1 Wednesday, 9 October 2024 2 (10.03 am) 3 SIR WYN WILLIAMS: Mr Beer, before we begin to hear evidence 4 this morning, I have an announcement to make. 5 Ladies and gentleman, it is my sad duty to announce 6 that Mrs Gillian Blakey, one of our Core Participants, 7 passed away last week. Mrs Blakey had been the 8 subpostmaster at Riby Post Office in Lincolnshire. 9 During her period as a subpostmaster, data from the 10 Horizon system suggested that there was a substantial 11 shortfall at the branch, and the use of that data, in 12 due course, led to Mrs Blakey's husband, David, being 13 prosecuted, and Mrs Blakey ceasing to be the 14 subpostmaster. Mr Blakey's conviction was quashed by 15 the Court of Appeal Criminal Division in April 2001. 16 Both Mr and Mrs Blakey were claimants in the Group 17 Litigation. My understanding is that Mrs Blakey had not 18 received the additional compensation to which she was 19 entitled under the GLO scheme. That must be a matter of 20 great regret for all concerned. 21 On behalf of all of the members of the Inquiry Team, 22 and on my own behalf, I extend my deepest sympathies 23 this to all Mrs Blakey's family and friends. 24 I understand -- and if any necessary formalities need to 25 be undertaken, this will be done -- that Mr Blakey will 1 1 represent his wife's interest as a Core Participant 2 during the remainder of the Inquiry. Thank you. 3 Yes, Mr Beer. 4 MR BEER: May I call Nick Read. 5 SIR WYN WILLIAMS: Yes. 6 NICHOLAS JAMES READ (sworn) 7 Questioned by MR BEER 8 MR BEER: Good morning, Mr Read. As you know, my name is 9 Jason Beer and I ask questions on behalf of the Inquiry. 10 Can you give us your full name, please? 11 A. Nicholas James Read. 12 Q. You've made, kindly, four witness statements to the 13 Inquiry. Can we start, please, by going through each of 14 those. The first witness statement is dated 2 September 15 2024, it's 132 pages long, excluding its appendix. Can 16 we look at that, it's WITN00760100. It'll come up on 17 the screen for you. 18 This is your first witness statement, 132 pages. If 19 we go to page 132, please. Have you managed to track 20 down the hard copy? 21 A. I'm just looking for it, actually. Bear with me 22 a second. I've got it, yes. 23 Q. Ah, thank you. Is that your signature in the hard copy? 24 A. It is indeed. 25 Q. Are the contents of that true to the best of your 2 1 knowledge and belief? 2 A. They are. 3 Q. Thank you very much. Your second witness statement 4 dated 3 September, ie the next day, WITN00760200, at 5 26 pages, excluding the appendix. Again, if you can 6 track that down, please. 7 A. I have, yes. 8 Q. Thank you. Page 26, is that your signature? 9 A. It is indeed. 10 Q. Are the contents of that true to the best of your 11 knowledge and belief? 12 A. They are. 13 Q. Thank you. Your third witness statement, WITN00760300, 14 142 pages, excluding its appendix, dated 13 September, 15 I think there are three corrections to make to this. If 16 we can go to page 28, please, and look at paragraph 64, 17 in the third line, it says: 18 "I was conscious there was a lot of activity that 19 could be brought together to deal with the actions from 20 [the Common Issues Judgment and the Horizon Issues 21 Judgment]. This came together under the Improvement 22 Delivery Group set up in February 2021 and which until 23 October 2021 focused on the change delivery and tracking 24 the actions." 25 Should that read October 2022? 3 1 A. Yes, that's correct. 2 Q. So cross out "2021" and insert "2022"? 3 A. Correct. 4 Q. Secondly, page 108, at paragraph 231, second line: 5 "We had incomplete HR records which, given this was 6 a desktop exercise to review 700 colleagues ..." 7 Should that read "1,700 colleagues"? 8 A. It should. 9 Q. So 1,700, rather than 700. 10 Then, thirdly, page 140, at paragraph 305, line 4: 11 "The working environment, being subject to public 12 sector pay, inventive and settlement constraints ..." 13 Should that read "incentive" rather than 14 "inventive"? 15 A. That's correct. 16 Q. Thank you. Can you go to page 142, please, in the hard 17 copy? 18 A. Yes. 19 Q. Is that your signature? 20 A. It is indeed. 21 Q. With those three corrections brought into account, is 22 the statement true to the best of your knowledge and 23 belief? 24 A. It is. 25 Q. Thank you very much. That can be put to one side. Your 4 1 fourth witness statement, WITN00760400. That's dated 2 24 September and is seven pages, excluding its appendix. 3 Can you turn up page 7, please. 4 A. Yes. 5 Q. Is that your signature? 6 A. It is indeed. 7 Q. Are the contents of that true to the best of your 8 knowledge and belief? 9 A. Yes, they are. 10 Q. Thank you very much. Those witness statements, I think, 11 can all be put to one side now in their hard copy. 12 A. Thank you. 13 Q. Before addressing your background, I just want to break 14 down the two species of witness statements that we have 15 just looked at and which, overall, I think, constitute 16 some 307 pages of material, if my maths is right. Is it 17 correct that the first, second and fourth witness 18 statements are corporate witness statements made on 19 behalf of Post Office Limited -- 20 A. Yes, that's correct. 21 Q. -- whereas the third witness statement is a personal 22 witness statement from you? 23 A. Absolutely right. 24 Q. Can you please explain in your own words the difference 25 between them? 5 1 A. Not a great deal because, to be fair, I think my role as 2 the CEO of the Post Office encompasses -- is all 3 encompassing, from a personal perspective, and such that 4 the deviation of my own reflections reflect exactly what 5 I believe has happened over the last five years. 6 So I don't think it differs enormously. There are 7 clearly elements within the questions that you asked me 8 in the third statement that are more personal but 9 I don't think the deviation from the corporate witness 10 statement to my personal witness statement is 11 particularly different. 12 Q. So it isn't the case, in relation to the first, second 13 and fourth witness statement, that you are saying things 14 that you do not personally agree with but you are saying 15 them because, on behalf of the company, corporately, 16 that is the company's position? 17 A. Yes, that's correct. 18 Q. Was there any difference in the process by which each of 19 them came to be made, ie one subject to, for example, 20 Board approval or a group of executives' approval, 21 whereas the third witness statement was your words and 22 your words alone? 23 A. Yes, I think it would be fair to say that the corporate 24 witness statements involved Subject Matter Experts from 25 within the business supporting and helping me with some 6 1 of the content. Clearly, from a personal witness 2 perspective, they were my words. 3 Q. Thank you. In relation to your background, you are 4 currently the Post Office's Group Chief Executive 5 Officer; is that correct? 6 A. That's correct. 7 Q. You joined the Post Office in September 2019? 8 A. Yes. 9 Q. You announced on 18 September this year that you will be 10 resigning from your position at the Post Office in March 11 2025; is that right? 12 A. That is correct. 13 Q. In relation to your previous career before the Post 14 Office, can we look, please, at your third witness 15 statement at page 3. WITN00760300. In paragraph 7, you 16 set out chronologically your career for us, by setting 17 out the jobs that you had before you joined the Post 18 Office in paragraphs 7(a) to 7(j); is that right, if we 19 just scroll down? 20 A. Yes, that's correct. 21 Q. You tell us later in your witness statement that two of 22 those roles amounted to large-scale leadership roles as 23 a CEO of a challenged organisation and that, as 24 a result, you had experience on joining the Post Office 25 of crisis management and turnarounds; is that right? 7 1 A. That's correct. 2 Q. One of those, I would guess, was the job at (i), the 3 Chief Executive Officer of Nisa Retail; is that right? 4 A. Yes, that's correct. 5 Q. Which was the other one? 6 A. The other one was the CEO of ExtraEnergie GmbH, which is 7 at (j). 8 Q. Could you explain briefly your experience in those two 9 organisations of stabilisation, modernisation and growth 10 in a struggling and challenged or failing business? 11 A. Yes, I'll start with (i), the Nisa Retail. I was 12 recruited into this role to a very challenged business. 13 It was suffering from breached banking governance, it 14 had just recorded its first loss as an organisation, it 15 had some serious governance issues associated with 16 shadow directors and issues of Board colleagues, and it 17 also overstated its income. 18 So it had four pretty fundamental issues at play and 19 it was in a very highly competitive market, which was 20 convenience retail. 21 My job was to come in and to stabilise the 22 organisation, to get the business growing again, and to 23 try and identify what the long-term future for Nisa 24 Retail would be, and that was and ultimately became 25 a sale to the Co-op organisation so it was a fairly 8 1 classic turnaround of some quite substantive challenges. 2 Q. And ExtraEnergie? 3 A. ExtraEnergie, I was parachuted into ExtraEnergie to 4 salvage an organisation that was suffering immense 5 stress in the UK. It was a European energy business 6 with a UK arm; this particular challenge was a service 7 challenge and an IT challenge. Ultimately, after five 8 months, it became apparent that it wasn't salvageable 9 and I had the difficult challenge of explaining to the 10 owners of the business that, in my opinion, we should 11 put the business into administration, which is what we 12 did, which was extremely challenging for the 500 13 colleagues who worked in the UK, and, obviously, my job 14 was to see that process through to its conclusion, and 15 to regroup the organisation back to mainland Europe. 16 Q. Thank you. In your witness statement at paragraphs 10 17 to 25 you provide details of your role as the Chief 18 Executive of the Post Office, the situation when you 19 joined the Post Office and the process which led to your 20 appointment. 21 If we can just look at a few paragraphs within that 22 section, starting with paragraph 12 on page 6. You say: 23 "Before and during this interview process ..." 24 This is the interview process for the role of CEO at 25 Post Office: 9 1 "... I familiarised myself with Post Office and was 2 therefore aware that the Post Office was facing 3 litigation from Postmasters connected with allegations 4 of historic bugs in the IT system and the requirement 5 for postmasters to repay shortfalls. I did not at that 6 stage have a detailed understanding of what the 7 litigation involved, nor the postmasters' allegations, 8 and had not, before being appointed, read the Common 9 Issues Judgment (as opposed to summaries). The job 10 specification did not mention the litigation, and as far 11 as I recall it was not mentioned during the interview 12 process. The job specification did not state that Post 13 Office needed to oversee a large scale and complex IT 14 transformation project (ie replacing Horizon); again, as 15 far as I [was aware], this also was not mentioned to me 16 during the interview process. I had no indication that 17 a significant part of my role would be a profound 18 cultural change of the scale needed, dealing with the 19 litigation or its implications, or in delivering 20 a large-scale IT transformation: these issues were never 21 presented to me as priorities during the interview 22 process." 23 Just stopping there, can we look, please, at the job 24 specification at POL00448890. This is, I think, the job 25 specification that you're referring to; is that right? 10 1 A. Yes, that's correct. 2 Q. We can see it's a person (sic) specification for the CEO 3 of Post Office Limited. Then, if we go over the page, 4 it's a seven-page document. It sets out the history of 5 the Post Office on this page; its reach within the 6 United Kingdom; in the paragraph at the bottom of the 7 page there, its turnover. It sets out its products in 8 four strategic business areas and then, over the page, 9 it says -- if we can just go over the page, thank you: 10 "Post Office [underneath the bullet points] has made 11 strong process over the last five years in laying the 12 foundations for longer-term success [modernising] 7,000 13 branches ... 200,000 extra hours of opening ... 14 continual programme of investing in, and modernising, 15 its branch network ..." 16 Three lines from the bottom of that paragraph: 17 "Legacy systems and IT are being addressed and 18 upgraded now that the separation from [RMG] is complete. 19 This will deliver around 15 per cent reduction in 20 annualised operating costs by March 2018." 21 That's obviously over a year before this -- 22 A. Yes. 23 Q. -- so that's out of date information that has been cut 24 into this document, presumably? 25 A. Yes. 11 1 Q. If we carry on looking down that page, we'll see at the 2 bottom the strategic priorities: 3 "With a stable network, and ongoing investment to 4 modernise the network, improve convenience and service 5 for the customer, the Post Office has identified the 6 following five strategic priorities", and they're set 7 out over the page. 8 It sets out on this page, page 3, the corporate 9 history of the Post Office; scrolling down, the 10 Executive Team; the Board; the role that the person to 11 take the role of Chief Executive was to perform. Over 12 the page, scrolling down, the "Candidate Profile". Then 13 over the page, scrolling down, that's the end of the 14 substance of the document and the rest of the two-page 15 document contains biographies of members of the Board. 16 So it's right, isn't it, that that does not mention 17 Horizon from start to finish? 18 A. That's correct. 19 Q. It doesn't mention, from start to finish, the move to 20 NBIT, does it? 21 A. No, it doesn't. 22 Q. A very large and exceptionally complicated IT 23 transformation project? 24 A. That's correct. 25 Q. It does not mention the litigation? 12 1 A. No, it doesn't. 2 Q. Even though at this time -- this will have been summer 3 2019 -- 4 A. Yes. 5 Q. -- the recruitment process was taking place -- the 6 Common Issues Judgment had been handed down already -- 7 A. Yes, it had. 8 Q. -- earlier that year? 9 A. Absolutely. 10 Q. That was rather a fundamental judgment for the Post 11 Office? 12 A. I agree. 13 Q. The Horizon issues trial was just around the corner, was 14 about to start? 15 A. Yes. 16 Q. Also a rather fundamental trial and, ultimately, 17 judgment for the Post Office. So looking at it, the job 18 specification does not properly address or describe the 19 role that you were, in fact, needed to perform, does it? 20 A. No, it doesn't. 21 Q. If we go back to your witness statement, please. Third 22 witness statement at page 7, paragraph 13, the last 23 three lines. You say: 24 "It is now clear to me that I did not have a proper 25 appreciation at this time of the scope or magnitude of 13 1 the injustice that Postmasters faced." 2 Then at paragraph 16, scrolling down, you say: 3 "My understanding was that I was joining a business 4 that was challenged. Its core product areas -- cash and 5 mails -- were 'sunset' products, experiencing year on 6 year declines in volume and revenue. There was a lack 7 of operational rigour, overheads were too high and cost 8 reduction needed to be driven harder." 9 Reading on: 10 "I did understand to some degree that the 11 relationship with Postmasters was strained, the 12 litigation required resolution and a new partnership 13 with Postmasters needed to be established. This felt 14 like a turnaround situation and [you] felt [you] had the 15 relevant experience to lead it." 16 If we go forwards, please, to page 11 and 17 paragraph 22, you say: 18 "In the first couple of weeks of being CEO I had 19 only limited contact with the Post Office Legal team 20 about the GLO ... I did have contact with colleagues who 21 were dealing with the operational changes that Post 22 Office needed to put in place from the [Common Issues 23 Judgment]." 24 Paragraph 23 on page 12, you say: 25 "[You] were keen to develop a purpose and vision for 14 1 the Post Office and from the start was convinced that 2 the postmasters had to be the central focus for that 3 purpose." 4 Then about eight lines in, you say: 5 "The findings from the litigation confirmed that was 6 the right decision. [You] cannot recall exactly when 7 [you] found out that Post Office privately prosecuted 8 postmasters (and had stop [doing so] -- although [you] 9 know from having read the [Common Issues Judgment] that 10 was mentioned there). Private prosecutions were 11 presented to me as a historic issue that had ceased 12 before 2015 and that I did not need to dig into the 13 details of what had happened at Post Office in the past 14 as this conduct had ended." 15 Looking at that all together then, my questions: had 16 you, in fact, known what was involved in the role, 17 ie the things that you were not told, would you have 18 applied for and accepted the role? 19 A. I think I was very well placed to tackle the issues that 20 the job description described. 21 Q. I'm focusing on the things that weren't in the job 22 description. 23 A. Yes, I was going to come on to that. I think there's no 24 question that I didn't have experience of managing 25 a litigation, I didn't have experience of running 15 1 a compensation scheme or, indeed, of managing a public 2 inquiry, and so the scale of those activities are quite 3 profound and have been quite profound on my role for the 4 last five years. Clearly, there won't be many 5 individuals who would have that mix of skills to run 6 a retailer and to continue to maintain an organisation, 7 such as the Post Office, serving customers, as well as 8 running a public inquiry and a compensation scheme. 9 Would I have accepted the role? I still believe 10 that I had the necessary skills to do it, it's just that 11 coming in to the job it was described in a very 12 different way from what I obviously found in those first 13 few months. 14 Q. Have you thought why that was -- 15 A. Yes, I have. 16 Q. -- why it was that the true position was not revealed to 17 you, either before appointment or upon appointment? 18 A. I think I have thought about it, and I've thought about 19 it quite a lot. I think there was an underestimation of 20 the impact of the Common Issues Judgment on the 21 business. I characterise it in my witness statement in 22 two ways. First and foremost, there was a population 23 who simply didn't believe that they would lose the 24 litigation and, as a consequence, there were not 25 contingencies or plans in place for that eventuality, 16 1 and so a degree of denial, I would argue. 2 And for the majority -- 3 Q. But they'd already lost the Common Issues Judgment by 4 the time -- 5 A. They had. 6 Q. -- you joined, that was some six months -- 7 A. They had but there was a degree of denial, I think, is 8 the point I was trying to make, in the sense that 9 I don't think people had come to terms with having lost 10 the Common Issues Judgment, or indeed what the 11 implications of losing it were. And I think, for the 12 vast majority of the organisation, they believed they'd 13 been doing a good job, what they'd been asked to do, and 14 were getting on with it. 15 So there were two very distinct camps within the 16 organisation: I think the majority of the organisation 17 was just getting on with what they thought their job 18 was; and I think the senior leadership were trying to 19 come to terms with the fact that they had not 20 anticipated losing the litigation. And so, therefore, 21 they were part in denial and part in paralysis. 22 Q. Who briefed you when you were appointed CEO? 23 A. Who briefed me when I within the organisation? 24 Q. Yes. 25 A. As I say in my witness statement, I spent time obviously 17 1 with the Chair, with Tim Parker, talking about the 2 priorities. I met with all of the Group Executive 3 before I joined, with the exception of one who was away 4 on holiday. I met with UKGI and with DBT officials 5 before I started -- so this was throughout August 6 2019 -- so I had a relatively broad understanding coming 7 in on day one. 8 Amongst those briefings, I don't -- and I think as 9 I say in my statement, I don't think the scale or 10 enormity of the scandal was brought to life for me 11 because I don't think there was a realisation or 12 recognition at that stage within the business of what 13 needed to be done or indeed what was likely to happen. 14 Q. Were you provided, in the course of those briefings, 15 with a clear analysis of the extent of the Post Office's 16 failings in relation to past enforcement action taken 17 against postmasters? 18 A. I'll answer that in two ways. I think work had started 19 to be done to understand the implications of the Common 20 Issues Judgment, and that was work that was being led 21 ostensibly by the legal function but also by the 22 Operations and Retail teams. 23 In terms of broader prosecutorial implications, that 24 wasn't something that was necessarily explained in great 25 deal to me when I joined in September 2019. 18 1 Q. Were you provided with a clear analysis of the findings 2 of Mr Justice Fraser in the Common Issues Judgment? 3 A. Yes, I was. That piece of work had been done and I had 4 a breakdown of, and summary of, the findings and the 5 implications that we were -- or what we were going to do 6 as a consequence. 7 Q. So you were provided with an assessment of the work that 8 was required to be done in order to react to the Common 9 Issues Judgment and move forwards? 10 A. Work had started on the conformance plan. I think in 11 one of my exhibits, I provide detail of what that work 12 is, and work was beginning to be discussed at the Group 13 Executive around what the implications more broadly 14 looked like. 15 Q. As part of the briefings, was the issue of the conduct, 16 competence and ethics of those within the Post Office 17 that had conducted investigations and prosecutions 18 against postmasters discussed? 19 A. No, it wasn't. The focus of the briefings that 20 I received were around conformance with the Common 21 Issues Judgment. What were we going to do in terms of 22 regaining trust and also the sort of specific themes 23 that Fraser J had identified from a process and 24 procedural and policy perspective. 25 Q. Did you receive any briefings in relation to the 19 1 standard of conduct expected of either civil 2 investigators or criminal investigators within the Post 3 Office? 4 A. No, I didn't. 5 Q. Therefore, I think it follows that no assessment of 6 whether currently, upon joining, the Post Office's 7 investigators met those standards, either now or in the 8 past? 9 A. I think, as I said in my witness statement, the way that 10 it was articulated to me in September 2019 was very much 11 prosecutorial activity had ceased in 2015. Indeed, it 12 hadn't been initiated since 2013. Nothing like this is 13 happening or could happen, we need to look forward. 14 That would be my summary of how it was positioned. 15 Q. But no analysis of the past, in terms of investigation 16 and prosecutorial decision making? 17 A. No. 18 Q. You said that you had only limited contact with the Post 19 Office Legal team about the GLO. Given the importance 20 or significance of the GLO, why did you only have 21 limited contact with the Legal Team? 22 A. I think it goes back to what I described at the start 23 when I came into role, which was that the litigation and 24 Common Issues Judgment wasn't part of the initial 25 briefings that I'd had in terms of -- called out as 20 1 something very specific. Those early weeks were about 2 trying to get to know and understand the business more 3 broadly, and so there were a multitude of different 4 priorities that were required in those first four to six 5 weeks, and I think I identified them in one of the 6 exhibits that I provide, which breaks down pretty 7 precisely what occurred in those four to six weeks in 8 terms of the breadth of stakeholders and business 9 understanding that was required. 10 But it was during that period that it became 11 apparent that we could and we should be looking to 12 settle with the GLO, and it was in October that those 13 conversations started to occur. 14 Q. Who was it who presented private prosecutions to you as 15 an historic issue? 16 A. The legal function and the General Counsel, in 17 particular. 18 Q. If you can name -- 19 A. Yes, at that stage, it was -- Ben Foat was the General 20 Counsel, he was leading on the work that we were doing 21 in that space. I think -- 22 Q. Can you give us a flavour? You tell us in your witness 23 statement that you were told that "I did not need to dig 24 into the details of what had happened at the Post Office 25 in the past". Can you give us some flavour of what 21 1 Mr Foat was saying? 2 A. Yes, the reassurance that Mr Foat was trying to provide 3 was that this was historic action and activity, as 4 I say, that had ceased in 2015, had not been initiated 5 until 2013. We were now in 2019, and this is activity 6 that had ceased within the business. 7 Q. Was it Mr Foat who told you that you did not need to dig 8 into the past? 9 A. Yes, that's correct. 10 Q. Did you accept what he said? 11 A. Yes, I had no reason to believe, at that stage, that we 12 should be looking -- going back and looking pre-2015 and 13 2013. I think we were very, very focused on making sure 14 we made the right changes to address the issues that 15 emerged from the CIJ, as opposed to historically 16 re-examining elements of prosecutorial activity. 17 Q. Thank you. If we can move forward to pages 13 and 14 of 18 your witness statement, please. 19 A. I think I've just done what Karen did yesterday, I have 20 a feeling. I'm not quite sure what that -- 21 SIR WYN WILLIAMS: So yesterday we needed to call on the 22 assistance of our IT man and we all just sat here 23 quietly, so let's do that? 24 THE WITNESS: So I'll sit here quietly? 25 SIR WYN WILLIAMS: Yes. 22 1 (Pause) 2 MR BEER: Is the screen back on? 3 A. Yes. 4 SIR WYN WILLIAMS: All right, let's resume, then. 5 MR BEER: I've been asked to ask you if you can move 6 forwards a little bit and just keep your voice up so 7 that the microphones catch you. Some people are finding 8 it slightly difficult to -- 9 A. Of course, is that better? Okay. 10 Q. We were looking at pages 13 and 14, and if we scroll 11 down to paragraph 28, please, you describe, under this 12 cross-heading, your first six months as CEO. If we just 13 go over the page, please, you describe in this section, 14 paragraphs 28 to 31, the provision of the Horizon Issues 15 Judgment, under embargo at the end of November 2019 and 16 its handing down in mid-December 2019, and you tell us 17 that you do not recall there being serious concerns 18 amongst Post Office's senior leadership when this 19 happened -- 20 A. That's correct. 