence all of their tasks, 11 and I think we felt frustrated that, after over a year 12 of work, there was suddenly this very rushed week, the 13 report had been published and, you know, I would have 14 felt that the Minister had been put in a difficult 15 position, having to make a statement to Parliament. 16 Q. Were there any individuals specifically named during 17 those discussions that stand out? 18 A. I don't recall that. I think this was part of where 19 some of my concerns about the Chief Executive were 20 starting to crystallise. 21 Q. What were those concerns? 22 A. It's really hard to talk about somebody's performance in 23 this context now, with everybody reflecting with such 24 a spotlight, and in my experience of Executive Teams, 25 performance can change, people can be stronger and 67 1 weaker on different things. I think I felt, though, 2 that this particular issue hadn't been well handled by 3 the Executive Team and, despite the rush of 4 communications, some late-night emails, some weekend 5 emails, it just didn't feel orderly and, as 6 a Non-Executive Director, the things that you take 7 comfort from are that the organisation is orderly, 8 thoughtful, no surprises. 9 No surprises is a really big thing. I still think 10 of that and use it a lot today. You know, I have 42 11 arm's-length bodies in the Department I'm responsible 12 for, you do not want to be surprised. And I think, at 13 that time I felt that it hadn't been well handled and 14 I think that comes out in the minutes for the subsequent 15 board that day, where we went on to say we didn't want 16 to be blindsided and a whole load of actions were put in 17 train. 18 Q. We mentioned just before the absence of Susan Crichton. 19 That was explained by Alice Perkins in her evidence, if 20 I am to summarise, that events overtook her, and I think 21 it was along the lines of the thought didn't come into 22 her head to invite her back in. Were you even aware of 23 Susan Crichton sitting outside that meeting? 24 A. I don't recall anything to do with her sitting outside. 25 Obviously because some of the papers we looked at that 68 1 day -- there was a paper from Susan written on 12 July, 2 it was from her -- yeah, I suppose I might have thought 3 why was this being presented by Paula Vennells, but 4 I don't remember now a big focus on that. And I suppose 5 I also would have thought that, if the General Counsel 6 wanted or thought she should be in the room, she would 7 have been in the room. It wouldn't really have occurred 8 to me that somebody would stay outside a room. 9 Q. Was the atmosphere in the room such that matters were 10 happening very quickly, it was a particularly rushed or 11 particularly packed Board meeting or not? 12 A. I don't recall that. I mean, as -- you know, the Board 13 agendas for this company through these years, when I was 14 a Non-Executive Director, were hugely full because there 15 was so much business to be done on very difficult and 16 important issues. I don't particularly recall this one 17 being more or less packed than any other. 18 Q. Thank you. If we go through a few passages from the 19 minutes, we see at the bottom of this page: 20 "The Board discussed the papers received from the 21 Executive Committee members and agreed that in future 22 the content of the papers would not be presented at the 23 Board meeting so as to free up time for discussion. The 24 papers needed to be clear, not overly optimistic, and 25 commercially focused so questions of fact would not be 69 1 necessary. They should also arrive in good time. The 2 Chairman asked the Board to contact the ExCo member 3 responsible for a paper before the meeting if they were 4 unclear or didn't have the necessary detail. The Board 5 also asked for earlier warning when risks and issues 6 arise to ensure they were not blindsided." 7 Can you assist us with that passage, please? 8 A. Well, I think we had been blindsided the week before, 9 and we were irritated, and my reflection is, in any 10 situation in any company, or if something starts to go 11 wrong, those are the times that you want to get into 12 more detail. I think we felt that we'd been bounced by 13 the Second Sight Interim Report and so I think that's 14 why we were saying, "Please give us early warning of 15 risks, please tell us about risks, please do not 16 blindside us". 17 The minutes, as you know, are quite mild in their 18 phrasing, quite anodyne. A word like "blindsided" 19 I think was probably a direct quote. 20 Q. If we could turn to page 6, there's a section on the 21 "Horizon Update". I won't spend much time on it because 22 this is something we've seen a lot of but at (b) it 23 says: 24 "The Board were concerned that the review opened the 25 business up to claims of wrongful prosecution. The 70 1 Board asked if Susan Crichton, as General Counsel, was 2 in any way implicated in the prosecutions." 3 At (c): 4 "The Board expressed strong views that the Business 5 had not managed the Second Sight review well and 6 stressed the need for better management and cost control 7 going forward." 8 There's a reference there to "the business". Can 9 you recall specific names being mentioned? 10 A. I don't recall particular names but, you know, I think 11 the day-to-day interface would have been between Paula 12 Vennells and, as we've discussed, she gave a number of 13 the updates, and also Susan Crichton. 14 Q. "The Board accepted this was an independent review and 15 therefore things could happen that were beyond the 16 control of the business. 17 "However, the things that could be managed by the 18 Business needed to be well managed with strong 19 leadership and the Board asked the CEO if she had 20 considered changing the person leading for the 21 Business." 22 What did that mean? 23 A. I think it was -- there was this sense, and it's quite 24 hard to disaggregate now specifically which meeting 25 different considerations came up and were then discussed 71 1 and acted on, but there had been a sense, increasingly, 2 I think, that the Second Sight Interim Report and Second 3 Sight, they were independent, the Board itself hadn't 4 had particular control of the terms of reference. If 5 you remember back to the May meeting, we were just told 6 in AOB that this was happening and we thought it was 7 a good thing to do. 8 But I'm assuming there was a sense at the time that 9 we wanted -- because now we'd seen the report, there 10 were a load of actions being discussed to be taken 11 forward, we wanted a kind of programme of work with 12 clear leadership and if you're a Board, a Non-Executive 13 Director, what you want is to be confident that they'll 14 be people leading that who have got the capacity and 15 capability to do it and will get whatever the work is 16 done. 17 Q. If we scroll over the page, please, there's one final 18 passage that I'd like to take you to and that's: 19 "The CFO was asked what the insurance position was. 20 He promised the Board a note on this. He was also asked 21 to ensure that both [Royal Mail Group] and business 22 insurers were given notice of the review findings." 23 Do you recall the insurance position being raised at 24 that meeting? 25 A. I have a sort of vague recollection. I can't recall who 72 1 it was. It may have been Alasdair Marnoch in his 2 position as Audit Committee Chair because, often in 3 businesses, if a risk profile changes, regardless of 4 whether or not it manifests, you need to notify the 5 insurers. So it may have been that. The other thing is 6 that the -- as part of the separation of the two 7 businesses, the Royal Mail Group, I think, had been the 8 named party on some of the insurance contracts, so -- 9 and we were trying to finish the transitional services, 10 such that the Post Office stood on its own, so it could 11 have related to that. But I don't -- I can't -- I've 12 sort of wondered about this and I can't really recall 13 much more. 14 Q. I'll take you to some of the insurance related emails 15 shortly. If that could come down, please. At 16 paragraph 127 of your witness statement you say that 17 this was the first time you became aware that the Post 18 Office was able to act and was acting as a prosecuting 19 authority, and you've described your feeling as being 20 uncomfortable by that. Now, what did you mean by 21 uncomfortable? 22 A. I think, as I said earlier, I'd obviously seen the SLRs 23 which had talked about legal situations. It just -- 24 I don't recall it having occurred to me, before I read 25 the papers for this 16 July Board meeting, that -- 73 1 specifically, what the Post Office itself was doing, and 2 that made me feel uncomfortable. I was surprised by it. 3 Q. Did it suggest something quite fundamentally wrong with 4 the levels of information that was going to the Board? 5 A. I don't think I was necessarily thinking that because, 6 as a non-executive Board member, consistent with 7 governance codes and best practice, you do not expect to 8 see the vast majority of information. What you expect 9 is that the responsibilities are clearly defined, the 10 delegations are working, you've got first and second 11 line assurance to sort of double-check. So I don't 12 think I would have been thinking particularly that 13 point. 14 I just had a discomfort because a year into the 15 business and, having seen the Second Sight Interim 16 Report, it made me feel uncomfortable. 17 Q. Can we turn back to your witness statement, please, 18 page 100. It's page 100, paragraph 218. If we scroll 19 down, you say in paragraph 218: 20 "I do continue to think we were robust in our 21 scrutiny and challenged the [Executive Team] when we had 22 the information to enable us to do so. And while there 23 were numerous proactive steps that I have detailed in 24 this document my view now is that it is impossible not 25 to feel now that more should have been done, even if the 74 1 signs at the time did not point us to that place given 2 the assurances we were being given." 3 Looking at this moment in time, where you find out 4 that the Post Office itself prosecutes people, do you 5 think that you were sufficiently robust in scrutinising? 6 A. Would you mind if I just make a general comment about us 7 as a Board before I come on to that point? 8 Q. Absolutely. 9 A. When I went onto the Board in April 2012, I was 10 pleasantly surprised by the calibre, to my mind, of 11 those Non-Executive Directors. They were extremely 12 robust, to the point that sometimes I used to feel in 13 meetings that it must have been quite difficult for the 14 executive members or people presenting. People did not 15 hold back in saying what they thought, what they were 16 worried about and in challenging. So, as a general 17 sense, I did think we were robust in our scrutiny and 18 not for this Inquiry but, as you know, there was 19 an array of things that we were trying to do with that 20 business, most of which were not easy. 21 I think the point here is -- and I wanted to reflect 22 at length in my statement, because the situation has 23 just been so catastrophic, you can't help feeling, as 24 a person I was responsible between April 2012 and March 25 2014 as the Shareholder Non-Executive Director, you 75 1 can't help feeling that we should have done more. So 2 yes, now I think, on each of these areas, could we, 3 should we, what would have happened if we had done more? 4 I mean, I set out in paragraph 140 of my witness 5 statement all of the actions we did take, and I think at 6 the time, we thought we were being active and prudent. 7 That's how it felt. It was a very busy time after the 8 Interim Report, a whole load of things happened. It's 9 a reflection, though, that, of course, you wonder if you 10 could have/should have done more. 11 Q. Given the terms that were used at that Board meeting, 12 "blindsided", et cetera, do you think you took 13 sufficient steps at Board level to scrutinise the whole 14 way that the company was being run at that stage? 15 A. Yes, I mean, I think generally we had been and were at 16 that stage, and continued to be for the period that 17 I was on the Board, diligent in trying to ensure that 18 the company was running with an appropriate control 19 environment and in an appropriate way. 20 In relation to this issue, after and at that 16th 21 Board meeting and in the following -- 16 July Board 22 meeting and in the following weeks and months, there 23 were a range of things that happened and, yeah, at the 24 time that did feel very active. As I have also put in 25 my reflections, you know, whilst we had actions in terms 76 1 of the Mediation Scheme, the various pieces of work and 2 the follow-on with Second Sight, and later set up the 3 Board committee, specifically on this, I do reflect now 4 that we should have done more at that point and onwards 5 on past prosecutions. 6 MR BLAKE: Thank you, sir. That might be an appropriate 7 moment to take our second morning break. 8 SIR WYN WILLIAMS: Yes. 9 MR BLAKE: If we could come back just after 12.15. 10 (12.06 pm) 11 (A short break) 12 (12.18 pm) 13 MR BLAKE: Thank you. 14 Ms Storey, I said that we would address the issue of 15 insurance and insurance notification, and that's the 16 issue that I'd like to address now. Could we please 17 start by looking at POL00099330. So we've had the Board 18 meeting of 16 July and there was that slightly ambiguous 19 wording in the minutes that we looked at, relating to 20 the insurance position. This is an email from Alwen 21 Lyons to the Board, including you, we can see there -- 22 thank you very much -- and Alwen Lyons says: 23 "On Tuesday the Board asked for information on three 24 things this week: 25 "[First] A paper on Transitional Support Services 77 1 ... 2 "[Second] The impact of the Financial Services 3 Junction insurance changes ... 4 "[Third] The impact on Horizon/Second Sight on our 5 insurance cover." 6 Then there is a section/paragraph at the bottom. It 7 says, "Insurance": 8 "We discussed what impact the current Horizon issues 9 might have on our insurance on which we are advised by 10 our insurance broker Miller. Their view is that whilst 11 other insurance policies may be impacted the most likely 12 one is [Directors and Officers] -- this has the added 13 complication as it is the only policy we share with 14 [Royal Mail] and was placed by their broker, JLT. The 15 excess on this policy varies under different criteria 16 but the main one is £25,000 on each and every claim. 17 A meeting is being set up with JLT and Miller to ensure 18 they are fully briefed on the issues before JLT engage 19 with the insurers". 20 Moving on to POL00099331. 21 Do you recall receiving that email? 22 A. The email that you've just been reading from? 23 Q. Yes. 24 A. Yes, I would have. I think, as it says, we had asked 25 for things obviously very quickly. So that was coming 78 1 three days after the Board meeting. 2 Q. Thank you. If we please turn to page 3 -- bottom of 3 page 2, and the top of page 3 -- we see, if we scroll 4 down slightly, Alasdair Marnoch responding to Chris Day, 5 whose name is at the bottom of that previous email. 