1 Monday, 4 November 2024 2 (10.00 am) 3 MR BLAKE: Good morning, sir. 4 SIR WYN WILLIAMS: Morning. 5 MR BLAKE: This morning we're going to hear from 6 Mr Recaldin. 7 SIR WYN WILLIAMS: Yes. 8 MR BLAKE: Thank you. 9 SIMON DOMINIC RECALDIN (affirmed) 10 Questioned by MR BLAKE 11 MR BLAKE: Thank you very much. Can you give your full name 12 please? 13 A. Simon Dominic Recaldin. 14 Q. Thank you very much. Mr Recaldin, you appeared at the 15 Inquiry on 29 September last year, and you confirmed the 16 truth of three witness statements, that's your first 17 witness statement, second witness statement and third 18 witness statement. I'd just like to begin today by 19 briefly taking you through your fourth, fifth, sixth, 20 seventh and eighth witness statements. The fourth has 21 a URN of WITN09890400 and is dated 15 May 2024; the 22 fifth is WITN09890500, dated 3 September 2024; the sixth 23 is WITN09890600, dated 4 September 2024; the seventh is 24 WITN09890700, dated 4 September 2024 as well; and the 25 eighth is WITN09890800, dated 16 October 2024. 1 1 Do you have copies of all of those witness 2 statements in front of you? 3 A. I do. 4 Q. Can you confirm that your signature appears on all of 5 those statements? 6 A. I can. 7 Q. Can you also confirm that those statements are true to 8 the best of your knowledge and belief? 9 A. They are. There are a couple of amendments that I would 10 like to go through, if that's okay. 11 Q. Thank you very much. Yes, please do take us through 12 those amendments? 13 A. So in the sixth witness statement if I -- if it's of 14 help to the Inquiry, there's couple of acronyms which 15 are incorrect. The first one in the Rule 9(56), sixth 16 witness statement, is I referred to SEG as the "Senior 17 Executive Group". With apologies, that should have been 18 the "Strategic Executive Group". In the same statement 19 I referred to "DBT" and this should have been defined as 20 "the Department for Business and Trade". Thirdly, 21 I refer to "DRP", and that should have been defined as 22 the "Dispute Resolution Procedure". Finally in this 23 witness statement, I refer to "DRT", and that should 24 have been defined as the "Dispute Resolution Team". 25 In my seventh witness statement, again, I refer to 2 1 SEG as the "Senior Executive Group". With apologies, it 2 should have been the "Strategic Executive Group". 3 Finally, under the seventh witness statement, I refer to 4 "DBT" and this should have been defined as the 5 "Department for Business and Trade". I hope those are 6 acceptable. 7 Q. Thank you very much. Subject to those, are those 8 statements true to the best of your knowledge and 9 belief? 10 A. They are. 11 Q. Thank you very much. Those witness statements, those 12 that haven't already been published, will be published 13 on the Inquiry's website shortly. 14 You are the Director of the Remediation Unit, which 15 was previously known as the Historical Matters Business 16 Unit; is that correct? 17 A. That is correct. 18 Q. You've been in that position since 10 January 2022. Can 19 you assist us with what you were doing prior to taking 20 up that role? 21 A. I worked for NatWest, then became Royal Bank of 22 Scotland, and then back to NatWest again for 33 years 23 doing a number of roles through junior management, 24 senior management and leadership within the Royal Bank 25 of Scotland. 3 1 Q. Thank you very much. Towards the end of your time, 2 I think you've said that you were involved in 3 compensation schemes of some sort; is that correct? 4 A. Yeah, in my last years of financial crisis in 2008 I was 5 involved in two significant remediation programmes. One 6 was called Project Rosetta, which was the investigating 7 the alleged misselling of sophisticated financial 8 products, such as swaps and collars and caps, and we had 9 to investigate 13,500 trades to understand whether they 10 were missold and, if they were, then we'd have had to 11 compensate the clients accordingly. 12 And the second programme was called Project 13 Sapphire, and that was -- actually came from 14 a Government report, the Tomlinson Report, when the 15 Royal Bank of Scotland was accused of deliberately 16 taking businesses to the wall in order to free up their 17 capital and effectively make companies go bust to free 18 up the capital and we were charged with investigating 19 those allegations and compensating accordingly. I was 20 the Operations Director in both of those programmes. 21 Q. Thank you very much. I would like to look at the work 22 of your team and your unit. Can we please bring up onto 23 screen POL00460645. You have produced a slide 24 addressing the various schemes that are currently 25 running. That will come on the screen at the moment. 4 1 We see there at the top the Remediation Unit and 2 you've set out those schemes that are directly run by 3 your unit and those that are run by the Department for 4 Business and Trade; is that correct? 5 A. That is correct. 6 Q. We see there on the left-hand side the Horizon Shortfall 7 Scheme. That relates to those who were not on the part 8 of the Group Litigation but who have been impacted by 9 matters relating to the Horizon shortfalls? 10 A. Correct. 11 Q. We then have the "Overturned Convictions". I don't 12 think it's called a scheme: it's just overturned 13 convictions redress; is that correct? 14 A. Yes. 15 Q. It provides redress for those whose Horizon related 16 convictions have been overturned by the courts? 17 A. Correct. 18 Q. You then have the "Suspension Remuneration Review". 19 That involves repayment to postmasters who were 20 suspended without pay; is that correct? 21 A. That is correct. 22 Q. Can you assist us with why those postmasters wouldn't be 23 able to claim under the Horizon Shortfall Scheme or how 24 that is different to the Horizon Shortfall Scheme? 25 A. They might be able to claim under the Horizon Shortfall 5 1 Scheme and, if they do, they get compensated 2 accordingly. There are others who do not have a claim 3 under Horizon Shortfall Scheme but were suspended and 4 therefore they are entitled to reimbursement of that pay 5 that they should have got when they were suspended. 6 Q. If you are a subpostmaster who experienced a shortfall 7 but who was also suspended, do you have to complete two 8 separate forms for those two different schemes? 9 A. No. No, you'll get your compensation through -- your 10 redress through the Horizon Shortfall Scheme. 11 Q. Thank you. The "Suspension Remuneration Review" 12 therefore applies to those who didn't experience 13 a shortfall but were nevertheless suspended; is that 14 correct? 15 A. Yes, that's correct. 16 Q. We then have the "[Post Office] Process Review". Can 17 you assist us with what that involves? 18 A. During our investigations for all schemes, a number of 19 allegations, issues, complaints were received around 20 a number of products and the use of those products 21 created what we call detriment. So we proactively did 22 a review of number of products where postmasters were 23 identifying problems with them, ie detriment, and we 24 investigated about 19 different products to understand 25 whether or not the use of those products created 6 1 detriment or potential detriment. That review of 19 2 products came down to ten, including an additional 3 category called "Other", and we confirmed that those ten 4 products might or do create detriment. 5 A good example of that would be a very bad training 6 manual that was issued to a postmaster that, had they 7 followed that training manual to the letter, they would 8 have suffered detriment and, therefore, that -- it 9 should be redressed, and that is the scheme on the -- 10 that is set up to redress those issues around those ten 11 products. 12 Q. Do those products relate to Horizon in some way? 13 A. No, they don't. 14 Q. Thank you. Can you give us some other examples, 15 perhaps, just to assist us? 16 A. It might be a foreign exchange process; it might be 17 an ATM shortfall not related to Horizon. 18 Q. Thank you very much. Then there are two further schemes 19 under your section "Schemes run by [the Department for 20 Business and Trade]". The first is the GLO scheme, 21 that's those who were part of the Group Litigation; is 22 that correct? 23 A. That's correct. 24 Q. Presumably your department or your unit is involved in 25 disclosure, perhaps making representations as well, in 7 1 relation to -- 2 A. No, just disclosure. We have completed the disclosure 3 exercise required for the Department of Business and 4 Trade for the GLO cohort. 5 Q. Thank you. Are you able to assist us with when that 6 disclosure was completed? 7 A. It was completed four weeks earlier than expected. 8 I think it was around June this year it was completed. 9 Q. Then the HCRS, the Horizon Compensation Redress Scheme, 10 that is redress for those whose convictions have been 11 automatically overturned by the recent statute; is that 12 correct? 13 A. Correct. 14 Q. Again, your Department provides information. What kind 15 of information -- 16 A. Disclosure. 17 Q. What kind of disclosure might be required for that 18 scheme? 19 A. Well, what we've done there, we've worked closely with 20 Government and legal advisers about what disclosures 21 they would require for these cases because many of these 22 cases, we understand -- because it's obviously run by 23 the Department of Business and Trade -- their 24 compensation may be limited to the £600,000 sum and, 25 therefore, the amount of disclosure to support those 8 1 claims may be less -- will be significantly less than 2 for claims of over £600,000. 3 Q. So is it likely that, in relation to that scheme, it 4 will be £600,000 as of right, without requiring more 5 proof than simply that you were convicted? 6 A. Well, my understanding is that if the claim is -- if the 7 claimant is, and their legal advisers are comfortable 8 with an offer of £600,000, then limited disclosure, if 9 any disclosure is required to support that. 10 Q. Thank you. Your teams work also involves other areas. 11 It involves the Criminal Appeals Review Process; is that 12 correct? 13 A. Correct. 14 Q. What is your involvement in that, briefly? 15 A. I have ultimate oversight of it. The work is part of 16 the Remediation Unit. 17 Q. Is that providing, for example, disclosure to the courts 18 or the Crown Prosecution Service or others? 19 A. Via our legal advisers, yes. 20 Q. Thank you. Also, I think your team is also involved in 21 related civil liability; is that correct? 22 A. Correct. 23 Q. Is that individuals who bring claims against the Post 24 Office outside of those schemes but relating to Horizon, 25 or more broadly? 9 1 A. Nothing outside these schemes, and nothing outside 2 Horizon -- it won't be dealt with by my team. 3 Q. Thank you. Paragraph 140 of your sixth statement, you 4 have outlined various meetings that you're involved in. 5 Perhaps we can bring that on screen. It's your sixth 6 statement, WITN09890600. It's page 42. Thank you. At 7 page 42, paragraph 140, you've set out various other 8 meetings and boards that you are a member of. 9 A. Yeah. 10 Q. We have there little in (a): 11 "Monthly monitoring meetings with [the Department 12 for Business and Trade] to formally oversee the 13 [Historic Shortfall Scheme], discuss performance and any 14 outstanding matters, risks and issues." 15 We have the Horizon Redress Programme Board, the 16 HMC, what's the HMC? 17 A. Horizon Management Committee. 18 Q. Horizon Management Committee or Horizon Matters 19 Committee? 20 A. Sorry, Horizon Matters Committee, thank you. 21 Q. If we scroll down to (d), you chair two further 22 subcommittees of the HMC. If we could carry on, please, 23 the HSS DRP Decision Committee, can you assist us with 24 what that is? 25 A. That's the Dispute Resolution Process, that's 10 1 a committee that oversees cases where we look at options 2 available to us to resolve cases which might be going -- 3 as it says in the statement, that might be going to 4 mediation. 5 Q. Thank you: 6 "Monthly, previously fortnightly, [Remediation 7 Committee] meetings." 8 At (g) wider Post Office governance committees 9 including the weekly Strategic Executive Group meetings. 10 Do you feel that you have sufficient time for all of 11 those and all of the other work that you carry out in 12 your unit? 13 A. No. 14 Q. Can you assist us with that, please? 15 A. There's a lot on. There's a lot to do. This is the 16 biggest miscarriage of justice ever in UK history, that 17 creates a lot of work, and I do spend a lot of time, 18 appropriately, in my view, in governance forums because 19 I use those to make decisions and guide my business 20 through extremely troubled times. 21 Q. Do you feel you have sufficient support, sufficient 22 staff, sufficient deputies? 23 A. Yes. 24 Q. How long do you feel you have had sufficient support 25 for: throughout your period? 11 1 A. Oh, in terms of sufficient support and the team around 2 me, yes, I feel I've had adequate support for some time. 3 Q. In her witness statement, and we've heard in oral 4 evidence, Karen McEwan commented that the sheer volume 5 of information and number of compensation schemes, and 6 their complexity, made it difficult for you to explain 7 to her all the relevant information. Is that something 8 you agree with or disagree with? 9 A. Can you repeat that, please? 10 Q. The sheer volume of information and the number of 11 compensation schemes and their complexity made it 12 difficult for you to explain to her all the relevant 13 information in her original briefing. 14 A. I apologise if that has come across that way and 15 I didn't realise that that -- I hadn't explained it 16 clearly enough to her. I think -- by their very nature 17 I think these are complicated. I think they are the 18 right thing for the postmaster, having said that. My 19 experience would say they're not -- from my experience 20 of other remediation schemes, complexity is what they 21 bring and, in order to ensure fair and reasonable 22 outcomes in a timely fashion to postmasters, sometimes 23 they will be complex. 24 Q. Before we turn to the specific schemes, I want to ask 25 you some broad questions about the administration of 12 1 those schemes and some themes that have come up 2 recently, before we took the break, in respect of their 3 administration. 4 A. Yeah. 5 Q. First of all, has it been the few of the organisation 6 throughout your involvement, that the schemes should not 7 be administered by the Post Office? 8 A. No, it has not been. I have a view, and I'm conscious 9 of the evidence that Mr Read gave as well -- which I, by 10 the way, conform to -- is when I was first interviewed 11 for this role, which would have been in 2021, back end 12 of 2021, I was interviewed for the role to head up what 13 was then called the Compensation Schemes and now Redress 14 Schemes, and I made it very clear to the interview panel 15 that, traditionally -- whatever traditionally means -- 16 that you wouldn't run a remediation scheme this way. 17 I was asked how you would run it and I was clear, 18 being the interview, that it would be completely 19 independent of Post Office. It would probably be part 20 of reporting to Government but there would be a way that 21 you could separate it and there was a danger of conflict 22 of interests, and it has to be separate from the Post 23 Office because you're judge, jury, prosecution, witness, 24 et cetera. 25 And the feedback I got directly from the Chief 13 1 Executive was that they sort of had been down that route 2 and had been -- had a clear direction from Government 3 that there was a degree of accountability here in that 4 the Post Office had committed these dreadful things -- 5 and, by the way, some dreadful things have been done -- 6 and, therefore, it was sort of feet to the fire time, 7 and you did it, you fix it. 8 I can go on further, and so, you know, I think it's 9 very clear, also from the operational agreement between 10 the Government and Post Office about how we operate the 11 schemes, I think clauses 5 and 6, is very clear as well 12 about -- that Post Office will be doing this, and Post 13 Office signed up to that operational agreement. So from 14 that point, the die was set and there was probably 15 little point in pushing against that because the 16 agreement had been settled. 17 Q. What was the view of Mr Read as communicated to you 18 about the appropriateness of the Post Office carrying 19 out those schemes themselves or administering the 20 schemes themselves? 21 A. Mr Read made it quite clear that he agreed with my point 22 and that he had said he had pressed Government on this 23 but had the response, "It's sort of feet to the fire 24 time, and you're accountable and therefore we are 25 looking to you to deliver the solution. But, obviously, 14 1 the Government will be extremely supportive, and provide 2 the important funding, and all the governance and all 3 the structure required in order for any redress schemes 4 to be a success". 5 Q. The Inquiry held compensation hearings dating back to 6 July 2022, April 2023. In your view, was that the 7 articulated position of the Post Office? 8 A. Apologies, what was the articulated position? 9 Q. Was the articulated position of the Post Office that it 10 would have been better for the Department for Business 11 and Trade to be administering and running those 12 compensation schemes? 13 A. The articulated position of the Post Office was clearly 14 embedded in the signed documentation under the 15 operational agreement that this is how these schemes 16 would be run. 17 Q. Do you think that a picture was or was not given that 18 the Post Office would prefer not to be administering 19 those schemes? 20 A. I have seen evidence that it's clear that Post Office 21 made their position clear to the Minister at the time 22 that they -- the Post Office viewed it would be better 23 and more -- more independent, although it is 24 independent -- it will be clearer and have more 25 transparency if Government were to operate the redress 15 1 schemes. 2 Q. That's the articulated position to the Minister. 3 A. Yeah. 4 Q. You've been present at compensation hearings in this 5 room. Do you think that that message has been 6 articulated to the Chair? 7 A. To Sir Wyn? 8 Q. Yes. 9 A. In those compensation hearings, I don't think so. 10 Q. Do you know a reason for that? 11 A. I think the reason for that, as I've said, and as say in 12 my statement, I think it's because the operational 13 agreement made it clear -- which Post Office signed up 14 to -- that the Post Office would be at administrating 15 and carrying out the redress schemes. That was 16 a commitment that they made. I have been in -- the 17 Select Committee in February asked me this question as 18 well. They asked me -- they made the statement that, in 19 their view, the redress schemes operated by Post Office 20 should be controlled by the Government. 21 I think the notes will show that I agreed with that, 22 and the Minister at the time was in the room, and 23 I know, subsequent to that meeting, we had a ministers 24 meeting literally the next week when myself and 25 officials from the Department were mandated to go away 16 1 and look at the opportunity and look at the possibility 2 of transferring the Post Office redress schemes into 3 Government. 4 Q. What happened to that? 5 A. That was called -- from a Post Office perspective, that 6 was called Project Green, and that's all documented, I'm 7 sure, in your evidence, you have seen some of that 8 articulation, and that was submitted to Government, it 9 would probably have been March/April this year and -- of 10 how we thought that could happen and, at the time, the 11 Government declined the opportunity to pursue that any 12 further. 13 Q. Thank you. Has there been any change to that situation? 14 A. I think there has, yes. 15 Q. To what extent and how? 16 A. In terms of there -- over recent weeks, there has been 17 some further engagement on that from the Government. 18 Q. Do you anticipate there will be a change to the 19 situation? 20 A. Well, you -- I think the Interim Chair was very clear 21 about his intentions, his wishes, in this space and 22 I know he has lobbied hard in Government around that, so 23 I do expect a change, yes. 24 Q. Could we please bring up onto screen the witness 25 statement of Mr Staunton, it's WITN11410100. Thank you. 17 1 If we could turn, please, to page 7, it's paragraph 14 2 I'd like to take you to. Mr Staunton's written 3 evidence, and reflected in his oral evidence, was as 4 follows, he says a few sentences down: 5 "As an outsider coming into the organisation (with 6 no prior experience of managing a company involved in 7 the prosecution of criminal offences), it seemed obvious 8 that exoneration was something that required proactive 9 consideration. But it became clear early on, that this 10 was not on the agenda. Instead, there were three 11 complex schemes for redress which only helped those 12 whose convictions had already been overturned or who had 13 not been convicted but nonetheless lost money (for 14 example by ploughing their own savings into the losses 15 wrongly calculated by the Horizon System). These were 16 administered, it seemed to me, in a bureaucratic and 17 unsympathetic way (particularly in relation to 18 overturned convictions), as evidenced by some of the 19 examples given elsewhere in this document." 20 Was that a view that Mr Staunton communicated to you 21 at all: that the schemes were administered in 22 a bureaucratic and unsympathetic way? 23 A. No. 24 Q. Did Mr Staunton have a conversation with you at all 25 where he was concerned that the Post Office wasn't 18 1 getting it right in terms of the attitude to 2 subpostmasters? 3 A. No. 4 Q. I'd like to take you to a couple more passages from his 5 witness statement, please. If we could turn to page 22. 6 Do you have any views as to the sentence that I've just 7 taken you to and your understanding of why Mr Staunton 8 may have said such a thing? 9 A. No. I had one conversation with that -- the past 10 Chairman. 11 Q. What was said in that conversation? 12 A. It was a meeting that I established to brief him up on 13 the redress schemes that the Post Office ran. 14 Q. Did he raise any concerns? 15 A. He raised a lot of interest but no concerns. 16 Q. If we could please have a look at page 22, paragraph 41, 17 he says at the bottom of that page: 18 "My impression was that there seemed to be little 19 recognition within the Post Office's Remediation Team 20 that we were looking at an injustice on an industrial 21 scale and that lawyers (both internal and external) made 22 issues overly adversarial. That is why I suggested to 23 Mr Read while I was chairman that the process be taken 24 out of Post Office's hands ..." 25 I'll take you to one more passage, 45(a), that's at 19 1 page 24. He says there: 2 "At my first Board meeting on 6 December 2022, there 3 was a discussion regarding postmaster repayments for 4 unreconciled losses. We were told there were some 77 5 postmasters who were currently repaying unreconciled 6 balances, despite advice that continuing to accept 7 repayment where cases had not been investigated was 8 a breach of an implied term in postmasters' contracts. 9 There was a concern from the Remediation Team that if we 10 notified postmasters and requested they pause payments, 11 we might be 'inadvertently stimulating claims against 12 an unfunded position'. The Board rightly felt that we 13 should do what was right and pause repayments, but the 14 fact that this was brought up at all indicated to me 15 that the culture of the Remediation Team was to try to 16 minimise claims." 17 Again, were those concerns that were brought to you 18 at all by Mr Staunton or anyone acting on his behalf? 19 A. Absolutely not, no. It seems to me that the phrase 20 "inadvertently stimulating claims against an unfunded 21 position", that is a risk that should be articulated in 22 a number of different governance documents. So to your 23 question, no, that wasn't -- Mr Staunton didn't talk to 24 me about that. 25 Q. Thank you. Can we please turn to POL00155397. What was 20 1 your relationship like with Mr Staunton? 2 A. Excellent. 3 Q. If we scroll down, please, this is an email that the 4 Inquiry has already seen and I'm sure you will have 5 looked at it, it pre-dates your time at the Post Office, 6 and it's an email from Mark Underwood. The subject 7 matter is "GLO Post Settlement [Group Executive] Paper". 8 We see there at the bottom of that page, so if we scroll 9 down slightly, the section on "Fees", it's, as I say, 10 something we've already looked at. He says there: 11 "My strong view is that you cannot seek payment from 12 applicants -- however small and regardless of the 13 rationale behind it. Optically this would be extremely 14 challenging and would be in a position that I believe 15 the business would struggle to maintain under political 16 and media pressure. I think you can achieve the same 17 desired outcome through having a very tight and clearly 18 communicated set of eligibility criteria and 19 requirements in terms of the documentation applicants 20 have to provide in order to be accepted into the 21 scheme." 22 You weren't there at the time but did you in any way 23 have the impression when you joined that the schemes 24 were set up to be intentionally bureaucratic? 25 A. No. 21 1 Q. Do you have a view as to what is said there and whether, 2 in some way, the eligibility criteria and requirements 3 were too narrow? 4 A. I've a very strong view. 5 Q. What is your view? 6 A. It's outrageous. 7 Q. What's outrageous? 8 A. To deliberately design, allegedly -- design eligibility 9 criteria that would be restrictive, I think that's -- in 10 terms of remediation, you just don't go there, you don't 11 do that. 12 Q. Having seen what you've seen over the number of years 13 you've been involved, do you have a view as to whether 14 that plan was, in fact, the rationale or something that 15 was actually put in place? 16 A. In terms of what is in place, I don't recognise that. 17 Q. In terms of what was in place on your arrival or before 18 your arrival, do you recognise that at all? 19 A. No. 20 Q. The Inquiry has also seen a document from 2020 where 21 Angela van den Bogerd suggests in 2020 that there were 22 too many fingers in the pie from Herbert Smith Freehills 23 and that that in some way delayed the process; do you 24 have a view on that at all? 25 A. I don't know what "fingers in the pie" means. I think, 22 1 if the interpretation of that is confusing matters and 2 elongating processes, I have to say, Herbert Smith 3 helped design the process, and it's a very difficult 4 process design to ensure full and fair redress in 5 a timely way. So I think they were helping Post Office. 6 So I think that's probably a bit unfair and, of course, 7 all legal advisers have to be instructed, and they are 8 instructed by the client, in this case the client is 9 Post Office. So I don't recognise fingers in the pie. 10 Q. I won't bring it up on to screen but, just for the 11 purpose of the transcript, that document is POL00293169. 12 How about Herbert Smith's involvement more broadly, 13 given that they represented the Post Office in the Group 14 Litigation towards the later stages; to what extent do 15 you feel it was appropriate or inappropriate for them to 16 design, for example, the HSS, Historic Shortfall Scheme? 17 A. So it was -- their appointment was well before my 18 appointment so I didn't -- I wouldn't have had a say in 19 that, and they are esteemed professionals in what they 20 do, they've got a track record of being able to do -- 21 build remediation schemes. I have no further comment 22 than that. 23 Q. Thank you. That document can come down, thank you. I'd 24 like to move on to the topic of taxpayers' money, value 25 for money, and the Department for Business and Trade's 23 1 funding. That's a topic that cropped up quite a bit 2 before we took our break. Can we please bring up onto 3 screen POL00458427, and if we could start, please, on 4 page 2. This is an email chain discussing development 5 of the Inquiry's hearing on compensation, Thursday, 6 27 April. It's dated 30 April. If we look at the 7 bottom of that page, we can see there some views from 8 you. You say: 9 "Indeed in the appropriate spirit of 10 collaboration -- on the basis of 'funds being no object' 11 within reason of course, I have asked that parties get 12 together online Tuesday to look at ... ways 32 weeks 13 could be brought down ..." 14 I think that's 32 weeks of disclosure in the GLO 15 scheme; is that correct? 16 A. That is correct. 17 Q. "... and the associated risks for Post Office Board 18 would need to consider within and without appetite. 19 This includes the potential for recruiting even more 20 people." 21 At that bullet point you say: 22 "As briefly discussed with you both on Thursday, it 23 appears that less the contract being finalised between 24 us on GLO disclosure is signed up by Wednesday this 25 week, due to [the Department for Business'] identity 24 1 change to DBT, this will be kicked down the road for 2 a considerable amount of time meaning Post Office will 3 have to work [I think that must be 'at risk'] for 4 an unacceptable period of time." 5 We see the phrase "work at risk" in a number of 6 places. Does that describe a situation where the Post 7 Office is having to fund these schemes without knowing, 8 in fact, whether the Government will step in and be 9 funding them themselves? 10 A. In terms of the formality of the documentation, yes, 11 correct. 12 Q. If we scroll, please, to the first page and the bottom 13 of the first page, we see there an email from Mr Read to 14 Lorna Gratton and he says as follows, about halfway 15 through that email chain: 16 "I always refer to David Bickerton's observation 17 that no one will be criticised for paying too much 18 compensation to postmasters ... however everyone will be 19 slaughtered if we continue to 'nickel and dime' on legal 20 fees, admin costs, compensation itself and a convoluted 21 and complex process ... see today's article in The 22 Times. 23 "I won't allow this to happen as my job is to 24 protect the brand, ensure timely compensation is paid 25 (and speedy justice delivered) and that trust in the 25 1 Post Office is not completely eroded through this torrid 2 period. 3 "I hope we can work together on helping [the 4 Department for Business and Trade] break the mould and 5 understanding that managing public money is not simply 6 about limiting spend and reducing cost, it is also about 7 the effective and efficient use of funds. I fear they 8 are missing this vital ingredient." 9 If we scroll up, we see a response from Mr Staunton. 10 He says there in the first paragraph: 11 "No corporate would allow this to fester as much, 12 which is why you are right to quote David Bickerton's 13 observation that managing public money is only one 14 ingredient of this exercise." 