21 Q. Does that mean in the Board or in the Executive, or 22 both? 23 A. It means both, and I think the statement I made there, 24 "no urgent calls or panicked discussions", is exactly 25 what I meant. 23 1 Q. Instead, the focus was on trading profits, reducing the 2 Government subsidy and investment in the Post Office? 3 A. That's correct. 4 Q. Looking back, would you agree that this description is 5 of a leadership team in 2019 that was living in 6 something of a dream world, given the content of the 7 Horizon Issues Judgment? 8 A. I think it would be impossible not to conclude that. 9 Q. You describe the leadership team having pride in their 10 work and their organisation, benign consultative and 11 friendly communications amongst themselves, but 12 essentially oblivious to the harm that their 13 predecessors, and in some cases they, had inflicted? 14 A. Yes, that's the point I was trying to make. 15 Q. There wasn't really any appreciation, would this be 16 right, of the seismic nature of both the Common Issues 17 Judgment and the Horizon Issues Judgment taken together? 18 A. Agreed. 19 Q. Instead the concerns were essentially those that had 20 occupied the Post Office for the past 20 years, namely: 21 how do we achieve financial stability? 22 A. Yes, I'm not sure for the past 20 years but there was 23 certainly a focus following Network Transformation and 24 the desire to reduce the Government subsidy to drive 25 trading profit, and to reduce cost, and that was very 24 1 much the focus of the organisation. 2 Q. Why was it, in your assessment, that the senior 3 leadership, including you, did not understand the true 4 implications of the Common Issues Judgment and the 5 Horizon Issues Judgment taken together? 6 A. I think we became more -- it became more apparent and we 7 became more aware, as the negotiation with the GLO took 8 place through November and December. I think that was 9 the trigger for me personally, given that I'd spent 10 a number of days working with Alan Bates and with others 11 on trying to get to a settlement. So I think it became, 12 as November rolled into December, something that the 13 organisation was getting to grips with. But I think it 14 would also be fair to say that, prior to that, the 15 business was very definitely focused on the objectives 16 that were put in front of it by the shareholder, which 17 was very much about reducing subsidy, about driving 18 profit, and reducing the overall necessity for the 19 Government to invest in Post Office. 20 Q. Were you amongst those that did not personally 21 understand the seriousness of the judgments taken 22 together, and their implications, including for criminal 23 convictions? 24 A. I think I was, certainly in those first three months, 25 faced with a number of issues, certainly trying to get 25 1 to grips with a new organisation as a CEO, and 2 determining what was important what wasn't important, 3 and what were priorities and what weren't. I think, 4 secondly, the negotiation and the settlement was a huge 5 opportunity for me to get to grips with the implications 6 of the HIJ and the CIJ but that was done -- that was 7 work that I did with the General Counsel, as opposed to 8 the broader Group Executive and the Board. So I think 9 there was more of a realisation, I think, from my 10 perspective, simply because I was in the room and part 11 of that team and, clearly, therefore, that wasn't as 12 widely felt across the organisation. It was from -- as 13 I say, from December onwards that we became much more 14 aware of what the implications were. 15 Q. If we move forwards in your witness statement to 16 page 80, please. You say, one line from the top in 17 paragraph 144: 18 "I did not spend much time digging into the 19 technical details of the [Horizon Issues Judgment], as 20 I was more focused on the future, to achieve cultural 21 change and drive modernisation and commercial 22 improvement." 23 Was that a common approach amongst the General 24 Executive and the Board at that time, focus on the 25 future, rather than the impact of the Horizon Issues 26 1 Judgment on the past? 2 A. Yes, I think focusing on today's Post Office for 3 tomorrow was very much the objective of both the Board 4 and the Group Executive back in 2019. 5 Q. Was that, what I've described as a "dream world", 6 reflected in your meeting with Tim Parker that you had 7 in early September 2019? 8 A. Yes, I think the first meeting I had with Tim was to try 9 and establish, as CEO to Chair, what the underlying 10 priorities he had for me, and I think as I exhibited in 11 my statement, the majority of that conversation was 12 centred around the priorities that I described a little 13 earlier. So I think that was fairly widely felt across 14 the Board and obviously with Tim. 15 Q. I think you made some notes of that meeting, it was on 16 4 September 2019, on your mobile telephone after the 17 meeting; is that right? 18 A. That's correct. 19 Q. Essentially as an aide memoire -- 20 A. Yes. 21 Q. -- of what had happened. Then more recently, you cut 22 those telephone notes into an email which you sent to 23 your solicitor, which has been disclosed to us? 24 A. That's correct. 25 Q. Can we look at those, please. POL00448897. We can 27 1 ignore the stuff at the top because that's the sending 2 on to your solicitor, which explains how it got to us 3 and then we can see this is an email sent to you in 4 August this year. But, as you said, this is essentially 5 you cutting from your mobile telephone into an email the 6 content of the near contemporaneous note you made back 7 on 4 September 2019? 8 A. That's correct. 9 Q. I just want to ask you about one passage, please, which 10 is I think the only reference to the litigation. If we 11 scroll down, please. Thank you. Can you see, it's now 12 about halfway down the page, just beyond halfway, it 13 says: 14 "Resolve the Post Office litigation situation 15 quickly ... and put it behind us and move on. Not the 16 huge [public relations] risk that BEIS believe it to 17 be." 18 Firstly, who is that a note of speaking? 19 A. That's the note of the comments that Tim made at the 20 dinner, which, I think as you -- all the notes are -- it 21 was his set of priorities for me and his commentary. 22 Q. Was this, in addition to him speaking, an agreed 23 position between you and him? 24 A. Sorry, I don't quite understand the question. 25 Q. Yes. Does this record what you agreed should occur, 28 1 ie you should resolve the litigation quickly, put it 2 behind you and move on? 3 A. These are the actions and priorities that he suggested 4 that I would want to do and what he saw me doing. 5 Q. Was that therefore something that you thereafter carried 6 into effect? 7 A. I guess this is the backdrop to the job that I was going 8 to take on. I saw it as an important meeting because it 9 was giving Tim the opportunity to give me his 10 perspective -- having been Chair for six years at this 11 stage, it was an opportunity for Tim to give me his 12 perspective on the business before I joined. So this 13 was some 10 or 12 days before I actually started, and it 14 was his opportunity to describe to me what he saw going 15 on in the organisation and where he saw -- where he 16 thought I should spend my time. 17 So that was the contemporaneous notes that I took of 18 that meeting, which was my recollection of how he 19 described it to me. 20 Q. Can you help us, not all of us move in the circles of 21 CEOs and chairmen: when a chairman says you're to 22 resolve the litigation quickly, put it behind us and 23 move on, is that an instruction that you carry into 24 effect or is it something which you think, "Well, the 25 old man is just spouting, I'll do what I want"? 29 1 A. No, I think, as I was brand new to the organisation, it 2 was important for me to understand where he saw the 3 priorities. I mean, looking at the list, there are, 4 gosh, it looks like 12, 14, 16 issues that he has 5 highlighted here. 6 Q. Yes. 7 A. And this is one of those, and, clearly, I would take 8 this information with me as a sort of aide memoire as 9 I go into the organisation. That was the purpose of the 10 meeting. I wanted to check my understanding of what he 11 had suggested with what I then found in those first four 12 to six weeks within the organisation. That was the 13 purpose, for me, of the meeting, rather than getting 14 a set of instructions; I didn't view this as a set of 15 instructions. 16 Q. Did they come from the Board, instructions, rather than 17 the Chairman speaking at a dinner? 18 A. Well, technically, the Chairman would give me a set of 19 objectives formally, which is what he did on a yearly 20 basis. This wasn't that. This was a first meeting. 21 Q. Yes. It's recorded that "Not the huge PR risk that BEIS 22 believe it to be"; is that Mr Parker speaking too? 23 A. Yes, it is. 24 Q. So he was saying that the litigation was not the huge 25 public relations risk to the Post Office that the 30 1 Government believed it to be? 2 A. That's correct. 3 Q. I think you, in due course, came to understand that what 4 is suggested here -- resolution of the litigation 5 quickly, putting it behind you, and moving on -- was 6 wrong headed. There was no way that the GLO could be 7 quickly resolved and put behind you, was there? 8 A. No. 9 Q. Interestingly, it seems that the Government knew that. 10 Did you ever explore that view with the Government? 11 A. Yes, I go on to mention in my witness statement that 12 there seemed to be two sort of schools. I think Greg 13 Clark was the Secretary of State at the time. His view 14 was very much around finding and seeking resolution with 15 the postmasters and ensuring that there was redress, and 16 that was the prevailing view, certainly, that I was 17 given from officials, that Greg Clark had. 18 It seemed to be less the case amongst officials, but 19 certainly from the politicians, if that makes sense. 20 Q. What do you mean, less the case amongst officials? 21 A. What do I mean by that? There wasn't a determination to 22 settle, necessarily, with the postmasters. I didn't 23 feel that in those opening months within the business 24 and that seemed slightly at odds with the position that 25 Greg Clark was adopting. 31 1 Q. Was there a view, within the Post Office, at this time, 2 that the civil judgments did not really impact upon any 3 past criminal proceedings? 4 A. Can you describe that a bit more: what do you mean by 5 that? 6 Q. Yes. Was it the view, within either the General 7 Executive or the Board or, in particular, the Legal 8 function within the Post Office that the civil 9 judgments, the Horizon Issues Judgment and the Common 10 Issues Judgment, did not impact on past criminal 11 proceedings? 12 A. Yes, I think that's the case. 13 Q. Who was expressing that view? 14 A. I don't think I can -- it's a sense. I mean, I'm not 15 saying people were expressing that view explicitly. 16 I think that's just a sense that I took. 17 SIR WYN WILLIAMS: By this time, over some years 18 periodically, the Criminal Cases Review Commission had 19 been corresponding with the Post Office. 20 A. Yes. 21 SIR WYN WILLIAMS: Were you made aware of that in 22 September/October 2019? 23 A. Yes, I would believe so. I'm trying to think explicitly 24 how and by whom. I think as I say, at the start the 25 level of briefing that I received was relatively 32 1 perfunctory, as opposed to in-depth and critical, which 2 I think is the point that you're making. That was not 3 the case. 4 SIR WYN WILLIAMS: Well, I just wondered whether the 5 significance of there being correspondence with the 6 Criminal Cases Review Commission was explicitly, well, 7 explained to you? 8 A. Not in September, no. 9 SIR WYN WILLIAMS: Right. Fine. 10 MR BEER: Subsequently? 11 A. Subsequently later but not in September. I think this 12 is -- this would have been post-litigation and it would 13 have been well into 2020 before we had those 14 conversations. 15 Q. Ultimately, the Court of Appeal Criminal Division 16 essentially accepted and adopted the findings of the 17 High Court that, throughout the relevant period, there 18 were significant problems with Horizon, which problems 19 gave rise to a material risk that an apparent shortfall 20 in branch accounts did not, in fact, reflect missing 21 cash or stock but had been caused by more than one bug, 22 error or defect in Horizon, and that the Post Office 23 knew that there were problems at that time with Horizon. 24 When was that first made clear to you, the 25 connection between what had been found in the civil 33 1 judgments and its impact upon criminal appeals? 2 A. Probably in September and October 2019, it became -- 3 well, no, maybe that's not strictly true. I think it 4 may have been as a consequence of the release of the HIJ 5 findings in November. That, I think, triggered 6 conversations about the robustness of Horizon and the 7 implications for the Legacy and HNG-X versions of 8 Horizon and the implications of potential bugs and what 9 they may or may not have done. That was as 10 a consequence of the judgment that was handed down in 11 November. 12 Q. In relation to the differences of view between the 13 politicians and the civil servants, can we look, please, 14 at what you say on page 20 of your witness statement, at 15 paragraph 44. You say: 16 "These variations in strategic focus were reflected 17 in the Minister and Permanent Secretary. Greg Clark, 18 the ... Minister when I arrived, was clear that we 19 should focus on postmasters and afford redress arising 20 from the court judgment in 2019." 21 That's essentially what you said to us two or three 22 minutes ago. 23 A. Yes. 24 Q. "He wanted to solve things for the postmasters and make 25 sure that the injustices were genuinely settled. Alex 34 1 Chisholm, BEIS Permanent Secretary, was more closely 2 aligned with the Board priorities and was not pushing 3 for a settlement and to some extent did not see the need 4 to broker a new deal with postmasters. [He] wanted 5 a short independent 4-month review so we could move on 6 and I could focus on the day job of moving the Post 7 Office forward. His view was more closely aligned with 8 the Board around the need for speed towards financial 9 sustainability. This left a somewhat unclear agreement 10 as to which priorities took precedence." 11 Firstly, what did you do in the face of an unclear 12 picture from your shareholder? 13 A. Well, I -- let me take a step back. I think -- I met 14 with Alex Chisholm and spoke to him specifically about 15 the independent review, and I'm sure we'll come on to 16 talk about that in a second but the specifics, I think, 17 in the point that I was trying to make here was that 18 postmasters had been left behind in the pursuit of 19 profit. That I was very clear about, in terms of what 20 had happened in 2016 to 2019, with the drive for Network 21 Transformation and commercial sustainability and 22 reducing the subsidy. 23 In that drive, I believed that postmasters had been 24 left behind and, by that, I mean the move from fixed fee 25 payments to postmasters to variable payments to 35 1 postmasters, to the level of support that was given to 2 postmasters, was not where it needed to be and it was my 3 intention to refocus the organisation around what I saw 4 as the central core to the Post Office, which was the 5 relationship between the postmaster and its local 6 communities and that's how we had to -- and we had to 7 focus upon it. 8 That was slightly at odds, I think, with where the 9 officials were, which was very much around trying to 10 ensure that we didn't continue to spend money on the 11 Post Office and that we could reduce, as I say, the 12 subsidy and the like. And I think there was an attitude 13 that was very much around trying to ring-fence and 14 ensure that the Post Office was a stand alone business 15 without really thinking through what the implications of 16 that were for postmasters, a new deal, understanding how 17 variable pay worked, what sort of support they would be 18 provided with, and it was that juxtaposition that I was 19 struggling to address. 20 Q. As well as the approach to be taken to the GLO, there 21 was also the issue, is this right, of to what extent 22 there should be an investigation or an Inquiry into the 23 past? 24 A. Yes. 25 Q. Can we look, please, at pages 27 to 28 of your witness 36 1 statement, paragraph 61, second line. You say: 2 "As mentioned, Permanent Secretary Alex Chisholm had 3 initially wanted this just to be a review, not 4 an inquiry and that it should be whilst independent, 5 essentially internal and importantly be forward looking. 6 That had been the plan from February 2020 when the Prime 7 Minister announced the review would look at historical 8 failings. Later in 2020 when the Minister announced the 9 Inquiry, it was truly a pivotal moment for the 10 organisation as a whole to fully grapple with the 11 process that it needed to go through and the changes 12 required." 13 Paragraph 62: 14 "By summer it had developed into a judge-led 15 independent inquiry which was only meant to last 16 4 months. This was reformulated into the Terms of 17 Reference that currently apply in January 2021." 18 So is it right that, in this earlier period, 19 Mr Chisholm continued to think that the problems exposed 20 by the Group Litigation could be addressed by a small, 21 internal inquiry? 22 A. Yes, that's precisely the point I was making. 23 Q. Was he of the view that we saw expressed in your note of 24 your dinner with Mr Parker: that the Post Office had 25 a significant PR disaster on its hands? 37 1 A. I can't comment on what his view on that was. 2 Q. Did he ever explain to you whether a view of the extent 3 of the wrongdoing had influenced his decision or 4 suggestion that there should be a short, internal 5 inquiry to essentially manage away the problem? 6 A. The conversations I had with Mr Chisholm on this 7 particular topic, I had become very clear by early 2020 8 that there was a growing need and desire amongst those 9 who had been impacted by the scandal to get to the 10 truth, to understand what had happened, why it had 11 happened and who was responsible, as opposed to the 12 notion that we have an inquiry to make sure nothing like 13 this could happen again. 14 I think this was -- the point I'm trying to make 15 here is that there was a clear distinction that -- and 16 the conversation I had with Mr Chisholm, was that 17 closure would not be achieved if we simply looked 18 forward to see what had been done by the Post Office to 19 ensure nothing could happen again, rather than 20 addressing what it was that the victims of the scandal 21 particularly wanted, which was to understand why it had 22 happened, who was responsible, and what was going to be 23 done as a consequence of that. 24 It was that that I struggled with, and Mr Chisholm 25 assured me that we would do a four-month forward-looking 38 1 review to ensure that the Post Office was now in 2 a position where nothing like this could happen again. 3 Q. Thank you. That can come down. 4 Can I turn to a different topic, namely the culture 5 within the Post Office in your five years as CEO and, in 6 particular, its attitude towards the guilt or innocence 7 of subpostmasters. 8 As a general question, have you come across 9 individuals within the organisation who adopt the view 10 that some subpostmasters whose convictions have been 11 quashed are nonetheless guilty? 12 A. I don't think I could say specifically that that is the 13 case but there will be a view that not every quashed 14 conviction will be innocent postmasters. I think -- and 15 certainly, if I was to reflect, I think the majority of 16 the organisation would agree that the action that has 17 been taken is absolutely the right action and whether 18 there are guilty postmasters who will be exonerated 19 really is no longer an issue. That is not something 20 that is of concern to people in the Post Office. 21 Q. Can we turn, please, to paragraph 27 of your first 22 witness statement, please, which is on page 13. You 23 say: 24 "Post Office is in many ways a different 25 organisation to the Post Office of the past." 39 1 Yes? 2 A. Yes. 3 Q. I am underlining the words "of the past" at the moment. 4 A. Yes. 5 Q. Then similarly, in this witness statement, at 6 paragraph 174, which is on page 84, you say: 7 "Post Office recognises the need for fundamental 8 cultural change. It recognises the presence of 9 oppressive behaviour and intimidating actions in the 10 past [and it's those words that I'm underlining] which 11 led to a lack of respect and trust between Post Office 12 and its postmasters. It acknowledges that there has 13 been a lack of effective leadership; a lack of effective 14 training and support; and a lack of responsibility 15 within the organisation. It accepts that it has work to 16 do to restore trust with postmasters and with the public 17 as a whole. Cultural changes in the Post Office are 18 integral to the rebuilding of that trust." 19 If those sentiments are correct, why is it that 20 those who were involved in the investigation and 21 prosecution -- the wrongful prosecution -- of 22 subpostmasters are some of the same personnel who are 23 involved in the handling of compensation claims under 24 the Horizon Shortfall Scheme, which includes their 25 attendance with subpostmasters at good-faith meetings? 40 1 A. I've been very clear that at no stage will we walk past 2 allegations of wrongdoing in the organisation, and I've 3 made that very clear publicly to all colleagues and to 4 postmasters themselves. Where evidence of wrongdoing is 5 brought to my attention or indeed to anybody else's 6 attention within the organisation, we will investigate 7 and we will take action fully, and that's very much what 8 we will do. 9 With regard to the Remediation Unit, I am very clear 10 that we have conducted a piece of work which you've 11 heard a lot about at this Inquiry, which is referred to 12 as the Past Roles piece of work, and once again, I am 13 confident that there are not individuals involved in 14 postmaster-facing activity that had roles in the past 15 where allegations or anything of wrongdoing has been 16 brought to my attention. 17 Q. When you say "there are not", you mean as we sit here 18 today? 19 A. Yes, we have -- 20 Q. Can you say that there have not? 21 A. What, that have not been individuals in those units? 22 Q. Yes. 23 A. As you'll be aware from the last couple of days, we have 24 individuals who are under investigation specifically. 25 I'm not convinced it would be appropriate to raise 41 1 those -- 2 Q. I'm not asking you to name them at all. 3 A. Thank you. So I guess the point I'm trying to make is 4 that we're not walking past these situations and we will 5 address them where those allegations are made, and 6 ensure that law enforcement and other activity takes 7 place. 8 Q. But we're five years on now from the Horizon Issues 9 Judgment, aren't we? 10 A. We are. 11 Q. So you can't say that there have not been individuals 12 who were involved in the improper investigation and the 13 wrongful prosecution of postmasters who were involved in 14 the handling of compensation scheme claims under in the 15 HSS? 16 A. Involved -- it depends what you mean by involved. 17 I guess certainly from my perspective, when I look at 18 the construct of the Remediation Unit and the work that 19 we've done on Past Roles and on Project Phoenix, I would 20 absolutely concede that that work has not gone quickly 21 enough. I would absolutely concede that we needed to be 22 more forthright, I think, in our actions. By that, 23 I mean giving confidence to postmasters who were coming 24 forward in the HSS scheme or involved in the HSS scheme 25 that genuine independence and no sign of bias was taking 42 1 place in the delivery of any form of compensation, and 2 that is absolutely what we are doing and are determined 3 to do. 4 Q. Have part of the investigations that have been conducted 5 included the question of whether investigators were 6 given bonuses related to the number of successful 7 prosecutions they conducted and/or the recovery of money 8 under the Proceeds of Crime Act? 9 A. I'm not aware that we've done a specific piece of work 10 into that allegation but I may be mistaken. I don't 11 believe we have. 12 Q. Can we look, please, at POL00113304. This, before we 13 get into the detail of it, is an email change that takes 14 place between May and July 2021, started by a man called 15 Gary Thomas, a former Post Office Investigator, 16 addressed in the first instance to you, in which he is 17 complaining about the Post Office's ill treatment of its 18 own investigators and security managers. If we can read 19 it first as a whole and then I'll ask some questions 20 about it. 21 A. This is a standalone email, is it? 22 Q. No, we'll look at the whole chain. 23 A. Oh, we'll look at the chain. 24 Q. So if we go to page 5 to see where it picks up, please. 25 If we just go up, please. Keep going. Essentially, he 43 1 cuts into an email earlier emails that he suggests were 2 sent. If we just go down to page 5, please. 3 This is seemingly an email addressed to you and he 4 says he is writing in relation to all the Horizon system 5 prosecutions that were conducted by Post Office against 6 postmasters that have been successfully challenged and 7 won in the High Court. 8 His question to you and the new Board is the actual 9 effect this whole situation has had on himself and the 10 other investigators employed by Post Office: 11 "We were informed by Post Office that the Horizon 12 system was 100% correct and that the Horizon Data we 13 obtained to provide evidence was all accurate and again 14 100% correct." 15 If we skip that paragraph and then the next 16 paragraph, pick up with "I took redundancy", he says: 17 "I took redundancy from Post Office in 2017 after 18 32 years loyal and committed service and now have to 19 live with all this every day as do my other Security 20 colleagues I have recently spoken [to]." 21 Then this: 22 "We even had a proceeds of crime unit within the 23 Post Office that ensured that some of these individuals 24 lost their homes and families." 