6 Slightly further down, sorry. Thank you very much. 7 He says: 8 "On the insurance [question] we were keen to know if 9 we have currently got insurance cover for any claim 10 arising? Don't think your answer deals with this 11 point -- I'm sure Susan will know though." 12 You're not on this email chain. I'm just going to 13 go through it just to provide some background and some 14 context. If we scroll up, it seems as though this is 15 an email from Mr Marnoch to Paula Vennells, and he says: 16 "No need to broadcast loudly but I don't think C 17 [I think that's Chris Day] has understood the question 18 on insurance (or I've misunderstood the answer). Either 19 way a quick clarification will hopefully avoid more 20 mails." 21 If we scroll up, Mr Day responds internally and he 22 says: 23 "Sorry if not clear; there are two points -- firstly 24 the D+O appears to be the policy which would cover this 25 eventuality, and our understanding is the first 25,000 79 1 of any claim is not covered (this is being verified). 2 "Secondly, our broker (Miller) will meet with [Royal 3 Mail's] (JLT) to determine the best way to engage with 4 D+O insurer/s which will enable us to understand the 5 possible impact on this (and possibly other) policy 6 premia going forward. 7 "The subtlety theory is that we need to inform 8 existing insurers of a potential new risk (in hand) 9 without 'scaring the horses' into immediately increasing 10 future costs, and this process is made more complex by 11 being a joint policy with [Royal Mail] (the only one 12 that is configured in this way). 13 "Will provide a fuller update when we have 14 established all the facts, next week. 15 "Charles -- please confirm my understanding is 16 correct." 17 If we scroll up there is an email from Paula 18 Vennells, forwarding that response to Alasdair Marnoch. 19 She says: 20 "Hi Alasdair, did you get the clarification you 21 asked for? 22 "I also left a message with Chris as his note on 23 insurance cover raised two questions for me. Firstly, 24 that there could be an impact re future costs across 25 several policies. I understand D&O but which others -- 80 1 may be obvious to the experts but it isn't to me. And 2 secondly, his note seemed to imply we were going to 3 check if we are covered -- does that mean we may not 4 be/we don't know? 5 "Chris' reply to my question is below. The line 6 which bothers me slightly is 'D&O appears to be the 7 policy which would cover ...' 8 "Am I being too hawkish? I would have preferred to 9 read 'D&O is the policy which (if needed) will cover 10 ...' 11 "Does Chris' reply to you give more comfort? 12 I don't want to pile the pressure on Chris by going 13 again unnecessarily." 14 If we scroll up to the top, we have the response 15 from Mr Marnoch. He says that he's afraid Chris' answer 16 does not address the key question as to whether or not 17 the Post Office have got cover: 18 "He dropped me a note which suggested we do but 19 seems to suggest it would be under D&O cover. Like you 20 I'm concerned that we believe this policy would cover us 21 for this sort of issue -- rather I'm sure we will have a 22 PI policy which will cover us for this and any other 23 like issue. 24 "The follow-on issue is that to avoid the 25 underwriters rejecting our claim, we need to keep them 81 1 abreast of developments and any possible claims (on this 2 and any other issues). Experience tells me that keeping 3 underwriters updated on this sort of developing issue 4 can be very tricky getting the balance right in levels 5 of disclosure. Normally I would have expected Chris to 6 have been involved in discussions with Susan testing the 7 thinking at each stage of the process. 8 "I've gone back to Chris for further clarification 9 but I suggest it's handled in a face-to-face 10 conversation ... 11 "The issues about any disclosure is that it will 12 affect our premiums even if the underwriters don't pay 13 out. It's a bit like having to report near misses when 14 you're driving as well as crashes. The result will be 15 higher premiums, etc, etc. But turn the issue, 16 hassle/cost) on its head and we can reverse this problem 17 into a cost saving/process improvement opportunity by 18 combining necessary reporting to underwriters with 19 improvements on our own processes identifying mistakes 20 and a tracking mechanisms to their resolution." 21 I'm afraid I'm going through the chain of events so 22 I am going to have to read a fair amount from this 23 chain. 24 Almost a week goes by after that and then the Board 25 is provided with an update on the work programme arising 82 1 from the Horizon report. That can be found at 2 POL00298004. There were two versions of this report 3 that were sent to Board members; do you recall, in broad 4 terms, this document? 5 A. I do recall it in broad terms. 6 Q. The document says: 7 "Further to the Board discussion on 16 July, this 8 note provides an update on how we're taking forward the 9 programme of work ..." 10 So this is essentially how we are taking forward the 11 matters raised at that Board meeting. 12 We see, if we scroll down, there's a section on 13 completing the Second Sight reviews. 14 Over the page and on to page 3, the bottom of 15 page 3, where we see there's "Prosecution Case Review", 16 and it outlines that: 17 "Through our criminal law solicitors, Cartwright 18 King, we are complying with this duty by reviewing past 19 and present prosecutions to identify any cases where 20 Second Sight Report ought to be disclosed." 21 Scrolling over the page to paragraph 17, there's 22 reference there to Brian Altman's review. 23 Can we go to paragraph 30, on page 7, please. 24 Paragraph 30 says: 25 "The Board requested further information on the 83 1 insurance position: a separate note is attached on this. 2 Annexe A also provides further information Directors' 3 duties as they relate to this review." 4 I'm going to just now take you to the covering email 5 to that. That can be found at POL00145882. If we start 6 on the bottom of page 3, we see Alwen Lyons emails and 7 we'll scroll up in a bit to see the group, but you are 8 one of the recipients. 9 "Dear All 10 "Please find attached a detailed note from Paula 11 providing an update on our programme of work in response 12 to the Horizon investigation." 13 If we scroll up, we can see copied to you a response 14 from Alasdair Marnoch, at the bottom of that email. He 15 says: 16 "Finally I seem to be missing the insurance 17 update -- could you please resend." 18 That's a reference to the insurance update that's 19 promised at page 30 of that document that I have just 20 taken you to. 21 If we keep on scrolling up, please, Martin Edwards 22 then responds and says: 23 "Apologies all, it should have been this version of 24 the note attached to yesterday's email, which 25 incorporates the insurance information (at paragraph 31) 84 1 rather than leave that in a standalone note." 2 I'm going to take you to that updated version very 3 shortly but, before I do that, if we could just have 4 a look at the email from Alice Perkins. She emails, 5 again, the Board, including yourself. She says: 6 "I had some thoughts which I want to put on record 7 about the way ahead. 8 "First, while it is clear that we are committed to 9 using [Second Sight] for the 47 cases which are already 10 in the frame for their review, it is extremely important 11 that we cap their involvement at that." 12 This is a separate issue but I'd just like to pause 13 there and ask you about that. Do you recall a movement 14 towards capping Second Sight's involvement at that 15 stage? 16 A. I mean, I can obviously read the words on this page. 17 I don't recall thinking of it in that way at that time. 18 I thought that, after the 16 July Board meeting, there 19 were a whole load of actions and that included work for 20 Second Sight. 21 Q. Because it follows in the next sentence: 22 "The moment they are involved in additional cases 23 beyond these, we will have lost the ability to end the 24 relationship with them ..." 25 Were you aware of a desire to end the relationship 85 1 with Second Sight at that stage? 2 A. I mean, this and all the other things you have just 3 shown me are a series of emails that were coming in 4 after the Board meeting. I would have read these words, 5 noted that they're from the Chair. I don't particularly 6 remember that issue to a greater extent than any of the 7 others at this point. 8 Q. It being, I think, on your own evidence, quite 9 a significant Board meeting of all the Board meetings 10 that we've seen, would you have paid quite a lot of care 11 and attention to the emails you were receiving at that 12 stage? 13 A. You mean 16 July? 14 Q. Yes. 15 A. Yeah, absolutely. I mean, I think that, even in the 16 ones you were just showing, I'm sure we'll come back to 17 the insurance question, but you can see emails coming 18 out on 19 July which is after we would even have 19 received the minutes, then emails to and fro, some of 20 which I was not copied on through the weekend. But 21 yeah, there was a whole series of actions and I would 22 have been very focused on it because, going back to our 23 conversation earlier, I was irritated about the 24 handling. 25 Q. Reading on, she says: 86 1 "Second, we need to pin down and cap [Second 2 Sight's] costs ... 3 "Third, we need a proper process of appointing the 4 independent Chair of the Working Party." 5 Then, "Finally", she says: 6 "... I have asked Susan to keep the Board fully 7 informed of future developments and to alert me of 8 anything which she is unable to resolve which could get 9 in the way of getting the job done in the way it needs 10 to be done. She will be seeking conversations about all 11 of this with all the [Non-Executive Directors] on 12 an individual basis and will be in touch with you to 13 arrange these." 14 Moving on, please, to POL00006590, this is the 15 updated version of the report that was circulated to the 16 Board. 17 A. Sorry, is this -- just to clarify, is this the one that 18 you're saying that Martin Edwards sent us -- 19 Q. Exactly. 20 A. Okay. 21 Q. So Martin Edwards sent an email on Saturday, 27 July 22 that said, "Apologies all, It should have been this 23 version of the note". 24 A. Okay. 25 Q. This is the updated version of that note. If we could 87 1 turn, please, to paragraph 30 and 31, this is the 2 insurance section. It's page 8. Thank you very much. 3 So we see there a changed form of words. It's 4 an expanded form of words at paragraph 31, addressing 5 the insurance position, and it says: 6 "The Board requested further clarification on their 7 exposure as directors in relation to the review. As set 8 out in more detail at Annexe A, it is highly unlikely 9 that any individual director would have any personal 10 liability in connection with this review ..." 11 Then it refers to insurance being in place to cover 12 their liabilities, and it gives the amount, and then at 13 paragraph 32: 14 "In response to the Board's request for a post 15 mortem, internal audit has now been tasked with carrying 16 out a review", et cetera. 17 So there's just a slight addition on paragraph 31 to 18 what was previously in paragraph 30. 19 If we scroll down, we can see Annexe A, it sets out 20 there the Directors' duties, the focus being very much 21 on individual liability of directors. 22 Could we please now turn to POL00193010, which is 23 another exchange from Alasdair Marnoch at the bottom of 24 the first page. Thank you. If we scroll down slightly, 25 he says: 88 1 "I'm afraid the para on insurance does not answer 2 the question which was about PI cover for the [Post 3 Office] not D&O cover for the Directors. 4 "The key question is does the [Post Office] have 5 insurance cover in the event of a material claim (or 6 perhaps a 'class action' type claim)? Probably easiest 7 if I pick it up directly with Chris." 8 Irrespective of this particular email chain and 9 whether you focused on this particular issue at this 10 time or not, looking at it, is that a big issue for the 11 Post Office, whether it has insurance cover in the event 12 of, for example, a class action claim? 13 A. My recollection of the 16 July Board meeting was we 14 wanted to make sure we were prudent in taking all the 15 steps we thought needed to be taken, in light of our 16 understanding at that time of what the Second Sight 17 Interim Report was saying. So there was a whole raft of 18 things. I took some personal comfort from the fact 19 Alasdair Marnoch, as Chair of ARC, and who I found to be 20 a very diligent individual, was going to take the lead 21 on behalf of the Non-Executive Directors, I think in his 22 capacity as Audit and Risk Committee Chair, for kind of 23 leading some of these areas of work. 24 This issue and all the to and fro you've just shown 25 me on insurance, some of which I wasn't copied on, 89 1 I don't remember that being high in my list of worry 2 areas. I wonder if it's simply that Alasdair Marnoch 3 being diligent, wanted to make sure if the risk profile 4 of this set of issues -- particularly I think we were 5 worrying then about disclosure and some of the things 6 that had been in Susan Crichton's paper of 12 July, he 7 may simply have felt they needed to be notified. 8 But I don't remember particularly focusing on this 9 issue, I'm afraid. 10 Q. We saw this morning the references to, for example, the 11 Shoosmiths case and potentially 85 claimants. We're now 12 at a stage where we have the Second Sight Interim 13 Report, potential class actions on the horizon. The 14 notification to the insurers was presumably quite 15 an important issue for Non-Executive Directors as 16 a whole, wasn't it? 17 A. All I'm saying is I personally don't particularly 18 remember that being high on my list. Alasdair perhaps 19 had had experience of some other business where they had 20 needed to notify the insurers. I also don't remember 21 particularly focusing on material claims. I think I was 22 more focused on what are the steps we are taking around 23 what became the Mediation Scheme, trying to improve the 24 business processes because that was the single biggest 25 kind of issue I had in front of mind, that if there were 90 1 problems with helplines, or the way kind of interface 2 with the system worked, that was a big issue and, of 3 course, getting a more clear view of what the actual 4 situation was. 5 Q. If we scroll up we can see a response from Chris Day 6 internally to Charles Colquhoun. He says: 7 "Charles, please see if there's a straightforward 8 paragraph we can write on this (should go in my name) 9 rather than giving them the whole insurance paper." 10 If we scroll up, there's again an internal 11 discussion about this, and Charles Colquhoun says: 12 "Chris -- I don't think Alasdair saw the insurance 13 paper and maybe the 2 points below (and in particular 14 the second) covers his point? I'll be in first thing 15 tomorrow to discuss." 