15 Before I turn to a question, I'd just like to show 16 you one other email chain, and that's between you and 17 Mr Cameron. That can be found at POL00423920. It's the 18 second page -- the bottom of the first page into the 19 second page, sorry. We see there an email from you to 20 Mr Cameron, 14 May last year. You say there: 21 "I get the urgency that we really do need to get on 22 with this as the clock is ticking, the judgment is 23 pushing 4 years and victims of detriment are not getting 24 younger. If it helps we are paying away in Detriment A 25 with some momentum." 26 1 A little further down, it says: 2 "The funding request went into [the Department for 3 Business] many months ago, has just been through DBT, is 4 with [Her Majesty's Treasury, His Majesty's Treasury], 5 is due an additional governance layer and expected to 6 emerge now July earliest -- more likely September 7 earliest due to the usual nonsense of summer breaks etc. 8 "If you believe we should start communicating and 9 settling prior to funding being formalised, better 10 people than I can advise, but my understanding is that 11 is a call for [the Post Office] Board (clearly with 12 government representation) who are obliged to look after 13 the interests of Post Office to consider associated 14 risks including potentially wrongful trading as the 15 Board would have to be comfortable that any liability 16 would be covered by funding/support -- but you know 17 this, apologies." 18 In terms of wrongful trading, was there a concern 19 within the Post Office that, because you hadn't secured 20 Government funding and were having to fund the schemes 21 yourself, there may be an allegation or even an offence 22 that's being committed by the Post Office? 23 A. Continually. For my entire tenure this has been 24 an issue about the potential for wrongful trading and, 25 therefore, as a commercial, separate legal entity, the 27 1 Board have to act on behalf of Post Office and, 2 therefore, they have to be advised of the risks of 3 potential wrongful trading. Therefore, without formal 4 letters of comfort in place, as the lawyers would say, 5 then that is a risk that the Board will have to accept 6 and, because of the way the construct of the Board is, 7 there is potential personal liability there and that is 8 why they have to be appropriately legally advised about 9 the risks of wrongful trading and the implications on 10 the Board and Post Office and then as individuals. 11 Q. Thank you. If we scroll onto the first page, we see the 12 response from Mr Cameron. He says: 13 "In that context, our position on wrongful trading 14 has changed in the [business as usual] business. We are 15 delivering NBIT without sufficient funding and without 16 thinking we are wrongful trading because of HMG policy, 17 statement of intent, support letters etc. Personally 18 I cannot distinguish the position from our position on 19 remediation schemes." 20 So it seems there was also a concern about wrongful 21 trading in respect of the NBIT scheme? 22 A. Correct. 23 Q. He says: 24 "I am not saying therefore that we can rush off and 25 do whatever we like, simply that the position is less 28 1 clear cut than we thought. 2 "But my main point is that the day after getting 3 funding or deciding we cannot wait, we should be ready 4 to progress all 14 workstreams as appropriate with the 5 postmaster community AND be asking for 'any others' at 6 the same time, so it is clear to everyone we are 7 pursuing justice with all the speed at our disposal. If 8 that's the plan, great. But I don't get the sense that 9 it is and honestly I think we will come a cropper." 10 He says: 11 "That is the point I would make at the Board if I am 12 there or you would be kind to make on my behalf: no 13 criticism and no need to defend. Just speed for the 14 future. And if [His Majesty's Government] doesn't like 15 it, we need to have an argument." 16 Thank you. That can come down. 17 I'm going to take this in a number of parts. First 18 of all, to what extent, if any, has a focus on managing 19 public money or value for money slowed down or impacted 20 negatively on compensation: so the value for money or 21 the managing public money aspect? 22 A. Well, I think there's a danger of two issues being 23 conflated here. If I may answer that in maybe 24 a slightly different way, and if it doesn't, please come 25 back to me, is I don't think we should be confused about 29 1 the amount available for redress and the impact of value 2 for money on that, which, in an operational sense 3 I don't see any restrictions or value for money debate 4 around the amount of redress available for payment. 5 I want to make that clear. I know this is something 6 that Sir Wyn asked a question of a previous witness 7 about. 8 So in terms of the £1.4 billion provision available 9 for redress in the Post Office redress schemes, that is 10 sacrosanct and I don't recognise any value for money 11 debate around that and, certainly, the terms of 12 references for the independent panel in HSS and the 13 independent panel on the OC, there is no restriction in 14 there about amounts, or there's no debate about value 15 for money, there is nothing about this is taxpayers 16 funds at all; this is what is a fair and fulsome 17 response to this, in terms of the amount of redress. So 18 I don't recognise a value for money debate in redress. 19 Where I do recognise a value for money debate and 20 officials reminding me and my team on a regular basis 21 around we need to manage public money appropriately, and 22 there are plenty of Green Papers that say more about it 23 than I can, then that a consistent conversation with 24 Government with me and others, but that's more around 25 the process designed to release those redress funds: so 30 1 is there a value for money debate challenging whether 2 that is an appropriate process; are there more efficient 3 ways of doing it; can you find cheaper lawyers -- dare 4 I say that in this forum -- et cetera; then that is 5 a consistent challenge. 6 Now, if that's a value for money debate, then 7 I understand that. But it's not about the redress; it's 8 more around the processes established to release that 9 redress. I hope I'm making some sense. 10 Q. Yes, I mean, we saw in that email from Nick Read, he 11 said, "We'll be slaughtered if we continue to 'nickel 12 and dime' on legal fees, admin costs," and then he said 13 "compensation itself"? 14 A. Yes. 15 Q. Is it your view that, when it comes to compensation 16 itself, there is or is not consideration of managing 17 public money, value for money, value for the taxpayer? 18 A. It's my strong view that there is not a value for money 19 debate around the amount of redress that is paid out. 20 Q. In respect of the test that is applied when calculating 21 an amount to be given to an individual, is there any 22 consideration of that? 23 A. In terms of the independent panels, there is no 24 reference to that for a consideration at all, in their 25 determinations. 31 1 Q. I said we'll take it in stages. So that was the 2 managing public money aspect. To what extent, if any, 3 has the Department for Business and Trade's delay in 4 authorising, or their bureaucracy, slowed down or 5 impacted negatively on compensation? 6 A. I don't know whether I can put a value on that. You 7 know, the Government have a process to follow in order 8 to release funds to make processes available, and the 9 process is the process, in that the DBT, Department for 10 Business and Trade, do not have oodles of cash, and nor 11 should they, waiting for Post Office to apply to fund 12 redress schemes. 13 They have a process they need to go through. They 14 need to see a business case to justify that spend. They 15 then need to analyse that, they need to understand that 16 and then they need to go to Treasury. They have their 17 own process, it's absolutely tried and tested. 18 My challenge around this has always been it's very 19 difficult to articulate a process that nobody has ever 20 done before. This is the biggest miscarriage of justice 21 ever and my frustration has been around the whole 22 process, and the Government know this, you've seen all 23 my emails, is that we're trying to squeeze a non-BAU 24 process in -- business as usual process into a business 25 as usual process and this breaks the mould. 32 1 As I keep on saying, this is the biggest miscarriage 2 of justice ever and to be redistribution agreement by 3 a -- and there are good reasons for it, that I'm not 4 arguing against those -- there are good reasons for it 5 to make sure it's fit and proper and set up 6 appropriately to understand that. But that can be 7 restrictive, and that process takes months. And, during 8 that process, quite understandably and reasonably, you 9 get lots of questions back around "Don't understand how 10 you get to that number. How do you justify that? 11 Please explain this", and that's absolutely fine, you 12 have to look at your business case for that. But that 13 whole process -- the process takes its time, it takes 14 its time in terms of the process it needs to go through. 15 Q. In that exchange with Mr Cameron, for example, where 16 you're discussing concerns about wrongful trading, 17 concerns about the delay in funding and those kinds of 18 matters, and that's 2023, the summer 2023, to what 19 extent have delays been built into the system because of 20 that process? 21 A. We never -- you never build any delay into a system. To 22 be clear, what Mr Cameron is talking about is redress 23 schemes outside the terms of reference for the -- my 24 understanding is these are schemes non-Horizon related, 25 and they -- but they follow the same process in terms of 33 1 getting funding. So you call it "delay", that was your 2 word. I don't necessarily call it delay. I just say 3 that's the process, that's the time it takes. But did 4 it stop the launch of those programmes until that was in 5 place? Yes. 6 Q. We heard suggestions from Mr Staunton about needing to 7 hobble up until after the next election, in terms of 8 compensation -- the election that's recently happened. 9 Was that something that was ever been mentioned to you? 10 A. No. 11 Q. From your experience, is that something that is likely 12 or unlikely to have happened? 13 A. If I was asked to do it, I wouldn't be here. 14 Q. So you were never asked to do it. Is it something that 15 is likely to have happened or not, in your view? 16 A. That would be speculation and I can't speculate. This 17 is a public inquiry. I can't speculate. I think it's 18 highly unlikely. 19 Q. You have funding, I think you've said in your witness 20 statement, committed to 31 March 2026; is that correct? 21 A. Sorry, what is committed to 31 March? 22 Q. Funding from the Government for the compensation 23 schemes. Do you ever a definitive period in which 24 funding ends or funding has been agreed to? What is the 25 current -- 34 1 A. Apologies. I do, but I can't recall it. 2 Q. Are you able to say anything in respect of the amount of 3 funds that has been recently announced as part of the 4 budget? 5 A. The -- do you refer to the 1.8 billion? 6 Q. Yes. 7 A. I can only assume -- and it is an assumption, please, it 8 is an assumption, I know nothing about it at all. All 9 I -- I know what my provision is. I know my provision 10 for the compensation scheme, the redress schemes that 11 I look are in Post Office, the four, I know the 12 provision for that is 1.4 billion. 13 Q. Is that going forward or is that taking into account 14 sums that have already been spent? 15 A. So I can help the Inquiry if it helps -- 16 Q. Yes. 17 A. -- there as well. So that is -- that includes -- so far 18 as of last week, across all the schemes that I operate, 19 we have paid out in redress 302 million. We have now 20 a financial projection of what that figure is going to 21 look like going forward, and there is clear acceleration 22 in there. There has been acceleration and I'm happy to 23 share the numbers with the Inquiry -- there has been 24 acceleration over the last six months, significant 25 acceleration of those numbers -- and by March 2025 -- 35 1 there are a few caveats of traction from postmasters, 2 et cetera -- that 302 million will exceed 650 million by 3 March 2025. Then, in the financial year '25 to '26, we 4 anticipate paying a further 500 million redress. 5 Q. So looking at the sums that have recently been promised, 6 do you think there is sufficient funding to cover all of 7 those schemes that we have been looking at already this 8 morning? 9 A. I do. 10 Q. Thank you. I'd like to turn, then, to the Horizon 11 Shortfall Scheme, and I think we'll go probably beyond 12 the first break just focusing on the Horizon Shortfall 13 Scheme. It was previously known as the Historical 14 Shortfall Scheme. Can you assist us with why the name 15 changed and whose idea that was? 16 A. It was feedback and I apologise to all the postmasters 17 for it. It was feedback from Lord Arbuthnot, actually, 18 when I met him and Lord Beamish, and he reminded me that 19 the term "historical" was offensive to postmasters 20 because, as we know now, you know, this is very much 21 a live issue now and it's not historical at all. And 22 he -- with clear direction, he suggested that I go and 23 consider the word "historical" and we just took it out 24 of everywhere, and I apologise to the postmaster 25 population for it. 36 1 Q. Thank you. You've addressed this scheme in your sixth 2 witness statement in particular and I'll be taking you 3 to references within your sixth statement. It was 4 launched on 1 May 2020, following the Group Litigation 5 and the conclusion of that; is that correct? 6 A. Correct. 7 Q. I'd like to look at the Inquiry's YouGov survey, and 8 that can be found at EXPG0000007, and it's page 48 of 9 that report. If we scroll down, please, we see a chart 10 there, figure 35, "Perceptions of applying to the 11 Scheme". These were answers given on a base of 1,483 12 current applicants or applicants to the Historical 13 Shortfall Scheme and you can see there, in terms of 14 understanding the scheme, there is a lot more red than 15 there is purple 47 per cent net hard, they found it hard 16 understanding the scheme. In terms of completing the 17 paperwork, again, a significant number who found it hard 18 completing the paperwork: 26 per cent there very hard. 19 What is your view about those figures? 20 A. Apologetic. 21 Q. Do you understand them? Do they take you by surprise? 22 A. No, they don't take me by surprise and I do understand 23 them and that's why we have completely redesigned the 24 application form for the recent -- with the mailout that 25 we've just started. 37 1 Q. How recently has that taken place? 2 A. So that was a week and a half ago, we started -- well, 3 this is all about the -- sorry, this all about the 4 £75,000 fixed sum offer, and the last cohort of that 5 population that we have now started to mass mail, and we 6 started that a week and a half ago. And we are now 7 ramping up the numbers in terms of that mass mailout, 8 and we have been mailing 30,000 past and current 9 postmasters with the opportunity to apply for the HSS 10 scheme, if they have not already. 11 Q. Is it your evidence that that the information in 12 relation to that scheme, and also the application form 13 itself, have been simplified? 14 A. Absolutely, and they're also available online as well. 15 Q. I'd like to turn to eligibility for the HSS scheme. 16 That's addressed in eligibility criteria. Perhaps we 17 could bring those onto the screen, that's POL00448027. 18 We have there the "Eligibility Criteria". First: 19 "You must have, or have previously had, a contract 20 directly with the Post Office ... 21 "[Second] Your application must relate to shortfalls 22 which arose in respect of previous versions of Horizon 23 ... 24 "[Third] If you are making an application on behalf 25 of another person, you must be a legally appointed 38 1 assignee, personal representative, attorney or deputy of 2 the person you are making an application on behalf of 3 ... 4 "[Fourth] You must agree to be bound by the Terms of 5 Reference for the scheme ... 6 "[Fifth] Your application and time with Post Office 7 must not involve or relate to any criminal conviction(s) 8 ... 9 "[Sixth] You must not have been part of the Group 10 Litigation against Post Office that settled in December 11 2019." 12 Can we please return to your sixth witness 13 statement, that's WITN09890600, and page 52. 14 Paragraph 159, you say at the top there: 15 "When compared to previous years, 2023-2024 has seen 16 an increase in the number of applications being deemed 17 ineligible, whilst the ... terms have been unchanged." 18 We see that there in a chart, if we scroll down 19 slightly. So the increase, I think, that you're 20 referring to can be seen by that blue nine; is that 21 correct? 22 A. Yes. 23 Q. The blue line there has increased significantly in 24 relation to non-represented applicants in 2024. Do you 25 know or do you have any view as to why that might be? 39 1 A. I mean, it says in my paragraph 159: 2 "The data itself does not provide a clear 3 explanation for this trend, [but] it is worth noting 4 that the 2020 mailing was targeted in nature and 5 intentionally excluded postmasters known to fall outside 6 the eligibility criteria." 7 So the mailing in 2020 was a lot more focused on 8 people who we thought were eligible. Since then, it's 9 been a lot wider and, therefore, you would expect more 10 to be ineligible. 11 Q. Because, I mean, for example, we had the ITV drama in 12 early 2024: might there be some relationship between the 13 number of ineligible claims there to have risen in early 14 2024? 15 A. I'm very grateful for the TV drama to raise interest, so 16 the more volumes you get then the more likelihood there 17 are cases that are eligible. Yes, that's the logic. 18 Q. Is that the likely explanation for that peak? 19 A. I wouldn't say that. The peak in activity, absolutely, 20 is a result of the ITV drama. But I can't -- I'm not 21 going to speculate about whether that's the reason for 22 more ineligible applications. 23 Q. If we could scroll down, please, we can see the time 24 that is taken. If we keep on scrolling on to the next 25 page, page 53, there's a table there that sets out the 40 1 days from application to eligibility confirmed, split by 2 legally represented and complainant complexity. It 3 seems there, from 2020 we can see, for example, those 4 who were represented in complex cases in 2020, 5 eligibility decisions took somewhere between 450 and 500 6 days to determine. Can you assist us with why it took 7 so long? 8 A. The original focus would be on cases we could get 9 through more quickly because they were more complex 10 cases. We were conscious of time and because they were 11 complicated they took more time to assess -- and for 12 eligibility. They're more complex cases. 13 Q. Does that simply reflect the fact that in 2020 there 14 were a large number of claims being filed? 15 A. All cases. 16 Q. Applications being filed? 17 A. Yes. 18 Q. Yes. We don't see that in 2024. Is it possible we 19 might see that in a slightly later chart or has that 20 issue now been taken care of? 21 A. We try and learn our lessons -- I hope this is clear to 22 the Inquiry -- and the lesson there was that we needed 23 the right resource in the right place, and that's what 24 we did: we put the right resource in the right place. 25 And therefore, I am hopeful that we continue with that 41 1 modelling going forward and, therefore, we will have 2 a better process, a more efficient process going 3 forward. 4 We have to take into account the expectation in the 5 HSS is that in a significant portion of new claims 6 coming in, following the mass mailing and following the 7 exercises we go through at the moment, a huge proportion 8 of those will be under 75,000 and there is a completely 9 different quasi-automated process around that, which 10 will make the eligibility check and the payout a lot 11 quicker. 12 Q. Can you assist us with why it might be that eligibility 13 decisions on represented applicants seem to take longer 14 than for those who are not represented. 15 A. I don't know. 16 Q. I mean, in 2020 and 2022, in particular, very 17 significant differences between those who are not 18 represented and represented; can you give us any idea as 19 to why that might be? 20 A. I would be speculating and I'm not here to speculate. 21 I think the legal advisers do a very good job in terms 22 of ensuring that their clients apply for the appropriate 23 levels of compensation. 24 Q. But eligibility doesn't have -- 25 A. Yes, eligibility -- 42 1 Q. -- anything to do with the level of compensation. 2 A. No. 3 Q. So can you assist us with why it might take longer to 4 process just simply the question of eligibility? 5 A. No, I can't. 6 Q. If we look at the paragraph below, you say: 7 "Of the 3,427 applications that [have been] 8 completed Eligibility assessment on 31 May 2024, there 9 are 3,194 (93%) confirmed as Eligible and passed to the 10 next stage to the process." 11 If we scroll up and see that chart again, so you 12 have a 93 per cent current success rate in terms of 13 eligibility. Is that likely also to have been the case 14 earlier on and, if so, was there something going wrong 15 that it took so many days to process applications that 16 have such a high rate of eligible applications? 17 A. They took a long time to get through eligibility because 18 the scheme hadn't started. Because, although the scheme 19 opened in May 2020, of course, we didn't have funding in 20 place, and the scheme didn't actually operate until 21 after funding came in. So the clock will be ticking. 22 So those checks would probably have not started 23 happening until funding was put in place, which I think 24 was March 2021. 25 Q. But even in 2022, we see -- 43 1 A. Yes. 2 Q. -- those two cases, those two charts, bars, that are 3 between 250 and 300 days just to confirm eligibility. 4 If you have such a high rate that are confirmed as 5 eligible, why is it taking so long or why was it taking 6 so long to confirm eligibility? 7 A. That would have been the result simply of volumes going 8 through. 9 Q. Of what, sorry? 10 A. Of volumes going through at the time. 11 Q. But I think we saw that the PEAKs in volumes, or we will 12 see, were quite early on and then again in 2024. 13 I don't think 2022, for example, was a particularly busy 14 year in terms of applications, was it? 15 A. No, but we were still dealing with the original cohort 16 of 2,500 that came in so they had to go down through the 17 process. So in -- given the funding was not in place 18 until March 2021, the scheme wasn't properly productive 19 until the end of 2021. 2022 was the -- effectively the 20 year when most of the work was done and, if you look at 21 the targeting that we delivered in 2022, you can see 22 when the offers went out, and 94.5 per cent of those 23 offers were actually issued by the end of 2022. 24 Q. Thank you. If we look at 2024, on this chart we can see 25 that the average days from application to eligible, it's 44 1 over 50 days waiting for an eligibility decision. If we 2 see below, it says that 93 per cent confirmed as 3 eligible. Might it not be easier, or possible to design 4 a quicker system, given the high volume or high 5 percentage that are or confirmed as eligible? 6 If, overwhelmingly, most are eligible, why must it 7 take over 50 days to confirm that eligibility? 8 A. I don't think you can link the two. We are required, 9 for funding purposes, to ensure they are eligible, so we 10 have to go through a check. If the challenge is more 11 around why does it take 50 days and can't you do it 12 quicker, that is a fair challenge. 13 Q. Yes, and what do you say to that challenge and how can 14 that be overcome? 15 A. And in -- we have -- as I said earlier, we have 16 completely redesigned the process for the vast majority 17 or anticipation of the vast majority of claims of under 18 75,000, and the eligibility is a very -- very much 19 slicker and quicker process and it will not take that 20 amount of time. 21 Q. If we could bring up on to screen your eighth witness 22 statement? 23 SIR WYN WILLIAMS: Before we do that, Mr Blake -- this is 24 just me being curious, if you like, Mr Recaldin -- but 25 in the year 2021, there appears to be no represented 45 1 claimant looking at the chart that we're currently 2 looking at, which seems a little odd to me. 3 A. I think, if I may, Sir Wyn, I think that might be down 4 to the fact that we weren't taking any new ones in. 5 Until it was confirmed that we were allowed to take in 6 late applications, we effectively had the original 7 cohort of 2,400 there waiting to be processed. They 8 were submitted in 2020. 2021 was a year of building the 9 scheme and getting funding in place, agreeing the 10 principles and going through the governance. So, 11 effectively, I could understand why no applications 12 would be -- no represented would have been submitted 13 during that period. 14 MR BLAKE: It looks as though at least some were -- 15 A. Yes, some were -- 16 Q. -- but not -- 17 A. -- but not represented ones, yes, which is Sir Wyn's 18 point. 19 SIR WYN WILLIAMS: Yes, all right. Fine. I'll have to keep 20 my curiosity in abeyance for a little while. 21 MR BLAKE: Could we please bring up on to screen your eighth 22 witness statement WITN09890800. If we could go to the 23 chart, please, on page 4. Thank you. That sets out the 24 number of applications that have been determined as 25 eligible and ineligible. At the point at the time of 46 1 writing this witness statement, you had 373 applications 2 determined as ineligible, I think that has now risen to 3 397; is that correct? 4 A. If that's the number I've submitted, yes. 5 Q. I will take you to the new chart shortly? 6 A. Yes, if that's the number I've submitted, then that's 7 fine, yes. 8 Q. Yes. You've said in this statement or in the other 9 statement that you can't say how many have challenged 10 that decision; is that correct? 11 A. Correct. 12 Q. Are you able to give us an indication as to how many, 13 whether it's a handful, tens, hundreds, or something 14 else? 15 A. Handfuls. If any. I'm not aware of any. If there are, 16 I would be made aware, and I'm not aware of many, but 17 maybe a handful. No more than that. 18 Q. So there are some that you are aware of -- 19 A. Yes. 20 Q. -- who have challenged that decision? 21 A. Correct. 22 Q. Can you assist us with whether some of all of those were 23 subsequently determined to be eligible? 24 A. I think all of them were. 25 Q. In terms of legal representation, were all of those 47 1 cases involving individuals who were legally 2 represented? 3 A. I don't know but I don't think any of them were legally 4 represented. 5 Q. Can you assist us with what might have changed the 6 situation regarding their eligibility: was it about 7 provision of more information or something else? 8 A. Yeah, correct. They would have been asked for more 9 information, they clarified a piece of information. 10 Q. Thank you. One question is about branch assistants and 11 branch managers. Why aren't they included? Why are 12 they ineligible for the Historic Shortfall Scheme? 13 A. Because they're not funded, because they're not included 14 in the funding arrangements for Government. 15 Q. I'd like to take you to a number of documents addressing 16 this but, when you say they're not funded, what is their 17 redress? 18 A. So they -- they didn't have a direct, my understanding 19 is they did not have a direct contract with Post Office 20 and, therefore, that excludes them from the HSS scheme. 21 Now, I can only -- my understanding of how things may 22 happen, and of what I've seen happen, is that, if 23 an assistant of a postmaster suffered a shortfall and, 24 as a result of that, maybe dipped into their own savings 25 or whatever they did in order to satisfy that but kept 48 1 the postmaster aware, but -- and the postmaster was 2 clear that that's what the assistant had to do, then 3 they are -- that individual is still -- is not eligible 4 to apply but the postmaster has applied, effectively, on 5 their behalf and we have managed to resolve it that way. 6 But from a formality of the scheme, those assistants are 7 not eligible. 8 Q. Can you see a problem with that? 9 A. Yes. 10 Q. What do you see as the problem with that? 11 A. So I can see there are potentially assistants or 12 postmasters who may have suffered, may have been forced, 13 in a way, to make good, and are still out of pocket, 14 effectively. 15 Q. Can you also see an issue for subpostmasters in that 16 respect, that, having received redress, they might 17 themselves become the subject of litigation by those who 18 worked for them -- 19 A. I am -- 20 Q. -- if the only route of claim is via the subpostmaster. 21 A. Yes, I am aware of that but I'm only -- of that risk, 22 but I'm only aware of two cases where that has actually 23 happened. 24 Q. What has happened in those cases? 25 A. They've -- they have both been resolved satisfactorily 49 1 directly with the postmaster. 2 Q. Can you see a potential significant issue, therefore, 3 for those subpostmasters who had assistants and managers 4 who themselves were out of pocket and who can't claim 5 under the Historic Shortfall Scheme or, it seems, any 6 other scheme? 7 A. I have empathy and sympathy with that, and I can only 8 assume that those considerations were made when the 9 scheme was established. 10 Q. Have there been efforts on behalf of the Post Office to 11 try to change that situation? 12 A. There has been representations to the Government around 13 that and I know that is something the Government are 14 considering and have considered in the past. 15 Q. They've -- well, we'll go through the emails, or some of 16 the emails. Has it been explicitly rejected in the past 17 by Government? 18 A. Yes. 19 Q. And how much confidence do you have that that situation 20 will change? 21 A. Ooh, um, I know it is under consideration now. 22 Government officials have advised me that it's under 23 consideration by the Minister. 24 Q. I'll take you then quickly then through these documents 25 because they may simply say what we've just been 50 1 discussing, but we'll start with UKGI00031750. This is 2 correspondence from September 2020, from Melanie 3 Corfield. If we scroll down, there's an exchange 4 between the Post Office and the Department for Business, 5 and she says as follows: 6 "I have not yet heard back from [I think that's 7 Herbert Smith Freehills] but essentially it is only 8 those with contracts with the Post Office who could 9 potentially be held liable by the Post Office, not those 10 they employed." 