25 Then this: 44 1 "In fact my yearly objectives that were bonus worthy 2 at the time were based on numbers of successful 3 prosecutions and recovery amounts of money to the 4 business. I had some instances of these postmasters 5 committing suicide, which now sits somewhat on my 6 [I think that's 'conscience'] because of my employer. 7 How do you think I deal with this and now actually sleep 8 at night now knowing my actions that were backed and 9 supported by my employer has affected the said 10 postmasters ..." 11 So a suggestion that yearly objectives of 12 an investigator, which were bonus worthy, included the 13 number of successful prosecutions and the recovery of 14 money to the business. You see that? 15 A. Yes, I can see that. 16 Q. Then if we go up to page 4, please. If we scroll down, 17 please. This was the reply, if we scroll down a little 18 further. He's actually cut off who the reply was from. 19 This is said to be the Post Office's reply. 20 "I am writing on behalf of Post Office to thank you 21 and respond to your email to Nick Read dated 9 May ..." 22 That's where I got the first date from -- 23 A. Yes. 24 Q. -- May 2021: 25 "We are working hard to improve Post Office, address 45 1 the past and fundamentally reform for the future by 2 putting Postmasters at the heart of everything we do. 3 Your email has drawn our attention to the prospect that 4 Post Office employees may have been incentivised to 5 bring successful prosecutions. We have not currently 6 identified this to be the case, however, we have 7 instructed our lawyers to find, recover and review 8 relevant material as part of our Post Conviction 9 Disclosure Exercise ('PCDE'). It is the PCDE that has 10 assisted those prosecuted by Post Office to have their 11 convictions rightly overturned. The review of this 12 material will allow Post Office to recognise and, if 13 necessary, address this issue as part of our wider duty 14 to those who were convicted ..." 15 If we go to page 3, please. This is Mr Thomas' 16 reply. If we scroll down, please, and scroll down. 17 We're just missing the paragraph I'm looking for. If we 18 scroll back up, please. Ah, stop. 19 In that fourth paragraph, beginning "I will advise", 20 he says: 21 "I will advise you now to save you more time that 22 you will find nothing in any 'PCDE' about any incentives 23 for prosecutions but if you still hold historical HR 24 records on Individuals -- Personal & Business Objectives 25 each year then I can assure you you will see the targets 46 1 for Prosecutions and Financial Recovery Targets. The 2 recoveries, if not voluntary, were carried out under the 3 Proceeds of Crime Act where I know the Security Team 4 paid to train at least 3 or 4 of my colleagues to carry 5 out such work. This meant if it was proven that the 6 prosecuted postmaster was found guilty or admitted any 7 guilt they could make serious recoveries over and above 8 the amounts found to be missing under the Benefits of 9 Crime Act, including some postmasters life savings and 10 homes." 11 Then page 2, please. Thank you. We now actually 12 get an email from Stuart Lill, if we scroll down, 13 please. You'll see he signs that off. 14 If we go back up please. We'll see that this isn't 15 a reply to Mr Thomas' email; it's distributed amongst 16 those within the business, including people with whom we 17 are familiar: Rodric Williams, Melanie Corfield and Nick 18 Vamos. This is headed, "Former investigator email to 19 Nick Read update". Below is the response from -- 20 Sorry, before I read it, are any of those people in 21 the distribution list part of your General Executive 22 correspondence team or anything similar, PA staff -- 23 A. Yes. 24 Q. Can you identify that person? 25 A. Avene was my PA at the time. 47 1 Q. So you're included on this distribution list by the 2 inclusion of her as a recipient; is that right? 3 A. That's not normally how it works. I would normally be 4 put in the "To" or "CC" box if it was designed to come 5 to me but it does seem strange that it's been directed 6 to her and not to me. 7 Q. So what would Ms Regan do if she received an email such 8 as this? 9 A. Well, I sincerely hope she would share it with me. 10 Q. So this is essentially for your attention as a person to 11 whom the email was addressed, albeit by a circuitous 12 distribution route? 13 A. You would assume it was directed for me, yes. I'm not 14 familiar with it -- 15 Q. Anyway -- 16 A. -- but yeah. 17 Q. I interrupted myself. Below is the response from Gary 18 Thomas who raised issues about the performance targets 19 given to former Post Office Investigators and then he, 20 Stuart, has included the email chain: 21 "This email is difficult to respond to for the 22 following reasons." 23 Then under 2: 24 "There is a new allegation that [Post Office] were 25 benefiting more than they were entitled to from the 48 1 'Benefits of Crime Act' (presumably [the Proceeds of 2 Crime Act]); 3 "3. It makes allegations as to the knowledge about 4 Horizon's failings by senior [Post Office] officials ... 5 "Whilst Mr Thomas does not say it expressly in 6 either of his emails, this appears to be an attempt to 7 negotiate a payment by [Post Office], otherwise there is 8 little need to raise or threaten speaking to 9 a solicitor. Further allegations are made, although 10 [Peters & Peters] will note that he has narrowed and 11 clarified his previous point regarding objectives -- 12 this may be capable of narrowing the current proposed 13 review. 14 "It seems to me that this email conversation needs 15 to be closed down as [Post Office] are unlikely to be 16 able to address the issues/allegations he makes either 17 for proper, sensible legal reasons or because Mr Thomas 18 appears to be using it as a forerunner to seek legal 19 advice ... 20 "... grateful for input ..." 21 Then if we go to page 1, the same distribution list, 22 I think, again, from Mr Lill: 23 "[Post Office] has no employment obligations to 24 Mr Thomas ... 25 "With regards to the whistleblowing policy, this can 49 1 catch and so [Peters & Peters] will/are drafting 2 a proposal regarding investigating and responding to it. 3 This is in order to ensure that we uphold our own policy 4 and we can demonstrate that we have dealt with the issue 5 if it were to be raised at the Inquiry or elsewhere. 6 "... I have drafted the response ... for 7 consideration and comment." 8 If we scroll down: 9 "Thank you for your email ..." 10 Second paragraph: 11 "... reiterate its sincerest apologies for any 12 negative attention you or your former colleagues have 13 received as a result of your time at Post Office." 14 Then this, which is the substance of the reply: 15 "It is not appropriate for Post Office to comment on 16 the general matters you raise at this time. As you will 17 be aware, Post Office is involved in ongoing legal 18 proceedings and is actively supporting and contributing 19 to the statutory Inquiry led by Sir Wyn Williams. 20 "You have stated that you will wait until Post 21 Office has addressed your questions and points before 22 seeking the advice of your solicitor. Whilst it is not 23 clear which specific matters you are referring to or why 24 it requires advice from a solicitor, it is ... a matter 25 for you ..." 50 1 So that's the chain of correspondence. 2 Given the addressee, your PA, Ms Regan, were you 3 aware of this correspondence with Mr Thomas? 4 A. No, I have no recollection of this correspondence. 5 Q. Were you aware of the suggestion that it was said that 6 Post Office Investigators and/or Security Managers had 7 yearly bonus objectives based on the number of 8 successful prosecutions that they undertook? 9 A. I think my understanding of that came from the Inquiry, 10 as opposed to from individuals within the Post Office 11 per se. I think it's an allegation that's certainly 12 been made in this forum, as opposed to more broadly at 13 the Post Office. 14 Q. What about the suggestion that there were yearly bonus 15 objectives based on the amounts recovered for the Post 16 Office? 17 A. I guess my immediate reaction to this is the lack of 18 curiosity to understand whether that is the case. I -- 19 Q. That's where I'm heading, Mr Read. 20 A. Yeah, I'm surprised that the tone of the response is 21 "Let's just close this down", as opposed to where is the 22 curiosity that says that this is something that was 23 going on? I think it would have been extremely 24 illuminating, culturally, to understand if that had been 25 the case. 51 1 Q. I think it follows that you weren't aware of the 2 suggestion that prosecution targets and financial 3 recovery targets might be found in Post Office's 4 historical HR records under personal and business 5 objectives? 6 A. No, I wasn't and, as far as I'm aware, that hasn't been 7 explored. I may be mistaken but I don't believe it to 8 be the case. 9 SIR WYN WILLIAMS: One of the parties receiving this email 10 chain was Mr Declan Salter. 11 A. Yes. 12 SIR WYN WILLIAMS: From memory, when I first became involved 13 in this, he had an important position, did he not, in 14 the Post Office? 15 A. Yes, he did. 16 SIR WYN WILLIAMS: Can you make that public, please? 17 A. Yes, he did, sir. Declan Salter was in charge of the 18 Inquiry Team and the Remediation Unit, which was 19 combined at that early stage, so he came in to do that 20 piece of work. 21 MR BEER: We scroll back down, please, to the distribution 22 list, at the top of page 2, he's the first addressee. 23 I think we know the functions that Mr Williams and 24 Ms Corfield were performing at this time. Can you help 25 us with Hannah Laming? 52 1 A. Again, no. I'm not familiar with Hannah Laming. 2 Q. The generic email address "flagcaseadvisor". I think 3 we've seen that before? 4 A. No, it's not one that I'm familiar with. 5 Q. Thomas Jennings? 6 A. No, again, not a name I'm familiar with. 7 Q. Catherine Emanuel? 8 A. Yes, she is from Herbert Smith Freehills. 9 Q. Andrew Robinson? 10 A. No, I'm not familiar with that name. 11 Q. Tim Perkins? 12 A. Yes, Tim works in the organisation. Tim is currently 13 the People Services Director. 14 Q. At this time in 2021? 15 A. I am guessing he was working for Declan but I could be 16 mistaken. Alternatively, he may well, actually, on 17 reflection, have worked in the Operations Team, Retail 18 Operations. 19 Q. Eamon McCarthy-Keen? 20 A. No, that's not a name I'm familiar with. 21 Q. Some of these people, including Ms Laming, for example, 22 might be lawyers within, for example, Peters & Peters -- 23 A. Right. 24 Q. -- which may be why you're not familiar with them. 25 I think it follows, at least from this chain, that you 53 1 didn't reply, "Hold on, I disagree with the suggestion 2 made by Stuart Lill that this conversation with 3 Mr Thomas needs to be closed down"? 4 A. I'm not familiar -- I'm not familiar with this exchange. 5 It may be that I did see it but I don't recall. 6 Q. Was this correspondence emblematic of a view within Post 7 Office, even at July 2021, that people that raised 8 issues as to the past and the past conduct of 9 investigations and prosecutions ought to be closed down? 10 A. No, I don't believe that to be the case. 11 Q. This is unusual, then; this goes against the grain? 12 A. Yes, I think that certainly by 2021, the Hamilton 13 judgment would have been alive already by then. I think 14 the business, by this stage, was coming to terms with 15 the past. I don't think that was something, as 16 I mentioned at the start, that was necessarily the case 17 in 2019/2020 but I think it clearly was coming to terms 18 with the role of -- that it had played in the past. So 19 I am surprised, yes. 20 MR BEER: Sir, I'm about to move within a topic to another 21 subtopic. Might we take morning break until 11.50? 22 SIR WYN WILLIAMS: Yes. Certainly. 23 MR BEER: Thank you very much. 24 (11.35 am) 25 (A short break) 54 1 (11.52 am) 2 MR BEER: Mr Read, can I continue to seek to explore the 3 topic of Post Office's attitude and approach to 4 subpostmasters who have a shortfall alleged against them 5 or a shortfall is detected, including those who, in the 6 past, had been convicted of criminal offences on the 7 basis of such shortfalls being alleged, and look at the 8 issue of Mr Jacobs, Elliot Jacobs. 9 In your third witness statement -- there's no need 10 to turn it up, it's paragraphs 237 to 239 -- you refer 11 to the Post Office's investigation concerning Elliot 12 Jacobs, and I think this was known as Project Venus; is 13 that right? 14 A. That's correct. 15 Q. You tell us about a conversation on 10 January between 16 Mr Staunton, Mr Jacobs and Mr Ismail, when they raise 17 concerns about the Post Office's treatment of 18 subpostmasters. 19 A. Yes. 20 Q. We're going to look at that in a moment. 21 Can I look at something that happened before then in 22 November 2023. POL00448693. This is an email to you 23 from Mr Staunton of 25 November 2023, and I think it's 24 just to you. He says: 25 "Nick, 55 1 "I drove home yesterday and had to deal with 2 a number of calls from both Saf and Elliot." 3 So that's Saf Ismail and Elliot Jacobs: 4 "I will not repeat some of their comments but I am 5 annoyed that this has blown up. They think that Ben is 6 stirring this thing up even though it has been 7 investigated ..." 8 Just stopping there, the thing that's being spoken 9 about here, would you agree, is the investigation into 10 an alleged shortfall at Mr Jacobs' branch? 11 A. That's correct. 12 Q. "... found the differences to be de minimis and well 13 within differences that may arise on a trading account 14 running to under £1 million per annum. It has been 15 looked at by a subcommittee of Lorna and Amanda. 16 "There were comments about the 'old [Post Office]', 17 things have not changed that much, [Post Office] 18 management think all [postmasters] are crooks etc, their 19 personal integrity is being questioned etc, etc. 20 I suggested they talk to Tom regarding the proposed note 21 in the ARA (of which they are unaware) who helped in his 22 replies for which I am grateful. Kathryn says she only 23 found out about this a day ago but then thought she 24 would 'brief' all the Directors a day later -- without 25 the full facts. Anyway I have suggested we hold off 56 1 until you and I chat. 2 "I needed to spend hours yesterday on this like 3 a hole in the head. What is behind this? Am I missing 4 something", et cetera. 5 The suggestion, seemingly made by Messrs Ismail and 6 Jacobs, about the "old Post Office" and Post Office 7 Management currently thinking that postmasters are "all 8 crooks", is that a view that has been expressed by them 9 to you? 10 A. I don't think before or around the time of this email, 11 I think that's something that has happened subsequently, 12 I think both of them gave evidence to that effect: that 13 they had raised that in a Board conversation, I recall. 14 Q. How did you react to those suggestions that were being 15 made in this email to you? Essentially, if I summarise, 16 the two Postmaster Non-Executive Directors were 17 suggesting to the Chairman that Post Office Management 18 think that all postmasters are crooks. 19 A. I think I'd probably try and separate two elements to 20 this email. I think (1) is the potential investigation 21 into Saf and Elliot and (2) is this notion that all 22 management think they're crooks. I certainly don't 23 think all management are of that opinion, in fact 24 I absolutely don't think that at all. 25 On the topic of this particular situation, and 57 1 I think it's perhaps quite important to talk a little 2 bit more about the context of this investigation, if 3 that's okay, the allegations that were sort of put to me 4 around Elliot Jacobs' situation, in terms of his 5 liability to the business, was something that I passed 6 to the Company Secretary and the Chairman -- which is 7 why Henry Staunton is obviously discussing it now -- for 8 them to decide what the best course of action should be, 9 and that, I think, is important context, as a Board 10 Director himself, Elliot, it was important that the 11 Chairman was overseeing this activity. 12 I think it's fair to say that the approach was 13 heavy-handed, I think I would say that, to Project 14 Venus. I think it was -- 15 Q. Sorry, to stop you there, I think the suggestion was 16 that over a six to ten-year period the suggestion was 17 some £15,000 of debt had been built up on a business 18 that was trading at about £1 million a year and that's 19 why it was thought to be de minimis; is that right? 20 A. Not quite. I think the liabilities were 198,000, to my 21 recollection. The settlement, which ultimately was done 22 by -- or agreed with Mel Park and her team in the 23 operations, was that identifying loss, for want of 24 a better word, that should be repaid, was some 16,000 as 25 is mentioned here. So I think it's slightly nuanced, in 58 1 the sense that there was a larger shortfall that was on 2 the account but, actually, once investigations had been 3 done, once the teams had worked, once the operational 4 team had worked with Elliot and his teams, we concluded 5 that, actually, the shortfall was around 16,000. So 6 yes. 7 Q. I mean, if we just look over the page to see an email 8 addressed to Ben Foat and Kathryn Sheratt from 9 Mr Staunton, he summarises it in the second paragraph, 10 second sentence: 11 "A lengthy investigation found that Elliot owed 12 under £15,000 built up over 6 to 10 years. Bearing in 13 mind that about £1 million a year is transacted ... they 14 believe that the amount is de minimis." 15 Why do you say that the investigation into this 16 postmaster NED was heavy-handed? 17 A. I think certainly looking at the approach that was 18 recommended and suggested, which was originally to do 19 unannounced visits to Elliot's branches, I think you 20 will have seen emails to that effect, in order to try 21 and establish what the current loss was, was 22 an extraordinary -- an extraordinary recommendation by 23 the team. 24 I think, as Elliot has rightly pointed out, a more 25 sensible and more balanced approach would have been to 59 1 employ members of the Operations Team to look into it in 2 a joint way with Elliot and that, I think, would have 3 been a more effective and more efficient way of doing 4 it. 5 The reason I say it's heavy-handed is that, clearly, 6 there was an issue with how this was going to be 7 recorded in the report and accounts. Clearly, there was 8 an issue with the volume and alleged volume of 9 shortfall, and I think it would be fair to say the sort 10 of over-enthusiastic investigative approach was 11 heavy-handed and that there were other ways that this 12 could have been addressed. 13 Q. Going back to page 1, please. Second sentence in first 14 paragraph: 15 "They [that's Messrs Ismail and Jacobs] think that 16 Ben [that's Mr Foat] is stirring things up even though 17 it has been investigated", et cetera. 18 What did you understand to be the suggestion against 19 Mr Foat? 20 A. I think -- I mean, I think this goes back to the fact 21 that the Investigation Team sits within Ben Foat's area 22 of responsibility. They work to him, as the General 23 Counsel, and I think, therefore, by association, they 24 were assuming that was the determinant of the 25 investigation, the manner of the investigation and the 60 1 activity that occurred as a consequence. 2 SIR WYN WILLIAMS: I'm sorry, I'm a bit unsure that you're 3 actually addressing the point that Mr Beer is trying to 4 get at. Can I just remind you that the evidence, 5 I think, from both Mr Staunton and Mr Elliot (sic) was 6 that the investigation had taken place in April, then 7 there'd been what Mr Elliot (sic) described as a series 8 of meetings, which were "business meetings" which 9 resolved the issue. 10 A. Yes. 11 SIR WYN WILLIAMS: His complaint thereafter, as I'd 12 understood it, to the Inquiry, was that the 13 Investigative Department and Mr Foat in particular had 14 taken a long time to actually formally close the 15 investigation. 16 Now, it seems to me that this all happening in 17 November 2023 is some kind of complaint about Mr Foat 18 still pursuing an investigation, if you see what I mean. 19 Or that's how it reads if you put it into the context 20 that I've just described, which I think is an accurate 21 summary of Mr Elliot (sic) and Mr Staunton's evidence. 22 A. It is. 23 SIR WYN WILLIAMS: So do you know what was going on in 24 November 2023, which caused this to resurrect itself, so 25 to speak? 61 1 A. So not specifically. I'm assuming, because Kathryn 2 Sheratt was engaged in this process, it had to do with 3 what director liabilities to the company were going to 4 be put into the report and accounts, and if the 5 investigation hadn't been formally closed down, which by 6 the sounds of things it hadn't, in terms of 7 specifically, that was the -- giving rise to some 8 concern. I think you're quite right that a seven-month 9 investigation into some alleged shortfalls seems 10 an inordinate length of time and I think that's 11 absolutely the case, and I think that -- well, I know 12 that the Investigations Team would recognise that that 13 was the case. 14 So, yes, I think there is some disappointment, 15 certainly on behalf of Elliot, and I heard what he said 16 two weeks ago, that the Retail Team were business-like 17 and confident in the way that they engaged with him to 18 resolve the issue, and it would have been far easier to 19 have done it that way than to have had something more 20 formal than what is obviously -- or obviously took 21 place. 22 MR BEER: Can we move forwards, please, to January 2024 -- 23 this was in November 2023 -- again, in relation to views 24 expressed by your Subpostmaster Non-Executive Directors. 25 By looking at POL00448302. If we can look at page 4, 62 1 please. This is a note sent by Mr Staunton to himself 2 by way of contemporaneous note of a conversation that he 3 had four days previously on 10 January 2014. The note 4 is dated 14 January 2014. I'll read it: 5 "Saf said the views expressed by Richard Taylor, and 6 previously by management and even members of the Board, 7 still persisted -- that those [postmasters] who had not 8 come forward to be exonerated were 'guilty as charged'. 9 It is a view deep in the culture of the organisation 10 ([including] at board level) including that postmasters 11 are not to be trusted. SOMETHING NEEDS TO BE DONE." 12 "Martin Roberts and certain members of his team were 13 singled out. There has been no feedback on the 14 investigation into Mr Roberts ([including] for 15 inappropriate behaviour and lack of integrity). He was 16 responsible for the postage stamps debacle where changes 17 were made to accounts by his team just like Fujitsu. If 18 Elliot had not been on ARC the controls would not have 19 been strengthened. Roberts and his team do not want any 20 extension to their terms of office as they believe new 21 [postmasters] would not have the experience to challenge 22 them." 23 Scroll down: 24 "Equally Saf and Elliot are FED UP WITH THE AMOUNT 25 OF POWER WIELDED BY FOAT. He and other members of the 63 1 senior team act as if [POSTMASTERS] ARE GUILTY UNTIL 2 PROVED INNOCENT ('as per my experience' they both said). 3 'No one believes us' is a constant refrain from 4 [Postmasters]. WHILST FOAT IS AT THE HELM NOTHING WILL 5 CHANGE. we must also part company with all those 6 investigators who behaved so terribly with 7 [postmasters]. What on earth is happening if Steve 8 Bradshaw is still with us -- his performance at the 9 Inquiry was a disgrace and reflected terribly on Post 10 Office. Foat uses his leadership of the Inquiry Team as 11 an instrument of his power -- it all has to stop. The 12 [postmaster] 'is not the enemy'. 'Only [postmasters] 13 can solve this' and tell us how to change. JB is 14 an ex-policeman. His behaviour has been unacceptable 15 and he needs to move on to prove we have changed." 16 Then skipping a paragraph. 17 "There are some 48 people involved in 18 investigations. There are over 40 just like Bradshaw. 19 These people need to go. Project Phoenix was allowed by 20 Foat to go into the long grass. Bradshaw went into one 21 of Saf's stores some years go and immediately said 'we 22 are closing you down'. [Postmasters] tell him not much 23 has changed since. There is a complete lack of respect 24 for [postmasters] and that has to change." 25 If we just scroll to the bottom, I don't think there 64 1 is anything else that's relevant. He ends with this: 2 "A lot in this note to consider and take forward 3 with the Board." 4 The reference to 40 people who are just like 5 Mr Bradshaw, investigators, have you ever referred to 6 such people as the "untouchables"? 7 A. No I haven't. 8 Q. Mr Staunton -- no need to turn it up -- WITN11410100, at 9 paragraph 107 and on 1 October, when he gave evidence to 10 us, page 109, line 7, states that you used the term to 11 him, both privately and in a meeting; is he incorrect? 12 A. He is incorrect. 13 Q. Mr Ismail says that you used the term "untouchables" to 14 refer to some individuals within Post Office in two 15 contexts: in a private NED-only meeting and in a Board 16 meeting; is he incorrect? 17 A. He is. 18 Q. Mr Jacobs said that you used the term in the context of 19 a NED-only meeting; is he incorrect? 20 A. Yes, he is. 21 Q. Are you familiar with the term? 22 A. Well, I've obviously seen a lot of it in the media, seen 23 a lot of it in the press. Obviously, it has occurred in 24 this forum as well. I think there's a lot of conflation 25 between what has been described. There's this notion 65 1 that there are 40 untouchables who are Investigators 2 from the past. That is not an expression that is used 3 in the organisation. That is not an expression that is 4 familiar to the organisation. 5 I also discovered, two weeks ago, as part of the 6 disclosure exercise, that there was an investigation 7 conducted by Andrew Darfoor into the comments that 8 I made at the Select Committee, and this was obviously 9 one of the areas of investigation and, as I discovered 10 two weeks ago, I was unfamiliar that an investigation 11 had been conducted, but it was and it was found that 12 that was not the case, that this is not an expression 13 that is used more widely in the organisation, that this 14 is not an expression that I have used, 40 Investigators, 15 or 40 untouchables. So I can say with some confidence 16 that this idea of 40 untouchables is not something that 17 is widely used in the organisation. 18 Q. In any event, given that Phase 4 of the Inquiry was 19 ongoing at the time of the conversation that this note 20 refers to in January 2024, were you concerned by these 21 reports from Mr Ismail and Mr Elliot (sic)? 22 A. As in the commentary that he's written here? Of course. 