16 Again, addressing Directors and Officers liability 17 and professional indemnity, which refers to the limit of 18 indemnity: 19 "This covers a breach of duty by [the Post Office] 20 resulting in a third party loss", et cetera. 21 Could we please turn now to POL00428835. There was 22 reference before in one of the email chains we saw to 23 Susan Crichton following up with all Non-Executive 24 Directors at this time personally, and it is at this 25 document, so it's POL00428835. We're now at the 91 1 7 August, and she is contacting you directly. If we 2 scroll down, we can see that's in response to the email 3 that was in this chain, the Alice Perkins email. If we 4 scroll up, we can see she says: 5 "Susannah -- hope you are having a good break, 6 please let me know if you would like to have 7 a discussion as per Alice's email, and I will organise 8 a time to meet/talk." 9 Did you speak to Susan Crichton at this point in 10 time? 11 A. No, I don't think I did because I've now seen an email 12 or note later in September, I think, where Susan 13 Crichton says she had spoken or exchanged emails with 14 the other NEDs and not me. So, from that record, I'm 15 inferring that I didn't. I don't know if, when we see 16 here, it's saying, "hope you are having a good break", 17 it is likely that, at that time, I was perhaps on 18 a holiday from work, I don't know. 19 But my -- I drew real comfort from the fact Alasdair 20 Marnoch was taking an active role in this work, as set 21 out in 16 July. 22 Q. You were also at this time a Non-Executive Director at 23 the Post Office. 24 A. (The witness nodded) 25 Q. Looking at it now, do you think that's an email that you 92 1 should have followed up on? 2 A. I don't know if we know that I didn't follow up. 3 I know, based on the information that I've seen, that 4 I didn't meet her, so I don't know if it was 5 a logistical thing and, by the time she was updating in 6 the autumn it hadn't happened. Of course, I think now, 7 when you look at it, it would have been good to speak to 8 her, not least because I now know all of the things 9 you've said about her not being in the room, and so on. 10 But, at the time, I felt there was a clear set of 11 actions, the Non-Executive Director, Alasdair, was 12 taking a lead. So I'm not sure, in my shoes at the 13 time, I did feel strongly and, obviously, if I had, 14 I would have done something different. 15 Q. We have seen all of those emails from Alasdair Marnoch 16 about the insurance position and the lack of clarity on 17 the issue that he is chasing down. 18 Did you have any discussion with Susan Crichton or 19 anybody else at this time about the notification to the 20 Post Office's insurers? 21 A. No, not about the insurers. As I say, I'm pretty sure 22 it wasn't me who raised it at 16 July. I also wasn't 23 the person charged with following up. So I wouldn't 24 particularly -- I would have seen some of these emails 25 coming in and the next opportunity to discuss any of the 93 1 actions from the 16 July Board meeting would have been 2 at the September Board meeting as a group. 3 Q. Let's have a quick look at the insurance notification 4 itself. That's at POL00112856. This is an email that 5 we've seen a few times before: 6 "Please find attached details received of a new D&O 7 matter for your consideration. The notice concerns 8 challenges which have been made to the accounting system 9 used in the Post Office Network ..." 10 It says about halfway down that covering email: 11 "A review of the Horizon system was undertaken and 12 whilst recommendations were made for improvements no 13 systemic problems were revealed which would call into 14 question the charges previously made against 15 subpostmasters. It is of concern to Post Office that 16 the expert of one prosecution witness, Dr Gareth Jenkins 17 of Fujitsu, may have failed to disclose certain problems 18 in the Horizon system potentially relevant to a case. 19 In the event it is discovered that improper prosecution 20 was undertaken, the risk exists of a claim being made 21 against the Post Office and Directors and Officers for 22 malicious prosecution [et cetera]. It is unclear at 23 this time the extent of possible exposure ... A copy of 24 your slip is also attached ..." 25 If we go over the page, we can see the note that was 94 1 prepared by Bond Dickinson and we've addressed this with 2 witnesses from Bond Dickinson. It's over the page, 3 please, there's a section on "Prosecutions & 4 Convictions". Again, in similar words in relation to 5 Mr Jenkins, it says: 6 "As noted above, where circumstances warrant, Post 7 Office prosecutes subpostmasters ... Post Office is 8 reviewing prosecutions ... 9 "Post Office has an obligation to consider whether 10 further disclosure should be made to defendants. It is 11 of concern to Post Office that the expert evidence of 12 one prosecution witness, Dr Gareth Jenkins of Fujitsu, 13 may have failed to disclose certain problems in the 14 Horizon system potentially relevant to a case." 15 What were you aware of in respect of Gareth Jenkins 16 at this time? 17 A. I wasn't aware, I don't recall being aware of Gareth 18 Jenkins until a long, long time later. 19 Q. Looking at this now, does this look to you to be a fair 20 and accurate notification of the position? 21 A. I thought you showed on the emails earlier, Alasdair 22 saying that there'd been a misunderstanding with Chris 23 about whether it was D&O or which insurance. It feels 24 as if somewhere underneath in the business, some people 25 are instructing Bond Dickinson to write a note. They're 95 1 obviously making some assertions. 2 None of this, I think, came to us and it wasn't 3 something that we knew at the time, and I think you also 4 showed an email where Chris Day is saying, "Don't send 5 the Board the whole note, just do a paragraph". 6 Q. Is this note or is the information contained in this 7 note the kind of information that you would expect to 8 have been shared at Board level? 9 A. I can't really comment on this note per se because I've 10 only seen it for the first time a few days ago. I think 11 the point I was trying to make before about not being 12 blindsided, giving us early warning of risks and all of 13 the areas that we discussed and are minuted in the 14 16 July Board meeting, to my mind, were the strongest 15 signal we, as a group of Non-Executive Directors, could 16 have sent at that time that this was now, we understood, 17 to be a much more complicated issue, having received the 18 Second Sight Interim Report, we wanted to see a series 19 of actions and we wanted to be aware of what was going 20 on. 21 So, of course, now that I see all of this other 22 information that we didn't see, I can't understand why 23 that wasn't shared with the Board, having given such 24 a strong signal at that time on this specific issue. 25 This was not a general signal; this was specifically 96 1 about all of the things that flowed from the Second 2 Sight Interim Report. 3 Q. A concern that an expert witness had given unreliable 4 evidence, whether it was in a case or many cases, would 5 you have expected that to have been brought to your 6 attention? 7 A. Yeah, I mean, I think, as I was saying, there was a lot 8 of new news, certainly to me and I think to the other 9 Non-Executive Directors, at that 16 July Board meeting. 10 After that, if there's any material risk, issue, 11 concern, worry, in my experience of Boards, when you're 12 in a difficult phase, that's when you want and expect 13 people to be at their most open. 14 Q. In your view, why did that information not reach you, 15 looking at what you know now? 16 A. I don't know. I don't know. 17 Q. Can we have look at the October Board meeting. That's 18 at POL00158089. 19 Thank you. It has you down as being present but 20 only at items 13/97 to 13/99. If we scroll down, we see 21 13/97 is the "Introduction". You then have a section on 22 "Government Funding and Strategic Plan". Over the page, 23 please, "Role of the Board" -- if we scroll down -- "and 24 Relationship with ShEx Post-Funding". It says there: 25 "The Board noted that Will Gibson would soon be 97 1 leaving ShEx and the Chairman agreed to discuss his 2 replacement and the ShEx representative on the Board 3 with Mark Russell, Chief Executive, ShEx." 4 Then it says: 5 "Susannah Storey left the meeting." 6 Can you recall why you were only present for those 7 first few items at that particular meeting? 8 A. Yes, this is the issue that I mentioned in my witness 9 statement, that in the autumn of 2013, the then 10 Government decided it wanted to take £50 off everybody's 11 energy bill in the country, and the people tasked by the 12 Cabinet Secretary to do that, lead that work, was my 13 jobshare partner and I. So just at this precise time, 14 it was very intense kind of conflict of roles, which 15 meant I had to leave that meeting early. 16 Q. We see there at (b) it's also a period of transition 17 within ShEx itself; is that right? 18 A. My recollection is that Will Gibson was taking paternity 19 leave and so would be leaving the Shareholder Executive 20 team. 21 Q. So there are changes taking place in the Shareholder 22 Executive team? 23 A. (The witness nodded) 24 Q. You yourself have described it as an exceptionally busy 25 period of your career, outside of Post Office work; is 98 1 that right? 2 A. That was an exceptionally busy period in that role. 3 I've had many busy periods in my career. 4 Q. If we scroll down, we can see that, if we go over the 5 page and over to another page, if we keep on scrolling 6 down over to the next page, we have the "Chief 7 Executives Report" and then we have at F, a section on 8 "Project Sparrow": 9 "Sir Anthony Hooper has now been appointed as 10 Chairman of the Horizon Working Group. The business was 11 working to prepare the team of people to work on the 12 mediation and case information necessary, as there were 13 likely to be up to 150 cases put to the Working Party 14 for a decision on whether they progressed to the 15 mediation process." 16 You weren't present at the Board during that 17 discussion of Project Sparrow; is that right? 18 A. Yeah, the -- I think -- the minutes will be correct in 19 terms of the chronology of when I left. I obviously 20 would have read the papers, including the Chief 21 Executive's update and including this update. 22 Q. But there was no Government representative on the Board 23 whilst this item was being discussed? 24 A. Well, I was on the Board. I wasn't at the Board at this 25 point. I think this is the meeting, as well, in October 99 1 2013 that Mark Russell, who was the Director General by 2 then of the Shareholder Executive, I think he came but 3 the written information doesn't help me now work out 4 whether he -- which bits he came for. 5 Q. I think if we turn to the second page, there's a mention 6 of Mark Russell in relation to the changes that are 7 taking place. If we scroll down, at (b) there's 8 a reference to Mark Russell but I don't think he's 9 actually mentioned on the first page as being present or 10 in attendance. 11 So you can't say whether he was there for the 12 discussion of Project Sparrow -- 13 A. I can't, I can't. 14 Q. But what we can be sure of is that there was no 15 Non-Executive Director who was representing the 16 Government's interests on that Board during that 17 discussion at the Board? 18 A. That's right. 19 Q. And if we turn to POL00027136, we see there this is the 20 "Chief Executive's Report". If we turn to page 5, we 21 can see there's the section on Project Sparrow that's 22 then discussed at that Board meeting. 23 Isn't this exactly the period of time when it was 24 important to have a ShEx representative sitting at the 25 Board and discussing Project Sparrow with the Board? 100 1 A. I mean, I think the reason why we put a shareholder 2 representative on the Board after separation was because 3 we felt all the issues that the Post Office were dealing 4 with were difficult and important and, therefore, we 5 generally wanted to increase visibility. Of course, 6 I take your point, at this point, and at every Board 7 after 16 July, there was a discussion about the issues 8 that became known as Project Sparrow. Would it have 9 been better if I was there? Yes. Did I have 10 an irreconcilable conflict on that day? Yes. Was this 11 part of the reason why I concluded I simply couldn't 12 keep doing this role in the way that I wanted to? Yes. 13 And that is why, at this point, I started my 14 conversations with the Shareholder Executive to say that 15 I wanted to resign a year early. 16 Q. Was there any discussion prior to that point when things 17 started to become particularly busy in your other role, 18 as to somebody to replace you or step in for you? 19 A. I have been clear that I -- my other role was a job 20 share, so I was working three days a week, and my 21 jobshare partner was working three days a week, so in 22 every week, there would be two days where I wasn't 23 working in the office, doing meetings for that employer, 24 and, therefore, generally in that year, I felt I could 25 give sufficient time to the Post Office, and in a way, 101 1 the sort of variable of whether or not things happened 2 was my time. So I would do the work as needed. 3 But I had a sort of growing feeling through this 4 autumn that this was continuing to be a very complicated 5 Board with a lot of difficult issues, not only this one 6 because, in another swim lane, as it were, we were just 7 about to announce the new funding, which was the thing 8 we'd been working on to make the business sustainable 9 for the last year and a half. That was announced 10 I think, in November 2013. 11 So there was a lot going on, and yeah, that's why 12 I started my conversations with the Shareholder 13 Executive. 14 Q. To summarise where we're at: busy Board, dealing not 15 just with Sparrow issues and Horizon issues but other 16 issues; you personally had a lot going on in your other 17 role; we've also discussed that you weren't physically 18 present at ShEx any more, not part of ShEx any more. Is 19 that a combination of factors that caused real issues? 20 A. I have said in my witness statement that I thought the 21 model that was adopted after I left was better. There 22 were structural obstacles, as we've discussed, in 23 relation to information sharing. I think, over time, 24 I felt that I was simply getting more distant from the 25 Government, and that -- I found that personally 102 1 difficult. I haven't had any period of my career as 2 a civil servant when I've seen ministers less on 3 an issue than I did at this time. As I said in my 4 statement, I only saw Jo Swinson once, in February 2013. 5 So yes, I didn't think it was completely 6 satisfactory. Was it still better having me than no 7 one? Yes, I'm sure it was. But, you know, we could 8 debate counterfactuals. 9 MR BLAKE: Sir, that might be an appropriate moment to take 10 our lunch break. 11 SIR WYN WILLIAMS: All right. What time shall we resume? 