11 That is the justification for that limit. It says: 12 "Background: The scheme was open to people/companies 13 who had or have a direct contract with the Post Office, 14 including multiples. It is only people with such 15 contracts who would potentially have been held liable by 16 Post Office for shortfalls. Assistants of postmasters, 17 or employees of other companies who had no contract with 18 Post Office would not therefore be eligible, ie they had 19 no liability to Post Office. Claims in the scheme will 20 be assessed by the Independent Advisory Panel using 21 information available and in accordance with recognised 22 legal principles ... 23 "Line to take: postmasters and companies who had or 24 have a direct contract with Post Office, and therefore 25 could have been held liable for shortfalls, were 51 1 eligible for the scheme -- multiples were included and 2 could apply. Claims can include consequential loss. 3 Employees of other organisations with no direct contract 4 with Post Office would have had no liability to Post 5 Office and would need to resolve any issues they had 6 with their employer." 7 It's that final sentence, really, that seems to 8 suggest that, if a manager or an assistant of 9 a postmaster suffered detriment as a result of 10 shortfalls from Horizon, they would have to take that up 11 with the subpostmaster themselves; is that correct? 12 A. That is. Would you mind just paging down because 13 I don't want -- there are two issues potentially that 14 could be conflated here. 15 Q. Absolutely. 16 A. You're absolutely right in that, but I think this email 17 may be about what we call strategic partners -- and 18 sorry for the additional jargon -- where we have 19 strategic partners who have a -- run a number of post 20 offices. 21 Q. Yes, and that's something that I'll come to shortly. 22 A. Okay, okay. 23 Q. If we stick at the moment with just managers and 24 assistants, perhaps we could turn, please, to 25 BEIS0001093. Can you assist us with what this is, the 52 1 "Quarterly Monitoring Meeting"? 2 A. It is what it is. 3 Q. Who does that involve: that's between the Department for 4 Business and the Post Office? 5 A. Yes, of course I can. This is an extremely important 6 meeting, quarterly, as it says, that was between the 7 Post Office and Government. It's chaired by Government, 8 by POL -- Department of Business and Trade, and it's the 9 sort of formal Government overview, a shareholder 10 overview, of the Post Office activity during that 11 quarter. 12 Q. Thank you. This one took place on 7 September last 13 year. If we please turn to page 4, "SR", I think, is 14 a reference to you, and it says: 15 "SR also highlighted that [Post Office] had received 16 the first claim where a postmaster had waived their 17 right to claim and assigned this to an assistant. [You] 18 explained that a paper was due to go to HMC ..." 19 Is that HMC; can you assist us with HMC and the 20 acronym there? 21 A. Horizon Matters Committee. The one I chair. Horizon 22 Matters Committee. 23 Q. Thank you: 24 "... on this issue as it would mean a change in the 25 terms of reference, and eligibility criteria." 53 1 Can you assist us: was there a change to the terms 2 of reference and eligibility eligible criteria? 3 A. My recollection is there was not. 4 Q. Can you recall this case at all or any like them where 5 a postmaster was able to assign their claim to 6 an assistant? 7 A. I cannot. 8 Q. Could we please turn to POL00448861. We're now in March 9 2024, and this is a Board meeting and a Board report. 10 Thank you very much. If we could please turn to 11 page 43. Actually, if we turn to page 31 first, you can 12 just see that it's a Board report. 13 It should be 31. If we perhaps go over the page, 14 there we go, there's the Board report, that's where it 15 begins. I'd like to ask you about paragraph 83, that's 16 at page 43. It says there: 17 "Late applications continue to come in, coupled with 18 enquiries about the HSS from current and former 19 postmasters, branch employees and strategic partners. 20 For now, [the Post Office] continues to decline HSS 21 applications from assistants/employees since the HSS 22 eligibility criteria requires applicants to have held 23 a direct contract with [the Post Office]." 24 So are we right to understand from those documents 25 that we've just seen that in September last year, there 54 1 was consideration given to changing the eligibility 2 criteria in some way but there has been no change -- 3 A. Correct. 4 Q. -- and, if so, can you assist us with why there has not 5 been a change? 6 A. The -- just the eligibility criteria hasn't been changed 7 since it was originally established. The process of 8 determining eligibility has become more efficient and 9 will become more efficient, but the eligibility criteria 10 have not changed. 11 Q. If you were a manager or an assistant, how would you 12 know what your rights were or how to make a claim for 13 the detriment that you have suffered? 14 A. Well, you would seek -- you could seek legal advice. 15 You could go to the website to understand whether or not 16 you will be eligible and, from there, you will see that 17 you were not eligible -- 18 Q. Yes. 19 A. -- because you do not have a direct contract with the 20 Post Office. 21 Q. So how would you go about getting redress for a serious 22 matter that has affected your life? Perhaps you lost 23 your job, perhaps you lost your savings, perhaps you had 24 to fill the till with your own money because there were 25 shortfalls: how would you, as an assistant or manager, 55 1 go about claiming any redress? 2 A. So you -- I would go and speak to the postmaster, who 3 ultimately ran that, and understand the situation from 4 their perspective. That's what -- and I might go and 5 get legal advice. 6 Q. Do you think it's fair to put that burden on the 7 postmaster who may themselves have suffered shortfalls, 8 whose lives may have been impacted? 9 A. The point is, yes, clearly, but they didn't have 10 a contract with the Post Office, and the scheme is 11 designed -- it's clear -- that the eligibility criteria 12 is that they had to have a contract with the Post 13 Office. Their contract was with the postmaster. 14 Q. Can I just clarify, when you said "yes, clearly", do you 15 mean -- 16 A. I have empathy to the situation that -- and I completely 17 understand it and have empathy to that. 18 Q. Going forwards, having discussed that today, do you 19 think you would press for a change, or not, to the 20 eligibility criteria, or for some other form of redress? 21 A. Ultimately, that's a decision for the Government to 22 make. The Government provide the funding for the 23 scheme. 24 Q. But as somebody who is head of the unit that runs some 25 of the schemes, for somebody who liaises with Government 56 1 as to funding, what is your position, and what would be 2 your communication to the Government about those 3 employees and those managers? 4 A. My position is completely understandable -- 5 understanding of the position those postmasters' 6 assistants find themselves in. I believe it's my -- my 7 personal view is that I need to understand the risks 8 associated with being able to open up that scheme wider, 9 in order to incorporate the significant number of people 10 that might come in as a result of that. And some of 11 them may have already been satisfied and some of them 12 may not have been. 13 And my -- I think I've made it pretty clear to 14 Government what my view is and I think that's one of the 15 reasons -- not my view but I think these considerations, 16 it's exactly what the Minister is currently considering. 17 Q. I think you've said already in terms of the new funds 18 that have been allocated that they will be sufficient. 19 Do you have a view as to whether they will be sufficient 20 if the schemes involved employees and managers? 21 A. So forgive me, I didn't say they were new funds. They 22 have always been in existence those funds. 23 Q. The funds that were committed as part of the recent 24 budget? 25 A. Correct, and my understanding, if the scheme was opened 57 1 up to assistants and people without contracts directly 2 with Post Office, a significantly larger provision would 3 be required. 4 Q. Larger than has already been promised? 5 A. Correct. Not promised: that provision has been 6 delivered. 7 Q. Thank you. So the announcement in the recent budget, 8 that amount has already been delivered? 9 A. So I had known that that funding for redress payments 10 has been available for some time, and it changes as our 11 modelling changes. As we get more experienced with the 12 schemes, we can anticipate with greater accuracy what 13 those redress payments are going to look like across all 14 four schemes. And we engage with Government 15 continuously on those projections and, therefore, they 16 adjust provisions, et cetera -- along with the Finance 17 Team, adjust accordingly. 18 So forgive me, I don't want the Inquiry to be under 19 the impression that the £1.4 billion has any just 20 materialised. This has been number that was growing and 21 established some time ago, well before I came to Post 22 Office. So the recognition of that redress has been in 23 place many, many years. 24 Q. Thank you. 25 Are subpostmasters told in any of your guidance or 58 1 in any of your forms that they're able to claim in 2 respect of redress for their managers or assistants? 3 A. I don't believe they are. 4 Q. We've seen that 397 applications have been deemed to be 5 ineligible. Can you assist us at all with the kind of 6 proportion that might involve either, on the one hand, 7 the employees and managers, or, as you've said, the 8 multiples? 9 A. No, I can't. I can't. I haven't got that split, 10 apologies. 11 Q. Is it rare; is it common; more than half/less than half 12 that are ruled ineligible because they fall within this 13 category of not having a direct contract? 14 A. I really don't know. 15 Q. Okay. As you said, another issue, and separate issue, 16 is issues that have been raised concerning multiples -- 17 A. Yes. 18 Q. -- or those who have had licences with somewhere like 19 Costcutter or McColl's. Is that a correct understanding 20 of that issue? 21 A. We call them strategic partners. 22 Q. Yes. 23 A. Examples are McColls, WHSmiths, Co-op, et cetera, and 24 they have separate arrangements with Post Office. 25 Q. They also fall outside the scheme; is that correct? 59 1 A. No, they don't. So -- 2 Q. If you were an individual store that had a licence from 3 one of those organisations, they would fall outside the 4 scheme; is that right? 5 A. So my understanding of the scheme -- and McColl's is 6 a great example -- is that we do accept applications 7 from the strategic partner who coordinate the claims 8 from all the branches that they -- the Post Office 9 branches they look after and, therefore, we get one 10 application in and that is considered in the scheme. 11 Q. Have those applications come in; are you aware of those 12 applications being built up, as we speak; or what is the 13 current position? 14 A. So when the scheme was first launched, I know we had two 15 strategic partners who came in, and my understanding is 16 that those two -- they have been resolved through the 17 HSS mechanism, through the scheme. I now understand one 18 other significant strategic partner is currently 19 engaging with Post Office around a potential claim they 20 have. 21 Q. There are others who operated through corporate vehicles 22 who may not personally have a contractual relationship 23 with the Post Office. Are you aware of an issue arising 24 in relation to those circumstances? 25 A. No, if they're a corporate identity that might look 60 1 after 10 or 15 branches, they can apply as their 2 corporate identity, and it's the same way with 3 partnerships as well. 4 Q. What if there was, for example, a company that was the 5 corporate vehicle for running the Post Office but has 6 now been dissolved or went bankrupt, for example, 7 doesn't exist any more; is that possible? 8 A. Yes. 9 Q. How about family members? Can they either claim in 10 their own right or on behalf of their own family members 11 and, if not, why not? 12 A. They're not eligible because they haven't got the direct 13 contract in terms of family members but, in the case of 14 an estate, for example, then they can apply on behalf -- 15 for the estate. 16 Q. If, for example, an applicant or somebody who wanted to 17 apply but couldn't because of, say, dementia or simply 18 because they didn't want to apply themselves on their 19 own behalf, is there a possibility that their family 20 members can pursue it on their behalf? 21 A. Providing the appropriate Powers of Attorney, et cetera, 22 are in place, absolutely, yeah. 23 Q. We've heard about current issues with the Horizon 24 system, we've seen the results of our own survey in 25 relation to those who still experience discrepancies, 61 1 unexplained shortfalls, on the current Horizon system, 2 we saw the Terms of Reference there and the eligibility 3 criteria are based on the old systems. Now, is there 4 any plan to put in place some sort of scheme addressing 5 current issues with Horizon? 6 A. That is under consideration as we speak, yes. 7 MR BLAKE: Thank you very much. 8 Sir, that might be an appropriate moment to take our 9 morning break. 10 SIR WYN WILLIAMS: Yes, by all means, yes. 11 MR BLAKE: Can we come back at, let's say, 11.47? 12 SIR WYN WILLIAMS: I think we can extend to then, Mr Blake. 13 MR BLAKE: Thank you very much. 14 SIR WYN WILLIAMS: All right, fine. 15 (11.35 am) 16 (A short break) 17 (11.50 am) 18 MR BLAKE: Thank you, sir. Can you see and hear me? 19 SIR WYN WILLIAMS: Yes. 20 MR BLAKE: Mr Recaldin, before we left off we were 21 discussing potentially extending the schemes to managers 22 and assistants or others, and you said you understood 23 that to be a much larger figure. Is there a figure that 24 has been discussed at all? 25 A. No. 62 1 Q. You -- 2 A. Excuse me, no. 3 Q. Can you approximate, in your view, what kind of ballpark 4 are we talking about? 5 A. All I can -- not speculate -- all I can say is that you 6 logically look at the post office, you look at the 7 postmaster and then you look at the numbers of people 8 they may employ to support them in that post office, and 9 you look at that across the country, across 11,500 10 branches and you do the maths, and that would be 11 a considerable population. 12 Q. Have there been discussions between the Post Office and 13 the Department for Business and Trade or the Treasury 14 about that potential? 15 A. I think there have, yes. But I don't think we've put 16 a number of potential redress on that. 17 Q. In terms of likelihood of there being some sort of 18 change, is it likely or unlikely? 19 A. You would need to talk to the Government about that, 20 this is very much in the Government's hands. 21 Q. How recently were those discussions with Government? 22 A. My understanding that those considerations were being 23 held at ministerial level a few weeks ago. 24 Q. Thank you. Moving on from eligibility, providing that 25 you meet the eligibility criteria, you're given the 63 1 opportunity to seek repayment for any losses caused by 2 any apparent shortfalls and also not just the shortfalls 3 themselves but also consequential losses; is that 4 correct? 5 A. That is correct. 6 Q. Thank you. Could we please turn to the "Consequential 7 Loss Principles and Guidance", that's UKGI00033420. Is 8 it right to say that this guidance that's about to come 9 up on the screen was developed in the summer and autumn 10 2020 and that it followed a request, I think you've said 11 in your statement, from Hudgells Solicitors? 12 A. Correct. 13 Q. If we scroll down please, can you assist us with who 14 developed these principles and guidance? 15 A. This would have been HSF with Post Office. 16 Q. Thank you. If we scroll down, please, we see there 17 a section on burden of proof. 3.1.2, if we scroll down, 18 it says: 19 "Where the postmaster is unable to satisfy the 20 burden of proof in relation to their claim, their claim 21 may nonetheless be accepted in whole or part if the 22 scheme considers it to be fair in all the 23 circumstances." 24 A. (The witness nodded) 25 Q. If we keep on scrolling down, there's then a section 64 1 that sets out established legal principles. If we keep 2 on scrolling down to the bottom of page 3, we can see 3 types of loss are outlined there. It says there's no 4 exhaustive list but it sets out, for example, loss of 5 earnings. If we scroll down, loss of profits, loss of 6 property, loss of opportunity, penalties, general 7 increased costs of financing, bankruptcy, insolvency. 8 If we scroll down, legal and professional fees, stigma, 9 damage to representation, personal injury/harassment. 10 Thank you very much that can come down. 11 In terms of categorisation, you've outlined in your 12 statements three types of cases. The first is something 13 called "below assessment threshold" or BAT. Can you 14 assist us with what that is? 15 A. It's effectively a de minimis case where, if a case 16 comes in where it's below a -- where the claim is below 17 a certain amount, the operational cost of actually 18 processing that would probably be restrictive and, 19 therefore, a decision was made that if a claim below 20 a certain amount came in, we would automatically pay 21 that -- pay that amount. 22 Q. Does that still exist? 23 A. That is now going to be superseded by the £75,000 24 opportunity. 25 Q. Thank you. We'll get on to the 75,000 in due course. 65 1 The second type of case is a standard claim and the 2 third is a complex claim. Can you assist us with the 3 difference between a standard claim and a complex claim? 4 A. It's basically the number of heads of losses that are 5 applied for, in terms of the categorisation you've just 6 gone through. So if it's 1 to 5, it'll be standard; if 7 it's a 5 to 10, it'll be a complex; over 10, I think is 8 a super complex. 9 Q. Super complex? 10 A. Yes, extra complex, I think. 11 Q. In your charts and graphs, you've only provided, 12 I think, standard and complex, do those super complex 13 fall within -- 14 A. Yes, included in the complex, yes. 15 Q. Thank you. I'd like to look at the number of applicants 16 and their current status. At paragraph 51 of your sixth 17 statement you said that, when it launched, the Post 18 Office wrote to 7,100 current and 20,000 former 19 postmasters and you also arranged for publications in 20 newspapers; is that correct? 21 A. It is. 22 Q. Can we please bring up on to screen your sixth 23 statement, page 49. WITN09898600, page 49. Thank you. 24 If we scroll down, please, we can see there a chart. 25 That sets out the applications received up until 31 May 66 1 2024 by date. It shows there quite graphically two 2 peaks: one in 2020 and one in 2024. We see there they 3 effectively stop in between 2020 and the end of 2022, 4 a very small number in 2021, and that might account for 5 those figures that Sir Wyn pointed to earlier today, in 6 terms of reference of the applications who were not 7 represented. 8 A. Yes. 9 Q. You've outlined the publicity when it launched. We know 10 that the 2024 numbers occurred at a time after the ITV 11 Mr Bates drama. So that perhaps explains the peak, is 12 that your understanding of why -- 13 A. Correct. 14 Q. -- it occurred again? Thank you. We know that, for 15 example, Phase 2 of this Inquiry was in October to 16 December 2022. Do you think that that might have 17 triggered some of those figures in late 2022/2023, or is 18 there some other explanation for figures rising during 19 that period? 20 A. So that's when we confirmed that we would accept late 21 applications. 22 Q. Thank you. Was there any publicity or anything done in 23 the 2021 and early 2022 periods to bring the schemes to 24 people's attention or did that stop altogether because 25 of the cut-off dates? 67 1 A. We -- well, we had -- formally, of course, we had 2 actually closed -- the scheme had closed in November 3 2020. So what we were doing, we were receiving 4 applications that were coming in and we couldn't process 5 them because they had missed the deadline, effectively. 6 So we wrote back to the people who were making these 7 applications saying, "Look, whether or not your claim 8 will be accepted isn't -- we don't know yet, so we're 9 effectively putting it on hold", and then, towards the 10 end of 2022, we got permission from Government not to 11 reopen the scheme but to allow late applications. So at 12 that point we did and we did publicise that via the 13 website, et cetera, that we would now accept 14 applications that were late. 15 Originally, we did ask for them to describe why they 16 were late, why they'd missed the deadline, and then that 17 has vanished now. So now we just accept them as late 18 applications. 19 Q. Thank you. If we scroll over to page 50, please, you 20 set out there the types of application. We can see 21 they're in that table. Am I right to say that 22 post-January there was a rise in the number of more 23 complex cases? 24 A. Yes. 25 Q. Can you assist us with why that may be or what your 68 1 understanding of that is? 2 A. I think people -- I don't know why that may be but 3 I think people might be more educated around the scheme. 4 Q. When you say people might be -- what do you mean by 5 that? 6 A. They might have taken an opportunity to look at the 7 website to understand what they're entitled to claim 8 for. 9 Q. Thank you. I'm going to take you to the overall figures 10 now. We can look at page 5 of your sixth witness 11 statement, please, that's WITN09890600. Thank you very 12 much. If we could zoom out of that slightly to have all 13 of the figures. Thank you. Is it possible also to 14 bring on screen, please, POL00460646. Ah, okay, that 15 can't be brought on screen at the same time. Perhaps if 16 you could have to hand your most recent figures; do you 17 have those in front of you? 18 A. Yeah, let me just -- if I may. These are the ones 19 I submitted on Friday? 20 Q. Yes. 21 A. Yes, thank you, I have them. 22 Q. So we start there with applications received and logged. 23 The figure as at May 2024 was 4,323; can you assist us 24 with what the figure is now? 25 A. 4,971. 69 1 Q. Thank you. Eligibility, work in progress. It was 896. 2 Can you assist us with what it is now? 3 A. It's 307. 4 Q. Thank you. So a significant decrease in eligibility 5 work in progression? 6 A. Correct. 7 Q. Applications ineligible, I think we've already covered 8 that today. That's now 397; is that correct? 9 A. Correct, which is 9 per cent. 10 Q. Thank you very much. Applications eligible? 11 A. 4,267. 12 Q. Thank you very much. Offers sent? 13 A. 2,792. 14 Q. No response to offer? 15 A. 123. 16 Q. Applicant in contact/querying? 17 A. 9. 18 Q. So a much smaller number of applicant in 19 contact/querying? 20 A. Correct. 21 Q. Disputes? 22 A. 319. 23 Q. Thank you very much. Can you assist us with 24 approximately, if you're able to, how many or what kind 25 of a percentage of those disputes involve individuals 70 1 who are legally represented. It doesn't have to be 2 an exact figure but, if we see there the number of 3 disputes currently 319, can you approximate what kind of 4 a percentage of those figures might be legally 5 represented? 6 A. What I can help the Inquiry with is the cases that are 7 in our dispute resolution process, I am aware that 8 I think the number is 70 per cent are legally 9 represented. 10 Q. Thank you. Is that different to your categorisation of 11 disputes here and, if so, why? 12 A. I don't think it is. 13 Q. No. So about 70 per cent are legally represented? 14 Thank you very much. 15 Offers accepted. You have there 2,248. 16 A. 2,341. 17 Q. Thank you very much. Again, are you able to assist with 18 the kind of percentage that are legally represented; is 19 it the same or is it a different type of figure for -- 20 A. So legal representation across the entire HSS population 21 is approximately the same. It is something like 22 12 per cent. So legal representation across the total 23 cohort is relatively modest, and yet the acceptance rate 24 is at now at 84 per cent. 25 Q. 84 per cent who are of -- 71 1 A. Offers. 84 per cent of offers that are issued are 2 accepted. 3 Q. Of those, what kind of percentage are legally 4 represented, so far as you're able to? 5 A. I understand it's circa 10 per cent. 6 Q. Thank you. Settlements, 2,085? 7 A. 2,321. 8 Q. Thank you very much. Total settlement figure? 9 A. 118.5. 10 Q. Thank you very much. Tax top-ups to HSS applicants? 11 A. 14.8. 12 Q. Thank you. Combined total paid? 13 A. 230.1. 14 Q. Thank you. We'll go through all of the charts that you 15 have provided in your witness statement or most of those 16 charts but can you assist us in your view what the 17 differences in those figures, in your mind, shows? 18 A. If I may. 19 Q. Yes. 20 A. Thank you. The one would like -- because at the moment, 21 when I got these Rule 9s, it was very much asking me 22 about trends and patterns -- 23 Q. Yes. 24 A. -- and hopefully I can help the Inquiry here. So if you 25 look at the statement that's on the screen, you look at 72 1 the combined payout of 121, if you then go down to the 2 notes -- so that 121 was at the end of May 2024. If you 3 go down to the notes, you can see on the 27 August that 4 that 121 had turned to 139, and that's a difference 5 of -- rounding -- that's a difference of about 6 18 million. So in those three months, in terms of 7 redress on this HSS scheme, there was £18 million paid 8 out. 9 The number I've just quoted as at end of October is 10 230 million, so the difference between the 139 and 230 11 is fairly significant, and I think what that does is -- 12 so what's that? That's about 90 million. Now, that is 13 over a period from August to end of October. So that's 14 a two-month period. So if you compare the 18 million 15 over three months and the 90 million over two months 16 I think what it illustrates is a rapid acceleration of 17 redress and that, of course, is purposeful, because we 18 need to speed this up and need to accelerate redress. 19 So that is a major trend I would like to use this 20 opportunity to point out to the Inquiry in terms of the 21 acceleration of redress, and I go back to a previous 22 statement I made this morning, that we expect across all 23 the schemes it's now 302 million redress and we expect 24 that to be 650 million by March 2025. 25 Q. What do you see as a principal reason behind a speeding 73 1 up of redress in that period? 2 A. That will be more efficiencies and a better process but 3 predominantly because of the £75,000 scheme, which 4 I know you want to talk about later. 5 Q. Absolutely. So let's look at the average time it takes 6 from eligibility to a decision. That's at paragraph 64 7 of the same statement. If we could turn to page 22, 8 please. Thank you. You say: 9 "For all non-BAT claims ..." 10 So those are standard claims and the complex claims: 11 "... from the eligibility confirmation letter being 12 issued it takes an average of 470 days to an offer 13 letter being issued. In respect of Complex Claims, this 14 process takes an average of 514 days improving to 306 15 days in 2024 although we note a lower volume of offers 16 were issued in 2024." 17 Can you assist us, in reference to days there, in 18 some places in your statement you refer to "working 19 days", in others just "days". Are you aware of whether 20 that is working days or all days? 21 A. Apologies it should be working days. 22 Q. Working days. 23 "For Standard Claims, this process takes an average 24 of 445 days and the data shows that this has decreased 25 in 2024 with Standard Claims now taking an average of 74 1 302 days." 2 So an average case took 470 working days, it's now 3 decreased, but we're still talking very significant time 4 periods, aren't we? 5 A. Yes. 6 Q. What do you see as the principal reason for such delays, 7 I mean, we're well over a year for an average claim? 8 A. The 445 we referred to? 9 Q. Well, those are only working days, so if we include 10 weekends, even more. 11 A. So they are not necessarily delays -- and whatever 12 I say, please, I don't want to be taken as defensive at 13 all because it's not: this process takes too long, full 14 stop. It does take too long. However, there is 15 a process that has to -- it has to be gone through and 16 that's all defined and all operationally agreed and all 17 signed off. Could it be quicker and could it be more 18 efficient? Yes, and that's what we tried to do 19 continuously and we will continue to do that. 20 So that's -- and those days will include what I call 21 lapsed time, so when it's queueing -- so when a case is 22 queueing for the next shortfall analysis to be done, or 23 the next Case Assessor to be ready, so there will be 24 queues at each particular process point, and those days 25 will include those. So this is not a true end-to-end 75 1 picture, this is a reality picture because this is what 2 the postmaster is experiencing. So I'm not going to say 3 well, actually, because it any takes two days in legal 4 review and three days in the SFA, that's a five day. 5 No, it's when it's queueing you have to include those 6 days. The process is too long. 7 Q. We see they that there has been an improvement, and 8 I think some of the explanation within your statement is 9 that, for the early claims, there were delays -- you 10 don't call them delays but I will continue to call them 11 delays -- relating to funding from the Department for 12 Business and Trade. To what extent did those slow down 13 the process from eligibility confirmation to the final 14 offer being issued in those early claims? 15 A. Well, of course it did because -- so to take -- if I may 16 add some colour to the whole thing and take a step back, 17 everybody in this room will understand that the HSS was 18 actually created from the GLO settlement agreement in 19 terms of a scheme to compensate those not represented in 20 the GLO, and that was effectively the activation date. 21 It was May 2020 when the whole thing started but the 22 scheme might have been announced and might have been 23 started but, as with many schemes, including the recent 24 appeal scheme announced by the Government, it's just 25 words on a piece of paper. There's no process, no 76 1 anything behind it, no application behind it. 2 So, from May 2020, you've got to start building 3 something and that's exactly what was happening and, 4 initially, the view was thought that -- the initial view 5 was that the number of claims would be relatively 6 modest, we're talking about a few hundred, and 7 therefore, an engine was built accordingly, and then, as 8 soon as the volumes started coming in, and mounting up 9 to 2,500 applications, it's at that point it was like, 10 "Well, actually, that engine is not going to be 11 appropriate any more and, by the way, Post Office 12 haven't got those sort of funds to be able to support 13 that, and therefore we have to go to Government and ask 14 for it", and that starts the whole process around 15 applying for funding. 16 Q. Can you assist us with who was responsible for 17 underestimating the number of potential applicants? 