23 Very, very concerned. 24 Q. What action did you take? 25 A. This obviously occurred at the time that the pineapple 66 1 email was in circulation. I think you'll be familiar 2 with how that occurred. Just to sort of take you back 3 to the mechanics of this, this was an email that 4 emerged, I think, on a Sunday night, inadvertently sent 5 to me by Henry Staunton. I sent it on inadvertently, 6 given that there was no identification in the subject 7 matter box of the email or, indeed, any confidentiality 8 associated with it, inadvertently sent it on to 9 colleagues in order to help me write a response to the 10 Voice of the Postmaster Group, which is what Henry had 11 asked me to do. 12 Q. We're just going to come to that in a moment. 13 A. Oh, okay. 14 Q. But just on the "I inadvertently disclosed to 15 colleagues", you disclosed it on to Mr Roberts and 16 Mr Foat -- 17 A. That's correct, yes. 18 Q. -- who were the targets of the allegations. 19 A. That is correct, yes. At 8.00 the following morning, 20 I dropped an email to Saf and Elliot saying I was very 21 sorry that the situation had occurred, it had been 22 completely inadvertent in terms of a mistake on my part 23 and that I'd be happy to speak with him. I recommended 24 that we have a Teams call, the three of us in that 25 email. Saf was unable to join it so I therefore had 67 1 a call with Elliot to apologise, and I didn't have 2 a chance to speak to Saf until the following week, which 3 is when we had a Board meeting, and so it did go 4 unanswered. 5 Q. As to the substance of what was said, rather than that 6 difficult handling issue that followed, what did you do? 7 A. I spoke with both Mr Roberts and with Mr Foat, about the 8 allegations that had been made. Clearly, it was quite 9 a difficult conversation because, clearly, it had been 10 released to them both and they were angry and upset 11 about the fact that they had -- this had come to light 12 and, more importantly, they were angry and upset that 13 Saf and Elliot had that view of them. So it was 14 a difficult conversation. 15 But, again, certainly from my perspective, the 16 challenge, I think, for Ben in particular, was the 17 management of the Investigations Unit and how we were 18 deploying it, and I think it is important to make a very 19 clear distinction between investigations work at the 20 Post Office now and how they worked historically. If 21 you'd like me to just describe that -- 22 Q. I think we'll come on to that in probably a passage in 23 this afternoon's questioning. 24 A. Okay. 25 Q. But this suggested that Mr Foat had allowed Project 68 1 Phoenix to "go into the long grass". What was done as 2 a result of that suggestion? 3 A. Just going on to Project Phoenix very explicitly, this 4 is a source of some frustration in the sense that we 5 haven't moved quickly enough, and I know that the 6 Inquiry has seen emails to that effect. I certainly 7 have been and was keener that we were more forthright in 8 terms of how we addressed individuals who would be in 9 a potential position of postmaster-facing activity, 10 either those who were involved specifically, or those 11 who weren't. 12 But Project Phoenix, just to remind everybody, is 13 formed of two very, very distinct parts. The first part 14 is it's individuals who were named during the Human 15 Impact Hearings, and it's also individuals who may have 16 been involved in activity that resulted in the 17 prosecution of postmasters; and, secondly, it was as 18 a consequence of the restorative justice meetings that 19 myself and Simon Recaldin, and subsequently others, have 20 taken part in over the last 18 months or so. 21 The combination of which is we obviously heard about 22 individuals during those restorative justice meetings, 23 and clearly needed to investigate the allegations that 24 had been made to us by the victims, and that's clearly 25 what Project Phoenix is about. There are 47 particular 69 1 case studies that have emerged through the Human Impact 2 Hearings and through the restorative justice meetings, 3 and we have distilled those down to six individuals, 4 three of whom have been -- three of whom have no case to 5 answer. The allegations, we haven't found corroborating 6 evidence for. 7 We've looked through, I believe, 130,000 different 8 documents. We've interviewed many of the people who 9 I spoke to at the restorative justice meeting and, 10 indeed, who were at the Human Impact Hearings, to see if 11 we can find and understand what occurred. Three 12 individuals, however, are now under further 13 investigation, both by the Post Office and by external 14 agencies. 15 So would it have been, and do I wish that we could 16 have moved more quickly with Project Phoenix? Yes, 17 I do. So I have sympathy with Elliot and Saf's view. 18 I think -- 19 Q. What was the cause of the pace -- 20 A. Primarily because we needed to speak to individuals who 21 had been involved -- who had made these allegations, 22 I think and then obviously trying to find corroborating 23 evidence and, as you've heard in this Inquiry, that's 24 not often easy at Post Office, to get the right data and 25 the right disclosure and the right information to help 70 1 us understand precisely what had happened. That could 2 be recordings, that could be records of interviews, 3 there's a number of different things that we looked to 4 do but it was frustrating. Yes. 5 Q. Just stopping you there, just to make sure I haven't 6 misunderstood your answer. 7 A. Yes. 8 Q. You said a couple of times that you looked for 9 corroborating evidence, which may have a special magic 10 for some lawyers. In order to find a case to answer, 11 are you saying that there had to be something additional 12 to that which the postmaster said, ie some independent 13 evidence coming from somebody other than the postmaster? 14 A. Well, I think the recordings, as an example, and the 15 records of the meetings, would be obviously areas that 16 we would be looking at to try and understand whether or 17 not the allegations that had been made, you know, could 18 stand up. 19 Q. So you weren't literally meaning corroborating evidence? 20 A. No, what I meant was supporting evidence I guess, fully 21 investigating each of the allegations that had arisen, 22 and that, as I say, involved specifically speaking with 23 those victims who had come forward and I am certainly of 24 the opinion that that took quite a long time to 25 organise, quite a lot of time to bring together, but too 71 1 slow. And I think perhaps, if I took a step back, 2 I would say that the Investigations Unit specifically is 3 pretty overwhelmed with activity at the moment, and that 4 may well have been a reason why the pace was slower than 5 we would have hoped. 6 Q. Can we turn to what we just discussed, then, namely the 7 handling of the email, by looking at POL00448564. And 8 turn to page 3, please. 9 We should briefly just look at page 4, just so we 10 can see what was included, and just the bottom of 11 page 3. Thank you. 12 An email to Mr Staunton copied to Mr Ismail and 13 Mr Jacobs, containing a suggested email to the Board, 14 and then the suggested email includes in its second 15 paragraph: 16 "... please see attached a file note I prepared 17 following my conversation with Saf and Elliot on Sunday 18 ..." 19 That's their file note we just looked at, yes? 20 A. Understood, yes. 21 Q. If we then go to page 3, please. Mr Staunton, by these 22 emails, essentially provided that Project Pineapple note 23 to you on 17 January; is that right? 24 A. Yes, that's correct. 25 Q. Then if we go to page 2, please, and scroll down, 72 1 please. This is the email that you were referring to, 2 I think, a moment ago, Mr Read -- is that right -- 3 A. Yes, that's correct. 4 Q. -- where you send the chain on, including the 5 filenote -- 6 A. That is correct. 7 Q. -- to Martin Roberts and Ben Foat, saying: 8 "... can you produce a suitable response for Henry. 9 "You will be aware of my views from discussions we 10 have had ... 11 "I assume there are GFA restrictions too?" 12 What does that refer to? 13 A. The grant funding agreement with the NFSP. 14 Q. If we scroll up, please. Stop there. This Mr Foat's 15 reply, second paragraph: 16 "The Project Pineapple email contained very serious 17 allegations of which I have not been made aware. Given 18 the circumstances, I would be conflicted." 19 Scroll up, please. Mr Roberts' reply: 20 "Having read [the email] below I am in the same 21 place not knowing what Project Pineapple is and having 22 never been made aware of the allegations made against me 23 and my team. 24 "I ... feel conflicted ..." 25 You tell us in your witness statement, the 73 1 crossreference is paragraph 243, as you've done today, 2 that you forwarded this chain inadvertently to Messrs 3 Foat and Roberts; is that right? 4 A. That's correct. 5 Q. You say that you didn't open the attachment at the point 6 at which you had sent it on; is that right? 7 A. Yes. 8 Q. That the email chain was not marked private and 9 confidential -- 10 A. Yes, that's correct. 11 Q. -- and that you didn't pick up from the subject line 12 "Future of Post Office branches", what it in fact was 13 about? 14 A. That's correct. 15 Q. Did those things contribute to your inadvertence? 16 A. Yes, they did. 17 Q. Later that day on the 18th, Messrs Ismail and Jacobs 18 emailed you expressing their concerns, they having 19 learnt that you had provided the Project Pineapple note 20 to the individuals named in the complaint. Can we look 21 at that, please. POL00448383. Can we start, please, at 22 page 2. Mr Ismail's email to you later that day, it's 23 10.00 at night, copied to Mr Jacobs and Mr Staunton: 24 "... writing to address a deeply concerning and 25 distressing matter that has ... come to my attention ... 74 1 there was a confidential meeting between myself, Elliot, 2 and the Chairman, where we discussed our observations 3 and concerns regarding the operations of the Post Office 4 and our ongoing cultural issues. Regrettably, it has 5 come to my knowledge that the notes of the meeting, 6 which were intended to be kept in strict confidence, 7 have been circulated to the individuals who were the 8 subject of our discussion. 9 "The implications of this breach of confidentiality 10 are far reaching and have placed me in an extremely 11 compromising position. It has not only damaged the 12 relationships between myself and those individuals (Head 13 of Legal and Head of Postmasters) but will have eroded 14 trust and will create an atmosphere of tension and 15 hostility and I worry about serious repercussions for me 16 as a postmaster as both these individuals are 17 'untouchable' as you have said. 18 "I am deeply troubled by how this breach occurred, 19 what measures were in place to prevent such a mishap 20 from happening. 21 "Please see below my concerns which outline the 22 gravity of the situation. I request that you thoroughly 23 investigate how [the] breach of confidentiality occurred 24 and address the following: 25 "Was the breach as a result of negligence or a lack 75 1 of judgement on your part? 2 "How can a mistake of this magnitude happen within 3 the organisation, especially when dealing with sensitive 4 matters and with all the current spotlight on us? 5 "By exposing me to such a compromising and 6 jeopardising position, how do you expect me to continue 7 working effectively with the individuals involved?" 8 Then to page 1, please. Mr Jacobs still later on 9 the same day, 11.58 at night, two minutes to midnight, 10 "I strongly echo Saf's views on this," he said in 11 an email to you. The same distribution list: 12 "The release of the confidential briefing note to 13 the very people we have highlighted in the document is 14 a horrendous breach of trust. 15 "My only desire on this Board as a Postmaster NED 16 has been to ensure the organisation does the right thing 17 and my actions have always sought to protect the 18 organisation from both internal and external risks. 19 "Your description of these three men, (JB ...)" 20 That's Mr Bartlett -- is that right -- 21 A. Yes. 22 Q. -- who is Director of Investigations and Assurance -- 23 A. That's correct. 24 Q. -- so the old Investigations Division -- 25 A. The new Investigations Division, yes. 76 1 Q. -- Mr Foat, General Counsel -- 2 A. Yes. 3 Q. -- and Martin Roberts, Chief Group Retail Officer, 4 correct? 5 A. Yes, that's correct. 6 Q. "... as 'untouchable' in our call earlier today was 7 worrying enough (especially in the light of our grave 8 concerns as to their ability and the power they wield 9 without any real oversight) but is made worse by them 10 now being told of our view of them. Only one Board 11 meeting ago these people came to the Board to request 12 authority to recommendation police investigations into 13 postmasters without Board oversight or approval -- and 14 thought nothing of it! To be so staggeringly out of 15 step with reality of the world Post Office occupies 16 today is beyond belief." 17 You'll see that both emails refer to you referring 18 to the three men or some of them in a call that day as 19 "untouchable"; did you do so? 20 A. My recollection of this is being very, very clear that 21 no one in the business is untouchable. I don't know if 22 I used the word "untouchable" but no one is above the 23 law, and that is really important. The point that I was 24 making to them, and it wasn't specifically about Martin 25 Roberts, them, or indeed JB, was that we are trying to 77 1 bring a sense of transparency to the organisation, and 2 nobody is above the law. And that is the point that I'm 3 trying to make. 4 The sort of secondary observation, as a consequence 5 of this, is that my position, in terms of formally 6 addressing the Investigations Team, at that current time 7 was difficult. I was under investigation myself, by 8 this -- the oversight was being provided by the 9 Investigations Team, and the point that I was making was 10 that, until such time as that had concluded, it would be 11 difficult for me to ensure that we were getting the 12 right -- that we were getting the right kind of 13 oversight from Ben and JB in terms of the investigations 14 that they were adopting. 15 Q. To move the matter on, what then happened, is this 16 right, is that Mr Foat and Mr Roberts, for their part 17 required written apologies to be provided by the two 18 Postmaster Non-Executive Directors, Mr Jacobs and 19 Mr Ismail? 20 A. Yes. 21 Q. If we look at those, please, POL00448577. 22 This, at the top of the page, is Mr Foat's email to 23 Ms McEwan and others, including you and, in his second 24 paragraph, Mr Foat says: 25 "As a minimum, Elliot Jacobs should go on record and 78 1 in writing to confirm the apology he provided to me 2 about the assertions that were made to me in the 3 Pineapple file note. Comments attributed to him have 4 been published in the media and he has remained silent 5 when he is well aware that those comments contain 6 factual inaccuracies and even a basic lack of 7 understanding of Post Office's organisational 8 structure." 9 So far as Mr Roberts is concerned, POL00448514, 10 page 2, please. This is Mr Roberts' email to Mr Jacobs 11 and Mr Ismail, third paragraph: 12 "I would now ask that you please put in writing the 13 apology and retract all the allegations and statements 14 presented in the email that I was copied in on." 15 Then page 1, please. A joint reply, essentially: 16 "As promised, Saf and I sat down and talked with 17 Martin after the Board meeting yesterday. An honest and 18 open discussion was had we believe we had put the matter 19 to bed. 20 "This evening, we have received the email below ... 21 asking us to retract the statements made in the 22 document. 23 "Whilst we have both made clear the tone and the way 24 it was delivered was unacceptable and should never have 25 been circulated; the content is not something we feel is 79 1 incorrect with regard to the Retail Team leadership and 2 performance. 3 "... our position remains that these are both 4 important and urgent issues that must be addressed, not 5 ignored -- regardless of how they have come into his 6 mailbox." 7 Scroll down, please. Yes, we needn't look at the 8 remainder. What discussions, if any, did you have with 9 Mr Roberts and Mr Foat on Project Pineapple? 10 A. I spoke with both of them and Martin Roberts, in 11 particular, said that he felt he'd had a fulsome apology 12 in conversation with Saf and Elliot, and this email 13 would suggest slightly different: that they were 14 obviously apologetic that Martin got to hear about the 15 information in this particular way but that, actually, 16 they stood by what was said, and I think there was some 17 disagreement, I think. Well, misinterpretation perhaps 18 is a better way to describe it. I think Martin felt 19 that he had a fulsome apology from them and so that was 20 very unfortunate for sure. 21 Q. What about the substance of the issues that these two 22 Subpostmaster Non-Executive Directors were raising: how 23 was that addressed; was it addressed? 24 A. Be more sort of specific, as in the sort of six 25 allegations they have made? Well, you've heard me talk 80 1 about the specifics around -- the specifics around the 2 investigation into past roles and -- my memory has gone, 3 sorry. What was I going to say? 4 Q. Do you want to look at the list? 5 A. Yes, that would be helpful. Thank you. 6 Q. Scroll down, please? 7 A. Yeah, Phoenix, sorry. Absolutely. The issue around the 8 replacement plan. We were very clear that the two 9 Postmaster NEDs were the first that had been on the 10 Board in the Post Office's history, and we wanted to 11 work with them to ensure that really clear lessons were 12 learnt, and I know that the Retail Team did that and 13 subsequently did that. They took the Postmaster NED 14 comments about induction, about recruitment, about what 15 the next phase should look like. But we had been clear 16 that -- and they were under no illusions that the term 17 was a single term, in terms of their three years on the 18 Board, and that they would naturally roll off. I don't 19 think we had been explicit about that but I think that 20 was the intent. So they had good input into that 21 process. 22 The stamps issue was well spotted by Elliot and we 23 jumped on that straight away. Within 24 hours that 24 process had ceased, so I'm comfortable that we took the 25 right action on that. 81 1 Martin Roberts was investigated and looked into and 2 there were no complaints that were upheld in that 3 regard. 4 I know, having spoken to Tracy Marshall and, indeed, 5 to the Postmaster Engagement Director, who is a current 6 serving postmaster, that they would absolutely refute 7 that. They feel that they've had good engagement with 8 the Non-Executive Directors, and this notion of path 9 clearing -- and I think this has come up a number of 10 times, Henry Staunton mentioned it -- and I think it's 11 important that we understand precisely what this is 12 because I don't think it's been well articulated. 13 Path clearing is an event that is going to occur 14 when the organisation rolls off the Horizon platform and 15 moves on to the NBIT platform. 16 What will be required to happen is that, in all 17 11,500 branches, there will need to be a full cash and 18 stock audit in order for the migration from one system 19 to another. We have no real understanding about what 20 the implications for that will be and, indeed, whether 21 or not there are going to be large surpluses or indeed 22 large gaps in terms of the stock and the cash that is 23 held in each individual branch. We really don't know 24 that. 25 We are flagging it as a challenge and we will need 82 1 to think very carefully when we get to that point in two 2 years' time how we manage that particular problem. It's 3 a known challenge and I think the way it's been 4 discussed in the Board -- in the Inquiry is that somehow 5 we're going to address this in the next few months. It 6 simply isn't the case. We've got lots of thinking to do 7 around this. It's a known problem. 8 So I hope I've tried to bring some colour to the -- 9 in the issues here. This, you know, is a very important 10 and big deal. I am very sad that the situation 11 occurred. I think the events that have subsequently 12 happened have not been helpful, either to the Postmaster 13 Non-Executive Directors, and/or indeed to the members of 14 the Group Executive who were quoted, and I think in 15 terms of the confidence that it's given to the rest of 16 the postmaster organisation about what goes on at the 17 top of the organisation, and you can see that playing 18 out in people's confidence in the colleague survey 19 results for '24, which happened a few weeks after this 20 event. 21 So it's not a happy period in the Post Office's 22 history and I don't think it's something that anybody is 23 particularly proud of amongst the leadership team. 24 Q. Would you describe what we read as the normal operation 25 of a Board and General Executive of a large corporation 83 1 undertaking complex issues or a sign to the outside 2 world, who have been given a glimpse into it, of the 3 dysfunctional operation of that company at Board and 4 General Executive level? 5 A. I think all businesses, all complex businesses, have 6 spats and issues that emerge at Group Executive and 7 Board level, certainly in my experience. I think it's 8 deeply unfortunate that this is a public spat, for want 9 of a better word, and I think it's fairly unedifying for 10 the Post Office but I don't think it's necessarily 11 reflective of anything more fundamental than that and 12 I think it is something that happens in large, complex 13 organisations. 14 Q. Are you saying this is the kind of spat that goes on 15 regularly at Board and General Executive level, the 16 public just don't get to see it? 17 A. No, I don't think I said that. I think this occurs and, 18 as I say, in large organisations and complex 19 organisations, people fall out, mistakes get made, 20 issues emerge. I don't think I would necessarily say 21 there is a corollary that this therefore means that it's 22 utterly dysfunctional. 23 Q. So to try to pin you down more precisely, take out the 24 word "regularly", these are the kind of exchanges and 25 these are the type of relationships that one could 84 1 reasonably expect to see in a well-functioning 2 organisation? 3 A. No, I don't think that's the case. I think the business 4 was under enormous amounts of pressure. I think that 5 has been well articulated by many of my colleagues who 6 have been at the Inquiry over the last couple of weeks. 7 I think, when a business is experiencing the level of 8 Parliamentary, media and Inquiry scrutiny that it is 9 under at the moment, it isn't entirely surprising that 10 issues that may be easily and more readily resolved, 11 suddenly take a life of their own, and I think that's 12 certainly the case with this particular issue, and there 13 are others as well. 14 Q. Can we move forward with the issue of the Project 15 Phoenix and Past Roles Project -- 16 A. Yes. 17 Q. -- and the interaction between the two, by looking in 18 February 2024 at the minutes of a POL SEG and General 19 Executive tactical meeting. POL00458674. Thank you. 20 Can you just explain briefly what the SEG/GE Tactical 21 meeting is or was? 22 A. Yes, I can. Yes. Every Wednesday we have a Strategic 23 Executive Group meeting. That is -- the names of the 24 individuals are, I think, those who are present, and you 25 can see from the apologies who constitutes the Strategic 85 1 Executive Group and, just for sort of clarity, the Group 2 Executive was replaced by this new group called the 3 Strategic Executive Group in January 2024. 4 Q. You're named, amongst others, as being present and, if 5 we scroll down to item 4, please, which is over the 6 page, I'm sorry, "The Project Phoenix/Past Roles Verbal 7 Update", "Key points of note", Nicola Marriott: can you 8 explain the function that Nicola Marriott performed at 9 this time? 10 A. Yes, I can. She is the number 2 to Karen McEwan in the 11 People department. 12 Q. "... noted the distinction between Project Phoenix 13 (where allegations of wrongdoing were concerned) and 14 Past Roles Review, when no such allegations were made 15 ..." 16 Firstly, is that a distinction that you recognise? 17 A. Yes, it is. 18 Q. "... and where the review was focused on determining any 19 conflicts or potential conflicts as between certain 20 previous and current roles." 21 So the latter, the Past Roles Review, concerns 22 a past role and a present role which presents a conflict 23 or potential conflict, even absent an allegation of 24 wrongdoing. 25 A. That's correct. 86 1 Q. "[Ms Marriott] noted the latest position in relation to 2 Past Roles ... where 35 colleagues had been deemed to be 3 RED." 4 Firstly, what is involved in being "deemed to be 5 RED"? 6 A. Right. I think that figure is now 27 but, again, it's 7 exactly as you depicted, which is that -- and I'll 8 provide some context to the Past Roles work, which is 9 effectively an assessment of the 1,700 individuals in 10 our organisation who have been with the Post Office for 11 ten or more years, and this was the start of a desktop 12 exercise to see if we could identify were there 13 individuals who were involved in activities that were 14 associated with this Inquiry and with the scandal, and 15 found themselves in roles where they could be 16 potentially conflicted because they would be involved in 17 activities that were informed with redress or indeed 18 with other postmasters themselves. 19 Q. Just stopping there, can you be more specific -- 20 A. Yes, I can. 21 Q. -- to the current role, which gives rise to a potential 22 or actual conflict? 23 A. Yes, we specifically prioritised the Remediation Unit 24 and the Inquiry teams, simply because of the nature of 25 the work that they were doing, which is obviously 87 1 administering operationally redress and/or supporting 2 this Inquiry, in a specific way. So I asked for the 3 work to -- for the 1,700 to focus most specifically on 4 those individuals who are involved with redress or the 5 Inquiry, and then trying to identify whether there were 6 individuals who might have, in the past, been involved 7 in activity that is covered by this Inquiry: 8 investigations, audit and work associated with 9 prosecutions as well. 10 And, if there were -- and there's no allegation at 11 this stage that those individuals have done anything 12 wrong -- if they were, we wanted to make sure that we 13 identified who they were, and what roles they were doing 14 today, and whether or not the roles that they were doing 15 today in some way could be conflicted or indeed could 16 postmasters who are involved in redress or receiving 17 redress be in some way intimidated or indeed affected by 18 the fact that these individuals were administering the 19 redress or indeed supporting the Inquiry. 