12 MR BLAKE: We can come back at 2.00. 13 SIR WYN WILLIAMS: 2.00. Fine. 14 (12.58 pm) 15 (The Short Adjournment) 16 (2.02 pm) 17 SIR WYN WILLIAMS: I see you've demoted Mr Beer, Mr Blake. 18 Very good. Off you go. 19 MR BLAKE: Thank you very much. 20 Before the break, we were looking at the 31 October 21 2013 Board meeting. I am now going to turn to the 22 November Board meeting, and that can be found at 23 POL00021520. 24 Thank you. These are the minutes and we can see 25 there that you are not in attendance on that day and 103 1 have provided your apologies. Again, is that because 2 the work at the new department was very busy on that 3 particular occasion? 4 A. Yes, it's the same issue that was in those few weeks, 5 yeah. 6 Q. On this occasion, if we scroll down, we can see there is 7 a significant update on Horizon, the Board has noted the 8 progress on Project Sparrow, there's discussion of the 9 Working Group. 10 If we go over the page, we see there at (c) past 11 prosecutions being discussed; at (d) future prosecutions 12 being discussed; there's a request for a note from the 13 General Counsel explaining who was named in past 14 prosecutions and the liability for the business. If we 15 go over to page 3, please, towards the bottom of page 3, 16 we can see there at (g): 17 "The Board noted the update on Risk Management and 18 the actions being taken as set out in [that] paper." 19 I'd like to take you to the paper. It's at 20 POL00027483. It's a paper prepared by Chris Aujard. If 21 we have a look at 2.2, "Allegations relating to the 22 integrity of the Horizon system": 23 "There is a risk that the allegations relating to 24 the integrity of the Horizon system, if not contained, 25 could raise wider questions over the robustness of our 104 1 core systems and our ability to operate, damaging 2 (amongst other matters) current partnerships, new areas 3 of expansion and public and government confidence." 4 This meeting, would you accept, was an important 5 Board meeting in the context of Horizon issues? 6 A. I think all the Boards, as I've said, after July, were 7 important on this issue because each one took an update, 8 yeah. 9 Q. Here we have the risk management update referring there 10 to potential issues to do with Government confidence 11 arising from Horizon. Wasn't that an important moment 12 to have the Government representative on the Board 13 present at the Board meeting? 14 A. I'm not sure the paper and the moment, if you see what 15 I mean, are the key thing. The bigger point you're 16 making is that I wasn't present at that Board, which, as 17 I've described, was because of my other role. I would 18 have read the papers I would have been doing the 19 follow-up around the edges, including with the 20 Shareholder Team. It's not totally clear to me whether 21 that point on Government confidence is actually about 22 the revenue lines from Government or more widely but, 23 absolutely, I mean, this issue was extremely 24 significant. We'd put in train all of these actions. 25 It was high now on the Post Office's risk register. 105 1 So -- 2 Q. If we can turn back to the minutes themselves it's 3 POL00021520. I mean, there was discussion at this 4 meeting. This was the meeting where past prosecutions 5 were discussed, future prosecutions were discussed. 6 A. Well, the Audit and Risk Committee had taken 7 a discussion on the future prosecutions paper and hadn't 8 reached a decision, and then decided to come back in 9 February, as we then see, including with the discussion 10 at the full Board but yes, I mean, a whole series of 11 important issues were being discussed at this and the 12 other Board meetings. 13 Q. At this time, you also weren't sitting on the Audit and 14 Risk Committee any more? 15 A. I was not. 16 Q. Why not put in place an immediate replacement at this 17 stage? 18 A. Well, when you're appointed to a Board, there's a whole 19 series of things happen and, in order to be replaced, 20 the Shareholder Team needed to find a replacement, the 21 Post Office would have to accept that replacement and 22 the steps would have to be taken. So I think I was 23 flagging, at this stage, as I already said, to Mark 24 Russell, who was my line manager and the Director 25 General and responsible for the Shareholder Executive, 106 1 that I had these concerns. 2 I don't think it would have been very easy just to 3 sub-in a person who wasn't a Board member, as a sort of 4 observer, if that's what you mean. But I did feel -- 5 and that's why I took the steps to step down from this 6 Board because I felt whoever did it needed to be there 7 and, as you know and as I've said in my statement, I was 8 very clear to my successor, which in the end ended up 9 being Richard Callard, that he needed, in my view, to be 10 on both the Sparrow Subcommittee, which was the place 11 where these issues were being principally addressed, and 12 on the Audit and Risk Committee. 13 Q. Looking back at those two meetings that we've just been 14 looking at, do you think there were missed opportunities 15 there, where -- 16 A. Um, I've -- I've set out in my statement a series of 17 reflections and missed opportunities. I didn't 18 particularly think these -- this meeting and the one 19 before fell into that but it's obviously hard to say 20 when I wasn't at the meeting. 21 Q. Moving on to discussions regarding the Post Office's 22 prosecution role. You were party to some of those 23 discussions in February 2014. By that stage, had 24 matters moved on in your other role? Was it less work 25 taking place on the £50 -- 107 1 A. It was completed. It had been implemented and the 2 customers who were getting that discount had got it. So 3 yes, it was a short, intense period that just happened 4 to coincide with this November Board meeting. 5 Q. Thank you. If that could come down, please. 6 By February 2014, there seemed to be three options 7 on the table, Options A, B and C: Option A being 8 preservation of the status quo; Option B focusing more 9 on egregious conduct; and Option C being ceasing all 10 prosecution conduct. 11 I'm going to turn to a few documents where those 12 options are discussed, where you have contributed. Can 13 we please start at POL00167751. It's page 4, 7 February 14 2013. 15 Thank you. If we turn to page 4, we can see there 16 is an email chain. Can you assist us, this is referring 17 to an Audit and Risk Committee teleconference on the 18 11 February. You're copied into or you're a recipient 19 of that email: can you assist us with why that would 20 have been sent to you at that time? 21 A. So my understanding is that in November 2013, the Audit 22 and Risk Committee had taken a paper on future 23 prosecutions, which at the time had Options A to D. 24 They asked for more information and, therefore, it was 25 coming back to the following Audit and Risk Committee, 108 1 which was in February 2014. 2 Although I wasn't on the Audit and Risk Committee, 3 I think the decision had been taken at the previous 4 Audit and Risk Committee that the full Board should at 5 least be able to provide their input on the options set 6 out in the paper but the actual decision was going to be 7 taken by the Audit and Risk Committee. So my 8 understanding of this Friday, 7 February 2014 email is 9 that that is that Audit and Risk Committee paper being 10 sent to us. 11 Q. Thank you. At this period, if your diary had fewer 12 commitments, was that an opportunity where you could 13 have rejoined the Audit and Risk Committee? 14 A. When I took the decision at the beginning of March 2013 15 about the following year and which committees to sit on, 16 I felt that was for the year. It was quite difficult, 17 I think, to chop and change, in terms of committee 18 membership. 19 Q. At this point, there was still not a Government 20 representative on the Audit and Risk Committee? 21 A. No, nothing had changed in the sense that, from April 22 2013 until April 2014, there wasn't a Government 23 representative. At April 2014, when, in the end, 24 Richard Callard took over from me, he was on the Audit 25 and Risk Committee. 109 1 Q. Thank you. If we scroll up, please, to page 3. We see 2 there Alice Perkins has contributed her view, that 3 Option C has been dismissed "too summarily". She says: 4 "I do of course understand that we couldn't just 5 throw our cases at the CPS and walk away at a moment's 6 notice. And I appreciate that we might find the CPS 7 route less satisfactory in cases where we were convinced 8 we should be prosecuting. But if it is the case that 9 the banks and other financial institutions are content 10 to live with this, why are we different?" 11 Could I please turn to UKGI00043711. We then have 12 Paula Vennells' contribution to this discussion, and she 13 says: 14 "I thought it would be worth sharing my thoughts on 15 why we are different; in my mind it relates to the 16 operational nature of [Post Office] rather than product 17 or services, where there is more commonality: 18 "The difference and perhaps not immediately obvious 19 to our leading Counsel is scale. None of the businesses 20 Brian Altman compared us to has a network the size of 21 ours ..." 22 If we scroll down, she says: 23 "We are more complex and operate without the ability 24 to monitor our agents easily ... 25 "This is an important area for the business and so 110 1 I am particularly grateful to our [Non-Executive 2 Directors] for your attention. We will do what we can 3 to facilitate a good debate." 4 At that point in time, can you recall what the 5 different positions were amongst the Board? 6 A. You mean at 22.57 on Sunday night? 7 Q. Exactly. That weekend, over the course of that weekend. 8 A. Well, I think it's, as just shown, the paper had come 9 round, Alice had set out her position, Paula has just 10 disclosed. There was actually a chain, I think, where 11 everybody was replying and I replied on the Monday 12 morning, just after 7.00 am. 13 Q. We have your reply at POL00138141. It's the bottom of 14 the first page, and you say: 15 "Thanks for copying me on these papers and given 16 I am not on the [Audit and Risk Committee Audit], I am 17 just passing my thoughts for information. But my read 18 of the paper was similar to Alice's. It doesn't seem we 19 had sufficient reasons for discard Option C and I think 20 it would be interesting to explore further. It seems 21 hard to imagine in 2014 [the Post Office] is so 22 different from other organisations to necessitate this 23 approach. 24 "As an aside, I also find the statistics for [the 25 Post Office] surprising and I can't help wondering if 111 1 any other organisation, to the extent we could get 2 comparable data, would have anything like this level of 3 situations that need investigation. Either way, I would 4 have thought any next steps must be accompanied by more 5 focus on training and better support. But sure that's 6 ongoing anyway." 7 Can you assist us with why you took the view you 8 did, as opposed to the view that Paula Vennells has 9 expressed in that previous email? 10 A. I mean, I think the -- what I wrote here speaks for 11 itself. I hadn't been in the November 2013 ARC 12 discussion nor would I therefore have seen the ARC paper 13 which came in November 2013. So, notwithstanding the 14 trail in on this issue, this was the first time that I'd 15 seen it, and I think I would have had in my mind all of 16 the things that we had set in train as actions, and the 17 papers we'd read from the 12 July paper onwards, the 18 year before, and I felt instinctively uncomfortable with 19 prosecutions and I didn't think the data was there in 20 the paper to back it up. 21 Q. Had you discussed it with ShEx at all? 22 A. I don't remember having discussed this ARC paper, 23 bearing in mind we got it a few days before, at the time 24 of my reply. This would be the sort of thing I was 25 doing as a Board member with my Board hat on, so 112 1 I wouldn't routinely check with them before. 2 I certainly would have been discussing it with them, 3 though, because Richard Callard obviously was getting up 4 to speed. He was the new Will Gibson, in my mind, and 5 I certainly would have told him what I thought about 6 this and, as you know, he came also to the February and 7 to the March Board. 8 Q. Absolutely. Let's have a look at those Board minutes, 9 please. Can we please turn to POL00021522. This is the 10 26 February Board meeting. It lists you as being 11 present and Mr Callard as being in attendance. 12 If we scroll down, we can see: 13 "... the Chairman opened the meeting and welcomed 14 Richard Callard, Non-Executive Director designate, 15 Shareholder Executive, who would be attending this and 16 the March Board before taking over from Susannah 17 Storey." 18 Can we scroll down, please, to the bottom of page 2, 19 "Review of the Current Prosecution Policy", and then 20 over the page we see that: 21 "The Board approved the implementation of Option B 22 as a new prosecutions policy ..." 23 Do you recall speaking up in favour of your 24 preferred option, Option C? 25 A. I'd already expressed my views in the email chain and 113 1 then this was being considered by the ARC. I can't 2 remember if, in the room, those of us who had 3 a different view expressed it again but when you don't 4 chair a subcommittee, no one Board member has a veto. 5 It's -- I'm not sure at this point I would have changed 6 it but I can't remember if I said anything in 7 particular. 8 Q. Can we please turn to POL00021523, and this is the March 9 meeting. This was your final Board meeting, was it? 10 A. It was. 11 Q. We have you down for items 14/31 to 14/38. Richard 12 Callard present. Was there a particular reason why you 13 were only present for part of that meeting? 14 A. I can't recall now why that was. 15 Q. If we scroll down, we can see Project Sparrow is 16 addressed: 17 "The CEO reminded the Board of the background to 18 Sparrow and the Initial Complaint Review and Mediation 19 Scheme, and introduced the work which Linklaters had 20 been asked to undertake to clarify the Company's legal 21 position." 22 So you were present for the discussion regarding 23 Project Sparrow and Linklaters. 24 If we scroll down to page 8, please. At 14/43 we 25 have the "Project Sparrow -- Insurance" issue being 114 1 raised, so that is a moment at which you're not present 2 at this particular Board. It says: 3 "The Board discussed the Professional Indemnity 4 insurance and the Sparrow compensation risks. The CFO 5 explained that [Professional Indemnity] insurance could 6 only cover incidents for which the Business was legally 7 responsible. Therefore any combination paid outside 8 that legal requirement could not be covered by 9 [Professional Indemnity] insurance. 10 "The Board asked the Business to consider enhancing 11 its insurance expertise and to reconsider how it tracks 12 events and near misses which should be reported to the 13 insurers. The CFO was asked to provide an update for 14 the next ARC on his proposal for [Professional 15 Indemnity] insurance." 