18 A. No, I can't, before my time and I don't know who would 19 have been -- I know there was a predecessor to myself, 20 who was appointed but I understand that individual 21 wasn't around for about eight months before I started. 22 So I don't know who that would have been. 23 Q. Was there anybody in your role in that eight-month 24 period? 25 A. Not that I'm -- no, not that I understand no. 77 1 Q. I'd like to take you through the various stages of the 2 application process and the offer process, unless you 3 have anything else to say at this stage? 4 A. What I would say is, please -- and to help the Inquiry 5 in the colour -- and, please, again, please do not take 6 this as being defensive at all, but the whole engine to 7 be produced has to go through a huge governance process, 8 so you talked about the consequential loss principles 9 and brought them up on the screen and, forgive me, I did 10 say HSF and Post Office built those but of course the 11 panel, the independent panel were heavily involved in 12 their creation as well, which helps from the 13 independence perspective. 14 That whole engine, in creating all those principles, 15 creating the funding, creating the process to build, to 16 make cases, allow cases to flow, took a considerable 17 amount of time and everything has to be agreed not only 18 through Post Office -- appropriate Post Office 19 governance, but also Government governance all the way 20 thorough to Treasury because, at the end of the day, 21 every process costs money. 22 Q. Thank you. So moving on to the various stages, we'll 23 start with the shortfall analysis stage. That process 24 includes assessing or analysing whether a shortfall 25 occurred, and how much it's valued at. Who carries that 78 1 out? 2 A. So my operational team carry that out, and how the 3 process works is that a postmaster in their application 4 form will identify a time period when they thought they 5 had a shortfall. The operational team -- my 6 understanding, I'm not an operator myself -- my 7 understanding is that individual will go into the 8 system, into the Horizon system, and they are aware, 9 they have experienced of the Horizon system and 10 therefore know what they're looking for. Some of these 11 members of staff have been counter clerks previously at 12 Post Office. So they have sophisticated knowledge of 13 the Horizon system and how to look for the shortfalls. 14 So they go into the date where the postmaster has 15 identified, and they look six months before and six 16 months after that particular date, to look for that 17 shortfall, and identify the shortfall. And they have 18 the skill sets to be able to identify that, but also to 19 be able to identify whether or not that was a Horizon 20 shortfall or another type of shortfall. If there's any 21 doubt, the default is that it is a Horizon shortfall. 22 Q. We've heard throughout this Inquiry about different 23 types of data being available to the Post Office, we've 24 heard about ARQ data, for example. What kind of data is 25 it that they are accessing? 79 1 A. So they are accessing Horizon data and accessing 2 a number of other -- other data sources, and if they 3 want even further to go and get a branch file, they can 4 go and get the branch file, as well, to create -- to be 5 assured of a shortfall. 6 Q. But when you refer to Horizon data, do you know what 7 that means? Do you know what kind of -- 8 A. Entries. So they can look at the physical entries. 9 Q. From where? 10 A. From at the time, so when the postmaster said it was 11 24 July, in whichever year, they can go in and look at 12 the entries on that day but they recognise that the 13 postmaster that may be a guess at the date and, 14 therefore, they go in six months after. They look at 15 the whole year, six months after -- to look for those 16 entries. 17 Q. Is that data provided by Fujitsu; is that data from the 18 Post Office's own archives or records? 19 A. So that will be Post Office and some of that will be 20 supported by Fujitsu. 21 Q. You've said in your statement there's a low evidential 22 bar; what do you mean by that? 23 A. In a language that maybe I understand better than most, 24 is that, if the postmaster says it happened, it 25 happened. 80 1 Q. That seems like no evidential bar? 2 A. No, it is, because -- and this is a panel thing, this is 3 an independent panel thing -- cases go to the panel 4 where we cannot find a shortfall. So it goes to the FSA 5 process and the postmaster said, "Look, there were five 6 occasions and here are the dates", and we've looked six 7 months after and six months before but we've looked at 8 it all but we'd always go to panel and say we can't find 9 it we can't find anything. The panel then will go to 10 the statements and all evidence that there has been 11 coordinated by the Case Assessor, and then they will 12 look at it in the round and said, "Okay, we can't find 13 any actual SFA technical evidence but, in the round, do 14 we believe, given all that evidence in the file, do we 15 believe a shortfall may have happened?" 16 Q. Thank you, and we're used to legal terms: balance of 17 probabilities, reasonable doubt, prima facie case, 18 credible evidence; are any of those kind of legal terms 19 used in the shortfall analysis stage? 20 A. In the shortfall analysis, those -- yes, in terms of the 21 mindset of the individuals, and they're looking to be 22 positive about it. Is it formally in their terms of 23 reference for operating and what they're doing? No, 24 it's not. But they are, a bit like as I said, the 25 default is a Horizon shortfall, if they can't find 81 1 another reason. So it's an empathetic/sympathetic 2 approach, they are looking for the shortfall. They are 3 not looking not to find the shortfall. 4 Q. Looking forwards to the ultimate offer, is it the case 5 that the actual offers are, in any way, reduced because 6 of the uncertainty at that particular shortfall analysis 7 stage? 8 A. I believe not, no. The shortfall is just the trigger. 9 It's just the trigger for the consequences of that 10 shortfall. 11 Q. So it won't be that, because of the form of words that's 12 used at that shortfall analysis stage, about the certain 13 or uncertainty of the shortfall, that is then used at 14 the offer stage to reduce or not -- 15 A. That's not my understanding, no. 16 Q. Can we please turn to page 58 of your sixth witness 17 statement, so the same witness statement, please, 18 page 58. 19 This is the average number of days it takes for that 20 shortfall analysis to take place. We see there on the 21 barcharts the average number of calendar days was 22 significantly higher in 2021 and 2022; is that correct? 23 A. Yes. 24 Q. But we do also see, from the volume, that that reflects, 25 albeit with a time lag, the volume of applications? 82 1 A. Yeah. 2 Q. Now, what we saw in the chart earlier is that after the 3 Bates drama, there was, again, a second spike in those 4 applications. We saw it earlier and then again in 2024. 5 Does that not mean -- and we see perhaps some affected 6 there on the far right-hand side -- that there is going 7 to be another spike in volume because they have to go 8 through the eligibility stage first, so there will be 9 an inevitable time lag. Will we not see a repeat of 10 what we saw in 2021/2022, later this year, or early next 11 year? 12 A. And later this year because of the mailing. 13 Q. Because of the January 2024 and onwards spike in the 14 volume of applications? 15 A. You will see that spike, yes. 16 Q. We'll see that in the number of calendar days it takes 17 to -- for the shortfall analysis to take place? 18 A. So I hope not. I hope -- I think there will be a spike. 19 But we are busy, as we speak, making sure appropriate 20 resourcing is in place to avoid peaks in terms of 21 longevity of time and eligibility. In addition, as the 22 Interim Chair said in his statement, we are looking at 23 some automisation and efficiencies in this space as 24 well, in order to speed that process up significantly. 25 Q. Can you assist us with quite what did he say meant by 83 1 that in terms of automation? 2 A. I can. Well, firstly there's the automation of actual 3 payments that we have already improved on and we will 4 continue to do that. Secondly, and it is related, 5 forgive me for jumping your agenda, it is related to the 6 £75,000 process, where we have talked about the SFA 7 process. With the £75,000, we are not intending to do 8 an SFA. We are effectively doing a shorter version of 9 it -- and we're calling it an SFI for future 10 reference -- and that is -- and that's all been approved 11 through governance, et cetera, for the £75,000 cohort, 12 which we believe will be the vast majority of cases. 13 And the big difference between the SFA and the SFI, 14 in terms of efficiency, is that you're only looking for 15 one shortfall. Under the SFA, if the postmaster is 16 saying "I had six", you look at all six. You look at 17 six months before, you look at six months after, you 18 draw up your report, et cetera, et cetera. On the SFI 19 is when you find a shortfall and, at that point, for all 20 cases under 75,000, we will not be doing a review with 21 HSF. So Post Office are going to be entirely doing that 22 process. 23 Q. So to clarify, and we will get to the 75,000, but you're 24 not granted 75,000 just on fulfilling the eligibility 25 criteria; you have to have the eligibility criteria plus 84 1 a shortfall; is that right? 2 A. Correct, correct. 3 Q. Thank you. And you've spoken about increased 4 resourcing. Can you assist us briefly with how you are 5 preparing for a spike later this year, early next year 6 and into next year? 7 A. Hiring people. 8 Q. Can you give us an indication of numbers before/after? 9 A. So I know we're currently in the process of hiring 10 a further 20 individuals. 11 Q. Okay, and when do you anticipate that will be completed? 12 A. My understanding is that will complete the hiring. 13 Q. When, sorry? 14 A. Oh, apologies: when? They're being hired now. So 15 within the next few weeks they should be in place. 16 Q. Thank you. The next stage is the legal case assessment. 17 A. Yes. 18 Q. Am I right to understand that Case Assessor from Herbert 19 Smith Freehills will compile a pack which includes their 20 own assessment and analysis of the claim which is then 21 passed to the independent panel to consider? 22 A. I'm not quite sure whether it's an assessment. They 23 coordinate the information they have. They get the SFA 24 analysis and then they do a legal review of the case, 25 building the case on -- per heads of loss for 85 1 consequential loss. The shortfall is the trigger, and 2 they look at the claim, and they assess, right, that 3 claim means it's that consequential loss and therefore 4 I'll build the case around that, and what under each 5 heads of loss the assessor then outlines what the 6 options to the panel could be for consideration under 7 each heads of loss. 8 So there might be three options understand each 9 heads of loss that the panel might want to consider. 10 They're not guided to take those options but it's things 11 for their consideration. 12 Once that pack is completed that goes off into the 13 independent panel. 14 Q. Can you assist us with who at Herbert Smith is carrying 15 that out: is it junior solicitors, paralegals partners? 16 A. A range -- not partners but a range of Herbert Smith 17 appointees. 18 Q. Do you have a view as to whether it's appropriate for 19 Herbert Smith to be involved in this process given their 20 involvement in the Group Litigation, as we discussed 21 earlier? 22 A. I think the two are completely separate. 23 Q. Do you know of any overlap of individuals involved, for 24 example, in that process? 25 A. No. 86 1 Q. Can we please turn over the page to page 59. We see 2 there the average days from starting legal case analysis 3 to the issuance of an offer. Again, we see perhaps 4 an increase in time, increase in number of calendar days 5 it takes, as a result of higher case volumes that have 6 reached that stage from late 2021 into 2022. So, again, 7 are we likely to be seeing a spike late 2024 into 2025 8 because of higher volumes and, if so, at the legal case 9 assessment stage, how are you going to avoid that? 10 A. I hope not because, as previously described, the 11 anticipation is on the existing cohort that are going 12 through the process and, indeed, future cohorts, the 13 vast majority will be under 75,000 and there will not be 14 subject to a legal case analysis. 15 Q. Thank you. Moving on to the request for further 16 information. During this process, Herbert Smith 17 Freehills, the Case Assessor, might issue a request for 18 further information or they might request multiple 19 requests for further information; is that correct? 20 A. Correct. 21 Q. Can you briefly describe what that involves? 22 A. That is designed to help the postmaster's application, 23 it's not designed to hold it up, please, it's not 24 designed to hold anything up. It's to seek further 25 information to support their case when it's being put 87 1 forward to panel. They are very empathetic approaches 2 in terms of, if we -- if we can get more information in 3 this particular area, we might be able to assist you 4 further, and that's what those requests for information 5 are. 6 And there have been occasions and, unfortunately, it 7 does mean the case takes longer, where there maybe have 8 been two or three requests for further information, but 9 they are well meaning and well intended to ensure that 10 those cases have the best information possible for 11 a positive outcome. 12 Q. If we could turn the page, please, to page 60, we again 13 have a chart of the average days from starting a legal 14 case assessment to the RFI request. Again, very much 15 the same trend that we see a peak towards the end of 16 2022, and possibly a peak again starting in 2024. Once 17 again, I think your answer will be that those will be 18 cut down because of the £75,000 offer; is that correct? 19 A. It would be. If I may add something, if it's helpful to 20 the Inquiry? 21 Q. Yes. 22 A. In terms of the full colour of the picture -- and, 23 again, please, this is not being viewed as defensive, 24 please don't take this as defensive, it's just the 25 process that happens -- with an RFI, you're going to out 88 1 to postmaster and you're going -- or indeed their legal 2 representatives -- to request further information. The 3 whole process at that point is sort of out of your hands 4 because you need that information to come back to help 5 that case. So we are relying on that turnaround and, 6 for good reasons, really good reasons, sometimes that's 7 not instantaneous. And therefore, you have to build 8 that lag in to. 9 And sometimes we do have a process of chasing down, 10 and it's wrong to call it chasing -- following up is 11 a better term -- following up those requests for more 12 information, and that's all part of the process but what 13 it does is, in the words that you use -- and I'm happy 14 to use those words -- it creates a delay. 15 Q. Thank you. If we go over the page, please, we can see 16 analysis of an average number of RFIs per case and also 17 average number of days from starting an RFI to the final 18 RFI response. We see at the top there, if we scroll up, 19 a gradual increase in the number of RFIs that are 20 requested; is that correct? 21 A. Yes. 22 Q. Can you assist us with why that is? 23 A. I think that will be down to complexity, in that, as the 24 easier cases go through quicker, if there is an easy 25 case -- I don't think there is -- the less complex cases 89 1 go through quicker, and therefore the more complex 2 cases, because their very nature and therefore the 3 likelihood of more RFIs, is more prevalent. 4 Q. If we look at the bottom table, please, we can see 5 a growing number of days spent on the RFI process and, 6 as recently as the second quarter of 2024 the average 7 time is nearly 120 calendar days. That's problem, isn't 8 it? 9 A. Yes, any delay is a problem. I think these figures will 10 also include the cases that are in dispute and they 11 naturally do take longer, and many of those, as I've 12 said in the dispute resolution process, are actually in 13 the hands of legal advisers as well, and that adds 14 a dynamic, in terms of their caseload as well. I'm 15 conscious that they have many clients as well. 16 Q. But what we have there is, of all the years that this 17 scheme has been operating, the current year actually has 18 the highest number of days that are being spent on that 19 RFI process. 20 A. I think that may be down to that factor because a number 21 of cases are in the dispute resolution process and, 22 therefore, the time it takes for -- the engagement on 23 RFI and the return of RFI is more. 24 Q. Can you assist us with what you mean by that, in 25 a little more detail? 90 1 A. So there are circa, I think, 300/350 odd cases in that 2 dispute resolution process. They are more intense 3 because the offer has been rejected and, therefore, they 4 are -- those postmasters and their legal advisers are 5 suggesting that a more significant redress needs to be 6 paid. In order to justify that, in order to understand 7 that better, Post Office will be asking for further 8 information. 9 Q. Why is it particularly in this year? Why is the average 10 time particularly higher this year? 11 A. Because the other normal cases, the non-disputed cases, 12 are less, and we've got a more efficient process around 13 those and, again, the RFI process, it will be in HSF, or 14 not at all, if it's under 75,000, whereas in the dispute 15 process, it's still under that process and therefore 16 requests for information are required. 17 Q. In your view, looking forward, how can you avoid that 18 increasing yet further? 19 A. The 75,000, again, I know we're going to get on to it, 20 will help massively in that space because we know number 21 of dispute cases will be able to be resolved with the 22 £75,000 offer, so that will help enormously, but we 23 absolutely need to get better and more efficient than we 24 are doing in that space. 25 Q. So in that dispute resolution stage, can you assist us 91 1 with what kind of proportion are actually claiming for 2 less than 75,000? 3 A. I -- I think the numbers might be in my statement but 4 the -- I think there are initially, we know -- the 5 number that I've got in my head is 25 per cent of cases 6 could well be impacted positively by the 75,000 but that 7 is a determination to be had by the postmaster and 8 indeed their legal representative. 9 Q. Thank you. If we could turn back to our survey at 10 EXPG0000007. Page 60, please. Thank you. Figure 45. 11 We have there the third bar is "The time it took for the 12 Case Assessor to assess your claim": net 13 dissatisfaction, 57 per cent; 40 per cent are very 14 dissatisfied with the time it took for the Case Assessor 15 to assess the claim. Does that surprise you? 16 A. No. 17 Q. Why do you think that is? 18 A. Because it's not good enough. 19 Q. Moving, then, to the independent panel assessment stage 20 could we please bring up onto screen POL00448026. These 21 are the terms of reference for the shortfall scheme 22 Independent Advisory Panel. I'll just take you through 23 briefly, just to explain the background to this. We 24 have at A1: 25 "The task of the panel is to assess and recommend to 92 1 Post Office a fair outcome for Eligible Claims made to 2 the Scheme for Shortfall Losses and Consequential 3 Losses." 4 If we scroll down, it has there the panel's 5 membership, and that comprises of legal specialists, 6 forensic accounting specialists and retail specialists, 7 and it sets out below those who are involved. 8 If we scroll down further to page 3, please, there's 9 a section on general principles. At 31, it says: 10 "In formulating its recommended offer, the panel may 11 recommend the making of an offer to the postmaster if, 12 guided by broad considerations of fairness, the panel 13 considers that doing so would produce a fair result in 14 all the circumstances of the particular case. For the 15 avoidance of doubt, in doing so, the panel's discretion 16 will not be confined solely to the specific heads of 17 consequential loss claimed by the postmaster but will 18 take into account any facts and matters which the panel 19 considers will produce a fair result on the facts of 20 a particular case." 21 Have you known the panel to make a recommendation 22 that includes heads of loss that haven't been claimed by 23 subpostmasters? 24 A. I have known many cases where that clause 31 has been 25 proactively used. I can't say with certainty whether 93 1 that means a new heads of loss but I have known that 2 they -- part of the process is, once they've opined, 3 made their recommendation, they step back and they look 4 at two things: consistency with other outcomes and 5 fairness. And they -- and I have seen them use that 6 licence to say, "Right, to be fair, we believe we need 7 to adjust here, here and here". 8 I also know that, once Post Office have signed those 9 recommendations off and the offer letter is produced, 10 the offer letter goes back to the panel for sanction, 11 and they take another moment then to assess the fairness 12 of that offer. 13 Q. Thank you. If we scroll down, there's a section on 14 "Horizon Shortfalls", and it says: 15 "Where: 16 "there is evidence that the shortfall in question 17 existed and was paid; and 18 "there is no evidence that the shortfall was caused 19 by something other than a potential issue with Horizon, 20 for the purpose of the Scheme the presumption is the 21 shortfall is a Horizon shortfall." 22 I think that's what you've already addressed. 23 A. Thank you. 24 Q. "Consequential Loss claims 25 "The Panel should apply the Scheme Consequential 94 1 Loss Principles and Guidance which are included at 2 Appendix 1. 3 "In relation to personal injury claims where 4 insufficient evidence has been provided for a claim to 5 succeed without further medical and/or expert evidence, 6 the panel may recommend the making of an offer to the 7 postmaster which the panel considers fair. The 8 postmaster will then have the option of either accepting 9 that offer or obtaining such further evidence and 10 pursuing a personal injury claim in accordance with the 11 ordinary legal standards relevant to such claims, 12 including as to proof of causation and assessment of 13 damages." 14 So it may be that the panel itself makes 15 a recommendation in respect of -- 16 A. Might do. 17 Q. -- the personal injury aspect of an application. 18 To understand your statement correctly, am I right 19 to say that the recommendation that's made by the panel 20 doesn't need to be accepted by the Post Office? 21 A. I have not known a case where it has not been accepted. 22 Q. But am I right to say that, technically, it's only 23 a recommendation, it doesn't have to be accepted? 24 A. Correct, correct. 25 Q. Yes. As you say, you've never made -- 95 1 A. I think we've increased a couple. 2 Q. You've never made an offer, so far as you're aware, that 3 is less than the offer that is -- 4 A. Never. 5 Q. On how many occasions, as far as you're aware, has the 6 panel revised their recommendation on that second look 7 that you've already explained? 8 A. I don't know. But I know the process does take place 9 but I don't know how many times they've taken the 10 opportunity to revise it. 11 Q. Thank you. What is your role in respect of the panel: 12 do you attend their meetings, are you able to 13 contribute/observe? 14 A. Absolutely not. They are completely independent. 15 I have no right of attendance to any of their meetings. 16 They are independent. If I had any engagement with 17 them, I could understand the optics of that, so 18 absolutely not. The only time I have met the panel was 19 when they presented to the Advisory Board. 20 Q. Thank you. How about in respect of the Department for 21 Business and Trade? Do you know what interaction they 22 have with the panel? 23 A. They have no interaction at all. 24 Q. Thank you. Could we go back to your sixth witness 25 statement, WITN09890600, it's page 62. We're now 96 1 looking at the situation at the independent panel 2 assessment stage. You set out the average number of 3 days from the last RFI applicant response to it being 4 sent to the panel. Thank you, it's page 62. 5 If we scroll down slightly we can see that chart 6 averaging, I think, 150 days from the last RFI response 7 to be sent to the panel in the last section before we 8 get to the right-hand side. Can you assist us with what 9 the shading means on the right-hand side at all? 10 A. I'm afraid I can't. 11 Q. No. 12 A. I don't know why it's shaded. 13 Q. So it may be those are accurate figures -- 14 A. I think they are. 15 Q. -- for the fourth quarter and, in that case, we are now 16 averaging almost -- is it 700 calendar days between RFI 17 application response and it being sent to the panel? 18 Are those three bars on the right-hand side showing 19 quite a problematic picture, as far as the current 20 situation is concerned? 21 A. Correct, and that's why we are redressing that. 22 Q. Is that again the £75,000 offer or something else? 23 A. It is the £75,000 offer and so some cases have been 24 waiting for that to be activated and, therefore, they 25 will flow through accordingly, and I think the other one 97 1 is that -- let's take a step back and see where we were 2 with HSF. We moved into 2023. We were -- across 20 -- 3 we were effectively winding down the scheme because what 4 we were doing was the later applications. So until the 5 Bates drama came out there was no peak, so we were 6 downsize -- and, indeed, HSF were downsizing as well. 7 Then the drama happen and then the volumes started 8 coming in again, so we have effectively had to recreate 9 the business once again in order to deal with the 10 volumes. Now, it will be -- the 75,000 will help 11 enormously in terms of that, but that has meant 12 a knock-on effect and one of the things that we have 13 done is we have, in the month of September, we made sure 14 that the panel now sits twice a week, rather than once 15 a week, and that will be moving into three times a week 16 shortly. 17 Q. Yes. I was going to address that. So there are about 18 1,500 applicants yet to receive an offer; is that 19 correct? 20 A. Yes. That's right, yeah. 21 Q. I'll be taking you to some correspondence with Hudgells 22 Solicitors shortly. 23 A. Yes. 24 Q. But in that letter you say that panel sessions recently 25 increased from one per week to two per week, and that's 98 1 five to ten cases per session. Doing the maths, to get 2 through those 1,500 applications, it's going to take 3 more than a year, considerably more than a year, just to 4 get through the panel stage for those applications; is 5 that right? 6 A. No, it's wrong because -- and, again, it's the overall 7 picture that now we need to look at. There are 1,500 8 cases but the vast majority of those are going to be 9 impacted by the 75,000. So the number is actually going 10 to be a lot less, so that will bring -- that ten per 11 week will be bringing that in significantly, correct. 12 Q. As I say, we'll get to the 75,000 but do you think 13 you're putting a few too many eggs in one basket in 14 terms of that 75,000 offer? 15 A. The postmaster will have the choice about whether they 16 are prepared to accept the 75,000 or they go for full 17 assessment. My statement makes it clear on several 18 occasions that the average payout redress for the HSS is 19 £53,000. I sit here as a layman and I look at the 20 average of £53,000 redress versus an increase in that, 21 an offer of 75,000, and a slick, efficient, automated 22 process. I sit here as a layman and look at that 23 logically, and we have looked at our data in terms of 24 the numbers of claims that, actually, are under 75,000, 25 and they are the vast majority. 99 1 Now, there is some mathematics and there is some 2 logic in coming to the conclusion, therefore, that we 3 believe the £75,000 offer will make a significant impact 4 in terms of the operationalisation and the time of this 5 process. 6 Q. We'll get in due course to -- 7 A. Sorry. 8 Q. -- to a number of issues, one of them being that there 9 is potential for an appeals mechanism, so it's not 10 entirely clear that those figures that settled for lower 11 than that sum actually might not, in due course, seek to 12 appeal the figures that they accepted. We'll also, in 13 due course, see issues with legal representation -- 14 A. Good. 15 Q. -- and a high number of those that are accepted at that 16 early stage not having legal representation? 17 A. Understood. 18 Q. In light of those problems, those potential issues, 19 might it not be that, actually, that 50,000 or so figure 20 is wrong and that, actually, ultimately, people seek 21 more than 75,000? 22 A. I think that's a potential, yes. 23 Q. Won't that throw a slight spanner in the works when it 24 comes to the predictions that you have for alleviating 25 those problems that are imminent? 100 1 A. I think you can separate the two between appeals process 2 and between the applications that you're going to get in 3 under £75,000. 4 Q. What do you mean by that? 5 A. I think the appeals -- the potential appeals process, 6 it's been announced but there's no process behind it 7 yet, that will deal with any case independently in 8 Government with anybody who wants to appeal and they're 9 not prepared to take the 75,000. That's absolutely 10 fine. And if they're not prepared to take 75 in 11 an offer, then that will go through the full process, 12 and I think the numbers we anticipate in that we can 13 cope that. 14 Still -- separately, I still believe that our 15 anticipation is that a significant number of claims will 16 come in for under 75,000, which we'll be able to be 17 process quickly without a legal review. I hope that 18 answers your question. 19 Q. That anticipation is based on previous figures -- 20 A. Yes. 21 Q. -- previous figures which themselves may no longer be 22 accurate because people are going to seek to challenge 23 those figures? 24 A. They may do that. I repeat my statement, and 25 I recognise that only 10 to 12 per cent are legally 101 1 represented, I really do, and, please, this not 2 defensive at all, but 83 per cent accept their offer. 3 Q. Do you read into that that 83 per cent are content with 4 their offer? 5 A. I have to draw some conclusion to that, that they -- but 6 I -- I know what the legal advisers will say. You know, 7 that they're not well informed enough, and I absolutely 8 get that as well but they have made a conscious decision 9 to accept that. So I have to read something into that. 10 And the appeals process, when it comes, will give them 11 the opportunity to say, "Well, actually, I wasn't sure 12 what I was signing at the time, and therefore I do feel 13 this is unfair, and therefore I want to launch" -- and 14 great, that is fantastic. But they also might say, 15 actually, I don't believe that was fair but the 75,000 16 is now fair. 17 Q. Have you planned for a scenario where, in fact, not as 18 many people take up that £75,000 offer as you currently 19 expect? 