20 That was the genesis of the work. 21 Q. So why were these 35 individuals given a red rating? 22 A. Specifically, I can't go through all of them but it 23 would be, as I said, it would be those roles -- 24 presumably retail facing roles historically, that they 25 may have been involved in, and now they are involved in 88 1 some form of activity associated with redress in the 2 case of these individuals. 3 Q. So in the Remediation Unit? 4 A. In the Remediation Unit. 5 Q. The Inquiry Team? 6 A. None in the Inquiry Team, as I understand it, but these 7 were specifically associated with the Remediation Unit, 8 and those roles would have been shortfall analysis, they 9 would not have been decision-making roles, in the sense 10 of deciding or determining what an offer may or may not 11 be from a compensation perspective. However, we wanted 12 to be really confident that anybody coming forward to 13 the Remediation Unit had the confidence that they were 14 talking and speaking with people that were unbiased in 15 any shape or form. So it was for the individual's 16 protection as well as specifically for the postmaster's 17 protection. 18 Q. We it might be suggested that this work in February 2024 19 was a little after the horse had bolted? 20 A. Yes, it's slower than we would have wanted and I think, 21 as you'll see from the correspondence -- and indeed as 22 this Inquiry has seen over the last couple of weeks -- 23 there is no question that this piece of work was slower. 24 However, we can now -- I can now confirm with some 25 confidence that there should be no conflict arising from 89 1 individuals working within the RU team when it comes to 2 redress. 3 Q. Are any of the 35 red-rated individuals the same 40-plus 4 Investigators that were mentioned in the Project 5 Pineapple note; are we referring to the same cohort? 6 A. Yes, I mean, I think we should be clear, this cohort 7 that's 40 "untouchables" or 40 Investigators, is not 8 a cohort that I recognise. So I don't think the two are 9 the same. 10 Q. How many of the 35 red-rated individuals are currently 11 within the Assurance & Complex Investigations Team? 12 A. I don't have the detail for that, but my understanding 13 is the A&CI team, which constitutes about 17 14 individuals, is brand new. It was established in 2022, 15 it was made up of individuals who have come in to the 16 organisation externally, and so there is no crossover, 17 as I understand it. 18 Q. The note continues: 19 "4 RED-rated colleagues were deemed to be high risk 20 ..." 21 Why was that? 22 A. They will have been individuals who will have been 23 involved in audit or investigative work, historically. 24 Again, not necessarily an allegation of wrongdoing but 25 clearly, from our perspective, it was important that we 90 1 identified who these individuals were and that they 2 weren't involved in activity supporting redress. 3 Q. So it was more to do with what they did previously, 4 rather than the function they were now performing, that 5 made them high risk? 6 A. Yes. 7 Q. "... 2 had been through the panel review, with 8 recommendations to redeploy and the other 2 were due to 9 go to the panel soon, where recommendations for 10 redeployment were also the expected outcome." 11 You are recorded as asking how it was that the 12 Remediation Unit had 35 red-rated colleagues. Not 13 an unreasonable question: you were concerned -- 14 A. Yes. 15 Q. -- why is our Remediation Unit staffed with 35 people -- 16 A. Correct. 17 Q. -- that occupied roles that brought them into conflict 18 or potential conflict with the task that they were then 19 undertaking? 20 A. That's exactly the question I was asking. 21 Q. The answer, from Ms Marriott, was that: 22 "... resourcing decisions at the time had likely 23 been based on a need for requisite knowledge ..." 24 Did you understand that to mean that we needed past 25 Investigators, Contract Managers and the like, audit 91 1 functionaries, involved because the very complaints that 2 were being made now concerned the same activities? 3 A. Less so that. I think it was more the fact that the 4 technical nature of shortfall analysis and disclosure 5 was -- these were individuals and experts who were 6 better at doing it than anybody else, was the way that 7 it was described to me. 8 Q. She continued: 9 "... the lens being applied now had not been 10 envisaged, but arguably it should have been." 11 This was just after Mr Bates vs The Post Office, 12 I think, wasn't it? 13 A. Yes, it would have been, yes. 14 Q. Did that affect the lens? 15 A. No, I don't think so. I think her point is well made. 16 I mean, I think it was a concern that this hadn't been 17 considered at the outset. 18 Q. "That said, [she] emphasised her earlier point, that the 19 individuals had not been implicated in any wrongdoing, 20 then or now. 21 "On Project Phoenix, there were 6 people against 22 whom there had been specific allegations of wrongdoing." 23 Over the page. 24 "[Post Office] had been engaging postmasters and 25 legal representatives to determine the facts and the 92 1 basis for any disciplinary/misconduct steps as proved 2 necessary. 3 "[Ms Marriott] noted the prospect that no findings 4 of misconduct would be made and the difficult position 5 this would present -- where there were competing 6 dependencies and interests including the expectations 7 and conviction of those who had made the allegations, 8 the proceedings of [this Inquiry] and the individuals 9 themselves who deserved fair treatment if they had done 10 nothing wrong." 11 "GE", is that the meeting? 12 A. GE is the Group Executive, yes. 13 Q. Rather than a reference to an individual? 14 A. Yes. 15 Q. "... noted that there were also wider historic 16 organisational and cultural issues being brought to the 17 fore which would also likely be subject to close 18 external scrutiny. 19 "... another lens to be applied beyond any 20 allegations of a historical nature, should be how 21 individuals presented themselves at the Inquiry, though 22 it noted the difficulties and dependencies in this 23 regard too. 24 "... agreed that the panel recommendations should go 25 on to [others] to make any final decisions on the 93 1 outcome ..." 2 What does "there were wider historic organisational 3 and cultural issues being brought to the fore" mean? 4 A. I'm not sure I entirely know. No, I'm not sure 5 specifically what that refers to. 6 MR BEER: In which case, Mr Read, that will be my final 7 question before lunch. 8 SIR WYN WILLIAMS: Just so that I can be clear in my mind, 9 the six people that are referred to on the previous 10 page, you have told us are now three with no case to 11 answer. 12 A. Yes. 13 SIR WYN WILLIAMS: I think it was Ms McEwan, although it 14 could have been Ms Scarrabelotti, told us that 15 a decision about the other three is imminent. 16 A. That's correct, sir. 17 SIR WYN WILLIAMS: Fine, yes. Thank you. 18 MR BEER: Can we say 2.00, please? 19 SIR WYN WILLIAMS: Yes. 20 MR BEER: Thank you. 21 (12.57 pm) 22 (The Short Adjournment) 23 (2.00 pm) 24 MR BEER: Thank you. 25 Good afternoon, Mr Read. 94 1 You will remember that before lunch I asked you some 2 questions about an exchange of emails between May 2021 3 and July 2021 involving a man called Gary Thomas, 4 a former Post Office Investigator -- 5 A. Yes. 6 Q. -- and the suggestion made by him that there existed in 7 his time a bonus scheme that was related to the volume 8 of successful prosecutions and/or the volume of 9 recovery -- 10 A. Yes. 11 Q. -- under the Proceeds of Crime Act? 12 A. I do. 13 Q. You noted that the correspondence had, in the final 14 analysis, been sent to your personal assistant but you 15 had not much recollection about it? 16 A. That's correct. 17 Q. I have had helpfully drawn to my attention a document 18 that maybe rounds this issue off a little. Can we look 19 at that, please. POL00142412. If we go to the last 20 page, please, which is page 7, you will see this is 21 a note from Peters & Peters Solicitors of 24 August 22 2022. If we go back to the first page, in the tramlines 23 at the top, it's a disclosure note in relation to, 24 amongst other things, number (2), "A Review of Bonus/ 25 Incentivisation schemes". 95 1 It seems that it was addressed to defendants or 2 putative defendants, and perhaps the CCRC, because in 3 paragraph 1 it's noted that: 4 "In accordance with its ongoing disclosure 5 obligations ... the Respondent [that's Post Office] is 6 continuing to review material not previously considered 7 for disclosure ..." 8 Then paragraph 2, "This note is intended to address 9 three matters", the second of which was: 10 "A [Post Office] review of bonus/incentivisation 11 schemes relating to [Post Office] employees involved in 12 the investigation and prosecution of criminal offences." 13 If we go to the part of the note that concerns that, 14 that's on page 3, paragraph 13. It says: 15 "[Post Office] has conducted a review of material 16 relating to the bonus/incentivisation scheme that 17 applied to employees involved in criminal investigations 18 and prosecutions ... in order to determine whether it 19 operated so as to incentivise or encourage improper 20 conduct capable of leading to unfairness in those 21 prosecutions ..." 22 If we scroll down, please, it says Post Office is 23 providing the note to disclose the fact of the review to 24 allow appellants to make representations in relation to 25 the review, the relevance of the review or the facts of 96 1 any particular appeal." 2 "Scope and ambit", if we go over the page, please. 3 I should have looked at the footnote at the foot of 4 the page: 5 "The Review was conducted by Peters & Peters as part 6 of the Post Conviction Disclosure Exercise ..." 7 If we carry on, please. "Scope and ambit". 17,000 8 documents, this included, where available, HR files 9 relating to individual members of the criminal law and 10 security teams. 11 Some interviews were conducted, paragraph 17, with 12 current and former Post Office Security Managers. 13 Then the note splits out its conclusions into 14 findings relating to the Security Team and then, 15 subsequently, findings relating to the Criminal Law 16 Team. I'll just look at those relating to the Security 17 Team, which is what Mr Thomas was a member of: 18 "The [Post Office] Security Team operated a bonus/ 19 incentivisation scheme during the period between [1999] 20 and 2013 ... 21 "The scheme included, among others, objectives 22 relating to the recovery of [Post Office] losses through 23 criminal confiscation or compensation proceedings, or by 24 repayment direct to [Post Office] during the course of 25 an investigation or prosecution. 97 1 "The recovery of [Post Office] losses, typically 2 expressed as a percentage of losses caused by fraud 3 activity, was a recorded team objective within the [Post 4 Office] Security Team. The achievement of this would 5 account for a proportion, albeit a small one, of the 6 total bonus awarded to members of the [Post Office] 7 Security Team that were entitled to receive bonuses. 8 These objectives were concerned solely with team 9 outcomes, not individual performance." 10 Then paragraph 21: 11 "The level of bonuses ... would depend principally 12 upon the individual's Performance Development Review 13 score at an annual appraisal." 14 Paragraph 22: 15 "The Review identified no evidence that the bonus/ 16 incentivisation scheme applicable to the [Post Office] 17 Security Team was based on the numbers of prosecutions, 18 convictions or recommendations ... Peters & Peters 19 collected bonus data and conducted an exercise to 20 identify whether there was any correlation between the 21 number of convictions and level of bonus ... No such 22 correlation was found ..." 23 Number 24 notes that: 24 "... charging decisions were taken by lawyers ... 25 not by investigators ..." 98 1 The Inquiry has heard a lot of evidence on these 2 issues, I should say, as to the accuracy of what is said 3 here. 4 A. Yes. 5 Q. Over the page, it goes on to the criminal law team. 6 So, essentially, it seems that there was a bonus/ 7 incentivisation scheme -- 8 A. Yes. 9 Q. -- that was linked to recovery of funds but not the 10 number of prosecutions? 11 A. Yes, that would be my interpretation as well. 12 Q. Of course, in order for there to be a recovery of funds 13 there needed to be a successful prosecution to start 14 with? 15 A. Yes. 16 Q. Were you involved in this in any way; did you have any 17 knowledge of this exercise to investigate the extent to 18 which there was a bonus or incentivisation scheme? 19 A. No, I don't recall it, actually. Not something I do 20 recall. 21 Q. Looking at it, it seems that part of what Mr Thomas said 22 would broadly align with what the review found? 23 A. Yes. 24 Q. But part of it would not, in that there wasn't a metric 25 relating to the number of successful prosecutions but 99 1 there was in relation to recoveries? 2 A. That's what I would interpret too. 3 Q. Thank you. Thank you, that can come down. 4 Can I turn to or continue with the topic of the 5 interaction between those that have been implicated in 6 the wrongs of the past and the payment of compensation. 7 A. Yes. 8 Q. Would you agree, as a general rule, that, if one 9 perpetrates a wrong, you should promptly admit the wrong 10 and seek to rectify the problem that you have caused? 11 A. Yes, I would. 12 Q. Would you agree that it has been established that the 13 Post Office devastated the lives of subpostmasters and 14 the lives of their families through the use of criminal 15 investigations, criminal prosecutions and civil claims? 16 A. Yes, I would. 17 Q. That those wrongs took many years to surface? 18 A. Agreed. 19 Q. Would you agree that when acting as a private 20 prosecutor, a public corporation, the Post Office 21 utilised its status and history to silence its 22 opponents? 23 A. Yes, I would. 24 Q. Would you agree that it's been established that the Post 25 Office denied postmasters disclosure that would have 100 1 enabled them, firstly, to contest the charges that were 2 wrongly laid at their door but, secondly, to seek to 3 remove unjust convictions that had been wrongly obtained 4 against them? 5 A. Yes, I would. 6 Q. Is that why, in light of those recognitions, you say 7 that Post Office should not have been involved in 8 dealing with compensation for those wrongs? 9 A. Yes, it is. 10 Q. Why was Post Office involved in the administration of 11 compensation for dealing with those wrongs? 12 A. Ostensibly because the shareholder, the Government, 13 wanted us to experience some of the discomfort that had 14 been caused by the Post Office and, therefore, be 15 involved in the redress. My personal view, and one that 16 I've expressed consistently since this decision was made 17 by the shareholder, was that it seems astonishing to me 18 that an organisation that has been involved in the 19 investigation and the prosecution of postmasters in this 20 light should be involved in redress. It should be done 21 independently and I've been consistent with that view, 22 well, for three or four years now. 23 Q. I've heard the analogy suggested it's like putting 24 a burglar in charge of deciding whether to give stolen 25 goods back. That may be strong language. 101 1 A. Yes, I think that's strong language but, notwithstanding 2 your analogy, I do think that the confidence of the 3 process and the independence of the process would have 4 been enhanced if the Post Office had been ring-fenced 5 and removed from this -- or not even considered, as 6 opposed to removed. 7 Q. You essentially explained it on the basis that the 8 Government said that the Post Office needed to feel some 9 of the pain? 10 A. Yes. 11 Q. Was that phrase used? 12 A. I looked at my contemporaneous notes and I think I may 13 well have disclosed something to this effect: that the 14 way it was portrayed to me was that Treasury were of the 15 opinion that the chaos -- I think was the word that was 16 used -- had been caused by the Post Office. There was 17 a desire for the Post Office to experience some of the 18 discomfort that had been caused. You could understand 19 why that might be the case but I just think it's missing 20 the point completely. 21 Q. Given your understanding that it was, in principle, 22 morally wrong for the Post Office to act as the 23 custodian or the decision maker in the provision of 24 a large range of compensation, wasn't it doubly 25 important to ensure that those that were entrusted with 102 1 that function within the Post Office had no connection 2 with the past? 3 A. Yes, I think that is the case. I mean, I would describe 4 it that structurally we have a problem here, the cause 5 is wrong and everything that has flowed from that cause 6 has been problematic for us. The building in of 7 independence has been critical to the schemes that are 8 operated by the Post Office, and that has had varying 9 degrees of success, I would argue. 10 Q. The fact of the matter is that those that have been 11 involved, or are implicated in the events of the past, 12 have nonetheless had a role in making decisions as to 13 compensation? 14 A. I don't think making decisions; I think, going back to 15 the conversation we had before lunch, I was clear about 16 the number of "reds", as they were described, and we 17 were very clear that we had ensured that any "reds", in 18 inverted commas, were not involved in decision making 19 associated with either offers or anything of that 20 nature. They may well have been involved in the 21 shortfall analysis, they may well have been involved in 22 disclosure exercises but not involved in decision making 23 associated with compensation. 24 Q. To take an example, Mr Rodric Williams was an important 25 figure in the Post Office's Steering Committee that 103 1 drove the defence of the Post Office in the Group 2 Litigation -- 3 A. Yes. 4 Q. -- and he went on to work on the Shortfalls Remuneration 5 Committee? 6 A. That may well be true. I couldn't confirm that. 7 Q. If it is true, and I suggest it is -- 8 A. Right -- 9 Q. Do you see the problem? 10 A. I do see your problem and Mr Williams is not involved in 11 that activity any more. 12 Q. Did it cross the mind of the Board or the General 13 Executive that the continuing -- and I think you've 14 described it as "inexcusable delay" in the delivery of 15 compensation might be that the wrong people were 16 involved in the provision of it? 17 A. I don't think expressly like that. I think, when we've 18 looked at disclosure as being a sort of core reason for 19 the delay in compensation or one of the core reasons for 20 the delay in compensation, I think there have been other 21 technical reasons and technical drivers, rather than 22 some of the individuals that you're alluding to. 23 Q. Can I turn to the Central Investigations Unit, as it was 24 initially called. 25 A. Yes. 104 1 Q. Just by way of background, can you help by confirming 2 the following: the Central Investigations Unit, or the 3 CIU, was established in the Post Office in February 4 2022 -- 5 A. Correct. 6 Q. -- and that was established as the Post Office's central 7 investigation function? 8 A. Yes. 9 Q. It's now known as the Assurance & Complex Investigations 10 Team, A&CI. 11 A. That's correct. 12 Q. Can you help by confirming that the establishment of the 13 CIU in February '22 followed a review undertaken by KPMG 14 between June and August 2021? 15 A. Yes, Project Birch, I think. 16 Q. Project Birch, the KPMG report, was, would you agree, 17 heavily critical of the approach within Post Office to 18 investigations at that time? 19 A. Yes. 20 Q. The report for the transcript -- no need to turn it 21 up -- is POL00423697. Can you help by confirming that 22 a number of GE papers were produced following the 23 Project Birch report and decisions taken by the GE on 24 the approach to investigations? 25 A. Yes, that's correct. 105 1 Q. They were put before the Board -- if we can look at 2 that, please -- on 27 September 2022. POL00448320. So 3 this is essentially a paper to the Board as a result of 4 prior decision making by the GE, sponsored by Mr Foat, 5 for a meeting on 27 September 2022. If we go to 6 paragraph 2.4, please: 7 "It is our recommendation that the minimum remit ... 8 is Option 4 [that need not concern us]. This would 9 allow [Post Office] to act in determining facts relating 10 to situations ranging from allegations of theft or fraud 11 by postmasters and/or their staff using/misusing [Post 12 Office] systems or functions where either or both [Post 13 Office] and the postmaster are victims, through to 14 misconduct or process failings in [Post Office] and the 15 subsidiaries. The Horizon issue identified a failure to 16 investigate ..." 17 I think that means the Horizon Issues Judgment: 18 "... identified a failure to investigate beyond the 19 postmaster in determining culpability. Best practice 20 (and in some situations, law) requires all reasonable 21 lines of inquiry to be followed, whether they point away 22 or towards the considered investigative hypothesis as it 23 is the truth that is sought, not that a case is to be 24 made against a selected individual. By investigating 25 wider than the Postmasters, for example their staff 106 1 where relevant, we demonstrate that [Post Office] has 2 learnt from the past and would seek to determine actual 3 culpability, if any, which is treating the postmasters 4 fairly. Allegations of misconduct by postmasters would 5 be explicitly included in the proposed remit." 6 Then if we go to page 6, please. If we scroll up, 7 please, this sets out the proposed operating model and 8 the interaction of the CIU with external agencies in 9 particular the police. 10 A. Yeah. 11 Q. "As a Government organisation, Post Office is viewed by 12 [law enforcement agencies] differently from a privately 13 owned company. It is unfortunately fact that LEAs 14 deprioritise most reports of crime made by 15 government-linked organisations if made in the 16 traditional interest in way. 17 "4.2. Suspected offences with an element of 18 criminal dishonesty would form the vast majority, if not 19 all, of our criminal investigations and potential 20 referrals. 21 "4.3. It is proposed ..." 22 Then a summary of this, would this be fair: that the 23 CIU would conduct an internal investigation but with the 24 intention of reporting any alleged criminality to the 25 police? 107 1 A. We touched on this topic yesterday and, as you say, this 2 is a proposal to the Board. I think maybe if I could 3 take a step back and just describe what the activities 4 of the CIU are today and what it does, it might shed 5 some light on where we're going with the CIU more 6 broadly. 7 There are four or five very specific activities that 8 the A&CI are involved in. First and foremost, it's the 9 whistleblowing and there's a ring-fence team that look 10 after whistleblowing and Speak Up. It is independent 11 and that's what it does. 12 The second element is that it investigates those the 13 issues of more than £100,000 potential loss in -- within 14 the sort of Post Office environment. That could be 15 branches or anywhere else. It obviously is the single 16 point of contact for liaising with LEAs and it's 17 important, we felt, to have a single place to do that, 18 and it acts in two other ways: it looks into and governs 19 the activity of the senior leadership group and the 20 Board, if there are investigations of conduct into those 21 individuals; and finally, it provides some assurance for 22 the organisation in terms of the way it conducts its 23 investigations. 24 I think the genesis of this work, in terms of 25 Project Birch, was particularly the fact that there were 108 1 disparate groups across the organisation who were doing 2 various levels of investigation for various reasons with 3 inconsistent levels of training and support. 4 So the important element here, I think, is that the 5 evolution of this issue is that the A&CI team interplay 6 with law enforcement agencies when there are organised 7 crime and larger issues associated with fraud or money 8 laundering, or the like, as opposed to the inference 9 that the A&CI would be doing individual investigations 10 into specific post offices, discrepancies or losses. 11 They have to be of a size greater than £100,000 for 12 this team to be involved in any of that kind of 13 activity. I don't know if that helps. 14 Q. That sets out the position now. 15 A. Yes. 16 Q. I want to explore in slightly more detail what was 17 proposed, and then what happened. 18 A. Right. 19 Q. If we go over the page, please, if we scroll down -- and 20 over the page, keep scrolling, and again. I think 21 that's probably the end. 22 Was the KPMG Project Birch report circulated to the 23 Board? 24 A. I don't know. I don't believe so. I think it was in 25 draft form, so I'm not sure that it went to the Board. 109 1 Q. Was the Project Birch report circulated to the General 2 Executive? 3 A. Yes, I believe so. 4 Q. Did you see it? 5 A. Yes, I believe I did. 6 Q. Do you agree with the criticisms in it of the Post 7 Office's then approach -- 8 A. Yes, I mean, I -- 9 Q. -- to investigations? 10 A. My recollection of that was that they were inconsistent, 11 that they were conducted across the business without 12 levels of assurance and control and, more importantly, 13 they were conducted potentially by Area Managers, people 14 who weren't qualified to investigate, and part of the 15 recommendation was that we needed to bring this together 16 to drive some consistency, and that is what has happened 17 as a consequence of Project Birch. 18 Q. Do you know why the Project Birch report may have not 19 gone before the Board? 20 A. No, I don't actually, no. 21 Q. When the Board was asked to approve this new approach to 22 investigations, were any questions raised by the Board 23 as to the approach that was then being taken to 24 investigations? 25 A. I don't recall specifically, I'm afraid. 110 1 Q. Can you recall whether questions were raised, designed 2 to question assumptions about culpability or assumptions 3 made on the way to substantiating losses? 4 A. No, I don't recall. 5 Q. The CIU team, I think, became properly operational in 6 January 2023 -- 7 A. Yes. 8 Q. -- and Mr Bartlett, John Bartlett, was appointed -- 9 A. That's correct. 10 Q. -- in February 2023 to head it, I think. 