16 So you can't recall why it was that you weren't 17 present at this meeting for this discussion? 18 A. No. 19 Q. Again, looking at this now, does that seem like 20 a relatively significant moment, the discussion of the 21 insurance position relating to Project Sparrow? 22 A. No. My view on the insurance issue is as we'd already 23 discussed earlier today. I think this would probably be 24 the follow-up from all of the actions initiated in July, 25 which Alasdair had been taking forward. 115 1 Q. Having looked at the way that the notification took 2 place and the information that was in that notification, 3 do you think it would have been helpful to have 4 scrutinised the insurance notification more, at Board 5 level? 6 A. I think the point you're making is about information 7 that was coming to the Board, which could have helped 8 overall in this situation and, obviously, as I said 9 before, if we had seen some of those papers, if the 10 Executive had provided some of that information after we 11 asked them not to blindside us and to be open with us, 12 then of course that would have helped. Sorry, I wasn't 13 seeing it as a sort of insurance issue, per se. 14 You're making the point if I had seen the Bond 15 Dickinson note that mentioned Gareth Jenkins in the 16 summer of 2013, would that have made the difference? My 17 answer is yes. 18 Q. There's reference in these Board minutes to the 19 Linklaters advice. I'd very briefly like to take you to 20 that. That's at POL00030724. The Linklaters advice can 21 be found at page 4. Do you recall that advice going to 22 the Board. 23 A. Yes, I do, and the partner came to the Board. 24 Q. Was it unusual, in your experience, for legal advice of 25 this nature to be shared at Board level? 116 1 A. As a general rule in all the Board conversations and 2 situations I've seen, and, you know, even now, thinking 3 about me as an executive with a Board of Non-Executive 4 Directors, you don't always share all of the underlying 5 information but what you do expect is, if the underlying 6 information is material, that it's being accurately 7 summarised and, if there's something particular that 8 would benefit the reader from seeing the whole paper, 9 that you share the whole paper. 10 So I think me as the Board wanted that Linklaters 11 advice. It was something we commissioned ourselves. So 12 I think I found it helpful to see both the paper and the 13 partner, as it were. 14 Q. If we scroll over the page, please, we can see the 15 "Executive Summary". The Linklaters advice, it says 16 summarises: 17 "... our key conclusions on the legal analysis of 18 the complaints made by [postmasters] about Horizon." 19 At 1.3 it says: 20 "The key factual issue is whether and to what extent 21 Horizon might be said to be reliable, what defects there 22 may be in it and how any such defects might manifest 23 themselves and translate into errors in the state of the 24 account between an individual [subpostmaster] and the 25 Post Office. Such relevant legal risks as exist arise 117 1 only in the event that there are provable malfunctions 2 in the Horizon system which are causative of losses on 3 the part of the [subpostmaster]." 4 From your perspective, was it not important at this 5 time to grapple urgently with whether the system was in 6 fact reliable, which is something that wasn't addressed 7 by this advice? 8 A. Yeah, and I think that's why, at this Board, and then 9 afterwards, the Deloitte work was commissioned because 10 the premise of this advice as set out was -- and I'm 11 summarising, these might not be the right words -- but 12 the system works. So I think what Linklaters were 13 saying, which we agreed with, was you need to get some 14 basis check that point. 15 Q. We're now in March 2014. 16 A. (The witness nodded) 17 Q. Why, in your view, are things moving so slowly in that 18 respect? 19 A. I think if you look at the long arc of this issue where, 20 unfortunately, problems have been arising for over 21 a decade, this to us at the time, to us as a Board, 22 who'd had the Second Sight Interim Report in July 2013, 23 actually felt that we'd taken a lot of actions, we were 24 trying to uncover things, and move at pace. Of course, 25 often with complex issues, each stone you lift, you find 118 1 something more complicated, and I think we felt that, as 2 well as all of the work described in paragraph 140 of my 3 statement, we wanted then to have this Deloitte piece of 4 work, which was a way of looking at the IT problems. 5 This Linklaters piece of work was a question of legal 6 issues and compensation, and so on. 7 Q. Wasn't the functioning of the system quite an obvious 8 and large stone to unturn, though? 9 A. Well, the Second Sight work had been looking at the 10 system and related issues. The 8 July report, the 11 Interim Report, as we've discussed, had a series of 12 complicated and difficult messages: on the one hand the 13 words "no systemic issues" but, on the other hand, it 14 was very clear through the spot reviews that 15 a combination of factors could create problems. 16 So, at the time, I think we felt taking the actions, 17 including with the Mediation Scheme and the other steps, 18 was a way to try and be prudent about this set of issues 19 but we also, as a Board, hadn't commissioned anything 20 other than the Second Sight Interim Report. So I think 21 this was -- it felt at the time another important step. 22 Q. I'm going to turn to one final issue very briefly, and 23 that's risk reporting. Prior to becoming 24 a Non-Executive Director, was there a system for 25 reporting Post Office risks within ShEx that you were 119 1 aware of? 2 A. So during my time in the Shareholder Executive, I joined 3 in 2006, I worked on a few different situations and, in 4 simple terms, I think the role of that team looking 5 after a series of different situations, evolved and 6 matured, including in relation to risk reporting. 7 So we used to have quarterly meetings in relation to 8 the individual companies or projects, if it wasn't 9 a company, and the risk reporting was on a journey of 10 improvement. I don't remember thinking -- it's hard to 11 think back now to all of the different iterations. 12 I think it was broadly in line with best practice at the 13 time, for example, when the Department or in the private 14 sector. If you looked at it now, with a 2024 hat on, 15 I think you'd think it was quite unsophisticated. But 16 I don't think we were particularly out of line. 17 Q. Did the system change while you were a Non-Executive 18 Director in respect of your ability to report risks to 19 ShEx? 20 A. When I was a Non-Executive Director, I would have been 21 primarily interfacing with the Post Office's risk 22 practices and what we did as that Board through the 23 Audit and Risk Committee to improve our risk management 24 and to look at different areas of what I would call the 25 control environment. As we've discussed, I would be 120 1 giving reflection, views, commentary to the Shareholder 2 Team. They were then responsible for what was in the 3 risk registers that they were managing. So I wouldn't 4 have seen those risk registers that they had after the 5 14 March 2012, when I left the building. 6 MR BLAKE: Thank you, sir, those are all the questions 7 I have. 8 Questioned by SIR WYN WILLIAMS 9 SIR WYN WILLIAMS: Before CPs ask any questions, I have been 10 musing about this debate that the Board had about 11 Options B or C, in terms of Prosecution Policy, all 12 right, and clearly there was a difference of view about 13 it. But in the discussions which did take place, was 14 there any acknowledgement or discussion that, in 15 Scotland and Northern Ireland, nobody but for the CPS 16 could prosecute and was that not considered as 17 a material factor in terms of England and Wales? 18 A. I do have a background recollection of that but, now 19 that you say it, I don't know why it wasn't in that 20 paper. So I can't recall -- I can't recall why. I just 21 remember feeling myself uncomfortable. 22 SIR WYN WILLIAMS: Yes, and I understand there was 23 a difference of view, and I'm not necessarily expecting 24 that you would have known personally -- 25 A. No, no, I get your point. 121 1 SIR WYN WILLIAMS: -- but someone in that Board would have 2 known -- 3 A. Yeah. 4 SIR WYN WILLIAMS: -- that in Scotland and Northern 5 Ireland -- 6 A. Yeah, it was a different -- 7 SIR WYN WILLIAMS: -- it had to be the Procurator Fiscal or 8 the CPS version in Belfast -- 9 A. Yeah. 10 SIR WYN WILLIAMS: -- so to speak. 11 A. Yeah. 12 SIR WYN WILLIAMS: Okay. 13 MR BLAKE: Thank you, sir. It's Ms Page and then Mr Stein. 14 Questioned by MS PAGE 15 MS PAGE: Thank you. 16 In your statement, Ms Storey, you describe 17 a critical moment in the summer of 2013 when the Board 18 was deprived of the information it needed, and you say 19 "at precisely the time when the Executive should have 20 been at their most open with us". The information you 21 were talking about was the information that was within 22 the Clarke Advice, that Gareth Jenkins had been acting 23 as an expert witness and that he was "tainted". 24 A. Yes. 25 Q. On that issue, in your statement, you said that you 122 1 didn't feel able to say whether the Board was 2 deliberately being kept in the dark by the Executive. 3 That's how you put it in your statement, not exactly 4 those words, but broadly. What I'd like to do is show 5 an email that the Inquiry has seen a few times to see if 6 we can get any closer to an answer on that. So if we 7 could look, please, at POL00382001, and this is the 8 email which has come up a few times. It's between 9 Ms Vennells and Ms Perkins about an unsafe witness. It 10 dates from November 2013, and hopefully you've seen it 11 before. 12 A. Yeah, I've seen that one. 13 Q. But I'd like to just zoom in on the important words. If 14 we could scroll down a little to "My concern", the email 15 begins between Ms Vennells and Ms Perkins -- or rather 16 the paragraph within it. Yes. 17 So there we are at the bottom. 18 "My concern re Sparrow currently is our obligations 19 of disclosure re an unsafe witness (the representative 20 from Fujitsu made no statements about no bugs, which 21 later could be seen to have been undermined by the SS 22 report). We do not think it material but it could be 23 high profile." 24 So that actually very succinctly encapsulates what 25 Mr Clarke enunciated much more fully in his Advice. 123 1 Would you have wanted to know about this unsafe witness 2 and the obligation to disclose the fact that he had made 3 statements about there being no bugs; would you have 4 wanted to know about that? 5 A. Of course. Of course. 6 Q. Do you think that the Board's discussions, in the months 7 leading up to November, would have made it clear to 8 Ms Vennells and Ms Perkins that the Board would want to 9 know about that unsafe witness? 10 A. I do. I've hopefully tried to give a general sense that 11 we were quite a difficult set of Non-Executive Directors 12 and we wanted to know things and, when something goes 13 wrong, yeah, I think those are the times when you need 14 to be absolutely as open as you can. And in my 15 preparation for this Inquiry, I've now seen a lot of 16 documents that I didn't see at the time, and I would say 17 even since I wrote my witness statement my position on 18 this issue has hardened. 19 Q. When you say "hardened", can you tell us exactly what 20 you mean by that? 21 A. I mean that I've seen a number of things that I think 22 were relative, contextual information that add to the 23 weight of the issues being significant, which were then 24 not reported to us as significant. So an example that 25 I was reading about last week was that Shoosmiths did 124 1 put written evidence to the 15 May Department of 2 Business Select Committee. They didn't appear at the 3 hearing. Paula Vennells and George Thomson appeared. 4 That's an example of something. We then met as a Board 5 the week later, that Select Committee is referenced. 6 The Select Committee itself didn't pick up that issue in 7 its own response, but it makes me think there was quite 8 a lot of information which was important and relevant. 9 Obviously, I'm applying hindsight, you know, I can't 10 put myself in the shoes of those people, which is why 11 I phrased it in the way I did in my statement. 12 Q. Mr McCausland told us yesterday, and obviously on the 13 same page as you in this respect, that the Board did not 14 know about the contents of the Clarke Advice, but he 15 also said that he was told that there was a Fujitsu 16 expert witness that could not be used any more but that 17 person could not be used any more because they had moved 18 on or they had retired or some such. He wasn't given 19 a name. The important point, perhaps, is that he was 20 given the impression that there was an innocuous reason 21 for that witness not to be used any more and therefore 22 the taint was hidden. And he thought that that was 23 perhaps some time in the latter half of 2013. Do you 24 remember being told anything like that? 25 A. I do not. I heard what he said yesterday when I watched 125 1 it last night. I don't recall that. 2 Q. No. 3 A. Bear in mind that Neil, as a Senior Independent 4 Non-Executive Director, would have been in and around 5 the business perhaps a bit more, so perhaps he had some 6 other conversations. 7 Q. And possibly also went to those Board meetings which you 8 didn't, in the latter half of 2013? 9 A. That's true. That's true. 10 Q. That was, of course, at the same time or around the same 11 time as the insurers were being informed and given the 12 name Gareth Jenkins. So, again, coming back to this 13 point, does this show that the Board was actually being 14 kept in the dark, as it were? You were not being told 15 about Gareth Jenkins but insurers were? 16 A. There was obviously a significant asymmetry of 17 information between what we were getting, which you've 18 seen -- both the papers and the minutes -- and what some 19 other parties were aware of and were getting. 20 Q. All right. Can we look, please, at another email. 21 POL00296944. This is just going back a little bit to 22 the 1 July telephone Board meeting and the reaction 23 afterwards. This is Paula Vennells to Alice Perkins at 24 9.07 pm, so on the day but afterwards: 25 "Hi Alice, I'm looking forward to catching up 126 1 properly tomorrow. I thought the Board were generous in 2 their patience tonight over the SS discussion. It is 3 helpful to know that they are supportive of the need to 4 be robust. That said, I thought Alasdair's intervention 5 was good -- it is why we haven't been completely 6 heavy-handed yet. We can discuss nuances and next steps 7 tomorrow." 8 Now, what do you recall of the meeting that would 9 have led her to say that the Board were supportive of 10 the need to be robust? 