20 A. I have to, yes. 21 Q. How are you going to deal with that when we see figures 22 like this, the process, the RFI process, the case 23 assessment process, taking a considerable number of 24 days? 25 A. We have to be more efficient and, as the Interim Chair 102 1 actually made very, very clear, we will have to automate 2 more and be more efficient and, indeed, for example, 3 introduce the SFI process more aggressively into that 4 population. 5 Q. Thank you. You've said at paragraph 88 of your 6 statement -- we don't need to get it up -- on average it 7 takes 37 days from the panel assessment, panel 8 recommendation, to the offer being sent. Can we please 9 turn back to our expert report from YouGov, EXPG0000007, 10 page 62, if we scroll down we can see there satisfaction 11 figures, in respect of the information provided by the 12 Independent Appeals Panel and the length of time to 13 consider the claim. Again, a lot more red than there is 14 purple. Net dissatisfaction with how long it took for 15 the IAP to consider the claim, 46 per cent; amount of 16 information provided about the IAP process, 52 per cent 17 net dissatisfied? 18 Do you have any views on those figures and why that 19 might be? 20 A. I'll repeat myself, it's just not good enough, and 21 I apologise on behalf of Post Office and, in terms of 22 the process, that it takes so long. I do believe we get 23 full and fair outcomes out of it and, as Sir Wyn has 24 mentioned more than once on the previous witness 25 statements, it's the timeliness which is the issue and 103 1 Post Office apologise for the time it has taken, and it 2 has taken too long. Am I surprised by these? 3 Absolutely not. Am I doing something about it? Yes. 4 Q. Thank you. The next stage is the Post Office review -- 5 that can come down off the screen, please -- and that is 6 when the Post Office reviews the recommendations of the 7 IAP. Can you assist us with who at the Post Office 8 reviews those recommendations? 9 A. Of the Independent Panel? 10 Q. Yes. 11 A. We are told who it's going to be. 12 Q. You receive them, though, there must be some internal 13 discussion? 14 A. The names are put forward by HSF and the names are 15 circulated for interest. But we don't have a -- we 16 don't opine about whether we're supportive of that 17 appointment or not. 18 Q. Sorry, I mean, in terms of the actual recommendation in 19 individual cases? 20 A. Oh, sorry. Apologies. Who sees those recommendations? 21 Q. Yes, and who is involved in any kind of internal 22 analysis or assessment of those recommendations? 23 A. There's no assessment of the recommendations. They are 24 what they are. There is no challenge to those 25 recommendations, it's me. I chair a committee, they 104 1 look at all recommendations that come out of the 2 independent panel and we understand how the panel have 3 come to those recommendations, and sanction them. 4 Q. Once the recommendation is made and accepted, does the 5 Post Office ever revisit those figures, even to increase 6 them once the offer has been accepted? 7 A. Where there may be -- the answer is yes. Where -- for 8 example, where we may have introduced a new heads of 9 loss, we may have adjusted a principle or adjusted the 10 heads of loss because of a new case that has got 11 a nuance in it that hasn't been considered before, then, 12 actually, we don't put anything on hold but we realise 13 that, actually, that might impact previous cases, so we 14 do -- we do a backward review, with the Panel's 15 assistance. We do a backward review on all cases that 16 might now have this additional nuance in it and we 17 adjust. 18 Q. Approximately how many times have you had that backward 19 review process? 20 A. I don't know but we've definitely had one, but there is 21 the opportunity there for -- I'm sure it was more than 22 one but I can only recall one. 23 Q. In that one, was there a revisiting of earlier 24 acceptances -- 25 A. Yeah. 105 1 Q. -- and communication made with those subpostmasters? 2 A. Correct, correct. 3 Q. If we go back again to the expert report, the 4 EXPG0000007, I think this is the final time I'll take 5 you to that report, page 63. Thank you. Page 63 has 6 the "Satisfaction with the amount of information 7 provided about how the application outcome was 8 determined". If we scroll down, we can see, in terms of 9 the time it took, 52 per cent net dissatisfied; the 10 offer amount, 59 per cent dissatisfied; the amount of 11 information provided to you about how the outcome was 12 determined, 49 per cent net dissatisfied. 13 If we go over the page on to page 65, please. 14 There's figure 49, "Reasons why applicants accepted the 15 offer in part/full", and we only have a figure of 16 15 per cent who say that they accepted because they were 17 satisfied with the offer. 18 What's your view of those figures? 19 A. Obviously extremely disappointed. I think where 20 I struggle -- and I know it's simply an optic and it's 21 simply numbers on a piece of paper, I need to talk about 22 numbers on a piece of paper, please, if it helps the 23 Inquiry -- is that the 15 per cent satisfied, it doesn't 24 tally in my mind with the 83 per cent acceptance rate. 25 That's where I struggle. But what concerns me more 106 1 around these numbers -- and I looked at these numbers in 2 particular -- what concerns me more about this page is 3 that wanted the process just to finish is 51 -- that 4 really concerns me and that goes to what some legal 5 advisers have been saying to me as well: that people 6 just want this done and, therefore, whatever you put in 7 front of them they're going to sign because they just 8 want to talk away from it now, it's taken too long, it's 9 two legalistic, et cetera, you're putting too many 10 barriers. So that does concern me. 11 On the more optimistic side, what I'm hoping is that 12 the appeals process, when it's ready, hopefully in the 13 New Year, will be able to accommodate those people to 14 say, "Right, I wanted it to finish but now I've got the 15 appeals process, I wasn't satisfied with that, I wanted 16 it finished but I can now apply to that". 17 Q. Thank you that can come now come down. I'm now going to 18 move on to the dispute resolution process. I'll 19 introduce that briefly before lunch but we'll have to 20 return to it after lunch, the Dispute Resolution 21 Procedure applies if the offer is not accepted by the 22 postmaster; is that correct? 23 A. Correct. 24 Q. It's assigned to a case manager. Can you help us with 25 who a case manager is? 107 1 A. It will be a member of my team who has a broad knowledge 2 of Post Office and how it operates but, specifically, 3 around how to deal with disputes, and team -- the team 4 is currently 23 people, and they all have their own 5 portfolio of cases. 6 Q. There is then a good faith meeting and the next level is 7 what's known as an escalation meeting; is that correct? 8 A. So there are four layers of dispute resolution process. 9 All determined, actually, by the GLO settlement, in 10 terms of when it was all -- when the HSS was established 11 it was agreed that a dispute resolution process would be 12 established and, therefore, it's pretty within, you 13 know, given terms that we had to create a four-layered 14 dispute process: so good faith, escalation, mediation, 15 arbitration. 16 Q. Thank you. In terms of a good faith meeting, can that 17 result in an increased offer from the performance? 18 A. Sometimes, yes. 19 Q. Has it resulted -- 20 A. Yes. 21 Q. After the good faith meeting or the escalation meeting, 22 it can then go back to the panel, can it; is that 23 correct? 24 A. It can, yes. 25 Q. Is there a maximum number of times it can go back to the 108 1 panel? 2 A. No. 3 Q. Is that set out anywhere in any of the terms of 4 reference or guidance in respect of the process of it 5 going back to the panel and how often that can happen? 6 A. Only the -- going back to panel, only internally, into 7 say the process is, once we think we've gathered enough 8 information, that may change the view, then it goes back 9 to a panel. But, as no doubt you've picked up from 10 recent correspondence with Dr Hudgell, is we are now 11 adjusting that to say if the legal representative or the 12 postmaster actually don't want it to go back to panel 13 and would prefer Post Office to take a commercial view 14 on that, then that's fine as well. We're beholden to 15 what the postmaster and what their legal 16 representatives' preferred -- preferred option. There's 17 no set -- it has to go back to panel, if that's the 18 question you're asking. 19 Q. Then, finally, you have the formal mediation with 20 Wandsworth Mediation Service? 21 A. Yes. 22 Q. Does that takes place; has that taken place? 23 A. Yes, it has taken place quite a few times and, so far, 24 successful in every occasion it's been used, and some 25 positive feedback on it as well. 109 1 MR BLAKE: I'm going to return to this topic after lunch but 2 that's an appropriate moment to take our lunch. 3 SIR WYN WILLIAMS: Yes. 4 MR BLAKE: Thank you, sir. 2.00, please. 5 SIR WYN WILLIAMS: Yes, sure. 6 (1.01 pm) 7 (The Short Adjournment) 8 (2.00 pm) 9 MR BLAKE: Good afternoon, sir. 10 SIR WYN WILLIAMS: Good afternoon. 11 MR BLAKE: Mr Recaldin, we were on the topic of dispute 12 resolution. I'd like to bring up on screen your sixth 13 witness statement at page 67, please, paragraph 185. 14 You address there some figures in relation to dispute 15 resolution. It may be that they're slightly out of date 16 now because they were based on the position as at the 17 time you wrote the statement. Actually, sorry before 18 I get to that, just to say in your evidence earlier, 19 I asked you about calendar days and working days, and 20 it's been brought to my attention that, where you use 21 the term "days" in your witness statement it's calendar 22 days rather than working days. 23 A. Okay, thank you. 24 Q. If we have look at that Dispute Resolution Procedure 25 section, it says: 110 1 "Of the 2,720 offers made, 532 have been disputed 2 ..." 3 It says: 4 "86% of legally represented applicants dispute their 5 offer compared to only 11% of non-represented 6 applicants." 7 So it's much more likely that there will be 8 a dispute where somebody is legally represented; is that 9 correct? 10 A. Yes. 11 Q. If we go over the page, please, to 185(d), you say 12 there: 13 "There remain 383 unresolved disputes with 14 an average time in dispute of 14 months, of which 261 15 have not yet gone through a Good Faith Meeting. Some 16 feedback from legal representatives is to bypass Good 17 Faith Meetings and go straight to next escalation stage 18 to speed up resolution, which is why the process is 19 approached with a degree of flexibility." 20 Average time in dispute of 14 months: I mean, that's 21 a very significant time period, isn't it? 22 A. Yes. 23 Q. What do you say is the principal cause of that delay? 24 A. I think -- well, there are a number of things, ie could 25 it be done quicker? Yes. I think in this part of the 111 1 process, however, it's really important that we have 2 continuous engagement with the legal representation, and 3 also with the postmasters, and that inevitably causes 4 delay -- your term. I call it a process but 5 I understand why it can be viewed as a delay. 6 That is deliberately put in there, the 261 that 7 hadn't yet gone to a good faith meeting because there 8 are legal advisers who say "We actually -- we were not 9 in dispute, we just want to understand more. So we want 10 to understand the offer better and we are waiting for 11 advice from our clients about whether or not it needs to 12 enter into the dispute process". So it's almost like 13 a waiting room until the legal adviser gets clarity from 14 their clients around whether or not it is a dispute or 15 not, and that's why they've yet to get to a good faith 16 meeting. 17 However, there are cases, quite rightly, where the 18 good faith meeting is bypassed and that's why the 19 process is flexible and the opportunity is there to go 20 straight to a face-to-face escalation meeting. 21 Q. Can you assist us, you have there the average time. Do 22 you know how long the longest time period for 23 a particular case has taken? 24 A. No, I don't. But I know I would be very embarrassed to 25 know what it is. 112 1 Q. Because it may be -- 2 SIR WYN WILLIAMS: I take it that there are cases still 3 unresolved which were part of the cohort of cases which 4 began within the original time frame, which would mean 5 that we're four years down the line, wouldn't it? 6 A. From May 2020 when they may have been submitted, yes, 7 Sir Wyn. 8 SIR WYN WILLIAMS: Yes, yes. 9 MR BLAKE: Do you think that's a handful, tens, hundreds? 10 A. Not hundreds but certainly tens, yes. 11 Q. Thank you. If we could please go over the page to 12 page 69. We have there the proportion of offers 13 disputed by date of first offer. It looks as though, in 14 parts of 2023 into the beginning of 2024, you have 15 somewhere approaching half of the offers being disputed; 16 is that right? 17 A. Yes. 18 Q. We see there towards 45 per cent, for example? 19 A. Yes. 20 Q. We'll get to the letter from Dr Hudgell shortly, but one 21 of the complaints that was made in that letter is that 22 the escalation meetings are difficult to secure and 23 don't lead to tangible follow-up. I think you've 24 reflected on the number of meetings of those escalation 25 meetings, and you've said that there will be a further 113 1 increase in their frequency; is that correct? 2 A. Correct. 3 Q. Do you recognise that those meetings have been difficult 4 to secure? 5 A. I'd say Hudgells and Post Office have worked what 6 I think collaborative together consistently and I don't 7 believe getting dates into diary, if that's what this 8 means, has been a struggle. I don't believe think that 9 is the case. I'd like to think we're very collaborative 10 in terms of getting those dates in diaries. 11 Q. One of the cases that they highlighted was a case where 12 a figure was agreed but there had been months of 13 argument as to which head of claim that amount fell 14 under. Is that something that you're aware of? 15 A. I am aware of that case, yes. 16 Q. What are your views as to what I would call delays in 17 that particular case? 18 A. I'm disappointed, and we need to be better at it. 19 Q. Are there plans to resolve that -- 20 A. Yes. 21 Q. -- imminently? 22 A. Yes. 23 Q. What about the resubmission to the panel? Does that 24 build in further time? 25 A. Yes, it does. The resubmission to panel is a bit of 114 1 a consistency because the panel provide that consistency 2 and that optic of fair -- that fairness of the outcome. 3 And, you know, we believe it's an important part of the 4 process for that consistency and for absolutely that 5 independence but we also recognise that could lead to 6 delay, there's another legal review requested in terms 7 of a resubmission into panel. It then has to wait for 8 their next panel meeting, then they opine, and then 9 they're recommended, and that's a process that does take 10 time. And we recognise that, to avoid that, we are now 11 offering an opportunity that, instead of going back to 12 panel, we can have a face-to-face negotiation with 13 the -- directly with the legal advisers and the 14 postmasters. 15 Q. Since when has that been in place or communicated? 16 A. So that's been in place consistently or has always been 17 there, by -- we've always followed the process of going 18 back to panel. Not every time but we have a commercial 19 flexibility in order to settle. But most of the time we 20 do go back to panel for that consistency perspective. 21 So the -- in terms of additional flexibility and 22 allowing the legal advisers to make the call, and 23 obviously their clients, that is something which you 24 will have noticed was in my correspondence to Dr Hudgell 25 last week. 115 1 Q. So that's a relatively new process? 2 A. Yes, yes. 3 Q. I won't bring back the survey onto screen but, in the 4 results, more were dissatisfied with the dispute 5 resolution process than satisfied. I think that it's 6 small in numbers but 16 against 4 who were satisfied. 7 Again, do you have any views on that? 8 A. I'm disappointed but not surprised. 9 Q. We then have the arbitration level, that's for claims 10 over £10,000; is that correct? 11 A. So we've never been to -- we've never experienced 12 an arbitration, and the £10,000 is now -- effectively is 13 ineffective now because of the 75,000 scheme, the offer 14 and, again, we have never actually been to 15 an arbitration, we've never formalised that process at 16 all. 17 Q. Thank you. In terms of an appeal mechanism, there has 18 been discussion about an appeals mechanism. 19 A. Yes. 20 Q. Can you assist us with what the current plan is for 21 that? 22 A. The appeals mechanism was -- actually came out of this 23 Inquiry, and Sir Wyn and the Inquiry very helpfully 24 suggested some areas that might bring -- he might bring 25 forward -- the Inquiry might bring forward for 116 1 attention, such as the fact that consequential loss 2 principles were issued after the scheme was launched, 3 the fact that legal representation was not supported at 4 the point of submission of claims, and Sir Wyn very 5 helpfully listed a number of questions and challenges 6 around what could be the implications of these. 7 So Post Office, doing their best to listen, if I may 8 say that to the inquiry, went away to consider those 9 challenges and those issues, and said how could we 10 address those? And at the same time, actually, the 11 Advisory Board also came forward to advise the 12 Department of Business that, in their view, an appeals 13 process, an independent appeals process for HSS cases 14 would be appropriate because of the inherent mistrust -- 15 I use the word -- the inherent mistrust of anything 16 coming out of the Post Office. 17 That might be slightly unfair on the Advisory Board, 18 in terms of their advice. 19 The -- and at the same time, because of the 20 challenges that Sir Wyn and this Inquiry gave us around 21 these issues, we thought, well, actually, a resolution 22 to all these issues could well be an independent appeals 23 process, so even if cases have settled with us, then, 24 actually, if the recipient, the victim, feels they've 25 had an unfair outcome, despite the fact it's from 117 1 an independent panel, et cetera, et cetera, then they -- 2 that they have a right to an independent appeals 3 process. 4 Q. Has that been implemented? 5 A. So the Government actually announced its intention to 6 bring that forward, I think under Minister Hollinrake at 7 the time, I think in March of this year, it was 8 announced in the House of Commons. We then had purdah 9 and we had an election and, therefore, new ministers had 10 to be appointed and new ministers had to be brought up 11 to speed, and they understand, and there has been 12 an announcement in the house, that the new Minister is 13 also supportive of such an appeal scheme, so that has 14 formally been announced. The actual process behind that 15 has -- is being built, I understand, but, again, Post 16 Office is willing to help, are helping, to build that, 17 but that has to be independent. It cannot be tainted 18 with Post Office, I completely understand that, and that 19 will be run by the Government. 20 Q. It will be run by the Government: who is building it at 21 the moment? 22 A. The Department of Business and Trade are building it 23 as -- I understand as we speak. 24 Q. Have you made any projections as to anticipated take-up 25 of that mechanism? 118 1 A. No. 2 Q. Do you have a view as to how likely it is or not that 3 the numbers are going to be of significance? 4 A. I think, through the helpful YouGov survey and our live 5 experience, I think we can help very much in what that 6 may look like and, although it has not been agreed, one 7 step that has been discussed in this appeals process is 8 the potential transfer of the dispute resolution process 9 into that appeals process. It hasn't been agreed, it's 10 one thing that is being considered. 11 Q. In terms of the overall perceptions, as you've said, 12 they're set out in the YouGov survey. Perhaps we can 13 bring that up. Again, that's EXPG0000007, page 67, 14 figure 50. 15 Page 67. If we scroll down, we can see overall 16 satisfaction levels, and I think this is something that 17 may give you, as you say, an indication. We have there 18 figures for those who said that they were fully informed 19 at every stage of the process, net dissatisfied 48 per 20 cent; that the scheme was easy to understand and 21 navigate, net dissatisfied 49 per cent; that you had 22 enough information to make informed decisions, net 23 dissatisfied 52 per cent; with the HSS overall, net 24 dissatisfied 49 per cent; with the time it took from 25 starting your application to reaching the end, net 119 1 dissatisfied 48 per cent; with the amount of 2 compensation received, net dissatisfied 43 per cent. 3 As you can see there, that was 1,430 respondents to 4 that part of the survey. Again, do any of those 5 surprise you? 6 A. What I can -- maybe hopefully to help the Inquiry is 7 they disappoint me, again, but they don't surprise me. 8 My experience away from the Post Office in remediation 9 schemes, this sort of feedback is not unusual, 10 unfortunately. It's just not unusual. It's 11 remediation. Something has gone badly wrong, for 12 anything like this to be -- and, boy, has it gone wrong 13 in this space, right, absolutely gone disastrously 14 wrong. And, therefore, any recoup from that position is 15 always going to be a struggle. So, yes, the figures are 16 just not good, in terms of, you know, 49 per cent are 17 overall dissatisfied; 51 per cent might be partially 18 satisfied. 19 And that's what -- in a remediation scheme, that's 20 what you have to hang on to, in terms of the positives. 21 So very disappointed, absolutely, but not surprised, 22 simply because of the nature of my experience before 23 Post Office of remediation schemes. 24 Q. Thank you. That can come down. If we address issues of 25 delays, you've already addressed them this morning. 120 1 You've set them out in detail from paragraph 104 onwards 2 in your statement, I won't bring that back on to screen, 3 I'll just go through one by one of the various reasons 4 you give for delays. The first is the issue of funding 5 and it's a matter you've already addressed today, that, 6 for example, panel members are only appointed in June 7 2020, funding sign-off from the Department for Business 8 and the Treasury was not until March 2021. 9 So am I right to summarise it, in your view, one of 10 the reasons for what I call delay, what you call 11 process, is issues with funding? 12 A. Yes. 13 Q. Second, you referred to high volumes of applications and 14 their complexity. You say that the 2,548 claims by 15 September 2020 was unanticipated. I think that's also 16 the evidence effectively you gave this morning; is that 17 right? 18 A. Yes. 19 Q. There's been complexity, such as taxation issues, the 20 Official Receiver and bankruptcy issues, issues with 21 creditors. Can you very briefly summarise those kinds 22 of issues for us? 23 A. Well, when you -- any activity where you are required to 24 engage with a third party then an education process has 25 to take place and you are dependent on the third party. 121 1 So bankruptcy is a great example, and insolvency. So 2 that will always take time to feedback and how you were 3 going to deal with those cases. 4 If I may, the one thing not on that list is the 5 governance around the establishment of the process, the 6 drawing up of the principles and we talked this morning 7 around HSF and the panel assisting us, and indeed, we 8 need to include the Government in that process as well, 9 in terms of drawing up all those principles and those 10 processes and getting them all signed off at a multitude 11 of levels. I think the last time counted there are 12 12 stakeholders that I need to keep happy and, in 13 particular, in this very sensitive space. That is 14 a challenge for any organisation to be able to do, to 15 keep those 12 stakeholders engaged and comfortable and 16 have a say in a process design. 17 Q. Thank you. Sticking, though, with the bankruptcy issue, 18 you've addressed that in your eighth witness statement 19 and perhaps that can be brought up on screen it's 20 WITN09890800. It's page 3 where the issue of bankruptcy 21 is addressed. You say there: 22 "In relation to claims concerning bankruptcy, there 23 are: 24 "56 outstanding claims which were made between 1 May 25 and 27 November 2020, all of which have received 122 1 an offer; 2 "15 outstanding claims which were made between 3 28 November 2020 and 31 December 2023; and 4 "87 outstanding claims which have been made since 5 1 January 2024." 6 Is this a particularly problematic group of cases? 7 A. That's not the feedback I'm getting. I mean, clearly we 8 need -- there's a separate process for bankruptcy cases. 9 We need to understand what the bankruptcy court are 10 interested in, in terms of their take on this and we do 11 split the heads of loss to -- heads of loss that we can 12 pay directly to the postmasters and ones that we need to 13 be committed to the bankruptcy court et cetera. So it 14 hasn't been raised to me as a particularly troublesome 15 area but, again, and I know we will get onto it, 16 a number of the -- and in particular the 87, may be 17 resolved by the £75,000 process. 18 Q. Thank you. That can come down. 19 I'm still going through the various reasons you give 20 for delay. The third is shortfall analysis. I think 21 we've already dealt with that, and you've said it could 22 possibly be sped up by just looking for one shortfall, 23 rather than multiple shortfalls in the future. 24 The fourth is later applications, so the scheme 25 reopened in October 2022, and you had 230 claims waiting 123 1 to be addressed straightaway, so those are ones that had 2 been stacked, effectively; is that correct? 3 A. Correct. 4 Q. Following the Mr Bates ITV drama there were 1,345 5 applications between January and May 2024, so a large 6 number of applications. 7 In paragraph 120 of your sixth statement you accept 8 that you were not resourced for that increase in January 9 2024. Can you elaborate on that, please, for us? 10 A. Absolutely. So until that point, we were effectively 11 planning closure of the HSS and, indeed, had 12 a tentatively agreed date with the Government about when 13 we would close the scheme, simply because we knew how 14 many late applications we were getting in and, 15 therefore, could project how long the scheme needed to 16 last for. Now, we'd have still issued a reminder for 17 people to come in if they wanted to, but it was clear 18 from the traction that we were getting and the new 19 number of claims coming in, that it was -- and they were 20 coming down to a handful a week and, therefore, we were 21 planning to effectively close the HSS scheme with 22 Government permission, et cetera, et cetera. 23 So we downsized the people accordingly, we can't 24 have people sitting round not doing anything, so both 25 HSF and Post Office started decreasing the number of 124 1 people on the scheme. 2 Q. So in terms of your staffing and support, what was your 3 team size as at, say, December or the very beginning of 4 January 2024? 5 A. Beginning of January, it will be circa 200. 6 Q. How has that changed since then? 7 A. Well, we're now increasing significantly. As I said 8 earlier, we're now recruiting in order to anticipate the 9 peak of activity that we have. That said, we are also 10 automating and, therefore, we are going through 11 a careful planning process around the people we 12 potentially release through automation, we're using -- 13 we're hopefully going to transfer their capabilities, 14 their abilities to other areas of the business. 15 Q. If I can pick you up though on the recruitment, I think 16 your evidence was the recruitment process was taking 17 place now? 18 A. It is. 19 Q. The increase in numbers took place in January/February 20 2024. Were you doing anything about those numbers in 21 the intervening period? 22 A. So the -- sorry, the numbers in 2024 are the consistent 23 numbers that we've had in the RU, Remediation Unit, 24 across, that's been fairly consistent. It's only the 25 recent recruitment where those numbers are going up. 125 1 Q. But in terms of the number of applicants, that shot up, 2 we saw those figures, after the ITV drama? 3 A. Yeah. 4 Q. Did the number of people within your team shoot up 5 accordingly, or is it just more recently that you have 6 turned your mind to increasing numbers in your team? 7 A. More recently, in terms of the impact of those cases 8 coming through. 9 Q. Why do you think it is that thought wasn't given to 10 increasing numbers before now? 11 A. It has been and, forgive me, I was talking about Post 12 Office. So don't forget a lot of these processes are 13 within Herbert Smith and they had downsized and they had 14 started increasing at that time, so in early '24, they 15 were increasing their numbers to deal with the peak. 16 Q. Thank you. The fifth reason you give is agreements 17 pertaining to tax treatment, interim payments, 18 eligibility, bankruptcy and insolvency. Under that 19 heading, you've also discussed issues with having to 20 liaise with the Department for Business and Trade. Is 21 there a figure at which you have delegated authority to 22 settle cases without having to refer them or refer 23 matters to the Department for Business and Trade? 24 A. Yes. 25 Q. Is that something you are able to give an indication of? 126 1 Is it most/some that fall under that? 2 A. So, that's a very good question. I would say some. 3 Q. But in the majority of cases, you still have to go back 4 to the Department for authorisation? 5 A. I would say more than that. So, certainly -- and I am 6 absolutely guessing here -- but it feels like sort of 7 60 per cent still need to refer to further authority 8 levels. So I hadn't been -- I haven't been -- my 9 authorities matrix is very complex and I have certainly 10 haven't been given the mandate to settle at whatever 11 cost; that would be wrong as well. But I haven't been 12 given a complete flexibility in that, no. 13 Q. Do you think the level that it is currently at is too 14 low, too high, just about right? 15 A. In order -- looking at the cases that we need to 16 resolve, I would say currently it's too low. 17 Q. Are steps being taken, have you had discussions with the 18 Department about this? 19 A. Continuously. 