11 A. Yes. 12 Q. Now, the Inquiry -- and I'm not going to go into the 13 detail -- has heard evidence from Mr Jacobs on his 14 experience of investigation by this CIU team. Has what 15 Mr Jacobs has said to the Board given the Board any 16 pause for thought as to the way in which the CIU were 17 conducting its investigations? 18 A. I think it will have given the Board some concern. 19 I think the Project Pineapple -- well, Project Venus 20 experience, as I mentioned before the break, the words 21 I used were "heavy-handed". I think there is certainly 22 a level of reflection associated with that. What we do 23 know is that the A&CI team is stretched and it is 24 involved in too many investigations. That may well be 25 a cultural reflection on the nervousness and broader 111 1 nervousness in the business that currently pervades as 2 a consequence, as we discussed before, of the Inquiry 3 and the scrutiny that is occurring. 4 I think there is a potential lack of judgement at 5 times and I think that is something that we are, as 6 a Board, conscious of. But, at the same time, as we 7 discussed yesterday, the Board is particularly aware 8 that there is no presumption of guilt when it comes to 9 loss recovery, when it comes to investigating 10 discrepancies, when it comes to looking at issues 11 associated with Horizon down in branches and, most 12 importantly, that that activity, in terms of working 13 with the postmasters, is conducted by the Retail Team 14 and not by this specialist team. 15 This specialist team is ostensibly there to work 16 with law enforcement agencies when organised crime is 17 identified, and vice versa, when we identify it as well. 18 As opposed to the -- I think the impression that is 19 being given is that this team is involved in the 20 day-to-day activity associated with branches. That 21 isn't the case at all. 22 Q. Given that at the time that the Board was asked to 23 approve the new approach to investigations set out in 24 that noting paper, the Common Issues Judgment the 25 Horizon Issues Judgment, and the Court of Appeal 112 1 Criminal Division's decision in Hamilton had all been 2 handed down, decided -- 3 A. Yes. 4 Q. -- were then well established, how did the Board or did 5 the Board satisfy itself as to the steps that were to be 6 taken by the CIU to substantiate, in the words of the 7 paper, losses in branches before proceeding to act upon 8 them? 9 A. Well, I think the Board made it very clear that, if what 10 you're suggesting is that, if we are to work with any 11 law enforcement agencies around potential losses, then 12 clearly the Board needs to be involved in making those 13 decisions, which is where it is -- which is what the 14 position it has today. So if we are to work with LEAs 15 in any sense of the word, it needs to be something that 16 is sanctioned by the Board. 17 But broadly, where LEAs ask for information, where 18 they ask for cooperation, we should and will provide it. 19 Q. I was looking at it the other way round? 20 A. Right. 21 Q. The paper envisages an investigation by the CIU in which 22 a loss will be "substantiated". I'm asking whether any 23 particular attention was paid by the Board to that 24 issue. How is a "loss" -- in inverted commas -- 25 substantiated? 113 1 A. No, I don't think the Board specifically got into that 2 level of detail. 3 Q. What about the General Executive, this being an issue of 4 controversy -- 5 A. Yes. 6 Q. -- the substantiation of whether a loss had in fact 7 occurred at all and, if so, who had caused it? 8 A. I don't think the Group Executive got into that extent. 9 This would be something that the Retail Committee would 10 be more focused on than A&CI, particularly, as I've 11 mentioned before, when it comes to identification of 12 discrepancies, when it comes to mismatches, when it 13 comes to transaction issues, that is something that will 14 be specifically in the domain of the Retail Team. 15 Q. I think having sat in this room, you will have heard the 16 evidence produced by YouGov concerning the levels of 17 satisfaction and dissatisfaction with the operation of 18 the Horizon system currently, and the extent to which 19 faults within it seemed to cause unexplained losses. 20 Can we look at that, please, by way of context to the 21 questions that I'm going to ask? 22 The "Executive Summary" will suffice, so 23 EXPG0000007, page 4, please. I'm going to whiz through 24 this because we've heard the evidence already. 25 A. Yes. 114 1 Q. But it's important context to the questions about 2 enforcement action. In summary, the survey on 3 subpostmasters, the SPM survey, found that nearly half 4 of the SPMs surveyed were dissatisfied with how the 5 Horizon IT system currently operates, compared to 25 per 6 cent who were satisfied, and 25 per cent were very 7 dissatisfied. So 75 per cent were dissatisfied or very 8 dissatisfied. 9 42 per cent were dissatisfied with the training that 10 they had received, compared to 25 per cent who were 11 satisfied. 12 70 per cent said that they suffered from screen 13 freezes. 14 68 per cent suffered from loss of connection. 15 57 per cent said that they had experienced 16 unexplained discrepancies. 17 19 per cent said that they had recorded unexplained 18 transactions. 19 14 per cent experienced missing transactions. 20 10 per cent complained of double entry of 21 transactions. 22 65 per cent of the subpostmasters surveyed 23 experienced those issues at least once a month. 24 In relation to the contract provision, 25 15 per cent -- only 15 per cent -- said that they had 115 1 received a full copy of their contract -- scrolling 2 down -- since the Common Issues Judgment in March 2019. 3 55 per cent felt that the terms of their contract 4 were unfair; 32 per cent very unfair. 5 Then to page 5, 48 per cent of subpostmasters felt 6 dissatisfied with their role; 31 per cent felt 7 satisfied. 8 72 per cent felt undervalued. 9 60 per cent disagreed with the proposition that the 10 Post Office Board listened to their views. 11 74 per cent disagreed that the Post Office 12 understand the concerns of subpostmasters. 13 52 per cent did not think that the Post Office was 14 a good place to work. 15 55 per cent thought that the Post Office had not 16 learned the lessons from the past. 17 If we go on to page 28, please, at paragraph 4.5, in 18 relation to shortfalls, around 7 in 10, 69 per cent of 19 subpostmasters, reported they'd experienced 20 an unexplained discrepancy on Horizon since January 21 2020. 22 Those that had been working between six and ten 23 years were most likely to have reported this experience, 24 up at 83 per cent; at 21 years least likely at 25 61 per cent. 116 1 Of the subpostmasters surveyed who reported 2 experiencing an unexplained discrepancy since January 3 2020, 1 in 3 had done so as frequently as a few times 4 a month, 17 per cent; or once a month, 18 per cent; 5 25 per cent who had experienced an unexplained 6 discrepancy said they had done so a couple of times 7 a year; 8 per cent, once a year; 9 per cent, less than 8 once a year. That's all represented in figure 15. 9 The vast majority, 89 per cent of subpostmasters 10 surveyed who reported experiencing an unexplained 11 discrepancy since January 2020 said that a typical 12 discrepancy was less than £1,000; 50 per cent, who said 13 less than £200; 39 per cent between £200 and £999; 8 per 14 cent reported a typical discrepancy was between £1,000 15 and £9,999. 16 That's all reported in figure 16, if we scroll down. 17 All subpostmasters surveyed who experienced 18 a discrepancy reported these were shortfalls, 98 per 19 cent; a third had surpluses with subpostmasters able to 20 have experienced both. 21 Over the page, please, when asked how discrepancies 22 were typically resolved, it was most common for 23 subpostmasters to report using their branch's money or 24 to have resolved it themselves, 74 per cent; more likely 25 among those who had been a subpostmaster for 11 to 117 1 20 years up at 82 per cent. 2 Then there's a quote from one subpostmaster: 3 "The ... system is still flawed at month end we have 4 seen a discrepancy where a cheque had been shown to be 5 cashed on our system which created a shortfall, we do 6 not cash cheques as a local branch and this put us in 7 a discrepancy when we went to [the Business Support 8 Centre] they didn't resolve the issue properly and we 9 took on the loss personally." 10 Figure 17, if we scroll down, shows how 11 discrepancies have generally been resolved: 74 per cent 12 resolved by the postmasters themselves or using the 13 branch's own money. 14 So the questions arising from that, Mr Read: these 15 statistically significant results that concern issues 16 with the frequency, volume and amount of discrepancy 17 transactions make dismal reading, don't they? 18 A. They're very disappointing and surprising. 19 Q. Would you agree that they mean that the obligation in 20 the contract upon Post Office to maintain oversight and 21 investigate any apparent shortfalls or alleged 22 shortfalls, and whether or not there was indeed any 23 shortfall at all, is failing? 24 A. I think where we -- where the "Review or Dispute" button 25 is used, where the Branch Support Centre is engaged, 118 1 where the Branch Support and Reconciliation Team are 2 involved, we have good metrics to support that progress 3 is being made in terms of how we engage with 4 postmasters, how we worked with postmasters, to identify 5 issues, and how that worked. 6 So the reason I say surprising is that the internal 7 statistics don't necessarily mirror these particular 8 results. So that's why it's disappointing and that's 9 why we need to dig into it further and try and 10 understand some of the underlying issues. 11 I'm conscious that I think it was only 14 per cent 12 of the postmaster population responded to the survey, 13 despite the fact that we wrote to them in hard copy, 14 sent them emails. It's more an issue of engagement, 15 which I think is the one that we are challenged by. 16 What we noticed is that where we reach postmasters from 17 an engagement and from an awareness and from a -- yeah, 18 from an engagement perspective, we're getting better 19 results. I think it's noticeable that those who have 20 been postmasters for less than two years, for those who 21 have been involved in some of our forums, some of our 22 support groups, some of the way that we are changing 23 internally, have reported better results. 24 There's no question, though, that these are 25 disappointing. We've got more to do and I think, 119 1 despite the changes we've made to the Branch Assurance 2 Team, despite the changes we've made to the Network 3 Support and Reconciliation Team, despite the teams that 4 now go out and help individual postmasters specifically 5 with discrepancies or issues that emerge in branches, 6 where we can try and resolve, we're not getting the same 7 level of traction, even though we are communicating and 8 engaging with postmasters in a very different way. 9 When discrepancies or problems emerge with Horizon, 10 we are utterly transparent when that happens. We use 11 our Branch Hub tool. We use our Memo View tool. We 12 engage with postmasters. But we're obviously not 13 getting through to everybody, and you obviously 14 experienced as well in your survey, that we have more to 15 do to try and win the trust and win the confidence of 16 postmasters. Because these results certainly don't 17 suggest that we are making the progress that we would 18 like to have made. 19 Q. I've got to ask you bluntly: how is it possible that, in 20 late 2024, the same issues with shortfalls are occurring 21 with postmasters paying them off themselves? 22 A. I just don't know why the postmasters feel the need to 23 do that. We have been absolutely explicit when we've 24 investigated shortfalls that, where it cannot 25 established how and why that shortfall has occurred, we 120 1 are not imposing upon postmasters to pay off or pay it 2 themselves with their own money. We've been very, very 3 clear with that, maybe we're not getting that message 4 clearly through. But there is no enforcement by the 5 Post Office in that situation at all, and it's important 6 that we convey that. 7 So that's the engagement piece that I've spoken to 8 the team about over the last three weeks, since this 9 survey was delivered, and I know that the acting CEO is 10 working with the Retail Team to try and get under the 11 skin of what it is that is -- and why it is that we're 12 not engaging in the way that postmasters can understand. 13 Because, clearly, as I say, this is a disappointing set 14 of scores. 15 Q. Has it occurred to the Board or the General Executive 16 that there may be a connection between the fact that 17 a very low percentage of subpostmasters report having 18 received the new contracts, 15 per cent, and the fact 19 that many postmasters, and notably more of the 20 longer-term ones, are still paying off shortfalls from 21 Horizon system errors, ie the changes that have been 22 wrought under the contract, have not -- 23 A. Haven't got through. 24 Q. Haven't got through because they haven't been given the 25 contracts? 121 1 A. I don't think that's necessarily the case. I think the 2 restatement exercise was back in 2019, which is when we 3 restated contractually to reflect the changes in the 4 CIJ, was very quickly and comprehensively done. 5 This suggests to me this is more about engagement as 6 opposed to contractual. This is about behaviours and 7 this is about the Post Office today not getting its 8 message through about how we want to help and support 9 postmasters to improve their operational performance and 10 more importantly to ensure that discrepancies don't 11 occur. 12 Now we know that there are anything up to 10,000 13 transaction corrections in any given month, which, if 14 you think about 11,500 branches, is approximately one, 15 transaction correction per month. So you know that with 16 the vast amount of cash and the vast amount of stamps 17 that we are moving between branches and the centre, you 18 know, problems do occur. 19 But the fundamental issue from our perspective is we 20 are standing by with the Branch Support Centre, with our 21 reconciliation support team to help the postmasters get 22 to the bottom, and the presumption of guilt is no longer 23 applied. This is absolutely about presumption of 24 innocence and making sure that we understand the issue, 25 and then we can communicate the problem more broadly to 122 1 our postmasters as well. 2 Q. If it's right that only 15 per cent of postmasters have 3 access to the new contract, then only 15 per cent of 4 them would be aware of the new post-Common Issues 5 Judgment terms. 6 A. No, I don't believe so. We communicated the restatement 7 exercise to all postmasters. So if that needs to be 8 re-engineered then we need to do more to do so. I don't 9 personally believe that it's a contractual issue that is 10 affecting the way that we are engaging with postmasters. 11 I don't think it's about contract. I think it's about 12 behaviour, and we've clearly got more to do. 13 Q. When a postmaster pays off a shortfall, is the cause of 14 the shortfall investigated? 15 A. We only invite postmasters to pay for shortfalls when 16 there is an agreement between the Post Office and that 17 individual. If they believe that there is no causality 18 associated with either error or carelessness on behalf 19 of the postmaster themselves, they press the review and 20 Dispute button and we go into a deeper investigation. 21 But if, at the conclusion of that, we can't find any 22 agreed cause between the two parties, we do not enforce 23 the postmaster to make good that loss. 24 SIR WYN WILLIAMS: I follow that and I've understood that to 25 be the position as you say it should be in practice. 123 1 But taking this survey at face value, there are still, 2 in numerical terms, perhaps hundreds of people who, when 3 faced with a shortfall, simply pay it back. 4 A. I know. 5 SIR WYN WILLIAMS: Right? Now, I think that's what Mr Beer 6 may just have been asking you about. In those 7 circumstances, presumably nothing happens? 8 A. Well, we don't know. 9 SIR WYN WILLIAMS: You don't know. 10 A. Yes. 11 SIR WYN WILLIAMS: The money goes to the Post Office and 12 that's the end of it. 13 A. Well, we don't know, sir -- 14 SIR WYN WILLIAMS: Who has done it? 15 A. -- who is paying money and that is troubling. 16 SIR WYN WILLIAMS: Right yes, okay. 17 MR BEER: That can come down, thank you. 18 Does Post Office conduct surveys of this kind in 19 relation to the extent to which postmasters experience 20 Horizon issues that lead to shortfalls in branches? 21 A. We do two things. We do two surveys a month -- sorry, 22 two surveys a year with the postmasters, a pulse survey 23 in the autumn and then a full survey in January, 24 February, March, where we ask the postmasters about the 25 issues that are affecting them, and so that we can -- we 124 1 do it consistently every year so we can build up a trend 2 of what is going on. But we also have a number of 3 different -- 4 Q. Just before you move on from that answer, I was asking 5 specifically about issues with surveys asking the types 6 of questions that YouGov put to the full cohort of 7 subpostmasters. 8 A. Yes, is the short answer to that question, perhaps not 9 to the same extent and exactly the same wording, but we 10 do ask about the issues that they are facing, and we do 11 ask about Horizon and we do ask about, you know, 12 problems that are associated with it, whether or not 13 we're communicating discrepancies appropriately, whether 14 or not we're communicating issues separately, how best 15 to do that, which vehicles and which tools do 16 postmasters like to be communicated through and with, 17 whether that's Area Managers, whether that's through 18 Branch Hub, whether that's through communication 19 directly to the counter itself. So, yes, is the short 20 answer; we do do that. 21 Q. You said in an answer a couple of answers back that only 22 14 per cent of the total subpostmaster cohort replied to 23 this part of the survey. 24 A. I think that's correct, yes. 25 Q. Did you mean, by that answer, to say that reliance 125 1 should not be placed on the result? 2 A. No, I -- what I meant was we didn't engage -- we didn't 3 manage to engage everybody to take part and so, 4 therefore, I think it's not unreasonable to ask the 5 question, you know, people who want to engage with the 6 survey will have an issue that is on their minds. I'm 7 just questioning whether the other 85 per cent had 8 an issue. 9 Q. As the Chairman has said, the 1,000 or so that did 10 respond to this part of the survey, a very significant 11 proportion of them, hundreds, 74 per cent, said that 12 they were paying back shortfalls themselves. That, in 13 and of itself, irrespective of the cohort -- 14 A. Is troubling. 15 Q. -- that did reply, is a significant number of 16 postmasters? 17 A. It is troubling, yes. 18 Q. In your witness statements, you don't appear to discuss 19 in any detail the Post Office's continuing 20 investigations and enforcement actions against 21 subpostmasters and, in particular, the mechanisms for 22 obtaining data from Horizon. Was there a reason for 23 that or was it just because of the questions that you 24 were asked? 25 A. I think it was the questions I was asked, yes. 126 1 Q. Okay. Can we look at some material relating to that, 2 please. BEIS0000789. This a quarterly shareholder 3 meeting. Can you just explain briefly, if you could, 4 what the quarterly shareholder meetings consist of? 5 A. Yes, certainly, it's a three-way meeting, effectively, 6 between DBT officials, UKGI officials and Post Office 7 senior leaders, non -- in the main, non-Board members, 8 with the exception of the Chair. And we agree -- it's 9 a quarterly meeting and it's held for a couple of hours 10 every quarter. There's an agenda that is agreed by DBT 11 and the Post Office. 12 Q. If we just scroll down we'll get a greater idea of those 13 that are present. Thank you. We'll see that you were 14 present at this one. If we just scroll up, we can get 15 the date: 10 January 2023. Can we go to page 4, 16 please, "Issues of note as required, including 17 interaction with policy guidance", and the third bullet 18 point, "AC" -- I've forgotten who that was. 19 A. Alisdair Cameron. 20 Q. Thank you: 21 "... mentioned they are seeing a rapid increase in 22 losses including shortfalls of cash in branches. [Post 23 Office] need to conduct a proper investigation and 24 demonstrate whether the postmasters are accountable. 25 However, it is difficult to conduct a proper 127 1 investigation based on the Horizon data, and also [Post 2 Office] are not in a position to ask for the relevant 3 money back in the current climate. It was noted as not 4 a good time to prosecute postmasters due to the current 5 historical cases, but this is seeing a rapid rise in 6 losses for [the Post Office]. MR's team ..." 7 That's Mr Roberts? 8 A. That's correct. 9 Q. "... are working on putting a new system in place. 10 "[Mr Roberts] noted a helpful summary from 11 [Mr Cameron] and added that in particular the view and 12 dispute buttons on the system are causing problems. 13 Getting in contact with postmasters was highlighted as 14 difficult, and they're not always available ... [Post 15 Office] noted they can do more in engagement with 16 postmasters. It is on the agenda for the next ... Board 17 meeting. 18 "[Mr Cameron] raised that there are other solutions 19 rather than going to the police. If postmasters are 20 responsible and don't pay money back, there is an option 21 to take it off their remuneration. Any solutions as to 22 how any shortfalls that postmasters are accountable for 23 can be recouped from postmasters, aside from 24 remuneration, were noted as preferable." 25 Then: 128 1 "[Post Office said] -- In cases where there is 2 fraud, these could be tested in a civil jurisdiction. 3 A paper on this was noted as being worked on currently 4 and would be raised to [the Government] in due course." 5 "TC", I think that's Tom Cooper, the UKGI Director 6 and also the Shareholder NED; is that right? 7 A. That's correct. 8 Q. "... noted there would be problems if money was deducted 9 from postmaster remuneration without an investigation. 10 "[Mr Cameron] confirmed no one is suggesting this. 11 Noted a key issue is that the investigations are not 12 currently being conducted in the most suitable way. 13 [Mr Roberts'] solution is forensic process. 14 "[Post Office] noted that where full investigations 15 are done quite often POL does get the repayment. The 16 issue is the investigation has to be good enough and 17 that it is independent ... the problem is that the data 18 is not sufficient to do an investigation in many cases." 19 Then you are recorded as noting: 20 "NR noted that ultimately those who steal from [Post 21 Office] will be prosecuted." 22 So the questions arising from what was said by the 23 various parties at this meeting, did you agree with 24 Mr Cameron that it was "difficult to conduct a proper 25 investigation on the basis of the Horizon data"? 129 1 A. No, I don't think that's necessarily the case. I think 2 what he was alluding to was getting data from Fujitsu. 3 I think that's what he's implying. 4 Q. It's not what's recorded as having been said -- "It's 5 difficult to conduct a proper investigation based on the 6 Horizon data". 7 A. Yeah. 8 Q. The passage that's highlighted in the second bullet 9 point down. Do you know why -- 10 A. I'm sorry, I'm pausing because I'm just not sure whether 11 or not he was in a position to make that comment, as in 12 factually whether or not that was something he was 13 particularly aware of. I think we are confident today 14 that we have a mechanism for properly investigating 15 discrepancies so -- 16 Q. I'm going to come on to that. This is January 2023 -- 17 A. Yeah. 18 Q. -- and the CFO is saying it's difficult to conduct 19 a proper investigation based on Horizon data. What's 20 changed? 21 A. I think, you know, certainly from the maturity of the 22 teams that we've now got in terms of the way that we 23 have organised our Retail Teams to investigate, we are 24 much more confident in the way we can go about 25 an investigation and identifying, you know, where there 130 1 are shortfalls and where there are discrepancies. So 2 I think we have matured as an organisation in terms of 3 how we work with postmasters to identify what has gone 4 wrong. I still think we have more to do, invariably we 5 have more to do, but I think it has to be recognised 6 that this was not done properly and it has not been done 7 properly for many, many years and that's half of the 8 issue, so building a them that knows how to properly 9 interrogate and investigate Horizon data to come up with 10 an appropriate route through is something that we are 11 developing and learning and have been for the last four 12 or five years. It's clearly the whole CIJ/HIJ findings, 13 whether we just were not doing this properly. So we're 14 making progress with this. 15 Q. The third bullet point from the bottom ends in the last 16 line as saying: 17 "... the problem is that the data is not sufficient 18 to do an investigation in many cases." 19 Why was it the Post Office's position that the data 20 is not sufficient to do an investigation in many cases? 21 A. I'm not sure of the genesis of that particular 22 statement. 23 Q. It seems to accord with what Mr Cameron had been saying 24 in the second bullet point from the top? 25 A. Yeah, possibly. Possibly. 131 1 Q. They seem to be the same thing, don't they: why was 2 Government being told it's difficult to do a proper 3 investigation, based on Horizon data? 4 A. I think what we saw at this particular time was 5 an escalation in potential liabilities as a consequence 6 of -- well, losses were starting to grow in the network 7 and, not unsurprisingly, the shareholder were asking why 8 were losses growing in the network, and I think this was 9 the conversation that arose as a consequence of that. 10 I think that was the primary. 11 Q. The answer seems to be that it's difficult to conduct 12 a proper investigation based on Horizon and the data 13 from Horizon is not sufficient to do an investigation in 14 many cases, and I'm asking, was that true and, if so, 15 why? 16 A. I have to say, that's not necessarily my sort of my 17 conclusion. I think with a growing number of -- with 18 a growing number of losses, we were trying to scratch 19 our heads as to why this was occurring. 