11 A. I can't be sure because this is an email exchange 12 between her and Alice. I am assuming -- I'm just 13 assuming -- it could have related to the point she was 14 making on that call about the need for factual accuracy 15 and, obviously, we were being told that day that this 16 report was going to go into the public domain, the 17 executive were not happy with it, they were concerned 18 about accuracy and they then went on to tell us about 19 that. So it may be that she's referencing the need to 20 be robust with Second Sight about the need to be 21 accurate and factual. But I can't be sure. 22 Q. Do you think that the Board was supportive of her view 23 on that? 24 A. I think, yeah, I think the Board heard what Paula said 25 on that call. We absolutely wouldn't have wanted 127 1 a document to go into the public domain that wasn't 2 factually accurate and we did trust the Executive. We 3 had no reason not to. So yeah, there's no reason, 4 I think, that this would be incorrect. What she's 5 reporting is her view of what we thought, having been -- 6 sorry, that's not a great sentence. 7 Q. No, understood. 8 Then sort of counterposed with that, she says: 9 "That said [so, in other words 'on the other hand'] 10 I thought Alasdair's intervention was good -- it is why 11 we haven't been completely heavy-handed yet." 12 Can you decode that for us at all; does that make 13 any sense? 14 A. I don't recall what specifically Alasdair said. 15 I wonder if it's to do with the interface with Second 16 Sight and, you know, it's plausible, isn't it, because 17 it was a debate later, that there was a concern about 18 the scope and time their work was taking and the cost, 19 the sort of desire to have some fixed parameters around 20 it. So it may be that it was a reference to that and so 21 Paula sort of implying that she might in due course 22 need, in her words, to be heavy-handed with Second 23 Sight. But I can't be sure. 24 Q. All right, well, it carries on: 25 "I caught up with Susan this evening after we 128 1 finished. She had finished her meeting with [Second 2 Sight] and [presumably this is 'and was of the view'] 3 that they do now understand the risk of being caught up 4 in something bigger and more sensitive. She is hoping 5 their report should be more balanced, should say they 6 have found no evidence of systemic Horizon (computer) 7 issues but will confirm shortcomings in support 8 processes and systems, and that Post Office has already 9 identified and corrected number of these. I hope when 10 they speak to James tomorrow that they will confirm all 11 this. They will also want to say their work is not 12 finished and therefore still not conclusive." 13 Then she says this: 14 "Not a final position by any means nor one that 15 controls what they might say rather than write but 16 sounding slightly better." 17 Do you know that the business were making efforts to 18 control what was written by Second Sight? 19 A. Not in that way as described there and it was 20 an independent report, so no. 21 Q. Then particularly she seems to be pleased, shall we 22 say -- or perhaps that's inferring too much, but in any 23 event she reports that Susan Crichton had told them 24 about the risks of being "caught up in something bigger 25 and more sensitive". Again, I hope I'm not reading too 129 1 much, but it's sort of an implied threat, isn't it? Did 2 you know that the business was involved in sort of 3 warning Second Sight of risks? 4 A. No, I don't really know what that sentence means. 5 I have to say, the end of it, the "something bigger and 6 more sensitive". I've obviously read this before today 7 because I've seen it in the disclosure documents but 8 I don't know what that's referring to. 9 Q. No. So, again, perhaps some issues going on behind the 10 scenes that the Board were being kept in the dark about. 11 You're nodding -- 12 A. Yes. 13 Q. -- just for the transcript. 14 A. Sorry, yes. I am nodding. I agree. 15 Q. Can list just have a look at this email, UKGI00045624. 16 If we scroll down a bit, the email that we can perhaps 17 look at is between Richard Callard and Tom Cooper in 18 2020, so considerably after the events we're looking at. 19 And, obviously, he's reporting back on a conversation he 20 had with you, and people no doubt have their own 21 slightly different recollections of conversations. So 22 you may wish to comment on various parts of this email. 23 But there are couple of these bullet points that 24 I wanted to focus upon. It's about the "whole Sparrow 25 thing", as Richard Callard puts it. The second bullet 130 1 point says: 2 "She does remember it becoming an increasing thing 3 after joining. Remembers Paula indicating that there 4 was nothing much to see here, it was a small number of 5 subpostmasters, long time ago, the business was getting 6 assurance etc ..." 7 But then in the next bullet: 8 "NEDs and Alice increasingly worried at the 9 seemingly slow pace of the execs' response and Arbuthnot 10 had started to fan the flames. The Board felt this was 11 mischief making that was fanning the flames and was 12 becoming a populist cause." 13 If that's the correct reporting of your 14 conversation, where is this idea of mischief making, 15 fanning the flames, a populist cause, coming from? 16 A. Yeah, I only saw this email very recently. I didn't 17 know -- I did meet Richard Callard from time to time, 18 I wanted to make sure he was getting the support he 19 needed. I do recall having various conversations with 20 him, including presumably one in March or April 2020. 21 I didn't know he was taking notes, I didn't know he was 22 recording it and I can't say exactly where all of these 23 things have come from. Obviously, what I've tried to do 24 in a very open way is set out my recollections and my 25 reflections in my witness statement, and that is after 131 1 I've read all the documents. So, at this point in 2020, 2 which would have been six years after I left, I'm not 3 sure how much reliance can be put on this. 4 Q. In other words, are you saying that you don't believe 5 that you said that there was mischief making or 6 a populist cause? 7 A. I don't remember those words. So, honestly, it's hard 8 to say. 9 Q. Do you think that there was any propensity on the Board 10 to be predisposed in that direction or was that 11 something the Board was being steered towards by the 12 Executive? 13 A. I think, from the beginning of our conversations as 14 a Board about what became the Second Sight Interim 15 Report, Alice was keenly aware, in the way she portrayed 16 it to us, that there was a whole series of issues that 17 had been going on for a long time, that understandably 18 James Arbuthnot was very worried about, as was Sir Alan 19 Bates. She wanted to get the work done, to look at it, 20 and that's what's happened. That's my recollection. 21 Q. Well, can we look at the Second Sight relationship over 22 a slightly longer time frame and, in broad terms, in 23 2020 -- sorry, the email can come down unless there's 24 anything else you want to tell us about it while it's up 25 there? 132 1 A. No. 2 Q. No. In 2012, the CEO announced the Second Sight Review 3 to the Board as just a little bit of AOB, right; that is 4 the first the Board gets to hear about it? 5 A. Yeah, it was in the AOB part of the discussion, I don't 6 think it was just a little bit, I wouldn't use exactly 7 those words but I understand of course the point you're 8 making. It didn't come as a paper nor as a main agenda 9 item. 10 Q. No history, nothing about past prosecutions. The 11 reasons that lay behind why Second Sight had been called 12 in, in effect, the fact that over many, many years, 13 people had been being prosecuted on the back of the 14 Horizon evidence and that, therefore, there were 15 multiple complaints to MPs about those prosecutions. 16 That wasn't part of the history that you heard about? 17 A. At that May 2012 Board meeting, no, it was nothing like 18 the horrific extent of what I now understand. It was -- 19 Q. Or even what was understood at the time, in the sense 20 that a number of MPs had made complaints, a number of 21 newspaper articles had been written. There was 22 a growing groundswell of people complaining about 23 Horizon that required this to happen. That wasn't made 24 clear, was it? 25 A. No, not in the May 2012 "Any Other Business" discussion, 133 1 no. 2 Q. No. So then, following that, each month the Chair draws 3 up the agenda and she puts the Significant Litigation 4 Report below the line just for noting, not for 5 discussion, month after month and, at the point where 6 there's Second Sight included as part of that, there's 7 kind of a couple of lines on Second Sight in those 8 Significant Litigation Reports but not for discussion? 9 A. The -- yes, I mean, you're right. The May 2012 Board 10 meeting was when Alice and Paula reported their meetings 11 to us with James Arbuthnot and then the Second Sight 12 work started, as well as the Significant Litigation 13 Reports, which were in the papers every month and 14 expanded over time in terms of their content. 15 There were, from time to time, updates, for example 16 if one of Alice Perkins or Paula Vennells had met Lord 17 Arbuthnot or Sir Alan Bates, they might update on that, 18 and I think, from time to time, the Board said, "What 19 happened on that work?" So there was a bit of to and 20 fro but nothing like the volume and focus, as you'll see 21 from the 1 July 2013 until I left the Board in 2014. 22 Q. Indeed, in May 2013, the Board did actually ask for 23 a formal update -- 24 A. That's right. 25 Q. -- which you did not receive? 134 1 A. We did not, and the next sort of thing we got, which is 2 why, as I've discussed, there was irritation, there was 3 this 1 July -- 4 Q. Exactly, when you were blindsided? 5 A. Yeah. 6 Q. So then even though you had asked in May for a proper 7 update, you then get nothing until you're blindsided and 8 told there is an urgent need to deal with the report 9 that's about to be presented to Parliament. So, in 10 effect, over that whole first year, the Board is not 11 substantively updated on the work of Second Sight and, 12 indeed, the agenda is managed in a way that everything 13 about it is put sort of below the line, everything in 14 the papers at least is put below the line just for 15 noting, nothing for a proper discussion? 16 A. Yeah, that's right. I mean, I know now from the papers 17 I've read that there was quite a lot of to and fro 18 between the company and Second Sight in the months that 19 led up to the publication of the Interim Report but we 20 were really getting very little colour on that, and as 21 you say, the written papers that we were receiving were 22 more as a sort of risk update, they're positioned as 23 there are these situations but not presented to us in 24 the way that we then came to understand them. 25 Q. Then we get to the July 2013 Board and, in the 135 1 background to just a few more questions -- and I don't 2 have many more -- it's just worth bearing in mind this: 3 that they are -- the July Board is a missed opportunity 4 arising from the fact that Ms Crichton was not 5 presenting her own paper, because she had received the 6 Clarke Advice. 7 A. (The witness nodded) 8 Q. She knew much more than the Board did about past and 9 present prosecutions. 10 A. (The witness nodded) 11 Q. The fact that she did not present her paper and become 12 subject to questions from the Board means that her 13 knowledge of the Clarke Advice stood no chance of being 14 revealed to the Board? 15 A. (The witness nodded) 16 Q. Ms Perkins gave an account to this Inquiry about why 17 Ms Crichton didn't come in to Board to present her 18 paper. At the end of that, Mr Beer asked her "Why is 19 none of that reflected in the Board minutes?", and after 20 a few false starts, her answer was, "I don't know the 21 answer to that question". 22 Was it your experience of the minute taking at POL 23 that important discussions were not reflected in the 24 minutes? 25 A. My recollection was that Alwen Lyons was a diligent 136 1 company secretary. The nature of minutes from any Board 2 meeting, and frankly any other meeting, often doesn't 3 give the reader all of the to and fro and who said what, 4 and might not include somebody having been expected to 5 present a paper and then not. So I don't think that in 6 itself was unusual. I obviously appreciate how 7 frustrating it is now and, you know, for me now as 8 a reader, trying to jog my memory, of course I think we 9 all wish there was a lot more colour on this issue 10 but -- 11 Q. No, of course minutes don't reflect everything but would 12 you have experienced a case where there's a discussion 13 about something significant and it just doesn't appear 14 in the minutes? 15 A. Um ... I mean, I can't think of examples of that now, 16 looking back. If we were contemporaneous, I'm sure it 17 would be much easier to give you an example about that. 18 SIR WYN WILLIAMS: Nothing about it sticks in your mind? 19 A. No, no. 20 SIR WYN WILLIAMS: All right. Is that it Ms Page? 21 MS PAGE: Just very briefly -- if I may, sir -- in your time 22 on the Board, was Ms Perkins somebody you would have 23 found or did you find her to be capable of leading and 24 controlling Board discussions? 25 A. Alice had a lot of experience of Board interfaces 137 1 because part of her day job was coaching people and 2 coaching boards and my experience was she took this role 3 really very seriously, she was very committed to it and, 4 I think, wanted to make sure there was a good discussion 5 of all of the issues across these difficult areas. 6 I think, if people felt strongly about things, they 7 would say them anyway. She probably was quite good at 8 sometimes drawing a conversation to a close or asking us 9 to pick it up offline. So I think she was rigorous. 10 Q. Would you have said that the July board "kicked off" in 11 any way? 12 A. "Kicked off" is not a sort of expression I would 13 particularly use but, I mean, as we've discussed today 14 and as I think the minutes reflect, it was 15 an uncomfortable Board and we had a difficult discussion 16 before the Board, just the NEDs who were there -- Neil 17 was not there that day, but for the NEDs and the 18 Chair -- the board meeting was difficult. "Kicked off" 19 slightly implies uncontrollable. I wouldn't say that. 20 Q. It wasn't uncontrollable; it was controlled, in effect? 21 A. Controlled in the sense of orderly. I don't mean 22 controlled to my memory in the sense of -- 23 Q. Steered? No -- 24 A. Yeah. 25 Q. -- not steered but, in the sense that at no stage did 138 1 Ms Perkins actually lose control of what was being said 2 in the meeting? 3 A. I don't recall that. She is quite a calm person. 4 I don't recall that. 5 MS PAGE: No. Thank you, sir. 6 SIR WYN WILLIAMS: Mr Stein? 7 Questioned by MR STEIN 8 MR STEIN: Sir, tempted as I am to say I've got a clear 9 hour, I'll be about 15 minutes -- 10 SIR WYN WILLIAMS: Tempted as I would have to say: no, you 11 haven't. 12 MR STEIN: I think about 15 minutes, if that suits both the 13 panel and -- yes, it does, I'm very grateful. Thank 14 you. 15 SIR WYN WILLIAMS: Well, I'll be rigorous, Ms Page, and hold 16 Mr Stein to 15 minutes, so I'll look at Mr Page's watch 17 now. 18 MR STEIN: The time is on, Ms Storey. 