20 Q. Are they open to changing that? 21 A. Yes. 22 Q. Do you foresee that changing soon? 23 A. I hope so. 24 Q. The sixth, and one that we're going to come back to and 25 possibly spend quite a lot of time on it, is the legal 127 1 representation and legal representation costs. Those 2 costs have only been available since October 2022; is 3 that correct? 4 A. Yes. 5 Q. They're not available at the application stage, they're 6 only available at the offer stage; is that correct? 7 A. That is correct. 8 Q. Could I please take you to page 39 of your sixth 9 statement. That's WITN09890600, page 39, paragraph 127. 10 So you say at paragraph 127: 11 "Some applicants have instructed legal 12 representation from the beginning of their application 13 process. While the data shows that this makes a minimal 14 difference to the eligibility outcome, we have received 15 proportionately more consequential loss claims as 16 a result. Although available to all upon request, the 17 data appears to show legal representation has also been 18 a driving force in applicants receiving an interim 19 payment." 20 So it seems as though those who do instruct their 21 own lawyers are more likely to claim for consequential 22 losses and are more likely to claim for interim 23 payments; is that a fair understanding of that 24 paragraph? 25 A. That is a very fair understanding of that paragraph. 128 1 Q. Does that not suggest that the ability to claim for 2 those might not be sufficiently identified to those who 3 don't have legal representation, or sufficiently known 4 by those who don't have legal representation? 5 A. I think that could also be a fair conclusion. If it 6 helps the Inquiry, if I may step back slightly, and 7 I think the Inquiry will recognise that post the GLO and 8 the activation of this scheme, the term "legally light" 9 has been used quite a lot because the GLO membership was 10 so burnt by the legal process, which they were forced to 11 go through to get the absolute right outcome for them 12 and for the other postmasters as well, and therefore, 13 their insistence was if -- for any other scheme, would 14 be legally light. 15 And that's why the HSS was originally built that 16 way, to say, "Well, we want to make this a legally light 17 process and, therefore, you don't necessarily need legal 18 advice for the submission but you can have legal advice 19 when the offer is made". Now -- and we'll support that. 20 That was the theory behind why there wasn't legal 21 advice. Now, I recognise the optics coming out of my 22 own statements, and instead the YouGov study, et cetera, 23 et cetera, it's pretty clear that that statement is 24 accurate, by looking at the data, that applicants who do 25 have legal representation apply for more consequential 129 1 heads of loss accordingly. 2 Q. As a result, do you think a lesson learnt is that, 3 actually, legal representation at an earlier stage could 4 positively benefit the scheme? 5 A. I think it can but, again -- and again, please, this not 6 defensive at all -- I struggle, therefore, with why 7 83 per cent seemed to be satisfied, and the vast 8 majority of those without legal advice. 9 Q. When you say satisfied, we saw from the survey results 10 they weren't necessarily satisfied. What you mean is 11 83 per cent accept the offers? 12 A. You're absolutely right, and I apologise: they have 13 settled. 14 Q. Yes. 15 A. And I just struggle with that sometimes. But I'm sure 16 you will go on to the fact that the ones who are legally 17 advised at the offer stage and beyond, their average 18 redress is greater, as well, and I absolutely get that 19 as well. 20 Q. I think you've said that the background to that is that 21 the subpostmasters wanted it to be legally light. Is it 22 not also part of the story that the Post Office and 23 Department for Business, or whoever else was involved in 24 designing the scheme, may also have wanted to avoid 25 having lawyers at an early stage in order to save costs? 130 1 A. I think that was probably a consideration. I wasn't 2 there but I think it probably was a consideration. 3 Q. One thing that you've said at paragraph 139 is that it's 4 regrettable that the Post Office didn't send the 5 consequential loss guidance to all potential applicants. 6 Have you done anything to highlight what consequential 7 loss is to publicise its availability to those who may 8 not be aware? 9 A. Yeah, I mean it's comprehensively covered on the 10 website, and we direct everybody to that. We also have 11 a customer care line, in effect a customer support line, 12 when postmasters ring in, legal advisers ring in, and we 13 can point them in that direction. 14 Q. We'll come to that. So that was your sixth reason, 15 legal representation issues. Seventh, in terms of delay 16 or time that things have taken, is the Dispute 17 Resolution Procedure. That can come down but, at 18 paragraph 130, you say: 19 "When an applicant rejects their offer, this is 20 often the time when an applicant obtains legal 21 representation [and that] has meant that ... further 22 information is then presented ... new heads of loss ..." 23 So when somebody instructs a lawyer, which is only 24 available as of right once an offer is made, then they 25 may, for example, provide new information or further 131 1 heads of loss. That again builds in time to the 2 process. Reflecting on that, doesn't that justify the 3 instruction of lawyers at an earlier stage because, if 4 you had that information or heads of loss at an earlier 5 stage before the offer is made, that might avoid the 6 delay or time taken after the offer is made. 7 A. I cannot see a flaw in that. 8 Q. I think you say in your statement that it elongates the 9 time that it takes to settle as a result of -- 10 A. Correct. 11 Q. -- that new information. 12 Moving on now to the fixed sum offer and top-ups -- 13 SIR WYN WILLIAMS: Before you do that, Mr Blake, have you 14 left the topic of appeals because, if you have, I just 15 want to ask one or two more questions about that before 16 you start another topic. 17 MR BLAKE: Yes, please, sir. Please do. 18 SIR WYN WILLIAMS: Mr Recaldin, perhaps we could have 19 paragraph 139 of Mr Recaldin's witness statement on the 20 screen, and that's at page 42. This is simply to give 21 us a reference point, really, Mr Recaldin, for the point 22 I want to pursue with you. You'll see that the second 23 part of this paragraph actually deals with what 24 an appeal may deal with. 25 MR BLAKE: We're just waiting for it to come up on screen. 132 1 SIR WYN WILLIAMS: Sure. (Pause) 2 Right, so I'll come to this paragraph in a second. 3 Let me just ask you one or two basic questions to make 4 sure I've got it right. The possibility of an appeal 5 process was first mooted earlier this year and not 6 before that; is that correct, Mr Recaldin? 7 A. There was a recommendation from the Advisory Board, 8 forgive me, Sir Wyn, I don't know when, but it was 9 before March this year, and there was a recommendation 10 from Post Office about the same sort of time as well, 11 for an independent appeals process. 12 SIR WYN WILLIAMS: Right. Then the Government announcement 13 was March this year? 14 A. I think so, yes, that was Minister Hollinrake. 15 SIR WYN WILLIAMS: That's fine for these purposes. I'm 16 right in thinking, from what you've said, that the 17 appeal process will be both formulated and administered 18 by the Department, not by the Post Office? 19 A. You're absolutely correct, Sir Wyn. 20 SIR WYN WILLIAMS: Right, but this is now coming to the nub 21 of what I want to ask you about. Since March 2024 to 22 the current date, has the Department, in inverted 23 commas, consulted with the Post Office as far as you are 24 aware about the grounds upon which an appeal might be 25 brought? 133 1 A. No, they -- sorry, since March -- yes, they have 2 recently, Sir Wyn. 3 SIR WYN WILLIAMS: When you say "recently", do you mean 4 within the last few weeks, or what? 5 A. I do mean within the last few weeks. 6 SIR WYN WILLIAMS: Right. So there is still work to be 7 done, if I can put it in that way, in formulating what 8 might be regarded as at the heart of any appeal process, 9 namely upon what grounds can you bring an appeal? 10 A. Correct. 11 SIR WYN WILLIAMS: Right, okay. I use this paragraph, 139, 12 because in it you say that the Post Office hopes that 13 the appeals process might assist with remedying people 14 who were unaware that they could bring, say, 15 consequential loss claims? 16 A. Yes, Sir Wyn. 17 SIR WYN WILLIAMS: Yes. So there's still a great deal of 18 uncertainty, am I right, about the basis upon which any 19 appeal can be brought? 20 A. There is uncertainty on the basis of which appeals can 21 be brought currently, yes. 22 SIR WYN WILLIAMS: Does that uncertainty extend to having to 23 decide whether the appeal process will be open to 24 everybody who has, thus far, participated in HSS, 25 regardless of whether they've settled or not, or is 134 1 there still a debate going on about which category of 2 HSS claimant might be eligible to appeal? 3 A. I think that is being discussed. Whether or not it is 4 open for everybody or whether there -- my words, 5 Sir Wyn -- whether there's a filter on that on what 6 types of applicant can apply to it, I think that is yet 7 to be determined. 8 SIR WYN WILLIAMS: All right, well, when Mr Creswell gives 9 evidence on behalf of the Department, he may be able to 10 place more flesh on this particular bone. But, doing 11 the best you can, does it look to you as if we are some 12 months away from formulating both the criteria for 13 bringing an appeal and the process for bringing 14 an appeal, and, therefore, some months away from this 15 appeal process beginning? 16 A. Sir Wyn, on the limited engagement I've had with the 17 Department on this, I understand there is a strong 18 appetite to have something up and running in the new 19 calendar year. 20 SIR WYN WILLIAMS: Well, those are very carefully chosen 21 words, if I may say so, Mr Recaldin, because something 22 up and running in the new calendar year could span from 23 January until December, couldn't it? 24 A. Okay, let me be fairer to the Government's Department 25 for Business and Trade. Again, the limited engagement 135 1 they've had with me and my team is that they are 2 certainly under pressure in order to produce a process, 3 and the articulation, the verbal articulation they have 4 is that they are under pressure to be able to do 5 something, to announce something in terms of a process 6 in Quarter 1 of the next calendar year. 7 SIR WYN WILLIAMS: All right, thank you. I wasn't trying to 8 tease you, Mr Recaldin. 9 A. No, that's fine. 10 SIR WYN WILLIAMS: Do you know if -- if you don't, please 11 say so -- but do you know if there has been any 12 consultation between the Government and any groups 13 representing postmasters about both the likely grounds 14 of appeal and the process generally? 15 A. No, I don't. 16 SIR WYN WILLIAMS: Fine. All right, thank you very much, 17 sorry, Mr Blake. 18 MR BLAKE: Not at all. 19 Thank you, we'll move on to the fixed sum offers and 20 top-ups. As you've said already today, the average that 21 was paid was £52,000 and, from 9 August this year 22 a fixed sum offer of £75,000 was introduced and is also 23 provided as a top-up to those who had already settled 24 for a figure below that. So we have top-ups to those 25 who have already settled that increase the amount that 136 1 they are provided up to £75,000; you have an offer to 2 those who haven't yet settled for 75,000 -- for any 3 figure, an offer of £75,000, and you also have -- are 4 communicating this offer to those who haven't yet 5 applied for any redress; is that correct? 6 A. Correct. 7 Q. Can you briefly explain the background to the 75,000 and 8 whose idea it was and where it came about? 9 A. So the background to the 75,000 was effectively 10 a minimum payment introduced into the new GLO scheme, 11 which, as we know, is operated by DBT, the Department 12 for Business and Trade. The Government recognised 13 straightaway, as the Post Office, that if that was being 14 offered in the GLO space, it would be absolutely 15 appropriate to also offer the same in the HSS space. 16 But, as ever, there are differences between the GLO 17 scheme and the HSS scheme. So we are grateful, willing 18 to adopt that but, of course, we had to incorporate that 19 new processes because the HSS cohort is a different 20 cohort to the GLO cohort. 21 Q. If you accept the 75,000, are you foregoing other rights 22 and including, as Sir Wyn has said, in terms of those 23 potential appeal rights, might you be foregoing those 24 appeal rights? 25 A. So -- and this is why I articulated the differences 137 1 between the GLO and the HSS is yes, you're absolutely 2 right, as you've mentioned earlier, by accepting the 3 75,000 you're waiving your rights to a future appeal. 4 So you would call it delay and I understand that. One 5 of the reasons for delay on the 75,000 was we had to 6 take a step back and say while, actually, you know, how 7 are we going to operate that in the HSS scheme because 8 what we prefer to do is one communication to all the 9 postmasters and past postmasters who had not applied, to 10 say, "Here is your opportunity to apply, here is what 11 the £75,000 scheme looks like, here is a closing date, 12 and here is the details of the appeals process". 13 So if you decide to accept the 75, you are waiving 14 your right to this appeal process and this is what it 15 looks like. 16 Now, because of the timing issue, and I have to say 17 that the election has probably got something to do with 18 it that appeal process was not built sufficiently enough 19 to be able to be communicated and, therefore, all we can 20 talk about is a future appeals process that is going to 21 be built, and -- but in my view, quite appropriately, we 22 still felt we had to get out there with these offers. 23 It's all about timely redress because we were falling 24 short on the timeliness of this redress. 25 So, therefore, it's not the best piece of 138 1 communication, I accept that, to say, "Here is your 2 top-up, here is your offer of 75,000, however, but by 3 taking it you are waiving your rights to appeal process 4 which isn't built yet." And I understand the optics of 5 that. I absolutely understand the optics of that, and 6 we have spoken at length to Government about those 7 optics; I call them risks. And the Government are aware 8 of our concerns around that. Nevertheless, everybody 9 felt it's still appropriate to launch the £75,000 scheme 10 accordingly. 11 Q. So an individual may accept the 75,000 figure now, in 12 the knowledge that they are foregoing an appeals process 13 that is not in fact yet developed? 14 A. Correct. 15 Q. You've also addressed in your eighth witness statement 16 the letters that have been sent out, you say 266 letters 17 have been sent out to those whose applications have been 18 recently received and the Post Office considers may be 19 appropriate; 54 of those have already been paid. Can 20 you tell us very briefly about this assessment. How 21 have you assessed that certain current applications may 22 be appropriate for that £75,000? 23 A. Well, because of their claim, sorry. We've looked at 24 their claim and their claim appears to be under 75,000. 25 So that feels like an opportunity. So we've ring-fenced 139 1 that population, that cohort, and we've proactively gone 2 out to them and said, "Would a 75,000 offer satisfy your 3 claim?" We've had a very interesting and a very prompt 4 response to that, which is really encouraging, and we 5 continue to do that with the existing cohort. And we've 6 got a positive response back in many cases, and we 7 turned -- so as soon as they signed their offer, they 8 are presented with an offer, as soon as they sign, we 9 pay within ten working days. 10 Q. Letters have also gone out to applicants who have 11 received but who haven't accepted offers of less than 12 75,000; is that correct? 13 A. Correct. 14 Q. There is also a mass mailout that either was just about 15 to take place or has -- 16 A. Has taken -- we started it, it's up to 30,000. I can't 17 send 30,000 out on the same day but we are ramping that 18 up so we're at hundreds now. This week we'll send 19 thousands, next week we'll send -- so we're ramping all 20 that up to cover the 30,000 population -- 21 Q. To be sent to 30,000 people? 22 A. Circa -- it depends on that. We were doing all the data 23 analysis on the population, yes, so up to 30,000. 24 Q. Thank you. In terms of the top-up payment those letters 25 are also being sent out to those who settled for less 140 1 than 75,000? 2 A. Yes. 3 Q. Again, have they gone out, are they about to go out? 4 A. They've gone out. 5 Q. They've all -- 6 A. They've gone out and, on that population alone, we've 7 paid out 87 million. 8 Q. I think you have said in your eighth statement that 9 1,194 top-ups have been accepted. Presumably that's 10 also increased since -- 11 A. Yes. 12 Q. -- the date that that was written? 13 A. Yes. 14 Q. You have noted that 85 per cent of settled claims have 15 settled for less than 75,000. There might be 16 a suggestion that those delays that we've seen in the 17 process in 2024, you don't call them delays, but we saw 18 the figures, the charts, the bars, quite high, as at the 19 current period. It might be suggested that there is 20 a delay being built in to the existing claims in the 21 hope that people will accept those £75,000 payments. 22 What do you have to say about that? 23 A. I think that's fair. I think there has been 24 an identified -- an exercise -- I know there has been 25 an exercise that has gone through on that population to 141 1 say, "Is there a part of this population who think will 2 be appropriate to offer the 75,000 and, therefore, once 3 we've got the funding in place, we can jump on that 4 straight away?" Absolutely, yes. 5 Q. But do you think that has actually resulted in a delay 6 to the processing of their applications through all the 7 stages that we've talked about? 8 A. No, I think it's actually sped it up, if I may be so 9 bold, because they won't have to go through the full 10 process, the full legal analysis, the full HSF review, 11 and the full panel session. So hopefully we go slow to 12 go fast on -- 13 Q. But those that are awaiting a panel session, for 14 example, awaiting those various stages and meetings, is 15 any consideration given to the fact that it might be 16 that those are cases that will accept the 75,000 so we 17 won't be progressing them to those various stages? 18 A. Absolutely. 19 Q. There is? 20 A. Yes. 21 Q. Can you expand on that, please? 22 A. So, again, we look at the entire population that have 23 made a claim and, if we believe -- if the claim is for 24 under 75,000 or we believe they may settle or under 25 75,000, we will approach them all to say, "This is the 142 1 new thing, is this something that you would be 2 comfortable with accepting, given you'll be waiving your 3 rights to an appeal, et cetera, and if you hear all the 4 details and if you're comfortable with this, let us know 5 and we will immediately make you an offer of 75,000". 6 So they can interject into that process at any time 7 they want. 8 Q. Do you think that that is fair to those that are 9 awaiting an imminent panel hearing, for example, or 10 panel decision, that their cases might now go back 11 slightly in the queue because you're waiting on the 12 response to that £75,000 offer? 13 A. I don't think it's as timely as that. I don't think 14 that would be a delay, and they have the right to 15 continue with the process -- or not, we're not stopping 16 that process; we're just giving them another option 17 which they might wish to consider. So I don't see that. 18 And again, if they're queueing up for panel, and 19 I actually see, if they are -- if 75,000 is a good offer 20 for them, I still would see that as being a quicker 21 redress than going to panel and waiting the 30 days from 22 panel to offer letter, et cetera, et cetera. 23 Q. But just so we're absolutely clear, there isn't, is 24 there, a conscious decision on behalf of the Post Office 25 to not take forward those cases? 143 1 A. No. So only with -- so only with their permission. 2 Only with the postmasters' permission. 3 Q. Can we please turn to BEIS0000763. This is the minutes 4 of a meeting with Minister Hollinrake on 30 April 2024. 5 We can see there that you are one of the listed 6 attendees. If we scroll over the page, please, there's 7 a section on compensation. We have a couple of versions 8 of this document. There is a slight change made to the 9 minute, and I'll take you to that, but there's 10 a discussion of compensation here, and it records as 11 follows: 12 "Simon ..." 13 Is that you? 14 A. That will be me. 15 Q. Yes: 16 "Simon explained the message from us on OC2 ..." 17 Is that the new Overturned Convictions process? 18 A. HCRS. 19 Q. "... happy to help. He noted that they are 20 communicating with Charlotte and Carl's team. Need to 21 clarify within acceptable time about what that 22 disclosure looks like. Full disclosure big job and very 23 expensive ... 24 "[Minister Hollinrake] noted that he was hopeful 25 that a lot of these people take the fixed sum award 144 1 route anyway." 2 You say: 3 "... even to a place where no disclosure at all." 4 Then this is the bit that is changed in the 5 subsequent notes, it says: 6 "How can I advise my client that £600,000 is good 7 enough given no disclosure." 8 The amendment in the later version, which I can take 9 you to, is making clear that you're saying that 10 claimants will say "How can I advise my client"? 11 A. I'm trying my best to identify a risk that the 12 Government might face in terms of something that a legal 13 adviser might say to them, "How do I know that -- how 14 can I advise my client if £600,000 is a fair offer if 15 I have no disclosure? I don't know". 16 Q. This is not in relation to the current scheme we're 17 looking at -- 18 A. No. 19 Q. -- but I just want to take you to some words from you 20 within that meeting. So we have what you've said there, 21 and it says: 22 "Simon said that they are hoping to help with 23 capture. Open and willing to let accountant in to have 24 a look. Also they are keen to see HSS Appeals that, 25 whenever it is ready." 145 1 Minister Hollinrake says: 2 "... still waiting for HMT I think? 3 "Carl [Cresswell] agreed with the Minister and noted 4 that we are working with [the Post Office] to see if we 5 can do the £75,000 top-ups (not new cases) in the 6 meantime." 7 That is the issue we've just been discussing, 8 I think -- 9 A. Correct. 10 Q. -- in relation to the appeals process and the £75,000 11 offer. 12 You say there, at the penultimate entry: 13 "Simon current proposal on the new £75,000 is to do 14 it in-house and not use the services of [Herbert Smith 15 Freehills]." 16 Is that still the case? 17 A. As in my statement and as advised earlier, yes. 18 Q. Thank you. If we look at the amended version, that 19 BEIS0000764. It's not significantly amended but, if we 20 look at the bottom of page 2., we can see there that the 21 issue you post is: 22 "Kevin noted that he was hopeful that a lot of 23 postmasters whose convictions are overturned by the Bill 24 will take the fixed sum award route [away]." 25 You respond: 146 1 "... even to a place where no disclosure at all. 2 [This is the risk that you're highlighting] Claimant 3 lawyers may ask, 'How can I advise my client that 4 £600,000 is good enough given no disclosure?'" 5 Doesn't that also apply to the 75,000 figure that 6 we're talking about in relation to the HSS scheme? If 7 your plan is for that to be a quick process, doesn't the 8 risk that it's not going through that disclosure 9 process, that it somehow bypasses that process, isn't 10 that risk present here? 11 A. Yes. 12 Q. Is there anything that you plan on doing about that 13 risk, or is that just a risk that -- 14 A. I'll articulate that risk in a slightly different 15 anyway, if I may, that is legal representation at the 16 claimant stage, effectively. I think you called it 17 disclosure, I say it's legal representation at the offer 18 stage. I'm sure the Inquiry have seen the documentation 19 around this. Post Office have pushed hard on this with 20 DBT, and I'm sure Carl will support that as well. The 21 evidence is there. We pushed hard on this in terms of 22 wanting to have -- understanding the optics of having 23 legal advice at the claimant stage from the 24 perspective -- DBT, currently, their thinking is not 25 aligned with that, in terms of funding -- in terms of 147 1 funding that -- everything has to be funded of course 2 and it's taxpayers money -- in terms of funding that, 3 and everything is under continuous review but, at the 4 moment, they're saying they want to stick to the current 5 process. 6 Q. So is your evidence that in respect of the £75,000 fixed 7 sum offer or top-up, the Post Office's position is that 8 it will be preferable to have legal advice at the early 9 stage, whereas the Department for Business' position is 10 different to that? 11 A. I don't want to elaborate on it, on a difference of 12 policy between -- that's not -- my job is to get redress 13 out to postmasters as quickly as possible. I really, 14 really cannot afford, and don't want to get involved in 15 sort of internal politics, but I need to answer your 16 question, okay. And the Post Office's view has always 17 been in this cohort that we should offer legal advice, 18 to pay for legal advice, in the offer stage, ie 19 learning from our lessons from the original cohort. 20 Q. You say at the offer stage, do you mean prior to -- 21 A. Prior to the -- at the claim stage. At the claim stage. 22 And the evidence is there and I'm sure the Inquiry have 23 seen it, the number of times I've written to the 24 Department to ask them to reconsider that position. And 25 they haven't. 148 1 Q. Do you know why: is it purely funding; is it something 2 more than that? 3 A. I do believe -- and I think I articulated before -- 4 I do -- I understand, I do understand, I try to be 5 balanced. I understand that, if somebody has got 6 an offer and people who talk to me regularly will be 7 bored of me saying this story -- if people have got 8 an offer of 40,000 and they've settled and they're 9 satisfied, I appreciate your definition of satisfaction 10 is different from mine -- they've settled at 40,000, and 11 then they get a letter saying, "We want to top that up 12 to 75,000, sign here", I can understand why they may not 13 need to necessarily think twice about obtaining legal 14 advice. I get that and, certainly, the process is not 15 designed to encourage legal advice. 16 And so, you know, to make it simple and slick, fast, 17 and get redress out of the door, which is my job, I can 18 see how that can work. I worry when the legal advisers 19 come to me and say, "Hang on a minute, how can I advise 20 my customer -- my client, whether that is a full and 21 fair?" And that's a risk to me. 22 Q. Thank you. That can come down. Thank you. 23 Moving on to interim payments. You've addressed 24 that at paragraph 22 of your sixth statement. I don't 25 need to go to the actual paragraph. At first it was 149 1 £10,000 limited to those in poor health or suffering 2 from financial hardship; is that correct? 3 A. Correct. 4 Q. Those limits on availability were lifted in October 5 2022? 6 A. Yeah. 7 Q. Since July 2023, interim payments of up to 100 per cent 8 are available to applicants who have received an offer? 9 A. Correct. 10 Q. Does that mean 100 per cent of the amount you're offered 11 you will receive straightaway, irrespective of whether 12 you contest it further or not? 13 A. Yes, if you ask for it. Yes. 14 Q. Thank you. What is the situation in respect of those 15 who haven't received an offer in respect of an interim 16 payment? How is that calculated now? 17 A. So we do offer interim payments prior to offer, upon 18 request, in particular in hardship cases, but it's not 19 limited to hardship cases. And we have a process where, 20 as long as we've identified the shortfall, it's the 21 amount of the shortfall we go up to, that we can pay 22 out -- we don't get many requests for pre-offer interim 23 payments. In fact, very, very few, for pre-offer 24 interim payments. 25 Q. How is that now going to work with the £75,000 offer? 150 1 If, essentially, people are getting £75,000 as of right, 2 albeit risking certain rights such as appeal rights, 3 does that justify a greater interim payment to those who 4 contest the 75,000 and say that their claim is worth 5 more? 6 A. That's where the jeopardy comes in and it's important 7 the Inquiry understand that, is that, if they decide not 8 to take the £75,000 offer and subsequently their claim 9 has gone through the independent panel and et cetera, 10 et cetera, and comes out at less than 75,000, they'll 11 get the lesser figure. 12 Q. Reflecting on it, do you feel that there should be or 13 shouldn't be some sort of increase in the standard 14 interim payment for those who are contesting, in light 15 of the fact that they are contesting, but they have 16 rejected a £75,000 offer? 17 A. Well, it depends if they've got an offer or not. So if 18 they've got an offer already -- 19 Q. They get 100 per cent? 20 A. I have strong views. As soon as an offer goes out, it's 21 not Post Office money, it's not Government money, it's 22 the postmaster's money. So as soon as that offer goes 23 out, they're entitled to the lot. The dilemma I think 24 you're articulating extremely well is the dilemma of 25 when you haven't got an offer, the 75,000 has been 151 1 rejected, so that's a pre-offer interim payment and, 2 therefore, we would go back to the shortfall. 3 Q. Exactly. 4 A. Yes. That's right. 5 Q. Looking at the £75,000 figure that's now going to be 6 offered, do you think limiting those interim payments 7 just to the shortfall figure is sufficient and is right? 8 A. I think it's consistent, and it supports the jeopardy 9 that Government clearly want to put in place to say, 10 "You've got an opportunity of 75,000 but if you don't 11 believe that's sufficient, there is a risk that once the 12 case has gone through the full assessment, the risk you 13 face is it might be less". 14 Q. Thank you. Can we bring up on to screen your sixth 15 witness statement at page 56. It's paragraph 167. 16 I just want to understand some figures that are given 17 there about interim payments. 18 Thank you, so it's page 56, paragraph 167. You say 19 there: 20 "In total, 474 interim payments have been paid to 21 312 applicants (7% of applicants). Of these Post Office 22 have offered 174 single payments equating to 100% of 23 their offer, with the balance being partial payments; 24 and 23% of complex applicants received an interim 25 payment compared to 10% for standard applicants." 152 1 Can you assist us, more interim payments have been 2 made than there are applicants. Can you help us with 3 that, please? 