20 Q. That's a slightly different issue. I'm asking about why 21 Government was told, in answer to its reasonable 22 question, "Why are losses growing?", that's it's 23 difficult to conduct a proper investigation and the data 24 isn't sufficient to do so. 25 A. It's not my understanding, certainly now, that that is 132 1 an issue for us. 2 Q. What new system was Mr Roberts putting in place? 3 A. We do a number of things. We set up two particular 4 schemes, I guess. We've been out to do operational -- 5 effectively operational training, so we're going out to 6 individual branches and doing operational visits to 7 those branches and we've also introduced an operational 8 incentive for postmasters that is designed to encourage 9 them to follow the operational procedures for daily, 10 weekly and month-end transaction -- month-end 11 reconciliations. 12 We've seen quite a significant increase since we 13 have gone out with effectively a carrot option, to try 14 and encourage postmasters to follow the procedures 15 correctly, which is what is happening. 16 So we went out and trained, effectively, all 17 branches individually, through our Area Managers and our 18 branch training teams, introducing them to and reminding 19 them of how procedures should be conducted, what the 20 mechanisms were for reconciliation, what the mechanisms 21 were for daily, weekly and monthly cash-end -- end of 22 days, for want of a better word and, having done that, 23 we then established a system whereby we are 24 incentivising all branches on a monthly basis to fulfil 25 the process according to the operational manual 133 1 guidelines which is obviously something that hasn't 2 happened. 3 I think it probably plays to the comment about 4 training at the start of the survey, that we have more 5 to do in terms of training, particularly some of our 6 older postmasters and some of those with longer service, 7 who perhaps didn't get the original training. I think 8 there is a lesson in here that says we will need to go 9 out in a more structured way to look at the older 10 postmasters, serving postmasters. 11 It was quite clear from this survey that those who 12 were more recently involved in the -- recently joined 13 the Post Office have had better onboarding and better 14 training and better support. 15 Q. What was the outcome of the paper relating to testing 16 fraud cases in a civil jurisdiction? 17 A. I don't know the answer to that. 18 Q. Is that something that is currently a planned route 19 within Post Office for addressing alleged shortfalls? 20 A. I don't have detail on that, I'm afraid. 21 Q. So you're not aware of any plan -- 22 A. No. 23 Q. -- to use the civil courts -- 24 A. No. 25 Q. -- as a means of testing cases of alleged fraud? 134 1 A. Not that I'm aware of, no. 2 Q. Thank you. 3 SIR WYN WILLIAMS: So is it reasonable for me to infer that, 4 as of January 2023, that was thought of as a possibility 5 but it, in the end, turned out not to be -- 6 A. That would be the -- 7 SIR WYN WILLIAMS: -- since we're now in October '24? 8 A. That would be the case, sir. 9 SIR WYN WILLIAMS: Right. 10 MR BEER: Mr Cameron is recorded as saying that 11 investigations were not being conducted in the most 12 suitable way. 13 Do you know how investigations were not being 14 conducted in the most suitable way at this time? 15 A. No, I'm surprised that Al had a view on that, to be 16 honest. My understanding of what is going on with the 17 Retail Team and how they are approaching the operational 18 effectiveness of our branches, the way they do -- as 19 I said, the way they do training and support, and I use 20 the word "support" advisedly, is markedly improved. And 21 we can see that in the internal surveys that we've done, 22 with people who have experienced problems and issues and 23 have got in contact with the Branch Support Centre 24 and/or with the Branch Assurance Team or the review and 25 dispute. 135 1 Q. Would you agree that an important, indeed essential, 2 partner in any investigation into an alleged shortfall 3 is Fujitsu? 4 A. Yes, I would. 5 Q. In paragraph 135(c), I wonder whether we could turn that 6 up, which is page 73 of your third witness statement, 7 page 73, and if we scroll down, please, and again. You 8 say: 9 "From Fujitsu's perspective, I think they are 10 suspicious of Post Office and my feeling is that they 11 consider some members of our Board are 'anti-Fujitsu'. 12 Fujitsu recently sent Post Office correspondence raising 13 concerns that they were being asked to give expert 14 opinion in prosecutions against postmasters, amongst 15 other matters -- that was not the case, and we reassured 16 Fujitsu that Post Office would never again prosecute 17 Postmasters, but we would comply with requests for 18 assistance from the police or CPS if asked which may 19 necessitate assistance from Fujitsu." 20 Then you give a reference to five lots of 21 correspondence: 22 "Again, I think that the correspondence was borne 23 out of a suspicion and distrust within the relationship. 24 It is also worth noting that Post Office has negotiated 25 with Fujitsu a standstill agreement in respect of [any] 136 1 potential legal claims it may have against them, until 2 the end of the Inquiry." 3 I think the correspondence that you're referring to 4 there took place primarily between April and July this 5 year; is that right? 6 A. That's correct. 7 Q. It related to a criminal investigation being undertaken 8 by the City of London Police -- 9 A. That's correct. 10 Q. -- in which the Post Office had asked the City of London 11 Police to seek a witness statement from Fujitsu in 12 relation to an investigation into a subpostmaster; is 13 that right? 14 A. That's correct. 15 Q. Post Office separately asked Fujitsu to provide that 16 witness statement? 17 A. Yes. 18 Q. Thank you. Can we look at some of this correspondence, 19 the early parts of which you're not involved in but the 20 latter parts of which, you are. 21 FUJ00243203. Can we start, please, with page 3, 22 an email from Simon Oldnall, the Horizon IT Director, to 23 Daniel Walton, who is the Head of the Post Office 24 Account -- is that right -- 25 A. That's correct. 137 1 Q. -- within Fujitsu? 2 A. Yes, he is. 3 Q. "Dan 4 "I understand from John that there have been some 5 challenges with supporting an ongoing Police 6 investigation that involves a large sum of money. 7 "I obviously understand broader context, but wanted 8 to reassure that [Post Office] is supporting the police 9 investigation and offering any and all assistance we 10 can. Can I ask that you help with any conversations 11 that City of London Police need to have with Fujitsu 12 ..." 13 Then onto page 2, please, if we scroll up please, 14 a reply from Mr Walton back to Simon Oldnall, again 15 copied to John Bartlett, who was the John referred to in 16 the first email: 17 "Thank you for your message ... 18 "As this is a legal matter, [Fujitsu] Legal are 19 communicating with the City of London Police. 20 "I am not involved in the discussions, and in any 21 event, [Fujitsu] considers it to be inappropriate for 22 Post Office and [Fujitsu] to be discussing a police 23 investigation." 24 Then page 1, please. And then scroll up. 25 Mr Bartlett joins the conversation on 19th April this 138 1 year. With Christian Spelzini added in: 2 "One of my team has gone back to City of London 3 Police to see how the contract you referenced below was 4 progressing as we have an open and objective engagement 5 with [City of London Police] on this matter. 6 "[City of London Police] has informed us that they 7 have not had any additional information nor contact with 8 Fujitsu after the single, exploratory and inconclusive 9 conversation. They left that conversation with the 10 feeling that they were indirectly being told that the 11 Horizon system was unreliable and so the case could not 12 progress. We really need to explore this as this is not 13 the nuanced impression Simon Oldnall has given me. 14 "As the potential victim in this case [the Post 15 Office] would be grateful if you can provide me with 16 contact details for either the equivalent person in 17 Fujitsu ... to my role ... or an appropriate person in 18 your UK legal team. I will then pass those details on 19 to [City of London Police] who are looking to have a 20 trilateral conversation ... 21 "It is impossible to over state how important this 22 is: I need to advise both the police and [the Post 23 Office] as to the evidentially-established reliability 24 (or not) of data that is being used every day in 25 establishing outcomes with postmasters and, potentially, 139 1 to be presented to the criminal justice system by the 2 police and the three public prosecuting agencies. The 3 non-provision of relevant witness statements from [Post 4 Office] and Fujitsu will rightly be interpreted by the 5 police and prosecutors as [Post Office] and Fujitsu not 6 having faith in the reliability of the data with the 7 obvious outcome resulting." 8 So that's, it seems, where the matter ended on 9 19 April. I think the next step in the chronology is 10 a letter from Mr Patterson to you, raising concerns in 11 relation to Mr Bartlett's email of 19 April. Is that 12 the first that you became aware of it: the Patterson 13 letter? 14 A. Yes. 15 Q. Can we look at the Patterson letter, then. FUJ00243199. 16 This is a letter with which you'll be familiar, partly 17 because it's been shown in the Inquiry before and partly 18 because you replied to it. 19 A. Yes. 20 Q. He writes to you raising concerns about Mr Bartlett's 21 email and essentially makes it clear, is this right, 22 that Fujitsu wouldn't support the pursuit of any 23 enforcement action, criminal or civil, against 24 subpostmasters, at least by the Post Office? 25 A. Yes. 140 1 Q. So if we just look at what's said, he is writing in 2 paragraph 1 to raise serious concerns which indicate the 3 Post Office continues to pursue enforcement action 4 against postmasters and that it expects Fujitsu to 5 support such actions. Then this: 6 "To be clear, [Fujitsu] will not support the Post 7 Office to act against postmasters." 8 Just stopping there, did you, and do you, understand 9 that broad statement to encompass all and any action 10 taken against postmasters, whether by the police or by 11 the Post Office? 12 A. That was my inference, yes. 13 Q. The letter continues, however: 14 "We will not provide support for any enforcement 15 actions taken by the Post Office against postmasters, 16 whether civil or criminal, for alleged shortfalls, fraud 17 or false accounting." 18 That may be a slightly narrower statement -- 19 A. It is, yes. 20 Q. -- limited only to Post Office action against 21 postmasters? 22 A. I would agree with that. 23 Q. Okay. He continues: 24 "In particular: 25 "(i) Criminal investigations: 141 1 "We have become aware of a recent investigation by 2 the [City police]. The approach of [Fujitsu] is to 3 cooperate with the police and any other third party 4 exercising independent investigative, prosecutorial, 5 regulatory or judicial powers. 6 "However, we are concerned by the behaviour of the 7 Post Office investigation [...] on this matter. That 8 team maintains an approach of Post Office as 'victim' 9 and requires [Fujitsu] to provide a witness statement as 10 to the reliability of Horizon data stating that without 11 such [a] statement the case will not progress." 12 I think that is a fair summary of the Bartlett 13 email, isn't it. 14 A. That is, yes. 15 Q. "For the Investigations Team to act in this manner seems 16 to disregard the serious criticisms raised in multiple 17 judicial findings and indeed, exhibits a lack of respect 18 to the ongoing Inquiry. 19 "Pursuit of Shortfalls from postmasters: 20 "... Post Office may be continuing to pursue 21 postmasters for shortfalls in their accounts using 22 Horizon data. We would have expected that the Post 23 Office has changed its behaviour in light of the 24 criticisms and is appropriately circumspect with respect 25 to any enforcement actions. It should not be relying on 142 1 Horizon data as the basis for such shortfall 2 enforcement." 3 How did you react to that -- 4 A. Badly. 5 Q. -- quite strong statement? 6 A. Badly. 7 Q. Why did you react badly to it? 8 A. Because it's not true, we aren't pursuing postmasters 9 for shortfalls, and I think the overall tone of the 10 letter was incendiary and provocative, and that was 11 certainly the reaction that it had in me. 12 Q. "Postmaster Redress: 13 "[Fujitsu] recognises that it holds Horizon related 14 information that may assist postmasters and Post Office 15 workers to appeal convictions or seek appropriate 16 redress including compensation. [Fujitsu] has and will 17 continue to provide Horizon information", essentially to 18 that end. 19 "[He has] asked Dan Walton to work with your team to 20 ensure this change is implemented, documented and 21 reported immediately. 22 "Based on what I have heard and seen in the Inquiry, 23 there is a significant behavioural and cultural aspect 24 to the Horizon scandal. As leaders of our respective 25 organisations, I believe we are both committed to learn 143 1 the lessons necessary so that this appalling scandal can 2 never be allowed to happen again." 3 Just shortly before the break, can I, for myself, 4 ask some broad questions? 5 A. Yes. 6 Q. Given the history of the Horizon scandal, do you 7 consider that it is appropriate that the Post Office 8 continues its investigative function? 9 A. Yes, I think we still need to have an Investigations 10 Team. 11 Q. Should the Post Office Investigation Team still be 12 carrying out recorded interviews? 13 A. Perhaps not in the way that we are doing at the moment 14 but, if they are for the purposes of sharing that 15 information, then fine. But in terms of the -- I think 16 the inference is that these are almost sort of police 17 orientated interviewing, then no. 18 SIR WYN WILLIAMS: In other words, there should not be 19 an investigation by the Post Office which includes, in 20 effect, an interview under caution? 21 A. Correct. 22 MR BEER: The name of these things has been changed, as 23 "assurance visits"? 24 A. Branch assurance visits. They are very, very materially 25 different. The only thing that a branch assurance visit 144 1 does is count cash and count stock. It doesn't 2 investigate. Investigations are done by a completely 3 different team. So we are very clear that there is 4 a separation of accountability here. The Branch 5 Assurance Team does stock checks, for all intents and 6 purposes, cash and stamps. The Branch Support and 7 Reconciliation Team will help investigate what the issue 8 is with those particular -- in those particular 9 circumstances. 10 Q. This statement refers, in that second paragraph on the 11 page we're looking at, to a change being implemented; 12 can you see that? 13 A. Yes, I can, yes. 14 Q. What change did you understand was to be implemented: 15 from what and to what? 16 A. I'm not entirely sure what change was being implemented. 17 We'd been extremely clear and I was, certainly when 18 I replied to Fujitsu, that we aren't prosecuting, which 19 is the major sort of consequence of this particular 20 letter, but that we did expect them to support the 21 police and the law enforcement agencies. I think when 22 I take a step back, I would say we pay hundreds of 23 millions of pounds to Fujitsu to manage our 24 transactions, of which we do some 7 million transactions 25 every single day. They manage our stock, they manage 145 1 our cash, they manage postmaster remuneration, they 2 manage the transactions of our third parties in and out 3 of our system. 4 I think it's entirely reasonable to rely on their 5 integrity and the integrity of the system, given what we 6 pay and what we get from them. 7 MR BEER: With that answer, can we take a break? We will 8 return after the break with, I think, some email traffic 9 that suggests that Fujitsu would provide a witness 10 statement to the police. 11 SIR WYN WILLIAMS: Right. Thank you. 12 MR BEER: Thank you. 13 SIR WYN WILLIAMS: What time shall we resume, Mr Beer? 14 MR BEER: 3.35, please, sir. Thank you. 15 (3.19 pm) 16 (A short break) 17 (3.37 pm) 18 MR BEER: Thank you, Mr Read. 19 Can we just go back, please, to FUJ00243203. 20 Do you remember, this was the exchange of emails 21 that you weren't copied into, which you said you didn't 22 know about, before you came to receive the letter of 23 17 May? 24 You'll see that this finishes with Mr Bartlett's 25 email of 19 April 2024, the "Good morning Dan" email, 146 1 which we looked at. 2 Can we look now, please, at FUJ00243158, and go to 3 page 2 and scroll down. There's in fact an extension to 4 this email chain, again, emails that you didn't see, but 5 I'll draw it to your attention. So you'll see that this 6 is the "Good morning Dan" email. 7 A. Yes. 8 Q. If we scroll up to the bottom of page 1, you will see, 9 at the bottom of page 1, Chris Breen, thank you. We can 10 see a reply by Mr Breen to John Bartlett's email: 11 "Dear Mr Bartlett ..." 12 So this is Fujitsu to Post Office: 13 "I have been passed your message by the team within 14 [Fujitsu] that looks after the delivery of contractual 15 services to Post Office in relation to the Horizon 16 system. 17 "I am a solicitor in Fujitsu's Legal Team. Please 18 refer any further correspondence to me rather than 19 Mr Walton. 20 "I note your comments about [Fujitsu's] engagement 21 with City of London Police, which are not accepted." 22 Then over the page. 23 "It is not appropriate for [Fujitsu] to discuss with 24 [Post Office] the nature and substance of its 25 cooperation with an ongoing police investigation. 147 1 "[Fujitsu] will continue to cooperate with the 2 Police in relation to its ongoing investigation (or 3 indeed any other) and it will not discuss the nature and 4 substance of this engagement with others, unless the 5 police directs this to happen." 6 Then top of page 1, please, a reply by Mr Bartlett 7 to that email: 8 "We have had a call with [City of London Police] 9 following your email below and they will be in touch to 10 arrange the taking of a witness statement or statements. 11 We would be grateful for Fujitsu to extend any and all 12 assistance to the [City of London Police] to aid their 13 objective understanding and assessment as to the 14 reliability of the Horizon system and the admissibility 15 of evidence produced from it ... to the investigation 16 they are conducting following [the Post Office] making 17 a crime report to them as a potential victim." 18 So taking the matter further than the exchange of 19 correspondence that we ended up on 19 April. 20 A. Yes. 21 Q. Some further correspondence suggesting that there would 22 be contact between the City of London Police and Fujitsu 23 about the possibility of providing a witness statement 24 or statements. 25 We then come to the letter to you of 17 May. If we 148 1 just go back to that, please. FUJ00243199, the 2 Patterson letter, as I've called it. We read through 3 that from start to finish -- 4 A. Yes. 5 Q. -- including your reflections on some of it. Was this 6 correspondence taken by you to the Board? 7 A. I shared it with Ben Tidswell and the shareholder 8 representative, I think. 9 Q. What about to the Board more generally? 10 A. No, I don't think it went to the Board. 11 Q. Why was that? 12 A. No particular reason. I think we've heard a lot about 13 information that goes up to the Board and information 14 that doesn't go up to the Board. There wasn't 15 a specific issue. I wanted to be certain that the 16 Acting Chair at the time and the shareholder 17 representative were aware, and that was as far as it 18 went. 19 Q. Was this not significant information capable of 20 impacting upon the integrity of the business or at least 21 a critical relationship for the business? 22 A. I didn't really read it that way, no. 23 Q. You were, I think, frustrated or worse with what your 24 partner was saying to you? 25 A. Yes, I was frustrated. Did that mean that I needed to 149 1 alert the Board to it? No, I don't think so. I think, 2 as I said in my witness statement, it's not an easy 3 relationship with Fujitsu for a multitude of reasons. 4 I think we all recognise and accept that. But, 5 ultimately, my relationship with Paul Patterson is 6 perfectly serviceable and transactional. I found this 7 particular exchange a surprise and I think, to be fair 8 to Paul, he reached out and tried to see if we could 9 resolve it, and I know Owen took him up on that. So, 10 you know, I think we moved on. 11 Q. Didn't the position as described by Mr Patterson have 12 a considerable impact on the ability of Post Office to 13 pursue or to report alleged crimes against the business? 14 A. Yes, I mean I think the fact that my interpretation was 15 that they were unwilling to stand by the integrity of 16 their system and indeed unwilling, as I interpreted it, 17 to engage with the law enforcement agencies, I was 18 surprised. But, you know, having seen now some of the 19 emails that I wasn't copied into, that's not the 20 completely clear picture, I suppose. I think that they 21 are saying that they will be willing to do that, which 22 I think was encouraging. 23 Q. If we scroll down in the letter, please, and under 24 "Pursuit of shortfalls": 25 "It seems that the Post Office may be continuing to 150 1 pursue postmasters for shortfalls ..." 2 Then at the end of the paragraph: 3 "It [Post Office] should not be relying on Horizon 4 data as the basis for such shortfall enforcement." 5 Does the Post Office continue to rely on Horizon 6 data to pursue shortfalls from subpostmasters? 7 A. No, it doesn't. 8 Q. What about the experience of Mr Jacobs, which rather 9 suggests that it does? 10 A. No, I think the situation with Mr Jacobs was exactly as 11 we discussed and described before, which is we worked 12 with -- well, once Mr Jacobs had started working with 13 the Retail Team, as indeed any postmaster would, who had 14 a shortfall, or a discrepancy, we all worked together 15 with the individual to see if we can resolve the 16 situation. And I think, as Mr Jacobs pointed out very 17 clearly, once that process began with the Retail Team, 18 he was very happy with the way that they engaged with 19 him and the way that they supported and helped him to 20 get a resolution to his problem. 21 SIR WYN WILLIAMS: I understood that, that it had all worked 22 out in a business-like way, once that two-way 23 conversation had occurred. But it surely must be the 24 case that the starting point was the data provided by 25 Horizon, otherwise there would have been nothing to 151 1 discuss? I'm not saying that in any critical sense. 2 A. No, no. 3 SIR WYN WILLIAMS: I'm just trying to analyse what occurred. 4 A. No, I think that's fair. I think if you recall with 5 Mr Jacobs' situation, some of the potential liabilities 6 went back a number of years, and so, therefore, it was 7 difficult to establish quite precisely what had 8 occurred, which is why we came to a situation where it 9 was only possible to identify £16,000 worth of losses 10 that he and we could naturally identify as being 11 a problem. 12 SIR WYN WILLIAMS: I suppose it's a good a time as any to 13 not ask you a question but just make a statement, which 14 is unusual for me. 15 But I am a little bemused about all of this debate 16 about the reliability or otherwise of the current 17 version of Horizon. Very early on in my role as Chair 18 of this Inquiry, I said that the judgments of Mr Justice 19 Fraser and of the Court of Appeal were, as far as I was 20 concerned, sacrosanct and not to be contradicted. Well, 21 unless I'm misreading it, one of the conclusions that 22 Mr Justice Fraser reached was that the version of 23 Horizon which was actually in use at the time of the 24 trial -- and I have forgotten his precise words, but 25 this is my interpretation of it -- was reasonably fit 152 1 for purpose. 2 I simply say that because we are having a great deal 3 of debate about current Horizon, which, at the moment, 4 doesn't seem to me to fit with one of the central 5 conclusions of Mr Justice Fraser's judgment in the 6 Horizon Issues trial, and so I want to know where I'm 7 going, having opened that up for you to all think about. 8 MR BEER: Yes, if I can be forgiven for offering -- 9 SIR WYN WILLIAMS: An instant riposte? Yes. 10 MR BEER: An instant riposte. 11 He says, that is Sir Peter Fraser, a number of 12 things about current Horizon as at 2019, as disclosed by 13 the expert evidence, including that it is "relatively 14 robust", in inverted commas, with -- 15 SIR WYN WILLIAMS: Well, these terms are no doubt wonderful 16 for debate but the general tenor of what he was finding 17 was as I've indicated. Now, I'm making no statement 18 other than that I have said that I regard what he said 19 as sacrosanct, insofar as it can be reasonably 20 interpreted, and yet, inevitably, as it seems to me, 21 there are streams and forces which are pushing me in 22 a direction away from that on that one issue. So I just 23 wanted everybody to remember what I've said and what he 24 said. 25 MR BEER: Yes. 153 1 You've told us that this wasn't taken to the Board, 2 this correspondence but you, in fact, yourself replied; 3 is that right? 4 A. That's correct. 5 Q. Can we look at the reply, please. FUJ00243201. This 6 is, I think, your reply of 30 May: top right, yes? 7 A. Yes, that's correct. 8 Q. You say that Mr Patterson makes number of concerning 9 statements about postmaster enforcement: 10 "... we share a commitment to learn lessons from the 11 ... scandal and to ensure that the appalling treatment 12 of postmasters, and the miscarriages of justice that 13 occurred, could never happen again." 14 Scrolling down: 15 "[Post Office] has invested significant time and 16 resource effecting cultural and procedural change across 17 the business, taking on board the court's findings and 18 ensuring that our postmasters' interests are central to 19 everything we do." 20 Then "Criminal investigations": 21 "I can reassure you that the Post Office is not now 22 -- and will not be in the future -- undertaking any 23 prosecutions against postmasters or any third parties as 24 the prosecuting body." 25 Then over the page: 154 1 "Post Office's requests to use Horizon data may be 2 for any number of day-to-day business reasons, including 3 supporting postmasters in their branches ... in respect 4 of enforcement, [the] requests only relate to cases 5 where our teams are supporting criminal investigations 6 or prosecutions pursued by independent third parties, 7 such as the police or [the CPS]. These independent 8 investigations may be initiated by (i) a third party, 9 (ii) by postmasters ... or indeed by a member of the 10 public ... or (iii) by Post Office." 