19 Ms Storey, I represent a large group of 20 subpostmasters, also people working in branches at the 21 small branches that you're familiar with right up and 22 down the country. 23 Can I just take you to two passages in your 24 statement to start off with, please. They're parts of 25 the statement whereby you refer to being reassured about 139 1 the system, the Horizon system. So paragraph page 17, 2 and I'm going to go page 8 of your statement, so I'd 3 like it on the screen, please. So paragraph 17 but it's 4 actually page 8 of the statement and it's the last, 5 I suppose, few lines of that paragraph. 6 So if we go to page 8, and we look at that top 7 paragraph, I'm very grateful. That's ideal, thank you 8 very much. So if you look above paragraph 18, the bit 9 I'm after is just above there. 10 What you're talking about there is that -- you're 11 talking about POL had full confidence in the Horizon 12 system, the system had been vigorously tested, full 13 confidence in the accuracy and robustness of the system 14 was shared by the NFSP: 15 "As I explain below, this was the consistent 16 position adopted by the company in relation to Horizon 17 throughout my tenure on the Board." 18 Paragraph 21, at page 10 now, please, and the last 19 few lines of paragraph 21. So very similar there. 20 "I referred above to the POL statement circulated 21 November 2011 [then a Relatively reference] expressing 22 full confidence in the accuracy and robustness of the 23 system and I do not recall hearing or reading anything 24 that was inconsistent with those assertions." 25 So we can see from your statement that on two 140 1 occasions you were referring to what you understood the 2 position to be, having been informed by the Post Office 3 that the system works fine. 4 A. Yes. 5 Q. Now, we then get, in terms of the order of things, we 6 get a reference within your statement to another 7 document I'd like to refer to, please, which is an SLR. 8 I'll ask this to go on the screen, please, UKGI00018251. 9 Now, this may appear as a slightly faded document on the 10 copy we're about to look at but we'll make our way 11 through it. 12 Yes. On my screen it's quite small, if that could 13 be expanded slightly I would be very grateful, if that's 14 possible. If we work our way down, so if we hold it 15 there for a second. So the SLR is referring, as you can 16 see there, to the right-hand side as "Privileged and 17 Confidential -- claims over 500,000 or those of 18 a sensitive nature". 19 If we look at file name "Horizon claims", and then 20 reference to case holder, we then see a name that is 21 very familiar to this Inquiry, Rod Ismay of POL. Now 22 the significance of Mr Ismay to the Inquiry, you've been 23 following the Inquiry clearly -- 24 A. I have. 25 Q. -- he wrote what within the Inquiry is called the 141 1 whitewash report 2010 -- 2 A. Yeah. 3 Q. -- saying essentially "No bugs here", okay? 4 A. Yeah, the Ismay Report that I think David Smith had 5 asked him to produce. 6 Q. Yes. If we then have a look at what is going on, we see 7 a reference -- I know it's very faded and slightly hard 8 to see. 9 A. It's okay, I can read it. 10 Q. Okay great. Look at the middle column under 11 "Description", we've got a reference to Shoosmiths, 12 under the fourth paragraph: 13 "Shoosmiths assert that they have consulted on 14 a further 85 cases which are all likely to raise similar 15 legal issues." 16 If you go up above that one, the third one, if you 17 can do the yellow line trick above to the: 18 "Each alleges wrongful termination of contract 19 (based upon (a) alleged defects in POL's internal 20 processes and (b) alleged defects with Horizon) ..." 21 Okay? Then we'll move across and again, names that 22 are familiar to this Inquiry. Mr Darlington, it's 23 talking about his position, the claim rejected "on the 24 basis that the SPMR admitted to and was convicted of 25 false accounting". Then "Response", in relation to 142 1 Shoosmiths, and then an update as to the position. 2 Okay. 3 So we see that there are Shoosmiths setting out the 4 fact that they've got 85 clients, plus the then five 5 that are here, all setting out -- this is the summary of 6 the situation which is they're all saying there are 7 problems within the system. 8 Now, you referred to this document at paragraph 66 9 of your statement. That's at page 32, paragraph 66. 10 I want you to help us with what you mean by some of the 11 terms that you're using. So if we can now go to 12 paragraph 66, page 32 of your statement. 13 So this is sent to you, this document. You refer to 14 this as being part of the Board pack for your first 15 Board meeting. Now, it might be said that, as it's your 16 first Board meeting, you may have read the lot, rather 17 than having the ability to sift, but let's see how we 18 go: 19 "The SLR [the one we've just referred to] appears to 20 have been included with the Board papers but 'below the 21 line' and for noting (ie not for discussion by or at the 22 Board). As I have explained, the Board papers would 23 include papers that were intended to form the basis of 24 discussion by the Board and papers which we were 25 requested to note for information but not usually 143 1 discussed." 2 Help us translate the corporate speak here, if you 3 don't mind. When you're saying, "Appears to have been 4 included within the Board papers but below the line and 5 for noting only, ie not for discussion by or at the 6 Board", what does that mean: "below the line", nobody 7 reads it at all or people are expected to read and raise 8 something if they think about it? Help us. 9 A. Yes, so what I mean by that is that the Board agenda 10 would set out each of the items that were going to be 11 discussed at the Board, each one would have a timetable 12 committed to it. That would basically take up the bulk 13 of the day, if a Board meeting went from 9.00 until 14 4.00. And then, just at the end of the day, in my 15 experience of the Post Office with these matters, there 16 were items that were not being raised to the Board for 17 discussion, but only to note, which means you needed to 18 read it and agree that you had noted it, and that was 19 the nature of these Significant Litigation Reports. 20 Q. Shoosmiths is saying they've got 90 people all saying 21 that there are problems with the Horizon system. Was 22 that something that came to your attention in terms of 23 you thinking about it and saying, "Hang on, that's 24 a heck of a lot of people"? Did it come to your 25 attention in that way. 144 1 A. I don't recall it coming to my attention in that way at 2 that Board meeting and, you know, that's one of the 3 things obviously that I've said I regret. My reflection 4 is -- and I understand why, you know, from your position 5 this will sound odd but, in the shoes that I was in and 6 as a Non-Executive Director Board member, we were 7 getting quite strong assurances that the system is 8 robust, nothing to see here. So I think I was trusting 9 what the execs were saying. But I take your point. 10 Q. All right well let's keep on going, you're talking about 11 shoes, I'm going to talk about Shoosmiths a bit more. 12 A. Yes. 13 Q. POL00141382. Now, you go away on maternity leave -- 14 I have this from your statement -- is it March 2012 to 15 March 2013? 16 A. No, I had the baby in March 2013, and I started on the 17 Board in April -- sorry, in March 2012, and I started on 18 the Board in April 2012. 19 Q. Right. Okay, maybe I've misnoted it from your 20 statement. So I'm not sure whether you're around at the 21 time of this particular document. We go to the end of 22 the document, I think it's July 2012. But let's have 23 look through. I want to go to particular paragraphs, 24 paragraphs 2 to start off with, it's a very good summary 25 of the situation. 145 1 Paragraph 2. I'm going to summarise this because 2 I've got a clock ticking. Access Legal from Shoosmiths, 3 national firm, contacted by 100 SPMs. So you see the 4 same numbers. The numbers, in fact, are going up by 5 this point. They suffered losses, those losses can't be 6 explained. They had been subject to disciplinary 7 measures, all adamant that they or their staff have not 8 stolen any money. Horizon system is at fault, they say, 9 the Post Office requires them to use it. The last three 10 lines: 11 "They claim there has been no real investigation by 12 POL as to the clause of the losses that have appeared -- 13 SPMs are expected to pay it back regardless of how it 14 was caused." 15 Can we go back to paragraphs 11 and 12 together. 16 They appear, I think, close to each other. 17 Paragraph 11: 18 "POL will ask an SPM to repay all losses ..." 19 I've used this document before in another context so 20 I'm just going to go to a slightly different part to 21 assist the Inquiry. Last line of paragraph 11 says: 22 "It is far from clear whether there is a loss in 23 a sub post office that POL have actually lost any 24 money." 25 So it's far from clear as to whether any money has 146 1 ever gone missing. Then 12, again I will summarise: 2 If the loss not repaid, POL will prosecute the SPM 3 for false accounting and then people are being advised 4 to plead guilty to false accounting. In the 5 circumstances, many were charged with theft or fraud but 6 these charges are typically dropped and SPMs have been 7 imprisoned for false accounting. 8 These are serious and quite complex issues that are 9 being raised. Lastly 14 and 16. 10 14: the contract is old, this is what it is saying. 11 It goes back to 1994. It was designed for a paper 12 system, no good for a digital system. That's what 14 is 13 saying. 14 Then 16, just finishing. Faults with Horizon, loads 15 of ways, this is saying, there could have been problems 16 with Horizon: system errors, human errors, faults with 17 cross-system communications, electrical faults. It 18 doesn't matter, it goes on to say, how they're 19 occurring, it's happening. 20 So you've got complicated detailed submissions being 21 made by Shoosmiths in relation to the Network 22 Transformation consultation. That's what's going on 23 here -- 24 A. Yes. 25 Q. -- saying look there are real problems, lots of people 147 1 we've got all having difficulties in the same way. 2 Now, first question, it relates to this: if I'm 3 right in thinking about the timing of when you were 4 away, was this brought to your attention, if I've got 5 the timing right, when you came back from maternity 6 leave or at you in any way familiar with this document 7 at the time -- at the time? 8 A. So just firstly, I never was away on my maternity leave. 9 So I had the baby and then started on the Board. So 10 I was on the Board when I was on my maternity leave -- 11 (unclear -- simultaneous speakers) -- doesn't matter. 12 Q. Are you familiar with this document? 13 A. This document I am now, it's a written submission, as 14 you're saying, to the Department of Business Select 15 Committee. 16 Q. Correct. 17 A. The hearing was in May 2012 and it was on Network 18 Transformation. Shoosmiths made the submission, it was 19 a written submission, it's in the papers, and Paula 20 Vennells appeared at that hearing, it's the one that 21 I was referring to earlier. She appeared on 15 May 22 and -- 23 Q. At the time of these sorts of matters, around this 24 period of time, forgive me for summarising your 25 position -- 148 1 A. Yes, sorry -- 2 Q. -- were you familiar with what was going long in these 3 submissions? Was it -- 4 A. I had not seen this submission, no, no. But the point 5 I was making before was, when we were given the update, 6 for example, at the Board on the BEIS Select Committee 7 that the Chief Executive had just appeared at, this 8 particular submission wasn't referenced and it actually 9 would have been extremely important to see it at the 10 time. 11 Q. Because one of the simple ways through this would have 12 been for somebody on the Board, or Ms Vennells, 13 somebody, to start speaking to the subpostmasters 14 because rapidly what would have happened is that would 15 have resulted in being told "Look every time we phone up 16 the damn helpline they just tell us to pay because of 17 the contracts". 18 A. I appreciate that -- 19 Q. That's masking people masking complaints about the 20 system, "they keep on telling us to pay and I'm trying 21 to say look there's a problem". 22 A. I appreciate that and -- 23 Q. If that had been looked into? 24 A. Yes, and also the Parliamentary Committee didn't pick up 25 this issue -- I think in the hearing Caroline Dinenage 149 1 MP asked one question which George Thomson took but it 2 wasn't even referred to in the committee's -- 3 Q. No, we have a slight problem with Parliamentary 4 privilege, so therefore -- 5 SIR WYN WILLIAMS: Anyway, just on this, can I just be 6 clear, there was no attempt by the Post Office 7 Executives to bring this sort of detail -- however it 8 came into being, there'd been no attempt to bring this 9 sort of detail to the Board? 10 A. No. 11 SIR WYN WILLIAMS: Right. 12 MR STEIN: We then get through -- and you have been asked 13 a lot of questions about it by Mr Blake and some of them 14 have been looked at them afterwards. So just to finish, 15 you get to the stage whereby you read and you're aware 16 of the contents of the Second Sight Interim Report. 17 A. Yes. 18 Q. Okay. Now, we don't need to go to it but one of the 19 most significant things about that report is saying that 20 there's bugs in the system, a couple of bugs -- 21 A. (The witness nodded) 22 Q. -- one which is the mismatch bug -- 23 A. (The witness nodded) 24 Q. -- could really cause problems to people. Okay? So 25 let's go back to where I started with my questions. 150 1 You're being told: system robust, no bugs, no problems 2 with it. Then later on, 2.13, you're told that there 3 are bugs. 4 A. (The witness nodded) 5 Q. Right. Did Ms Vennells, at this juncture, when you get 6 the Second Sight Report and the discussions at the Board 7 about it, did she say to the Board, or you individually, 8 "One of the things that's really peculiar about this is 9 that I've been reassured, reassured and reassured there 10 are no bugs in the system, and then, quite surprisingly, 11 or perhaps using other words, I've now learnt through 12 Second Sight and details before that there are bugs in 13 the system, and we really ought to look into this as to 14 why we weren't told about this before". 15 Did she ever say something like that because I might 16 feel a bit misled in that situation, if I were in her 17 shoes. 18 A. No, she -- 19 Q. Right. 20 A. Not in -- 21 Q. What about you and the other people on the Board? 