4 A. Absolutely. It is confusing and apologies, that is 5 a confusing paragraph. So an applicant can have number 6 of interim payments. So they -- even if they may have 7 an offer and they may -- and they offer, let's say, is 8 £100,000, they say, "Can I -- I'm going to go into 9 dispute. In the meantime, can I have 50 per cent of my 10 offer?" Of course you can, so we pay out 50 per cent, 11 and they then may come back a few weeks later and say, 12 "Well, actually, can I have another £25,000 please?" 13 Of course you can: you can have up to 100 per cent 14 of your current offer. 15 Now, during the dispute process, for example, the 16 offer might go up a few times and, every time that offer 17 goes up, they're entitled to more -- another interim 18 payment, up to that offer amount. So that's why there 19 are more offers than cases. 20 Q. Is there a number that you have for interim payment 21 applications that have been refused? I think that 22 7 per cent of applicants is referring to total 23 applicants, isn't it -- 24 A. Yes. 25 Q. -- it's not referring to applicants for interim 153 1 payments. Are there a large number, a small number, 2 some -- 3 A. Small. Tiny. 4 Q. A tiny number that are refused? 5 A. I think, to be fair to them, again, a lot of these are 6 legally advised, and the legal advisers understand 7 exactly the process and, therefore, they are advised 8 absolutely appropriately. 9 Q. And if we scroll down we can see there in paragraph 168 10 you say: 11 "Overall, 4% of those without legal representation 12 have received an Interim Payment and 64% of those with 13 legal representation have received an interim payment." 14 A very significant gulf between those who are 15 legally represented and those who aren't. Again, that 16 suggests, possibly, that the message isn't being 17 communicated effectively to those without legal 18 representation. What's your view on that? 19 A. I think that's always going to -- I think that's a fair 20 observation. I'm -- I think the availability of interim 21 payments is well known. It is on the website, 22 et cetera, et cetera. It is out there and I know every 23 case that goes into the dispute resolution process, they 24 are all written to to say, "These interim payments are 25 available to you". In particular around hardship, it's 154 1 very clear about the interim payments, but I do 2 understand we could always do more publicity and prompt 3 it more. I do accept that feedback. 4 Q. If we scroll over the page, please, we can see a chart 5 there for the average days from interim payment requests 6 to payment. So that's the processing time of those 7 interim payments. We can see, even this year, it's 8 nearly a six-week wait from request to actual payment. 9 We've seen again the number of applications increasing. 10 That's something we looked at earlier, in terms of the 11 2024 figures. What gives you confidence that it'll 12 either stay the same or reduce? 13 A. As advised in my statement, the -- we are going to adopt 14 much of the automation and efficiencies around the 15 £75,000 process, this will come down significantly. 16 Q. I won't take you to our expert report again but it's 17 page 58 of that report. Lots of red again, in terms of 18 satisfaction levels with the interim payment process. 19 I assume your answer to that is the same as before, that 20 you understand it and something you recognise? 21 A. And disappointed. 22 Q. Yes. Returning to legal fees more broadly now -- that 23 can come down, please -- the BAT -- below assessment 24 threshold -- cases, are they provided with any legal 25 advice? 155 1 A. So they are made an offer, and therefore at the offer 2 stage, they can still have -- yeah, they can still have 3 legal advice. They're all the same. 4 Q. Are you aware of what kind of proportion of those cases 5 actually take legal advice? 6 A. No. I'm not. But, of course, that has now been taken 7 away by the 75,000. 8 Q. Yes. You've explained the background to why legal fees 9 are only available at the offer stage, or why that was 10 formulated. Previously, there was £1,200 for legal 11 advice where the offer was less than the sum claimed; is 12 that correct? 13 A. Yes, that's right, yes. 14 Q. There was a small amount -- 15 A. Yeah. 16 Q. -- only £400 -- 17 A. 400, yeah -- 18 Q. -- for where the offer was for the entire sum or for 19 more. Those caps were removed from all offers made from 20 10 October 2022; is that correct? 21 A. That is correct. 22 Q. Applicants are now entitled to what's called reasonable 23 legal fees. Is that different to legal fees available 24 in the GLO scheme, where there are fixed sums for legal 25 advisers? 156 1 A. We try and work collaboratively to the ranges in the 2 GLO, and we have used those, yes, but we still base ours 3 on reasonable, so there have been a number of occasions 4 when -- and I have been given authority to exceed 5 whatever reasonable is, but I take legal advice on 6 those. So we are still -- we use -- we do use the GLO 7 guidelines as guidelines but there we are still -- you 8 know, we have reasonable fees. 9 Q. If we could go back to your sixth statement, please, and 10 turn to page 10. At paragraph 27, you give figures for 11 the average legal fees. It may be quicker if I just 12 read it. It says: 13 "The average legal fees prior to 10 October 2022 was 14 £3,044 and after that date it was £4,575." 15 Can you assist us with that difference, why you 16 think it is that those figures have changed? 17 A. Just the submissions from the legal advisers. That's -- 18 and very comfortable with them. 19 Q. If we could please turn to page 66, paragraph 184. 20 Thank you. We see there that the take-up of legal 21 representation is low: 12 per cent -- 22 A. Yeah. 23 Q. -- in respect of those that have had offers; 16 per cent 24 if you include legal support rather than legal 25 representation. Why do you think that take-up is low? 157 1 A. I really don't know. 2 Q. If we go to page 63, please, paragraph 181. If we 3 scroll down, you say there that: 4 "In almost all instances a legally represented 5 applicant receives a higher offer even within the same 6 applicant types ..." 7 A. Correct. 8 Q. Can you see an issue there? 9 A. Absolutely. 10 Q. What's the issue? 11 A. Well, they are -- claimants are generally -- the vast 12 majority, are not taking up the offer of legal -- of 13 free legal advice, funded by Post Office and, yet, the 14 stats are clear that, when they do have legal advice, 15 they get higher payouts. I absolutely understand that. 16 Q. If we go to page 64 there's a table. We see there, in 17 2024, for example, in complex cases, similar in 2023, 18 it's almost double the same figure where those 19 individuals are legally represented. Is that something 20 that you were aware of before compiling this chart? 21 A. I think this makes it much more transparent but yes, 22 I was aware. 23 Q. Yes. Does that, in some ways, suggest that 24 representations further pushing from people representing 25 individuals is necessary and that, actually, the Post 158 1 Office on its own isn't coming up with the right 2 figures? 3 A. I wouldn't call it pushing. I'd call it representing. 4 Q. Why should that be necessary to drive the figures up by, 5 in some cases, double? 6 A. Because there representing their clients and their 7 clients are providing a position for them, which they 8 are asking to be represented. I do see it as an issue. 9 Again, I -- in my mind, I struggle with this. 10 I absolutely get it and that's the reason one of the -- 11 the major reason why Post Office recommended, following 12 Sir Wyn's prompt, around an independent appeals process 13 where people, if they feel dissatisfied, now they see 14 these statistics, the transparency that this has 15 provided, and thank you for doing it, actually do they 16 feel they have an unfair offer, subject to Sir Wyn's 17 challenge around, well, what's the parameters of that 18 appeal, who qualifies for the appeal? If, in the way 19 that I've articulated to the Government and Government, 20 you know, have accepted this, is that if they believe -- 21 and the Advisory Board more importantly have said 22 this -- if they believe they've had an unfair outcome 23 and seen these stats, they may feel they've had 24 an unfair outcome, then they have the option for the 25 appeal process. 159 1 Q. One thing we spoke about earlier was legal advice at 2 an early stage. In the GLO schemes and the Overturned 3 Convictions Scheme, we understand that solicitors can 4 commission a report such as a forensic accountant 5 report -- 6 A. Yes. 7 Q. -- from the outset. Might that, first of all, speed up 8 this process and, secondly, as you've highlighted, have 9 an impact on the final figures? 10 A. It might. 11 Q. Why do you think there is that difference of approach? 12 A. I think there is an aspect of trying to keep this as 13 legally light as possible. I understand that. Much -- 14 a lot of the feedback -- in fact, I noticed in the 15 YouGov survey as well, there's a lot of feedback about 16 this is too legalese, you know, why can't we just cut 17 a deal on this, and make it a much more simpler? I get 18 that from many of the legal advisers as well: why do we 19 have to go through this process, why can't we just go 20 and shake hands on things? So I'm not trying to counter 21 it because I'm absolutely agreeing with you, but there 22 is this other aspect still, that I still grapple with, 23 about how can we make this as simple and unlegalistic as 24 possible? 25 Q. Thank you. Before we take our afternoon break, I'm 160 1 going to take you to that letter from Dr Hudgell that 2 we've spoken about. It's HUJ00000007. 3 A. This the new bundle yes? 4 Q. Yes. It's the letter of 23 October this year. So very 5 recent correspondence between you. 6 Thank you. The letter includes various examples of 7 the differences between original offer and revised 8 offers. If we scroll down, please. These are in 9 respect of those who Dr Hudgell represents. We see 10 there alleged at number 2, for example, the original 11 offer 46,000 in December 2021, a revised offer of 12 140,000 by November 2022. Number 4, we see from £4,000 13 in the original offer to £133,000, within the space 14 of -- it's taken two years, the original offer July 15 2022, and the revised offer September 2024. 16 If we scroll over the page, number 8. We have there 17 an original offer of 363,000, and revised two years 18 later to 649,000. Very significant increases in these 19 figures. Number 11, 298,000 to 421,000. 13, 260,000 20 again to 420,000. So quite similar increases in those 21 11 and 13, from 200 to 400 thousand. 22 Do you accept that they're big changes in these 23 offers, and the revised offers? 24 A. I absolutely accept them and think it's great. 25 Q. Number 9, we see there the original offer 42,000 in 161 1 August 2022, 45,000 by May 2024, and we understand that 2 that now stands at £171,592. So a dramatic increase, 3 despite the fact that that figure not really changing 4 very much between 2022 and 2024. What's your view on 5 that? 6 A. My view on that is that the legal advisers are doing the 7 excellent job that they do and they're gathering the 8 information required for -- to enable the panel, in many 9 cases, if not Post Office, to increase the offers based 10 on the evidence that is provided with the help of the 11 legal advisers, maybe by forensic accountants or by 12 medical reports, et cetera, et cetera. So I think the 13 legal advisers are doing exactly what they should be 14 doing and doing a brilliant job at it. 15 Q. Isn't something going a bit wrong, though, that there 16 have been such dramatic leaps in those figures taken so 17 long to negotiate? 18 A. So the -- I think there are two separate issues here. 19 In something going wrong, no, it's going right, because 20 the evidence has been found in order to increase those 21 offers to get to the fair redress. Timeliness is 22 a separate issue, and I accept that challenge about how 23 long it's taken. But -- and, you know, this is 24 a two-way street here. We like to work collaboratively 25 with the legal advisers, and make it clear to them what 162 1 would help the case. Many of these cases of course 2 have -- all the cases have originated from the 3 independent panel. That's where the original numbers 4 come from and many of these cases go back to the 5 original panel so again there's -- they have worked 6 within their terms of -- the panel work within their 7 terms of reference to come up with these new offers. 8 So they are basing it on evidence that has been 9 produced by the postmasters and the legal advisers. So 10 this is a process taking too long, but is working. 11 Q. It's working for those who are, in this case, 12 represented by Dr Hudgell and represented by others. 13 But if we can turn back to the YouGov report, that's 14 EXPG0000007 and, if we look at page 52 of the YouGov 15 report, it addresses legal advice. 16 Page 52. We have there only 33 per cent of 17 respondents said that they had been informed of their 18 right to obtain legal advice. Only 10 per cent were 19 provided with information about how they could contact 20 a legal representative. If we look at the bottom of 21 page 52, the author says: 22 "Reflecting the low awareness of the right to obtain 23 legal advice, just over one in eight (12%) actually 24 received legal advice during the application process. 25 Amongst those that did, 11% received financial support 163 1 that they felt was sufficient, but 63% did not receive 2 financial support." 3 Then we can see the chart over the page, please. 4 Actually, yes, figure 39 "Received financial support for 5 legal advice during the application process", the 6 overwhelming majority didn't and that's reflected in 7 your own figures. 8 If we go, please, to page 55. Even in respect of 9 those who received financial support for legal advice 10 when they received their offer, you have there 11 29 per cent saying no financial support received for 12 legal advice when they received their offer, there is 13 a net "Yes," but 23 per cent of those felt that the 14 financial support was not sufficient. 15 Looking at these and looking at your own figures, 16 and looking back at that letter from Dr Hudgell and the 17 impact that lawyers have had in that particular case, 18 and I think you've really already given your evidence on 19 this but do you think something is going a little wrong 20 there in respect of the availability, the take-up of 21 legal advice, and the impact that it may have on those 22 who may have received offers, or those who are awaiting 23 offers? 24 A. Well, I think the first sentence, on page 52 of the 25 YouGov survey, it says, "One in three, 33 per cent, 164 1 recall having been informed to their right". So that's 2 their recollection of being informed about their right 3 to obtain legal advice. The evidence which the Inquiry 4 has seen is that everybody was offered legal advice at 5 the offer stage. So this is -- and -- and, again, 6 I don't want to project this sort of corporate image 7 because it's not a corporate image, it genuinely is not, 8 but the offer of legal advice is there at reasonable 9 costs. And I haven't turned anybody down in terms of 10 the amount of legal fees. I have had the odd discussion 11 with legal advisers about their bills, yes, but we've 12 never fallen out about it. 13 And so the offer is always there. It's the take-up 14 is the issue, and I think the challenge, quite rightly, 15 from the Inquiry, should be that it is how much have you 16 pushed the fact that -- the benefit of legal advice? 17 Maybe that's the challenge that I should go away and 18 consider, because it's clear from the stats, as I've 19 said earlier, my evidence is my evidence, is in that 20 there is a -- there's clearly a benefit of it happening. 21 But to be clear, the offer is there. 22 Q. How do you think you can improve that situation? 23 A. By being more upfront, as I possibly can, by making sure 24 the clients are -- yes, they are my clients -- my 25 clients are aware of that opportunity. Again, I still 165 1 struggle, I've got an 83 per cent acceptance rate. 2 I need to grapple with that, and where people appear -- 3 I'm not going to use your word any more -- they appear 4 to want to settle at that rate. 5 MR BLAKE: Thank you. 6 Sir, that might be an appropriate moment to take our 7 mid-afternoon break. 8 SIR WYN WILLIAMS: Yes. 9 MR BLAKE: If we come back at 3.40, please. 10 SIR WYN WILLIAMS: Certainly, yes. 11 MR BLAKE: Thank you. 12 (3.25 pm) 13 (A short break) 14 (3.40 pm) 15 MR BLAKE: Thank you, sir. 16 Mr Recaldin, my last question in relation to the 17 Historic Shortfall Scheme concerns an end date: when do 18 you expect it to close; is there a date fixed; and has 19 a date been publicised? 20 A. Expectation, I don't know. Is there a date fixed? No. 21 No, there has been discussions prior to the election 22 about when that date might be, and we did propose a date 23 which was sort of tentatively -- nothing had been 24 agreed, nothing has been accepted but it was understood 25 when that date might be. But then, of course, we had 166 1 a peak of late applications, et cetera. So the date 2 that was originally discussed was actually March 2025, 3 and we have been advised by Government that that might 4 still be considered, but let's not take that as a date 5 that will be publicised. So yet to be determined. 6 Q. Is that a date for potentially the applicant process to 7 stop or the entire scheme to finish? 8 A. Applications to be in by. 9 Q. Thank you. One thing you've mentioned is the postmaster 10 contact centre. You've addressed that in your witness 11 statement. You say it opened in September of this year. 12 Can I clarify is that simply for the HSS Scheme or for 13 all schemes? 14 A. It's for whatever the postmasters want so it'll be for 15 all the schemes, currently it is predominantly to do 16 with HSS because that's the incoming, but we also 17 mandate outgoing calls, as well, to be helpful and 18 proactive. In the fullness of time, it will absolutely 19 be anything we can do on the OC side as well. 20 Q. What steps have you taken to publicise that contact 21 centre? 22 A. It's available on the website and available via 23 correspondence. 24 Q. Would it surprise you that some subpostmaster Core 25 Participants were not aware of this centre until 167 1 receiving your witness statement? 2 A. It wouldn't surprise me at all. 3 Q. In light of that, is there anything that you have in 4 mind that you could do to publicise it? 5 A. So in the mass mailing which we've currently started, 6 absolutely included in all of that, so there will be 7 huge publicity because of the up to 30,000 letters going 8 out, it's included in that, and they all point to the 9 website as well in terms of when that -- where that 10 number is available, including -- and also in the 11 outbound calls they are effectively publicising their 12 availability to take inbound calls as well. 13 Q. Thank you. I'm going to move on now to the overturned 14 convictions redress. It's not known internally at least 15 as the Overturned Convictions Scheme; is that correct? 16 A. Correct. 17 Q. On 11 December 2020 the first six convictions were 18 overturned by Southwark Crown Court and then the 19 Hamilton judgment was on 23 April 2021. By 22 August 20 this year, you say in your seventh witness statement, 21 I think, 111 appellants had successfully appealed their 22 convictions and therefore fell within this scheme; is 23 that correct? 24 A. That is. 25 Q. They fall within this scheme and not the Historic 168 1 Shortfall Scheme because, as we saw in the eligibility 2 criteria, it doesn't include those with convictions? 3 A. Correct. 4 Q. There is, however, another category also included in 5 this redress -- I won't call it a scheme. What do you 6 call it if you don't call it a scheme? 7 A. Process. 8 Q. Process, redress process. That is those who were 9 prosecuted but not convicted and who aren't postmasters 10 and, therefore, also fall outside of the Historic 11 Shortfall Scheme; is that right? 12 A. Correct. 13 Q. What about those who weren't prosecuted but who received 14 cautions? 15 A. They are included in that cohort, prosecuted not 16 convicted. They are within that cohort. 17 Q. Not convicted extends not just to those who had a trial 18 but also those who simply received a caution? 19 A. Caution, correct. 20 Q. In terms of Government funding, you've said in your 21 witness statement that that became available in July 22 2021; was that difficult to obtain? 23 A. No. 24 Q. That led to interim payments of £100,000 at that point 25 in time -- 169 1 A. Yes. 2 Q. -- from that point in time. Then there was a second 3 funding agreement in December 2021, again, was that 4 difficult to obtain? 5 A. I wasn't around so I don't know but my understanding was 6 it was again, it followed the process and it was put in 7 place. 8 Q. Could we please turn to POL00448914. As you say, this 9 was before your time but this was the funding commitment 10 as at 22 July 2021, communicated by the Department for 11 Business, Energy and Industrial Strategy, as it was 12 known then. If we scroll down, please, it says: 13 "The funding commitment letter confirms that the 14 [Department for Business] will provide funding for Post 15 Office to make interim compensation payments of up to 16 £100,000 to each postmaster, branch manner and/or 17 assistant who have their criminal convictions overturned 18 by the Court of Appeal or the Crown Court due to 19 unreliability of evidence obtained from the Horizon 20 System operated by the company." 21 Over the page, please, it sets out there the funding 22 structure, and says: 23 "Each interim payment, which shall be no greater 24 than the aggregate of £100,000 per any one affected 25 postmaster, will be eligible for BEIS funding to the 170 1 Company provided the postmaster meets all of the 2 following criteria: 3 "i. Their Horizon-related conviction has been 4 overturned by the courts ..." 5 That's why we see the scheme doesn't involve those 6 that recently received the change following the 7 legislation: 8 "ii. They do not belong to the class of postmasters 9 whose convictions were overturned but were not opposed 10 by the company on public interest grounds ..." 11 Now, at this stage, that was an additional criteria, 12 that it couldn't have been any of those cases that 13 weren't opposed by the public interest on public 14 interest grounds. Can you briefly explain your 15 understanding of that? 16 A. So public interest cases -- and there are five of 17 them -- so these are cases that go to the Crown Court at 18 Southwark and, when the case is made to it's -- a quirk, 19 almost, of the Southwark court, in that the cases that 20 go forward, you can either support the appeal, or you 21 can -- the alternative is a retrial and, clearly, 22 a retrial is not in the public interest and, therefore, 23 by default, you are going to a case where they or you 24 are supporting the appeal of the conviction. Or you're 25 raising no evidence against it. 171 1 Q. Those cases were originally not included in the scheme, 2 but they are, I think, following the Mr Bates ITV drama, 3 there was a change in that position; is that correct? 4 A. There was a journey to get there but, yes, that is 5 correct. 6 Q. When you say a journey, what was the Post Office's 7 position? 8 A. Because of this funding agreement, even though those 9 three cases that I mentioned earlier there, their 10 convictions were overturned but, because of the funding 11 arrangement, they couldn't be paid their £100,000. So 12 despite Dr Hudgell asking for it, the funding 13 arrangement would not allow us to do it. So you've got 14 cases which have been overturned by Southwark court and 15 yet, because of the funding arrangement they weren't 16 entitled to the £100,000 because, technically, they 17 weren't Horizon related cases. 18 And that was an awful position to put anybody in and 19 so we had to work our way through that and we went 20 through mediation to do that and we reached settlement 21 with two of them. Subsequently, due to the Bates and 22 the mass exoneration, those cases have now been reopened 23 and now back in OC. 24 Q. I think you said there were five individuals. What is 25 the current status of those cases? 172 1 A. All those five are within the OC, I think one of them 2 has been settled. 3 Q. Thank you. Can we please turn to POL00448915 this is 4 the second letter of 20 December 2021, and it is the 5 funding commitment letter that confirms the Department 6 will provide funding of up to 685 million to the Post 7 Office when aggregated with the funding committed under 8 the interim payment, funding commitment letter, the 9 total funding amounts to 780 million. 10 Then it sets out below the criteria. So those who: 11 "... have their criminal conviction/s overturned 12 following the 'Common Issues' and 'Horizon Issues' 13 judgments issued in the Post Office Group Litigation, 14 and/or the [Hamilton & Others] judgment issued by the 15 Court of Appeal; or. 16 "were prosecuted, but not convicted, of offences 17 connected to the Horizon IT System and suffered 18 detriment in respect of the actions of the Company." 19 Am I to understand therefore that that has now 20 changed and we should add to that a third category of 21 those who received cautions because they wouldn't have 22 been prosecuted but not convicted? 23 A. My understanding is cautions are included. 24 Q. Are you aware of any formal change to any agreements in 25 that respect? 173 1 A. No, I'm not. 2 Q. If we go over the page, please, to the bottom of the 3 second page, it says there: 4 "[The Department] has agreed to fund the claim 5 payments made by the company to fulfil BEIS' commitment 6 to delivering compensation to postmasters fairly and as 7 quickly as possible, and supporting and maintaining the 8 Post Office Network." 9 It continues a couple of sentences on: 10 "This funding commitment letter specifically covers 11 the provision of funds for claim payments for the OHC 12 Liabilities only, and is provided to support the company 13 in delivering its rescue and restructuring plan ..." 14 Can you assist with how the redress for these cases 15 relates to supporting and maintaining the Post Office 16 Network, or the rescue and restructuring plan? 17 A. I'm sorry, I can't help you there. 18 Q. Let's move on then to interim payments. Interim 19 payments under this scheme were introduced in July 2021, 20 as we've seen, for £100,000. They were increased to 21 163,000 in November 2014, following representations made 22 by Lord Dyson, who was carrying out the early neutral 23 evaluation, which we're going to come to; is that 24 correct? 25 A. Yes, it is. 174 1 Q. More recently, it's increased for those who don't seek 2 what is referred to as a Government offer, and that's 3 the £600,000 payment, which we're going to come to as 4 well. It's been increased to 450,000 as an interim 5 payment, at the request of Sir Gary Hickinbottom; is 6 that correct? 7 A. That's my understanding. 8 Q. You've set out in your seventh statement at 122(b) that 9 the average time between submitting interim payment 10 applications and the payment is 34 working days; is that 11 correct? 12 A. That's my recollection. 13 Q. So let's look at the Government offer. Since 14 18 September 2023, there has been an offer of £600,000 15 to all overturned conviction claimants; is that correct? 16 A. Correct. 17 Q. Correct. That doesn't apply, though, to those who were 18 prosecuted but not convicted; is that right? 19 A. That is right. 20 Q. Can you assist us with why there is that difference? 21 A. Because the difference is the actual conviction. 22 Q. In respect of the rights, and we spoke about this in 23 respect of the HSS scheme, am I right to say that the 24 600,000 is only available to those who don't seek a full 25 assessment of their claim? 175 1 A. Correct. 2 Q. You've said in your seventh statement that by 31 May 3 this year there were 40 accepted cases, and you've said 4 that the average length of time from receiving the offer 5 to payment is 20 working days; is that all correct? 6 A. Yes, that's right. 7 Q. Pardon? 8 A. Yes, sorry. 9 Q. Thank you. Can we please turn to BEIS0000719, please. 10 This is an email chain, and I want to ask you about your 11 initial views as to the £600,000 Government offer. 12 A. Yes. 13 Q. If we turn to page 4 of that document, the background 14 is, I think, that -- is it Herbert Smith Freehills have 15 drafted a letter relating to the £600,000 figure, is 16 that correct, or a letter has been drafted by somebody? 17 If we scroll, please, to page 4, we can see some of 18 the background. Do you recall this chain where you're 19 commenting on a statement that's being made in respect 20 of that £600,000. 21 A. I recall -- I saw this email the other day, I do recall 22 the email. I recall its construction. I cannot recall, 23 as a result of a letter. 24 Q. Perhaps we'll go through it in a bit of detail. If we 25 start where we are, this is an email, if we scroll up 176 1 slightly, from Emily Snow, who is a member of the Post 2 Office Compensation Team in the Department for Business, 3 and she says as follows: 4 "You will spot comments in both attachments on 5 pitching as a DBT only intervention: I appreciate that 6 it is a DBT proposal and that the timescales at which 7 we're working have meant we haven't been able to do the 8 type of engagement and ironing out of issues that would 9 have been preferred, not least by [the Post Office]. 10 However, I am somewhat cautious about the language which 11 goes quite far to pitch as a DBT proposal without 12 showing some interaction between [the Post Office] and 13 [the Department] (as you'll see in the core text). This 14 is from a view that we do not want to create 15 a perception that Government is 'stepping in' because it 16 has lost faith in [the Post Office] process -- this is 17 not the case at all. We should send a positive message, 18 there are two good options for postmasters: £600,000 or 19 remediation (which Government supports), since 20 postmasters who do not wish to accept the upfront of 21 will still need to go through the remediation process. 22 I think the wording should uphold the faith in that 23 [Post Office-led] process." 24 There's then a response and we see there it's the 25 email below from Neil McDaid, that says: 177 1 "By way of an update, [Herbert Smith Freehills] have 2 crafted a high level heads up letter to claimant 3 representatives which [the Department] have commented 4 on. They have also provided comment on the core lines 5 for [the Post Office]." 6 It's above that that we see your response, and it's 7 that response I'd like to talk to you about. You say as 8 follows: 9 "Care with the statement please. 