11 Just stopping there, that doesn't bring into account 12 the use by Post Office of Horizon data in its own 13 investigations, does it? 14 A. No. 15 Q. "In response to this specific case you raised, potential 16 criminal activities were identified in the branch and 17 Post Office therefore reported the matter to the police. 18 We have assisted with the police's investigation, 19 including providing supporting data from the Horizon 20 system. 21 "Naturally, it is vital to the police's 22 investigation that it can rely on the Horizon data it 23 has received. I am happy you have confirmed in your 24 letter that [Fujitsu] will cooperate with the police 25 when it is exercising its independent investigative 155 1 powers as this case would require a statement from 2 [Fujitsu]. It is a matter for the police and [Fujitsu] 3 to determine the necessary content of the statement." 4 Then in relation to his second point: 5 "... civil recovery of losses was stopped by Post 6 Office in 2018 so Horizon data is not currently being 7 used for civil recoveries from postmasters." 8 Does that remain the case now? 9 A. Yes, it does. 10 Q. Thank you: 11 "However, Post Office does rely on Horizon data for 12 a range of key day-to-day ... activities, including 13 supporting its postmasters with resolving discrepancies 14 on their accounts." 15 Then you set out how that happens. Over the page, 16 please, "Postmaster redress": 17 "The reliability of Horizon data is central to the 18 compensation and redress schemes ... I welcome your 19 confirmations that [Fujitsu] will provide Post Office 20 with information to achieve redress at no charge, and 21 provide a credit note for any prior charges which have 22 been raised." 23 Following this correspondence, this exchange of 24 correspondence with Fujitsu, what was your view as to 25 how any shortfall or discrepancy, based on Horizon data, 156 1 could fairly be pursued by the business? 2 A. What do you mean by that particularly? 3 Q. It's a deliberately broad question. 4 A. Right. 5 Q. You've had an exchange of correspondence where 6 Mr Patterson has said, essentially, out of two of the 7 three activities that he mentions, Fujitsu will not 8 assist the Post Office in pursuing criminal proceedings 9 or civil recovery, at the same time has said that they 10 will assist the police -- 11 A. Yes. 12 Q. -- or other third party law enforcement agency? 13 A. (The witness nodded) 14 Q. You have replied, not addressing some of those points 15 head on -- 16 A. Mm-hm. 17 Q. -- but explaining some assuring activity, or reassuring 18 activity, that the Post Office has undertaken in 19 relation to the first two categories. 20 A. Yeah. 21 Q. Where did it, in your view, sit; what was the position; 22 what could be done by Post Office after this exchange of 23 correspondence? 24 A. It's a good question, I think there are couple of 25 things. One, I think we covered some common ground 157 1 where law enforcement agencies and the Post Office and 2 Fujitsu would work together when there were organised or 3 large-scale fraud or issues. I think, with the sort of 4 specificity, your point is well made, which is, if the 5 police are able to rely on the data, then presumably the 6 data is accurate and that would be where I am, 7 certainly. 8 When it comes to the maturity of the organisation 9 and to whether or not it is going to pursue civil 10 actions against postmasters, I think, as I said at the 11 very start of the day, I don't think the business has 12 yet earned the right or the trust to do such things. 13 I think we're still learning and developing how to help 14 postmasters, both in terms of the quality of the support 15 we provide, and the quality of the training we provide. 16 So I think there is still more to be done, whilst, 17 at the same time, you know, we have to get ourselves to 18 a place where I think both postmasters and Post Office 19 feel confident that we have done everything we can to 20 ensure that the system and the training and the support 21 is appropriate, and that's obviously what we're 22 currently doing. 23 Q. Mr Patterson replied. Can we look at FUJ00243204. On 24 8 July 2024, replying to your letter of 30 May 2024, he 25 explains at the end of his first paragraph that his 158 1 previous correspondence was seeking to bring to your 2 attention concerning conduct exhibited by members of the 3 Post Office. He says: 4 "In simple terms, the Post Office is requesting that 5 [Fujitsu] give expert opinion ... to be used in criminal 6 proceedings against postmasters and Post Office 7 workers." 8 He says that: 9 "... you rightly note that the content of any 10 witness statement is a matter between the police and 11 [Fujitsu]. [He] considers it necessary to address this 12 issue with you because the request was made by Post 13 Office and [he considers] the request to be entirely 14 inappropriate, particularly in the light of the evidence 15 being uncovered [in this] Inquiry." 16 He encloses with this letter an email chain, this is 17 the email chain we've looked at before the break -- 18 A. Yes. 19 Q. -- which contains emails from a senior member of the 20 Post Office's Investigations Team, Bartlett to Walton: 21 "Mr Bartlett continues the prior narrative of seeing 22 the Post Office as the 'victim' and requests a witness 23 statement to address 'the reliability of the Horizon 24 system and the admissibility of evidence produced from 25 it' ... and suggests that a failure to do this would 159 1 'rightly be interpreted by the police and prosecutors as 2 [Post Office] and Fujitsu not having faith in the 3 reliability of the data ...'" 4 He says: 5 "A witness statement from [Fujitsu] attesting to the 6 reliability of the system and of data from it in 7 criminal proceedings would amount to expert opinion 8 evidence. [Fujitsu] is incapable of providing expert 9 opinion evidence as it is neither independent nor has it 10 sufficient information to provide such an opinion. 11 "As the Post Office is well aware, there have been, 12 and there continue to be, bugs, errors and defects in 13 the Horizon system. [Fujitsu] currently has, and 14 previously had, access to branch transaction records. 15 Your letter ... acknowledges the existence of other 16 matters ... which could have operated to create innocent 17 discrepancies in branch accounts including '... miskeys, 18 or omissions when remitting cash or stamp stock based on 19 Horizon data ...' by end users. 20 "... the Horizon system is reliant on the delivery 21 of services by Post Office and third parties retained by 22 the Post Office. Therefore, records generated in 23 relation to its operation are not exclusively retained 24 by [Fujitsu]. The Post Office has appointed other 25 suppliers to manage aspects of the system such as the 160 1 network and end user computing towers. Further, the 2 Post Office has insourced various services previously 3 provided by [Fujitsu] and other suppliers engaged by the 4 Post Office, including the Helpdesk and integration 5 services." 6 Then over the page. 7 "[Fujitsu] considers that all of the matters 8 mentioned above would need to be investigated carefully 9 but the Post Office and the police, with the assistance 10 of an independent technical IT expert, and possibly also 11 a forensic accounting expert, to ascertain proper 12 explanations for branch account discrepancies ... only 13 after such an investigation has been undertaken could 14 a meaningful expert witness statement be made in ... 15 criminal proceedings which addresses the reliability of 16 the Horizon system. [Fujitsu] cannot provide such 17 a statement." 18 So, just stopping there, leaving aside the meeting 19 that took place on 18 July, what did you understand 20 Fujitsu's position to be by this time, 8 July? 21 A. Yeah, I think we're going round the houses a little, 22 would be my observation. I think, taking a step back, 23 my expectation was that there would be one, two, three 24 maybe incidents/events of this sort of magnitude that 25 would require the police to engage with Fujitsu on very 161 1 specific issues, and I don't think a sort of blanket 2 expert statement was necessarily what we were trying to 3 achieve; we were trying to achieve a situation where 4 Fujitsu would cooperate with law enforcement agencies. 5 Q. Just stopping there, I'm sorry to interrupt an answer 6 which I'm conscious I'm doing -- 7 A. Yes. 8 Q. -- you said that there would be one, two or three, or 9 maybe, I think, four occasions, on which -- is that 10 because -- 11 A. Because of the -- 12 Q. Why is that? 13 A. Because of the scale of what we're discussing here is -- 14 and I think I said at the very start of the day, our 15 expectation is that where there is organised crime, 16 where there is fraud, where there is money laundering, 17 issues of that nature reported either by the Post Office 18 or by the branch or by postmasters, they would be very, 19 very small in number, and my expectation would be that 20 Fujitsu would be willing to engage with the police on 21 whatever it was that they needed. So I think there's 22 a degree of cross purposes, in terms of some of the 23 engagement, and I suspect that Fujitsu felt that they 24 were being directed, to a degree, by John Bartlett in 25 terms of what they should or shouldn't do, and I think 162 1 it's very much up to the police and FSL to decide what 2 it is that is required or needed in whatever particular 3 circumstance occurs. 4 So I think there was a degree of cross purposes, in 5 terms of the engagement. 6 Q. Even allowing for that, what did you understand 7 Fujitsu's position to be, at this point in time? 8 A. That they would engage with the police but they wouldn't 9 give a specific expert witness, and my understanding was 10 that they would obviously engage with them, but they 11 would engage with the police rather than Post Office 12 engaging with the police and engaging with FSL. 13 Q. Thank you. 14 The meeting occurred on 18 July 2024 at Wood Street. 15 Can we look, please, at FUJ00243206. This is 16 Mr Patterson's own note of the meeting. It opened with 17 Owen explaining the absence of you, who was 100 per cent 18 focused on this. The COO joined the meeting, as he will 19 continue in post. 20 Then rolling down the page, please, about the fifth 21 paragraph on this page: 22 "To be clear Fujitsu will not provide expert witness 23 statements and will only work when requested [by] the 24 police ..." 25 Was that conclusion one that was fed back to you? 163 1 A. Yes, it was. 2 Q. Then, if we carry on scrolling down, please, over the 3 page: that's the end. That appears to be the only part 4 that concerns provision of evidence -- 5 A. Yes. 6 Q. -- is that right? 7 A. I think so. 8 Q. Can you recall what else was fed back to you as a result 9 of that meeting? 10 A. I spoke with Owen about the meeting, he said it was very 11 cordial. He said it was -- that Paul was very 12 reasonable in terms of the issues that were at play, 13 that, actually, it moved fairly quickly on to the 14 concept of an extension, rather than being inclusively 15 focused on Fujitsu's position with providing expert 16 witness statements/requests from the police. 17 Q. Then I think Mr Woodley wrote to Mr Patterson, 18 essentially in response to Mr Patterson's letter of 19 8 July -- 20 A. Yes. 21 Q. -- and following this meeting? 22 A. That's right. 23 Q. FUJ00243209. Scrolling down, paragraph 1 refers to the 24 Patterson letter, number 2, and the meeting. There's 25 a statement from Mr Woodley, as acting CEO, of shared 164 1 commitments. He says that he was concerned by some of 2 the points raised in the letter of 8 July. There was 3 some misunderstanding, having talked them through. 4 Scrolling down, under "Expert evidence": 5 "Your letter said that Post Office was requesting 6 that Fujitsu give expert evidence ... That was not the 7 case. As you rightly say, [Fujitsu] is not able to 8 provide expert opinion evidence as it is not 9 sufficiently independent for any statements that it may 10 provide to be deemed expert evidence by the Crown 11 Prosecution Service. Post Office is aware of that and 12 has not/would not request that [Fujitsu] provides expert 13 opinion evidence." 14 So there seems to be a meeting of minds there? 15 A. Yes. 16 Q. Over the page: 17 "[The Investigations Team] has been supporting 18 a police investigation into a significant financial 19 crime identified in one of our branches ... data from 20 the Horizon system has been shared with the police by 21 Post Office. The police have raised questions regarding 22 the data and [the system], and the [Investigations Team] 23 referred the police to [Fujitsu] -- as [the] provider of 24 the system ... The feedback they [the police] received 25 in April 2024 was that the police had only been able to 165 1 have one conversation with [Fujitsu] at that time and 2 that the investigation officer's impression from that 3 conversation was that they were indirectly being told by 4 [Fujitsu] that the Horizon system was unreliable. As 5 a result, the police told the [Investigations Team] the 6 investigation could not progress." 7 As a result, Mr Bartlett sent the email of 19 April. 8 He was not asking Fujitsu to act as an independent 9 expert witness. He asked that Fujitsu engage with the 10 police and provide a statement regarding the reliability 11 of data. Fujitsu has confirmed that it will further 12 engage with the police on this matter. 13 So that seems to remove, would you agree, some of 14 the confusion, as it's been put, or misunderstanding. 15 A. Yes, I think so. 16 Q. "(2) Criminal investigations and prosecutions." 17 There is essentially a restatement of what was said 18 in an earlier letter under 1, 2 and 3. If we go over 19 the page, please: 20 "To get the right checks and balances in any of 21 these investigation processes, data will be required 22 from [Horizon] along with analysis of any known bugs, 23 defects or errors ... Thank you for confirming that such 24 data will be provided ... 25 "We discussed that Post Office had used the word 166 1 'victim' in correspondence with [Fujitsu] ... while this 2 may be a legally and factually accurate description, it 3 does not reflect the change in Post Office's attitude 4 towards postmasters." 5 Then (3), shortfalls: 6 "Thank you for confirming that [Fujitsu] will 7 continue to deliver its contractual obligations 8 including reporting promptly and transparently on branch 9 impacting incidents." 10 Next paragraph: 11 "While Post Office does not currently take civil 12 recoveries action to recover established losses ... this 13 may be necessary in future to establish a fair, 14 transparent and consistent approach ... this would only 15 be undertaken in future with the wide endorsement of the 16 Postmaster community and robust independent assurance." 17 I think you've told us today that that is not 18 presently contemplated; is that right? 19 A. That's correct. 20 Q. He welcomes the commitment that Fujitsu will work 21 collaboratively with the Post Office over the coming 22 months. 23 Then lastly in this chain, FUJ00243211, 24 Mr Patterson's reply to Mr Woodley: 25 "It is unfortunate that Nick was not able to attend 167 1 the meeting ... The original purpose of writing to Nick 2 was to escalate, CEO to CEO, the concerns relating to 3 certain behaviours within the Post Office ... the Post 4 Office continues to have significant cultural issues, 5 sees itself as a 'victim' with the enforcement and 6 prosecution of postmasters considered as a business as 7 usual activity of a commercial retail company ... 8 Fujitsu finds the language and the suggested behaviour 9 unacceptable from Post Office's investigators. 10 "I do not intend to engage further with the Post 11 Office on the matters I raised ... 12 "You will recall, I have stated publicly Fujitsu 13 does not wish to extent the contract with Post Office 14 and your letter has reinforced the challenges we have as 15 an organisation with continuing to do business with the 16 Post Office." 17 Just stopping there, where did this leave 18 investigations that were ongoing? 19 A. I haven't had an update. I'm not fully aware of what 20 the next stage was, whether Owen responded to Paul or, 21 indeed, what the situation is with their support of the 22 police. That hasn't been fed back to me. 23 Q. What's the current state of play, therefore, in relation 24 to obtaining evidence from Fujitsu in support of either 25 investigations or in support of investigations or 168 1 prosecutions being conducted by third-party LEAs? 2 A. Again, as I say, I haven't had an update since this 3 letter, so I can't give you that answer, I'm afraid. 4 Q. Was any of this correspondence taken back to the Board? 5 A. Again, I'm not aware of whether it was or not, I'm 6 afraid. 7 Q. By you? 8 A. Well, it wasn't by me, no, because -- obviously as I've 9 stepped back because I've been working on this matter. 10 This would be, obviously, an activity for the Acting 11 CEO. 12 Q. Was the Board, to your knowledge, aware of Post Office's 13 involvement in the City of London Police investigation? 14 A. I think, as we said at the very beginning, my 15 involvement was certainly to bring the Acting Chair and 16 the shareholder representative into the loop. I am 17 unaware of whether or not this was shared with the Board 18 in July or, indeed, in September. 19 Q. Are you able to say whether the Post Office's current 20 investigative function is fully compliant with all 21 relevant legal standards? 22 A. As far as I'm aware, yes. 23 Q. What's the current position, therefore, in relation to 24 obtaining evidence from Fujitsu? 25 A. As I say, I haven't had an update since this exchange. 169 1 So I'm -- going back to what it said earlier in the 2 email, I'm assuming that they are continuing to 3 cooperate with the police as they said they would. 4 Q. Can we look, please, at a separate train of 5 correspondence starting with FUJ00243191, starting with 6 page 3, please. If we just pan out a little bit, 7 please, and scroll down. Thank you. 8 It's an email from a Detective Constable Edwards in 9 Lancashire Constabulary's Economic Crime Unit. If we 10 just look up, please, to the bottom of the next page, 11 it's addressed to Mr Morley, who we will in due course 12 see is in the A&CI team? 13 A. That's correct. 14 Q. "Good afternoon Andrew." 15 So this June 2024. 16 "... could I ask that you/your Legal Team provide 17 the following: 18 "1) Documentary evidence which will confirm/verify 19 that more robust [I think that's 'the more robust'] 20 Horizon [Online] was installed on the systems at [Blank] 21 post office from 2021. I appreciate your letter 22 confirms the same, but is there any documentary 23 evidence/records which show it was installed. 24 "2) As the letter suggests are you able to get the 25 ball rolling to prepare and provide a formal statement/ 170 1 report in an evidential format which shows why you 2 believe the Horizon system in place at [that post 3 office] was reporting correctly -- the CPS will 4 inevitably want the same." 5 Then scrolling up, please, reply from Mr Morley, 6 a Senior Investigations Manager in the A&CI team: 7 "While I work through the information required can 8 I request that in response to item 1 and 2 below that 9 you obtain a statement from Chris Breen who is the Legal 10 Manager -- Litigation Europe for Fujitsu ..." 11 Then some details are provided: 12 "As you may be aware Fujitsu are the company that 13 supply the Horizon software and are therefore best 14 placed to address the points you raise." 15 So this is the A&CI team directing the police to 16 Fujitsu asking for a statement as to Horizon's 17 robustness and whether the system installed at this 18 branch, in I think it was 2020 or 2021, was the HNG-A 19 system. 20 Then scrolling up, please, you will see an email to 21 Fujitsu, to Mr Breen, so the detective constable 22 followed the suggestion made by the A&CI team. You'll 23 see what is said in the first two paragraphs, which are 24 sort of introductory: 25 "Are you able to assist by providing a written 171 1 statement dealing with points 1 and 2 ... below?" 2 So it seems that Fujitsu is receiving requests for 3 witness statements, or at least a witness statement from 4 another police force, whilst the exchange was going on 5 between those higher up the organisation -- 6 A. Mm. 7 Q. -- both in Fujitsu and Post Office. 8 A. Mm-hm. 9 Q. Did you become aware of this operation, which was called 10 Operation Jetfire? 11 A. No, I'm not familiar with it. 12 Q. Were you aware of any investigation like this being 13 undertaken? 14 A. No, as I say, I wasn't aware of this investigation. 15 Q. You said earlier, and it's reflected in some of the 16 written evidence, that a Board approval was required? 17 A. Yes. 18 Q. Board approval for what? 19 A. Sharing information -- well, bringing to the table 20 information associated with interaction with law 21 enforcement agencies on specific issues. 22 Q. If we just scroll up, please, you'll see this is the 23 24 July 2024, whilst the correspondence between you and 24 Mr Patterson and then Mr Woodley and Mr Patterson is 25 ongoing. 172 1 What steps were taken to ensure that those in the 2 A&CI team understood the nature of the relationship and 3 the limits of the relationship as between Post Office 4 and Fujitsu on the provision of Horizon evidence? 5 A. Personally, I haven't been involved in that activity, 6 but I am -- I would be -- it would be obvious to ask the 7 General Counsel who looks after that particular function 8 to bring that to life, but I am not aware of what kind 9 of briefing they will have received. 10 Q. Can we look, please, at FUJ00243192. This is a letter 11 to that detective constable, who on this version has 12 been redacted, I think: 13 "Post Office Legal have reviewed the reasoning for 14 not progressing ... to a charging decision." 15 Scrolling down: 16 "... not for Post Office to influence the 17 independence of the situation ... however the reasoning 18 around the credibility of the Horizon system seems to be 19 a significant factor ..." 20 Just for context, this was a letter saying "We're 21 going to NFA", take no further action: 22 "[Post Office] have been asked to address three 23 questions in respect of the decision to [take] No 24 Further Action ... [Post Office] hopes that the 25 information provided below ... is sufficient to assist 173 1 with the review of that decision." 2 Then the three questions: 3 "... new Horizon is much more reliable than the old 4 system 5 "evidence that a Court has ruled so ... 6 "new system was installed and in place at the 7 [Blank] post office from 2021 onwards." 8 Then, over the page, question (c) is answered: 9 "[The] branch was operating the HNG-A version of 10 Horizon." 11 Then questions (a) and (b) -- this letter goes on 12 for many pages, setting out extracts from the Horizon 13 Issues Judgment of Mr Justice Fraser -- 14 A. Right. 15 Q. -- in answer to the question: which legal case 16 establishes or proves that the current Horizon system is 17 reliable? You see that? 18 Is this is an approach that you, as Chief Executive, 19 knew was being taken, ie leaning on the Horizon Issues 20 Judgment? 21 A. I was unaware of that. I am unaware of this level of 22 engagement, candidly. 23 Q. I'm not going to spend time now going through all of the 24 passages in this letter; it's there for the Chairman and 25 to others read. You can see -- 174 1 SIR WYN WILLIAMS: Are you going to cause me to resile from 2 or amend what I said earlier? 3 MR BEER: Well, I knew this was coming, sir. 4 You can see some passages which are, in my words, 5 lent on. Extracts from, for example, paragraph 964 of 6 the Horizon Issues Judgment and the relevant passages 7 are in bold, findings in relation to Legacy Horizon from 8 2000 to 2010, and then of Online from 2010 to 2018 are 9 not findings on the Horizon system, as it exists at the 10 date of the judgment. They cannot be routinely applied 11 to the way HNG-A operates, as at December 2019: 12 "It is agreed by the experts that the Horizon System 13 in its HNG-A form is now relatively robust." 14 Hence my answer to the point raised earlier. 15 Then carrying on over the page -- 16 SIR WYN WILLIAMS: I can't help it. I love phrases like 17 "relatively robust". You could argue about them until 18 2030. 19 MR BEER: Yes, there's another variant on that theme, and 20 it's in bold, three lines in, where Mr Justice Fraser 21 says: 22 "HNG-A is a different matter, and the experts are 23 agreed that it is far more robust than Horizon in 24 earlier times." 25 Then another variant on that theme, paragraph 969, 175 1 again in bold, Mr Justice Fraser said in relation to 2 HNG-A: 3 "... the experts agree is a better system than 4 either of the other two iterations of Horizon." 5 Then carrying on, Mr Justice Fraser's finding at 6 paragraph 974 and 975 is set out: 7 "... I have found that the system as it is in 2019 8 is far more robust than it was prior to 2017." 9 Then the letter leans on some explanatory notes to 10 the exoneration bill, essentially. 11 Were you aware of this approach that was being 12 taken -- 13 A. No, I wasn't. 14 Q. -- ie picking out some extracts from Mr Justice Fraser's 15 judgment as evidence of -- 16 A. I wasn't -- 17 Q. -- of the current reliability of Horizon? 18 A. No. 19 Q. Was that a Board-sanctioned approach? 20 A. Not that I'm aware of. 21 Q. Was it a General Executive sanctioned approach? 22 A. Not that I'm aware of. 23 Q. I think it therefore follows that you didn't investigate 24 or cause to be investigated the extent to which extracts 25 from a judgment in civil proceedings could be used as 176 1 evidence in criminal proceedings -- 2 A. No. 3 Q. -- to prove the reliable of the system? 4 A. No. 5 MR BEER: Thank you. 6 Sir, that's the end of that topic and the end of my 7 questions for today. 8 SIR WYN WILLIAMS: All right. 9 MR BEER: Can we reconvene at 10.00 tomorrow, please, unless 10 you have any questions. 11 SIR WYN WILLIAMS: No, I have no questions. 12 MR BEER: I could sense one brewing. 13 SIR WYN WILLIAMS: No, no, no, it's not a question. I was 14 simply going to say that perhaps I should amend my 15 statement to say that Mr Justice Fraser's judgment will 16 be sacrosanct once I decide what it means. Thank you. 17 (4.25 pm) 18 (The hearing adjourned until 10.00 am the following day) 19 20 21 22 23 24 25 177 I N D E X NICHOLAS JAMES READ (sworn) ...................2 Questioned by MR BEER .........................2 178