22 You're in a similar position. You agreed with Ms Page 23 and Mr Blake that you feel as though the Board was left 24 in a bit of a vacuum on information. But the one thing 25 that you've been told at the beginning is no bugs in the 151 1 system and yet, in 2013, you're told about bugs that 2 well affect branch accounts. Did you ever get or was 3 there any discussion at the Board "Why on earth are we 4 being told that there were no bugs in the system? Who's 5 been making this up? What's going on?" Did you ever 6 get to that because, as an example, Mr Ismay, who 7 I referred to right at the beginning, he learnt in 2011 8 about the mismatch bug. 9 So it's been going on for years, the Post Office has 10 known about these things. 11 A. Yeah, I can't speak to the sort of pre-2012 period, 12 although obviously I know that when I started on that 13 Board we had none of the long history from the Royal 14 Mail Group, we were not getting any concerns flagged by 15 internal -- or any material concerns from internal or 16 external audit. 17 To your point, when it came to the Second Sight 18 Interim Report, it did flag those issues from the spot 19 reviews very clearly. It also said there were no 20 systemic issues. It also flagged some serious concerns 21 that we needed to look at and, at the time in 2013, 22 those were the steps that we thought we were taking. 23 Q. Forgive me for interrupting, as again I'm slightly 24 thinking about the seconds ticking -- 25 SIR WYN WILLIAMS: They've ticked but carry on, yes. 152 1 MR STEIN: They've well ticked but did you think to yourself 2 or did the Board think to itself, "Well, hang on we 3 ought to look into why we've been reassured about 4 something that ain't true"? 5 A. Well, I think at the time, we did have various elements 6 of discontent that we expressed to the Executive and 7 then we set about a series of actions that we felt we 8 could control, to try to get to the bottom of these 9 things. 10 Q. And that one? 11 SIR WYN WILLIAMS: Well, I think the answer to the question 12 is that you didn't enquire, as Mr Stein suggested you 13 should. What you did, by the look of it, is to accept 14 the explanation you were given, namely there had been 15 two bugs but they'd been cured. That's what happened, 16 isn't it? 17 A. Yeah, I think we took what the -- the Executive were 18 clear about their view. At that point in July 2013, we 19 had no particular basis to think anything different and 20 then we started to take a series of steps and then, as 21 I said earlier to Mr Blake, part of the point from my 22 perspective of the Deloitte report was to try to get 23 under the skin of the IT -- 24 MR STEIN: Outward facing from this, going into then the 25 question of -- it doesn't matter who is prosecuting, 153 1 whether it's the CPS in Northern Ireland, whether it's 2 the Procurator Fiscal in Scotland, whether it's Post 3 Office in England. We know that prosecutions continued. 4 I've referred to Ms Falcon who was prosecuted at the 5 beginning of 2015, using data from the Horizon system. 6 The prosecutions continued using Horizon data. Didn't 7 the Board say to itself, "Well, hang on, haven't we got 8 to make sure what on earth is going on with this. If 9 there are bugs in the system, like are being set out in 10 the report, we, the Board, have to be responsible for 11 making sure we stop it right now"? 12 A. Well, I can only speak to the Board until I stepped down 13 in 2014. 14 SIR WYN WILLIAMS: Well, I think that's really a speech, not 15 a question. So I think we'll call it a day there, 16 Mr Stein. 17 MR STEIN: Thank you, sir. 18 SIR WYN WILLIAMS: Thank you. 19 MR BLAKE: Thank you, sir. Those are all the questions for 20 Ms Storey. 21 SIR WYN WILLIAMS: Right, we're not quite at the end of the 22 session because Mr Beer wants to make one or two 23 announcements but that does conclude your evidence, 24 Ms Storey. So you're very welcome to sit there and 25 listen to Mr Beer for a couple of minutes, or you can 154 1 disappear, as you prefer. 2 But for certain, I'd like to thank you for making 3 your witness statement, which is a very detailed one and 4 for answering questions for the greater part of today, 5 so thank you very much. 6 If you'd like to leave, now is your chance, 7 otherwise Mr Beer is going to start. 8 MR BEER: I won't take offence at all. 9 THE WITNESS: No, it's fine. 10 Announcements by MR BEER 11 MR BEER: Sir, as we've come to the end of phases 5 and 6 -- 12 SIR WYN WILLIAMS: Well, is that true? 13 MR BEER: -- at least the principal part of the evidence 14 taking of Phases 5 and 6, I thought it might assist to 15 firstly draw the threads together in terms of the nature 16 and extent of the evidence that you've heard, secondly 17 to read some statements into the record, in fact, those 18 statements received in the course of these phases but 19 which relate to other phases of the Inquiry, Phases 2, 3 20 and 4, and then thirdly to say something quite short 21 about the independent surveys that are being conducted 22 for the purposes of Phase 7 of the Inquiry. 23 So, firstly, the evidence heard in Phases 5 and 6. 24 Over the course of 16 weeks, sir, you've heard 25 evidence from people at the highest level within the 155 1 Post Office and Government paying careful attention to 2 the three questions which run through every stage of 3 this Inquiry: who knew what and when, about the issues 4 with Horizon. Since April of this year, you have heard 5 oral evidence from 66 witnesses. You will hear evidence 6 from a small number of witnesses on Phase 5 and 6 issues 7 in the course of Phase 7. Their evidence could not be 8 taken during the course of the last 16 weeks, for one 9 reason or another. 10 As in other phases of the Inquiry, the oral evidence 11 that you have heard is not the entirety of the evidence 12 that you will be considering. Aside from the huge 13 volume of documentary evidence, there are the statements 14 of witnesses who will be read into the record. I'm not 15 going to do that now for Phases 5 and 6, ie Phase 5 and 16 6 witnesses, and, instead, I'll do that in the course of 17 Phase 7, when all or nearly all of the Phase 5 and 6 18 written evidence is available to the Inquiry. 19 Owing to the scale of Phases 5 and 6, your Inquiry 20 Team will continue to seek evidence and issue Rule 9 21 requests throughout August, and further evidence will be 22 disclosed to Core Participants and then to the public in 23 due course. 24 Reading in of statements from Phases 2, 3 and 4. 25 Today the Inquiry will be publishing statements from 156 1 witnesses about Phase 2, 3 and 4 issues. Those 2 statements will be admitted into evidence and treated as 3 having been read into the record. The witness 4 statements will be uploaded shortly to the Inquiry's 5 website. 6 The witnesses who fall into those categories are 7 described in a PowerPoint presentation that I'd ask to 8 be displayed. INQ00002022. If we look at page 2, 9 please. The names of the witnesses that are going to be 10 read into the record by the act of displaying this 11 document are listed on the left-hand side for Phase 2. 12 There are seven witnesses and eight statements because 13 Mr Folkes has got two statements relating to Phase 2 14 issues, and the URNs are displayed in the right-hand 15 column. 16 Over the page, please, to Phase 3. On this page and 17 the next, there are 11 witnesses -- Mr Folkes being the 18 first of them, his fourth witness statement -- who give 19 evidence in relation to Phase 3 issues: names listed on 20 the left; URNs, which I'm not going to read out, on the 21 right. 22 Over the page, please, that's the balance of the 23 Phase 3 witnesses. 24 Then the last page, please, there are four witnesses 25 who give evidence about Phase 4 issues, names on the 157 1 left, URNs on the right. 2 That can come down. 3 The work of your Inquiry so far has covered a period 4 of over 20 years. It has heard evidence through oral 5 witnesses from 267 individuals. We had published the 6 written evidence from a further 229, including those 7 listed on that PowerPoint presentation. Your Inquiry 8 has disclosed to Core Participants almost 250,000 9 documents totalling just under 2 million pages of 10 documents. I'm told, for those wishing to visualise 11 that number, if stacked up it would be the length of two 12 football pitches. 13 Can we turn, lastly, then to Phase 7 of the Inquiry. 14 As we move on to the final phase of oral evidence, 15 the Inquiry will turn its focus to the current practice 16 and the current procedures within the Post Office and 17 within Government, in relation to the Post Office. 18 Phase 7 will include evidence from current and former 19 senior officials and executives within the Post Office 20 and Government. We will also return to looking at the 21 effectiveness of the compensation schemes and the 22 redress schemes, building on your Interim Report 23 published last year. 24 Work on this phase has been going on in the 25 background for many months now. Those following the 158 1 Inquiry will be aware that you have commissioned 2 independent research and data analytics from a firm 3 called YouGov, in particular to conduct two surveys to 4 gather views from all current subpostmasters and all 5 applicants to the Horizon Shortfall Scheme. 6 Those two surveys are ongoing. They're live at the 7 moment. By way of update to you and for others, 8 I understand that, so far, over 2,000 recipients have 9 either started to complete or have completed and 10 returned the survey. We're surveying 16,000 people, so 11 that is a response rate of around 12.5 per cent, which 12 I am told is a promising start at this point of 13 a research project. 14 So, sir, that's all from me today. I would like to 15 end by encouraging those, everyone who has received 16 a link to the surveys, to complete them. It's vital 17 from the Inquiry's perspective that we enter Phase 7 18 with as full a body of evidence about the current 19 position as is possible. 20 Thank you, sir. 21 Statement by SIR WYN WILLIAMS 22 SIR WYN WILLIAMS: Thank you, Mr Beer. 23 Well, those who have had the grave misfortune of 24 following what I do will know that I am not very keen on 25 repetition but, on this occasion, I do wish to repeat 159 1 the appeal which Mr Beer has made for continued 2 participation in the two surveys. I am obviously 3 heartened by what he has had to say about the numbers of 4 participants to date but it is crucial that I get as 5 full a response as possible to these surveys because we 6 have looked long at the past, but now I'm coming up to 7 date, so to speak, and I want to know about the present, 8 both in terms of subpostmasters' reactions to the 9 present regime -- survey number 1 -- and postmasters' 10 reactions to the compensation scheme HSS in particular. 11 I think I am now brave enough to say that I have 12 stretched my terms of reference on compensation to, and 13 perhaps beyond, breaking point. It's something I am 14 very keen to say as much about as I reasonably can. So 15 I need as much help as possible from those who are 16 claiming compensation in order to make proper 17 conclusions about what has happened and whether it lives 18 up to the mantra of being full and fair. 19 I want to stress that the surveys are not connected 20 to the Post Office. I said that, I think, some weeks 21 ago when they were first introduced but I want to stress 22 that, because I can't help but think that there will be 23 lurking in some people's minds "Do we really want to get 24 involved with this? Is the Post Office somehow behind 25 it?" 160 1 The Post Office is not, this is for the benefit of 2 the Inquiry. So if you find it difficult to speak about 3 challenges which you still face, you people out there 4 whom I am addressing, please be assured that these 5 surveys are for the benefit of the Inquiry and therefore 6 ultimately for the benefit of me writing a sensible 7 report about the information they will contain. 8 Let me just say something about Phase 7. I think -- 9 in fact, I'm 95 per cent sure -- that this will begin in 10 the week commencing 23 September. There are significant 11 issues to examine. I don't want to rush it. So what 12 I expect is that hearings will run into November. Quite 13 how far into November we'll have to see because I have 14 decided that you all deserve a break in the middle of 15 this Phase 7, so that there won't be sittings in the 16 last week of October and the first week in November, 17 ie the potential half term weeks when people may want to 18 take a break. 19 A witness timetable for these sessions will be 20 published as soon as we can reasonably do that. 21 All that will be left after the Phase 7 evidence is 22 closing submissions and I want to tell you what I have 23 in mind, and I'm telling you this now so that if anybody 24 violently objects, they'll have a chance to register 25 their objection. What I want is that the substance of 161 1 closing submissions are in writing. I do not want 2 anyone to get the impression that I am going to sit 3 here, or on screen, for a number of weeks listening to 4 oral submissions because I'm not. 5 What I will allow are reasonably short oral 6 submissions so that the advocates can demonstrate their 7 oratorical skills and treat me as I'm a jury in the Old 8 Bailey, even though I'm not, but it will allow there to 9 be some human impact to those oral submissions. So 10 I would expect that oral submissions will last for, say, 11 up to two days but the bulk of it has to be done in 12 writing, not least because that's the best way that 13 I can ultimately digest what is being said. 14 With a fair wind, all that will be completed for all 15 you to go off and enjoy your Christmas holidays, and for 16 me to think "Oh, my goodness, what comes next?" 17 Can I thank you all for participating as you have 18 done in this phase of the Inquiry. 19 Mr Beer, with his usual understatement, has reduced 20 66 witnesses and goodness knows how many documents he 21 mentioned, as if it was an everyday occurrence. With 22 the cooperation of all of you, we have got through 23 an enormous amount of work in a very short period of 24 time and, for that, I am eternally grateful for every 25 single person who participates in this Inquiry. 162 1 You've heard me praise my team up to the sky is the 2 limit, but all you -- and I'm looking past Mr Beer 3 because Mr Chapman hides in the corner there and I can 4 never see him -- but every CP in this room deserves 5 credit, together with their legal teams, for 6 facilitating my work. 7 So thank you all very much. I am going to retreat 8 back to Wales shortly and escape the heat of London but 9 I'll see you again in the autumn. 10 MR BEER: Thank you, sir. 11 SIR WYN WILLIAMS: Right. There we are. 12 (3.29 pm) 13 (The hearing adjourned until September 2024) 14 15 16 17 18 19 20 21 22 23 24 25 163 I N D E X SUSANNAH JEMIMA STOREY (affirmed) .............1 Questioned by MR BLAKE ........................1 Questioned by SIR WYN WILLIAMS ..............121 Questioned by MS PAGE .......................122 Questioned by MR STEIN ......................139 Announcements by MR BEER ....................155 Statement by SIR WYN WILLIAMS ...............159 164