10 "You are absolutely right this does read as a DBT 11 proposal without showing interaction between [the Post 12 Office] and DBT as apart from you and an email exchange 13 between myself and Carl [I think that's Carl Creswell] 14 (initiated by me) there hasn't been any! Of course this 15 will create a perception that Government is 'stepping 16 in' because it has lost faith in the [Post Office] 17 process as this is precisely what it is! I don't think 18 we should be disingenuous -- we have to be honest and 19 transparent here. It is clear from this and the lack of 20 risk assessment to the [Secretary of State] that the 21 Government nor the Advisory [body] have any faith in 22 Post Office. This will come up at the Inquiry with 23 Government nowhere to be seen. The paragraph of most 24 concern I have lifted and pasted below -- my comments in 25 red." 178 1 If we scroll down, we can see you've lifted 2 a paragraph from this statement and commented on it. So 3 it was going to be say, "Government having consulted 4 with the Post Office", and your feedback is: 5 "false, delete, only you have kindly told us the 6 bare essentials and then to a highly restricted 7 audience -- this is not consultation." 8 It then was going to continue: 9 "... has decided that postmasters who have their 10 convictions on the basis of Horizon evidence overturned 11 should have the opportunity upfront to accept an offer 12 of £600,000 in full and final settlement of their claim. 13 This will be delivered by the Post Office with funding 14 from the Government." 15 Your comment there is: 16 "This implies this is extra funding and again is 17 disingenuous -- this is not extra funding as you know -- 18 the funding is already in place. It is just a different 19 (hopefully more efficient) way of paying it out. In 20 fact a quick look at the Post Office accounts will show 21 to anybody who wants to see that we are anticipating in 22 paying out in excess of this average. This is where 23 consultation would have helped." 24 Just pausing there before we continue with this, can 25 you assist us with your position as set out there? 179 1 A. Yes. 2 Q. Please do. 3 A. So I think the 600,000 opportunity was brilliant, 4 I think it was an inspired idea, in terms of how to 5 speed up redress. It was -- I think I'm clear in my 6 note -- it's the way that it was imposed on Post Office 7 and yet we were told that there were -- it was clear in 8 the correspondence that they had consulted with Post 9 Office. Government had not consulted with Post Office; 10 my statement is clear. 11 I was told about it literally in a quarterly 12 shareholder meeting that we had, I was advised that it 13 was going to be launched the next day. I knew about it 14 probably 24 hours before then because I did request DBT 15 whether or not we could see the press briefings around 16 it, and I think I was politely declined that as well. 17 So it was all shrouded with secrecy in terms of its 18 actual launch, but Post Office were expected to 19 operationalise it, manage it and push it through. 20 And that came out in my note. There was no 21 consultation, which can be fine and doesn't mean to say 22 it's not a good idea -- it was still a good idea, don't 23 get me wrong -- and it came directly from the Secretary 24 of State, which is one of the reasons why we believed it 25 was confidential, et cetera, et cetera, it was kept 180 1 under wraps, because it had to make an impact: 2 a positive impact. 3 Q. Why do you raise a concern about the extra funding being 4 disingenuous or reference to extra funding being -- 5 A. Because the impression that was given by the statement 6 was that they had -- Government had proactively found 7 additional funds in order to be able to do this, and 8 that was not the case. The funds -- as I articulate, 9 the funds were already available, it's just a different 10 way of doing it. 11 Q. Thank you. Do you have a similar view in respect of the 12 budget announcement that's just happened in respect of 13 the extra funds? 14 A. Forgive me. My job is to pay out redress as fast as 15 I can, and I know I'm being challenged on that and, as 16 much as I can, I really do not -- and my preference is 17 massively not to get involved in politics, with a small 18 "P" and a large "P". But I have to answer your 19 questions and there are elements in this, and there are 20 obviously elements in the Chancellor's thing that are 21 political and I find myself in a really, really 22 difficult position around that, because the politicians 23 with a capital "P" are taking the opportunity and that's 24 their right -- they're politicians, that's what they 25 do -- to take advantage of that to -- I don't know what, 181 1 to give themselves publicity, to give themselves credit 2 for whatever. This 600,000, to your point, is 3 a Secretary of State decision. 4 Q. Thank you. We'll move on. You say: 5 "I suggest we change to: 6 "'Government has decided that postmasters who have 7 their conviction on the basis of Horizon evidence 8 overturned should have the opportunity upfront to accept 9 an offer of £600,000 in full and final settlement of 10 their claim'." 11 You say: 12 "I think this is damaging enough and is a bit more 13 like the truth please -- I think somebody has to try and 14 cling to some morals here please. This is an imposition 15 and it should not be flowered up in any other way. [The 16 Department for Business/the Secretary of State] should 17 take the credit for this initiative. 18 "Let's not forget that this will be exposed at the 19 Inquiry where this will be seen for what it is -- 20 a clear Political intervention into a Post Office scheme 21 with good/excellent intent but simply not thought 22 through which is how the legal representatives will view 23 it. Interestingly, despite the common interest and 24 direct request, Post Office have yet to be extended the 25 courtesy of seeing the legal advice given on this -- on 182 1 a scheme we have to run! Does any actually exist?" 2 What do you mean by "simply not thought through"? 3 A. So the allegation that we were consulted, the Post 4 Office were consulted when we weren't, and part of not 5 thought through" was we immediately started asking 6 questions around "What did the 600,000 -- is it 7 a minimum payment?" And it became apparent it wasn't 8 a minimum payment. Oh right, okay, so how are we as the 9 operation people going to administer this? And there 10 were questions that we were posing that had yet to be 11 worked out what the answers would be. 12 In addition, with the greatest respect to the legal 13 representatives in this room, is that I had a couple of 14 phone calls from them wanting to understand, and to my 15 point about the politicalisation of this, I got two 16 calls from legal representation sitting in this room 17 before I was advised of this scheme to say, "This is 18 about to be launched, what's your comment on this, this 19 and this, please? How is this going to work and how is 20 this going to work?" And I'm afraid I had to say to 21 them, "I don't know because I'm not aware of this 22 scheme, I'm not aware of how we're going to 23 operationalise it, bear with me" -- that's embarrassing 24 -- "bear with me, I'll come back to you as soon as 25 I know the answers". 183 1 So that's where that comes from and there was some 2 publicity around this because, effectively, that 3 population out there of convictions, it became 4 immediately apparent that the spin on it was that 5 everybody was going to get a minimum payment of 6 £600,000. We had direct approaches from very distressed 7 postmasters, that because the people knew they were in 8 that cohort and that they knew they were making a claim, 9 they were going to get £600,000, and we did have reports 10 of people actual knocking on their door about it and 11 that was quite distressing, and I got that feedback 12 through the legal advisers as well. 13 Q. Do you mean they were concerned for their safety or for 14 being chased for money from third parties? 15 A. To that a point, that the vast majority were anonymous 16 and yet, if anybody knew they were making a claim or 17 part of the scandal, then they knew that they -- that 18 effectively this was saying they were going to get 19 a minimum of £600,000. 20 Q. You continue: 21 "[For your information] -- we had a pecuniary claim 22 in from Hudgells at the end of last week for £18,000. 23 Their non-pecuniary was settled for ... 195,000. Under 24 this proposal this individual will enjoy £600,000. I am 25 not saying this is wrong and as you know I want to pay 184 1 out these sorts of sums but to date have been prevent by 2 [value for money] restrictions, evidence, governance, 3 etc." 4 Just pausing there, you addressed value for money at 5 the very beginning of your evidence today and you said 6 you didn't think that value for money restrictions were 7 being imposed in respect of the settlement of 8 compensation claims. 9 A. Yeah. 10 Q. This reads somewhat like it did have a role to play? 11 A. Yeah, I can understand that. It's not meant that way. 12 It's a list of processes, restrictions that I had to go 13 through and governance that I had to go through. I do 14 understand your point about -- but no, please, value for 15 money was not applicable in this. 16 Q. You continue: 17 "At a stroke, all credibility/professionalism is 18 gone, never mind the months of work put in by Post 19 Office and DBT on principles and working with postmaster 20 lawyers. The Inquiry will seal all this. I have to 21 assume that all are comfortable with this. I'm not." 22 It might be suggested that what you're saying there 23 is that you're not happy with the £600,000 scheme 24 because, for example, in that Hudgells case, the Post 25 Office could have got away with a lot less. What's your 185 1 view on that? 2 A. No, I think that's the wrong interpretation of that. 3 I've been clear in the paragraphs above that I think 4 this is a good idea and this is exactly what I want to 5 do. I think I can argue that that sentence is more 6 around the process that you have implemented, that you 7 have agreed that I can follow, the governance that you 8 have put in place for me that I'll have to follow only 9 allows me to pay out this amount and yet, at a stroke, 10 you're completely undermining that and saying, actually, 11 you're going to get £600,000. 12 Q. You say: 13 "Am I the only one worried about all this? Is it me 14 or is this really Emperor's New Clothes stuff? I think 15 we are sleepwalking into real difficulties." 16 What did you mean by that? 17 A. Again, it's around the Post Office are an operational 18 engine that delivers these outcomes, these fair 19 outcomes. At a stroke, the Government were undermining 20 the confidence in that by -- and it's in here -- by 21 saying that, actually, you know, effectively we're 22 uncomfortable with this process and we've not -- it's 23 clearly not fit for purpose because it's not paying out 24 enough and, therefore, what we're going to do is we're 25 going to impose this on, and we're not even going to 186 1 consult about it. 2 Q. Can we please turn to BEIS0000738, and now moving to 3 January 2024, and there's an email chain regarding 4 whether it's a minimum payment or not a minimum payment. 5 If we start on page 4, we see at the bottom of that page 6 being forwarded to you an announcement from the 7 Government, "Government announcement re overturned 8 convictions": 9 "Once this legislation is passed and convictions 10 have been quashed, individuals will be entitled to at 11 least £600,000 in compensation to rebuild their lives. 12 "The Government has always been very clear 13 previously that there is no minimum amount, although in 14 reality the £600,000 upfront offer set that floor. If 15 they are saying publicly that individuals are entitled 16 to at least [I think that should be £600,000] it feels 17 uncomfortable to me that we cannot make interim payments 18 up to that amount." 19 Now, is this the overturned convictions process or 20 is this the other process? 21 A. So this is the new process from the £600,000 that 22 effectively was -- so in terms of interims, we couldn't 23 go up to the 600,000 -- it wasn't a minimum payment; it 24 was very clear, to be fair, very clear, that this was 25 for full and final settlement only. So it's a bit like 187 1 the 75,000: here's £600,000, providing you're prepared 2 to settle. 3 Q. If we scroll up, we can see correspondence between 4 yourself and Carl Creswell, and you say: 5 "I know we're going through interesting times ..." 6 Is that a reference to the post-Bates television 7 drama: we're in January 2024? 8 A. Yes. 9 Q. "... but further to previous mails does not the 10 government link below translate to the current £600k 11 being a minimum payment? 12 "If so, we could pay [circa] 60 cases up to £600k 13 with [imminent] effect." 14 If we scroll up, the response to you is: 15 "The £600k is a fixed offer sum that postmasters can 16 choose to take, or they can seek to make a fully 17 assessed claim. It is not a minimum payment sum, and 18 therefore not suitable for an interim payment amount. 19 There is a £163k interim payment to relieve any 20 immediate financial pressures for those making a full 21 claim whilst that claim is developed and considered, 22 additionally, specific further interim/hardship payments 23 are also considered if requested by a claimant." 24 If we scroll up, you say: 25 "Beth 188 1 "OK -- last go, I promise! 2 "I do understand the initiative but it is not 3 logical. 4 "We don't have an expiry date on the £600k [full and 5 final] offer -- we await to hear on this. So currently 6 there is no expiry date on this offer. 7 "If a victim decides to push their claim through 8 full evaluation and their offer is less than £600k they 9 will be advised to take the £600k in [full and final]. 10 If their offer is above £600k they clearly will settle 11 above £600k. 12 "So whatever happens they get £600k -- as per the 13 'mass exoneration' scenario. Nicely aligned. 14 "So whatever happens they get £600k. 15 "So alleviate postmaster stress and media outrage by 16 being proactive and top all 60 up to £600k because they 17 are all going to get this anyway." 18 If we scroll up, the response to you is: 19 "You asked yesterday whether the aim was to get 20 money as quickly to claimants, or to get [full and 21 final] settlements to the claimants. Our focus is on 22 achieving the latter. This proposal doesn't encourage 23 any pace or movement to full and final settlements does 24 it? Ministers and politicians as shown in the Select 25 Committee are keen to take steps to encourage victims 189 1 getting their full and final settlement as quickly as 2 possible. I don't believe this moves the dial on that." 3 You respond slightly above: 4 "Beth 5 "So we hold the funds back that we could pay to 6 pressurise sorry 'encourage' [full and final]? 7 "No need to respond (but grateful for your two 8 responses!). 9 "Last word -- promise -- what is the right thing to 10 do? 11 "I've moved on." 12 If we scroll up, we can see the response: 13 "The policy position regarding the £600k was 14 announced by the Minister last year. Last week's 15 announcement doesn't change that policy. You asked 16 yesterday whether you should focus on maximising 17 payments or maximising settlements yesterday. We were 18 very clear that we would like you to focus on ensuring 19 that claimants are able to settle their claims as 20 quickly as possible, as this is what Ministers and other 21 politicians are keen to achieve, we need to ensure that 22 victims can complete the claims process. The proposal 23 that you have made does not speed up the overall claims 24 process, and indeed may actually further lengthen it, 25 that is not fair to those still waiting to achieve full 190 1 and final compensation -- many of whom are coming up to 2 their 3rd anniversary of their conviction being 3 overturned this spring." 4 Can you assist us with what appears to be a dispute 5 between the Post Office or yourself and the Department 6 for Business? 7 A. I can. So -- and it's pretty clear from the one below, 8 from the Department, around there's a choice here 9 between are you saying the objective is full and final 10 settlement: is that a priority over paying funds out 11 because there are -- because, in particular, in OC there 12 are many opportunities, as I explained earlier, to pay 13 out more -- further interim payments, and what the 14 Department was saying to me was "No, we don't want you 15 to do that. That's not the objective any more. We'd 16 rather you hold on to those and hold out for 17 settlement". 18 I was extremely uncomfortable with that, and I think 19 I'm making my point, articulating, of what is the right 20 thing to do because I didn't want to delay -- it seemed 21 to me I was getting an implication to delay redress in 22 order to hold out for full and final settlement. I was 23 saying, "Hang on a minute I'm not quite sure I'm 24 comfortable with that. If I've got the opportunity to 25 still pay out redress" -- a bit like my example if 191 1 there's an offer there, I want to pay the offer 2 amount -- "then I don't want to feel restricted about 3 not paying that out because I'm only going to pay out 4 when I get a full and final settlement". 5 That, for me, was quite a strong moral dilemma, and 6 maybe I articulated it badly in there but that was the 7 moral dilemma that I was facing and they made it clear 8 to me, absolutely crystal clear, "No, Simon, the 9 objective, it's there. Black and white, full and final 10 settlement". So I then had to issue instructions 11 internally to say those potential interim payments, the 12 Government will not approve them now, and they didn't 13 approve them, because they were holding out for full and 14 final settlement. 15 Q. What is the latest position on all of that? 16 A. It's changed. 17 Q. How has it changed? 18 A. So Government now appear comfortable that, whenever we 19 can make payments via a head of loss, for example, so 20 there may be ten heads of loss and we may -- the legal 21 advisers and we may be comfortable with eight of them, 22 we can pay those eight heads of loss, and we settle 23 effectively via each heads of loss. 24 Q. Does that extend beyond £600,000, potentially? 25 A. Can do, yeah. 192 1 Q. When has that change been in place? 2 A. Forgive me, I don't know when, but for some time. But 3 this was the initial -- and, since then, the position 4 has eroded. 5 Q. Can you give us an idea: was it in the summer; in 6 spring? This is January of this year. 7 A. Yes, this will have been during the summer, yeah. 8 Q. Thank you. That can come down, thank you. 9 Moving on from interim payments. There's then 10 a full assessment for those who don't opt for the 11 Government offer. 12 A. Yeah. 13 Q. Claims are made of pecuniary -- that's financial -- 14 losses and non-pecuniary losses, such as physical and 15 mental loss/impact. 16 Let's start with non-pecuniary. You've addressed 17 this in your seventh statement at paragraph 100. You 18 describe the Early Neutral Evaluation scheme that was 19 set up in 2022. Lord Dyson was appointed to the role of 20 Evaluator and he evaluated, at that point, ten claims. 21 This led to Lord Dyson's evaluation of 29 July 2022, 22 which set out the ranges of redress for various heads of 23 claim. 24 A. Yes. 25 Q. Is that correct? 193 1 A. Correct. 2 Q. Lord Dyson considered matters again in December 2023 3 relating to whether the money from the Group Litigation 4 Order -- 5 A. Yes. 6 Q. -- should be deducted. Can you summarise for us what 7 his finding was in that respect? 8 A. Well, that we -- that nobody should deduct the GLO 9 payments that had already been made from redress. 10 Q. Do you know what the Post Office position was in respect 11 of those GLO payments prior to that decision? 12 A. That we were deducting them. 13 Q. Were you in favour of deducting them or was there 14 internal discussion that you were party to as to whether 15 that was the right or wrong thing to do? 16 A. I wasn't -- I was aware of the policy, the process to do 17 it. I wasn't involved in any debate about whether to do 18 it or not. It was just accepted that that was -- that 19 their overall redress would be discounted by the redress 20 that they'd already received. 21 Q. Thank you. The Post Office, you say in your statement, 22 has offered to refer three further cases to Lord Dyson 23 for his own review but that hasn't occurred. Can you 24 briefly assist us with what that involved and why it 25 hasn't occurred? 194 1 A. There are three specific cases. Forgive me, I think 2 they all come from one legal adviser and we are very, 3 very keen, where the legal adviser is not agreeing with 4 the non-pecuniary offers that we are making, and in 5 order to resolve those, we have suggested that we go 6 back to Lord Dyson to help us evaluate, and we are 7 extremely supportive and we were trying to encourage 8 that proactively and, as yet, we haven't managed to get 9 the time in the diary from the legal adviser's 10 perspective. 11 Q. Is that something that Lord Dyson is happy to do -- 12 A. Yeah, absolutely. We've even got time -- we've even 13 had, previously, time in his diary allocated to it. 14 Q. Thank you. Paragraph 75 of your seventh statement, you 15 say that by 28 August of this year, 77 non-pecuniary 16 cases had been fully settled, including some who 17 accepted the Government offer; is that correct? 18 A. That's right, yes. 19 Q. I think you say 77 non-pecuniary; 9 non-pecuniary 20 haven't settled; 25 more expected but not yet submitted. 21 Perhaps we can bring that onto screen. That's the 22 seventh statement, WITN09890700. That's paragraph 75. 23 It's page 27. 24 That gives the figures there: 77 non-pecuniary 25 claims have been fully settled. 195 1 You also say in this statement that over 90 per cent 2 of non-pecuniary claims submitted were settled and paid 3 within 44 working days of application submission; is 4 that right? 5 A. That's right. 6 Q. It appears from your statement that the non-pecuniary 7 cases that take a longer time are bankruptcy cases; is 8 that right? 9 A. Yes. 10 Q. So whereas in the HSS scheme I think you weren't 11 particularly concerned about the bankruptcy cases and 12 delay, is there a concern there at the moment? 13 A. To be clear for the Inquiry, I am always concerned in 14 any delay, firstly and, again, where the bankruptcy has 15 evolved, we just have to engage with a third party and 16 that then elongates the process -- builds in delay. 17 Q. Is there anything there that you think would speed up 18 that process? 19 A. I think we're on this, and I have -- there will always 20 be things that we can do to speed up redress and, if 21 this is one of them, I'm more than comfortable to get 22 involved. But, at the moment, it's not being raised to 23 me as a significant risk. 24 Q. Thank you. Moving on, then, to pecuniary. You've 25 explained that, prior to establishing the pecuniary 196 1 principles, it was a slow process; is that right? 2 A. Yeah. 3 Q. Those principles were established in October 2023 and 4 finalised in January of this year; is that right? 5 A. Correct. 6 Q. We saw that non-pecuniary claims took an average of 7 44 days to complete. In terms of pecuniary claims, 8 you've said 305 working days. So over a year in 9 relation to pecuniary claims; is that your experience? 10 A. Well, in terms of -- but that -- my understanding is 11 that will be including the building of the pecuniary 12 principles. So that was the journey. So when -- and 13 I think Mr Cameron's witness statement also supported 14 this -- when I first arrived at Post Office, in this 15 space, obtaining settlement with postmasters on 16 overturned convictions was a negotiation, okay? It was 17 locking lawyers away in a room and working things out on 18 a heads of loss by heads of loss basis, and it was not 19 constructive and it was not collaborative. 20 So one of the first things I did -- and Mr Cameron's 21 evidence supported this -- was I proposed a different 22 approach, a remediation approach, very much 23 collaborative with the postmasters and their legal 24 advisers to walk in the journey between us, all of us, 25 being a party to that. 197 1 That took some time to establish, and then we built 2 the principles based on that principle, that this will 3 be a collaborative voice. So the principles were with 4 the legal advisers. 5 Now, the legal advisers would never agree to those 6 principles but their input was very, very valuable, and 7 we did adjust those principles with their feedback. So, 8 by the time we got to the October and by the time we got 9 to the end of 2023, we were in a position where we had 10 a bunch of principles which people appeared to be very 11 comfortable with working within, although they weren't 12 signed off but that they had input from a number of 13 third parties, including postmasters and, more 14 importantly, their legal advisers. 15 And that's where we shared all of that journey all 16 the way along, through governance in Post Office and 17 indeed with Government as well, to ensure everybody was 18 comfortable with the approach we were taking of that 19 process. And there was some really good behaviours were 20 seen by everybody in that respect, in getting to 21 an outcome, a remediation outcome, that we could take 22 the postmasters through. 23 Q. I think you say in your seventh statement that full 24 claims not involving novel heads of loss now take around 25 40 working days; is that right? 198 1 A. Yes. So we were absolutely aware that new nuances, new 2 principles, new heads of loss will appear, and we have 3 a process that wraps those in, as well, which again have 4 to go through governance. Now, as soon as a new 5 principle or new heads of loss has to be reviewed, of 6 course we have to understand the financial impact, and 7 we have a huge modelling exercise that we go through to 8 say, "Right, if you're going to now embrace that new 9 heads to loss" -- to your point earlier -- "what's the 10 impact on anything you've already done, and what's the 11 impact going forward, and how is that going to affect 12 the financial modelling, indeed the provisioning", 13 et cetera, et cetera? So all that exercise has to be 14 done with Government approval. 15 Q. Thank you. Could we bring back up onto screen your 16 seventh witness statement, please. WITN09890700, 17 paragraph 86 on page 30: 18 "As at 28 August 2024, all Claimants except three 19 have received a payment in some form, whether an interim 20 payment or final settlement payment. These three 21 Claimants had their convictions overturned between late 22 January and August 2024. All three have been sent 23 an interim payment application form with one Claimant 24 accepting the interim payment; this interim payment was 25 made on 2 September 2024." 199 1 Can you assist us with how many pecuniary claims 2 have finally settled and how many are outstanding, or 3 an indication of that? 4 A. So what I can hopefully assist with -- I haven't -- 5 I probably have somewhere -- got the complete breakdown. 6 I'm happy to supply that to you. What I can hopefully 7 help the Inquiry with, out of the 111 cases -- because 8 that's a fixed population now because of mass 9 exoneration -- so out of the 111 cases, 61 have settled. 10 The vast majority of those are the 600,000, but there 11 are other cases that are above 600,000 that have 12 settled. So 61 have settled but there remain 50 cases. 13 Of the remaining 50 cases, every single one -- to 14 this point in paragraph 86, every single one has had at 15 least a minimum payment of £200,000. Many of them have 16 settled on non-pecuniaries and some of them have settled 17 on pecuniaries, as well. I haven't got that precise 18 breakdown here. I think it is in my statement as it was 19 at the end of May. I'm happy to provide the Inquiry 20 with updated figures on that. 21 MR BLAKE: Thank you very much. 22 Sir, we're going to shortly break for the day. 23 Mr Recaldin is able to come back tomorrow morning and we 24 are able to accommodate Ms Munby to be completed within 25 the day as well. 200 1 SIR WYN WILLIAMS: That's fine. 2 There's two rather pedantic points, Mr Recaldin. 3 When you say that the number 111 is now closed, 4 technically, that may not be right -- 5 A. Ooh, you're absolutely right. 6 SIR WYN WILLIAMS: -- in the sense that there could be 7 non-convicted but prosecuted postmasters who would come 8 forward still; and there could be, if you are right 9 about this, postmasters who had been cautioned who have 10 not have yet come forward. 11 A. You're absolutely right, of course, Sir Wyn. 12 SIR WYN WILLIAMS: Well, no, no, I could be wrong. 13 A. No, you're absolutely right. But in my head is 14 absolutely the funding allows the prosecuted not 15 convicted population into the OC funding space but 16 because they're not a convicted case, I haven't 17 included. So in terms of overturned convictions, my 18 understanding is a locked down population. Thank you 19 for the clarity. You're absolutely right. 20 SIR WYN WILLIAMS: Yes, but the reason I was thinking about 21 that was -- and I certainly may be wrong about this -- 22 I hadn't appreciated previously that cautioned 23 postmasters were within OC and, when I was reading the 24 section of your witness statement, which deals with 25 prosecuted but non-convicted cohort at paragraph 29 201 1 onwards -- don't bring it up now, I'll just ask you to 2 look at it overnight -- there's no mention of cautioned 3 subpostmasters. 4 I'm very happy that you may be right about it but 5 I would like you to clarify that for me, if you would. 6 A. And Sir Wyn, I would appreciate the opportunity for 7 clarity. And I think Mr Blake also pointed out in the 8 funding arrangement it didn't refer to the word 9 "caution" either. And, as soon as I've said that, I'm 10 now doubting myself. So I'm pretty sure it does but 11 I need to -- thank you for the opportunity for me to go 12 and seek clarity. I will do that overnight. 13 SIR WYN WILLIAMS: That's fine. Thank you. 14 Well, thank you very much for giving evidence all 15 day. 16 I'll see you -- I think it's 10.00, Mr Blake, 17 tomorrow? 18 MR BLAKE: Yes. We can accommodate both Mr Recaldin and 19 Ms Munby tomorrow, even with a 10.00 start. 20 SIR WYN WILLIAMS: That's fine then, so I'll see you at 21 10.00 tomorrow morning. 22 MR BLAKE: Sir, can I just clarify for Mr Recaldin: 23 obviously, he can't speak to anybody about his evidence, 24 subject to that one issue relating to the caution? 25 SIR WYN WILLIAMS: Yes, I think that must be right, 202 1 Mr Recaldin. You're not supposed to speak about your 2 evidence, unless I specifically allow you to do so. 3 Certainly, in relation to the clarification which I have 4 provoked, you can speak to whoever you think is 5 appropriate. All right? 6 THE WITNESS: Thank you, Sir Wyn. 7 SIR WYN WILLIAMS: Thank you. 8 MR BLAKE: Thank you, sir. 9 (4.31 pm) 10 (The hearing adjourned until 10.00 am the following day) 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 203 I N D E X SIMON DOMINIC RECALDIN (affirmed) .............1 Questioned by MR BLAKE ........................1 204